Rob Arnott, who is the Chairman and Founder of Research Affiliates LLC, gave a great interview with MoneyWatch.com in which he discusses three common precepts about investing and explains how they are misused.
1. Stocks may not be for the long run afterall
2. Taking on more risk to get higher returns is not how it works
3. Diversification fails temporarily, but doesn’t mean you should give up on it
I’ve been a big fan of Arnott’s work for some time now and I enjoyed this video. I think it is well worth the five minute running time. If you are reading this via facebook or email, don’t forget to visit the website to see the video.