Broker Check

Practical Planning Tip: Investing is Like Birthday Cake - The Cherry On Top

February 27, 2024

Today we will discuss the Cherry on top: The maraschino cherry on top of many birthday cakes is unnecessary. They are usually taken off immediately and discarded, unless one grandpa or uncle in the family is willing to eat it. The other 99% of people are appalled by its distinct taste and lack of contribution to the cake itself.

The maraschino cherry equivalent within a portfolio are all the latest fads of the day, things that sound exciting, may have had their day in the sun, but are usually extremely high risk and don’t always have a solid investment thesis behind them. These include, but are not limited to, Cryptocurrency, NFTs, hard money lending, option strategies, and IPOs. I would also argue that most retail investors don’t need exposure to hedge funds, private equity, or real estate syndication deals. All these products or strategies fall under the purview of gambling and don’t belong in the typical investor’s portfolio. Sure, there are exceptions to this rule, but if you are listening to this you are probably not the exception.

You can WATCH the full video here.