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Taylor Larimore: The Investment In An Index It Is Better Than Share Purchase

Interview with legend Taylor Larimore.

One of these days there was rather interesting interview of one of much known “investment-authors” in the USA Taylor Larimore. He is a follower of “school Boggle”, and, actually, one of its main “evangelists”. John Boggle is considered the author of such large phenomenon in stock market as investment funds which take shares exactly in those proportions to which they are presented in this or that index. John Boggle has based in due time company Vanguard which became one of the largest managing mutual funds.

It is possible to disagree with thoughts and conclusions of Larimore, as he is too focused on the ideas. But anyway, as it is represented to me, interview of the 84-year-old investor to more than 50-year-old experience in the market deserves perusal. His answer concerning present financial crisis is especially instructive. Interview transfer is lower.

Taylor Larimore is one of coauthors of the book ?The Boggleheads Guide To Investing? and also the former head of financial division Federal Small Business Administration (the American state body, prosecuting small-scale business subjects) across southern Florida. Besides, he actively participates in work of the Internet forum devoted to index investments ?in style of Boggle?.

The correspondent of edition Index Universe has met Larimore to learn his opinion on passive investments at the time when the economy is slowed down, and gasoline costs $4 for gallon ($1,06 for liter, you will laugh, but in the USA it is considered terribly expensively ).

How you think, in present times of trouble there are reasons for investment tactics change ?

What the Larimore has answered: you are much younger than me, differently wouldn’t began to name nowadays “heavy”. I could worry about ten periods of the “bear” market when index S&P500 fell on 20 % or more. I was the child when index Dow has fallen upon 89 %. The restaurant of my father was closed in the absence of clients and we have been forced to move to the house of my grandfather in Florida.

After that there were some more events: the Second World War, Cold war, the Cuban crisis, murder of the president Kennedy, the Vietnamese war, 15 %-s’ inflation, capture of hostages in Iran, ?the 2000 Problem 2000? and set of other crisis situations. Each time financial “gurus” predicted the complete paragraph. But know, what happens? Dow has grown from 235 points in 1950 year to more than 12000 points now ? and it without dividends. Therefore, answering your question about ?tactics change? and as a matter of fact ? applications a market-timing (trades on short-term changes of quotations), I would tell that the best strategy there is a preserving of well diversified portfolio.

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