Investing can be a daunting and confusing topic for many people, but luckily there are experts out there who can guide you through the process.
With decades of experience in the finance industry, Barbara is a true authority on investing and personal finance.
Whether you’re a seasoned investor or just getting started, Barbara’s insights and advice can help you make informed decisions and achieve your financial goals.
So if you want to take control of your finances and build long-term wealth, you’ve come to the right place.
Get ready to learn from one of the best in the business.
Q1) Can you tell us a little bit about your background and how you got started in the finance industry?
I was inspired by my Dad when I was in my early 20s.
Investing, finance, real estate and money were big topics of conversation in my family, and from that point, I had a desire to learn.
Over time I began investing on my own. I read many great investment books from Malkiel, Ellis, Graham and Dodd, Schwab, and many more.
Ultimately, I received an MBA in Finance and worked as an investment portfolio manager and university investments and finance instructor.
Q2) How has your investment philosophy evolved over the years?
I began as a stock picker.
After studying the investment research, it became clear that passive index fund investing was likely to outperform active management most of the time.
Q3) How do you approach risk management in your investment strategy?
I own the major asset classes, including fixed income and cash.
That way, when the stock market tanks, I have cash and fixed income to minimize the total portfolio losses.
Q4) Can you share a particularly successful investment you’ve made and what factors contributed to its success?
I bought LOWs stock many years ago, at the bottom of the housing crisis.
I assumed people would be more likely to fix up existing homes than buy new ones. Over time that investment has increased 5 times.
It is one of the few individual stocks that I own.
Q5) What advice do you have for individuals just starting to invest?
Don’t expect to get rich quickly when investing.
Don’t follow the ads. Beware of what you learn on Reddit or in the media. Educate yourself before investing. Read books such as A Random Walk Down Wall Street by Malkiel and The Elements of Investing by Malkiel and Ellis.
Q6) How do you stay current on market trends and changes in the industry?
I read credible investment information from well-regarded websites and media outlets.
Q7) What do you think sets successful investors apart from those who struggle to make returns?
Patience, education and a long-term outlook.
Q8) How do you balance your investment strategy between short-term and long-term goals?
I maintain enough cash in a high-yield money market account and short-term
Treasury Bills for any expected expenses during the next 3 to 5 years and for emergencies.
We auto-invest into a 401k (for my husband) and regularly invest in my SIMPLE IRA.
Q9) What do you see as the biggest challenge facing investors today?
Not prioritizing saving and living beneath their means.
Taking on debt or not paying it off. Delaying investing.
Q10) Can you discuss your approach to asset allocation and diversification?
I believe you can be well diversified with 3 to 4 ETFs or mutual funds.
(A) US stock index fund
(B) International stock index fund
(C) Bond index fund
(D) High-yield money market mutual fund
Take a risk tolerance quiz to help decide what per cent to devote to each asset class.
Although not necessary, if you prefer, you can add in more niche funds like small- or mid-cap stock funds in value or growth investment styles.
You can also add in other types of bond and international stock funds.
Q11) Can you discuss your thoughts on cryptocurrency and its place in an investment portfolio?
I believe it is too risky and unproven to include in my investment portfolio.
Although, I suggest that those who want to delve into more speculative investments carve out no more than 5% of their overall invest-able assets for riskier assets.
Q12) How do you manage emotions and maintain discipline when investing?
I set an asset allocation that fits with my risk tolerance level, my age, and my long-term goals.
For me, I have 65% in stock investments (including a small allocation to REITs) and 35% allocated to fixed assets. I don’t deviate from this asset allocation until my circumstances change, not when the market falls.
I don’t look at my investment values too often.
I have studied investment history and historical asset prices over decades and realize that asset values go down periodically. In all cases, these downturns have rebounded.
I never invest with the money I’ll need during the next five years. Thus, I’m not forced to sell after a market decline. I frequently use stock market drops to invest.
Q13) What do you see as the biggest trend in finance and investing in the next 5-10 years?
Automation and lower prices to invest. Robo and digital investment advisors will continue to grow in popularity.
So there you have it, folks – investing doesn’t have to be scary or overwhelming.
You can grow your wealth and achieve financial freedom with the right guidance and a solid strategy.
And who better to learn from than Barbara Friedberg, a true expert in the field?
So why not take the first step towards financial success today?
Follow Barbara on LinkedIn to stay up-to-date on her latest insights and tips.
Your future self will thank you!