Consuelo Mack On the Best Advice from Investors like Buffett, Templeton and Bernstein

On the WSJ Watching Your Wealth podcast, Consuelo Mack, anchor and executive producer of WealthTrack, shares some of the best investment advice from her many years of investing and journalism experiences. She stresses that much of the “best” advice is the simple, and not overly complex.

  1. Her first point is make Uncle Sam work for you. Investors need to take as much advantage as possible of tax deferred savings through vehicles like IRAs.
  1. Her second point is that investors don’t pay attention to the power of compounding. Things like dollar cost averaging, interest and reinvesting dividends are very important, especially for younger investors.
  1. Her third point is about rebalancing. Mack says that our emotions and biases influence our trading behaviors, and rebalancing helps avoid these traps that can hurt investor returns. Setting up a disciplined rebalancing approach can help “avoid a lot of pain by buying and selling at the wrong times”.
  1. The fourth point is around the “performance trap”, which is the concept of selling low and buying high. Investors emotions hurt their long term returns. Her advice on this is taking a long term view and finding a strategy or fund company that you believe in and can stick with. Citing conversations with great investors like Sir John Templeton and Warren Buffett, Mack says that you should follow their advice and buy stocks in periods of maximum pessimism and sell in periods of maximum optimism.


On the concept of diversification, Mack references a quote from Peter Bernstein, author of the book “Against the Gods: The Remarkable Story of Risk”, who said you are never totally diversified until you own an asset you are uncomfortable holding (i.e. gold is a good example for some investors). She talks about how holding cash is an overlooked asset, and advocates that 10% of an investors’ portfolio be in cash so that they can take advantage of market declines in various ways.

When asked about who she admired the most in all her years of interviewing great investors, she focused her remarks on the late Sir John Templeton, saying he was a pioneer on global investing, always on the hunt for value stocks worldwide in areas when there was maximum pessimism. This philosophy of buying during times of maximum pain, or pessimism, is one she says investors can learn greatly from.