As the Portfolio Turns, Episode 3

soap opera

Julie is torn about how to handle her retirement. Mr. Bond’s conservative approach (Episode 1) sounds wise, but her boss Karen’s DIY strategy (Episode 2) has an off-road appeal. She meets Karl at a café, after work.

Karl: You know, I’m not sold on this whole stock market thing.

Julie: Well, your money won’t grow if you’re not in the market.

Karl: Yeah, that’s what those greedy investment banks want you to believe. Look where that got us in 2000-2010—The Lost Decade for investors! My money is in my business.

Julie: Nice for you, Mr. Entrepreneur. Actually, I’ve been doing my homework—did you know the stock market’s average return, over the last 30 years, is like 11 percent?

Karl: Did you know that my business grossed almost $900,000 last year? Not bad for a guy with a storage franchise.

Julie: Yeah, and I bet your savings is in some basic bank account that yields .025%.

Karl: I don’t save, I reinvest in the biz. That’s how it grows.

Julie: That’s crazy—putting all your eggs in one basket! I’m trying to figure out how to diversify—that’s the key.

Karl: Eh, you just need a smart guy to handle it for you.

Julie: Ugh. That’s what Jack said—and that’s why I’m pushing 35 with no retirement plan!

I’m going home to read up on lazy portfolios. There’s some investor out of Philadelphia who beats the market by sticking with low-cost, no-load index funds. Tonight, I’m going to check out the Coffeehouse Portfolio, by this former Smith Barney guy in Seattle.

Karl: (groaning) Thanks. I need to reorganize my sock drawer. Ciao!

Your turn
Have any of you tried the simpler investor methods?

This new series was made possible by DailyWorth expert and financial planner, Galia Gichon, creator of the “My Money Matters” kit, featured in the New York Times.

Join the Discussion