patrick.net

Private equity is bullshit; the essence of investing is mutual funds.

The simple answer seems wrong to those who think "advisers" know some "secrets."

Ask yourself; why are these advisers still working?

"If you're so smart, why aren't you rich?"

Young men aren’t investing in a 401(k) for retirement — they’re banking on bitcoin

https://www.marketwatch.com/story/young-men-arent-investing-in-a-401-k-for-retirement-theyre-banking-on-bitcoin-ead9d58c

summary:

• Shift in retirement planning: A growing number of young men are opting out of 401(k) plans, preferring to invest in Bitcoin as their primary retirement vehicle.
• Distrust of traditional finance: They see 401(k)s and the stock market as outdated or unreliable, believing cryptocurrency offers higher potential returns.
• Generational divide: Older workers tend to stick with employer-sponsored retirement accounts, while younger men are more likely to embrace riskier digital assets.
• Volatility concerns: Experts warn that Bitcoin’s extreme price swings make it a dangerous substitute for stable retirement savings.
• Financial literacy gap: The trend underscores a lack of trust in institutions and a need for better education on balancing risk with long-term financial security.

Following up on my recent posts (and thanks for all that had some input). I sold all of my IUSG today which was a little over 10% of my stonks. I kind of freaked out last week when I checked it's main holdings and it's at 13% for Nvidia.

Even Stalwarts SCHB and VTI are around 7% Nvidia. These two constitute over 50% of my stonks so I still have plenty of exposure to AI.

Waiting for funds to settle and I'll put it in DGRO. No single stock is more than 3.5% of the total and it has big tech but also big pharma and consumer staples.

I may do a large cap energy ETF because I do believe the future is oil, gas, coal, and nuclear. Nobody can convince me that Solar or Wind will ever produce more energy than it costs.

Any idiot can diversify a portfolio.
Diversification is for the know-nothing investor.

-- Charlie Munger

Eric Holder says

Diversification is for the know-nothing investor.

The only person who is not a "no nothing investor" is an insider trader. The rest of us are making out best guesses.

Eric Holder says

Any idiot can diversify a portfolio.
Diversification is for the know-nothing investor.
-- Charlie Munger

So be it as far as being labeled an investing idiot but still earn on average about 9% to 10% annually after inflation on your retirement savings accounts for 25 to 35 years.

AD says

Eric Holder says

Any idiot can diversify a portfolio.
Diversification is for the know-nothing investor.
-- Charlie Munger

So be it as far as being labeled an investing idiot but still earn on average about 9% to 10% annually after inflation on your retirement savings accounts for 25 to 35 years.

Charlie would not have been impressed.

Vanguard is singing a new tune for investors in 2026.

It goes like this: Out with the standard portfolio mix of 60% equity and 40% fixed income. In with the opposite — a 40% equity share (20% US stocks and 20% international stocks) and 60% fixed income.

“This is a significant shift,” Roger Aliaga-Diaz, Vanguard’s global head of portfolio construction and chief economist for the Americas, told me. “It's almost like a tectonic shift.”

https://finance.yahoo.com/news/vanguard-flips-the-script-on-6040-investment-strategy-110026190.html

I'm pretty close to 100% stock all the time.

As far as my above post, the bellweather of investment grade bond securities is the Vanguard Total Bond Market ETF.

Its up about 7.25% year to date, and it dropped about 25% in price around 2021 to 2023 when inflation and interest rates started to increase.

Seems like it has somewhat recovered from that 25% drop

It has returned about 3.2% annually since its inception in April 2007 versus annual inflation averaging around 2.7% since April 2007

AD says

It has returned about 3.2% annually since its inception in April 2007 versus annual inflation averaging around 2.7% since April 2007

And that's my problem with bonds. Taking your numbers that's a real return of .5% vs. S&P real return of over 8% over last 20 years.

Further, at a yield of 3.2% and a typical cash flow requirement of $100k per year for a retired couple (feel free to disagree with that but to me that's just basic living ex-CA) that would mean you need a nest egg of $3,125,000 in order to live off the interest. I'm guessing that less than 4% of retirees have that much of a nest egg.

To illustrate - If I put that same nest egg money into something like SPYD or SCHD I'll get that $100,000 (or more) in dividends and still have a decent chance at another $200,000 in capital gains. I might also have a capital loss of $200,000 but as long as I don't realize those losses my dividends shouldn't change by that much. Over time the odds are with me.

In my investing lifetime (last 35 years) bonds have never made sense. They are considered "low risk" because they have low volatility. This is straight out of the MBA curriculum where they define risk as volatility when they are calculating their debt to equity ratios. That's not my definition of risk. Risk should be defined as not keeping ahead of the cost of living.

The previous post is correct.
Over time, bonds pay interest; periods of capital appreciation are followed by periods of depreciation. The long term result is the interest.

I'm retired and have a 90% stock allocation. In time, I'll convert some funds within IRAs, or similar to more dividend paying stocks, unless I'm lazy and keep doing almost nothing.

stfu says

In my investing lifetime (last 35 years) bonds have never made sense. They are considered "low risk" because they have low volatility. This is straight out of the MBA curriculum where they define risk as volatility when they are calculating their debt to equity ratios. That's not my definition of risk. Risk should be defined as not keeping ahead of the cost of living.

Yep.

The risk premium for an investment is the return an investor expects to receive above the return of a "risk-free" asset (like U.S. Treasury bonds) as compensation for taking on additional risk. It's a theoretical concept that constantly changes.

One analysis in March 2025 noted that VYM's risk premium was still near a 10-year peak relative to Treasury rates, suggesting an attractive potential return for the inherent risk at that time.

The fund's current SEC yield is approximately 2.42%. The difference between this yield and the current yield of a risk-free asset (e.g., a 10-year Treasury note) can provide a rough, current-market estimate of the yield premium, but this is not the total risk premium (which also includes capital appreciation expectations.)