Well over a decade and years ago I noticed that my 401K age-target balanced plans had small returns during the greatest years, and deep losses when the markets or economy dipped. I gathered as much information as was disclosed about the funds, including tracking the individuals who managed my money and thousands of others like me. Those individuals turned from multi-millionaires to centi-millionaires in those years with one even becoming a billionaire, yet my lifetime of earnings was just… not going to cut it. And it wasn't confined to just one 401K plan or company. My spouse's plan shows similar paltry returns. The 401K manager just bought his second vacation home in Naples for $10,000,000. After nearly 2 decades of steady contributions and no withdrawals, the account pays about $3000 per year in dividends, which won't even cover our property taxes on our meager small starter home when we get aged out of the workforce. BUT, of that $3000, he charges $2995 to manage the plan. All combined, I took a third 401K from an old sponsored plan, after many hurdles and back and forth exchanges with the fund company, I finally got control of it before their fees wiped it out. I learned everything I could about investing, and continue to learn now. I researched a handful of companies, studied and monitor their financials, listen to their earnings reports, analyze their markets and customers, follow their patent filings, and have extensive profiles on their leadership, and strongest employees, and node maps of all of the connections between those people and much of their own financial activities, investments, and ventures. And, I follow macroeconomic events and study and model the impact those will have on the companies I'm interested in. Only then do I decide whether or not to invest. And, I still don't have high confidence that I'm a great investor, and conceded that likely I'm just lucky. So I still let the professionals manage other 401K plans. But with the one I took over, I've now tripled the balance without having to make any more contributions. Every investment I've made has at least 20% returns and my favorites are much, much more. But I still feel like a lot of it is like gambling and luck.
So, I decided recently that the sums are so large now that if I fumble or am wrong about any significant factors, it's a future, life-altering fumble and instead I should take the advice I see often parroted… that most people are too dumb to pick stocks, and instead we should all be buying index funds or whatever. So I did that. VTI seemed like a good, favored one. But, now I continue to watch the holdings I picked, what remains in them, continue to grow, and VTI is meh. It's doing better than actively “professionally” managed 401Ks, but… I guess I'm having a hard time seeing such slow growth in comparison.
Did I just de-worsify my portfolio? Was this a mistake? I don't really want to spend my free time continuing to do the level of research I've done for many years now. It's a full-time, after-hours and weekends level of work, which at my age now is so tiring. On the other hand, I'm just not impressed by any of the index funds and question just how diversified they actually are, how well-balanced they actually are.
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