My few pals generally discuss health and politics way more than money. Yesterday one of two best friends who has revealed he is 60/40 admitted he only checks his portfolio when the monthly statement is issued. Had no idea about recent market conditions. Other friend is very ill and in a care facility, he told me yesterday that he will run out of money in 2.5 years but had a plan to generate “ 10-12% return from his portfolio. He watches CNBC all day. I guess my point is that, unless one is a boglehead,,, we all invest in way that is uniquely personal.
Comments
Then, I realize that I really do not want them acting (half-heartedly) on things that I might say, without proper monitoring and follow through.
I do have one friend who I talk with about such things, but we have very different approaches.
Most of my friends don't care or pay attention to anything around investing or retirement.
that said they know i pay attention and have asked me for information here or there. I have a few books that i recommend or lend out. most of the time even if they read them, it doesn't bring about much discussion. or we'll talk about it.
whats funny is that I know pretty well about half a dozen financial advisors and even they don't like talking shop. The one friend who is largely a insurance salesperson moreso an advisor and I have pretty great conversations because he is genuinely curious and feels like he's been led astray somewhat by the industry he's in.
The guys that taught me were older gentlemen. they loved talking this and its what got me to start paying attention.
people want conversations around 10X'ing on some stock, nobody wants to talk about what trowe price, vanguard, or capital group is doing in the world of mutual funds and ETF's.
Hopefully, this strategy works out for his family. I rib him that they should enjoy his investment success and spend some it on themselves. But he is set in his way.
as FIRE, the youngsters prefer my career advice to investment advice !
when it comes to investments, they would rather hear\opine on what i have been doing, rather than what i would do in their situation (since that has previously been rather boring). its a good vent for what has stunk the most.
But about four or five weeks ago I had an unusual conversation with my nephew, who works as a tradesman and has a wife and two very young kids. To prep and sell their home of seven years they moved into a condo, soon to move to another state for better employment. I expressed concern about carrying both rents, to which my nephew replied "Don't worry, I have money saved", and then showed me the four holdings using his cell phone. The two top holdings were Bitcoin and Ethereum! He had held everything long enough to turn roughly $25K into six figures.
I was stunned, elated, and unable to contain myself. "How did you select these holdings", "What was the advice you got (from a friend) that convinced you", "Do you know anything about what these companies do", Do you have any idea how incredibly unusual your returns are", I asked. His answers confirmed he is a total neophyte when it comes to investing. Once I caught my breath I suggested he take the bulk of his winnings off the table to pause and regroup, not only to lock in the gains but also to maintain his family's stability during this precarious time. While I felt strongly this was the right thing to do, in the back of my mind I also knew it is tough to tell anyone who has seen so much success to make such a big change in direction.
In the last week the market has made a big change in direction and those holdings have plummeted. Enough to more than cover the taxes my nephew would have to pay for liquidating his holdings a month ago. I have no idea whether or not he took my advice.
I'm not interested in this because i'm trying to beat the system or "win the game". I just enjoy the math if I had to guess a reason. when someone does express interest and want to talk to me it's usually because they think if i'm interested it's because i have some out-performing strategy and they want in. and then are largely disappointed when i'm like figure out your risk profile and build a well diversified allocation based on your tolerance. Check your risk profile again 5 years later and make changes if appropriate. not what they are expecting to hear.
I have someone who wants to talk with me at Thanksgiving who sold a few investment properties and wants to talk about what they should do with this money. boy o boy are they going to probably be disappointed when i'm not like "well you see you need to load up on fartcoin and 3X Beyond Meat leveraged ETF's"
That raises an interesting question. Assuming this is for someone in retirement, what would ”doing great” mean YTD?
Someone sitting 100% in cash would think 5% YTD is “great.”
Playing in longer dated CDs …. maybe 7%?
With 100% in a balanced fund 10% might appear “great.”
For an actively managed broadly diversified portfolio +15% might be “great “
With an hefty exposure to gold / precious metals, +30% YTD might represent “great”.
Disclosure: My performance has not been “great”, but is OK. I’ve managed to step on my own toes a few times this year.
Beating some arbitrary benchmark is irrelevant.
He could be in 100% cash? Do you call it a win?
Someone who read that if you have enough, don't play the stock market anymore and invested in the total bond index, BND, in the last 15 years and made 2.2% annually...is it a win?
The biggest problem is that most can't define their goals with a specific number for performance, SD and max draw to know if they won.
In most of my circles, most people think their advisor is staring at candlestick charts shouting "buy" "sell" into a phone all day long and had their finger on the pulse of the market and is beating the pants off the market. So when they say "great!" they usually think they are beating some benchmark because their guy is uniquely intelligent enough to position them in that way.
To some extent the goals can be modified as return dictates: Less expensive motor vehicles, shorter vacations, $25 scotch instead of $50. 2 - 3 dolls instead of 10.
And for some, making 2% less than the next fella and not avoiding ulcers is a fine trade off.