Beat Financial Advisors with These Simple Monthly Moves


I keep a half-million bucks with a financial advisor to keep me honest.

It allows me to see how “professionals” manage money. Yours truly of course is no professional. I have no acronyms after my name.

And while I’ve so far passed the financial test of life, I haven’t passed — or bothered to take — the tests that make any of this financial advice. So of course it isn’t.

What does this Blind Squirrel, as I’ve come to deprecatingly call myself, know anyway?

I’ve nothing against financial professionals, their tests, or their acronyms. Everyone’s got to make a living. And most of them are nice enough people.

But results matter. So back in April, as I may have told you, I sent my professional a polite note:

Dear John,

For the past two quarters I have noticed the value of the account managed by [your firm] was keeping pace with the record-setting broader market.

In late January and again in late February, stocks underwent a bit of corrective selling. After these corrections, I noticed my account did not rise to new highs like the S&P.

My dumb brain says this is because tech is no longer leading, with energy, industrials, and financials outperforming it over the past three months. Just wondering how you all think about things like sector rotations.

Hope Easter was good!

His response was: 

As far as how we think about sector rotation, we try to not make sector bets to be honest. That being said, your allocation now is meant to be more broadly diversified. About 80% of your allocation is based on core holdings that are going to drive return and participate and then about 20% is going to be an "alpha play" where we do make some more calculated calls, like FPX. These are based on how our analytics team feels about the broader market as a whole, potentially favored asset classes and how that particular holding fits into the rest of the allocation.

I think it’s interesting that a more broadly diversified portfolio is nearly a quarter weighted in tech.

The top-performing S&P sectors of the year so far, in order, are:

  1. Real Estate (32%)
  2. Communication Services (29%)
  3. Financials (27%)
  4. Energy (25%)
  5. Information Technology (21%)

The firm I’m paying a percent of assets to has me 25% weighted in the 5th best sector of the year.

Where have I been positioning premium readers of Foundational Profits? (and the money I manage for myself)?

Earlier in the year it was energy. And when sectors started to rotate again mid-year, we rotated into real estate via two real estate investment trusts (REITs) that are each now up double digits.

We even got into tech last month when it started to do well again. But we haven’t been 25% weighted to it all year!

Preaching to Choirs

So is my financial advisor a bad guy? Should I rake him over the coals?

No and of course not.

Like so many things in life, there is nuance. But people don’t like nuance these days.

Sure, there are times I think, “I should fire his ass.”

Then I remember why I hired him in the first place.

I know I can outperform an institution when it comes to managing my own money. Truth be told, most people can. It doesn’t even take that much effort. You don’t need to watch the market every day. And you certainly don’t need to make market moves or “trades” every day.

If you can get the bigger moves right — like energy starting to outperform tech late last year and then real estate starting to outperform energy this summer — you’ll be ahead of the guys and gals with acronyms behind their names.

They simply aren’t able to navigate and respond to markets as quickly as you can as an individual.

It’s a secret that’s sort of always been out there in the open. But the democratization of information and the digitization of investment platforms — and the fee reductions they’ve enabled — has made the individual investor more capable than ever.

I know why I keep a bit of capital with a local money manager. He pays dividends in other ways by performing annual planning services and keeping me abreast of changing tax laws that are beyond my scope of expertise.

But I also manage the bulk of my wealth myself.

See how you can follow my broad investment moves here, including:

  • An update on the cannabis market with an undervalued way to play it now. 

  • A precious metals update and the gold price under which you should be buying gold stocks

Plus: Two mega-cap stocks yielding over 8% that are buy-rated now!

Get the latest issue of Foundational Profit now.

Call it like you see it, 

Nick Hodge
Editor, Daily Profit Cycle

Nick Hodge is the co-owner and publisher of Daily Profit Cycle and Resource Stock Digest. He's also the founder of Hodge Family Office, the umbrella organization for his three premium services: Foundational ProfitsFamily Office Advantage, and Hodge Family Office . He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.
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