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Short Summary
Main recommendation: Treat 2023 as a year to stay diversified and invested for the long term rather than chase short-term gains, with the bulk of new money going into index funds and a patient search for commercial real estate. Graham explains that his plan spreads money across real estate, equities, Treasuries, alternatives, and a small crypto allocation, so that no single asset class can sink the whole portfolio. He stresses that the stock market should be treated as a 20 to 30 year strategy, not something to trade day to day.
Key Points
- Graham describes 2023 as a confusing year: stocks are cheap after a two-year decline, but could fall further, and the Federal Reserve is expected to keep raising rates.
- His portfolio is roughly 35% residential real estate, 35% equities and index funds, 22% Treasuries and money market accounts, 4% alternative investments, 3% Bitcoin and Ethereum, and 1% other.
- He moved away from concentrating nearly all his money in seven Southern California rental properties, which he saw as too risky, and shifted toward index funds starting in 2020.
- Historical data he cites: he says the S&P 500 has never lost money over any rolling 20-year period in the last century, while the chance of profit rises from 73% in year one to 97% by year ten, according to his figures.
- Commercial real estate is his main new target, since it has declined about 13% from its peak and Treasury yields of 4 to 5% should justify a higher premium for the risk.
- He notes the market was down about 15% year to date, the worst drop since 2008, and says this is a wake-up call that investing carries real risk.
Details Worth Noting
- Concrete instructions:
- Keep investing a fixed share of income (he plans about 35%) into the S&P 500, total stock market, and international index funds, and continue dollar cost averaging.
- Hold long-term money for 20 to 30 years so that short-term fluctuations matter less.
- Park cash that is not yet invested in Treasuries or money market accounts paying roughly 3.5 to 4.5%, instead of leaving it idle.
- For commercial real estate, look for triple net leases, where the tenant pays taxes, insurance, and maintenance, to reduce day-to-day management.
- Review your investments and spending at year end, and use a system to track subscriptions and bills rather than doing it manually.
- If you want to indulge in collectibles, Graham suggests a bone stock Honda S2000, a modified 2000s BMW, or a vintage Tudor watch, but only as passion purchases, not core holdings.
- He said he sold two properties that no longer offered attractive returns and paused rental investing because deals were hard to find.
- He cites a Dave Ramsey observation that his strongest returns came from investments he enjoyed most, which led him back to real estate.
- He plans to be patient and hopes to find a commercial property within 12 months, with no geographic limit.
Bottom Line
Graham's 2023 plan is less about predicting the market and more about structure: diversify, keep investing steadily, and wait for a strong commercial real estate deal rather than rushing into one, reflecting his personal opinion and approach, not guaranteed advice.
