Simple, Not Easy

As you read and research on the internet, I think it is very useful to read the comments. Always read the comments, sometimes there is more value in the comments than the content. Yahoo has an article about about people who accumulated money without engaging an advisor but as they turn the corner toward actually retiring, they are starting to turn toward advisors for help. 

The comments are mostly dismissive of needing an advisor. I've tried to be consistent in saying that someone needs to do the work for your retirement. Hire an advisor or don't hire one but if not, you need to do the work to be your own advisor, there are a lot of things that are easy to get wrong and those mistakes could be very expensive. 

This comment stood out as exhibiting a common behavior. 

If he retired on July 14, 2010, exactly 16 years ago, then he is probably confusing a bull market and being for being a smart investor. And even if that doesn't apply to him, it applies to plenty of people. In the last 16 years the S&P 500 has compounded at 14.95%, an 80/20 portfolio using IEF for bonds, compounded at 12.52% and a 60/40 using IEF compounded at 10.03%. Going back as a far as we can on testfol.io for those three, the long term growth rates have been 10.55%, 9.91% and 9.12% respectively.  I can recall several blog posts over the last few years that mentions how my few clients who are overspenders have been bailed out by a strong longer term bull market.

If in the last 16 years, the S&P 500 compounded at 4%, then I suspect he'd be whistling a different tune in terms of how easy investing is. Investing can be simple; build a portfolio that is properly allocated for your tolerances, has a reasonable basis for believing it can work and then don't panic. That's simple, it's only one sentence, but not necessarily easy. 

As a matter of personal philosophy, I try to be introspective, self-aware, with everything. Life is good at humbling people from time to time and this comment appears to lack self-awareness. Overestimating our abilities often ends badly. 

The information, analysis and opinions expressed herein reflect our judgment and opinions as of the date of writing and are subject to change at any time without notice. They are not intended to constitute legal, tax, securities or investment advice or a recommended course of action in any given situation.