We are putting the old house on the market this Saturday. The housing market doesn’t seem nearly as hot as it was in previous years. Selling a house is certainly no fun; it is a very emotional experience. For some people, buying a new home is one of the biggest decisions of their lives. Hopefully, we can find someone who appreciates a comically oversized lanai and loves orchids.
We had a big Easter celebration with a whopping 25 people, which included yet another new baby. With our large property, we decided to host an egg hunt. We got a little carried away and hid 400 eggs! However, when it was time to start, only two kids wanted to look for them. I guess we forgot that most of the cousins are now teenagers. I’ll be finding plastic eggs in my yard for years to come!
The base of the pickleball court is complete, but we have to wait another month before the permanent surface can be installed as it cures. We are still deciding on colors. Green? Blue? Blue court, green on the outside? I'll let you know.
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Sometimes I forget that many of you haven’t been immersed in the world of investing like I have. After 20+ years of managing money—and growing up with a dad who talked stocks and bonds at the dinner table—it’s easy to take certain concepts for granted.
But most people didn’t grow up with that kind of background.
So, let’s hit the reset button and simplify things as much as possible.
Most people don’t invest by buying individual stocks. Instead, they put their money into mutual funds or ETFs (exchange-traded funds). These are bundles
of hundreds or even thousands of stocks or bonds wrapped into a single investment.
When someone tells you, "You need a diversified portfolio," all they mean is: Don’t put all your eggs in one basket. Mutual funds are one of the easiest ways to diversify.
I generally advise against picking individual stocks. They’re unpredictable and volatile. The overall stock market has a very reliable long-term upward trend, but individual stocks? Total wildcards.
Just because a company is famous or has been around forever doesn’t mean it will make you money.
Let me show you what I mean with a few examples from 2024:
Peloton dropped another 39% this year, after already losing the bulk of its value since its COVID-era highs.
Walgreens was down another 34%, continuing its rough run.
Hasbro, the toy giant, fell over 20% despite the popularity of its brands.
These are household names—and yet, not exactly money-makers lately.
The Harvard Endowment Fund, which utilizes sophisticated stock-picking strategies, manages over $50 billion, and has teams of Ivy League-educated analysts, hasn’t outperformed the plain old S&P 500 Index in the past decade. Sometimes, boring wins.
If you buy a mutual fund or ETF, it comes with a ticker symbol, kind of like a stock’s abbreviation. For example, if you walk into Fidelity or log into your Schwab account and say, "I want to buy $100,000 of SPY," you’re investing in the 500 largest companies in the U.S., all in one shot.
As of 2024, your money would be spread roughly like this (the more market share, the higher the allocation):
$6,300 into Apple
$5,900 into Microsoft
$4,400 into NVIDIA
$4,300 into Amazon
$3,800 into Google
$2,200 into Meta (Facebook)
$1,600 into Berkshire Hathaway
$1,500 into Tesla
$1,300 into Eli Lilly
$1,200 into Visa
$1,100 into JPMorgan Chase
…and so on, until you own pieces of 500 companies. The bigger the company, the larger the slice of your investment it gets.
If you have a 401(k), your company likely offers options for these types of diversified funds. They might say things like, "You want to build a balanced a diversified portfolio of stocks and bonds."
Bonds and stocks often move in opposite directions, which is why they balance each other out in a portfolio. When the economy is booming, stocks typically rise, while bonds may lag, as interest rates often rise to cool inflation. But when markets get shaky or recession fears grow, investors tend to flee to the relative safety of bonds, driving their prices up while stocks fall.
This push-and-pull creates a natural stabilizer—when one side of your portfolio is struggling, the other is often holding steady or gaining. That’s the beauty of diversification— and it's what's happening right now.
Here’s a breakdown of the main categories of investments:
Stocks:
Large Cap – Big companies, such as Apple and Microsoft etc.
Mid Cap – Medium-sized companies.
Small Cap – Smaller, more nimble companies.
International – Companies from developed countries outside the U.S.
Emerging Markets – Companies in countries like Brazil, India, or Indonesia.
Bonds:
U.S. Government Bonds – Loans to the federal government.
Municipal Bonds – Loans to cities or states.
Corporate Bonds – Loans to companies.
International Bonds – Loans to foreign companies or governments.
A sample diversified portfolio might look like this:
30% Large Cap
10% Small Cap
10% Mid Cap
10% International
10% Emerging Markets
10% U.S. Government Bonds
10% Municipal Bonds
10% Corporate Bonds
(Just an example—not a recommendation!)
Each year, different asset classes take turns leading or lagging. Nobody knows in advance what’s going to win.
Just look at the past few years:
In 2022, tech stocks were the worst performers—absolutely brutal.
In 2023, they bounced back and led the market.
In 2024, energy and value stocks have outperformed, while growth and consumer retail have lagged.
It changes constantly. So, don’t chase performance. Just diversify and stay the course.
I hope this helps clear things up a bit and removes the mystery from investing. Keep it simple. Stick with what works.
Be Blessed,
Dave