Billionaire investor Jeremy Grantham was recently on the massively popular Diary of a CEO podcast. If you haven’t seen it, the point of this podcast is likeable host Steve Bartlett asks a bunch of rich guys how to get rich. Or he’ll ask people how to optimize their health or their productivity. It’s mostly a lot of drivel with the usual blowhards (Kevin O’Leary, Scott Galloway, etc.). And Bartlett is usually wide-eyed, nodding along, non-skeptical. But he asked Grantham what would be a good investing strategy moving forward, and Grantham told him do NOT invest in US stocks.

Bartlett just about fell out of his chair. I mean this was a watershed moment for Bartlett. He’d never even considered such a radical proposition. Now Grantham is a longtime bear, he’s been saying this for a while, and he’s been wrong for a while. But he’s known for having gotten ahead of the Dot-com Bubble and the Great Financial Crisis, and he made the point that US stocks are more drastically overpriced than they’ve ever been.

He also explained to Bartlett what a bond is …

Anyway, it’s become almost a foregone conclusion that US stocks will always outperform, they’re inherently superior.

I recently read an article that was recommended to me in an email from Substack called The 3-Fund Portfolio I’d Build If I Started Over. I love these articles because I’m actually fascinated by what people want to put their money in and why. And the whole point of the article was that people have too many funds with too much overlap, their portfolio is too complicated and not actually diversified.

So what’s the portfolio?

• Vanguard’s S&P 500 ETF (VOO), 50% (the core)

• Invesco’s Nasdaq 100 ETF (QQQM), 30% (the engine)

• Schwab’s US Dividend Equity ETF (SCHD), 20% (the ballast)

Right off the bat I’m concerned, because this portfolio is A) 100% stocks; B) 100% US stocks and C) 100% US large cap stocks.

Now, we can use Testfolio to backtest this portfolio. I used Large Cap Value to replace SCHD because it doesn’t have that long a track record, but Morningstar puts it in the Large Cap Value category. The returns going back about 40 years are amazing:

• CAGR: 12.76%

However, the journey getting there was absolutely hair-raising:

• Maximum Drawdown: 60.62%

• Longest Drawdown: 11.97 years

So before you sign up for a portfolio like this, you have to at least ask yourself, am I willing to see my money lose more than half its value? Imagine you have $1 million and a couple years later you’ve got $400,000. Of course, it came back, but it took 12 years.

Is that manageable for your psyche?

If you added just a shred of diversification, with something as “boring” as bonds or as “complex” as managed futures/trend following you could reduce your drawdowns somewhat and lose less than 1% in annual returns. Note this backtest has about 39 years of data.

• 3-fund Portfolio

  • CAGR: 12.85%; Max Drawdown: 60.62%; Longest Drawdown: 11.97 years

• 80% Stocks/20% Bonds

  • CAGR: 11.96%; Max Drawdown: 52.27%; Longest Drawdown: 10.73 years

• 80% Stocks/20% Managed Futures

  • CAGR: 12.77%; Max Drawdown: 52.65%; Longest Drawdown: 7.53 years

Still, if we’re talking about a portfolio that is “diversified” or robust, this is a bit too much drama for my liking. These aren’t just numbers on a screen, there is actual risk at play. As I often say, what if you need the money? If it’s money you’re certain you’re not going to touch for many years, sure, maybe you can take as much risk as you want. On the same token, I’ve heard too many people panic sell under far less severe circumstances than the worst case scenario.

My current mix is roughly 50% GLOBAL stocks; 20% bonds; 20% managed futures/trend; and 10% gold. The same backtest would give me only an 8% return, however the maximum drawdown was only 23% and the longest drawdown was only three years.

• My Mix

  • CAGR: 8.32%; Max Drawdown: 22.75%; Longest Drawdown: 3.18 years

There, I can breathe again. Morgan Housel says if you can’t sleep at night, no portfolio is worth it, no matter the return. My feeling is simply that I don’t want to be too “all in” or dependent on any one asset class or strategy.

Now the article I mentioned at the beginning does go on to say if you don’t have the stomach for a big market decline (down 30%), own more SCHD – the value stock component or the “ballast.”

However, in 100 years of history, according to Testfolio, US large cap value stocks have had a maximum drawdown of 83%, with the longest drawdown lasting almost 16 years (the Great Depression). The fund SCHD, which only has a 14 year track record, still has fallen as much as 33%. The Nasdaq 100 (part of the suggested three-fund portfolio) also went down more than 80% … in 2002! This isn’t ancient history we’re talking about.

Looking Backward

The bigger issue with this whole exercise is we’re looking backwards. And we know that US stocks have performed the best … looking backward. We don’t know what will happen in the future. In fact, from 1970 to 2009 US and International stocks essentially gave you the same return. You could have reasonably, at that point, split your equity allocation 50/50 between them, given that it was basically a coin flip.

That would’ve been the wrong choice, of course.

Past performance does not guarantee future results. It says that on every fund you can buy.

There have also been long stretches where 10-year Treasury bonds beat stocks – 21 years from 1929 to 1949; and 19 years from 2000 to 2018. Gold beat stocks from 1971 to 1980 and from 1998 to 2025!

The point is we don’t live in an endless backward looking track record. We’re investing situationally in finite time periods.

I was watching another podcast/video recently with MIT Professor Bob Pozen and he was saying essentially investors are too conservative. Instead of having a 60/40 stock/bond portfolio, it should be 90/10. Ok, that may or may not be true, but his reason was that if you look back 40 years you would have made a lot more money owning more stocks than if you had more bonds in your portfolio.

Well, duh. We know that, because it’s already happened. And we could start taking that to more extreme conclusions: Why would you invest in the S&P 500 when you could’ve just invested in the tech sector? Everyone knows that’s what made the most money. Or why would you bother with the whole sector when you could be in just Nvidia, Amazon and Apple?

Because we Don’t. Know. What’s. Going. To. Happen.

Think of it this way: it’s 1970, the “Nifty Fifty,” the top US companies, ruled the market. It was time to get out. It’s 1980, gold roared through the 1970s. You wanted nothing to do with gold for another 20 years. It’s 1990, Japan is the biggest stock market in the world! It went in the tank for 30 years. It’s 2000, US stocks just ripped through the 90s. Lost decade for US stocks. It’s 2010, US stocks are dead. They’ve been dominant ever since. I’m not saying there’s a pattern, but there might be a pattern.

I actually don’t care what anyone wants to invest in, but I do scrutinize the reasons. You don’t say, “I’m investing in stocks because they’ve done the best.” You say, instead, “I’m investing in stocks because the reward from profitable businesses should be greater than a guaranteed fixed income payment from the government.” Or, “I know stocks are expensive, but the earnings justify the valuation.”

My personal view is that if you’ve got money that isn’t locked up for a long time (i.e., your 401k), you should at least have some backstop in case the stock market doesn’t deliver; in case you have an extended layoff; an ongoing medical problem; a massive home repair; etc. Maybe that’s an emergency fund, but in reality, if you have a large emergency fund, that’s effectively a cash position in your portfolio, and you’re not as fully invested in stocks as you may think.

The S&P 500 has gone up 15% a year for 10 years. The Nasdaq has gone up 21% a year for 10 years. Will it continue? Maybe. If it does, and that’s where all your money is, congratulations, you’re going to be very rich very quickly.

I just think it’s reasonable, if not wise, to diversify, at least a little bit, away from US large caps. In particular US large cap tech.

Let’s quote the famous investor Howard Marks: “Investment risk comes primarily from too-high prices, and too-high prices often come from excessive optimism and inadequate skepticism and risk aversion … When everyone believes something embodies no risk, they usually bid it up to the point where it’s enormously risky.”

I’m not calling for a crash. I’m not predicting a lost decade. I don’t even have a problem with it, if you truly believe VOO/QQQM/SCHD is the best portfolio. It might be. I just want to get away from selling the most expensive asset class in the world as diversification.

This is not financial advice.

My son’s first grade classroom only has 15 kids in it. It’s sort of amazing because my entire life all I ever heard about was the absolute quagmire that was classroom size. There were simply too many kids to a classroom. Your child could never learn in a classroom of 25 or 30 kids!

Now we’re facing a crisis over low enrollment so severe schools are losing funding and considering closing. This trend was exacerbated by the … pandemic … but it really has to do with declining birth rates.

People aren’t having children and really, who can blame them? Sure there are always going to be personal and spiritual reasons why you’d want to have children, but from a macro perspective why should you? Because there’s so much child care support? Because health care is so cheap? Because the air is so clean? Because it seems like there will be so many promising careers in the future?

Things look kind of bleak, largely due to … Ai. College students are booing the mere mention of the technology at graduation ceremonies. Can you blame them?

Sure, ChatGPT will update your resume, you just won’t have a job to apply to. Meta just laid off 8,000 employees with an email, and its using Ai to track what their workers do on their computers so they can train their Ai models. It’s dystopian. Maybe even Kafkaesque.

Have you been on LinkedIn lately? Just go on LinkedIn. It’s really bad. Just go look. I won’t even get into what’s going on there, but it’s a ritual humiliation. It’s like watching people get flogged in the public square. People can’t get corporate jobs at any level. There’s also a litany of people writing on Substack about how they either quit or lost their job, and then just didn’t find a new one. They call it a “transition.” That’s sort of like when Billy Crystal’s character from City Slickers came to his child’s classroom on career day and said, “in your 50s you’ll have a minor surgery. You’ll call it a procedure. But it’s a surgery.”

I’m worried about the economy. I’m worried about the middle class. However, the unemployment rate is at or near historic lows.

The stock market is at or near historic highs. The IPOs of companies like SpaceX and Anthropic could be valued at more than a trillion dollars. We’re not in what you might have thought of as a traditional recession. There’s still so much money floating around the system. There’s seemingly so much money people on the high end will pay any price for what they want.

People are out here paying thousands or even tens of thousands for World Cup tickets. The top ticket for the final match in New York is going for more than $30,000.

If you’ve got the money, you’ve got a lot of it.

However, on the whole, wage growth seems to have stagnated. According to a Pew Research report, while wages have beat inflation for the last 25 and 10 years, they’ve lost to inflation in the last five years.

We were living in lollipop land during the 2000s and 2010s, because things were relatively cheap. Inflation was persistently low. Now, even if you have a job, you’ve taken a silent pay cut.

My fear is not that we’re on the precipice of a spectacular crash a la 2008, it’s that we’re in the midst of a slow, painful squeeze. In other words, we may not fall off a cliff, but we will be roasted over a spit. Rising inflation due to the fallout from extensive stimulus and pent up demand after the … pandemic. But we won’t talk about that part of it. We’ve also recently had big tax cuts – inflationary. And an oil shock war – inflationary. The absolute rate of inflation is not currently very high, but it’s on top of a much higher base. Gas prices have skyrocketed as salt in the wound.

That’s why it feels like you’re in a blender.

Here’s something to think about. As of this writing, as well as stocks have done, the best performing major assets of the last five years have been … gold and commodities.

5 Year Annual Returns

• iShares Gold Trust — 18.60%

• Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF — 13.07%

• Vanguard Total Stock Market ETF — 12.78%

If you’d told me just the part about gold and commodities, and I didn’t know anything else, I probably would’ve conjured up a vision that looked something like Mad Max: Fury Road. A desperate, lawless race for resources.

The surge in energy commodities is also part of the Ai story. We need the oil and gas to fuel the data centers. I don’t know how bad the environmental impact of Ai is going to ultimately be, but it’s at least alarming. Not that we shouldn’t have already been gravely concerned about the state of the environment. Getting back to that thing about why someone should want to have children under the current setup. Well, why should they? And that’s just one piece of the Ai problem, never mind the whole thing about it taking everyone’s jobs.

But the train is so far out of the station, there’s no turning back. I hope better technology and economic interest is able to solve or mitigate some of these issues. It’s like, we want to ruin the environment because we could make more money doing so, but if it gets to the point where it’s so bad it’s impeding our ability to increase profits, we’ll need to change that. We want to replace everyone with Ai so we can make more money, but if we displace so many people they can’t buy our stuff, we’ll have to reverse course.

I guess what gives me some hope is that the classroom sizes used to be too big. I mean it was a major problem. It was presented with such hysteria that it almost seemed hopeless. Now we have the opposite problem.

Often worst case scenarios turn out to be just that.

There’s a Franz Kafka story called In the Penal Colony. It’s about this island that’s specifically for government officers to slowly torture prisoners. A machine painfully tortures people over the course of 18 hours, and in the final six hours the accused have a beautiful spiritual epiphany as they die. The officer in charge of the machine goes on and on extolling its virtues while a traveler to the island looks on in horror. Eventually they realize the machine, which used to draw large crowds, has fallen out of favor and stop using it. I feel like the next economic cycle could feel a little bit like that. Slow, painful torture, followed by epiphany and a new system.

To learn more about navigating different investing environments without having an opinion on macro events, read my article on trend following.

Or consider reading my article on investing during a job loss.

This is NOT financial advice.

Someone asked me recently, why isn’t the stock market down more given…everything that’s going on. We’re at war with Iran and I think it would be hard for even the most astute observer of geopolitics to figure out where it’s heading. It’s also a war accompanied by an oil shock, with crude oil reaching more than $110 a barrel at one point and gas prices skyrocketing.

In addition, job growth seems to have slowed to a crawl, if you can even count on the data given some dramatic revisions.

The questions become, are we going to see downstream inflation because of oil or other supply disruptions? Are we going to have a recession? Are we going to be in a prolonged armed conflict?

Scary stuff. Yet the global stock market is up 2.5% as of this writing and the US stock market is down less than 1%. Not exactly cataclysmic.

I asked this person if they’re selling stocks? The answer was no. In fact, they’re likely not going to sell their stocks under almost any circumstances.

There’s your answer to why things in markets aren’t worse. People just aren’t selling.

At least that’s part of it.

Your Philosophy

In some ways it comes down to your philosophy on the markets. Is, for example, the stock market simply a place to take partial ownership in businesses? If so, and you imagine you’re the owner of a business, you’re not going to sell it because of a war. You’re not going to sell it because of a rough quarter or a bad year.

For all the concern – and this is not to say it’s misplaced – about degenerate sports gambling and crypto and Robinhood and Kalshi, there are millions of people who have a death grip on their target date funds or their S&P 500 ETFs.

They’ve been richly rewarded over the last decade and they’re not touching that money regardless of the mind-boggling chaos of politics and world events.

What would cause you to sell your business? Forced liquidation. You need the money. You’re out of work and have bills to pay. Not global events outside of your control.

This market is stubborn. It’s been volatile but the volatility hasn’t been that steep.

There have only been 16 years in which US stocks finished down more than 10% in a calendar year.

Years with >10% Decline

Modern Era (Post-1957)

1957, 1962, 1966, 1973, 1974, 2001, 2002, 2008, 2022

Pre-1957

1929, 1930, 1931, 1932, 1937, 1940, 1941

The inflationary 1970s; the Dot Com Bubble; the Great Financial Crisis; the Great Depression; World War II. It takes some massive events to have a double-digit decline over the course of a calendar year. This is not to dismiss the fact that there have also been multiple decade-long periods where you’ve lost money in US stocks – broadly speaking the 1930s, 1970s and 2000s. And frankly, I’m not sure anyone can reliably say how they would behave during a bear market that prolonged unless they’ve lived through it.

The point of this is that it seems like it’s going to take some significant economic pressure – not just volatility – to create a significant and sustained decline in the stock market. Recession, inflation, long wars.

I also think with the onset of AI, there’s an underlying sense that you may need to own assets to survive. Your job could be replaced by a robot, but the companies profiting from it can’t replace you as a shareholder.

Depending on how far down the doom spiral you want to go, your stocks might be your salvation if your profession becomes obsolete.

There’s also the so-called wealth effect. While your career prospects may be dwindling, your portfolio has buoyed you during this bull market. Momentum is a powerful thing. Selling your stocks now might be almost like biting the hand that feeds you. As a trend follower myself, what keeps me bullish is the trend, not my opinions.

A Strange World

It’s been an extremely noisy start to the year. You’ve got massive geopolitical tumult. Two of the largest macro assets – gold and oil – have seen double-digit declines in a single day! And yet, these are two of the best performing assets year-to-date.

• The ProShares K-1 Free Crude Oil ETF is up 44%.

• The iShares Gold Trust Micro is up nearly 10% (and up almost 60% over the last 12 months).

• The Invesco Optimum Yield Diversified Commodity No K-1 ETF is up 28%.

When you see commodities and metals spiking, you might think the world is blowing up, and one could argue that is, indeed, what’s happening.

However, if you look at the major stock indices, they wouldn’t tell you much.

Opening up Apple News is aging me years. S&P is flat.

I’d be lying if I said I knew what was going to happen next. But investors are holding tight, really tight. Some of it might be optimism, some of it is complacency, some of it is a feeling that there is no alternative.

This is not financial advice.

Believe it or not, we’ve come to the end of another year.

We’re here. I can say that. It’s been an unrelenting hell every step of the way – with the affordability crisis, AI, social media, TikTok. Politics. Wars raging. Remember at one point we bombed Iran and that was a big deal?

Portfolio manager Mike Green wrote recently that a household income of $140,000 is the new poverty line. In his estimation, the costs of child care, health care, housing, transportation, etc. have become such a burden that the only way to live a quality life is to be so rich it doesn’t matter or so poor you’re getting the benefits of Medicaid and food stamps.

Meanwhile, the Dean of Valuation Oswath Damodaran was on the Prof G Markets podcast saying there is nowhere to hide in this market and he’s considering buying…collectibles.

And legendary financial author Larry Swedroe had a warning for investors: bull markets don’t last forever. He says the math simply doesn’t support ongoing high returns, or maybe even any returns.

I’ve had several people ask me if we’re in an AI bubble.

Everything is so expensive it seems like a lot of people are just going once more into the breach with no idea how they’ll survive.

Yet… yet… despite all that, the returns on all kinds of investments in 2025 have been phenomenal.

The AI Story

The big narrative that everyone is talking about, of course, is AI. And, indeed, the iShares A.I. Innovation and Tech Act ETF is up nearly 27% (at the time of this writing). This includes companies such as Broadcom, NVIDIA, Microsoft, Snowflake and Alphabet (Google).

That is a great return, however, it’s not nearly the best investment of 2025 (more on that later).

Many suspect we’re in a bubble that could pop any minute. I suspect part of that is because we’ve all used AI now – we’re familiar with what it can do – and it’s…fine. It’s a handy tool. It’ll rewrite your resume and make funny pictures.

But it doesn’t really do anything that matters in our lives. I’d say it’s not nearly as helpful as say…Google Maps. It’s a parlor trick – hey look what the robot said!

They say it’s like having the brain power of 10,000 PhDs. It’s really more like having a replacement level copy editor or graphic designer, whose work you have to double check. Part of the trick is that it will keep giving you the answers you’re looking for, which feels almost revelatory, until you realize half of what it’s saying is just completely wrong.

Take ChatGPT by OpenAI as an example – 95% of its users don’t pay for it. It’s losing billions and billions of dollars.

No one pays for it, because it doesn’t do anything all that worthwhile. If you run out of free time on ChatGPT, you just switch over to Gemini or Grok or Perplexity or Claude. They’re all more or less the same.

For the general user, it’s just a commodity. And that’s fine. It can be a useful tool. It’s not yet transformative. The big companies are spending massive amounts on it in the hopes that it will unlock some massive “productivity gains” (read: profits).

At the same time, tech companies have laid off nearly 50,000 people in the name of AI, even if AI isn’t necessarily doing those jobs, according to a report from the LA Times. The following from the article sums it up perfectly:

Many big companies, especially in the tech industry, also “overexpanded during the post-pandemic boom and ended up with very large labor forces,” said George Denlinger, an operational president at staffing agency Robert Half.

For that reason, the emphasis on AI can sometimes be misleading. “They talk about using AI to do those jobs in the future, which can amount to a kind of ‘AI-washing,’” he said. “They blame AI even though it is not the only reason layoffs are happening.”

Shiny Metals

Despite all the talk about game-changing technology, probably the best investment of 2025 was in shiny metals.

Gold is up nearly 60%; silver is up more than 80%. The gold miners were up nearly 150%.

To my credit, I wrote about the iShares Gold Micro Trust (IAUM) as a potentially interesting ETF to add to a portfolio at the beginning of the year.

Now you’re going to hear a lot of explanations for why gold is going up so much. Commentators will cite geopolitical uncertainty; a weak US dollar; lower interest rates; inflation; China’s buying it.

You can twist yourself into a pretzel trying to explain it but you’ll ultimately end up contradicting your own explanation. My reason for owning it is that central banks around the world consider it a trusted currency; it tends to be uncorrelated to stocks and bonds; and it does actually have some practical uses for jewelry and electronics.

Silver, often referred to as “leveraged gold,” also has a strong history as currency and considerable industrial applications.

The Spanish conquistadors wiped out entire civilizations in Central and South America in the 1500s partly in search of gold and silver. It’s amazing to think that 500 years later, we’re still chasing the same shiny objects.

The Foreign Resurgence

It’s been downright blasphemous to challenge the superiority of large US tech stocks and the S&P 500 for more than a decade, but this year that changed in a big way.

The Cambria Global Value ETF (GVAL) was up more than 50%. Its holdings are in countries such as Columbia, SIngapore, Czech Republic, United Kingdom and Poland. It’s invested in a lot of banks and telecommunications companies. Who would’ve thought this mix would so soundly beat the big names we all know in the US?

The iShares Latin America 40 ETF was also up more than 50%. The Alpha Architect International Quantitative Momentum ETF was up more than 40%.

These aren’t exactly household names. The S&P 500 managed a piddly 17% gain (as of the end of November). Broadly, international developed and emerging markets were up close to 30%.

Again, I’m not going to try to give some big macro economic explanation for it or sight a bunch of indicators that may have predicted it.

It’s a good reminder, though, that one asset class or country doesn’t dominate forever. You never know when there will be a major sea change or mean reversion. There’s a big world out there and this was a massive year for international investments.

You Can’t Predict

Some other notable oddballs that performed amazingly well in 2025 – the VanEck Uranium and Nuclear ETF, up almost 60%; iShares Global Clean Energy ETF, up almost 50%; iShares Biotechnology ETF, up more than 30%.

If I told you the trade of the year was going to be foreign value stocks and precious metals, I don’t know that I would’ve got much buy in.

Humility, humility, humility. We don’t know what’s going up next or what’s about to crash.

However, despite an all around great year for investments – and full warning, these numbers could change in the next month – everyone seems economically sort of miserable. The drudgery of chronically high prices – you can’t even buy a burrito anymore as Chipotle stock reflected. The confusion and chaos over tariffs. The insanity of health care premiums. The freeze in hiring and home buying.

I don’t know what will happen next or what we’ll do about it. For now, as fragile as it all feels, just keep making money.

This is not investment or financial advice. These numbers are subject to change before the end of 2025.

I’ve mentioned before that roughly 20% of my investing allocation is to a strategy called trend following (often referred to as managed futures). I thought I would dive more into what that means because there are many ways one could define it. For me, I simply want to systematically follow trends in the market. When stocks, bonds, commodities, currencies are going up, I want to own them; when they’re going down, I either want to be short or just avoid them.

To illustrate it with a simple example – it’s like always being late to arrive at a party and early to leave. The hope being you’ll catch the fun parts and miss the boring or disastrous parts.

Sounds good, right?

Well, not necessarily. Because just as often as not, you show up at the wrong times and leave before things get good again.

It’s also maddening because different funds use different signals to identify a trend and so there is wide dispersion in performance.

The biggest ETF in the space (which I own) is the iMGP DBi Managed Futures Strategy (DBMF). It’s got about $1.5 billion in assets, which is actually not that big in the asset management industry. I’ve written about it before, but essentially it looks for the winning trades among hedge funds and then attempts to duplicate them. It’s up about 7% year to date. A global 60/40 stock and bond portfolio is up 14% by comparison.

DBMF owns futures contacts (derivatives) in things like the S&P 500, gold, crude oil, the Japanese Yen, the US 10-year Treasury. It’s trying to capture, in the biggest of pictures, what’s working and what’s not.

Trend followers often use futures because you can get access to lots of different markets — such as wheat futures or soy beans or live cattle — and because it’s easy to get a futures contract to go short (bet against) different assets.

If, since 2020, you’d held a portfolio of 50% in the Vanguard Total World Stock Market Index (VT) and 50% in DBMF, you’d have earned about 10% a year, compared to 12% a year if you’d been 100% in global stocks.

However, your worst drawdown would have been only 11%, compared to 25% for global stocks. Your worst year would have been up 2% compared to down 18%.

Therein lies the promise of trend following. Similar returns to stocks, far less risk. Volatility dampener. Crisis alpha. In 2022, when stocks and bonds were down approximately 20% due to a major spike in inflation, trend following strategies were up 20% because they were short bonds and long commodities. Your typical buy and hold strategy — i.e., a target-date fund or a stocks/bonds mix — cannot go short, cannot get in and out. That’s most often a good thing, except when it’s not.

Stocks and bonds tend to do well generally with occasional periods of doing extremely bad. Trend following, in contrast, tends to do meh most of the time with occasional periods of doing extremely well.

The Drawbacks

The problem is after an absolute banner year in 2022, trend as a strategy has been mediocre at best and downright disappointing at worst.

Take a year like this, some strategies are down close to 10%. How the heck can you be down when stocks, bonds and gold are all up and up a lot?

During the “tariff tantrum” in March and April, these funds were all positioned wrong. By the time they changed course, the market rebounded and they were slow to get up to speed.

This can happen for years.

In fact, the entire 2010s were basically a dark winter for trend following/managed futures.

These strategies also tend to be rather inefficient in a taxable account, because they make a lot of transactions, and due to the way futures are taxed.

Not to mention the fees are usually high compared to broad market indices.

Why I Trend Follow

And yet, I choose to utilize this strategy.

Why?

Because, as silly as it sounds in a time when the market is going up seemingly without fail, there are still unaccounted for risks out there. Things could get weird and it’s possible that the tailwinds that have fueled stocks and bonds could stall out.

In the last 100 years or so, there have been three extended periods that were very much not like the one we’re in today. I’m talking about, of course, the Great Depression which rolled into World War II. Stocks spent almost two decades underwater. Then there was the inflationary 1970s which, to my understanding, really sucked. And there was the 2000s, where we saw the tech bubble burst; the 9/11 terrorist attacks; and the Great Financial Crisis.

It’s not always this easy to make money. So if there’s a strategy that can do really well even when all else fails, some of those drawbacks become far less significant.

We don’t know when the next bad period will come or what will cause it, but trend following doesn’t attempt to predict trends, only follow them. It can potentially – and admittedly imperfectly – adapt to any environment.

Stocks, on the other hand, depend on the stability and growth of profits; bonds on the worthiness of credit and the path of interest rates. Trend doesn’t necessarily depend on any of these factors being up or down. It can go whichever way the wind blows.

That’s another attractive aspect of the strategy. You don’t have to decide if it’s a “good time” to invest. You don’t have to have any opinion about the economy or the government.

It doesn’t have to be complicated either. I have my own DIY trend following strategy where I simply follow the last three months’ price movements and pick the best performing ETFs over that time period. If nothing was performing well, I’d go to cash. That’s it. That’s all there is to it.

I own things I don’t want to own and sell things I don’t want to sell, but I do so not based on opinion, but on price. I make no assumptions about the state of the world, valuations or quality of companies.

I go where the price goes. In this strategy, nothing else matters.

This is NOT financial advice.

Would you run into a burning building to save your children? Of course. Your dog? Maybe. What about to burn $300,000? No, of course, that doesn’t make sense.

You spend money either because you have to (paying your bills, buying food) or because you’re getting some kind of value (a luxury, convenience, experience). You wouldn’t spend money to be miserable or to put yourself in financial jeopardy or to chain yourself to a fence. Those are bad value propositions.

I’ve noticed lately there are some major parts of the American experience where the value proposition no longer makes sense. The costs are so astronomical that any enjoyment you get is either negated or significantly lessened.

Travel

Let’s start with the most discretionary item – travel.

It now costs $250 a night to stay at a Holiday Inn in Cleveland. Nothing against Holiday Inn or Cleveland, but you get very little in return except a bed to sleep in.

Air travel is going to cost you $1,000 or more to go most places, and the experience is actually deleterious. It reeks havoc on your mental and physical health. It’s crowded, laborious, dehydrating and if you’re unlucky, downright terrifying. You know when you’re waiting to take off, and there’s no air and you’re just sweating, listening to screaming babies, smelling farts and watching propaganda videos. These are torture techniques!

The average cost of a vacation is now more than $7,000, and only 46% of US adults planned to travel this summer. Many can’t afford it, but even for those who can, it’s often just not worth it.

You have to go through this horribly draining gauntlet to get to your destination; then you’re either throwing your dirty towels on the floor of an overpriced hotel or you’re doing dishes at an AirBnb. Vacation is supposed to be an escape from the drudgery of your regular life, not an extension of it.

We learned recently that many of the major airlines make all their profits from credit card issuers paying for points, not from ya know, flying passengers around. Given that incentive structure, just think about how they’re going to treat you? You’re more of a mark than a customer.

Home Ownership

Meanwhile, the Wall St Journal reported that American mobility is stalling out. People are not moving, they’re not buying new homes or getting new jobs.

Some families are even woefully choosing to live in … a smaller home. The toaster is in the dining room and they have an “apartment kitchen.” Well, shit, this might as well be Soviet Russia!

A 30-year mortgage has a rate between 6 and 7% and home prices are stubbornly high in some areas. And since people are not moving jobs, they’re not getting big raises. It’s just not worth it to upgrade to a bigger home or buy a new one.

The unfortunate truth is that home ownership is really a bad deal. Even at lower rates, you’re still strapped with enormous liability and extraneous costs that go far beyond the mortgage payment.

While many feel locked out of the housing market, they may wind up better off for it. What if you save and invest your money rather than pouring it into repairs, renovations, landscaping, roofing, HVAC, plumbing, pest control, broken appliances and property taxes. It may be a rewarding lifestyle, but it is not the key to building wealth or happiness.

People will say, well, it goes up in value. Yes, but that value is constantly getting eaten into by what are essentially fees – the maintenance, taxes and insurance. Not to mention the personal labor, the headache of “keeping up with a house.” Something is always going wrong and it’s always your responsibility.

There may have been a time when the pricing was reasonable enough that it made sense, but right now it’s a square peg in a round hole. There’s a lot of pressure to “get into a home” and there are endless costs associated with owning one, but what is the payoff? Constant stress?

The problem is – and I’ve been guilty of this myself – when you shop for a house, you lose your critical thinking skills. It’s only apparent after you’ve taken the plunge and you’re suddenly renovating every room and painting every wall. This house you supposedly loved so much now needs to be changed in every way, practically down to the studs.

It’s not just me saying this – home sales are frozen. Either people are realizing the value proposition is not there or they simply have no choice.

Education

Part of the reason home sales may be down is that people can’t get a job out of college. Or they can’t get a good job. They’re living at home or with other relatives, saddled with debt. This has been well documented.

I happened to stop by Notre Dame recently on a road trip. Beautiful school. You can’t help but drink the Kool-Aid when you’re there. My 7-year-old son loved it. However, I looked up the total cost of going there and it’s more than $80,000 per year. So more than $300,000 for four years.

At some point, you have to ask yourself if it makes sense, even if it is a great school. Is it going to pay off monetarily or otherwise? Are you paying for a degree in something that will be rendered irrelevant by AI or some other technology.

The average cost of going to college is $38,000 per year or $150,000 for four years. That money can’t be better invested in another way?

We’ve been conditioned to believe that it’s risky not to get a degree, but perhaps the risk has been completely reversed. Is it a six-figure bet families will continue to make? You might be better off becoming a plumber or working a service job, saving money and then investing it – be it in a business of your own or financial assets like stocks.

If you already have more money than you know what to do with, who cares, go ahead and overpay for shitty trips, shitty assets and a worthless degree (I kid trips, homes and degrees!). But for those whose dollars mean something, there has to be a reevaluation of some of this spending. Things are changing too rapidly and costs continue to rise to a level that feels off to me, at least given what you’re getting in return.

I’m searching for a better value for my money moving forward.

This is NOT financial advice.

I’ve been watching a lot of Dave Ramsey lately. He’s a no nonsense, common sense personal finance guru who focuses primarily on getting people out of debt. Now there’s a lot of people who don’t believe in his investment advice or his political leanings, but I find his folksy sayings quite entertaining. The stories of his listeners are enlightening.

Some of his callers have gotten into debt from student and car loans; others from foolish spending or bad business ideas; and still more who’ve faced some kind of personal tragedy.

He steers these people steadfastly into paying down their debts by working extra jobs, eating nothing but “rice and beans” and budgeting every dollar with the outcome on the other side of being free. Free from debt, because after all, the “borrower is slave to the lender,” as Dave says.

For the most part, it’s hard to argue with any of this. Of course, you don’t want all these debts hanging over your head. Particularly high interest credit card debt or car loans on depreciating assets. We know all that. You pay too much towards debt, you can’t save, you can’t invest. It sucks.

However, the very rich don’t think about debt in terms of fear. For them it’s just another financial tool in the toolbox. You may have heard of the concept of “buy, borrow, die.” Essentially instead of paying for stuff, they just borrow money (tax free) against their stocks or real estate holdings at a low rate. They don’t pay capital gains and eventually they just die and pass the assets onto their heirs.

More commonly, if you have a low enough interest rate on your mortgage, you might choose to invest money you could otherwise use to pay down the mortgage. If I’m borrowing at 3% and I can grow my money at 6%, it’s presumably worth more to me over time than paying down the loan. Now Dave would disagree with this concept, primarily because of the supposed peace and freedom that comes with paying off the mortgage as soon as possible.

But in this case, I wouldn’t get any peace because paying off a mortgage doesn’t negate the endless costs and massive liabilities associated with owning a home.

I’d rather have the debt than flush all my money into a house.

Borrowing for Investments

Another way you could use debt (or leverage) is to borrow money against your stocks (a margin loan) to purchase more stocks. This comes with a lot of problems because not only could you start losing more money than you have, but the broker could ask for that money back at any time. This sounds like a generally pretty bad idea.

However, I think you could use leveraged ETFs in a way that makes some sense. This doesn’t require actually taking out a loan of any kind, but the leverage is embedded or implicit in the cost of the fund, often at a competitive rate.

Let’s say, for the sake of an example, you want to be invested 100% in US stocks, but you still want to diversify with some other assets like bonds and gold.

You could put half your money in the Ulta S&P 500 ETF (SSO), which gives you 2x exposure to the S&P 500. Then you put 25% in a bond ETF and 25% in a gold ETF. Ultimately you have a portfolio that looks like this:

100% US stocks

25% Bonds

25% Gold

Is it risky to have a 150% portfolio using leverage? Yes, but not necessarily more so than just owning the S&P 500. During the last 10 years that portfolio would’ve done about 1.20% per year better than the S&P with a slightly higher risk adjusted return as well.

Another reason you might do something like this is because you want to be fully invested, but hold on to more cash.

Let’s say you happened to come into a lump sum, say $10,000, and you wanted to put half in stocks and half in bonds. Problem is you’re also worried you might need $5,000 for a new air conditioner because the one you have is 20 years old.

You could put $5,000 into the Return Stacked Global Stocks and Bonds ETF, which gives you 100% exposure to stocks plus 100% exposure to US Treasury bonds. Your remaining $5,000 goes into cash, in case you need it, and you still have the investment portfolio you wanted.

I’m by no means suggesting someone should do this. But is it unreasonable? I don’t think so. There are useful ways to use debt to your advantage in certain circumstances. If I needed money and didn’t want to sell all my stocks and bonds, I’d consider something like this. I use RSSB in one of my accounts so I can add more diversifying strategies.

Big institutions, such as pension funds, have been doing this kind of thing for decades and now it’s fairly easy for the average person, so why not take advantage?

Your House is Leveraged to the Hilt

Now Dave would say the only thing you should be invested in is “good growth stock mutual funds.” However, as much as he’s against debt, he does allow for getting a mortgage to buy a home (paying it off as quickly as possible).

I think most people would consider a mortgage “good debt,” but leverage is leverage. Most people are taking on hundreds of thousands of dollars for this privilege of owning a home.

If you take a margin loan, you could lose more money than your initial investment. If you use leveraged ETFs, you could lose all your initial investment but not more than that. If you default on a mortgage, you could lose your home and all the money you’ve put into it, plus face a series of financial challenges for years. Your credit is destroyed, your wages could be garnished.

Borrowing to buy a home comes with its own set of risks. To Dave’s credit, he pushes doing everything you can to pay it off. But it’s a massive loan that most people don’t have collateral to pay off. And there’s this hamster wheel of work and income that you must maintain to keep paying for it.

You could also use your home to take on even more debt by borrowing against it. I’m getting emails constantly from my mortgage provider urging me to take out a home equity loan. Yay! Another debt payment!

In a recent email they wrote, “float yourself some cash, no sweat … whether it’s a big vacation or a much-needed upgrade, summer can get pricey.”

So the mortgage company wants me to take a loan against my home, which I’m already borrowing money to pay for, so that I can have a fun summer filled with cool trips and a new bathroom.

You think this isn’t a dirty game? My mortgage is like a ticket to getting staked at the casino.

Dave is right. The debt cycle is insidious and he often tells people they simply don’t have the money to buy a home or invest. You can’t invest if you’re broke.

Most people probably shouldn’t have any debt.

But I also think I can use it judiciously to make some slight optimizations in my portfolio.

Or I could buy a swimming pool.

This is NOT financial advice.

Some research suggests the grief experienced when losing your job can be worse than that of losing a spouse. When your spouse dies, you’re sad, but you bounce back. When you lose your job, you may never be the same.

In a way, your job is similar to your husband or wife – you’re endlessly annoyed with them, and you also count on them for everything.

Getting fired or laid off is a threat to your financial viability, your sense of self worth, familial relationships and friendships, and just your overall health. So much of what you cared about and counted on for your future just disappears in smoke.

Your last day is right now.

To make matters worse, the company that just had to get rid of you is often immediately hiring someone very similar to you.

It’s embarrassing, humiliating. There’s nothing quite like the pang of having to explain it to someone and then seeing the look of pity on their face.

But if you’ve been through it you don’t pity and you don’t judge, you just shake your head. Know how that feels.

I was laid off multiple times at particularly inopportune times. The first was just a few months after my son was born. The second was in the depths of … the pandemic. Thank you! And recently my wife experienced her own job loss in what seemed like a very stable position.

The truth is we’re all expendable. They can take us out pretty much at any time, for any reason. I was caught off guard the first time, but not after that.

Unemployment “insurance” only gives you about half your salary for about six months. Yes, of course, there’s the idea of the three or six month emergency fund, but what if that’s not enough. You may need a bridge that could last you years until you can access your retirement funds.

I try to manage my portfolio knowing it’s a possibility.

Liability Matching

One of the things I do is have enough short term liquidity available to pay for liabilities – the mortgage, car payments, student loans. This means holding things like cash equivalents, short term bonds and 100% buffer ETFs that cover as much of those liabilities as I can.

If worse comes to worst, and a job loss is extended, at least there’s enough to keep the lights on and it’s in assets that aren’t subject to the ups and downs of the stock market. I’m likely sacrificing returns for the sake of security.

This sometimes means having a more conservative portfolio, but when you’re in midlife you often have more at stake than earlier or later in life. When I was younger I didn’t have a problem pouring money into stocks and I might not later if I didn’t have any big liabilities, but right now I keep a big short duration bucket for times like these. I don’t want to have to sell stocks if they happen to be in a major drawdown when I need the money.

Taxable Account

I’m a big believer in saving as much as possible in a taxable brokerage account along with your retirement accounts, because if you need money you can pull from it whenever you want without penalty, unlike a 401k.

During the “tariff tantrum” market crash in April I talked about what to do in a market crisis. But what about a personal crisis?

There’s something called sequence of returns risk, where some really bad returns early in retirement could wipe you out before you have a chance to recover. However, retirement is not the only point in time you might need to draw down capital.

You don’t want to be forced to sell your house or liquidate your retirement accounts.

The taxable brokerage is not just an emergency fund, it’s a fully diversified portfolio. If stocks are soaring I can sell some and only have to pay the (favorable) capital gains tax. If stocks are tanking, I have the short term bucket to use while stocks recover.

If things got really desperate, you could even borrow against your portfolio, or use leverage to keep your exposure to stocks while freeing up cash. That’s probably a topic for another day.

In any case, a taxable brokerage account is a vehicle not necessarily for retirement, but for when the company you gave your blood, sweat and tears to ... retires your ass.

Capital Over Labor

As I tell my son, there’s capital and there’s labor. Labor is when you work for a store. Capital is when you own the store.

Owning assets (stocks, bonds, real estate, businesses, natural resources) is the only real backstop we have to the cruel fact that no job is really safe.

We’re all at the mercy of things that are largely out of our control. Sure, you could get let go because of dereliction of duty, insubordination or a company’s financial hardship. But in my experience, it’s often more random than that.

The consultants come in and recommend reducing headcount by 5 or 10% and you’re on the wrong list. Someone is playing a political game you either weren’t aware of or couldn’t win if you tried. You make too much money. You’re not “visible” enough in the organization.

We’re going in a different direction!

… And it’s away from you.

Hell, in the NFL and NBA they fire championship winning coaches all the time. Your quarterly performance review where you “exceeded expectations” is not going to save you.

The guillotine is coming down sooner or later. Very few get out alive on their own terms.

When you’re a shareholder, though, they can’t really fire you. I own Apple, it doesn’t own me.

As Jay Z said, “I don’t get dropped, I drop the label.”

This doesn’t mean you’re going to be leading an extravagant lifestyle without a job, but it gives you a chance to survive. At least financially.

As for your ego, your self esteem, your pride and your dignity, you’ll have to work that out in therapy.

This is not financial advice!

Well, that escalated quickly.

With the announcement of wide sweeping tariffs by the Trump administration, also known as Liberation Day – a name that would be downright satirical were it not real – we’re in a bear market! Recession on the way? Layoffs? Inflation? Deflation? Trade war? Global chaos?

Markets are in turmoil, falling sharply from their 52-week highs.

• US stocks - down 18%.

• International developed - down 12%

• Emerging markets - down 15%

• US REITs - down 15%

It’s really hard to say how much worse things could get, because we’ve never seen this before. We haven’t had tariffs like this for more than 100 years. It’s almost impossible to measure the impact, but most economists and market analysts seem to agree it’s very bad.

The thing is tariffs are taxes. Unlike what Trump thinks – that they’re paid by foreign countries – they’re actually paid by American businesses importing foreign goods. So when it costs an American company more to get something from China or elsewhere, they raise the price on the consumer to make up for it.

That’s really all you need to know. Predicting the machinations of the global economy or the whims of a president are not your job. You just have to pay the bills and make sound investments for your future.

How to Invest in a Bear Market

So what do you do amidst the chaos? You could go by feel, either sell everything in a blind panic or ride in like a cowboy ready to buy the dip. The problem is you don’t know if you’re cashing in on an opportunity or catching a falling knife. The slightest bit of news could reverse this next week or we could be heading much, much lower.

I’ve written before about my philosophy on investing and my current asset allocation, but to summarize:

40% - global stocks

30% - bonds

20% - trend following

10% - gold

Year-to-date, global stocks are down about 10%; bonds are up between 1 and 7% depending on the duration; trend is down 4 to 8% depending on the fund; and gold is up nearly 16%. So the good news is the old fashioned diversifiers (gold and treasury bonds) are working. But when the global stock market falls almost 10% in just one week it’s hard to feel good.

One of the few strategies that really worked during this selloff was the Cambria Tail Risk ETF (TAIL), up an impressive 16% over the last week, but over the last five years it’s declined about 9% per year. It’s been said often in one way or another, you’re never aggressive enough when it’s a bull market nor conservative enough in a bear market. If you’ve managed to hedge this decline perfectly, you’ve probably missed out on a lot of gains up to this point.

It’s really hard to be prepared for moments like this. People say they have the stomach to be all in on stocks (who needs bonds?!) or load up on crypto, but it doesn’t feel that way now. There’s panic in the streets already and we really haven’t gone down that much.

Facebook happened to serve me up the following post from famous money guru Suze Orman:

“Now, I know many of you are dollar-cost averaging—and that’s still okay—but please hear me on this: if you're going to continue that strategy right now, do it with seriously tiny amounts. This is not the time to be aggressive.”

Jesus Christ, Orman is fearful. Tiny amounts? What does that mean? You’re reducing the amount you’d normally contribute? That sounds like market timing based on feeling scared. If you’re investing a fixed amount on a monthly basis, why would you start putting in less when the market is 20% cheaper than it was a few months ago?

401k? I’d proceed with business as usual.

If money becomes available I’ll rebalance as I go. Holding on to cash or “dry powder” for the right time is a dangerous game, because you could be missing gains while you wait, or to Orman’s point, you rush in because you think it’s the right time and end up losing a lot of money.

If I had a lump sum that I’d just been sitting on, I’d simply allocate it to balance out my targets (40% stocks, 30% bonds, 20% trend, 10% gold). If the stock allocation was below my target, I’d buy stocks. The same with other asset classes or strategies. Those targets and strategies, of course, are going to be different than someone else’s. Some may be more or less aggressive or complex. Everyone has a different financial situation to manage.

Within my taxable account I also maintain what I call a short duration bucket with mostly short term bonds and buffer ETFs, in case I need money and we’re in a situation like this. I took this partly from Asset Manager Cullen Roche’s All Duration Investing concept. Essentially, he says you have some assets, like stocks, that are meant for long-term liabilities (retirement/beating inflation) and others like cash/bonds meant for short-term liabilities (fixing your house or car).

So in other words, you don’t buy or sell stocks based on what you think is going to happen in the next few days, weeks, months or even years. You buy stocks for many years down the road.

This would also be a time to feel really good about your 401k, regardless of what’s happening with the balance. You just keep plowing money into it, getting a match hopefully, and not worrying about it until you have to make withdrawals.

It would be almost, in my opinion, a kind of insanity to make investment decisions based on what’s happening in the world today. Look at what happened during Covid. You had an airborne virus that shutdown the economy worldwide. And that led, of course, to a…speculative bubble in meme stocks and crypto!?

If that didn’t shake your belief in making investment decisions based on macro events, nothing will.

If you’ve been to a Walgreens pharmacy recently, you probably have a sense for what a miserable state everyone is in. We’re all desperately trying to get drugs we’re dependent on, because we’re sick from chronic disease and mental illness. The people working there are trudging back and forth, overwhelmed and understaffed. Others are in cars at the drive-thru yelling through a muffled speaker, spelling out their last names.

The prescriptions people have come for are almost never available. It’s not in the system. It’s not ready. It’s out of stock. Or the insurance doesn’t cover it. The cost is $700. The employees appear exhausted and hollow; the customers often aren’t able to communicate their needs. They’re calling family members and doctors, yelling at the pharmacist.

The situation is not sustainable. And it’s a microcosm of America right now. An unhappy populace making lots of demands in a service economy where the service is terrible. You can get basically everything with the click of a button on your phone – except human decency, that’s in short supply.

Yes, the workers may not be doing a great job at Walgreens, but neither are the customers – they’re unprepared and snarly. Everyone is waiting for their reason to be dissatisfied and upset.

This experience is more than just anecdotal. A recent report called the State of the Nation project compared the United States to other developed nations. While we beat almost everyone on economic output and productivity, we’re doing downright awful in areas such as depression and anxiety, suicide, fatal overdoses, shootings, murder and trust in institutions.

And we’re in a mediocre state when it comes to child mortality, social isolation and life expectancy.

They say money can’t buy you happiness. That’s especially true if you’re depressed or worse, dead.

Profit Over Everything

Our GDP is rising, the stock market is rising, crypto is rising. It’s great to make money, but what is the cost?

Who’s enjoying it?

The answer appears to be no one.

The knowledge workers in the offices are in a state of almost constant existential dread. They’ve returned to the office for no apparent reason to do a job with no apparent meaning. But they’ve got it good by comparison. The service workers are in an endless slog – serving up high priced burritos and coffee, stocking shelves and dealing with irate consumers.

Go to any store and there’s too much going on – with the drive thru and the mobile order pickup and curbside pickup and the deliveries. Never mind the people actually coming into the store.

The Door Dashers and the Uber Eats drivers are like zombies, at the end of their desperate rope.

America doesn’t have much of a social safety net, but if all else fails, there’s Uber Eats. It’s a profession of last resort.

Why is everyone putting themselves through all this? Because the shareholders are getting seriously paid.

Despite this dissatisfaction with work, corporate profits just keep going higher and higher, topping $3 trillion in the third quarter of 2024. The S&P 500 continues to make new highs.

But who cares? What’s the point of all this money if everyone is isolated, polarized, angry?

Suicide, Depression, Murder

Think about it. We’re doing worse than the rest of the world in suicide! Depression! Murder! But our economy is doing better than the rest of the world. We’re not living through a famine. We aren’t at war. We’re actually making money hand over fist. We’re going to Disney every year.

Still, I think having so much abundance can make what’s lacking stand out even more.

My biggest issue, which wasn’t addressed at all during the presidential campaign, is mass shootings. The psychological damage of seeing innocent people get gunned down in the most sacred cornerstones of everyday life – schools, churches, parades – is devastating.

Every line that could possibly be crossed that would spark political action has already been crossed. It’s deadening.

And why can’t we address it? The gun industry is too powerful. It’s the money!

What does this have to do with with our day to day doldrums? Well, parents are struggling mightily to raise kids in the world’s richest nation, largely because of anxiety related to the violence they see around them. This leads to a bunch of overprotective, helicopter-style parenting, which creates all kinds of anxiety in the children.

Now you’ve got a nation of young people who are dangerously depressed, just staring into the sparkly doom of the phone.

According to the State of the Nation report, we’re outperforming only 1% of developed nations when it comes to youth depression. The obvious reason is because of the damn phone and social media, but at this point the media isn’t even social. It’s just a bottomless series of short video clips that form a narrative about the world. It’s evidently not a very good one.

How We’re Winning

While we may be staring into the abyss socially and emotionally, US companies have been downright kicking ass. The US stock market has vastly outperformed the rest of the developed world for more than a decade with a relentless focus on efficiency, automation, algorithms. We came out of the pandemic with a speculative frenzy, generating ridiculous sums of capital in crypto, meme stocks, artificial intelligence (AI). We had to deal with a bout of inflation but it wasn’t enough to slow down the economy.

• 10 Year Annual Return for US Stocks: 13%

• 10 Year Annual Return for the Developed World Ex-US Stocks: 6%

And somehow despite all that we had a presidential election that was about…the economy?

The economy is good. We have the best economy in the world. But we’ve lost the plot. The economy is not going to make us happy.

Our politics should be focused on things like how we can keep children safe; what can we do to improve our quality of life? Better healthcare and childcare. Cleaner air. Less assault weapons. Time off to take care of newborn babies.

But we’re not focused on those things, because who cares about all that, we need to get the money!

The truth is we have enough money. We don’t need more tax cuts, more crypto, more AI, more productivity. It’s just making the millionaires and the billionaires more millions and billions. We’ve sacrificed nearly everything — our sanity; our kids’ sanity — to the tech and the cash it generates.

We make fun of the Europeans with their long vacations and parental leave. Japan’s stock market has hardly gone anywhere in 30 years. Suckers. They don’t have what it takes to return 13% a year.

Yes, when it comes to markets, we’re winning. Our GDP is ripping while our quality of life is dipping. If you’ve got a lot of money and want to make more, you’re in the right place. But what’s it all for? If we don’t answer that question instead of constantly chasing the next dollar, our lives could get worse before they get better.

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Last year I did a detailed breakdown of how I invest. I thought about doing it again this year, but nothing significant has really changed, and I struggle with how meaningful it is given how much personal circumstances dictate one’s money decisions.

As the financial writer Morgan Housel has said, everyone is playing a different game. Everyone has different risk tolerances, liabilities and goals.

In any case, my investments essentially breakdown as follows:

• 40% - global stocks

• 30% - bonds

• 20% - trend following

• 10% - gold

Meanwhile, the vast majority of new money from my household is going into a target date fund set 20 years into the future.

But I thought it might be of interest to highlight some of my biggest ETF holdings to highlight which funds I think are interesting. I’m not recommending you buy these! I’m not saying these are the best investments right now! It’s simply food for thought. These also happen to be funds that not everyone and their neighbor owns, and I enjoy new ideas, so maybe you’ll find some here.

Again, these are not my predictions for the five best investments of the year. They’re five ETFs I think have some interesting utility in a portfolio.

1. iMPG DBi Managed Futures ETF (DBMF)

Want something a little exotic in the portfolio? DBMF bills itself as a liquid alternative to a hedge fund. Instead of paying “2 and 20” (2% management fee and 20% of profit) to a fancy hedge fund, this ETF will do it for 0.85%. That’s still a high fee for an ETF, so what does it do?

It takes long and short positions in stocks, bonds, oil, gold and currencies, with the aim of catching major trends (up or down) in the market. It rose to prominence in 2022 by being up 21.53%, while S&P 500 was down 18% and the aggregate US bond index was down 13%. How did DBMF do it? Because it can shift gears and go short stocks and bonds.

Now, of course, it’s not going to catch the prevailing trends just right every time, but for adding a layer of diversity to your portfolio and an ability to zig zag against the broader market, it has its benefits.

2. Vanguard U.S. Multifactor ETF (VFMF)

While the market cap weighted US stock market has performed tremendously over the past decade, it’s heavily concentrated in a small number of companies – names like Nvidia, Apple, Amazon, Meta. If those mega cap giants run into serious headwinds, it could mean lower returns going forward. To diversify that portion of my US stock holdings, I use VFMF, which ranks companies by a combination of factors.

The fund eliminates the most volatile stocks, and then equally weights hundreds of large, medium and small companies by “momentum- stocks that exhibit strong recent performance, quality- stocks that exhibit strong fundamentals, and value- stocks with low prices relative to fundamentals.”

The expense ratio is only 0.18%.

3. iShares Gold Micro Trust (IAUM)

I’ve written a fair amount about gold in the past, not because I’m some gold bug, but because it’s performed surprisingly well over the last 20+ years, and tends to be uncorrelated to stocks and bonds.

Last year it returned 26.85%, beating the S&P 500 by 2%. It tends to also do well in a crisis. It could also do nothing for 20 years.

In any case, if you did want to own it, IAUM is about the cheapest way to do so (expense ratio of 0.09%) and it’s highly liquid. I would be cautious owning it in a taxable account, because there’s some funky tax implications with gold. It’s taxed as a collectible and could make tax reporting a headache, which I hate.

4. Janus Henderson AAA CLO ETF (JAAA)

A collateralized loan obligation (CLO) is a simply a basket of loans usually dealt to smaller companies that are below investment grade and wouldn’t otherwise get funding. This may sound risky, but when pooled together they form a AAA-rated product that has “endured through the Global Financial Crisis and the COVID-19 pandemic.” CLOs are not to be confused with collateralized debt obligations (CDOs). CDOs are the things that blew up during the 2008 financial crisis – they’re on the naughty list.

JAAA has a similar duration and credit quality to 1-3 month treasury bills, but it’s giving you roughly 6% compared to 4%. Yes, there is still some risk of default amongst these loans, but historically they’ve held up quite well.

5. Return Stacked Global Stocks and Bonds (RSSB)

This fund is equal parts stocks and bonds, but instead of giving you 50% stocks and 50% bonds, it’s giving you 100% stocks and 100% bonds, hence the “stacked” title. It does this by using leverage, so your return at the end of the day will be stocks plus bonds minus the cost of borrowing.

The way I use this is to create room in the portfolio to add more strategies, while still keeping my exposure to stocks and bonds. So for example, if I wanted to add 10% of gold to a 50% stock and 50% bond portfolio, I could do something like this:

• 40% - stock ETF

• 40% - bond ETF

• 10% - RSSB

• 10% - IAUM

This would give me a portfolio that’s 50% stocks, 50% bonds and 10% gold. Yes, that’s a 110% total allocation.

Or if I just wanted to hold more cash for emergencies, I could have a portfolio like this:

• 40% - stock ETF

• 40% - bond ETF

• 10% - RSSB

• 10% - Cash

This would give me a portfolio of 50% stocks and 50% bonds, with 10% in cash set aside to use as needed. It’s essentially borrowing money to buy your stocks and bonds exposure, but the leverage is implicit in the cost of the RSSB ETF.

Or let’s take the ETFs I’ve mentioned in this article and do this:

• 20% - RSSB

• 20% - IAUM

• 20% - DBMF

• 20% - VFMF

• 20% - JAAA

Now I’ve got 40% in stocks with multi-factor exposure and an all-star lineup of diversifiers – 20% bonds; 20% gold; 20% managed futures; 20% CLOs. A 120% allocation.

I’m certainly not recommending that particular portfolio, and these ETFs may not be necessary for most people. In fact, they may be just adding unnecessary complexity. However, you can be quite creative with how you diversify your portfolio and potentially take less risk.

This is not financial advice.

Idiopathic. A spontaneous disease for which there is no known cause.

This is a word I’ve become very familiar with in 2024, as I’ve battled on and off bouts of severe, out of control, full body hives. Out of nowhere.

The itching is so bad I often have to sleep with an ice pack between my legs. I’ve seen the primary, the allergist, the dermatologist. I’ve been loaded up on steroids and antihistamines. Taken various blood tests.

We don’t know what’s going on.

I feel like 2024 has been a little bit the same way – I don’t understand what’s going on.

Trump won reelection? Bitcoin hit $100k? The stock market repeatedly hits all time highs, we’re at near full employment, wealthier than ever and yet everyone is very angry and dissatisfied?

I know that the price of everything is ridiculously high. Still we’re eating out all the time and traveling like there’s no tomorrow.

Inflation has come down, but that doesn’t mean prices are lower. They’re just not going up at as high a rate. And honestly, you don’t want that to happen, because that would mean while the cost of your eggs would be lower, so would your salary.

The Bitcoin Bonanza

Part of the good news is that it’s not just goods that have gone up in price, so have assets. There were lots of strategies and traditional investments that have done quite well in 2024 (as of this writing in mid-December). US stocks (VTI) and gold (IAU) are both up nearly 30%. Global stocks around 20%. Even risk-free T-Bills (BIL) gave you about 5%.

Meanwhile, the digital asset Bitcoin has skyrocketed to the stratosphere, reaching a price level of $100,000. It’s grown more than 120% in 2024, as of this writing.

Why? Because it’s providing some cool new service? Because there’s been some giant innovation? It’s the new steam engine? The new Internet?

No, it’s just a currency that isn’t really used for transactions and it goes up and down wildly in value. It’s not a business. It’s not a resource. It’s basically a video game.

Trump has talked about making it a “strategic reverse asset” and making the US the “crypto capital of the planet.” But guess what? We already are the capital. The US government owns $15 billion in Bitcoin. You know why? We seized it from criminals. And who is championing it? Trump – a criminal!

You see the fact that he thinks it’s a good idea should tell you it’s probably not. It’s sort of like when the Chicago Bears hire a coach or draft a quarterback – the biggest red flag is that the Bears thought it was a good idea.

Countries around the world buy US treasuries. Why? It’s the most trusted asset in the world. So why would we (the US) undermine that trust with something else? It’s like saying we don’t trust ourselves.

But who cares? It goes up and up and up. And the ETFs that hold it are gathering record breaking amounts of assets. The iShares Bitcoin Trust ETF alone has more than $50 billion in assets. I wrote about how the big financial players were coming to swoop up these assets when these ETFs launched and the dangers to investors.

One of those dangers was missing out, and I certainly have. But I was always taught you don’t invest in what you don’t understand. I’m still concerned people are into something that could blow up in their faces.

It doesn’t matter. Nothing seems to matter. Everyone believes they are in on the perfect trade. Whether or not it makes any sense is, at the moment, not even relevant.

Fartcoin

There’s a good line in the new Gladiator II movie. One character is being confronted by these two tyrannical twin Emperors of Rome - petulant brothers with no regard for humanity – and he says to them: if you want to torture me go ahead, but do do not lecture me.

That’s kind of how I feel. I’ll take the pain, but don’t go on and on declaring the efficacy of fast money and corrupt politicians.

If price is the ultimate validation, we have to now look at a new cryptocurrency called Fartcoin. Since being created, in October of this year, it’s gone up some 400% and gathered more than $300 million in assets. The absurdity speaks for itself.

Millions of dollars even flew into a crypto coin named after the alleged UnitedHealth CEO’s assassin. It’s called LUIGI.

There’s a company called Microstrategy that uses a convoluted strategy to essentially borrow money to buy Bitcoin, which causes the price of Bitcoin to go up, and thus the company’s stock price to go up. It almost seems like a scam. And yet you could even further juice this strategy by buying ETFs that give you leveraged exposure to this company. It’s risk upon risk upon risk.

And yet the center of this – BItcoin – is considered entirely legitimate by the most moneyed of moneyed bankers. Larry Fink, the CEO of the world’s largest asset management firm Blackrock, has said it’s a new asset class similar to gold, despite once calling it an “index of money laundering.”

Gosh, what incentive would he have to endorse it now?

I find it hilarious that Bitcoiners use the gold comparison as a way to legitimize it. Gold comes from the ground, it has practical uses like jewelry and it’s the stodgiest, most grandpappy’s grandpappy of an asset. JP Morgan used gold to buy the rights to the Panama Canal from the French in 1902. It’s been used as a currency for a thousand years. It’s also had 20 year periods where it was underwater. This is not what people are looking for with cryptocurrencies. They see them as a way to get rich quick.

Defenders of Bitcoin would say, well, it’s a finite resource. But is there real value in a finite resource that isn’t real? These coins are not virtual representations of something in the real world – like how a share of Apple stock represents ownership in the company. Cryptocurrencies – even though completely virtual – are the assets themselves.

Crypto is kind of like Trump – an obvious fraud that people have inexplicably entrusted with their future.

But what does it matter? Let the people decide. The price is going up. It’s idiopathic. We don’t know the cause.

This is not financial advice.

However, you could’ve outperformed stocks handily with another very simple asset – gold. 

This is a look at the performance of gold versus US stocks from 2000 to the end of September 2024, via Portfolio Visualizer. It’s a bit hard to take, isn’t it? You were doing the right thing, just plowing money into stocks and holding on. And what did you get in return? 

You underperformed gold by more than 1% per year on average for more than 20 years, and endured a 50% decline during 2008/2009. Gold’s biggest decline was only 43%. To make it even more painful, gold has outperformed US stocks during the last three years and over the course of the last one year. 

What’s the Takeaway? 

It’s not that you should start investing in gold, even though it may have a place in a portfolio. It’s not even that you should have invested in gold. Why? Because you can’t predict the returns of various assets. What seems like a no brainer today, might look like a big mistake 10 years from now. Of course, we’d always like to have had more money in whatever did the best, but that’s not usually possible.

We’re in a Frenzy 

I wouldn’t say that we’re in a bubble, but we’re in a bit of frenzy. Stocks keep hitting all time highs. Bitcoin is skyrocketing and collecting tons of money in its new ETFs. Home prices are soaring. People are very angry about the economy, but they’re also a lot wealthier. 

It may not feel like it but a lot of people are getting rich. At least relatively speaking. This has led to a lot of conclusions about investing that make me a bit uncomfortable. 

If you listen to investing and finance podcasts, as I do, you’ll hear a lot of things like: bear markets just don’t happen that often anymore; or, US tech stocks are where all the growth is; or, the likelihood is that the market will keep going up significantly, with a small chance it might go down a lot. 

It’s that “might go down a lot” part that many people have either forgotten or never really experienced. It’s easy to make pronouncements about how great the riskiest assets are when everything is going up and to the right. 

And make no mistake, it could continue. It could continue for a long time. But the fact of the matter is we don’t know that. I bring up the example of gold’s long-term outperformance, because it includes the 2000s when US stocks went nowhere. Of course, in the 2010s, gold went nowhere. Weird things can happen and they can happen for a long time. 

The famous quote, “markets can stay irrational a lot longer than you can stay solvent” comes to mind. 

Right now it feels like you’re almost stupid if you don’t just buy large US tech companies and crypto, and watch your account balance keep rising. However, when I started investing the consensus narrative was that all the growth was in emerging markets – Brazil, Russia, India, China. They even had a name for stocks from those countries – the BRICs. Sounds a bit absurd now doesn’t it? 

Now It’s AI 

The growth narrative right now is centered around artificial intelligence. Nvidia, ChatGPT. Exponential growth! We can’t even imagine what this technology is going to mean for the future. 

Every company – from Google to Facebook to Apple – is rolling out AI features. Google is even try to sell me a premium AI package, Gemini, that’s going to help me write emails or something. 

The truth is I don’t really understand what AI is or does. It’s synthesizing data; writing code; generating blog posts and podcasts. Fine. There are data centers and chips. Cool. If you know how to make money off of this coming boom, hats off to you. 

But there’s a chance, at least, that the AI revolution may not play out as we expect or that we may not have even heard of the companies that will be the big winners. 

Think about the fact that in the 1980s the clear world leader in technology was Japan. Its stock market and property values were worth more than the US.  

This doesn’t forecast anything about what might happen next to the US, it just shows that in the global economy, things can change quite a bit over time.  

Humility in Investing 

I’ve written before about how I allocate to different strategies for different reasons. The primary reason I try to have so much diversification is because I just don’t have enough faith in any one strategy, asset class or country to bet the farm on it. 

I try to stay away from the business of predicting the economy; where innovation and growth will come from; or which companies will be the leaders in monetizing emerging trends (though I do own individual stocks). 

Yet I’m hearing a lot of virtual certainty in financial circles. Interest rates will definitely fall. The bull market will continue. Crypto is mainstream. There’s no reason to own bonds. The top US companies will continue to dominate. It’s fine to have your beliefs, but will you be around to explain yourself if things don’t go as planned? 

On the opposite end of the spectrum, you’ve got people who are always expecting a crash. I had a car salesman tell me in October of 2023 how the market was too risky. He cashed out his 401k and got into something “safer” his “advisor” recommended. 

Well, the US stock market is up nearly 40% since that conversation.

Whether they’re pushing crypto or dividend stocks; telling me to get in or get out; I’m weary of anyone trying to push something. Or predicting what’s about to happen.

I don’t think anyone could have predicted 24 years ago – and they probably can’t believe it now – that gold would outperform stocks for as long as it has. But we didn’t know what was going to happen then, and we probably don’t know now.  

This is not investment advice. Read more about my portfolio here.

It’s that time of year when parents are sharing the first day of school photos. Often accompanied by a picture from the year before to illustrate the alarming rate of change occurring among our children. The passage of time stabbing us in the heart. 

How are they so big? How are they already in first grade? High school? Already? What happened? 

We’re all getting older and while it’s a bit of a depressing slog as adults, watching it happen to our kids is a gut wrenching heartbreak. 

They were so little! 

There are a lot of days we want to just get through and get over with as quickly as possible. Like having a surgery or a dental procedure, going to work or doing your taxes. Then there are periods where you don’t want the time to pass. Please don’t let fall come. It means my child has grown up. 

My son is starting kindergarten this week at a new school, and I just sit around with a knot in my stomach a lot of the time. Having trouble letting go. Worried about the transition. 

Knowing things will never be the same.  

I can’t imagine the agony of these poor souls sending their kids off to high school or college, where the stakes and the risks are higher. 

There are these reels I see occasionally where it’ll say something like: one day your house won’t be filled with constant screaming, there won’t be crayon on the walls, you’ll be able to use glass without it being immediately smashed and broken. Everything will be neat and clean, there won’t be laundry lying all over the kitchen, the toilets will be flushed, you’ll be able to enjoy quiet, peaceful meals. And you’ll be sad and alone, desperately missing every aspect of that chaos. 

It’s a foreboding thought. Enjoy every moment now, because what awaits you is empty, lonely and backward-looking. You had it so good and you didn’t appreciate it! 

Another reel points out: a day will come when your child will reach out to hold your hand and it’ll be the last time. 

It’s sort of bleak. There’s an underlying feeling that sooner than later you won’t be able to love your kids as much as you do now. When they’re babies, you get to hold them all the time. When they’re little, you snuggle them and hold their hands. When they’re teenagers, they hate you, but that’s still preferable to when they’re fully grown adults and they have no need for you at all. 

The Cost of Memories 

I wrote earlier this year about how people are willing to travel at any cost and bear the innumerable costs of home ownership, because they’re willing to pay whatever it takes to make memories. 

That came into stark relief recently when the New York Times wrote about how people are going into debt so they can visit Disney. Families are plunging themselves into thousands of dollars worth of credit card debt to experience the joy and capture the memories of Disney. And you know what? They’re happy about it. They don’t care about the financial implications. 

One person with a two-year-old son said, “I’ll make more money … But he’ll never be that young again.” 

This is time you do not get back. 

Another person who had no regrets about taking on debt said, “I was young, my child was young, we only had that time … Especially once your kids get older, memories are everything.”

I don’t think I agree that memories are everything, but even if they are, I really don’t agree that you should have to spend a certain amount on a particular brand to create them. That, of course, is what people in various marketing departments would like you to believe, but memories can be made on a shoestring budget. 

In fact, most kids are just as happy playing in a swimming pool at a suburban Holiday Inn as they are at Disney World. 

The bigger issue is this psycho-emotional construct we’ve created for ourselves. Time is fleeting. Create the memories now before it’s too late. Your children will only be this age once.  

It creates this expectation that we have to spend to make things special and worse that the best of times are always in our wake, rather than in front of us.

How to Face the Passage of Time  

Is it healthy to live in the past? Is it healthy to go around heartbroken all the time because your child isn’t a baby anymore?

You’ll see these calculations brought up by gurus and motivational speakers where they’ll say something like, you think you have nine years left of your kids living at home, but when you subtract all the time they’re at school or sleeping it only adds up to six months. Then they’re gone. Married. Families of their own. They’re not around. 

The same calculation is also made in reverse – your parents live in Colorado, you see them once a year. You’ll see them eight more times before they’re dead. 

There’s appreciating the moment and being grateful, and then there’s just this morbid countdown to when everything comes to an end.  

I want to be present, live in the moment and look forward to the future. Not mourning every milestone. Saying “if only.” If only I still had that old job or lived in that old house. If only my son could be a toddler forever. If only he didn’t have to go to … kindergarten. 

The fact is we don’t even really want these things to stay the same. At least not with our kids. We want our kids to move on. If you’re a parent, having a healthy child that’s growing physically and emotionally is one of the luckiest and best things you could possibly have in life. 

Trust me, I’m talking to myself as much as anyone. I’m a complete mess. Just crunched up in a ball hoping the days pass slowly. Absolutely terrified of change. And, yes, the media messaging around these things does affect me. 

Memories Are Not Everything 

I’m not entirely sure why we’re doing these first day of school photos. It’s very awkward and painful for everyone involved. This weird portraiture in the midst of a siege of anxiety. It’s the first day – everyone is nervous. We don’t have to stop and take this picture. 

Invariably, after someone posts one of these pictures, someone says: beware! Danger! Don’t give away your address. Don’t name the school! Don’t name the children! Someone is out there coming to take them. 

Never mind! We’re trying to preserve memories here. 

Let memories come at their own pace. Go to Disney when you have the money. Good memories are important, but not if they’re making you miserable or putting you in financial peril. 

Keep in mind, too, you can make memories with your kids at any age. They don’t have to be very young. Hug your adult child. Snuggle your teenager. Go on a trip with your children’s children. You don’t need to leverage their future when they’re two.

The thing is memories should be made, not manufactured. Memories are not everything and if they are you’re going to be seriously unhappy. You need a past, present and future. The passage of time is hard enough to endure as it is, let’s not treat it like a tragedy. 

What if I could make you a deal – over the next year you can earn as much as 8% (and no more) in stocks, but with no chance of losing money? In other words, if stocks go up 8%, you make 8%; if stocks go down 30%, you make 0%. 

However, if stocks went up 30%, you would still only make 8%. 

Sound good? Would you do it? 

Well, there’s a popular new style of ETF available that allows you to essentially take such a deal. They’re called buffer or defined outcome products. A company like Innovator allows you to mix and match all kinds of similar deals where you can “buffer” your downside while putting a “cap” on your upside. 

The PJAN ETF, for example, protects you from the first 14% of losses and caps you at the first 13% of gains from Jan. 1 to Dec. 31. I recently put some money into the ZAUG ETF, which aims to protect you from 100% of losses while offering 8% of gains from Aug. 1 to July 31. And that’s part of the deal, you have to hold these products for the entirety of that period to get the full protection or gain. 

This is a similar concept to certain annuity or insurance products that may have offered you principal protection and steady returns, but with more liquidity and transparency. I’m not going to get into the nitty gritty, but defined outcome ETFs use options rather than credit instruments (like with annuities) to set up these payoff profiles. You can read more about that process if you’re interested.  

What are the Risks? 

Some of have said these products sound too good to be true, but the most obvious risk is the loss of upside. Imagine a two year stretch where in year one, stocks are flat and in year 2, stocks go up 20%. Assuming you were taking this deal of 8% upside and zero downside, you’d only be up 8% over those two years, instead of the 20% the market returned. 

Stocks tend to go up most years, so you could be paying for downside protection you don’t really need, while severely limiting your upside. 

Because these are tied to the “outcome period” you also won’t be able to sell them during a sharp market downturn and buy stocks. They’re not going to stay at 0% while the market drops 20%, there will be dips during the period before you’re made whole.

At the same time, we should also consider the risks of being fully invested in stocks. Since the year 2000, the SPY ETF, which tracks the S&P 500 has dropped 55%. Imagine for a second having $1 million and having it turn into $500,000. Could you go on? Could you hang in there? 

The QQQ ETF, which tracks the growth oriented companies of the Nasdaq 100 at one point went down – are you ready for this – 83%! Yes, you read that correctly. This is why I believe in diversification. Imagine your $1 million turning into $200,000. 

So while it’s important to point out that even if stocks deliver 8% per year on average over a period of time, one of these products may not give you that same return even with the 8% cap, because it has to take place during a defined timeframe; I think it’s also worth considering how we can participate in the upside of stocks without some of the extreme risks.  

Use Case

One of the things I think about all the time is how to create a risk balanced portfolio within a taxable account, while still maintaining tax efficiency. Stocks generally receive pretty good tax treatment (long term capital gains tax rates, qualified dividends), but bonds do not (you pay ordinary income tax on the interest). So assuming you’re not comfortable being all in on stocks, how do you diversify the portfolio? Bonds, gold and managed futures are all tax inefficient investments.

These buffered, defined outcome products, however do not pay out dividends (which you’re taxed on whether or not your investment makes money). You only pay capital gains when you sell them. My thinking is if they’re part of the conservative portion of my taxable portfolio and I can get bond-like returns without the bond tax treatment that would be a win. 

There are a couple issues with this approach. One is even though you’re getting protection from equity drawdowns, you’re still tied to equity performance. So if stocks do really bad, you won’t do really well, you’ll just do not as bad. You may not lose money, but you won’t make any.

It’s also just a bit of an esoteric, unproven strategy and I wouldn’t feel comfortable putting too much at stake. In fact, I’m not comfortable putting too much at stake in any particular strategy. 

Still, I think this could be a component of a conservative approach along with cash, bonds, maybe trend following, etc. 

At the end of the day, you may not want to over-optimize for taxes anyway. You wouldn’t want to make less income from your job, just so you wouldn’t have to pay as much in taxes.  

There really is no way to fully mitigate risk. There is always a downside. But that doesn’t mean I won’t at least try to prepare for a variety of scenarios in a variety of different ways. And there are lots of new tools emerging to do so, for better or worse.    

This is not investment advice. I have a small position in ZAUG. 

Lately I’ve found it hard to write about something personal finance or investment related…with everything going on. 

An attempted assassination attempt. The resurgence of a former president who refused to concede after losing a free and fair election. A current president who slowly and then suddenly lost his marbles in front of a national TV audience.

It’s all too much. But what strikes me as one of the sadder parts of the whole fiasco is that there are no issues in this campaign. No policy debate. The only debate is whether or not it’s better to have a crazy old man or a senile old man as president. 

In 2004, the election was all about the Iraq War. In 2008, it was about the financial crisis. In 2020, it was about Covid.

This presidential election feels more like a macabre funeral, where the pallbearers are demented clowns and the coffin carries American democracy.

Ok, maybe it’s not that bad! 

But perhaps it is…

In any case, if I were running for president I’d be focused on three issues and policy proposals. I don’t consider these to be deeply partisan. I think they make sense. They’d make our lives better. They’d keep us alive! 

Ban Assault Weapons 

The man who tried to assassinate Donald Trump used an AR-15, an assault rifle so common in mass shootings you don’t even have to wait for the forensics to come in. 

Now from 1994 to 2004, there was a ban on assault weapons. 

Do you remember those days? Were they so bad? Studies found there was a significant decline in mass shootings during the period and a big increase when it expired.

Let’s just try it again? Reinstate it and see if we can live with it not being so easy to gun down large crowds of people. 

This is my No.1 issue because the psychological terror of innocent men, women and children getting randomly gunned down at schools, churches, malls, movie theaters and political rallies is simply too much to bear. It casts a dark shadow over the country. Makes even the most innocent of gatherings and the most essential institutions of American life tinged with the unthinkable. 

We’re a nation stricken with anxiety and fear over our safety. Banning assault weapons would be the most basic acknowledgement that we’re not going to continue living with it. 

Tax Red Meat 

There’s some research that suggests if we just ate beans instead of beef, we could make a significant dent in greenhouse gas emissions.  

Beef and meat in general is bad for the climate because it produces methane gas from cows and requires deforestation for grazing land. But, of course, we’re not just going to stop eating meat because it’s good for the environment. It’s like, I care, but watch me eat this hamburger. 

If we put a heavy tax on beef, though, people will start choosing something else. They will at least have a choice. It also won’t require massive infrastructure. You won’t have to buy an electric car or install solar panels from a borderline fraudulent company. 

It will be so much easier to eat a veggie burger than it will be to build out charging stations and wind turbines and photovoltaic panels.  

We’ll start with only beef. You can still eat chicken nuggets. You’re just cutting down on Big Macs. If you really want filet, you can pay a big premium.  

Have you seen the weather? The heat is getting hotter. There were 10 tornadoes in Chicago the other night.  We’re in crisis mode and it’s not even a talking point in this election. 

Subsidize Childcare 

I was on a vacation in Florida recently, and my wife and I happened to strike up a conversation with a couple from Europe. They were with a newborn baby, on their parental leave, which lasted something like six months to a year. They asked us how much time we get in America.

My wife, who’s in HR, informed them there is no guaranteed parental leave in America. They looked at us like we couldn’t be that barbaric. In fact, we’re the only industrialized nation that doesn’t offer it.

There have been countless think pieces and podcasts about what a nightmare modern parenting has become. The pandemic both magnified and exacerbated it. The fact is parents today don’t typically have a lot of help, and the cost of getting it is astronomical. 

If you have a child, you’re essentially taking on the cost of another mortgage (at least) to send them to daycare, just so you can work. In fact, it’s so costly sometimes it’s not even worth it for one person to have a job. It’s cheaper for them to stay home with the child. Meanwhile, the people we’ve entrusted with our children don’t want those jobs because they’re not paid enough. 

The result is people are having less children. Is that really what we want? A society so hostile towards parents that we have to stop growing it? 

There should be a massive infusion of capital into the system, so that the providers can pay more and the parents can pay less, by a lot. We have the money. We use it to provide welfare to corporations all the time. 

What’s the Platform?

Maybe these aren’t the best ideas, but they’re at least a platform. Right now there’s no platform. Hopefully someone will be able to step up and lead with some actual plans, but right now there’s just desperation that we don’t end up back in the hands of a madman with immunity.

Stop the violence! Restore the planet! Save the children! That would be my message. 

It’s better than: I don’t talk or walk as good as I used to! 

Or: I won my club championship!

We have to get back to real issues. The alternative, as we’ve seen, is insanity. 

I was watching a discussion on YouTube recently from the team at Alpha Architect, a provider of ETFs and financial education. At one point during the discussion, they were talking about how your needs change as you near retirement, and that if your money is in a portfolio of 60% US stocks and 40% US bonds, you might be in a precarious situation. In fact, you might end up on food stamps by the time you’re 80! 

Now most people have some balanced combination of US stocks and bonds in their retirement portfolio. So if it’s the case that such a portfolio could put you on food stamps, we’ve got major problems. 

I followed up on X (Twitter) with Alpha Architect and said that this seems a bit extreme. They pointed out that there is some academic research that suggests small variances in a person’s portfolio could lead to very different outcomes. Over a similar time period, one person does quite well, while the other basically runs out of money. You have a bad year early on, it creates a “butterfly effect” and eventually wipes you out. Hence, the food stamps. 

The answer to avoiding that bad scenario is “proper diversification.” What does that mean? In some cases, it could mean implementing a strategy called trend following that has some significant benefits while also being hard to stick with over the long term. Essentially, it involves a systematic process of getting in and out of markets based on prevailing trends. It won’t always save you, but it could. 

The point is being concentrated in one specific strategy in one particular geography has legitimate risks. Think Germany after World War II. 

If all this sounds like a bit of gobbledygook, well, it sort of is. I mean what are we even talking about? Most people don’t even know what’s in their 401k. A lot of people don’t even have a 401k. Some don’t have a savings account. 

In fact, about half of Americans have $0 saved for retirement.  

What are you Comfortable With? 

Making an investment – taking your hard earned money and putting it into some vehicle (stocks, bonds, apartment buildings) – is a big deal. It can be scary, emotional, stressful. Some people don’t “trust” the stock market. Others don’t even trust the bank.

Some people like physical real estate, managing rental units. For me, that’s a nightmare. For someone else, it’s tangible. It’s not a bunch of numbers in an account. 

When it comes to portfolios, most people have what’s called a “home country bias.” In the US, we want US stocks. We don’t trust foreign governments, international accounting practices. Yet, someone in, let’s say, Germany or France, feels the same way about their own country. 

I personally am not comfortable only being invested in the US. I’m also not comfortable holding only static stocks and bonds. I want an allocation to global stocks, bonds, trend and gold, which I’ve written about more extensively before. 

People have very devout beliefs about money – they believe in dividend or value stocks. They believe in real estate. They believe in pouring money into their homes. 

There’s a group of people called the Bogleheads. They have an online forum and an in-person conference. They’re inspired by index fund pioneer and Vanguard founder Jack Bogle. They believe you should only have a handful of the most simple, low-cost index funds, and that’s it. Anything else is superfluous.

There’s a new company called Return Stacked that believes you can get better performance by using leverage to add alternative strategies on top of your stocks and bonds.  

I listen to a podcast called Top Traders Unplugged where they talk about the superiority of systematic trend following. These guys are buying futures contracts on wheat and cocoa purely because of price trends. Their only question is why people don’t add more of this strategy to their portfolio, or use this strategy for the entirety of the portfolio. 

There’s a lot of ways to play the game. None of them work all the time. All of them have strengths and weaknesses. The one thing we know for sure is we cannot predict which one will make us the most money. And even if we could, the bumps in the road may be so severe we wouldn’t stay the course. The best strategies of the past may not be the best strategies of the future, or maybe they will.

What the Data Says 

One of the ways we determine what to invest in is we look at the historical returns and make an assumption about what we might get in the future. The problem is that we could draw very different conclusions based on what time periods we’re considering. How far do you go back? Ten years? Fifty years? One hundred? 

Most people assume that stocks are going to do better than bonds over the “long term.” But, again, what is the long term? And is that even true? There’s some evidence that if you go back far enough there’s really not much of a premium for one or the other. 

Sure, you may have done well with stocks in the 20th century, but what would you have done from 1836 to 1858 when stocks returned less than 1% per year?    

Now maybe that’s ridiculous. But it probably would’ve been equally ridiculous to assume emerging markets and gold were better investments because they trounced US stocks during the 2000s. 

Think about the Great Depression, which started roughly in 1929 – you really didn’t get above water again on stocks until the 1950s. Can you even imagine? How long could you keep the faith? 

There’s also some positive surprises along the way. I mean who would’ve thought a global pandemic that shut down the economy would’ve led to a speculative boom and a big increase in wealth for the average household. 

More research suggests only 14% of people even withdraw the principal from their retirement portfolio. They’re just living off the interest. Is it because they’re genius stock pickers or asset allocation wizards? Obviously not, they’re just careful about spending the money. Or maybe they were lucky to be in the right things at the right time. 

A website called Portfolio Charts looked at what portfolio would have the best withdrawal rate over a 30-year retirement. They came up with something called the Weird Portfolio which consists of: 

• 20% Small Cap Value

• 20% International Small Cap Blend

• 20% Long Term Bonds

• 20% REITs¹ (real estate investment trusts)

• 20% Gold

This will allow you to withdraw 6.1% per year without running out of money, compared to only 4.1% for the Food Stamps Portfolio (60/40 US stocks and bonds).

Now are you going to invest in that weird mix? Of course not. Is there any guarantee it will work going forward? No. Is it so much easier to look backward and put together the perfect combination? Yes. 

At some point, you have to consider “the data” and then ignore it. You have to find a sensible allocation that works for your particular circumstances. You have to invest in what you’re comfortable with and then adapt to what comes your way. So I’m weary of telling anyone they’re invested in the wrong thing, because I could so easily be wrong. 

Some retirees have so much money it doesn’t matter what they’re invested in. Others have so little that it doesn’t matter. There are so many factors we can’t control or predict. Even though I do believe there are valid risks to consider. We could all end up in ruins, eating mustard sandwiches, or we could wind up with more than we ever imagined. But at the end of the day, above all else, we must be able to live with how we ended up there. 

This is not investment advice. 

My new favorite podcast is I Will Teach You to be Rich with Ramit Sethi. The title is a little misleading. It doesn’t tell you how to make more money or offer investing tips. It’s essentially just couples revealing the intimate details of their finances. Typically you’ve got one person who’s monitoring the financials, while the other is in the dark. However, they usually both have deep-seeded money issues that often go back to childhood. 

Episode titles include “We have $22k in credit card debt…but I want to renovate the house”; “We’re drowning in debt but I drive a BMW”; “Our gas is getting shut off…but I won’t sell my 7 cars.” 

What emerges is sort of a playbook on what not to do if you want to be rich. Like buying a bigger house and doing a renovation as soon as you have a baby – something I never did, thank god. I didn’t personally make that exact same mistake. So that’s good. 

And I certainly didn’t do something like that while I was unemployed! Because I’m too smart, savvy and judicious for something like that. 

OK, well, to be fair we were living in a very small house with a baby and two dogs. But the family who moved in after us had two young children. Tells you something about perspective. 

In any case, while you may be tempted to shake your finger at people making one disastrous financial decision after another, the amazing thing is how universal these choices are in American life. And even though most people would say they, of course, would like to be rich, I’m not convinced they really do. They want the stuff that goes with being rich – whether they have the money or not. 

So in honor of that I’ve compiled a list of the top ways NOT to be rich. If you do these things, you’re almost guaranteed to wind up with little savings, living just at the edge of viability.  

1. Buy a house you can’t afford

This is really the most effective and common way not to be rich. It’s the most expensive purchase of your life and the “phantom costs”, as Ramit calls them, are enormous. We’re talking about maintenance, taxes and upgrades – the reno, everyone does the reno.

As much as you may enjoy it, a house will bleed you dry. Not only do people buy too much house, they do so without giving it much thought. They dismiss the endless costs by saying things like it’ll “add value to the home” or “we’re building equity.” You don’t want to “throw away money renting.”

But rich people don’t build wealth by buying homes. In fact, generally speaking, the wealthiest 10% have all their money in stocks and other financial assets; while the bottom 90% have all their money in their homes.  

This is an especially bad problem right now when home prices and mortgage rates are rising, and people are still desperate to buy a home. The risk of buying a home you can’t afford is high.

It’s simply impossible to save and invest when you have to pour everything you have (and more) into your home. And then you start borrowing even more money than you already have for your renovations. Until people get out of this buy and upgrade mentality/addiction with homes, being rich is just not going to work out. 

2. Have a lot of cars 

There are guests on the podcast who are in such financial peril they literally can’t pay their mortgage or utilities, and yet they have multiple cars – Corvettes, vintage cars, motorcycles, trucks. You’d think it would be the first thing they get rid of, but they don’t want to. 

The cliche is driving a luxury car and being broke, but it doesn’t end there. A lot of people have a pedestrian Honda AND they have an F-150.

It’s sort of like if you’re super rich, you can own a ton of cars, but if you own a ton of cars and you’re not super rich, then you’re broke. 

There can’t be a much worse purchase when you consider the cost, the debt, the repairs and the rapidly declining value. 

We don’t even have time to get into the obsession Americans have with large SUVs and trucks they don’t need that are a waste of money, dangerous and bad for the environment.    

3. Get into credit card debt 

Credit card debt is like the smoking of personal finance. It’s so obviously bad for you. You would think no one would touch it. And yet people build up massive credit card debt, sometimes in the name of “points” or the free trips they’ve gotten out of it. 

Not only do the costs drastically outweigh the perks, but then there’s the issue of interest rates. Credit card debt is usually at well over 20%. There’s simply no way to outpace that kind of compounding. 

It just gets worse, and worse, and worse.  

But what’s the easiest way to get stuff you can’t afford?

And how do you get out of it? Often by taking on some other loan, like a personal loan or a home loan of some kind, just dragging out the pain. 

It’s a cancer that will eventually kill you. 

4. Don’t learn about investing 

This is the one where people say it’s too complicated or they’re not good with numbers. It’s too boring. Ironically, it’s often people with limited expertise and the most simple approach that do well.   

The thing is without some capital working for you (stocks, bonds, etc.), there is just so much heavy lifting involved in building wealth. Many of the people Ramit talks to on the podcast work extremely hard. They’re willing to hustle, take on multiple jobs. But the question becomes how long can you continue to go that hard? And do you want to? 

Without investing, you’re committing to an indefinite grind. 

Maybe It Doesn’t Matter 

The thing we should say, though, is that not everyone wants a lot of money sitting in an account. Maybe they want to live closer to the edge, so they can go on the vacations and have the big house and the motorcycles. 

Even if it means violating the most basic tenant of personal finance – spending more than you have. 

Because you can push it quite far before it all falls apart. Our financial system is in many ways set up for that. Max out the credit cards. Take on the biggest mortgage the bank will approve. Borrow from your home like it’s a piggy bank. Take out a personal loan. Withdraw money from your 401k. Go on margin and buy meme stocks. Gamble! 

It’s not necessarily a bad thing to be broke from a net worth perspective. It all depends on the risks you’re willing to live with. The trade-offs you’re willing to make. 

Can we live with that bathroom the way it is? Are we really going to skip a vacation we can’t afford because we don’t want to put it on a credit card? Are we going to…rent? 

You can live large and lose money for a long time. It’s very easy to do.  

A recent New York Times article exposed the fact that McDonald’s is bigger than ever with more than 40,000 locations, and the fast food industry is booming. More than 80 million people eat fast food on any given day. 

The basis of the article was that it’s been 20 years since “Super Size Me” came out. “Super Size Me” was a finger-waving documentary that bluntly made the point that eating McDonald’s for every meal is…gasp…not good for you. It seemed to set off this moralization around eating fast food and eating out in general. It didn’t actually change anything. It didn’t make anyone healthier. It just changed the way we talk about eating out publicly. 

Ask anyone about what they do for dinner, and nine out of 10 will say, “we never eat out.” Or “we rarely eat out.”  

They make a point of it. Not sometimes, not once in a while, not in a pinch. Never. Rarely. Hardly ever! It’s just nothing but an endless stream of salmon and grilled chicken with steamed veggies. It’s almost like there’s a moral failing if you admit to eating out. It’s like saying you smoke or drink during the day. Or really enjoy spending hours a day on Facebook. Some things people just don’t like to admit. Like Facebook, McDonald’s is another place no one has set foot in for years to hear them tell it.

The data tells a different story. If you feel self-conscious about admitting to eating out like I do, the good news is, everyone is lying. 

Another study by food service distributor US Foods found that Americans eat out three times per month and order delivery 4.5 times per month.

Ok, so we’re up to seven days a month. That’s hardly never. It’s not rare. It’s multiple times per week.

Restaurants have also made great investments for the past decade.

10-Year Annualized Performance as of April 30, 2024

• Chipotle (CMG): 25.86%  

• McDonald’s (MCD): 15.07%

• Darden Restaurants, owner of Olive Garden (DRI): 16.58%

• S&P 500: 9.89% 

Those profits have to be coming from somewhere. 

So you doth protest too much. The cat is out of the bag. We can stop the charade. Most everyone eats out fairly often.   

Cooking is Hard 

Part of the issue is just the continuous production of meals required to go on living. Particularly if you have a family, it’s just an endless slog coming up with three meals a day. Or even just dinner every night. As “the one who cooks,” I find myself wandering grocery stores, staring dead-eyed into the meat section. How many more chicken breasts can I make? How often can we have steak? Who wants to gnaw on another pork chop?

There’s the obligatory vegetables and the bag salads, the chicken nuggets and the frozen pizzas. The taco nights and the orange chicken in a bag. 

Soup? You want soup? You don’t. 

A piece of meat and a handful of vegetables is an optimal state. Let’s not talk about the nights when the child is eating Ritz crackers and cheese sticks. When I’m serving up bowls of Lucky Charms and Cocoa Puffs. The family favorites quickly devolve into a menu item you’re so sick of, you never want to see it again.  

It takes a lot of time, effort and planning. It’s monotonous. And it often doesn’t come out that good. That’s why we eat out. 

It’s generally not as healthy as eating at home and the costs have become outrageous. But you want a break. You want to get out of your home. You need something to do. The mess, the hassle, the cleanup. This is why we’re at Chipotle and McDonald’s. 

Yet we moralize against it. Go ahead and tell someone you eat out all the time just to see how they react. They’ll clutch their pearls. It’s not healthy! It’s too expensive! But the ironic thing is we’re not that healthy or happy, and we’re certainly not good at saving money. So why judge it? We don’t judge dumping endless amounts of money into our homes. Or the constant fever to travel. That’s another thing, we take trips all the time. And celebrate them! You telling me you make your own meals on vacation?  

To eat out or not is just one more cost/benefit decision in life. Is the convenience and taste worth the cost in dollars or in pounds? Does it take stress out of my life? Does it make me happier?

It’s a choice, but not a moral one.

Sneak Eaters 

Whenever I’m out driving around rush hour, I notice two things people do in their cars: smoke and eat.

People don’t like their spouses’ cooking (because it’s usually not very good), so they’re stopping at Burger King on the way home.  

Then you can stomach choking down whatever is for dinner. The McDonald’s drive-thru always has a line, because people are secretly getting ice cream. It’s the same with the ice coffees and the cigarettes. 

Tobacco, by the way, has historically been one of the best investments. 

We all have bad habits. We should be doing nothing but working out and flossing and eating salmon. Unfortunately, we have to live our lives. Sometimes we cut corners. Some people just don’t have the time or energy to do what is optimal. You simply don’t know the circumstances which cause people to eat out or not.  

So if you can do it without severe detriment to your well being or falling into financial ruin, it’s ok to eat out! 

Just don’t tell anyone. 

Starbucks stock is in trouble. After a dismal earnings report at the end of April, it’s now down more than 30% in the last year, while the S&P 500 is up more than 20%. 

Why? Well, despite bringing in more than $8 billion in revenue for the quarter, its comparable store sales were down 3% in the US, 6% internationally and 11% in China. Oops. Their press release quoted a “highly challenged environment.” 

People are out here taking $10,000 vacations like it’s nothing and eating tacos for $35 a tortilla – this is not a challenging environment. Unemployment is virtually nonexistent, markets are near all time highs. We’re driving around with our windows open, letting dollar bills fly out.

And Starbucks can’t hit their numbers? What’s the deal? They’re selling $6 coffee and there’s a line around the block every time you drive by. My son is pulling his weight in chocolate croissants. How are they struggling? 

The Triple Shot, Double Pump Strategy

Luckily for shareholders (I’m one of them since 2015), the coffee giant has a plan. 

It’s called the “Triple Shot Reinvention with Two Pumps” strategy. That’s not a joke. This is the official policy of the company. It involves the following triple shot: 

• Growing their brand 

• Expanding their digital rewards program

• Adding more stores around the world 

And these two pumps:

• Being more efficient

• Reinvigorating employee culture 

What’s amazing is I’d be willing to bet there were millions, maybe tens of millions, of dollars put into this “strategy.” I’m sure they brought in the consultants and the marketing agencies, the PowerPoint presentations were flying and the top brass were putting their heads together at countless meetings. 

The problem is for all the money they have, for being one of the most recognizable brands in the world, all the experience and bright minds that must be running the place, they’ve forgotten one small detail…the customer! 

They’re talking about the brand as their top priority. There isn’t a soul on this earth that’s not familiar with the brand. They’re talking about…adding more stores?! They have so many stores that it’s a cliche, a running joke. You can’t throw a stone without hitting a Starbucks. This can’t be the strategy.

Why aren’t they talking about creating a great experience? Faster service; more comfortable stores; better food, and oh yeah…the coffee. Make cool drinks that people like, that’s what you do.   

Am I Selling the Stock? 

If you go back to Starbucks’ early days as a public company, its performance has been nothing short of incredible. Consider this crazy stat: $10,000 invested in Starbucks stock in 1993 would be worth $1.8 million today. 

However, the last 10 years have been less than stellar. After this recent drop, Starbucks (SBUX) has given you 9.55% annually. McDonald’s (MCD), for comparison, delivered 12.25%, and the S&P (SPY) did about the same. 

The last five years SBUX returned a measly 1.57% per year and the last three years have been miserable with the stock declining 11% annually.

All that said, for as lousy as the stock has performed recently, the company is practically a bedrock of society. When the pandemic hit, Starbucks remained open. It was considered an essential service. I think it could survive a nuclear attack. The world may be ending, but we still need our coffee. 

We also have to go somewhere. Where are you meeting friends, taking your kids for cake pops and doing your job? At Starbucks. There aren’t that many gathering places and they’re in a unique position there. They may be a bit slow, but the employees treat you better than just about anywhere else. You going to take your laptop and set up shop at a Popeye’s? 

They also bring in more than $30 billion in revenue every year. The demand is still there. In 2021, they did $29 billion in sales. In 2023, that rose to $36.5 billion, a 24% increase.

It’s not a company in decline. They’re one menu item away from a resurgence. Every food service business tends to go through these down periods. Starbucks has been through it before when they oversaturated the market. McDonald’s stores used to be dumps, now they’re more like Starbucks. Chipotle gave you food poisoning, and people are pouring in there today. Eating $10 burritos.  

Starbucks is a prime target for an activist investor to come in and demand whatever changes need to be made, the way Bill Ackman did with Chipotle. Maybe it’s a new menu or a new CEO. Someone certainly should be telling their leadership not to say it’s a challenging environment or call their strategy a double pump. 

The bottom line is Starbucks is everywhere. It’s ubiquitous. I’m not the one to slice and dice their balance sheet, but the fixes shouldn’t be hard. Make it a nice place to get coffee and pretend you’re working on your laptop. 

I don’t plan on selling.   

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