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Kevin Kroskey – About – Contact
Intro:
Hey, it’s another edition of Retire Smarter. Walter Storholt back with Kevin Kroskey today, President and Wealth Advisor at True Wealth Design, serving you in Northeast Ohio, Southwest Florida, and the Greater Pittsburgh area. You can find Kevin online at truewealthdesign.com. Kevin, it is great to be with you this week. How are you, my friend?
Kevin Kroskey:
Walt, it’s always my pleasure. I’m good. We’re recording about a week out from Hurricane Ian really decimating Southwest Florida, which, as probably many listening to this know, my family and I live. Thankfully, at this point in time we’re in Ohio and happy to be here. While we heard that our home in Southwest Florida didn’t sustain any damage, we had some people staying there because we have a generator and it was kind of safe and more inland. A lot of our friends and a lot of people, as you can see from the news reports, were utterly… I mean, whether it’s the death or destruction, you name it, really sad to see. I mean, unfortunately, these storms are inevitable, particularly in places like that. And with the warming that we have, it seems like those are increasing. But really sad to see what happened for sure.
Walter Storholt:
Yeah, devastating. The power of those storms is just incredible to see, and it’s just the worst when it hits through populated areas like that and areas that just haven’t taken that many strikes in the last 50 years. But they do happen, and boy, just devastating images out of there. But glad to hear that you guys are okay and were away and didn’t have to even experience really the storm in person and that the house came out okay as well.
Walter Storholt:
So glad to have you back here on the podcast and thankful that we’re able to chat with you and get some good knowledge about financial education and information today, Kevin. And looking forward to our topic today. A bit of a follow-up to episode 108, our most recent one, where we had a little bit of fun talking REM on the podcast. That was a little bit out of left field, didn’t see that one coming, Kevin. So that was fun last time around. The end of the world as we know it, yet why we felt fine about the economy. And then maybe our finances and looking at things from that macro level. And you want to expand on that a little bit more today, right?
Kevin Kroskey:
Yeah, I do. Walt, as you mentioned that and we were just talking about Hurricane Ian, forgive me if this is kind of a bad analogy, and again, this is not to diminish any of the tragedy that people are suffering, but we talked last episode about this creative destruction process, and maybe that’s not a great way to phrase what’s going on with Ian, but when you think about what’s going to happen, building codes are going to change. Homes that were single-story may be built in the 1950s now maybe aren’t just going to be raised, but maybe they’re even going to be raised more. They’re going to be more reinforced. And so I don’t have any doubt that Southwest Florida’s going to build back stronger, and this is going to be an ever-present issue to deal with. But things will change. There’s a ton of destruction, very sad, very much a tragedy. But nonetheless, I think we’re going to build back stronger for those reasons as we have over time.
Kevin Kroskey:
Last time when we were talking about REM, and why it makes sense to be long-term, rationally optimistic for that matter, we also talked about that process of creative destruction that Joseph Schumpeter, if I can do my best pronunciation there, which is pretty terrible, I know. But that’s the process that capitalism is built on. It’s either, yes, there’s winners or losers, and it feels terrible to be on the destructed rather than the constructed side. But in aggregate, our economy and our society grows wealthier. And it’s kind of a separate and tangential question about, well, do we provide some sort of safety nets to the society and to the people that comprise it in general, maybe to help make that creative destruction process a little bit less destructive to those people’s individual lives?
Kevin Kroskey:
But again, nonetheless, that process does create more wealth for people over time. It takes resources to higher and better use, creates more opportunity, creates more profits, creates returns in the marketplace. And for us as investors, and the whole podcast is really about retiring smarter. And what I wanted to touch on today was, okay, we know that it makes sense. We have all this evidence supporting that it makes sense to be long-term optimistic, but we do have this kind of creative destruction process in the markets. So how should we really think about that in terms of really implementing our retirement investment portfolio? So we were kind of up in the clouds last time. I was listening to REM and being all happy-go-lucky, despite the lyrics. And now I want to try to bring it down on the runway today.
Walter Storholt:
Okay. We were at 30,000 feet cruising along, listening to the white noise of the plane, popped in the headphones and got a little music going, got the REM. Now we’ve landed at the airport and we’re back to reality and kind of our own lives again.
Kevin Kroskey:
Yeah. Well, we’re circling the airport, so it’s my job over the next 20 minutes or so to make sure-
Walter Storholt:
So you’re going to bring it to a safe landing. Yeah.
Kevin Kroskey:
… I do it safely landing. Yeah. If I crash and burn, that’s why you’re the Warren to my Buffett and you’re here to get me on track. Okay, buddy?
Walter Storholt:
Captain Kroskey is what you are today, and I guess I’m in the control tower, just helping you out if you run into any troubles.
Kevin Kroskey:
All right. So kind of a key point, number one, if you will if I can set this up. So when you think about saving for retirement, and our episode 45 goes through our Retire Smarter solution, it really is the process that we use here internally to take a new client through that process and help get clarity and confidence and make sure that everything that they have is aligned to go ahead and support the lifestyle that they want to lead in retirement. And we kind of overlay that with a tech-smart planning strategy as well. So that’s all there, but really what we’re going to focus on is just the investment portion today and specifically about this sort of creative destruction process.
Kevin Kroskey:
And some of the things you’ll hear about if you’ve read at all about investing, or maybe you’ve even taken another step beyond just casually reading, but maybe even taken a course, a college course or online or whatever the case may be, you’ll hear some things about average returns or volatility or the kind of statistical term, standard deviation, which I prefer to call the wiggle factor or just how-
Walter Storholt:
That’s my favorite, the wiggle factor.
Kevin Kroskey:
The wiggle factor, right? What do the ups and downs look like? And all those are important, but those really are kind of a little bit shortsighted when you think about retirement. When I think about retirement, it really is that lifestyle. People become to a certain level of lifestyle. Maybe they even want to increase it in retirement once they have more time on their side, and maybe they’ve done a pretty good job of saving, investing and living below their means so they can do that. So to me, the investment part isn’t necessarily, or I would say isn’t solely about those traditional things that people think about when it comes to investments, but it’s really making sure that we have enough dollars to do what you need to do when you want to do it.
Kevin Kroskey:
Think in terms of dollars more than anything. And when we think about really taking this a step further, if we do weave back in that investment education that maybe somebody would go through, so rather than the wiggle factor of volatility, rather than the standard deviation or rather than average returns. And we did an episode on this, and I think this may have been when the egghead alert was first created, I’m not exactly sure about this, Walt, but it was terminal wealth-
Walter Storholt:
It is the origin story.
Kevin Kroskey:
… dispersion in episode 67.
Walter Storholt:
I think you’re right.
Kevin Kroskey:
Said much more plainly, it’s having the money when you need it. So it’s about having those dollars when you need it. So that’s kind of the setup here, but those are some of the key points and how we need to think about investments as it relates to retirement. I’ll kind of transition here to the next point, but when we had Dr. Michael Finka on earlier in the year, which I think it’s still one of the highest-rated episodes, which was a two-parter that we’ve done, I still get a lot of feedback on that, and I actually saw Dr. Finka at a conference last week, and he did a fantastic job in a continuing education session that I was in of his.
Kevin Kroskey:
But one of the things we talked about on that episode, and then as kind of a follow-along, was the certain types of risk. So something called, and again, I’m going to use an egghead word here, and then I’ll explain it in plain English, but something that he says is kind of idiosyncratic. I’m kind of waiting anytime I say one of these words, Walt, [inaudible 00:09:01] I have a little trepidation that it’s coming. I don’t know if I’m hoping, but I’m a little scared. You’ve laid off-
Walter Storholt:
I mean, I’ve heard of idiosyncratic before. I’ve heard of it before. Maybe I’m getting smarter listening to this show, so I’m not triggering the egghead alert anymore.
Kevin Kroskey:
Hey, I like it. I might have to find a new Warren to my Buffet if you’re becoming me, buddy.
Walter Storholt:
I don’t know if I’ve reached that status quite yet, but yeah, maybe I’m just feeling more, I’m feeling a little smarter. So there you go.
Kevin Kroskey:
In playing English, it’s kind of a unique or specific. Think those terms, it’s unique, and we think of this in terms of risk generally in the investment world, it’s unique or specific risk. So there can be good examples of this and then bad examples of this. And forgive me for the crass analogy, but rather than idiosyncratic, I’m going to call the bad examples idiosyncratic, not that I’m calling anybody an idiot, not that I’m trying to offend anybody. I know the whole world is sensitive and overly sensitive these days, but it just works. If somebody else has another suggestion about how I can use idio to get to contrast without using idiot, I’m all for the suggestions. So, kind of quick disclaimer there.
Kevin Kroskey:
But the good part or of having idiosyncratic or unique risks in your portfolio, unique risks is that it does lean towards its diversification. We’re talking about this kind of constructive or destructive process, and we want to make sure that we have the dollars that we need in retirement. So a good example of having unique or specific risks in the portfolio or having different types of asset classes, very broad asset classes. So think of a school of fish. You could have a school of fish of… Man, Walt, you’re going to have to help me with my types of fish here, but what types of fish can we have at different schools? I don’t know. Let’s use, hey, we got one school of fish that’s yellow and another school of fish that’s red. How about that? Let’s keep it simple.
Walter Storholt:
You made it really simple. All right.
Kevin Kroskey:
Yes.
Walter Storholt:
I was going to try and trigger the egghead alert on myself and drop the Latin names for some type of fish or something like that. But no, we’ll go with red and yellow. That sounds good.
Kevin Kroskey:
Yeah, I’m not going to demonstrate my lack of knowledge in the fish area, but-
Walter Storholt:
I mean tuna, salmon, maybe something like that.
Kevin Kroskey:
Red and yellow fish. They’re both fish. And then you have these individual fish within those schools of red and yellow that are all different too. The redfish are different from the yellow fish. Pretty clear to see something like that. So broadly speaking, analogous on the investment markets, so you could say stocks and bonds are two different schools of fish, if you will, or something that we’ve at least touched on in a few episodes this year, and we’ve talked a lot to our clients, something we call a systematic trend strategy. It’s very different. Those all have different or unique risks that sometimes can be correlated to each other like we’ve seen with stocks and bonds this year, but over longer periods or other periods, they’re not correlated with one another. And the trend following in general is not correlated or has no relationship in its price movement to the other two.
Kevin Kroskey:
So when you have different schools of fish and they all have positive expected returns, that’s the other key point here, positive expected returns, then ultimately you’re going to have more of an all-weather sort of strategy to your portfolio. If something zigs, you’re going to have something else on the portfolio that’s hopefully zagging and going to smooth out returns overall. You can take this down to another level if you’re looking within the school of fish. So if you think about having stocks, well, you could get into like, okay, now let’s look within that school of fish and say, okay, you have big stocks, little stocks, or small company stocks. You could have domestic or foreign, you could have companies that are cheap, other companies that are high growth, things like that. But they still have very common characteristics of the type that they are and their stocks. Think of the very broad level, the school fish level, and then you could start drilling down. So that’s what I would call a good type of unique risks or those idiosyncratic risk.
Kevin Kroskey:
The bad type is if you’re kind of having a focus stock strategy, for example. I’ll give a couple of examples here. And this is something we talked about in that episode 67 and just kind of going through, like, hey, how many stocks do you really need in a portfolio to be diversified? And again, that’s where we got into this concept of, well, how are we defining diversification? Are we defining in terms of having a lower wiggle factor, or more appropriately in my view, are we defining it in a term of likely having the dollars that we need when we need it? AKA terminal wealth dispersion.
Kevin Kroskey:
So if you look at just individual stocks, they have their own company-specific risks, and those risks are not compensated for. You’re just taking more risk without any expectation of additional return. Said another way, you’re kind of introducing some other risks to it beyond that sort of individual company risk, what the academics or what my teachers in grad school would call security selection risk. It’s a few different names. But long and short of it is, if you’re not well diversified, if you don’t have a very broad diversification, if you don’t have some different schools of fish rather than just having fish within the same school, then you’re exposing yourself to this idiosyncratic risks of these company-specific risks, which I am therefore renaming idiosyncratic risk because you’re taking more risk and there’s no compensation for it. You’re just trying to introduce a luck factor if you will.
Kevin Kroskey:
Now, most people don’t think that they’re doing that. They may have all kinds of different ideas. Investing in individual stocks has been around for a long time before the advent of mutual funds. It could be something that’s more almost hereditary that they got from mom or dad or grandma or grandpa and just been doing a long time. If I go back maybe 40 years ago or 30 years ago, maybe you could make a case that, hey, if I buy these individual stocks and I have enough of them, well, I don’t have to pay these mutual fund fees that are just going to kind of suck away some of my return. I would argue about that even looking back, say 20 or 30 years ago. But nonetheless, today, I mean you can buy mutual funds or ETFs pretty darn close to free. So there’s really no point in that argument today.
Kevin Kroskey:
So I think a lot of this is just more inertia than anything. It’s just the way that people maybe have done it before. And so it’s the way that they still do it in terms of picking individual stocks. But again, if you’re just having 10 or 20 or 30 in the portfolio, more likely than not, it’s not going to work out so well. And I’ll give some evidence to that here in a moment.
Walter Storholt:
I liked your explanation of the idiosyncratic risk. It reminds me of whenever Connie and I go hiking and we’re on the edge of a cliff and I feel like I need to take two more steps closer to the edge of the cliff, like for some reason the view’s going to get that much better from just those two steps. And she’s like, “Please step back away. Your middle name is accident waiting to happen. Step away from the edge of the cliff. You’re not improving the experience at all, you’re just stressing everybody out. Move away from the cliff.” I’m taking idiosyncratic risk. There’s no extra payoff for that extra step closer to the edge. It doesn’t change the view, there’s no payoff, there’s no benefit to that extra chance of slipping and falling. So I like that. I pick up on what you’re talking about with the idiosyncratic risk.
Kevin Kroskey:
That’s good, Walt. I like that as well. So few bullet points here on kind of evidence supporting what I’m saying. So JP Morgan had a study that they did for us stock returns from the period 1980 to 2014. I love the title of this paper. It was called The Agony & The Ecstasy: The Risks & Rewards of a Concentrated Stock Position.
Walter Storholt:
That almost deserves, say, an egghead alert on its own just for the long title.
Kevin Kroskey:
Well, I mean I think it’s great the way that they phrase it though because it really goes to it. Yeah, sure. I mean, you could have on the probability as we’ll see here, and as I’ve already conveyed, but I’ll support with some numbers. It’s more so the agony. But you can take a company-specific risk and be ecstatic about it because maybe it pays off. But that’s more of a luck factor. And for anybody that’s seriously investing their retirement dollars, I just don’t think luck is a very good investment strategy. If anything, if it’s a hobby account or something, and it’s kind of a play account, and it’s a very small subset of what you have, and you can afford to lose it, that’s fine. That’s one thing. We have several clients to do that. But if that is the core of your retirement strategy, again, I mean, it’s not anything that I would ever do with my money or advise a client to do, and it just, it’s kind of foolhardy in my view.
Kevin Kroskey:
So in that study, one of the things that they said was, and they were looking at the Russell 3000, so broadly speaking, the largest 3000 US stocks quite a bit, and they said, using that universe since 1980, roughly 40% of all stocks, 40%, pretty big number, have suffered a permanent 70% plus decline from their peak value. Permanent, 40%.
Walter Storholt:
Wow.
Kevin Kroskey:
Pretty darn close to half, right? Well-
Walter Storholt:
That’s not good.
Kevin Kroskey:
That’s not good. So kind of a little bit more broadly, I’ll give a few other points here from other studies.
Walter Storholt:
And you’re not just talking random risky, I mean it’s all risky but not random fly-by-night type of companies. You’re talking about the top 3000, right?
Kevin Kroskey:
Yeah, top 3000. Everybody’s heard of the S&P 500 and Russell, which is another investment company and a large kind of index provider. The Russell 1000 are generally large US companies. And then they have the Russell 2000, which they consider kind of the small and mid. So you put those two together, and that’s 2000 plus 1000 is the 3000. So sure, if you dig into it, there’s going to be more turnover and what have you in the smaller companies. But just like we talked about last time at the tail end of our episode, we went through how the largest companies fell off that list and weren’t large anymore. And so, again, it’s just that process of creative destruction. Sure, maybe larger companies have a little bit more staying power a little bit longer than the small companies do, but it happens to them too. So they’re not immune from that.
Kevin Kroskey:
Another paper, called the Capitalism Distribution, this was by an asset management company called Longboard, which also looked at the Russell 3000, a different time period, ’83 through 2006. So there’s somewhat of an overlap here with the JP Morgan study in terms of time, but similar sort of findings which you would part expect from that. But some of the ways that Longboard conveyed this was only 25% of the stocks were responsible for all, not some, but all of the markets’ gains. And nearly two-thirds underperformed the broad index, two-thirds underperformed the broad index. And then lastly, 39% of these stocks lost money.
Kevin Kroskey:
So almost similar to what I just said, about 40% of all stocks having suffered a permanent decline from the JP Morgan study, said in another way, related but slightly different, similar percentage lost money. So you just start looking at evidence like this. And to me, I mean it’s plain to see. It’s like, okay, why I want to go ahead and try to pick those individual stocks and then put the risk of me not being able to meet my dollar goals for retirement, or it could be college or something else for that matter, but why would I want to put that at risk?
Kevin Kroskey:
So a couple other things, and I’ll kind of beat this into the ground like a tomato stick. There’s a guy that’s done a lot of research, I think a lot of good research, Hendrik Bessembinder. He did a study in 2017 that says, “Do stocks outperform Treasury bills?” So if anybody’s not familiar, Treasury bills are basically kind of cash-like investments. They’re very short. He went back over a much longer a time period, 1926 through 2015 and looked at all the stocks that were listed on the New York Stock Exchange, NASDAQ and the AMEX. And when he was comparing to just cash, he found somewhat similarly to the others, but only about 42% of stocks had a return greater than cash, one-month Treasury bills. Lot more risk, well, stocks versus cash, I’d say. But only 42% of stocks had a greater return than one-month Treasury bills, AKA cash.
Kevin Kroskey:
And in terms of the time that stocks are generally listed, he found that they were generally listed or publicly traded, if you will, for a little bit more than seven years. And he said only 36 stocks were present in the database for the full 90 years, 1926 through 2015. So again, the implication is I think pretty striking. Everybody’s heard it, Walt, and I’ll put you on the… I’ve done this to you, I don’t know how many times over the years we’ve been recording this, but on average, Walt, what do US stocks return over the long run? [inaudible 00:22:32].
Walter Storholt:
10%.
Kevin Kroskey:
Boom! Good job, Walt. Ding, ding, ding, ding. You’re the Warren to my Buffet once again.
Walter Storholt:
I was waiting for a math question, but-
Kevin Kroskey:
Yeah, it’s about 10%. It’s a little bit higher if we kind of look at the end of 2021 before the follow-off that we’ve had this year. But the round number is called 10%. However, even those are sizable returns, you could create a significant amount of wealth by compounding that over time. It’s really coming from a very small subset of stocks that kind of changes over time. And on average, a good majority of those stocks underperform and provide returns less than that broad market. So again, it was about two-thirds of the stocks in the Longboard study, and those not only underperformed the index, but a lot of those, about 40% lost money. So literally destroyed your capital, destroyed your wealth, destroyed your dollars.
Kevin Kroskey:
So let’s kind of take a step back and look at this for a moment. So again, capitalism creates wealth. This creative destruction process creates winners and losers. The winners tend to win a lot. And the losers, which are actually a bigger subset of the stocks that we can invest in, in the public markets lose. So unless you have that crystal ball about which stocks to pick, then it doesn’t seem very rational to go ahead and take a strategy-based approach where you’re trying to select these individual stocks in a very concentrated fashion. Makes sense so far, Walt?
Walter Storholt:
Makes sense so far. Yeah, I like it.
Kevin Kroskey:
All right. So one other thing I’ll make-
Walter Storholt:
If you can ask all questions in multiples of 10, I have a feeling I can get future answers right as well.
Kevin Kroskey:
All right. So on multiples of 10. So I can’t use the English system, but I have to stay in metric for you. Is that what you’re saying?
Walter Storholt:
That’s right. Yeah, exactly.
Kevin Kroskey:
All right, got it. So one other thing. What’s another implication of this? So if we take this a little bit further and we just look at, whether it’s an ETF or mutual fund that’s trying to pick individual stocks. So let’s look at how the pros do. So we already talked about what happens broadly speaking for these individual stocks in the index, whether it’s the S&P, whether it’s the Russell 3000, so on and so forth. But if we take it a step further and look at actively managed mutual funds, professionals that do this day in, day out, that have a lot of education, that have a lot of resources, that often wear a lot of nice suits and drive expensive cars for that matter, how have they done?
Kevin Kroskey:
Well, anybody can look up this data. If you just type in Spiva, S-P-I-V-A, it’s the Standard and Poor’s, it’s called an active and passive scorecard. So they basically measure how do the actively manage funds do to a passively managed benchmark like a Russell 3000, like an S&P 500, like an international index if they’re internationally invested, so and so forth. So the data that I’ll share is as of the end of the year 2021. So what Standard and Poor’s found is over the last three years, 72% underperformed of these actively managed funds, underperformed in absolute terms. And even more, 80% underperformed when they measured by risk-adjusted returns. So the risk was measured in the wiggle factor.
Kevin Kroskey:
And if we extend that a little bit longer for the 10-year period, so let’s give them a little bit more time. How did they do over 10 years? Well, it actually got worse. 86% underperformed on an absolute basis and 93% on a risk-adjusted basis. The number actually even gets a little bit higher for 20 years. And we’ve seen this time and again. I mean we’ve been doing this quite some time. I started the firm in late 2007. I’m looking at our dashboard here in front of me on my screen. And we have certain holdings where clients have, whether it’s a hobby account or whether it is, we call it a legacy security, maybe something that has a really low tax basis. And we’re kind of just holding for different reasons, at least for a period of time. And we mark these as unmanaged in our database.
Kevin Kroskey:
I can’t talk about performance numbers or anything like that on the podcast for our portfolios, but what I can say is that the unmanaged holdings have significantly larger losses than what the portfolios do in part because of the diversification that we’ve been talking about over this episode. So the evidence is there. Ignore it at your own peril. But if we’re talking about investing your retirement dollars and making sure that you can live the lifestyle that you want to live, then I can’t see a better way to do it than making sure that we’re only taking risks that we’re being compensated for and diversifying away the ones that can be diversified. Retirement is not time to try to take a lucky approach to your investment planning. It’s really the time to be prudent, play the probabilities, and make sure you have the money when you need it.
Walter Storholt:
Well, helpful episode, I think here, Kevin, to drill down a little bit. You’ve lined the plane up well, you’re coming in, you’ve got no crosswind. I think you just had a very nice smooth landing. Wheels are down. Well done. The crowd is applauding. You landed the plane for us.
Kevin Kroskey:
All right. It’s always, when I’m on those planes, and they cheer when the pilot lands the plane, I don’t know, I kind of like it. It’s cheesy in a way, but-
Walter Storholt:
Well, I thought you were going to bash it. No, you’re a fan of the cheer.
Kevin Kroskey:
No, I like it. I’m like, “Yeah, yeah, good job!”
Walter Storholt:
Well, if you think about it, you just took 300 humans in a small tube through the air at 500 miles an hour and landed it on a thin strip of asphalt, and somehow brought it all to a stop, and you didn’t even have to get out of the plane onto the tarmac. There’s even a little tunnel that then takes you into a nice comfortable airport. That feat is pretty amazing every time it happens.
Kevin Kroskey:
Yeah. Ever since we started traveling with our kids, and they’re four and nine now, I mean, they always cheer at the end. They’re like, “Yeah!” And it’s so sweet.
Walter Storholt:
That is.
Kevin Kroskey:
So maybe I’m partly influenced by their sweetness and cheering for them. But I agree, we should give them a good old cheer. So, here we go.
Walter Storholt:
I don’t think you’re human if you’re not at least on the inside cheering every time you drop out of the sky and are still alive to walk around. I mean, I personally, every time I’m like, “Whew, made it.” I mean, that’s something to cheer about right there. I love it. But yes, some sweet reasons as well when you’ve got some young ones. That’s just one thing, like flying on a plane, travel, it just never loses… I mean, maybe if you’re doing it for business, obviously, it’s not always super exciting. But just in general, any sort of flight trip, that just doesn’t lose its magic. That sense of adventure is always stoked a little bit when you go to the airport and you fly somewhere.
Kevin Kroskey:
Yeah, I can take issue with that, Walt. Any, “Hey, how was your flight?” I’m like, “Well, we got here in one piece.” But, I mean for the kids, they definitely enjoy it. We have it real quick and we can wrap up-
Walter Storholt:
I’ll knock on wood, I’ve really not ever had an extremely terrible flight situation before. Only one. But then I rented a car and I drove home instead, and then always fine the next day.
Kevin Kroskey:
But we had a recent bad experience with our travel and our kids. The gate agent was, well, I’d use the first letter of the alphabet and then follow it up with a four-letter word “hole”. He totally was. Long story short, I mean, he closed the gate basically right on us. And the sky bridge or whatever was filled with people. We weren’t holding up the plane. I got a four-year-old and the plane was late, and we had a three-hour layover. We were playing right outside the door, and they didn’t even do a final call. We’re sitting right there, and this guy just closed the door. It was an exercise in me not flipping out, but my kids, they were like… There’s a process in this. And then they’re like, “This means we get to stay in a hotel for another night?” Thank God for them. They kind of got me out of my anger-
Walter Storholt:
Nice.
Kevin Kroskey:
And quickly got me to realize, well, hey, I get to spend some more time with my family, and it is what it is.
Walter Storholt:
That sounds like something I would say. Maybe I’ve just never lost that child’s ability of seeing the silver lining and the bright side of things. I’ll try to hold onto that as long as I can because it sounds like it’s a good thing.
Kevin Kroskey:
Yeah. I guess in a parting shot here, so with where we are here in October 2022, markets are down quite a bit this year. It stinks. I mean, it’s part of investing. This is the same reason why we can expect higher returns in the future and why in general, you’re compensated more for taking stock market risk than you are than leaving your money in cash.
Kevin Kroskey:
Now’s really a good time to take a look at your portfolio and if you have some things that maybe shouldn’t be in there, if you do have more of a concentrated portfolio, if you’re not thinking in terms of having a proper plan and having your portfolio aligned to it, focusing on the things that really matter about having the dollars when you need it, playing probabilities, keeping costs low, staying well diversified, and being really tax smart in your approach, this is the time that you can make some changes to the positive and move forward in a much more prudent fashion. And if you’re a taxable investor, because stock prices are down, it’s really a good time to go ahead and maybe realize some of those losses and move on and move forward to a better portfolio.
Walter Storholt:
I can’t think of a better time to get a review than right now when we do have certainly a lot of uncertainty in the future and not knowing which direction things will go, but also having this opportunity of things being down and reallocating our portfolios and making sure that we’re on the right track to get to where we need to be. And so if you’d like to have that review of your plan with a member of the True Wealth Design team, you can certainly do that. Go to truewealthdesign.com, click the Are We Right For You button to schedule a 15-minute introductory call with an experienced advisor on the True Wealth team. That’s at truewealthdesign.com. Or you can call 855-TWD-PLAN. That’s 855-893-PLAN. And again, we’ll put the contact info and those different ways that you can get in touch in the description of today’s show so you can find that easily as well.
Walter Storholt:
Well, Kevin, appreciate the help. Didn’t trigger the egghead alert. I almost did it just for old-time’s sake, but see if you can come up with a good word to get us going next episode. Okay?
Kevin Kroskey:
I’ll do my best, Walt. Appreciate the help, buddy.
Walter Storholt:
We appreciate it as well. Thanks for joining us everyone. We’ll see you next time right back here on Retire Smarter.
Disclaimer:
Information provided is for informational purposes only and does not constitute investment, tax or legal advice. Information is obtained from sources that are deemed to be reliable, but their accurateness and completeness cannot be guaranteed. All performance reference is historical and not an indication of future results. Benchmark indices are hypothetical and do not include any investment fees.
