Ep 57: A Tale of Two Decades

Ep 57: A Tale of Two Decades

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The Smart Take:

Proper investment diversification works … even when you don’t want it to. With the US stock market and particularly large technology stocks having the wind at their backs recently, many are eschewing diversification to chase these high flyers.

As the saying goes, if we forget history, we are doomed to repeat it. In that spirit, hear Kevin tell a tale of two decades.

First is the Lost Decade of the 2000s when, after the Tech Bubble burst, US investors lost money for an entire decade from 2000 to 2009. Second is the recent decade from 2010 to 2019 where US stocks screamed. The two are starkly different and instructive. Combining the entire 20 years allows you to clearly see the benefits of discipline and diversification.

What will the 2020s hold? Only time will tell, but today resembles the late 1990s in some ways. Importantly, in retirement, you can’t afford to have a Lost Decade.

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6:15 – Stock Splits Create No Value

13:41 – Our Current Environment Is Similar To The Late 1990’s

18:50 – Areas That Are Not Doing Well

22:11 – The Way Diversification Works

25:12 – Avoiding Recency Bias


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The Host:

Kevin Kroskey – AboutContact

Intro:                                     Welcome to Retire Smarter with Kevin Kroskey. Find answers to your toughest questions and get educated about the financial world. It’s time to retire smarter.

Walter Storholt:                It’s another Retire Smarter podcast. Walter Storholt here alongside Kevin Kroskey, president and wealth advisor at True Wealth Design. Serving you throughout Northeast Ohio and Southwest Florida, you can find us online by going to truewealthdesign.com. Listen to past episodes of the podcast, find subscription links, ask Kevin a question. Lots of great information there on the site. Again, it’s truewealthdesign.com. We’ve got a great show for you today. We’re going to be talking about the tale of two decades that we have now completed in the 2000s. We’re going to look back at the last two decades, very different decades as we look in the rearview mirror a little bit. But before we get to all of that, Kevin, what’s going on in your world?

Kevin Kroskey:                  It never seems like a dull day or dull week, Walter. We have new family members. We have a four-legged variety.

Walter Storholt:                Oh, very nice.

Kevin Kroskey:                  I’ve mentioned in the past. A lot of our clients know that my wife and I, before we had two-legged young family members, children. We had four, and we had two old English sheepdogs that had four legs each, not in total.

Walter Storholt:                Thanks. Thank you for clarifying.

Kevin Kroskey:                  Just wanted to point that out. Unfortunately in the last year, we lost both of them. They were 12 and 14. And so my wife is on Facebook and on a rescue site and sees this dog. And it looks exactly like our most beloved dog that we lost. It was just uncanny how much this dog looked like our Boogie, was his nickname that he grew into Bear. So Pickwick Bear of Royalton was his given dog name.

Walter Storholt:                Wow!

Kevin Kroskey:                  Yes, yes. You already know how it is. You got to be a little pretentious when you’re into dogs, I think so. But Boogie-

Walter Storholt:                Depends on the kind of dog, yeah.

Kevin Kroskey:                  Yeah, and the people. She sees this dog, looks like our Boogie and she thought it was our Boogie. She always say Facebook was showing her like an old picture of our Boogie, and here it’s not. And then it’s a rescue. Oh my gosh, this dog looks just like our Boogie. And so it of got the wheels in motion. Here the dog was actually a rescue in South Korea. So we had an old English sheepdog that is in South Korea. I don’t know if you know this Walter, but when you go into China and some of these Asian cultures, men will eat dogs to supposedly enhance their virility. So they have this dog meat trade. I think China is maybe the worst, but South Korea it’s prevalent as well.

Walter Storholt:                That was in the news a lot at the beginning of the COVID crisis. I’m seeing a lot of those articles.

Kevin Kroskey:                  Yeah, so my wife informs me on some of this. Basically, once she saw the connection with her Boogie, I mean, just the wheels started in motion and then all of… Oh, by the way, there’s another purebred old English sheepdog and his name is Moby. Basically last week I picked up these two sheepdogs that were shipped here from South Korea and what’s interesting is, we’re watching these videos and they’re responding to South Korean commands. One is one year old and the other one is two. And I’m like, great. We have old English sheepdogs that aren’t English. That are from South Korea, that respond to Korean commands, and now they’re coming back to the States to speak and learn a different form of English. And Walter, all I could say is that-

Walter Storholt:                And they eat is Kimchi instead of dog food.

Kevin Kroskey:                  Well, so the guy at the airport, when I was picking them up from cargo, he’s like, “Oh, you saved them from becoming Chop Suey, huh?

Walter Storholt:                Oh my God.

Kevin Kroskey:                  I’m like, “Oh, great.” So our life is busy. They are great dogs. I mean, we thought we were going to have some… Our work cut out for us, just being that they were rescues and their temperaments are fantastic, which is really great for us being that we have two young girls. They certainly have to learn and go through training. Life got busy, but it definitely seems like it’s… It just feels more fulfilling again. It feels more natural for us. That’s what’s going on across the household.

Walter Storholt:                Something about having a dog in the house. That just makes the world better. I think that’s definitely true. A lot of people can identify with that for sure. I’m curious, have the dogs found it difficult, the culture change from South Korea to South Florida? They’re so sophisticated. I thought they might have an opinion.

Kevin Kroskey:                  Not that I can tell. Moving right along.

Walter Storholt:                Thanks for letting me pick on you a little bit.

Kevin Kroskey:                  It’s all good. It’s all good.

Walter Storholt:                Do we have names yet? I realized we’re within the week, so you may still be formulating that eight-word name.

Kevin Kroskey:                  Yeah. We’re keeping Moby on the one and for the one that looks like Boogie, we were thinking maybe BJ, Boogie Junior. I don’t know, there’s a few contentions. Right now we’re just like, “Hey, you.” Which is really effective for training.

Walter Storholt:                Dog 1 and dog 2.

Kevin Kroskey:                  I think we’re narrowing in on it, but we have not firmly decided. The trainer is coming over this weekend. We have to have a name picked by the time the trainer is here.

Walter Storholt:                All right. We’ll get a report from you next episode on what names we ended with. But, good for you. Glad that dogs are back in the house. They are amazing. I’m glad that that brought some light into the Kroskey household this week and will for many years to come, it sounds like. Well, speaking of bringing light into the household, this is a very poor segue, but we’ll try to bring some light to the financial conversation on today’s show. We’re going to talk about the tale of two decades. We’re a little over 20 years now into this new decade or just below the 20 years, depending on where you mark the millennium, I suppose. But in any event, about 20 years of data to gather and talk about these last two decades, Kevin. Little bit different course of action between the two decades, a different way of putting them into context.

Kevin Kroskey:                  Yeah, and the purpose of this, I think it’s going to be instructive prospectively. It’s not just a historical redox on what happened over the last two decades. I’ve had several conversations over the last couple of weeks with some friends, some neighbors, some new clients that are coming on board and it feels different. I was still in college in the late 1990s when the tech bubble was going. I was not a participant from the professional side, but more so from the observer and investing a little… I hate to say investing, losing the little bit of money that I had, as I had thought you could not lose in tech stocks, and swiftly learning that yes, you can certainly lose and things do swing the other way. But it feels like that.

Kevin Kroskey:                  I had a neighbor that has a Tesla asking me, “Hey, I was on this Schwab website and I got this account. I can’t figure out how to go ahead and buy $50,000 of Tesla.” I’m like, “Whoa if you can’t figure that out, should you really be putting 50 grand into it?” I didn’t say that, but though, he probably saw it on my face. I had that. I mean, I’ve had a few people recently where they’ve done really well in their portfolios and candidly, I mean, after talking with them, I’m like, “Well, how did you pick this?” They’re like, “Well, it’s been going up a lot.” And usually, I mean, the investing process of, it’s been going up a lot, so I’m going to buy it and hope that it’s going to keep going up, tends not to work out that well. But it has been working recently and it’s been working quite well for a lot of people that are chasing shares of whether it’s Tesla, Netflix, any of the tech stocks we’ve talked about.

Kevin Kroskey:                  A fair amount about it in different ways over the last probably year or so, but particularly through COVID because it obviously had a big difference of impact, whether it was more technology-enabled or not. And even today, today’s the day that Tesla and Apple shares are doing a stock split. And so for anybody that’s not sure what that means, to say that, hey, it’s $1,000 a share, and they’ll a two for one split. So they’re just going to say, “Well, we’re going to make our shares worth 500 rather than a thousand. But we’re going to give you two of them.” And so Walter, what would you rather have? $1,000 or two $500 bills?

Walter Storholt:                I will take whatever you want to give me.

Kevin Kroskey:                  Mathematically it’s equivalent, right?

Walter Storholt:                That’s right. Well, I mean-

Walter Storholt:                Whatever’s easier for you, would be my response to that.

Kevin Kroskey:                  The mathematical equivalency is very rational. And that’s not what’s happening in the markets. Apparently, the stock split is, say, “Whew, we’re getting more shares. So that must be good. So let’s buy more of it.” And if the stock price is going up even higher, when there’s no really foundational reason for that to happen. In fact, I’d argue probably the opposite. That when you look at the Dow… The Dow has 30 companies in it, and Apple is one of those 30 companies. Not a lot of people know this, but they should, particularly if they’re clouting the Dow or maybe buying an ETF that’s based on the Dow. But the Dow was one of the first indices that were created. I think it was in the very late 1800s or very early 1900s. It’s a price-weighted index. What that means is, whatever the share price of the stock is, in part just basically determines how much of it will be in the index. So when Apple is doing a stock split, it is now going to be less in terms of the composition of the Dow.

Kevin Kroskey:                  Any index-based investments that follow the Dow, which there are many, I don’t know what the dollars are, but it’s quite substantial. It’s a very common index that’s out there. Those index providers have to sell Apple today because the stock split has lowered its stock price, and thus lowered its composition in the Dow. Makes no rational sense, but it was the first index that was created and it basically has never been fixed. It’s just the way that it is, and the way that it works. Because those index providers have to sell it, I would say that, well, hey. If anything, there’s more of a technical reason why Apple should not be going up, but yet it seems to be. Again, two $500 bills, I don’t even know if there are $500 bills but let’s pretend that there are, is the same as $1,000 bill, which I know there was. I don’t know if they still exist or not, but you get the gist. Whether it’s 5 or 10 or 500 or 1,000, two of the 5s equal to one of the 10s. Let’s put it that way.

Walter Storholt:                No longer in circulation, the $500 bill.

Kevin Kroskey:                  Okay, thank you. Thank you. You have a lot of this frothiness going on.

Walter Storholt:                McKinley by the way, was on the $500 bill.

Kevin Kroskey:                  Okay. And what years was he in office, Walter?

Walter Storholt:                That would have been a 19- [crosstalk 00:11:41].

Kevin Kroskey:                  You’re trying to recall it from what part of your brain? Oh, the Google part of your brain.

Walter Storholt:                From the Wikipedia part of my brain. Thanks for catching me on that.

Kevin Kroskey:                  My neighbor that’s trying to figure out how to buy $50,000 worth of Tesla and can’t figure it out. If you can’t figure that out… Certainly, Tesla’s got to be a good buy. The buy makes sense. You have people that are just chasing returns here and things are just going up. It seems like just because. We talked about Hertz. Hertz had this… They’re in bankruptcy and their debt is trading for pennies on the dollar but yet, their stock price is substantially higher. In fact, they were trying to issue new shares of stock because there was a market for their stock. They’re like, “This makes no sense, but hey, let’s capitalize on this idiocy, and let’s issue new shares.” And then the SEC came in and said, “No, you can’t do that. Yes, people are dumb.” They didn’t say that, but basically, that’s what they were saying. “And we are going to protect the dumb people from being even dumber.” Or dumber, I guess I should say.

Kevin Kroskey:                  It’s not like the market is completely irrational right now. I would say certain parts of the market certainly are or certain stocks certainly are. We talked about this with Zoom. There’s a different company that has the Zoom ticker, versus the Zoom that people are doing the web meetings on. People didn’t even know what they were buying, so they’re just buying the ticker Zoom and send it up 140%.

Walter Storholt:                Oh my God.

Kevin Kroskey:                  And then they’re like, “Ooh, no, it was the wrong company. Oops.” You just have a lot of craziness going on. Again, I wasn’t in the business in the late 1990s, but that tech bubble is what drew me into it because I just had an interest for that and I really wasn’t all that happy being a high school physics teacher. But I digressed. It feels like that right now. It feels like, hey, I own a Tesla, so I like it. And so the stock has to be a good buy. And, hey, I’m on this computer and has Microsoft on it. And Microsoft has been going up, so that’s got to be a good buy. Price or value net really never come into play. It’s just like, it’s going up, let’s buy it and it’s going to keep going up.

Walter Storholt:                That was the mentality I grew up with. My grandmother was getting me into finances at a young age. My cousins and I were very fortunate to have her influence over the years. I’ve told her story before on the podcast. But that was part of her reasoning for buying the stocks she did. One, she was looking for dividend-paying stocks, was one thing she always prioritized and just strong companies that had been around for a long time. But then the third one was something that we’d be interested in as kids. And honestly, that was one of the big driving forces, which is why we had some Disney and Hershey and Harley Davidson. Cool fun stuff for kids. And then one year we got Energy. We were all like, “What’s this? What is this Royal Energy Group of Scotland?” Whatever where it is.

Kevin Kroskey:                  Well, it was a show.

Walter Storholt:                It’s okay. But it’s interesting. I mean, it’s funny because then it’s hard to shake that when you grow up learning something a certain way. It’s hard to get more sophisticated on the topic once it becomes part of your mindset.

Kevin Kroskey:                  I think that’s true, but also the way that our brains work. I mean, one, you should know what you’re investing in for sure. You should understand it. But you shouldn’t just buy something because you know it. That should be the other very important part of that sense. Make that point about a compound sense. Know what you invest in, but make sure you buy it at a decent price. Something to that effect. All these companies, people certainly are hearing about and know and… “I have an Apple device and certainly enjoy utilizing it.” Just because it’s a good company, it doesn’t mean that you’re actually getting a good price or going to get a good return from owning the stock. You can’t pay too much. I always use the analogy of a house. You and your neighbor have very similar houses. Say you bought yours for 400,000 earlier this year and then the neighbor sells theirs for 500,000 six months later. They got a great house, great neighborhood, but they way overpaid for the house. The same thing can go for a stock.

Kevin Kroskey:                  You just have to look through this. I think looking back over this tale of two decades is instructive because, again, it feels like right now what the late 1990s felt like. And certainly, the 1990s with the tech bubble was just booming and US stocks, particularly technology stocks, were just shooting the moon. And then when 2000 came around, things just flipped and went the other way. It was really March of 2000 when it started going the other direction. But really through all the 90s, I mean, it was just going and keep going and it was irrational. Exuberance was the term that you heard. But it even kept going after it got into nosebleed prices. But when the music ran out and people were looking for chairs to sit down, they realized, “Oh man, price does matter. There are no chairs for me to sit in.”

Kevin Kroskey:                  If you held on to, say the NASDAQ. The NASDAQ as most people know is generally technology-focused stocks. The vast majority of it is really comprised of a lot of these large tech companies. The Amazons, Apples, Microsoft, Google, Alphabet, and Facebook as well. But when you looked at what the NASDAQ did from January 2000 through December of 2009, it lost an annualized average of 5.2% per year. Cumulatively, over that entire 10 years, what that means is if you had a million dollars in the NASDAQ on January 1, 2020, by December 31st, 2009, you had about $590,000. Million bucks down to 590, entire 10 year period. Those were still some great companies. Microsoft was in there. Microsoft was a great company. Cisco was in there. Cisco is still a great company, Intel. All these companies were still in there. They were in the NASDAQ. They still are there today and they’re still great companies today. It’s just that you paid way too much for them in the late 1990s and you paid for that over the next decade.

Kevin Kroskey:                  Even if you looked a little bit more broadly and went outside of just more of the tech-focused NASDAQ and looked at the S&P 500, even there, for that entire 10 years from January of 2000 through December of 2009, you lost about 1% per year or you lost… Again, if you had a million bucks in the S&P 500 in January 1 of 2000 and you looked at the end of 2009, you had about $900,000. So you lost money for an entire decade. It’s just amazing to me right now. And it shouldn’t be. I know investors can be led astray by what we call recency bias and this familiarity bias. “Hey, we know these stocks and look how well they’re doing. So this is going to keep happening.” We talked about Homer Simpson in a couple of podcast episodes ago. How his investing thesis was. “Hey, it’s October. These pumpkin prices just keep going up. I’m on this. I’m going to buy it. It just got to keep going up and up and up.” And obviously, when you get through October, November, he realizes that it doesn’t really work anymore.

Kevin Kroskey:                  You’re having that happen right now. Now, what hasn’t been working as well more recently, are smaller companies or international companies. Whether they’re in more developed economies like Europe, Japan, the UK, Australia, or even more emerging economies like China and India or to the larger ones. If we look at say the last… Well, let’s go back to the 2000s. I’ll go back to the 2000s first since we already talked about that time period. While the NASDAQ lost 5.2% per year and the S&P 500 lost about a percent per year, if you went to emerging markets, they actually made more than 10% per year. So 10% per year, you just do some simple math there and your money way more than doubled over that 10 year period. If you go to international small companies, about 13% here per year and cumulatively 13% per year. Here your money is more than doubling. Almost four times as much over that time period.

Kevin Kroskey:                  And so the US was really out of favor because it had done so well during the 90s, has been bid up in price. Still had these great companies, particularly these technology companies. Some of them went away, but a lot of them were still there. Microsoft, Intel, Cisco, again, you name it. But you pay too high of a price and you had negative returns for the entire decade. Meanwhile, over that same time period, you had small companies in the US that were doing well, about 8% per year. You had the emerging markets, like I mentioned, 10% plus per year. You had international small companies doing more than 13% per year. So that’s really where you made the money through that decade. Owning small companies in the US, owning some value stocks in the US, and then owning international stocks as well.

Kevin Kroskey:                  Now you fast forward to, say the last 10 years to 2010s, which here we are from January 2010 through December of 2019. And as everybody’s well aware, the US market has been kicking butt recently. You look at the S&P 500 over those 10 years, 13.5, 13.6% per year. You look at the NASDAQ, more than 16% per year over that time period. And then you go on the other side of it and… Small companies in the US still did well, about around 12 or so. But you go international and here you are, and looking at same emerging markets and you’re close to about 4% per year. Or you’re looking at international small companies and you’re around 7. Not terrible, and you didn’t lose a lot of money like you did owning the NASDAQ or the S&P 500 in the prior decade, but certainly if you look at it on paper, you say, “Man, I’d much rather have a 16% return than a 4% return.” I mean, you don’t have to be a financial advisor to figure that one out.

Kevin Kroskey:                  But when you put this all together, if you just string the entirety of these two decades together, the 2000s from January 2000 all the way through the end of December 2019, so 20 years in total, and now you look at the returns. You had these two very distinct decades, but now you put them together. And now you look at the NASDAQ and it had about 5% per year return. You look at the S&P 500, it had about a 6% per year return. You look at small US stocks, hey, you actually got compensated for owning those even better. You made about 10% per year. You go outside of the US and you look at emerging markets, here you got about 7% per year. So you got more than what you did for the S&P 500, what have you. You look at the international small companies and here you got about 10%.

Kevin Kroskey:                  What I’m hoping people are taking away from this is that we all know that we need to be diversified. But diversification works when you want it to and also when you don’t want it to. People loved diversification during the 2000s when the S&P 500 lost money for an entire decade, for 10 years. They loved it when the NASDAQ was down more than 40% over those 10 years. And now here more recently, when those asset classes are doing really well, they hate it. “Why do I own this international stuff? Don’t you know America’s the best country in the world to live?” Guess what? It was the best place in the world to live 20 years ago too. But it was the exact wrong country to go ahead and invest all your money in. And we don’t know what it’s going to be going forward.

Kevin Kroskey:                  The US market has been really expensive for quite some time, but it’s continued to get more expensive. At a certain point, I mean, we talked about this in the past too. The forward-looking nature of the stock market relative to the economy. But then, when does looking forward become more of the irrational exuberance, and you’re really just overpaying? And nobody has the crystal ball. And certainly, there are ways to go ahead and measure this. But in the short term, whether you’re talking about six months, a year or two years, I mean, anything can happen. That term irrational exuberance was created in a book that was written in ’97 and published in 1998 by Robert Shiller, who is a professor at Yale, and who later won a Nobel prize. But the market still was irrationally exuberant and kept going up more than double digits for another two, three years from the time that he researched and wrote the book.

Kevin Kroskey:                  So the market can do really wild and crazy things, but eventually there’s an underlying gravitational pull back to reasonableness. Price does matter. What we get as investors are the earnings per share that we have. Just because somebody bids up the price of whether it’s Tesla or Apple for whatever reason because they like it because there’s a stock split or whatever nonsensical reason that they can come up with, over time this stuff is going to average out and the pendulum is going to swing back the other way. I don’t know when it’s going to swing back, but eventually, that music is going to run out.

Kevin Kroskey:                  And if you’re talking about investing your retirement dollars, particularly if you’re in the last few years of working or those first few years of retirement, that’s f the red zone area that we’ve heard about. Having really negative returns during that time period can really cause a lot of harm for you and your financial plan and may cause you to have to work longer or spend less in retirement. And God forbid that you have to go back to work. But you got to be responsible here. You got to be prudent. You got to be diversified and you have to take more than six or 12 or 24-month timeframe. Again, we talked about decades here. I mean, beyond belief to me, how people just forget. All the things I’m hearing about American exceptionalism, I mean, it was the same thing 20 years ago, but it was just such a terrible place to invest. It’s only 20 years, but it’s like people completely forget about it, Walter. Maybe that’s why in part I have a job.

Walter Storholt:                Recency bias, we all have it. It’s a value to be able to buck recency bias and put things in that grander scale to see the future as not just a year, but decades at a time or hundreds of years at a time in some organizations.

Kevin Kroskey:                  Yeah, and most people, as it relates to retirement planning, certainly they want to get a decent return on their money. They want to get a return commensurate with a risk of 13. But more importantly, they want to make sure that they’re able to preserve their lifestyle. They want to make sure that they don’t have to go back to work. That they could sleep at night. All those important things, that money is a tool, it’s not the end all be all. But you have to get a good return. I mean, if you look at those 20 year returns that I talked about from 2000 to 2019, and you’re looking at 6% for large US stocks and 10% for small stocks, both US as well as outside of the US and you’re getting a little bit more for emerging markets over this 20 year period, frankly that’s about what you would expect. When you factor in just longer-term expectations based on risk, based on growth of the economies, things along those lines.

Kevin Kroskey:                  But you look at 10 years, and it sounds like a really long period, right? But in investing, it’s really not. I think that timeframe is something that’s difficult for a lot of people because they’re going and… The recency bias is there, but they just think a year or two or three years is a long period of time. We had a conversation with a new client. We worked together on some project work in the past and we just had a conversation again last week. They’re going to becoming on as I guess what I would call full-blown client, where we’re going to handle their planning, their taxes, and their investing.

Kevin Kroskey:                  He’s talking about how his portfolio is doing well this year and how another advisor that he hired, he didn’t do all that well. I just told him and I said, “I have no idea how the next year is going to go. I’m very comfortable in our thinking and our process, but anything can happen in a year. And not to defend your advisor, I’m not sure what they were doing for you or didn’t do for you at this point, but a year frankly is way too short to draw any meaningful conclusions.” 10 years, like we just talked about here with these two different decades, is quite a long period of time to get two, almost mirror opposite results. You just look at it and say, wow. And I get it, 10 years is a long time. But when you look at investing, the markets can stay pretty irrational for a while and can get really bid up or underperformed for quite some time.

Kevin Kroskey:                  But when you do take an even longer view, things do tend to even out over time. There is that underlying rationale gravitational pull back to… Well, we get earnings per share and that’s really what we get as investors. And so whether that’s in the form of dividends being paid out, earnings per share being reinvested back in, that’s what we get. If investors bid up or bid down the price of a stock with something maybe really exuberant or really oversold. That’s going to happen. Inevitably that ever happens in markets because markets are constructed by people and people are emotional. But you need to have a little bit longer-term view and importantly, you need to be diversified. You don’t want to be chasing money and something just because it’s been going up. You don’t want to be completely in the US. We’ve talked about it episodes in the past, where you pull different return expectations from a lot of different money management firms like JP Morgan, BlackRock, Morningstar, Vanguard.

Kevin Kroskey:                  And every single one of them, I did this recently again for a client. Every single one of them is expecting higher returns for international markets in the US. I went back and I showed this client that this has basically been the belief for the vast majority of these large institutional money managers. I went back to 2013 and I was seeing that pattern. And so here we are seven years later, very sophisticated, very smart people, very good methodologies, but it hasn’t been true. And they’re looking at five or 10 or in JP Morgan’s case, 15 year expected returns. It could still be right over say maybe a 10 or 15 year period if the pendulum really swings back away from the US, but it hasn’t been right so far. It’s natural that people start questioning this. But when you really understand investing and investing history, and you need to understand that or you’re going to repeat the mistakes that history could have taught you and you’re going to repeat them in the future, but 10 years isn’t that much. We have to be diversified. We have to stick to diversification.

Kevin Kroskey:                  Every time you look at your portfolio statement and you see something, you should probably have something that causes a little bit of angst. Maybe investments 1, 2, 3, and 4 are up, and then 5 and 6 you’re like, “Why do I own this?” They’re out of favor for whatever reason. But when you put it all together, when you look at the diversified portfolio, the whole is more than the sum of the parts. And you want to go ahead and smooth out that ride, reduce that wiggle factor, particularly when you’re in retirement and taking out retirement distributions for your lifestyle and just have a smoother return pattern. Something where you can sleep at night, something where you know your money’s going to last and not really chasing returns and maybe ending up having to go back to work.

Walter Storholt:                A couple of pieces of homework or things to clean up on the show. McKinley was president until 1901, to answer that question when he was assassinated. So 1987 to 1901 was his distance. And lastly, in terms of catching up on notes, Grover Cleveland was on the $1,000 bill that you mentioned. I’m a little disappointed that we still don’t have that because I would love it. I just think that would be cool to call the $1,000 dollar bill, the Grover. Can you say, “How much does it cost?” A couple of Grovers. I guess that could catch on I think.

Kevin Kroskey:                  Walter, that sounds pretty millennial of you. That is way hip. Who’s the guy that’s running for president? Kanye West, hip. Kanye would probably say that, right?

Walter Storholt:                Yeah, that’s right. How much does that cost? How much does that car cost? About 20 Grovers. So I don’t know. I’m going to start a movement. That’s what I’m going to run for president on, that we bring back $1,000 bill and we call it specifically the Grover. That’ll be my platform. Wonderful to talk about these kinds of things and to get your perspective on them as always, Kevin. If you need some different perspectives when it comes to your financial plan, how you’re preparing for retirement, and beyond, don’t hesitate to reach out to Kevin and the team at True Wealth Design. They can take a look at your current financial plan, talk about how they can design it heading into the future, to accomplish more of your financial goals. And point out some of the areas where you may not know that pitfalls currently exist. Some of the danger areas for your portfolio.

Walter Storholt:                It’s a sophisticated, intelligent look at your financial plan. And again if you want to set up a time to meet and talk with Kevin and the team about that, you can do that on truewealthdesign.com. Click on the, Are We Right For You button to schedule your 15-minute call with an experienced advisor on the True Wealth team? Again, that’s truewealthdesign.com or give a call to 855-TWD-PLAN. That’s 855-TWD-PLAN. Kevin, thanks for the help this week. Appreciate it, and enjoy those dogs. I will talk to you again next episode.

Kevin Kroskey:                  All right. Thank you, Grover.

Walter Storholt:                Go make some Grovers. All right, we’ll talk to you on the next episode. Thanks for listening today. It was Kevin Kroskey. I’m Walter Storholt. Don’t forget to subscribe to the podcast on your favorite apps, and I will look forward to talking to you next time 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.