How should I be thinking about a modern investment philosophy?

Range Certified Financial Planner
Range Certified Financial Planner
July 27, 2022


Investing can be confusing, nuanced, and ever-changing. The dilemma of choice is greater than ever when it comes to what to do with your money, and deciding what to invest in can be crippling. With a little bit of education and creativity, you can set the table properly for how to position your assets in alignment with your various financial goals. Layer on top of that some diligence around what you are paying in advisory fees, expense ratios, and transaction costs and you'll be in great shape! The traditional infrastructure for investing and access to objective financial advice was not set up to be open to all.

We think it's time that changed.

First, a little about traditional investing...

Have you ever asked yourself any of the following questions?

  • "I have no idea what to choose for my 401(k) lineup, but I’ll just wing it.”
  • "I get my stock tips from WallStreetBets or CNBC."
  • “I read about it online - seems like an easy way to make some $$ short-term.”
  • “I saw that stock on TV, I decided to invest in it.”
  • "Yeah, I really don't understand investing or how the stock market works."

As a society, we can no longer be OK with the traditional gate-keeping of investment knowledge and access.  

In reality, it’s never been easier for anyone to invest, even if money is in short supply in your household. You can invest in stocks with just a few hundred dollars and receive a personalized, diversified investment that meets your needs. We always recommend participating in your company retirement plan at least up to your employer match % (or dollar amount). Most employers match up to approximately 5% of salary, with limits imposed. Employer matching is a 100% return on your investment!

The rest depends on your other goals (debt payoff, saving outside of retirement, etc.) FYI, you can put up to $20,500 in your 401(k) per year as an employee for 2022. (Your employer match does not count against this annual limit).

As it relates to investing, it's always a challenge to predict the top or bottom of the market, even for professional financial analysts and portfolio managers. We recommend investing on a regular basis using smaller amounts to take advantage of different market pricing as you go along.

Traditionally, investment asset classes at the highest level can be defined as equity (stocks) or fixed income (bonds and cash). Sub-asset classes, or one level under, for these categories consist of U.S. equity vs. International equity and corporate bonds vs. municipal bonds.

Digging in further within these asset classes, we have U.S. Large Cap (companies with market capitalization over $10B), U.S. Mid Cap (companies with market cap between $2B and $10B), and finally U.S. Small Cap (companies with market cap less than $2B). All these companies or funds can then be categorized as growth, value, or blend from a style perspective.

In the international investing arena, we have international developed asset class which we consider the EAFE index, which refers to corporations based in places such as Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the UK.

We also have emerging market stocks which are corporations based in places such as Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and the United Arab Emirates.

Traditionally, financial advisors and portfolio managers will attempt to arrive at an investor’s ideal asset allocation, known as the ideal split between stocks, bonds, and cash. Beneath that breakdown, managers allocate funds across the various sub-asset classes within the portfolio to arrive at the ideal profile to achieve the highest risk-adjusted return according to an investor’s goals, risks, and objectives.

Many firms will simply assign an equity allocation to an investor between 0-100%, assign the remainder to bonds, and invest the portfolio in a pre-defined menu of investment funds. For example, the most common asset allocation for retirees is simply 60% equity, 40% fixed income using perhaps 6-10 broad mutual funds and/or ETF’s…with a methodology of:

  1. Buy a basket of generic mutual funds
  2. Hold without adding anything creative
  3. Rebalance periodically

An archaic approach by most standards.

OK...So how does this relate to us at this moment in time?

We have a few factors at play when you look at the current investing landscape. For one, we have had a 12 or 13-year bull market since the 2008-2009 global financial crisis, where the S&P 500 fell by almost 50% (!). We saw a concurrent job loss with unemployment over 10%, a U.S. housing crisis and widespread global financial struggle.

When we came out of that bear market, the equity markets went on an incredible run. From March 6, 2009 (the bottom of the 2008-2009 crash) until December 31, 2021 (the top of the recovery), the S&P 500 increased 327%, Dow Jones increased 238%, and the NASDAQ a remarkable +581%.

Since then, we've had volatility in small pockets of time, plus a few “Black Swan” market events such as COVID-19 and the war in Russia and Ukraine, which have caused the markets to sputter and even dropped dramatically. Specifically, in February/March of 2020 with the onset of COVID-19, the MSCI World Index dropped by 34% in the span of just 1 month. Of course, most long-term investors and financial advisors preached discipline and staying the course during this time.

Other than these periods of short-lived volatility, the general markets have gone “up up up”…leading to inflated valuations and expensive stocks.

Unfortunately, we've experienced a low-interest rate environment for several years which has caused the yields on safer products like bonds, short-term money markets, and cash savings vehicles to be close to zero for a long time.

We also have seen the phenomenon of increased correlation across the asset classes. This simply means that when the markets are falling, most asset classes are behaving similarly in a “risk-off” behavior. This is in contrast to traditional concepts of inverse correlation, in which you would expect to see certain asset classes rise, certain asset classes fall, and some remain stagnant (i.e – when stocks fall, bonds and safer assets rise).

It seems like a tough time to invest in traditional stocks and bonds. What else is out there?

Enter the concept of alternative investing, which has a broader definition today than ever before.

Things like commodities, investment real estate, private equity, venture capital, hedge funds, and agriculture are all part of this broad asset class in today's investing world. Not to mention other asset classes such as silver, gold, soybeans, real assets, timber, and other natural resources.

We've also had the appearance of digital assets, such as cryptocurrencies, like Bitcoin (BTC) and Etherium (ETH), and non-fungible tokens (NFT's), which can be several things, but most commonly these are digital art, which is produced in limited batches, and bought by people on the internet, with the hopes that they will be worth much more when they turn around and sell the NFT.

These types of investments often have high barriers to entry for most traditional investors due to accredited investor rules, high minimum investments, and other constraints such as access and knowing where to source opportunities and how to evaluate them by performing due diligence.

Thankfully, the asset class is more accessible than ever given technology platforms and smaller minimums for investing, and it can serve as an incredible way to achieve higher levels of diversification with potentially outsized returns on your investment. As a rule of thumb, we would recommend keeping your overall allocation to alternatives between 5-15% of your overall net worth depending on your expertise and financial circumstances. This becomes more important if you already have exposure to something like real estate or are employed in a more volatile company or industry.

We also recommend taking the time to understand all risks, fees, and expenses related to any alternative investment opportunity you may be considering.

Investing a portion of your discretionary income in BTC is one thing, but taking a large chunk of your investments and pursuing a risky or speculative private investment opportunity is a much bigger consideration.

Why don’t traditional financial advisors recommend things like crypto, alternative investments, and real estate investments to their clients?...

Most traditional advisors focus on investing in one-size fits all “model” portfolios consisting of stocks, exchange-traded funds (ETFs), and mutual funds. This has been the common methodology for investors and institutions alike for decades, and financial planners are currently grappling with the challenge of advising their clients who are interested in the alternative investments mentioned above.

For one, clients who invest dollars in assets like NFT’s, crypto, individual stocks, or private equity will not typically align with the interests of advisory firms who are charging clients based on the assets that they oversee for them. The most common fee for traditional wealth management firms is 1% of assets under management (1% on portfolio of $1,000,000 = $10,000 fee per year).

If clients were to take a portion of their investments from the advisor’s control and invest in these alternative asset classes, the “base” on which the advisors apply their percentage ($1,000,000 in the example above) of assets under management fee will decrease, which lead to a decrease their revenue. The less money you place under the firm's direct management = the less money they make off of you.  

Traditional financial advisors also just don't understand these asset classes very well. Thus, they are hesitant to jump in and advise clients on where to place their dollars or how to fold this kind of investment into a traditional asset allocation plan. Between these factors, the advisory relationship can be somewhat broken for modern, forward-thinking investors who want to participate in modern trends and have more control over their investments.

Can’t I just pick a few blue-chip stocks and ride out the ups and downs?

Even traditional stock picking (investing in individual companies rather than a large basket of holdings using an ETF or mutual funds) is something that we need to consider in the larger scope of our plan. At Range, we don’t look down on individual stock investing like many traditional advisors, who prefer a passive ETF or Mutual Fund strategy applied to all clients via a “one-size fits all” methodology.

However, we need to urge caution here as well. For example, if you work for Microsoft (NASDAQ: MSFT) and receive a large portion of your compensation in the form of Microsoft stock, we need to evaluate that as you're choosing investments for your portfolio.

For one, most of U.S. Large Cap ETFs and mutual funds are going to have a large portion of the underlying holdings invested in Microsoft by default. You also may have several other very highly correlated U.S. Large Cap Growth stocks in the portfolio. Therefore, when US large cap stocks fall in lockstep, your portfolio is going to suffer, and your Microsoft stock is going to go down in sync and therefore you may be overexposed to this asset class from a traditional standpoint of diversification.

You don't have to look far back in recent memory to identify companies such as Enron, Kodak, Pan Am, Blockbuster who literally had their stock shares "go to zero" for one reason or the other.

All it takes is one news headline or scandal to send a stock spiraling, such as Netflix’s (NASDAQ: NFLX) recent subscriber loss resulting in a ~40% intra-day decline in the stock price back on April 19th, 2022.

Another recent example is Meta (NASDAQ: FB, –53% stock performance year to date) which was significantly impacted by Apple's recent privacy policy changes to see how 1 major company’s stock can easily lose ~50% in the span of a few months.

As emotional beings, investors also find it very difficult to decide whether to hold or sell a stock. Choosing when to sell a stock can be a difficult task. For most traders, it is hard to separate their emotions from their trades, and the two human emotions that influence traders when they are considering selling a stock are greed and fear. Traders are afraid of losing or not maximizing profit potential. However, the ability to manage these emotions is the key to becoming a successful trader.

At Range, we subscribe to the concept of diversification and long-term orientation to help mitigate risks and achieve more predictable financial outcomes in the short and long term.


We believe strongly that your money is your money – point blank. We don’t charge an investment management fee for our advice or get financial kickbacks from fund companies or robo-advisor platforms. This allows us to be completely objective in advising our members.

Our job is to help you understand the risks and considerations when considering what to do with your hard-earned dollars. Our job is not to tell you that you shouldn’t invest dollars in non-traditional investment vehicles and simply stick to the traditional asset classes. We believe there is real value in adding diversification by investing in alternative investments.

We also think that a modern world requires modern thinking around investing – particularly when observing increased correlation across asset classes and the potential for muted returns in the coming years (based on lofty valuations and the macro-economic environment at large). This includes all of the asset classes mentioned above and using them to not only further diversify your portfolio against things that impact traditional stock market prices (such as interest rate fluctuations, geopolitical events, unforeseen black swan events such as COVID-19, or the war in Ukraine) – but potentially earn you larger returns over time.

Every single investor is different. Every individual person has had a different history with money, possesses different earnings potential, and views risk differently in general. These factors, among several others, dictate the feeling about how we feel about money and investing. As a result, each person should have a unique investment plan which should consider all the factors at play.

  • Look at your asset "mix" - what percentage of your net worth is currently held in qualified retirement accounts (401k’s, IRA’s, Pensions), non-qualified (brokerage, cash, crypto), and property (real estate, personal property)?
  • Assess current investment holdings and strategies across all accounts, including employer retirement plans.
  • Reduce single stock risk, where possible.
  • Keep any 1 single stock risk to <10% of your liquid net worth, ideally.
  • Examine fees, both advisory fees and individual fund expense ratios.
  • Keep blended expense ratio for mutual funds and ETF’s to below 0.50%.
  • Identify risk tolerance for you and your spouse, and compare the results to your overall asset allocation.
  • Identify opportunities for consolidation and/or simplification across accounts, banks, and custodians.

Using traditional guidance around goals-based financial planning concepts, we can fold these investments into short-term and long-term financial plans in which we tie your investment mix to your desired outcomes. A portion of your dollars earmarked for the long-term can naturally be assigned higher risk and increase the potential to earn outsized returns over time.

Said differently, we want you to be involved in the decisions that will ultimately impact your ability to achieve financial clarity and freedom.

We want you to win.

Range is here to help.

With Range, you can connect all your finances into a single dashboard to track, monitor and plan the best version of your life. Say goodbye to middlemen and spreadsheets and hello to the new financial you.

Get started with Range today

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