The Price Of Admission

Self-driving cars, NFTs, AI, SPACs - what a time to be alive. With so much excitement and promise, investors are jumping in to invest in seemingly world-changing projects. It's a fun time to trade. Endless options, big gains, compelling stories. Even I've been tempted to join the fun.

The lack of fun is the cost of admission when you choose to index. Speculation is taken off the table. You'll never get rich quick. Volatility will be limited. Never will you double your money overnight. Swings of about 10% is as exciting as it gets and these days are few and far between.

You'll never have amazing stories about how you were able to successfully buy the dip of a EV stock that has since tripled. You'll never be able to brag about buying Amazon at 10 bucks. You'll never play visionary by yoloing into Bitcoin because you knew it was the future.

Active and concentrated portfolios lead to great stories (good and bad). Passive and diversified ones lead to snores. No one wants to hear about your market-capped weighted ETFs. Except maybe me.

This cost is also a feature. The lack of speculation, the lack of big movements, the lack of activity allows you to sleep at night. With the right portfolio, everything will take care of itself.

While it sure looks fun, old me will probably thank me for thrill seeking outside of my retirement account.

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Herman Ye

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