Financial pundits are everywhere. We all get hit up with various ways to invest our money. It comes from the media, our friends, our families, print ads, TV ads, social media ads, and online search ads – a never-ending assault that can be dizzying.
We have NO relationship with Invesco, but appreciate the point made here.
When we pull back the curtain, we realize that the media is tasked with bringing in eyeballs, with the purpose of selling more valuable advertising space. Their stories, therefore, need to be more attention grabbing than informative. Obviously, every ad you see is also a bit biased. Friends and family can hopefully be trusted, but how reliable is their financial advice? Does it come from actual historical data, or is it based on recent fads or speculation?
At times, we just want to throw our hands up in light of this deluge of info. Maybe the best thing to do is to invest like Warren Buffett or an elite endowment fund like Harvard's? Copying either of these models would be better than many, but it may not be right for YOU.
While impressive over the long term, and an investing icon to many, Buffett has lagged the S&P 500 over the last five-year period. And, while the S&P 500 has hit numerous new all-time highs this year, the Harvard Endowment Fund still has not made it past its prerecession levels (6+ years ago).
Investment allocation is a fascinating topic and is key to successful long-term investing. What is right for Harvard, Buffett, or your uncle, may not be right for you. Depending on your stomach for volatility, your future potential earnings, your desired retirement picture, etc., your plan likely won't mirror Buffett's or Harvard's. That is very much OK!
Don't think your plan should mirror anybody else's. Your investment plan should complement both your personal situation and your mindset. If it doesn't align with your situation, you are doing your future self a disservice; and if it doesn't align with your mindset, you probably won't stick with it.