10 min
A Diversified Approach Is Normally Suitable Episode 79 Excel in Retirement
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- Investing
Charlie Munger is a 97-year-old billionaire and the vice-chairman of Berkshire Hathaway. You may recall Munger and Warren Buffett are primary controllers of Berkshire, and they’ve obviously both been around for a long time.
Munger was recently interviewed and stated that the stock market today is “crazier than the dotcom boom.”
From the article, “He said many companies were now trading on the US share market at prices that represented 35 times earnings – making it much harder for ordinary investors to make money on the market. It is hard to get results which could be called normal results in investing.”
This may be why CEOs and insiders have sold a record $69 billion of their stock according to a recent CNBC article. The key takeaways from the article are:
Looming tax hikes and lofty share prices encourage many to take profits. As of Monday, sales by insiders are up 30% from 2020 to $69 billion, and up 79% versus a 10-year average, according to InsiderScore/Verity. The selling is likely to increase even more as December is often an active month for sales due to tax planning.The Result
The government continues to use extraordinary measures to stimulate the economy. The Federal Reserve has not given a clear indication of when interest rates will be increased or when the $105 billion of money printing per month will end. The government uses the newly created money to buy bonds and presumably equities.
These drastic measures seem misplaced given the seemingly robust economy we have. But these measures may be creating an illusion of economic vitality. The challenge becomes, how do we invest in this economy?
A Possible Solution
Our philosophy is to have a diversified approach that includes:
Investments that cannot lose principal.A bucket of money that is in the market and has active portfolio management.And a smaller portion that is more aggressively invested to combat inflation.Obviously, the suitability of this approach will vary from person-to-person, but having your portfolio performing different tasks is prudent. This approaches allows us to attempt to earn a consistent return in different types of markets.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Charlie Munger is a 97-year-old billionaire and the vice-chairman of Berkshire Hathaway. You may recall Munger and Warren Buffett are primary controllers of Berkshire, and they’ve obviously both been around for a long time.
Munger was recently interviewed and stated that the stock market today is “crazier than the dotcom boom.”
From the article, “He said many companies were now trading on the US share market at prices that represented 35 times earnings – making it much harder for ordinary investors to make money on the market. It is hard to get results which could be called normal results in investing.”
This may be why CEOs and insiders have sold a record $69 billion of their stock according to a recent CNBC article. The key takeaways from the article are:
Looming tax hikes and lofty share prices encourage many to take profits. As of Monday, sales by insiders are up 30% from 2020 to $69 billion, and up 79% versus a 10-year average, according to InsiderScore/Verity. The selling is likely to increase even more as December is often an active month for sales due to tax planning.The Result
The government continues to use extraordinary measures to stimulate the economy. The Federal Reserve has not given a clear indication of when interest rates will be increased or when the $105 billion of money printing per month will end. The government uses the newly created money to buy bonds and presumably equities.
These drastic measures seem misplaced given the seemingly robust economy we have. But these measures may be creating an illusion of economic vitality. The challenge becomes, how do we invest in this economy?
A Possible Solution
Our philosophy is to have a diversified approach that includes:
Investments that cannot lose principal.A bucket of money that is in the market and has active portfolio management.And a smaller portion that is more aggressively invested to combat inflation.Obviously, the suitability of this approach will vary from person-to-person, but having your portfolio performing different tasks is prudent. This approaches allows us to attempt to earn a consistent return in different types of markets.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
10 min