I wanted to do a quick video on this topic, but I was met with the challenge of considering so many angles to approach it. At its core, it's really simple. Total returns = capital appreciation + distributions. The most challenging question is how a beginner is supposed to view one of the most important variables of their investing journey. I was motivated to do a video because I think people appreciate my way of explaining things, and I do think I have a unique spin. For one, I don't think the growth-hybrid-income spectrum makes any sense. One of the fascinating realizations is that as a broad investor, even if total return is the key metric, you don't really actually care to predict or even be precise with projecting future expected returns. It almost feels like a paradox — something really matters, but you don't care about the exact measurement?
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43 Comments
Not Financial Advice @anpc86 · 4mo
The only wrinkle or counter to why hybrid approach is good is that not everyone’s situation is the same. To just say one way works for all .. I don’t buy it. Time horizons influence the strategy , risk tolerance , and needs vs wants. Liabilities and cash flows and real life personal events. If it’s presented as this is my situation, this is my ideal investment situation and you the audience need to assess if this fits your situation for yourself then sure go for it.
Twenty-five And Invested@25andinvested · 4mo
Im not a big fan of hybrid portfolios. Off the top of my head you are taking distributions and reinvesting in somthing that leaves more in you end total....but backrested, skipping the middle man (income) always left you better off. I defined total return as the broken down pieces of a total.
Rabid Money Badger @riggs · 4mo
I hear you. I’m not sure how to realistically project future returns anyway. The only thing I really know is that certain investments tend to trend up and to the right over time better than others. Just try to pick those ones more often and stick with it through the bad times.
J E J@kingdolla · 4mo
Maybe it should be done across multiple videos where you explain each approach. I know it may be more effort than you wanted, but for a beginner investor, without having the basics, your explanations may go over their head.
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