Why I Don’t Post Specific Investment Recommendations

A good question that’s come up is, “Why don’t you post specific investment recommendations on the blog?”

Investment advice is personal and recommendations should be made within the context of an investor’s situation. To make a good recommendation, I’d need to know someone’s ability to take risk, willingness to take risk, time horizon, liquidity needs, tax situation, net worth, account details, and a lot more. I do not know everyone who reads this blog nor their financial details, so how can I make a recommendation? 

To illustrate the above, consider that I will often make different recommendations to the exact same client! Suppose a client has four accounts, but wants to invest all of them identically. I may recommend a specific index fund for one account, a different share class of the same fund for the second account, a different fund targeting the same index for a third account because it is taxed differently than the first two, and a separately managed account targeting the same index for the fourth account due to tax considerations. The client may be purchasing the same underlying holdings in all four accounts, but there are four different recommendations.

If I were to make a specific recommendation on this blog, I’d have to list out all of the nuances, caveats, exceptions, and so on. So I will leave the specific recommendations to the talking heads on CNBC and the writers who contribute to Seeking Alpha. Publishing specific recommendations for the general public is not something I want to do, nor do I believe it is especially helpful to individual investors.

Before You Open a 529…

Many of my friends are having kids these days, which means I’m being asked about 529s more than anything else. Below are just a few of the common questions:

  • “Should I open a 529?”
  • “Which company should I use?”
  • “How much should I contribute?”

Ready for the answers? My answer is:

  • Are you properly insured?
  • Is your estate plan in order?

If not, my advice is generally “Go get properly insured and engage an estate planning attorney. Before investing money for an uncertain future, invest to protect your family should anything unexpected happen.” The baby books don’t cover this, but this is Parenting 101.