facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast blog search brokercheck brokercheck
%POST_TITLE% Thumbnail

How I Invest

I am often asked about my personal investment management style and what types of investments I use. Therefore, I thought I would describe my investing style, types of holdings, asset allocations, constraints and even investment hits and misses.

My investing style can generally be described as patient, boring and using primarily stocks mainly in the form of index and low-cost active mutual funds. I do own some individual stocks as well. My main investing approach has been consistently focused on the long-term. I’ve used widely available and time-tested investments over decades with the help of compounding power for important financial goals like saving for a house, college tuition and retirement.  

A highlight of my investing career has been the introduction of many investor-friendly innovations and products that continue to favor the average investor, like myself. These innovations include the boom of no-load, commission-free mutual funds including low-cost funds, ETFs and most recently no-cost stock trading.  What hasn’t changed are the strategies that typically work and don’t work to achieve life’s important financial goals. Since the Ronald Reagan Presidency (when I started to invest) a patient, lower cost investing strategy using proven and transparent investments mixed with intestinal fortitude remains a viable way to achieve financial goals. 

Hits and Misses

Along with investment success will come some miscues. Investing mistakes are par for the investing course for all investors. I’ve kept more speculative investments to a minimum since this approach tends to require more luck than skill and patience for success. It also takes a lot of focus and stress and I’m more productive focusing on more important areas like my clients and family.   

Past miscues have typically fallen into two categories. The first is with individual stocks, when insufficient research combined with too much impulse and emotion were to blame.  Remember the late 90s when the Palm Pilot was supposed to organize and connect the entire world and send PALM stock to the moon?  I made a relatively modest investment in PALM on this thesis. However, the story didn’t exactly pan out and the company and stock quickly returned to earth. The second type of investing shortfall is tied to actively managed mutual fund investments where performance was hampered by poor stock selection and unexpected fund portfolio manager changes. Over the years, I’ve deemphasized less long-term speculative investments and kept them outside of my longer-term goal accounts like IRAs and 529 plans.

KISS - My Asset Allocation

My investments continue to heavily tilt towards stocks as retirement plans are decades away. However, since I’m now more than halfway to centenarian status, I’ve started the process of adding more conservative investments (bonds) to my portfolios.  I view my risk tolerance as above average since I’ve experienced the benefits of long-term investing through simple and suitable asset allocation. I’ve developed sufficient intestinal fortitude for taking the long-term view by investing through numerous recessions and bear markets over the last several decades.

I am also asked if I invest in alternative investments. I generally define these as investments other than stocks and bonds. They would include bitcoin, private REITS, managed futures, hedge funds, private equity even gold. I don’t invest in these options since they tend to be illiquid, opaque, hard to understand and expensive. Plus, many alternatives have not generated longer-term returns after fees compared to stocks. For me, by keeping it simple with an appropriate allocation of stocks and bonds over time has generally provided the risk-adjusted investment returns necessary for my goals.


My IRAs are mainly in Vanguard low-cost U.S. and overseas developed index funds along with some actively managed sector mutual funds. My holding periods for these mutual funds are typically many years and I let the power of dividend growth compounding do its work over time while rebalancing when needed.  These funds carry very low expenses helping me keep more of what I earn to reach my retirement investing goals. 

In my taxable brokerage accounts, I also maintain a long-term view and hold a mix of low-cost mutual funds and individual dividend growth stocks. I continually reinvest dividends to boost compounding power. I also take a private market view of these stock holdings, meaning if the stock market shut down for 10 years, I believe the companies’ profitability, cash flows and dividend growth would continue to rise.  

529 College Plans: Still A Good Deal

I started 529 college savings plans soon after my children were born. They are managed by Fidelity (St. of New Hampshire plan) and T Rowe Price (St. of Alaska plan).  In the early years, the plans required little time and attention as I continually invested in stocks. However, since one of my kids is in college and the other will be off to college shortly, more attention and planning is required for distributions and appropriate risk reduction. I believe tax-deferred 529 college plans remain a very effective tool for college savings especially given the seemingly never-ending spiral upward of college costs.

                                             Source: Security Benefit

I Did It My Way & So Should You

My asset allocation and investments are appropriate for only me given my goals, risk tolerances etc. There is no off the shelf investment plan as we all have differing needs, restraints and emotions.  The key is not searching for the magical investment(s). Instead, investment success over time requires a process of evaluating changing goals and risks, patience and formulating a suitable asset allocation that can usually be accomplished with stocks, bonds and cash. It’s your money and life and by actively engaging in a suitable and simple investment approach, you can be in charge.