Big Bets: Wellesley Fund vs. Jekyll and Hyde

We live in a world of big bets. You can’t watch a sporting event without being bombarded with advertisements for ways to bet on it. You can’t read about investing without ads on this “winning” strategy or that one. And this isn’t about the “kids” because Baby Boomers are buying bonds in one account while trading options in another. They’re what I call the Jekyll and Hyde investors. And they’re everywhere.

I get it. It’s hard to be “safe” with your money. Yes, you know how hard it was to make it, but “look at the opportunities out there,” you say to yourself. You subscribe to this system or that, and before you know it, you’re trading with the stars. That is until a once in a generation Black Swan comes swooping in and the investor begins losing money, like always. “It’s not my fault,” he says, usually adding an excuse to justify the losses.

Your Survival Guy works too hard for his money to play these games. I have a front-row seat to the psychology of the investor. I know exactly how it all played out many times before this century, and like a broken record, it will play again and again—and again. No one learns because they feel like they have the magic touch or that, this time, it’s different. It never is.

I want investing to be boring. I want investors to embrace the income generated by my balanced strategy, similar to the bond and stock approach taken by the Vanguard Wellesley fund. I am not a fan of the Jekyll and Hyde approach, where one side could be completely wiped out.

Action Line: Work with an advisor to help you craft an individual mix of stocks and bonds. If you can’t, then my next best choice is a Wellesley-style balanced fund, not the Jekyll and Hyde strategies we hear so much about or, more often, don’t hear about because nobody tells you about their losses. Let’s talk.

Originally posted on Your Survival Guy.