You Probably Know You Should Invest. But Invest Where?
Making sense of trillion-dollar IPOs, inflation, and market volatility.
The current investing environment isn’t as ‘plug-and-play’ as it’s been.
We’re staring down a pipeline of potential trillion-dollar-scale IPOs like SpaceX and OpenAI. Expectations are high – really high. That has some seasoned investors wondering whether we’re flying too close to the sun.
The S&P 500 is up about 8% year-to-date, which feels really good on paper, but getting there has been a bumpy ride with plenty of volatility. Short-term interest rates are now likely to go up, not down. Then there’s inflation. At the time of this writing, prices on the things we use every day are rising at an annual inflation rate of 3.8%. The highest level we’ve seen in three years.
So yes, we all know the golden rule: ‘stay invested.’ But the real question everyone’s wrestling with is… invest where?
This is where having a network of more than 200 rigorously vetted, experienced fiduciary advisors comes in handy. Matt McKee, CFA, is one of them. He recently wrote on this topic explaining investment approaches in a fresh, understandable way.
As Matt puts it, after you’ve built the financial plan and figured out how much risk you’re really okay with, “now we have to put our money to work.”
Which brings us right back to the question: invest where?
There’s a good reason Matt, just like the other advisors I’ve vetted, doesn’t come out of the gate with stock picks, private investments, or even his latest ideas. Before recommending the investments, he has to know what role that investment is supposed to play in your portfolio.
He starts with purpose. What’s the job you need your investments to do? Because every investment should have a job.
A large U.S. stock fund has a job. An international stock fund has a job. Bonds have a job. And cash has a job.
As Matt points out, “We’re not choosing investments based on the gaudiest historical returns. We’re not chasing investment returns, either. We’re looking for the right tool for the right role inside a portfolio.” Too many investors focus on trailing returns. Matt says that’s a trap. Historical returns do matter, but they won’t tell you the whole story.
The best advisors aren’t trying to predict what happens next. They’re building portfolios designed to survive multiple versions of what happens next.
That’s one reason thoughtful advisors spend so much time evaluating how their clients’ investments interact with one another and pay close attention to taxes and fees.
The goal isn’t to own everything. It’s to own the right mix of assets that can help support the life you’re trying to build through different market environments.
What I appreciate most about Matt’s perspective is that it removes some of the mystery. There’s no secret sauce. No magic fund or perfect forecast. Just a disciplined process for deciding what belongs in a portfolio, why it belongs there, what it costs, and how it supports the life you’re trying to build.
What investing question trips you up most right now? Share it below. We’ll unpack it together.
Reach out to me anytime. And if you’d like to explore Wealthramp’s network of vetted, fee-only, fiduciary advisors who can help you with everything from a one-time financial plan to long-range support, you can do so here.