2019 Investment Portfolios

Hi Friends,

With the year ending I always like to look back at how the markets did against my own portfolios.

The S&P 500 is up 31%+ this year. 31%!!! That is a big year, yet so many of us fail to capture all of this upside in our portfolios, myself included. I too, am a victim of “balanced” portfolios in order to diversify and minimize risk. While some diversification over companies, industries, sectors, style-types, etc is probably a good idea, I honestly feel like the 60/40 (or 70/30, 80/20) stock to bond ratio gold standard we are all taught is really unnecessary for young people.

My conclusion, after a decade and a half of investing my personal money, is that you just need to leave your foot on the gas when you are young, and capture all the upside you can – diversification is overrated when you are young. This strategy may be painful during market corrections, but the markets always pop up higher the next time and there are few times (if ever) where having a traditional diversified portfolio will produce a higher return over a 5 year period than an aggressive portfolio of 100% stocks. If you can just keep adding to an aggressive, all-stock portfolio (still diversified over individual companies/sectors/industries/style-types/international/emerging market/etc) and don’t fret about how the markets are doing, you will be much better off, historically.

I am still in favor of the more principal-protective, traditional-style portfolios as you get closer to retirement – perhaps starting at 45 to 50 years old, but before then, keeping an all stock portfolio is likely your best strategy if you want to have at least $1M in your brokerage accounts when it comes time to retire.

These are just my own thoughts and should not be taken as investment advice.

Would love to hear some other’s thoughts and perspectives as well!

Thanks for coming by,

Brian