INDIVIDUAL INVESTORS ARE PROFOUNDLY DIFFERENT FROM institutional investors like pension funds and endowments. It’s not just that individual investors have less money. One difference is taxes. Active managers with typically over 100 percent annual turnover generate tax obligations that their investors must pay. So beware: Declared investment performance is before taxes. Another difference is decisive: Every individual is mortal. Mortality is a dominant reality for all individual investors. Of course the exact timing of this great reality is not known. But know as individuals and as investors that life is short.

Those of us who are earning incomes have a finite number of years in which to build our lifetime savings ...

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