Hi all!
Apologies in advance if this has come up before. I have only been in the community / watched the podcast for a few months and wasn’t able to find a similar question before.
A quick PSA to start! The podcast convinced me of the importance of being more personally engaged with retirement investments; Just taking a preliminary look pointed out I had made a few pretty big mistakes that I can see others like myself making.
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Letting myself use the Fidelity brand name as an excuse not to look at where my 401k contributions were going. When I started my current job in ~2016, the 401k plan was run by a local company. At 24, I had no investment education outside of confirming it was fiduciary run and fees weren’t absurd. After two years, my company was bought out by a much larger corporation and the 401ks rolled over to Fidelity’s site. It took me 5 years to bother to check and see how awful the new TDF was. Even the company running it (Capital Group TDF Trust TD2) must be ashamed, since the fund isn’t publicly listed and they don’t put it on their website (only the “American Funds” show up).
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Letting a lack of confidence in investments postpone reallocation. For better or worse (mostly worse) our 401k plan only has ~20 mutual funds you can buy into outside of TDFs. Had I looked into that a bit earlier, confidence wouldn’t have mattered as much - you can’t exactly pick a bad “large cap value” fund if there’s only one choice. I also didn’t realize how much simulators like Portfolio Visualizer could help. Doubt vanished after seeing a standard “lazy portfolio” would outperform the 2055 American Fund TDF (which already had 2x the yield of the one I was in). ! I know Monte-Carlo analysis is a bit antiquated mathematically - but it helped reframe the task from “finding the best option” to “only having to beat out the junk TDF I’m in”
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This one is situational - but I completely forgot to take into account that having spent almost half of the last two years on medical disability leave would also mean I was no longer saving for retirement because I was getting paid by an insurance company and not my employer.
So I have to play some catch up! Fortunately I woke up to the problem young enough (32) where I will have plenty of time to fix it.
I opened up a Roth IRA a few months ago and had initially planned on letting time do all the work and do a 3 fund portfolio out of Fidelity’s zero expense ratio funds (large, mid, international). Eventually, the ecologist of my college days got the better of me and I wasn’t satisfied with that lack of diversity.
I’ve kept my 401k largely in a 3 equity fund porfolio, but have since expanded my investments to add some TIPS and dividend aristocrat ETFs and REITs into the Roth. I opened up a taxable brokerage back before I understood you could withdraw Roth contributions (not that you should, just reduced my anxiety to know that) with some S+P 500 index shares and have since pivoted that towards municipal bonds.
Nowhere near a textbook 40% of the portfolio or anything - just that it made more sense to me for bond exposure to come via municipals in a taxable account. The ~25-30% on taxes effectively boosts yield by 1-2% and lowers opportunity cost by letting me keep the Roth money in equities.
Now I’m starting to wonder whether it’s worth keep maybe ~2-3% in market neutral ETFs (since I don’t know if they are good products or not, I won’t give examples 
). I know full well they will have minimal to no return; my goal would just be for those to keep up with inflation and serve as a (I guess the industry term is black swan?) hedge for extremes like the drop in equities and bonds seen from COVID. The idea being I would sell those first rather than selling equity at a low point or bonds below face value.
I have put myself through a 4-5 month investment crash course (I’m not overly concerned about funds at this time - the education was just as much about finding a way to feel useful in my marriage while on disability than actual financial goals) so I am very green and very likely have naive or misinformed understandings!
I know enough to at least realize I should avoid any ETFs that get overly fancy, use crazy leverage or have ridiculous options trading simply because they are trying to sell something in an industry where 99% of the good ideas have already been taken. Or those odd “anti-beta” ETFs that make no sense long term (e.g. given beta is calculated as a benchmark against the S+P 500 - it’s a measure of how far it deviates from the mean, which it will naturally regress to a value of 1 over time). That seems like folks turning confusion over the central limit theorem itself into a product to sell someone on. But finance has all kinds of wacky math. I’m at least like…15-20% serious in my belief the retail side always uses the arithmetic mean vs the harmonic mean (if you pick one math says to) or geometric mean (which the odd field of math made up by professional investors says to) in order to inflate the numbers and make the average returns look larger than they actually are.
Any input would be appreciated!
