Comments on: Dave Ramsey’s Been on the Air for 15 Years! http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Fri, 25 May 2012 01:47:17 +0000 hourly 1 http://wordpress.org/?v= By: Derek http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/comment-page-1/#comment-143841 Derek Tue, 25 Sep 2007 01:59:38 +0000 http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/#comment-143841 Check this out~for those of us who are Ramsey fans. FOX BUSINESS NETWORK NAMES RADIO SHOW PERSONALITY DAVE RAMSEY AS PRIMETIME HOST http://www.daveramsey.com/etc/cms/dave_fox_business_network_7703.htmlc Check this out~for those of us who are Ramsey fans.

FOX BUSINESS NETWORK NAMES RADIO SHOW PERSONALITY DAVE RAMSEY AS PRIMETIME HOST

http://www.daveramsey.com/etc/cms/dave_fox_business_network_7703.htmlc

]]> By: Elaine http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/comment-page-1/#comment-135474 Elaine Sun, 02 Sep 2007 02:16:56 +0000 http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/#comment-135474 Heard a portion of the Ric Edelman show this morning. Ric alluded to some comment Dave Ramsey made about Ric - I believe that Ric is "crazy." Don't know context of alleged statement; missed the segment where Ric discussed this in detail. Does anyone know what Dave Ramsey said? Heard a portion of the Ric Edelman show this morning. Ric alluded to some comment Dave Ramsey made about Ric – I believe that Ric is “crazy.” Don’t know context of alleged statement; missed the segment where Ric discussed this in detail. Does anyone know what Dave Ramsey said?

]]> By: Baba Ghanoush http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/comment-page-1/#comment-125166 Baba Ghanoush Wed, 01 Aug 2007 15:39:49 +0000 http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/#comment-125166 A good thread with the straight dope on Dave's investment advice... http://www.diehards.org/forum/viewtopic.php?t=4591 A good thread with the straight dope on Dave’s investment advice… http://www.diehards.org/forum/viewtopic.php?t=4591

]]> By: Forrest Dinnell http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/comment-page-1/#comment-116568 Forrest Dinnell Wed, 27 Jun 2007 13:53:45 +0000 http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/#comment-116568 I entered the contest for the ipod so I can listen to music while riding my Harley. I entered the contest for the ipod so I can listen to music while riding my Harley.

]]> By: Chris http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/comment-page-1/#comment-116379 Chris Tue, 26 Jun 2007 17:49:05 +0000 http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/#comment-116379 I've heard Dave recommend the S&P 500 index fund. I entered this contest for the ipod. But if I win I'm going to sell it and apply it to some debt. I'm sure Dave would approve! I’ve heard Dave recommend the S&P 500 index fund.

I entered this contest for the ipod. But if I win I’m going to sell it and apply it to some debt. I’m sure Dave would approve!

]]> By: Baba Ghanoush http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/comment-page-1/#comment-116364 Baba Ghanoush Tue, 26 Jun 2007 16:24:54 +0000 http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/#comment-116364 All the same, I'd love to hear Dave say "a low-cost, total stock market index fund", like one from Vanguard or Fidelity's Spartan line, instead of "growth fund". All the same, I’d love to hear Dave say “a low-cost, total stock market index fund”, like one from Vanguard or Fidelity’s Spartan line, instead of “growth fund”.

]]> By: Chris Thomas http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/comment-page-1/#comment-116362 Chris Thomas Tue, 26 Jun 2007 16:13:25 +0000 http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/#comment-116362 That Baba Ghanoush is one smart dude! It's like you were reading my mind with that last post. That Baba Ghanoush is one smart dude! It’s like you were reading my mind with that last post.

]]> By: Baba Ghanoush http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/comment-page-1/#comment-116354 Baba Ghanoush Tue, 26 Jun 2007 15:45:02 +0000 http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/#comment-116354 Also, I know that Dave's show is not primarily about investing. If he gets too detailed -- talking about risk, stock/bond and domestic/intl allocations -- he will disinterest a big segment of his audience. And the primary determinant of portfolio size is how much one saves. This is the tough part, and Dave is right on the money here. So I'm focusing on small details with my comments above, and Dave's getting the really life-changing, big-scale things right. I suspect that if someone had detailed investing-related questions (rather than debt/credit issues), Dave would tend to send them to a fee-only 'endorsed local provider', which strikes me as the responsible thing to do. Also, I know that Dave’s show is not primarily about investing. If he gets too detailed — talking about risk, stock/bond and domestic/intl allocations — he will disinterest a big segment of his audience. And the primary determinant of portfolio size is how much one saves. This is the tough part, and Dave is right on the money here. So I’m focusing on small details with my comments above, and Dave’s getting the really life-changing, big-scale things right.

I suspect that if someone had detailed investing-related questions (rather than debt/credit issues), Dave would tend to send them to a fee-only ‘endorsed local provider’, which strikes me as the responsible thing to do.

]]> By: Baba Ghanoush http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/comment-page-1/#comment-116336 Baba Ghanoush Tue, 26 Jun 2007 15:27:21 +0000 http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/#comment-116336 Chris, I assumed he set his investment style in the 90s as that's the last cycle when growth did well. A growth tilt is typical of those who set their allocation then due to recency bias. Historically, though, value has outperformed growth. (Try searching for Fama and French's Three-Factor model.) In particular, small value has outperformed small growth. However, that's not necessarily a reason to tilt towards value (or growth). There's some debate as to whether the premiums for value and small caps are a reward for additional risks (apart from market risk) in those sectors, or if ultimately we should expect them to return to the mean. I believe that it's wiser to hold the market at roughly market weight, except in regards to domestic/intl, where I weight slightly more towards domestic stocks to decrease currency risk. Most important -- keep costs and taxes low (index funds). But even if Dave were correct that growth outperformed value over time, there will still be long periods of time where growth (or value) underperforms the market -- all sectors of the market are down at times. So when Joe Investor is heavily tilted towards growth and his returns are well below the market for 2-3 years, he panics and sells, locking in his losses. This is the real danger of selecting a subset of the market (value or growth, large or small) and heavily overweighting it. If the investor doesn't understand the variability of the growth sector and have the stomach to ride it out (most won't), especially when comparing to published market returns, then overweighting them on growth is a disservice. Chris,

I assumed he set his investment style in the 90s as that’s the last cycle when growth did well. A growth tilt is typical of those who set their allocation then due to recency bias.

Historically, though, value has outperformed growth. (Try searching for Fama and French’s Three-Factor model.) In particular, small value has outperformed small growth. However, that’s not necessarily a reason to tilt towards value (or growth). There’s some debate as to whether the premiums for value and small caps are a reward for additional risks (apart from market risk) in those sectors, or if ultimately we should expect them to return to the mean. I believe that it’s wiser to hold the market at roughly market weight, except in regards to domestic/intl, where I weight slightly more towards domestic stocks to decrease currency risk. Most important — keep costs and taxes low (index funds).

But even if Dave were correct that growth outperformed value over time, there will still be long periods of time where growth (or value) underperforms the market — all sectors of the market are down at times. So when Joe Investor is heavily tilted towards growth and his returns are well below the market for 2-3 years, he panics and sells, locking in his losses. This is the real danger of selecting a subset of the market (value or growth, large or small) and heavily overweighting it. If the investor doesn’t understand the variability of the growth sector and have the stomach to ride it out (most won’t), especially when comparing to published market returns, then overweighting them on growth is a disservice.

]]> By: Chris Thomas http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/comment-page-1/#comment-116328 Chris Thomas Tue, 26 Jun 2007 14:38:00 +0000 http://allfinancialmatters.com/2007/06/25/dave-ramseys-been-on-the-air-for-15-years/#comment-116328 Yo Baba, Dave has always recommended diversification across four types of funds. Sure, they may be what you'd consider the same "style" of fund, but I think you would agree they are all very different in their holdings, earnings potential and risk tolerance. Also, his strategy for investing wasn't impacted by the 90's, but was formed by looking at the history of the stock market and the 10-20+ year track records of certain types of funds, i.e. growth, growth & income, aggressive growth and international. Yo Baba, Dave has always recommended diversification across four types of funds. Sure, they may be what you’d consider the same “style” of fund, but I think you would agree they are all very different in their holdings, earnings potential and risk tolerance. Also, his strategy for investing wasn’t impacted by the 90′s, but was formed by looking at the history of the stock market and the 10-20+ year track records of certain types of funds, i.e. growth, growth & income, aggressive growth and international.

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