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April 25, 2016 | Investing your “Serious” and “Mad” Money Buckets

Adrian Mastracci

Adrian Mastracci, Discretionary Portfolio Manager, B.E.E., MBA. My expertise in the investment and financial advisory profession began in 1972. I graduated with the Bachelor of Electrical Engineering from General Motors Institute in 1971. I then attended the University of British Columbia, graduating with the MBA in 1972. I have attained the “Discretionary Portfolio Manager” professional designation. I am committed to offering clients the highest standard of personal service by providing prompt, courteous and professional attention. My advice is objective, unbiased and without conflicts of interest. I’m part of a team that delivers comprehensive services and best value in managing client wealth.

Investing your retirement nest egg is dull and boring.
While investing to beat the markets has huge appeal.

Investors often wonder about adding zing to a doughty nest egg.
Of course, without betting the entire farm.

There are two main types of investment buckets.
“Serious” money and “mad” money come to mind.

Let’s define them:

“Serious” investing is the long-term capital that funds retirements.
“Mad” money investing tries to hit home runs out of the park.

There is absolutely no pizzazz attached to serious money investing.
The thrills of swinging at home runs always win hands down.

Nothing has changed for decades; however, be realistic.
Precious few have the crystal ball to “consistently” outperform the markets.

Nevertheless, investors keep polishing the crystal ball hoping to beat the very slim odds.
Remember that hope is not an investment strategy you want to rely on for retirement.

What I do

There is a better way to accomplish both investing missions.
That is, pursue an approach that accommodates long term needs and immediate excitement.

If you crave a “mad” bucket, divide your nest egg in two separate camps:

Invest most of it, say 80% to 90%, as the boring “serious” bucket. Use professional management.
Earmark the remaining 10% to 20% into the far more thrilling “mad” bucket. You manage this part.

Once in place, revisit the wisdom of your decision every year.
You can redirect more or all of the nest egg to the “serious” bucket anytime.

This is a wise and sensible solution that diversifies your money management.
It preserves the majority of your retirement nest egg and allows for some investing excitement.

Many investors are not sufficiently prepared at managing portfolios from both money camps.
It’s a tall order to deploy speculative and long term investing strategies, all at the same time.

You want the lion’s share of the portfolio to remain intact if your home run crystal ball strikes out.
The bonus is that you get to tell some fascinating stories about trying to outperform.

I would like to hear those stories.

Talk soon,

Adrian

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April 25th, 2016

Posted In: Adrian Mastracci Blog

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