March 1, 2024:  Are you currently evaluating The Holy Grail of Investing, The All Seasons Portfolio from Tony Robbins/ Ray Dalio/ Stronghold Financial/Creative Planning or Wealthfront risk parity strategy?  If so, check out the facts below.  You don’t have to pay 1% for a financial advisor.  If you want a free 2nd opinion about your portfolio, total fees, strategy & red flags, schedule a meeting on the calendar below.

Your current Advisor is hoping you don’t run this analysis!

We work with Clients on a national basis. Click here to see a video of our 2nd opinion process!

Here are some things to consider before you sign up with Tony Robbins & The Holy Grail of Investing,  Creative Planning, Stronghold Financial or any other Advisor.  DO YOUR HOMEWORK!  Before you trust a review from Tony Robbins, Michael Hyatt, Tim Ferriss or Fortune Magazine, watch the video link below.

Let me save you some time and a bunch of money.  Most investors with less than $10 Million in a portfolio should either 1) Just use index funds (see here, here, here) or 2) Use indexing and factor tilts (overweighting value companies, small cap companies, high profit companies and companies with good momentum).  Some investors will also benefit from hedging strategies.  A high quality fee only advisor (who is a fiduciary for you- this is the best part of Tony’s book) can add tremendous value net of fees.  I can show you the data.  See why factor investing may be a more optimal long term solution than Vanguard index funds here, here, here and here.

So many resources on Alternatives… if you have under $50 million in a portfolio, it is way too hard.

• – Impersonating David Swensen is Leading to Titanic Losses (Yale Model)
• – The Fairy Tale of Alternative Investing – https://richardmennis.com/blog/the-fairy-tale-of-alternative-investing (read the full article)
• Failure of the Endowment Model — https://richardmennis.com/blog/failure-of-the-standard-model-of-institutional-investment  (read the entire article)
• Have Alternative Investments Helped or Hurt?  — https://richardmennis.com/blog/have-alternative-investments-helped-or-hurt
• Lies, Damn Lies and Benchmarks: An Injunction for Trustees — https://richardmennis.com/blog/lies-damn-lies-and-performance-benchmarks-an-injunction-for-trustees

As of 5/19/22, Creative Planning is facing a big lawsuit for industry collusion see article here.

See this page — Should I invest with Creative Planning?

Is Creative Planning too expensive for $1M+ accounts?

As of September 2015, Ray Dalio’s All Weather hedge fund was down 5% for the year and had an estimated $8 Billion in outflows from the fund.  It is really hard for risk parity to do well in a rising rate environment.

• May 2016 – Tony Robbins joins advisory firm (Creative Planning) as chief of investor psychology!  In case you are wondering what the fees are for Creative Planning, here they are: (warning, they are 100% to 300% higher than my firm) – see this page –  You don’t have to pay 1% for access to DFA Dimensional Funds
• Annual Fee Calculation (as of 3/2022)
• 1.20% on the first $500,000 or $6,000 per year (way too much)
• 1.00% on assets of $500,001 – 2,000,000 (another $15,000) (way too much)
• .85% on assets of $2,000,001 – $5,000,000 (another $25,500)
• .80% on assets of $5,000,001 – $10,000,000 (another $40,000).  Total at $10M is $86,500 per year! (by comparison, our fee would be $33,000)
• .70% on assets of $10,000,001 – $25,000,000

In our opinion, these fees are way too high.  We charge 0.6% on the first $1 million and our fees decline above $1 million.

If you are planning to see Tony live in Florida ($100 to $150 for tickets) or any other city, please recognize that Tony is an excellent marketer/sales person.  When you review his information you will find phrases like “Tony has partnered with…..”  “Tony or Josh Jenkins-Robbins may be a potential owner of the firm or have a financial incentive”.  It is important to be highly skeptical.

Make sure you read this – The Pledge Most Advisors Won’t Sign! Tony Robbins is a tremendous leader and I am very excited to read his first new book in 20 years. Tony inspires others to live BIG and give back by helping others.  He is very generous and I love his passion.

All of that being said, I am always highly skeptical about investing shortcuts and strategies that almost never lose money. Should you invest in the All-Seasons Portfolio, Vanguard, Dimensional Funds or something else?

1. High fees reduce performance.  Some firms charge 1% per year to manage money.  In our opinion, these fees are too high.  We charge 0.6% on the first $1 million and our fees decline above $1 million.
2. Make sure you only hire a low-cost, fee-only Advisor.  Not a fee-based Advisor or an Insurance Rep.
3. Make sure your Advisor is a fiduciary for you 100% of the time.  This means that by law, the Advisor must put your interests first at all times.  This is a much higher duty than the suitability standard that brokers need to apply.  Tony talks about this at length in the book.  If you hire an Advisor, I recommend that you ONLY hire a fee-only fiduciary Advisor.  See our blog – Why You Need a Fee Only Fiduciary Advisor! (video)
4. The Ray Dalio All Weather Portfolio is a Risk Parity strategy.  It is typically overweight bonds and the primary reason it has done so well over the last 33 years is because bonds have been falling since 1981.  This strategy has had a very difficult time in 2015!  Maybe Tony’s book marks the peak of a good strategy?
5. See this link from Fortune — Ray Dalio’s ‘All-Weather’ fund goes cold
6. Don’t chase hot trends or hot mutual funds.  When you invest in stocks, you should not need any of the money for at least 7 years.
7. Many High Net Worth Investors are looking to get out of expensive Hedge Funds and Private Equity (Click this link).  If you are looking at Liquid Alternatives, we can help.  There are many strategies in addition to risk parity that allow you to minimize stock market risk.
8. It is important to have a well diversified portfolio.  We recommend using low cost institutional portfolios that utilize Dimensional Funds (DFA) and if you want to implement hedging or risk parity, we suggest a company like AQR.  If you are a do-it-yourself investor or have under $300k, we suggest Vanguard.  See Why Dimensional Funds vs. Vanguard Funds