Here are some of my favorite posts from 2022. It was a busy year with my young kids so I didn’t write as much as I had hoped, but one of my goals is to start writing a lot more this year. I’ve missed it. In any case, here’s some of my favorites from this year. I hope 2023 is a great one for you.
This post was written almost a year ago as the bear market was starting. It touches on some important lessons to remember about bear markets and how to better navigate them. It’s even more relevant today than it was then.
I might go into house flipping. I was bearish housing before the 2008 housing crash, turned bullish in 2012 and then wrote this cautionary piece on housing in April 2022, which looks like the peak in house prices. Just kidding. I am never building another house in my life.
Remember when the Russian stock market cratered last March? Yeah, me neither. It feels like a lifetime ago. There are some important lessons in there about home bias and diversification. Everyone says “oh, the USA is different”. And I am inclined to believe that also, but I don’t want to test that theory. You shouldn’t either.
Bonds were down 13% in 2022. Not good. I was surprised by the aggressive posturing of the Fed, but there’s good news in falling prices – those higher yields are good for bonds, especially as the Fed reaches the end of their rate hikes. A lot of people are going to abandon bonds after a year like this, but that’s exactly the wrong thing to do because their falling prices actually make them more attractive, not less.
I am obviously a huge fan of diversified indexing. But I also know that indexing requires a certain level of activity. In fact, the underlying market caps of stocks and bonds always change. So it’s always bothered me how index funds are mostly static weights. That makes no sense. There isn’t even an index fund that tracks the actual changing relative market caps. Which is crazy because that’s the only portfolio that would be truly “passive” in the sense that it’s the actual market portfolio. Anyhow, I wrote some stuff about that.
A little off topic, but as a terrible golfer and occasional fan I felt the need to write about this one. This post was especially interesting since it touches on the abuse of government spending and how it can ruin a good thing.
This white paper took up a big chunk of my year. I thinks it’s one of the most important things I’ve ever written and I consider the formalized implementation of the concept to be very practical and useful for everyday investors. I’ve started implementing all my portfolios this way and all my personal money is invested using the same concept.
Not a post, but this new video series has been some of the most enjoyable stuff I’ve started working on. I know that a lot of people prefer the writing, but the videos allow me to succinctly archive educational material in a more useful manner. I am really enjoying it and I hope you are too.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.