If it looks like it hurts, it probably does

“Hey Pete, doesn’t she look like the girl we met on the Black Sea?”

Pete stared at the picture: “Not really; what happens if she needs to blow her nose?”

“What do I know.”

“By the way, it was the Dead Sea, not the Black Sea.”

“I should have tossed you in the Red Sea when I had the chance.”

Quality time with your dear ones is hard to come by these days. Pete knew instinctively that it was time to go and so decided to pay a visit to Herb, his banker. He liked Herb, save for that verbal tic, “In the long run we are all dead.” Last time they met they decided to implement a new, simpler passive portfolio and he was curious to see what happened since.

“Pete, how are ya? How was Israel?”

Let’s not go there, please. I’m fine thank you. Can you show me what the new portfolio looks like?”

“Sure; let me get you a printout.”

A few whizzes of the printer later Pete gets a two-sheet report listing 30 securities. Before Herb could say anything else,

“Whoa, some simplification; didn’t we say that going passive would have reduced holdings?”

“In a sense yes, because these exchange traded products and index funds represent thousands of underlying securities.”

“Herb, I’m not an idiot: before we had 15 lines here and now we have double that? How’s that simpler?”

“You need some tactical positioning and besides our research says certain sectors and countries should be avoided.”

“I’ve got stuff here on cobalt miners, bottle recyclers, dolphin food producers and robotic bomb squads…”

“Diversification.”

“But I thought there is an ETF for the whole world equity index.”

“Yes, but do you want a one-line portfolio? It doesn’t look good.”

“What’s wrong with that? Isn’t all this dickering around costing me more with no benefit?”

“Remember, in the long run we are all dead; you want a balance between time and results!”

“You guys are better than 99.9% of all others out there?”

“Give me some time; you’ll see how the tactical moves will pan out; if you’re not happy after a few years we can go back to the old system.”

“Oh, so now in the long run we’re all alive? And what is this unpronounceable triple-levered S&P500 thing?”

“That’s to protect you if the market goes down.”

“But in the long run the market goes up, no?”

“In the long run we’re all dead.”

“Do we need a ‘Silicon Valley small-cap tech Zip code ending 09 ETF’?”

“Fred, the tech analyst, thinks there’s a lot going on in that Zip code. Lots of garage shops apparently.”

“And how much is this new portfolio costing me in commissions?”

“Hmm, let me see… I’ll have to get back to you on that; the system is temporarily down.”
“How long do you think?”

“I may have to email you the…”

“Herb, I know in the long run we’re all dead, but in the short run some of us are more dead than others!”