Shocked by professional advice on a local radio call-in show.

[paddedhat]

I'm in the car with the wife, and we are listening to the owner of a local investment company, and the host of a local station. The topic is, "Is the US stock market overheated, and about to crash?".  A call came in from a woman with a spare thousand to invest, and she wanted guidance on what small cap. stock to invest in. The expert starts to respond, and I turn it up and say, "here we go" to the DW, as I'm ready for the usual bull, and maybe even a pitch to contact his firm. He starts with first telling the woman to never invest in a single small cap. stock. He cautions that the average one will not beat a treasury bond, long term, and there is little the small investor can do to try to divine which company will soar, and which will tank, so it's best to not take the risk. He then tells her the next big mistake is wasting money on fees, including excess fees to purchase individual stocks and having them managed for you. Finally, he tells her to buy a very low cost small cap. index fund, and specifically recommends a Vanguard product. He closed the show by stating that the goal is to end up with a big, beautiful, well balanced, well diversified portfolio of domestic and some global holdings.

Not in the least what I expected, or have heard in the past, when one of these types gets a chance for free media exposure.

[Scortius]

Wow, that's fantastic, exactly the opposite of where I thought this post was going.

[JAYSLOL]

Jaw -> Floor.  Definitely not what I expected to hear on the radio from a "local investment firm".  Good on him though, the MMM gospel must be spreading! 

[dandarc]

Maybe one of them "hourly fee" type of advisers?

[paddedhat]

Jaw -> Floor.  Definitely not what I expected to hear on the radio from a "local investment firm".  Good on him though, the MMM gospel must be spreading!

It sure was different. Much discussion on irrational exuberance/greed and fear being opposite extreme behaviors, that damage your potential as an investor.  Explained why he felt that the S&P was a more reliable indicator that the Dow, what Shiller's P/E index is, and why it's a different barometer than a straight P/E when trying to determine overvalue. He also discussed why market timing is for fools, as is predicting the end of this rally. He wasn't willing to give much credence to any president who believes their stellar performance is responsible for a rally, and on the flip side, listed many famous experts and personalities  who were wrong when they warned that the inauguration of the orange one was the immediate end of prosperity.

Yea, I've listened to some pretty slippery sales types on other radio programs, and this was quite a pleasant change. It was a local NPR station with a local issues host, BTW.

[talltexan]

What you're describing sounds surprisingly...rational. If the show were to ever have Larry Swedroe as a guest, I'd be ready to go all in!

PS Do you believe in this notion of "tilting toward small cap"?

[paddedhat]

What you're describing sounds surprisingly...rational. If the show were to ever have Larry Swedroe as a guest, I'd be ready to go all in!

PS Do you believe in this notion of "tilting toward small cap"?

Nope. At some point as the recession got deeper and uglier in my part of the world, I started on things like Jacob's ERE, and other hardcore "how to thrive in this mess" writing, which led to MMM, then the jlcollins stock series : http://jlcollinsnh.com/stock-series/ 
I then pulled all my assets away from some ass clown individual "wealth adviser" at Wells-Fargo,  and did exactly what Collins so effectively recommended. I also always kept the overall MMM mantra of, "don't do stupid shit with your money" humming in the background, without living the extreme of some here, like the cold shower and splitting two ply shit paper crowd. OTOH, I don't have debt, would never buy a new car, don't generally waste money, and have lots of areas where I could improve.  Now the wife and I are FIREd and pretty comfortable. Truth be told, I never dreamed of a life where my annual returns exceed my previous upper middle class income, by a wide margin.

So when it comes to things like small cap. and other investor concepts, I'm largely ignorant of the topic, have no shame at being so, and no interest in having more than a vague knowledge of the subject. I'm happy to let Vanguard do my thinking on the topic.

[Dicey]

What you're describing sounds surprisingly...rational. If the show were to ever have Larry Swedroe as a guest, I'd be ready to go all in!

PS Do you believe in this notion of "tilting toward small cap"?

Nope. At some point as the recession got deeper and uglier in my part of the world, I started on things like Jacob's ERE, and other hardcore "how to thrive in this mess" writing, which led to MMM, then the jlcollins stock series : http://jlcollinsnh.com/stock-series/ 
I then pulled all my assets away from some ass clown individual "wealth adviser" at Wells-Fargo,  and did exactly what Collins so effectively recommended. I also always kept the overall MMM mantra of, "don't do stupid shit with your money" humming in the background, without living the extreme of some here, like the cold shower and splitting two ply shit paper crowd. OTOH, I don't have debt, would never buy a new car, don't generally waste money, and have lots of areas where I could improve.  Now the wife and I are FIREd and pretty comfortable. Truth be told, I never dreamed of a life where my annual returns exceed my previous upper middle class income, by a wide margin.

So when it comes to things like small cap. and other investor concepts, I'm largely ignorant of the topic, have no shame at being so, and no interest in having more than a vague knowledge of the subject. I'm happy to let Vanguard do my thinking on the topic.

Nice post!

[Cari]

Paddlechat.... trying to reach you because I need advice on a stinky crawl and your opinion is the only one that made sense!  I am in uncharted territory w/my home design and more (abandoned w/kiddos during an owner/build).  Please please contact me, thank you!

[wenchsenior]

It's interesting that almost all of the financial pros that used to guest on the two public radio stations I listened to a lot back in the first decade in the 2000s (MN and WI) almost uniformly gave great advice.  And they had a personal finance type guest on regularly, certainly every month or two.  Some were financial educators, etc., but many owned advisor businesses.  Those stations must have vetted the guests really well.  I never remember hearing any snake oil in about 10 years of listening.

[Dicey]

Paddlechat.... trying to reach you because I need advice on a stinky crawl and your opinion is the only one that made sense!  I am in uncharted territory w/my home design and more (abandoned w/kiddos during an owner/build).  Please please contact me, thank you!

Sorry, @Carl, paddedhat's last post was December 9, 2017. Hopefully they hit FIRE and rode happily into the sunset. The way to ping someone is by using the "at" symbol in front of their name, like this: @paddedhat. This will batsignal them, but it only works if they're still checking in. Another option is to click on their name. There may be a "Send Personal Message" option, but only if their account is set up that way. That is also the way to see their stats and their entire post history. If paddedhat doesn't answer, you may discover that they've written more on the topic on a different thread. 
Alternatively, you could just start a new thread and someone will help.

[Car Jack]

I find that radio financial talk people all have some good advice.  Unfortunately, most have interlaced horrible advice in there.

Ric Edelman: Use low cost index funds and ETFs.  But you can't possibly understand which ones to get, so pay my firm 1.5% to pick the right slice and dice portfolio.

93 Financial Group: We use low cost funds, then actively manage them and sell you annuities.

Dave Ramsey:  Eat rice and beans to get out of debt.  Don't buy stupid stuff.  Have an emergency fund.  Pay off all your debts.  Use my hand chosen local providers who send me a ginormous kick back so you know they'll never charge that to you and will invest in stuff that'll outperform the market by 1000% so who cares that they're charging you 3%.

They all want their cut.  I don't know about Ramsey but do know that Ric and 93 pay for their spots on the radio.

[Blueberries]

I do wish that those who want to passively invest would realize the benefits of indexing. 

Jaw -> Floor.  Definitely not what I expected to hear on the radio from a "local investment firm".  Good on him though, the MMM gospel must be spreading!

Or they've heard of a relative unknown named Warren Buffett.  Or another small towner named Jack Bogle.