This is a YouTube video titled "You Don't Have to Invest in Everything" created in August 2024. It features Jim Dahle discussing investment strategies, emphasizing that investors do not need to invest in every asset class to be successful. He covers topics such as stocks, real estate, bonds, and alternative investments, sharing personal insights and advice on avoiding FOMO and sticking to a diversified investment plan. The content is a monologue or podcast-style presentation rather than a multi-speaker conversation.
We're going to talk a little bit about how you don't need to invest in everything. You don't have to do everything that somebody else is doing successfully. And that sure is the truth. Stocks tend to be the mainstay of most people's portfolio, and that's fine. Stocks are the basically most profitable corporations in the history of mankind. That's what stocks are. You're owner and you can buy them all very quickly. In 30 seconds you can buy all the stocks in the world, right? You go to Vanguard or your favorite brokerage and you buy vt, right? This is the worldwide stock index. Or you buy the US and the international one separately or whatever. You own all the stocks. There's like 4,000 traded in the US, there's like 8,000 traded overseas. 12,000 most profitable companies in the history of the world. You own them. It's a great mainstay for your portfolio. I think most people own stocks. If they don't, I'd encourage them to buy some. It's so easy to invest, so easy to diversify. They're great investments. Even if one or two or 300 of them go broke, you're still doing fine. Cause you're so diversified with them. So I think that's a pretty good thing for just about everybody to be invested in. But after that, lots of people invest in things that I don't invest in and vice versa. You don't have to invest in everything to be successful. There's lots of people out there that are young, they still have most of their earnings ahead of them and they're like, I'm not gonna panic sell. I'm not even gonna own bonds or have much in cash other than my emergency fund for a few more years. Great, right? You don't have to invest in everything to be successful. Real estate I've talked to you about all the time about being optional. I think real estate's a great asset class. I find a lot of things very attractive about it, both tax wise as well as return wise in correlation with my stocks and bonds. But it's optional. You do not have to invest in real estate to be successful. I think there's lots of things going for it, but you don't have to invest in everything. You know, I often get feedback on a blog post. You know, I write a blog post about some sort of investment. You know, maybe it's the way the person's investing in that investment, or maybe it's just the asset class itself and I'm not super keen on it. You know, I'm not investing it. And it's almost like they take personal offense to it that I'm not doing what they're doing. They think I'm crazy, that I'm leaving money on the table, that I'm, you know, I'm misleading those who listen to this podcast by not telling them about what they're doing, you know, because they just think it's is the best thing in the world. Now it might be picking individual stocks, it might be time in the market or using some sort of a momentum strategy. It might be one specific tilt, some sort of factor investing. It might be the method they're using to invest in real estate. Maybe they're buying individual properties, for instance, or perhaps they're into syndications or whatever. More recently it was somebody that buys individual municipal bonds. I mean, I invest in municipal bonds. I let Vanguard manage it for nine basis points a year. I let them run my bond fund. And this person couldn't believe I let them do that. Couldn't believe I was leaving all that money on the table, not managing my own bond fund. Right. Nevermind. This person was entirely invested in municipal bonds and relatively small portion of my portfolio. I'm not going to spend the several hours a week this person was spending managing their bond portfolio. I don't even look at my investments, but about once every couple of months. So it was very interesting there that he thought I was crazy to not be managing that actively. Another one was a fellow that was into buffered ETFs and after about four or five emails swapped back and forth, he told me he was spending several hours a day trading these buffered ETFs. You don't know what a buffered ETF is. It's basically four types of options wrapped up in an ETF wrapper. And it's got some cool things about it, but it's kind of like Bitcoin. I think it's cool, I think it's interesting. But I'm more than content to stand on the sidelines and watch what happens with it. And that brings you to the Bitcoin Bros. Right? They can't believe I don't invest in Bitcoin. Well, you know what? I've reached my financial goals without using Bitcoin and I have no idea what's going to happen with Bitcoin in the future. It might be incredibly successful. It might go to zero, I don't know. But I don't need to take that risk to meet my financial goals. So I don't. You don't have to invest in everything to be successful. And one asset class I was very interested in a few years ago, I don't know, 10, 12 years ago, something like that was viaticals. These are basically people selling their whole life policy. They don't want it anymore. They go to the company and they're like, what can I surrender this for? And the company gives them a number and they're like, that sucks. And they're like, well, I don't want to keep feeding it. I don't want to hold onto it for 10 or 15 or whatever more years. So what are my options? Well, there are people that will pay them funds essentially that will pay them more than the company is offering, less than the death benefit, obviously. And then they pay the premiums until the person dies and then collect the death benefit. It's a biadical investment. And some of these funds have pretty good track record. I was very interested in it. I thought it was really cool. Obviously, no correlation whatsoever with your stocks and bonds and real estate and that sort of thing. Katie says, heck, no, we're not investing in that. So we didn't. Right. It's important to be on the same page with your spouse, but you don't have to invest in everything to be successful. So avoid having fomo. This fear of missing out because you're not investing in something somebody else is investing in. When they talk to you about their investments, they're going to be telling you about the ones that have been doing well lately. So that's natural for you to feel FOMO when that happens. But it's far more important that you stick with your written investing plan. Right. If you're diversified, something in your portfolio isn't going to be doing great. And you're going to be like, why did I buy that? Why do I invest in this? But if you stick with it, two or three or five years later, it's going to be the best thing in your portfolio. And so that's the whole point of having a diversified portfolio. But don't go chasing your tail. Don't go chasing returns, don't go chasing what other people are doing. You don't have to invest in everything to be successful. This is a single player game. It is you against your goals. Right? Never forget that the hosts of the.
White Coat Investor are not licensed accountants, attorneys, or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.
