Who manages your money?

Hi All,

     Just curious how folks are managing their investments. Is everyone doing it themselves?There are a lot of robo-advisors like Vanguard Digital Advisor and robo-advisor hybrids like Personal Capital and Vanguard Personal Advisor Services.

Warren Buffet has said it makes the most sense for most people to just invest in the S&P 500 but I know folks on here are not most people :)

I have been managing everything myself so far but have been considering using something more hands-off but high-growth potential so I can focus more energy on hobbies.

Thank you in advance!

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Comments (95)

  • Research Analyst in HF - Other
Sep 12, 2021 - 5:58am

Who manages my money? TQQQ has been managing my money for the last 7 years. Almost exclusively at this point given the fact that every other position now pales in comparison.

Fuck everything but tech in your long term long vol PA. The best of the best companies at unfortunately the highest of the high valuations. Who cares - it's still what will be the clear winner 20-30 years from now.

We're not pension funds, we don't have constant liabilities or need nice sharpe ratios and low volatility/smooth monthly/annual returns. We need pure % and $ returns. Fuck alpha and fuck beta.

  • Analyst 1 in IB - Gen
Sep 12, 2021 - 10:33am

Can you please explain why TQQQ is safe long term? Because I asked this question a month back and was roasted for even considering a levered ETF for long term holding? They started talking about decay and all this stuff. Also I suppose a 33% fall in the index would wipe you out but can this be mitigated with stop loss or something? Thank you

  • Research Analyst in HF - Other
Sep 13, 2021 - 3:36pm

I don't know if TQQQ is safe long term. All I know is that any excess money I have is going into it. And it's at the point where there's mid to low 8 figures due to growth.

Here's why I like it - path dependency is an issue but I'm ok with the risk given the strong positive trajectory of the Nasdaq 100. This is an index of the best tech companies basically - the strongest business models. If you look at a chart of TQQQ vs say SHOP, they look similar because even though TQQQ is 3x levered, it's on an index of 100 stocks which is naturally much less volatile than a single stock. So the volatility looks similar in most periods (except severe market drawdowns you'll see TQQQ go down more).

On the 33% drop in one day - yes you should be wiped out if this happens and I don't have a magic bullet to counter this. However we do know there are marketwide (as well as individual) circuit breakers. The market stops trading for the whole day if the S&P 500 drops more than 20% in one day. SO - if there is somehow a scenario where the largest 100 stocks on the NASDAQ can drop 33% on average WHILE the S&P 500 somehow has dropped less than 20%, then yes I am fucked. However, running the math on this given that a giant chunk of the S&P 500 IS the Nasdaq 100…you'd basically have to have all the other sectors in the green pretty solidly (like 5%+) - in what world is this going to happen?

Anyways, hindsight is 20/20 and I'm obviously very happy. But I still believe in it. I've tried value investing and shit for my PA. I just don't see how business models like Google are going to stop being attractive af. Why would I waste my time digging into tire manufacturers and owning that shit.

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  • Analyst 1 in IB - Gen
Sep 13, 2021 - 4:32pm

Thank you for writing this. Fuck it I need to stop being pussy I'm going all in on TQQQ. It's either this or crypto and I rather take my chances with TQQQ fuck all the negative noise about these levered ETFs always trying to pull me away from freedom.

Sep 13, 2021 - 5:29pm

This is a terrible strategy going forward… tapering will start soon & most of the growth in equities is due to multiple expansion (which can't happen forever) and lower interest rates (which could rise to combat inflation).

I would take my massive gains and put them in VTSAX or VTWAX and live a wealthy man.

  • Research Analyst in HF - Other
Sep 13, 2021 - 6:19pm

I'm sorry but no. This is the kind of mindset and overused argument/rationale that would've prevented you from investing 10 out of 12 months in 2020, in 2019, in 2017, in 2016, in 2014, in 2013, in 2012 and in 2010. Every one of my friends over the last 7 years that i've tried to put into TQQQ have told me "equities are overvalued and TQQQ is at all time highs!!!! its up 200% this year!!! why would I invest in it now??" - and each one of these fuckers is a sorry poor fellow because (save 2020), TQQQ never went back down again. And even in 2020 - it went down to levels not seen since....late 2018!!!! So if you invested in TQQQ 15 months pre March 2020, you would've still been in the green even after the 70% drop.  

FB is still trading at like 12x EBITDA ex-Oculus.....are you trying to tell me that FB is overvalued on a multiple basis?

Also - you're basically arguing for taking your money out of equities period (with the 2 most overused and perennial arguments) yet you're advocating total stock market indices. 

I would bet 95% of my net worth that TQQQ goes up 100% before it goes down 40%, and that over 20 years it will 10x at the very minimum. 

Another way to do it is invest in TQQQ and once it doubles, take your principle out and play with the house's money. Its up like 65% YTD thus far. 

Sep 14, 2021 - 1:43am

You have won the game, my friend. You have won the game. Stop playing.

I have a similar mindset actually as I was in QQQ for roughly the same time as you. Had I known of TQQQ, I likely would have been in it. However, I recently switched from QQQ to VT because my contributions matter more now than the gains of my investment.

Why would I risk a marginally higher return when what is actually material is my contributions which can be 2/3 of what my investment is now. What is also material is the risk from TQQQ.

  • Research Analyst in HF - Other
Sep 14, 2021 - 2:05am

Put a lump sum initially when I decided to transfer all the liquid assets that I could (including 401k rolled over into IRA). Then dollar cost averaged for a few more bonus cycles. Then stopped for a couple years until 2020 when I legged some more in.

Sep 18, 2021 - 10:34pm

Man you guys on some oversaturated market shit. Go search any MSCI frontier market. Hire some local consultant to give you the best company with P/B >1 and a solid EBITDA and project. x4 your money in max 2 quarters bruh

  • Associate 1 in S&T - Other
Sep 12, 2021 - 11:21am

It's not just that something like that would wipe it out. Loses compound more, so after a big drop like during COVID, it takes much longer to recover. Volatility hurts you even if things stay flat (unlike with the underlying unlevered ETF)

  • Research Analyst in HF - Other
Sep 13, 2021 - 3:27pm

You are right IF you model it out stochastically using say a Monte Carlo simulation with a mean return of 0%, then yes of course the losses compound more, the stock is path dependent and you have decay due to the volatility. Look what happened during covid. Down almost 70% peak to trough - look where it is now baby ;). The reality is that QQQ is not a randomly moving stock index and it does NOT stay flat, and there are far more up days than down days and so the compounding works well in your favor despite the volatility decay math we all know of - so for example in the last 10 years TQQQ is up 100x while QQQ is up 7x.

Sep 13, 2021 - 8:26pm

yo where tf you work at, i need to you be my advisor for my PA. send me a DM if ur comfortable, i wanna follow u for future posts

Go all the way

Sep 13, 2021 - 5:48pm

Yes money will cease to be free in a years time…and QE will most likely end in November, equities have not priced this in AT ALL. For those that made money in this insane bull market, that's great. For new investors, this is not sustainable in a stagflationary environment. Terrible time to buy TQQQ, great time to buy MZZ

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  • Research Analyst in HF - Other
Sep 13, 2021 - 6:29pm

Your problem is you're trying to use your finance education and theory to impart some logic on things. That logic would tell you to short things and buy bonds and shit. That is all fucking wrong and you know it. Over any 30 year period, equities, going balls to the wall long, has been much much more lucrative than any other asset class. You go ahead and short the market, see how well that takes you.

I used to do long/short in my PA. I used to look at value stocks and short RX plays and do options and all that shit. And you know where it got me? couple points above the market some years, couple points lower other years. Am I a bad long/short investor? Maybe Maybe not? - most l/s portfolios return low single digits Is long/short the way to maximize returns? Fuck to the no. 

Ultimately - people should not be trading in and out in their PAs running long/short hedge fund portfolios. You don't have risk limits, duration limits, max drawdown constraints, volatility targets, fucking pensioners to pay for. You are NOT a hedge fund. Your job is to make $ in any way by possible by X age without regards to how and when that happens. No one cares about the sharpe or the path dependency. 

Sep 13, 2021 - 6:57pm

Brokerage is 100% in SWTSX, Schwab's total market fund. Retirement is like 80% in SWTSX (or similar total market fund), 20% target date retirement fund. I should probably increase exposure to international equities.

Sep 13, 2021 - 8:05pm

I manage cash, taxable accounts and retirement accounts for myself (~$1mm), my father (~$5mm) and my father-in-law (~$10mm+). They handle their own real estate investments.

I started off trying to act smart by buying individual stocks, options, allocating some cash to international and certain sectors. In a couple of years I finally learned the lesson that Warren was trying to teach us. The vast majority of all that money is in vanguard 500, vanguard total stock market and vanguard extended market.

With the ten year bull run we have been on my dad and fil think I am some sort of investing genius and I have out performed 85% of my active investor friends.

The truth is that unless you work for a hedge fund or something you have no chance. You're not going to discover the next google and you're not going to win the lottery. The retail investor is at a large disadvantage compared to the funds that get all that inside info.

Another benefit of passive investing besides owning 75% of active funds is that it requires none of your free time to manage. Active investing is like sex, poker or fashion sense, everyone thinks they are awesome when in reality most people suck at it.

Sep 13, 2021 - 10:32pm

I needed to hear this - thank you!

I'm coming to that realization as well. I'm 30 so it's not too late for me. lol  :)

Recently moved all of my 401K to an S&P 500 index (previously has some small and mid-cap mixed in) and thinking about moving my IRAs to Vanguard Total Stock Market and be done with it since Total Stock Market is just a mix of Vanguard 500 and Extended Market (I think).

  • 1
Sep 13, 2021 - 10:39pm

You are correct. Total stock market is 80% the 500 fund and 20% extended market.

I just give a larger weight to extended market cause I'm still trying to find a little alpha.

But if you compare vanguard 500, total stock market and extended market over the long term, the returns are all similar.

I think if you make a lot of money or will get a decent inheritance cause your parents worked hard, then you don't need to make money fast. And passive investing over 30 years is almost fool proof.

Only downside is that you won't get rich fast.

Sep 13, 2021 - 11:06pm

Count me in on the "mostly passive" train. Here's the breakdown of my portfolio:

Retirement Accounts - 100% $VOO & $VTI. In case I'm wrong about international outperforming this next decade, I don't want to lose out on 10 years of compounding. Plus, these funds are cheap and obviously well diversified, so it's not the end of the world even if US returns stagnate like I think they will.

"Safe" Personal Account - 100% $VT and $VWO. Reason being I'm of the unpopular mind that the US market is quite overheated and there will likely be money flowing abroad to chase new yield/returns. I'm particularly bullish on emerging markets, which is why I'm indirectly overweighting them by buying $VT (which already has an allocation to $VWO) and purchasing additional shares of $VWO to complement the $VT position.

"YOLO" Personal Account - This only makes up to 10-15% or so of my account and will gradually decrease to 5% as I get closer to 50. This consists of a hodgepodge of individual positions I'm wheeling options into, private investments, and crypto. The idea is basically that if this portion goes to $0, I won't be ruined financially, but on the off chance some of this pays off quickly, I could really accelerate my semi-retirement goals or give me some passive income to fund some of my travel/activities. Index investing is historically the highest percentage way to build wealth over time, but I also am starting to see the wisdom of potentially becoming rich when you're young, so why not? Plus, it's fun as shit.

Sep 13, 2021 - 11:31pm

Thanks for posting Lester! I appreciate the insight. I really like the differentiation between the safe and yolo personal accounts.

I'm currently in crypto but would like to start investing in real estate, agriculture, and art once I am able to max out my 401K. I agree that it is fun as shit! lol

If I wasn't saving up for a condo/house I'd probably have more in crypto right now.

I was thinking about VT as well. It's interesting how much VWO has gone up since COVID really hit the US.

  • 2
Sep 14, 2021 - 10:40am

Honestly, my active allocation record, outside of my ETF sector picks, isn't that great lol. I'm a bit of a boomer and still believe that valuations/cash flows matter, but I've been dead wrong for an entire decade now, which is why I started just heavily allocating my funds to the aforementioned funds. I've kind of realized that I'm decent at understanding general trends (i.e. I have a feeling rates will go up, so I'm buying financials right now), but I'm really bad at picking individual companies. At this point, I literally only buy individual stocks for fun and essentially assume that my pick will fail and put in what an amount that I'm content with going to $0. To tilt my portfolio, I lean heavily on ETFs, to be frank. This still gives me a good balance between enjoyment and being responsible.

  • Analyst 1 in IB - Cov
Sep 14, 2021 - 7:58am

GOOG, FB, MSFT, active and passive ETFs

Thoughts on holding FAANGs? Seems like good r/r, not crazy tech valns and monopolies with significant economic moats

Sep 15, 2021 - 11:18pm

Makes sense to me. FB seemed more affordable when I looked earlier in the year but with these big tech stocks I feel like you just need to dive in. They just keep on going up. lol

What kinds of ETFs are you using and who are the issuers? 

  • Analyst 1 in IB - Cov
Sep 15, 2021 - 11:48pm

Yeah FB is great value with lot of upside optionality. I saw lot of HFs buy AMZN. Obvs a phenomenonal biz but takes so long to DD.

I hold VAS and based in Aus so I hold RF1 and IOZ.

Sep 14, 2021 - 6:38pm

I just started managing my Roth IRA account and I plan on mostly investing in VTI and make small investments on the side (mostly fundamentals based, maybe some with macro themes). So the alpha generation is on the small investments, which won't affect the portfolio that much if it goes down. The only risks I can currently think of are market risk and liquidity risks during a downturn, but if u are cautious enough and have a good read on the markets you could just make defensive plays when u think the markets are too hot (don't try to time the markets btw) and preserve most of your capital.

Generally speaking, just go with long only since u don't have the time and effort to make complicated trades.

I guess another strategy is just going long vti but buying puts along the way to hedge against market risk. Still that strat prob requires a lot of skill and the put option contract costs are going to add up and not worth it in terms of price rn. God it's really hard to invest in this period when everything is so uncertain. And if u don't invest at all, there's the risk of inflation staying to eat up your purchasing power (but more likely to be transitory unless it sparks a demand side inflationary spiral). China used to be a good investment but the government fucked that up. I guess I'm long LIT.

Sep 15, 2021 - 11:01pm

Interesting - I hadn't looked into LIT before. Just looked up - it's been kicking but the past couple years

I'm tempted to put a little in there as I'm a huge advocate of EVs. They still take a lot of fossil fuels to make but I'm assuming the reliance will decline over time.

Sep 16, 2021 - 7:25am

I would say that VTI is a great holding overall no matter the type of account you want to open. Of course, you have to understand that VTI follows the S&P500 + some US tech holdings so you are essentially betting on the prosperity of the entire US economy. If you want to go for even more aggressive investments, just make sure that both the fundamentals are really solid, there's a good risk to reward ratio, and you have risk management measures such as stop losses to prevent heavy losses. Like one of my biggest mistakes so far for my Roth IRA was investing in DiDi and I would have lost less if I had proper risk management. Luckily DiDi made up only a small portion of my portfolio so my losses were manageable. But yeah good luck

  • Analyst 1 in AM - Equities
Sep 17, 2021 - 3:14pm

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