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MY HUSBAND AND I have been selecting investments together for years—and we’re still married. How have we gotten along for decades without killing each other?
Our investment discussions revolve mostly around individual stocks and bonds. They constitute the bulk of our investments and take up the bulk of our time. We own everything from small amounts of risky stocks like Immutep (symbol: IMMP) to blue chips like Johnson & Johnson (JNJ) and 3M (MMM). Riskier stocks involve a lot of back and forth, while our discussions about blue chips are quick and easy. After all, what’s not to love about a dividend aristocrat—those stocks that increase their dividend every year?
We get recommendations on funds from our financial advisor. Those are also easy discussions because the parameters we set up are clear. For instance, our advisor recently suggested a closed-end fund that looked good to us because the fees were low, it invested in municipal bonds—something we’re lacking—and the credit quality and distributions looked enticing. Problem is, the fund’s shares were selling at a premium to the fund’s net asset value, which is its portfolio value on a per-share basis. We agreed to continue watching the fund and buy when it was at a discount.
Sometimes, our decisions take an especially long time. Consider bitcoin. We’d been talking about adding cryptocurrency to our portfolio since 2017. During a seminar in 2018, we were introduced to the workings of cryptocurrencies by someone we respected. But we didn’t do anything. In 2019, we were reading about hyperinflation in Venezuela and hearing firsthand reports that bitcoin was being used to purchase goods and services. The buzz seemed here to stay. In January 2020, we finally decided to buy.
Let’s face it, when we make investment decisions, the stakes are high: Success or failure can determine our next vacation, whether we can afford college costs and how much we spend in retirement. How have my husband and I avoided coming to frequent verbal blows? I gave it some thought and huddled with my better half (don’t tell him I called him that). We agreed that these are the five strategies that have worked for us.
Sonja Haggert is the author of Invest, Reinvest, Rest. You can learn more at SonjaHaggert.com. Follow her on Twitter @SonjaHaggert and check out her earlier articles.
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To clarify:
Per my schwab account the 3 year return is expressed as an annual %. Thus it is 20.38% per year. Also per schwab the SP500 return for this period is 17.77%.
Since 1/1/2000 when I started keeping track, my portfolio is 4 > it would have have been had I invested in SP500 with much less volatility.
I’m not saying this approach is for everyone or even most people, but the notion that is impossible to beat the market is false or that indexing is the only way to go is wrong.
Oddly, I have never owned a high flying stock, just what I call steady eddies. However, I also have avoided the very overvalued sections of the market.
One other reason that I don’t index is that I want my investments just like my consumer goods to be consistent with my values. Hence, no tobacco, alcohol, fossil fuels, or gun stocks in my portfolio. I don’t want to profit from those activities. Money is not the only goal in life.
Jonathan has created a great website here, but I don’t think all of the users are very kind. It isn’t necessary to attack everyone that does something different than you. Anyway, I’m done with you’ll.
This is a good article to read often as it provides many good things to consider for an individual or for a couple.
Sonja, Several other commenters have asked if you compare your returns to benchmarks. Your lack of a response suggests that you don’t and raises questions about the value of your advice.