Asset Trip with Justin Choi: An Inside Look at a Financial Advisor's PortfolioCertified financial planner and Fidelity consultant talks asset allocation, aggressive long-term investing, and why financial planning is for everyone—especially young folks.
I always try and torque up my risk, because my philosophy is: as long as I stay invested for a long period of time, I just don't have to worry about the volatility.
Regional Planning Consultant at Fidelity Investments
35 years old
Married, 2 kids
15% income invested
Big Ws & Ls
First job after college
Most Intriguing Alt:
Oil ETF Futures
To start it off, can you tell our readers a little bit about what you do?
I'm a regional planning consultant for Fidelity. So I coach and develop our most valuable assets, which are our advisors. That way they can better serve our clients.
How'd you get into that and into the investing space in general?
I started back in '08 in New York City. I joined a firm, called Bernstein Global Wealth Management, that works with high net worth individuals. I studied finance in college, so I found my way towards that. [In the past] my role has always been kind of a specialist—I come in to be the closer, help with complex situations, super high net worth planning, trusts, estate planning, tax planning, stuff along those lines.
[At Fidelity] I still get to sit with clients and meet with them every now and then. But now my role is to grow and develop the next generation of advisors, which has been really fun and rewarding.
That's exciting. Can you tell us a little bit about the typical client that comes to your advisors and why they end up seeking additional support with their investments?
They really run the gamut, everything from people who are just starting out all the way up to ultra-wealthy clients. Usually, it's for the same reason that everyone wants to get into investing, right? It's... Can I build my wealth? Can I grow it? A lot of times it's built around retirement. And Fidelity has done a lot of work trying to engage the younger demographic as well to get the next generation of investors.
Do you think that financial planning is something that everyone can find useful at some point in their life? Or is it more geared toward people in particular financial situations?
Everyone should have a financial plan, and the earlier you can do it, the better. A lot of times when people think about financial planning, they think about tax planning and retirement planning and how to take distributions and whatnot, but the best part about it is starting younger. What does your budget look like? Personally, I think the United States is a really big opportunity for personal finance education. I think the consumer debt problem is something that needs to be addressed. It's a real passion of mine to help address that. That's all financial planning.
Do you happen to remember your very first investment and what it was?
The very first investment that I physically bought myself... I think it was just whatever I invested into my 401(k). I was always interested in investments in college and stuff like that, but I never actually actively participated in the market. But two memories really stick out to me. I just remember when I was a kid, like really young, my dad would come home excited about how much his 401(k) went up. I remember this one specific memory when he was like, "Oh, I made $10,000 in the market today." I was a kid, but I just remember him being very excited about it.
And then the other thing I remember is I was in college when Google went live with their IPO and a couple of my friends were like, "oh, we should buy into this." And I was like, it's Google, it's a search engine. What could they possibly do? Why would you invest in this? How are they gonna make money? There's no revenue stream. And fast forward to today, it's crazy, obviously. I remember that IPO launch. I think it was like $100 or something for a share at the time, which was high at the time, but look at it today.
So you were exposed, at least to some extent, to the financial industry and the concept of investing at a pretty young age.
Yes. I was always very conscious of saving and budgeting and stuff like that, even from a young age.
And do you remember when you started taking your investments to the next level and going beyond just automatically contributing to your 401(k)?
When I had more money saved up to be able to do it on my own. And to be frank, although I do manage some of my own money on the side, the large part of it, especially in my retirement, I just have professionally managed. I always like to say, the shoemaker's kids don't have shoes, right? I don't have time to manage my own portfolio properly. So I don't even do that much.
But when I first started working and could actually save up a little bit of money, I started taking a little bit more of an aggressive stance as far as the market is concerned. I always try and torque up my risk, because my philosophy is: as long as I stay invested for a long period of time, I just don't have to worry about the volatility because I've got such a long time horizon. Now there are going to be better opportunities within different funds or investments that I find. But theoretically speaking, the best performing asset class in history is small caps. So if you just did 100% small-cap, in the long run, you're going to win out. Now that's not practical information because there's more to it than that, but that's kind of like the basics of it. I do a lot of single stock picking now for fun stuff that I see pop up in the news or stuff I just think is going to do well, but I consider that almost gambling because I don't do any research.
So your investing style is definitely more aggressive. Your goals are more long-term. How do you allocate your assets according to those goals and your investing style?
Most of the retirement money that I've saved is professionally managed. I just let them do it and tell them I want to be as aggressive as possible. And then my play account is just a smattering of individual stocks and mutual funds that I will pick and rotate around based on what I think is going to happen in the economy. It's just personal guesswork at that point. I try and remain diversified. So I have more emerging markets, more international, small-cap stuff, I would say. I still obviously have a large U.S. exposure because the U.S. is the largest economy in the world. But a few years back, I got into China and India mutual funds just because their economy is growing. It's vast. It's still considered an emerging market, so there was a lot of growth if you could stand the volatility.
Are there any other asset classes that you're not currently invested in that you've been curious about?
There's something that I'm not in that I do like: cryptocurrencies and blockchain technology stuff. I want to get more invested in crypto, and I encourage at least a small portion of it. I see a ton of value in it. I just personally haven't because I think it's kind of troublesome to access that money.
If you could hop in a time machine and go back and give your 18-year-old self one piece of investing advice, what would it be?
I would tell myself to buy that Google share. But honestly, the best piece of advice that I got was when I first got my job when I turned 21. I was setting up my 401(k) and they gave a full 5% match. So I was gonna put in 5%, at least. And the senior associate on my team was like, no, put at least 10% of your paycheck into this. I was like, why? This seems like a lot, I'm barely making any money. I'm in New York City. I'm starving to death here, like stealing food from conference rooms.
He was like, here's the thing. Let's do the math. Going from 5% to 10% ends up being like $100 a month. Do you really need that extra $100 a month? I was like, probably not. But when you get to retirement, 20 or 30 years from now, that's going to add up, and you're going to thank yourself for that. So I just bumped it up to 10% and I was like, here we go.
That's great advice. Imagine if everyone did that.
And the studies have shown that if you give someone two scenarios—incentivized saving or automatic saving—automatic is overwhelmingly more effective. So even if the company is like, we'll match you 10%, that's less of an incentive than companies being like, we're just going to automatically sign you up for your 401(k). Because it takes the thinking out of it, now you don't really miss it.
That makes a lot of sense. Not to put you on the spot for our last question, but can you name your biggest investing win and your biggest investing loss?
My biggest investing win was Netflix. I bought it back in 2013 because I heard about the way they run their business. It sounded absolutely cutthroat, like you really gotta get sharp to survive in here. They're always trying to better themselves and one-up themselves. And my words were I'd never want to work for a company like that, but I'd like to be an owner of that company. So I bought it, and it wasn't instant, but over the next few years, people were amazed at how much it jumped up. So I made a really good amount of money in that.
My biggest loss was back when oil barrels were like $30 a barrel? Two years ago I was like, oh, these are historic lows. I'm going to buy some oil futures. So I did some triple leveraged oil ETF futures and just got taken to the cleaners. And I kept on trying to bounce in and out to time it, and it just kept getting lower and lower. It was bad. I call it gambling. You know, everyone always talks about their wins. You've got to talk about your losses too.
True. And they're not just losses, they're also lessons. What are the lessons you've learned from your investment losses?
It's kind of like Vegas, right? The majority of your money should be somewhere with a disciplined investment approach. My managed accounts aren't anything glamourous. You're never going to see huge numbers popping off on them, but that's okay. I just need steady returns because that's what I need to count on for a long period of time, without having to think about it. I just want to set it and forget it.
And then the other stuff is more money I play with because I can afford to lose it. I want to take a little bit more of a risk on it, do some more uncertain things, but the majority of it should just be somewhere safe. I mean, I'm still basically 100% stocks, but safe in the sense that I'm not putting everything in one single stock or anything like that.
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