#233 – FOMO Free Investing

Wes Moss [00:00:40]:
We’re going to get into that today. Really today. The five keys of for the Retire Sooner podcast and be a successful investor over time. We have done episodes around these five ideas. Today we’re going to dive into the second part of that. That has to do with patience and longevity or being an investor for a long period of time. And we get a lesson from a study around the perils of chasing different investment styles, AKA fear of missing out fomo. So we’re going to introduce a guy here on the show.

Wes Moss [00:01:16]:
We may have talked about it a little bit before. We’re going to bring him back up. We’re going to reinvite FOMO Freddy to the party. He’s the guy you’ve been trying to avoid. It’s always telling you how well he’s doing in the stock market and investing because he’s in the hottest latest thing and you’re thinking, wait a minute, why? Why am I not in that? He’s always got something. You’re always feeling like you’re missing out. But the reality is FOMO Freddy doesn’t have all the answers. In fact, it might seem like he does on the surface, but he’s falling maybe pretty short.

Wes Moss [00:01:48]:
That’s today’s episode. Also recap of some of the most interesting market machinations in 2024. A fascinating year with a presidential election, multiple all time highs and a real shift in overall market performance. Which by the way leads us back to why we’re introducing FOMO Freddy. We’ll also introduce producer Mallory who joins us in studio today. Hi producer Mallory. Hi.

Mallory [00:02:17]:
Thanks for having me.

Wes Moss [00:02:18]:
Marissa said, remember, talk with your chest so we can hear you.

Mallory [00:02:22]:
But it’s so much easier if I’m singer. I know I should speak from the diaphrag ram.

Wes Moss [00:02:27]:
Pretend you’re singing. Can you recall kind of peak nervousness this year when it comes to markets or your 401k? Has there been anything that is. Remember, this has actually been a low volatility year. Yes, of course. We’ve had some drawdowns, but we haven’t had your typical 16% drawdown. It’s been more like 8 or 9 at worst.

Mallory [00:02:51]:
I will tell you though, I think I’m going to give an answer that most listeners would probably agree with when it comes to when I was most nervous this year, which was the. I think that we saw that with the volatility, the index was up significantly prior to the election. It was so neck and neck and it’s funny to look back on it now. It’s like very easy to say oh it was, it was clear.

Wes Moss [00:03:11]:
Monday morning QB is always so easy, isn’t it?

Mallory [00:03:13]:
Exactly. But. But beforehand it just seemed so uncertain. We didn’t know what was going to happen. And if there’s one thing that we know the market hates, it’s uncertainty.

Wes Moss [00:03:22]:
Well, and we really saw that. It’s funny, the Monday morning quarterbacking thing is so. Monday morning quarterback or in retrospect, everything seems so cle clear. So much so I noticed this, I was thinking about this, these authentication apps that we have that you log in and then you log in again and then you’ve got to do a sequence authentication that comes up and it’s usually six numbers or eight numbers. And I can’t help but think when I see one of those numbers pop up and it’s like a pretty simple seeming number like 360882. I’m thinking, well, I could have guessed.

Mallory [00:03:54]:
That there’s such a huge number of combinations, right.

Wes Moss [00:03:59]:
It’s like one in a billion. But I was like, well it’s just 38862 and it’s probably a similar number a week ago.

Mallory [00:04:05]:
Right. You’ve seen that number.

Wes Moss [00:04:08]:
Monday morning is such a. There’s so much obviousness and I wanted to do this because it’s been a fascinating year. Obviously it was a good year for.

Mallory [00:04:16]:
Stocks, I will say. I mean if we look at the numbers, we’re in what, above 50, above 50 market all time highs this year. It’s been a great year.

Wes Moss [00:04:25]:
Exactly. We had more than 55 all time highs on the S&P 500 multiple. It’s similar if you’re looking at the Dow Jones, you’re looking at the nasdaq. So we know that we’ve had a really good year in that respect in order to keep plowing new ground higher. But what has been interesting about this year is that it has not just been a few names, it hasn’t just been one very select investment style. That very narrow market has broadened out. So you look at multiple sectors that have actually had good years. Financials have had one of the best sectors of the year, ironically utilities one of the best sectors of the year.

Wes Moss [00:05:01]:
Even the worst sectors of the year were still up single digits, which still decent or high single digits.

Mallory [00:05:07]:
When I will tell you as a producer on this show and Money Matters, this has been so different from the last couple of years. I feel like for a long time we were just seeing what seven stocks that were really driving the market.

Wes Moss [00:05:18]:
Exactly. The magnificent seven was the kind of the completely dominated the market only by a few names. So we were talking, we talked so much about this is back in 2023 that you’ve got 400 so 500s and P500, 493 players on the bench. There’s only seven guys on the field and they’re doing all the work. The other 493 kind of sitting everything out. Now, in Contrast, what did 2024 look like? Just much so many more names participating. So if you look at the Russell 1000 and this is an index of both growth and value companies, but again, it’s even obviously broader. Twice the amount of stocks of the S&P 500, there’s only one MAG7 name that’s in the top 50 for performance and that’s in stark comparison to the year prior.

Wes Moss [00:06:02]:
Nvidia was number seven on the list. Still had again, this was as of mid December, up 193%. So still phenomenal performance for the year. But you look through this number 50 out of this thousand, that performance again looks like an insurance company that I’m not even sure of, up 84%. William Sonoma that we all know is the home goods store, up 88%. Virtue Financial, up 93%. Maple Bear Inc. Again, I’m not sure I even know what this company is.

Wes Moss [00:06:39]:
Maple Bear Inc. Up 94%. So we look through this. We’ve got this long list of media and financial investment, insurance, home goods, energy companies. Constellation Energy is an example. Texas Pacific Land Corp. These are companies that are up anywhere from 84 to almost 800% in the Russell 1000. So a long list of companies that did really well that for the most part did not include anyone except for one from the Mag 7.

Wes Moss [00:07:14]:
And if we’re looking at the broader market, think S&P 500 up over 25%. That sounds abnormally high, doesn’t it? Wait, 26%, 28%, doesn’t that? That sounds abnormally high.

Mallory [00:07:29]:
Huge. Well, don’t we normally see market returns closer to like 11%, historically.

Wes Moss [00:07:33]:
Well, that’s the average. Right. Because we have. I think of it as feast or famine, where we have some really good years and then we have some really bad years. And they average out to that 10 number, though I think most of us remember 10, 11% over time. But these big years are a little bit more common than you might think. S and P. The S&P 500 has finished with a total return above 25% in 26 out of the last 96 years.

Wes Moss [00:07:59]:
So it’s not that uncommon. It’s more than a quarter of the time. So 27% of the time.

Mallory [00:08:04]:
I did not know that.

Wes Moss [00:08:05]:
I think you nailed it. Which was the elephant in the room for most of the year was the election. And it wasn’t so much about who was gonna win. It’s that we seemed so deadlocked before. We were Monday morning quarterbacking, and of course Trump was gonna win, but it was very close and so close. There was a lot of worry that we would end up in a stalemate and we need a recount, and there would be this back and forth about was it fair, was it not fair? And then the recount of the recount. And the worry was that there’d be a month of political uncertainty, which made people really nervous.

Mallory [00:08:41]:
Yeah. I remember when we were in the studio for Money Matters a Sunday prior to the election, we were saying, I hope by next Sunday when we’re here, that we’ll have some idea of who the president is. And here we are. It was a really clear, obvious answer.

Wes Moss [00:08:54]:
Very quick, very clear. And right away we saw this sigh of investor relief when we got a definitive, clear answer of where we were politically. So there’s this real sigh of relief post any election, and sentiment once, you know, to some extent. And I think it’s really interesting, Mallory, to take a look at how the market did in the aftermath, or just let’s call it one month post the 2016 election when the market knew that Trump won. And then one month post the 2024 election, again a month post the market and everyone knowing that we had a new administration and who it was.

Mallory [00:09:32]:
It’ll be interesting to see how this mirrors throughout the next four years, really, because Trump has been president before, to see if it mirrors similarly.

Wes Moss [00:09:41]:
It will be interesting. Now, what we have seen, I would say we saw a similar first month, but certainly not the same. Here’s what we saw in 2024, post election, relative to a month out in 2026. Both of the performances in general were good to let’s call it really good. And again, I think it’s not just that Trump won in the GOP won, which are considered, let’s say, more market friendly. It was. It also goes back to this clear and definitive answer of who won.

Mallory [00:10:11]:
That’s right. And actually, have we seen historically after an election, does the market typically do very well after that first month?

Wes Moss [00:10:17]:
Yes, we actually, we did run the data and looked at how do stocks look 6 months, 12 months and 18 months into the future. And on average it was about a percent per month, which is about the average. So we saw in three months up on average about 3, 6 months, 612 months. About 12. So we really did see a similar rate of return relative to history. But let’s look at these numbers. 2016 plus a month, 2024 election plus a month. So in 2016 was a little bit more of a mixed bag.

Wes Moss [00:10:54]:
The S and P was up 3% in the latest period. The S and p post the 2024 election, the latest one post the 2024 election a month was up 4.5%. So one was good in 2016. One was really good. More recently, 2016, the Dow was up approximately 5% a month after the election. Today up about 6%. Way back in 2016, a month after the election, tech was down 1%. This time up 4%.

Wes Moss [00:11:25]:
Staples then down 4% today up 3%. 2016 utilities were down 5% a month out. Today’s post election one month measure up 2%. So to some extent we’ve seen a more consistent rise across the board. Maybe that’s because we’ve already had Trump in office once and there’s a little bit more certainty around how things did perform then.

Mallory [00:11:51]:
I got to say, I think on the tech front, that might have to do with Musk hanging around.

Wes Moss [00:11:55]:
You know, it’s funny because one of the best sectors has been consumer discretionary. And although that doesn’t sound like tech, it’s very heavily dominated by Tesla. And that a month post election, that whole sector, the S and P consumer discretionary sector, was up over 10% just in that one month period of time. What is similar, and this is this collective investor sigh of relief, is the vix, the volatility index, or the measure of volatility or fear in the market were virtually identical. Both down right around 35% one month post election.

Mallory [00:12:32]:
All of this sounds great.

Wes Moss [00:12:33]:
You’re right, it has been good. And I would say that the emphasis here is has it has been good. And really the question is, what’s next?

Mallory [00:12:45]:
Are you pulling a Warren Buffett with the what is it? Be fearful when others are greedy and greedy when others are.

Wes Moss [00:12:51]:
I think there’s real validity to that. So I think that anytime that we almost have too much effervescence and too much froth and too much excitement around stocks or any particular area, that’s usually not a great sign. And we’re going to learn that today from the study with FOMO Freddy and looking at different styles. That was great for you to bring up because it’s that leads right into the perils of hopping from one investment style to another, back and forth. So it’s always about what is next. It’s yes, it’s been good. Anytime it’s been good or bad, it’s really about, okay, what are we doing moving forward? And I’ll just revisit some of the fundamental pillars that we believe here on the Retire Sooner podcast lead to a higher probability of successful outcomes, which is essentially being able to do what you would like to do with economic freedom and little to no worry when you get to the point when you stop working. So that’s what we’re really we’re all trying to do that.

Wes Moss [00:13:48]:
And there are lots of different opinions around this. But the way we see this, and here are the five we’re going to really emphasize number two today by introducing FOMO Freddy’s one, we want to own stocks or mostly that’s where we’ve seen that super broad category has been one of the most successful inflation fighters that we can find. Number two, patience. Having patience and longevity and being in the investment game for a very long time. These are behavioral things that we can all work on, but that is a pillar of successful investing. We’re to go into some data around not being so patient with FOMO Freddy 3. Large dose of diversification 4. Investing today.

Wes Moss [00:14:31]:
I think it’s good to recognize that it is both, I think, easier and harder at the same time in the world that we live in. And then number five, knowing where you’re driving or what you’re driving towards, AKA having a really definitive plan, or at least some sort of plan that can keep your eyes on the destination as opposed to looking at your smartphone while you’re driving around a curve. If you’ve ever done a Jane Fonda workout or if you remember as a kid, Rocky running the steps, and if Michael keaton is still Mr. Mom to you, then guess what? It’s officially time to do some retirement planning. It’s Wes Moss from Money Matters. Weren’t those the good old days? Well, with a little bit of retirement planning, there are plenty of good days ahead. Schedule an appointment with our team today@your wealth.com that’s why you are your wealth.com.

Mallory [00:15:29]:
So Wes, I know that we’ve really gone in depth on each of these before, so I don’t think we necessarily need to do that. But I do need a refresher. So can you please just run me.

Wes Moss [00:15:36]:
Through these right before we’ll do that. We’ll do the four before we go back to number two, which is fomo Freddie and the lessons we learned from him. So the first one, the way, the way I write this is stocks mostly because it doesn’t mean 100% stocks because most people can’t handle 100% stocks. We know that broadly. If we’re just looking at the s and P500 as an example, that’s been far and away one of the very best ways to have rates return well above inflation over time. Certainly doesn’t work every year. In fact, some years and some multi year periods are really brutal and it feels like the whole system’s broken.

Mallory [00:16:14]:
And that’s why you say mostly, not all stocks.

Wes Moss [00:16:17]:
That is why I say mostly because there are going to be some periods of time that some investors with iron stomachs, they can handle having almost everything in stocks and they can take the huge oscillations that come with that, the pain of seeing your values go down. But for most investors, they need some sort of significant percentage, not a throwaway amount, but enough that matters, that’s in some sort of stability. And we call that three years worth of dry powder, which is taking your annual spending and having enough nominally or in dollars, that would give you a couple of years of real spending. So you allow the more volatile piece of the equation, the mostly stocks, part time to recover from those drawdown periods. So again, mostly stocks 3. A large dose of diversification. There’s a lot of layers here. Diversification can be in multiple categories.

Wes Moss [00:17:15]:
First of all, fundamentally diversification of individual companies. We don’t want five companies, we don’t want one, we don’t want 10. We want ideally hundreds. And we don’t want any one particular company to be a huge percentage of our portfolio. And I think that’s relatively understood and I think fundamental basic investing, almost 101.

Mallory [00:17:38]:
To be fair, these are our foundational principles. So this is kind of what we’re talking about.

Wes Moss [00:17:41]:
It’s okay to be foundational. Exactly. Then there’s the thought of diversification from sectors, the diversification of asset classes so owning different kinds of stocks, a variety of fixed income or bonds, real estate, alternative areas that can include real estate or publicly traded REITs, energy pipeline companies, closed end funds, commodities. These are all areas that don’t necessarily move in perfect unison. And that is a good thing. They’re not necessarily correlated. So we’ve got lots of diversification that moves into asset allocation. So again, a healthy dose of diversification.

Wes Moss [00:18:23]:
Again, I think that helps people keep on tracking. It makes the journey less bumpy. 4 easier and harder. I think this is just simply the function of social media, our phones. How easy is it to tune into our favorite channel whether we want to or not? I find myself if I don’t see NBC on the television, I can just bring it up on my smartphone and go to the YouTube TV app and watch any of the shows if I’d missed a part of it.

Mallory [00:18:51]:
Oh, and don’t forget, they’ll give you the pop up notification so you can’t miss it.

Wes Moss [00:18:54]:
You almost can’t miss it. So it is both easier and it is harder today. And information, it’s free for the most part. As long as you subscribe to 40 different things, information is relatively free, it’s nearly limitless, and investment options are accessible and inexpensive to participate in. And the question is, can you invest through these principles or all this information 100% on your own? I think the answer is absolutely yes. I think investors can do that. We don’t know the exact numbers, but a lot of people do. Maybe it’s 30%, maybe it’s 50%.

Wes Moss [00:19:34]:
I’ve never actually gotten an acceptable or perfect answer around the amount or the percentage of investors that end up using some sort of guidance or coaching. But the group does include a very large percentage of the population that does it on their own and a giant part of the population that has some help or some guidance. So as it’s gotten easier, it’s also gotten harder. Don’t be afraid to find some human guidance along the journey.

Mallory [00:20:03]:
I would say that’s probably part of the reason we have a lot of listeners here. I think it helps to know.

Wes Moss [00:20:08]:
Oh, so you say the guidance could just be a podcast for some people? Yeah, it can. I can for some people.

Mallory [00:20:14]:
And I think there’s some people where it’s helpful to have. It’s kind of like having a gym buddy, you know, I don’t know if this is a great example, but sometimes you just need somebody to help hold.

Wes Moss [00:20:21]:
You accountable, or a trainer, not just a gym buddy.

Mallory [00:20:24]:
But they’re going to tell you how to do it. And that’s. I mean, that’s when you see results.

Wes Moss [00:20:28]:
And then, of course, maybe the cornerstone to the whole thing is having some sort of plan, because it just makes it so much easier to know if I’m. If I want to get there. And I need a million dollars or $3 million or $10 million or a $50 million at any given point in the future to then sustain my lifestyle. It’s nice to back into the math and know what it takes to do that. Once we figure that out, we’re more informed on how we need to be invested.

Mallory [00:20:54]:
Who was it? Was it Napoleon Bonaparte who said a plan? No, a failure to plan.

Wes Moss [00:21:00]:
If you fail to plan, failing to.

Mallory [00:21:01]:
Plan is planning to fail.

Wes Moss [00:21:02]:
You plan to fail. And I don’t know, I thought that was Benjamin Franklin, but it maybe it could have been Napoleon Dynamite.

Mallory [00:21:10]:
Great movie.

Wes Moss [00:21:12]:
Now let’s talk about fomo, Freddy. So we skipped over number two, which is patience and longevity. We know from a financial perspective, an asset accumulation perspective, real estate, anything that has value, that can sustain value, whether it’s publicly traded companies or it’s real estate, it takes a long time for it to be worth a lot more than you ultimately started with. The beginning of the journey doesn’t feel like you’re necessarily getting anywhere because the math of compounding takes a while to really have these big leaps and bounds relative to what you started with. So it takes a long time, right? You look at a giant oak tree and you know that it just has. There’s been many summers and many winters that that tree has grown through decades. But when you’re thinking about being patient and being able to sustain a really long journey, a lot of that is really. Almost all of that is behavioral, and it doesn’t have a whole lot to do with any one investment in particular.

Wes Moss [00:22:09]:
Now, to make this all harder, there’s a guy named fomo, as in fear of missing out FOMO Freddy, that’s always lurking around at the cocktail party in the corner, where he’s like, stopping you at the bar or at the grill, but he kind of corners you, and.

Mallory [00:22:26]:
You’Re just trying to get away. And you’re like, oh, no, not again. How do I get away?

Wes Moss [00:22:30]:
If you’re listening to this around the holidays, you’re thinking it’s a relative that you see once every five years, and they’re going to. They’re going to kind of corner you. And they say to you, this is. Maybe it’s Uncle Freddy. He says to you, I’m sure glad I got into bitcoin. And you say to yourself in your head, you say, well, I’ve got some bitcoin, but you really don’t have it. Or you maybe have 100 bucks worth of Bitcoin, good news, it’s not worth 200 bucks. And you think, well, my stocks have done pretty well, like really well this year.

Wes Moss [00:23:07]:
But not as good as Freddie’s bitcoin. Which by the way, going back to our presidential where, where was bitcoin a month after the election was up almost 40% in one month post election.

Mallory [00:23:19]:
Are you trying to say, Wes, that you have a lot of bitcoin? Are you FOMO Freddie right now?

Wes Moss [00:23:24]:
I really don’t, I don’t have a lot. And yes, this has been one of those banner, banner years for that one particular area. And it’s only natural to say, wow, it would be nice to have a lot more of that. But it’s just not in the style of investing that I have. And I’m very comfortable with the particular style that we talk about here. Highly diversified, multi asset class income investing. We want our stocks to pay dividends, we want a portion of dry powder that pays us some stable interest and then a variety of other areas that we call alternative asset classes. Those are the three main buckets.

Wes Moss [00:24:03]:
Now I’m gonna take that a little bit further and talk about what FOMO Freddie might like to do as an investor. And now these are broad categories. You could do this study with any particular asset class. You could say you could do it via market industrial sectors or look at different commodities or commodities end stocks. Here we’re gonna look at kind of the big overarching investment styles that we can choose from. And again, there’s a mutual fund, there’s dozens or maybe hundreds of mutual funds or ETFs that are following any one of these given styles. I’m about to go over. Well, here are the names.

Wes Moss [00:24:41]:
Well, first we’ll just start with just pure index investing and we’ll choose again. Even with that, there are hundreds of indexes to choose from. But let’s just say A S&P 500. That’s just a portfolio that mirrors the S&P 500 index. It’s that simple. You don’t change it. 2. Value investing.

Wes Moss [00:24:58]:
This is also more akin to dividend investing. To some extent, this would be investing in companies with lower valuation. So when you’re looking at financial metrics priced relative to earnings, these are companies with lower multiples and particularly relative to some of their peers value, they’re good Value versus growth. These are companies, they’re not paying dividends. These are companies that are really gangbuster growing and they’re taking all their profits, they’re putting it back into the company and they have higher growth rates, but they don’t return a whole lot of cash to investors. That style, by the way, works as well. It’s called growth. The category that gets labeled quality.

Wes Moss [00:25:38]:
Doesn’t everybody just want to invest in quality companies? Sometimes. If you are looking at a company that is, remember, sometimes quality or healthy doesn’t necessarily mean companies growing quickly.

Mallory [00:25:51]:
Oh, that’s interesting.

Wes Moss [00:25:52]:
So maybe think of a giant oak tree, super quality oak tree, but it’s only growing a little bit in any given year relative to a 10 year old sapling that’s still shooting up to the sky. But it’s high quality. And then there could be investor benefit to that as well. So it’s a different category. In this category, investors are looking at a high rate of return on equity or roe. It’s usually a good measure. If a company doesn’t have a whole lot of debt, it’s very much a measure of earnings relative to shareholder equity. Perhaps not the fastest growth, but more consistent growth.

Wes Moss [00:26:30]:
Again, quality. So we have these different categories. We’ve talked about Value. These are companies at discounts. Growth. These are companies going gangbusters. Quality. These are companies that are consistent.

Wes Moss [00:26:41]:
Next we get to minimum volatility. Well, would it be nice to have stocks that have minimum volatility? Well, yes, I would consider this the category of more mature behemoth companies. We’ve seen some behemoth companies grow through the roof recently. But think of a company that’s very mature. Again, an index like this or a style of minimum volatility are companies that literally have a much lower elastic band up and down on any given day. Then we come to momentum investing and it almost sounds like FOMO Freddy would be into momentum investing, but it’s a lot more complicated than that. This is a more sophisticated investment style that is constantly and professionally catching trends that are either in a positive or a negative direction, depending if you’re long or short these stocks. But again, you’re looking at companies that have momentum and you’re literally jumping into that momentum in a very careful way.

Mallory [00:27:43]:
Is this for my math nerds?

Wes Moss [00:27:45]:
I think to some extent, yes. Because you’re looking at relative strength, moving averages. You could make an argument that’s almost more technical in some ways. Again, you can find mutual funds or ETFs that are very much doing this. Now, if you were to chart this out and give every style that we just talked about its own color, you would end up with something that looks very much like the periodic table from high school chemistry class or biology class. Meaning that in any given year we start in 2000, then the next year is 2001 and 2 and 3 and you rank each one of these. Well, very rarely do you see the same color just stay at the top or the same color stay at the bottom. Instead it gets very checkered and very quilted, if you will.

Wes Moss [00:28:34]:
And if anything, what we see is one of the categories that ends up being, quote, the loser, the bottom of the basement, either the next year or the next may end up at the top of the heap. We can think of it as somewhat dramatic change in leadership from any one of these styles in any given year. Now what’s interesting is that if you were to pick any one of these strategies or styles and you stick with it over time, and these again are all a variety of stock oriented approaches, they end up with pretty similar long term rates of return. The S&P 500 is kind of right in the middle, about 7.9%. We’re looking at 2000 to 2024.

Mallory [00:29:17]:
So that would be index investing, straight.

Wes Moss [00:29:20]:
Index Investing, S&P 500 and then Quality as a category up a little more than that, about 8.6%. Growth investing slightly less at 7.7 on average over time. Value investing again, almost identical, 7.7% over time. And then the minimum volatility a little just above 7%, but all kind of right around that, which kind of makes sense. The market in general, 7.9% right smack dab there in the middle. So all very similar long term outcomes. But in any given year, one style looks like the bell of the ball and one style invariably looks like the New York Jets. I’m not, by the way, it’s a bad football team.

Mallory [00:30:10]:
Oh, okay, good. I was like, I was like, I don’t, I don’t get that one.

Wes Moss [00:30:14]:
Like a lot of teams, but they’re very special level of disappointment. So here’s what happens with FOMO Friday. He thinks he’s smart and what does he do? He always picks the bell of the ball because it’s always. We talked about Monday morning quarterback earlier. It always feels like, wait a minute, that did well. I’m just going to pick that. And every year Freddie switches from whatever he’s in or last year’s winner to the most recent winner. So he’s switching if growth did the best.

Wes Moss [00:30:46]:
Now he’s in growth for the next year and then a value does the best, he’s in value for the next year and then momentum or quality does the best, then he’s back in that again. So what’s the result of Freddie? He’s still only operating with these same six asset classes and they’re all stock oriented, so he only has that choice. So he has to be in stocks. So you would think he’s got to be pretty darn similar to all of them and he’s not that far off. But what’s interesting is that over that same period of time where everything’s doing around 8%, some a little better than that, some slightly less than that, that’s strategy. Again, you think he’s done better than you, but he’s actually made a lot less.

Mallory [00:31:24]:
Even though he’s bragged about it at the cocktail party, even though he’s always.

Wes Moss [00:31:28]:
In the hottest of things, he ends up with 6.7%. He drops down to the sixes. So again, on a dollar perspective, $500,000 invested over this 24 year period. Quality ends up with 3.9 million. Freddie ends up with 2 and a half. Again, Freddie did fine. He’s still in stocks, but he’s been bouncing around, always trying to pick the bell of the ball. He ends up with almost 1 million and a half dollars less than the investor that just stuck with his one style.

Mallory [00:32:02]:
Plus, he was probably really stressed through the whole process too.

Wes Moss [00:32:06]:
Maybe he’s a little bit more stressed than someone who sticks to a style that they like and they’re comfortable with and has been proven over time. And they lock in for that longevity because they have patience. Mallory, what’s the bottom line here today?

Mallory [00:32:22]:
Don’t be FOMO Freddie.

Wes Moss [00:32:23]:
Yeah, I couldn’t summed it up any better. We don’t know. We don’t want to be FOMO Freddie. And today is a reminder that our primary foundation that we talk about here on the Retire Sooner podcast on our show Money Matters is made up of pillars that really are fundamental. Diversification and asset allocation, patience and longevity. Not being FOMO Friday stocks mostly to your extent, that you can handle them, that adds in some safety and diversification, understanding that it is easier and harder in the world that we live in. And you may not need help, but it may help to have some guidance. And then finally, I don’t know who can argue this, it does help to have a plan.

Wes Moss [00:33:07]:
Whether it’s a one page plan, whether you use the happy retiree planner you can find for free, which we spend A ton of time on here in 2024. You can find it on YourWealth.com it’s called the Happy Retiree Planner. That gives you a financial plan that’s not 400 pages and overly complex, but really hits the important points of what you may be working towards. Here’s the amount of money I need to spend, I think, when I’m in retirement, and the plan will tell you about how much you need in order to do so. And yes, it might be the most important one if we had to pick any one of these. Well, I really don’t think it’s any one, Mallory. I think we’ve got to do all of them together. I don’t think it’s due two or three out of the five.

Wes Moss [00:33:51]:
I don’t think it’s do four out of the five. None of them should be all that hard. But anything that deals with psychology and emotion and investing is that way. Because it’s simple doesn’t mean it’s necessarily that easy. So let’s remember as we head into 2025, let’s put them all together. Let’s do all five of these fundamental principles and I think it gives us a very good chance at what we’re all looking for. That financial freedom, that sleep well at night when it comes to money sense that we’re all looking for. That’s all it is.

Wes Moss [00:34:28]:
It’s not magic, it’s not hype, just the boring essentials we need on this, Mallory, this financial journey that we’re all on together.

Mallory [00:34:39]:
Hey, y’all, this is Mallory with the Retire Sooner team. Please be sure to rate and subscribe to this podcast and share it with a friend. If you have any questions, you can find us@westmoss.com that’s we s. You can also follow us on Instagram and YouTube. You’ll find us under the handle Retire Sooner podcast. And now for our show’s disclosure. This is provided as a resource for informational purposes and is not to be viewed as investment advice or recommendations. This information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors.

Mallory [00:35:15]:
The mention of any company is provided to you for informational purposes and as an example only and is not to be considered investment advice or recommendation or an endorsement of any particular company. Past performance is not indicative of future results. Investing involves risk, including possible loss of principal. There is no guarantee offered that investment return, yield or performance will be achieved. The information provided is strictly an opinion and for informational purposes only, and it is not known whether the strategies will be successful. There are many aspects and criteria that must be examined and considered before investing. This information is not intended to and should not form a primary basis for any investment decision that you may make. Always consult your own legal tax or investment advisor before making any investment tax, estate or financial planning considerations or decisions.

Mallory [00:36:01]:
Investment decisions should not be made solely based on information contained herein.