The BEST Portfolio for 99% of People | Humphrey Yang

What is the perfect portfolio for someone watching this right now? >> Moderately conservative, I'd probably say 90% stocks, 10% other. Other could be if they're more conservative, fixed income. Other could be if they're more aggressive, speculative assets. But, yeah, I think if you're young and you're making money, 90 to 100% equities is probably fine. >> And what do you mean equities? Like, how do you determine which stocks you would want to buy? >> Uh, most of the time just S&P 500 is is good enough. >> Is that what you do personally? >> That is not what I do personally. >> So, what do you do personally? >> Personally, I've been buying more individual stocks. >> And why do you do that instead of buying S&P? >> I think my appetite for risk has gone up over time, um, as I've been making financial content and I'm always paying attention to the markets. I'm investing in big companies that I know and love and I know intimate detail, or not intimate, but I know them intimately. Uh, so my portfolio has been getting more weighted towards individual stocks, but I think, you know, I was on the Money Guy show maybe like 6 months ago. I think I need to diversify back into the S&P 500. >> Why would you say that if you Have you done well with individual stocks? >> Uh, I have done well with individual stocks, but I do think that the entire market has done really well with individual stocks and I just really want to make sure that if I have the amount that I have so far, that I protect that capital. And so, I should really take my own medicine there. So, I think I've learned a lot on this podcast, which is I should probably spend a little bit more, right, in my personal life and I should probably take my own medicine and diversify back, but the tax hit on the individual stock is tough. >> Do you think that people should consider tax consequences when investing in stocks? >> Um, how long are they investing for? >> Let's say they're investing for retirement and they're in their 20s or 30s. >> Then probably not. Not as much, especially if it's in especially if it's in a retirement account yeah. >> What say it's not though. It's a taxable account. You see you made a whole bunch of money, but you're like, "Oh, man, if I sell it right now, I'm going to have to pay all this tax." >> Yeah, I mean, that's I don't know, that's a tough balance because what what is their situation going to look like when they're 65? I don't know. Is their tax bracket going to be really high for long-term capital gains? Um are they going to be able to weather that tax bill depending on their other assets? I'm not sure. So >> I've >> that that maybe is not a good question for me cuz I'm not sure. >> I personally I've made more mistakes uh avoiding the tax than I have uh riding it out. Like there there's so many positions where I was up a ton and I said, "Oh, man, I don't want to sell it because I'm going to have to pay the tax." And then it just drops. Like I lose all the profit in that. >> positions, would you have held for 40 years? Or these like you know, that you're up a lot on? >> Um some of them. Well, like I'll give you an example. Ethereum, I bought in at the very bottom of like 20 20-something uh and I was up like 100-and-something percent. And I figured instead of selling it, I'm just going to let it ride. >> Okay. >> And now I'm basically break even on that. Or no, I'm down a little bit, I believe. >> So you would have preferred to sell it, take the tax hit, but at least have the gain. >> Yes. And what's what's >> You would have not known if it would got it could have got up to 10K, right? >> That's true. The other funny thing is, of course, the one time I do start to take profits, it was on Bloom Energy. And I started selling it like I sold a little chunk at 250, a little chunk at like 275, a little chunk at like 285. And now it's past 300. And of course, it's the one stock where I'm like, "I'm going to trim some of this." That's the one that just keeps going up higher. >> I feel like you're you're measuring yourself up against the perfect investment though. Like you still What was the percent return did you get in Bloom and in over how long of a time period was it? >> of percent. And and but I'm paying taxes as though it's like uh ordinary income basically, short-term gains. >> I would say that's like the only real distinction that I would make. Obviously, it's extremely nuanced and it's a case-by-case basis, but if you can hold it out so you're not taxed at short-term capital gains and you're taxed at long-term, then that's like the biggest thing. And then past long-term, I don't think that tax consequences should make any decision for you. >> guide your investment decisions. >> Right. Yeah. >> Yeah. >> What do you think are the best investments to get rich? >> The best investments to get rich? I mean, that's a loaded question. What do you think? It's tough cuz like concentration does really get you rich fast if you concentrate in the right thing, but it can also ruin you fast. So, um do you want risk of ruin? Then >> You just need to tell us >> of ruin, dude, if you want risk of ruin, then yeah, you can concentrate in any you know, individual stock that you want. And if it 10x's, then it 10x's. But, if you want the disciplined approach where you're going to get rich slow, then index funds. >> What do you think about the market being at an all-time high right now? Do you think people should >> frothy. >> Yeah. >> Do you think people should invest differently with the market hitting an all-time high? >> No, dollar cost average. DCA and chill. >> Always and forever dollar cost average. >> Dollar cost average. Time in the market beats timing the market. >> What do you say to the people who feel like they should sell a little bit right now? And maybe take like half off the table with the market the way it is right now. >> I would ask them if it's out of a need like a psychological need or if it's out of like a portfolio need or like do they need the money or they just they're just worried that it's too high. >> Yeah. >> Um I'd re-evaluate your time horizon. Like if you're going to be investing for 30 years, like should you be selling half right now? Cuz in 30 years, it's probably going to be higher than it is today. So, no. >> Do you feel any desire to sell? >> Oh, yeah, I do, but I I fight it. I fight it. I I'm not going to sell, but yeah definitely. >> Interesting. >> Yeah, I feel it. Like I see the market right now and it makes no sense to me whatsoever. >> Yeah, like things are getting disconnected from their fundamentals, of course. >> Um and and the same thing happened, I remember, in 2021 when people were thrown like, "Oh, I'm going to add Bitcoin to this." And then it goes up in price. People are doing the same thing with AI. They just say oh, we have this new AI division. It's like >> it really depends on the type of investor you are, right? Like if you're investing for really long-term stuff, retirement account, passively, you're not even looking at it. But for someone like you or someone that's very active in the market, maybe you could trim a little. >> Sure. I wouldn't. I I know my >> But you could if you wanted to. If that's what you really believe, which is like where I don't know. >> Yeah, but I also know that I don't know enough to be able to beat the market. >> Got it. That's good. >> And then every time I think okay, this is it. It's the peak. It's going to double from there. So, it's it's not it's not worth it. It's not worth it for me to say it's better for me just to keep buying and holding. And that's what I just continue to do. But I fight the feelings. >> Yeah. >> How often do you see bad investment advice? >> Like online? >> Yeah. >> Oh, yeah, all the time. >> What's the worst advice you've seen? >> Just anything on Wall Street Bets is usually the worst advice I've seen. I mean, you see a lot of success stories on there. Don't get me wrong, but I see like zero day to expiration calls. >> though or is that just people circulating? I don't think that that I think Wall Street Bets >> That's not advice. That's just investment advice. >> Degen. Like they all know what they're doing and that it's a gambling. >> We're talking like conventional advice that's bad. [clears throat] Uh I don't know if this is investment advice, but like the idea that oh, you'll just save more or invest more when you make more money. I don't think that's true. >> I agree with that. >> So, like let's say someone is not already saving and investing and they're like oh, yeah, once I get my raise, I'll I'll save more then. No, I don't think that's true either. So, maybe something like that. But that's not really investment advice. It's not telling someone to buy a certain stock or buy a certain uh thing. We were talking about this yesterday, dividend stocks, right? For someone who's young. Like really the only reason you would have dividend stocks if you're like 21 years old is just for psychological comfort, but really it's not doing much for you in terms of growth. So, you know, Graham and I reviewed some people's portfolios yesterday and it's like, "Well, you should probably be re- reallocating into VTI or VT or VOO." >> If we are to all pick, let's say each three of us at the table two stocks that we think are going to do well over the next 10 years, which two stocks would you pick? And really quick, I got to say something that Jack and I have been trying to do a lot more lately is just to remove the annoyances that quietly waste time and energy because those things add up fast. >> The thing is, we're always on the go. We're always trying to get to the next thing. So, having a cleaner setup and a little more control in your day really goes a long way. And that is exactly why we absolutely love MagBak. The MagBak Elite case is so much more than just a case. It has the finger loop for a secure grip, side grips that feel great, a pinky pillow for comfort, and a built-in kickstand when you need it. That is all built to make everyday use way better. And it also just comes with a screen protector, so that's one less thing that you have to worry about. Then they also have their MagBak three-in-one home multi-charger that keeps everything clean and ready to go. You drop your phone, AirPods, and Apple Watch on it at night, and by morning, everything is charged in one place. What I really like about this is that it's not just like a mess of wires that looks awful. I don't have to like try to plug and play and which one does what. It's all in one place, and it looks incredibly clean, and it just makes it easy. I kid you not, Graham and I are genuinely huge fans of MagBak. I use their wallet, I use their phone case, and also on the side of my Tesla screen, I put my phone up there. It is so, so helpful. Check it out with this footage. I can guarantee if you're on Apple or Android, they have something for you. So, if you want to make your setup cleaner and way more efficient, definitely check them out with the link down below, and don't forget to use our code, which is also down below. Which two stocks would you pick? >> I'm picking Robinhood cuz I've been a big Robinhood bull uh since like $18, $15. So, I really like Robinhood. I like the direction that they're going. I liked Vlad when I met him. So, I always liked founder-led businesses. I saw that their financials were growing year over year. I like all the offerings that they're coming out with, right? They have credit cards, they have custodial accounts, they've got the Like I said, they have the Trump accounts now. Um and I just think it's the de facto brokerage for Gen Z and younger and maybe a slight a big slice of millennials as well. And I think that their assets under management is only going to grow. So, for me I thought Robinhood is at least on the cutting edge of brokerages, right? Whereas the old brokerages, they might take a little bit longer to adapt. Um I don't like the sports betting stuff or the Polymarket stuff that's on the Robinhood app. That's maybe one thing morally that I can't get behind, but I just contacted them to disable it on my app, so I can't be tempted there. So, that's one. The other's probably just Google. I just don't think you're going to beat Google. Like Like I feel like Google's like full AI capabilities are not fully realized yet. Uh kind of same thing with Apple. I feel like Apple's really positioned well for like the AI revolution cuz they haven't really done much, but you know that they're probably working on it and they're just a little bit slower to market than all the other all the other big like mega caps, but I feel like they're in a good position, too. So, those are probably my two or three, but what are yours? >> You picked my exact ones. >> Let's go. >> Yeah. I would say Apple. I just think that the moat is insane. Like you know I tell me to buy a different phone, bring me a phone that's two times better than the iPhone, I probably wouldn't change. Uh and then on top of that and also the way that like MacBooks are used in college, like it's kind of just like the the go-to computer in education and I Yeah, I would have to agree Apple. I think it's safe. I think it's like it's a safe bet. >> Well, we Okay, so two things about that. I think one, I really like the the new CEO is more hardware focused. I think that's kind of going back to their roots of like being hardware focused, which is nice even though services is a is a large part of their business now. So, that's like one more thing, great thing for Apple, but we were talking about the S&P 1 yesterday, which I thought was interesting, too. Do you want to tell people about that? >> Yeah, so >> And then we'll get Graham's >> The S&P 1, and that's that's another argument for like Nvidia or like any of the other like top, you know, three companies or whatever. The S&P 1, if you look at the way it's performed over the past 20 years, it has obliterated the S&P >> What is the S&P 1 again? >> The S&P 1 is when you buy the number one largest market cap company, and then as soon as a different company takes over and becomes the largest in market cap, you immediately sell and buy that company. >> Yeah, but you're getting a tax consequence in that. So, you're constantly trimming >> What did we just talk about? We we We just >> saying you're constantly selling >> Dude, this doesn't happen every 3 months. Like the number one market cap company changes A lot of times they'll ride out for a couple years, a few years. So, you have a long-term capital gains. But yeah, if you if you rode out the S&P 1 for the past 20 years, the returns are like I don't even know. I will put up a example right here, but like three or four X the S&P >> Is that Is that before or after tax? >> Probably before tax. >> I'm just saying when you constantly trim your position, depending on your tax bracket, 20 to 23 and a half percent or whatever it is, you're constantly trimming that down and then reinvesting. You have to outperform >> Of course. Plus 30 Yeah, I agree with you, but you literally said 10 minutes ago that every single time you've made a decision based off of taxes, it is not helped >> giving me another hypothetical scenario. >> It's not a hypothetical scenario. Like you can look at the data. I don't >> Okay, we'll look at the data. >> What are your two stocks, Graham? >> Uh I would say I like Robinhood, Amazon, and Google. >> Oh, yeah. Yeah, I've heard Chris Camillo talk about Amazon, so I got to look into that more. >> I'm in Amazon now. I'm in Amazon literally just because of Chris Camillo. So, like it's I I You would argue the same thing, right? Like yeah. Listen, I like Amazon a lot, but I stay out of individual stocks. It's purely because Chris Camillo that then in Amazon. >> Okay, so your portfolio is mostly ETFs and maybe like a couple individual stock holdings. >> Pretty much. >> What percent is individual stock holdings in your portfolio? >> Like less than 1%. >> Oh, that's really low. >> Oh, yeah. >> It's It's not much. I mean, it's Is your crypto position higher? >> Yeah, oh yeah. Crypto's like Now it's maybe eight per maybe eight to 10%. >> Just cuz it's gone up so much since your cost basis or just cuz you dollar cost average in? >> kept dollar cost averaging and I just didn't stop. And then when it dropped to like 60 to 65, I just I couldn't help myself but to buy more. And we'll see if that was a bad decision or not. >> Cool.