Financial Writer Takes His Portfolio's Volatility in Stride

Christine Benz: Hi, I'm Christine Benz from Morningstar.com. It's portfolio makeover week and I'm excited to be joined by the subjects of one of this year's portfolio makeovers, Jeff Benjamin. Jeff is a senior columnist at InvestmentNews, and he's been kind enough and generous enough to show us his portfolio, discuss it with me, and let me write about it.

Jeff, thank you so much for being here.

Jeff Benjamin: Thanks for having me. This has been an experience for sure.

Benz: It's been an experience for me, too, and I'm really grateful that you're willing to do this. Let's talk about your motivation for being willing to put yourself out there. I know you want to write about this for InvestmentNews. You plan to write about it. But what were your goals when we sort of entered into this engagement?

Benjamin: Well, I know that you do this annually with a bunch of different people and I saw this as an opportunity to get, first of all, some free financial advice, which is always good. It's nice to have an expert like yourself look at my portfolio and let me know if I'm on the right track or if I should be preparing to eat cat food when I retire. So--and you want to--I don't know. I was anxious to find out where I am.

Benz: So, let's talk about some of the surprises for you. One thing that you and I talked about is I identified that you actually had a fairly sizable allocation to gold through a couple of exchange-traded funds. You noted that was kind of a surprise in your current portfolio. Any other surprises as we sort of went through the process in either the before portfolio, or in the after portfolio?

Benjamin: Well, as you know, we talked about--I wasn't surprised that I have kind of a mishmash of things in my current portfolio, because I kind of pop things in there motivated by various things, and leave them. I don't mess around with it a lot. I tend to save a lot and I tend to add a lot to those allocations that I have and then if something is in there that might look a little strange to you, it's because I was motivated by something for some reason. But I know I had a lot of gold. I mean 5%, I guess, some people would consider it a lot, but it's been a pretty good run for gold. And I guess what I was surprised or pleased with in the after portfolio was that you let me keep a little bit of my gold, and also that you let me stay as aggressive as I like to be. I mean, I know I have a lot of equity exposure for somebody my age, and I really want to stay that way. And also, I feel good. I was pleasantly surprised that as you explained it to me, I'm not in that bad of shape right now.

Benz: Not at all. And so, let's talk about that. You mentioned that your portfolio had made really great strides over the past decade. What do you see as the key things that you've done to help enlarge your portfolio?

Benjamin: A couple of things. Investing as much as I can as regularly as possible, which is basically every pay period. And staying invested, just sitting in--even if all my investment allocations aren't perfect, I've ridden it through. I know people that have tried to get in and out of the market over the past few years. It's been some volatile times even earlier this year. But what I do is I don't check my portfolio very often at all. Sometimes less than twice a year. And that's how I plan to be for the long haul. And that's again, why my--as you detailed--my portfolio is not perfect, because I don't go in there and tinker with it a lot. I just kind of, I leave it. I just try and invest as much as I can and ignore it, especially during down market cycles.

Benz: Jeff, you indicated to me that you're maybe within eight years of your expected retirement date. Do you think volatility will feel different to you if you are that much closer to retirement than it did when you were a little bit younger?

Benjamin: Well, it's kind of difficult to know how I'm going to feel exactly, but I can understand that getting to a point where I don't have an income or a steadier income or a job, I guess. I'm sure I'll be more anxious about the volatility in the markets, but I'd like to think that I'm going to stay as committed to my, I guess, relatively aggressive strategy as I am now. I mean, 70% equities basically. The idea is that once I retire, I'm hopefully going to live for a while afterwards. So, I'll still need to be in the markets. So, yeah, short answer is, at this point, my plan is to stay just as I am and to not dwell on the ups and downs in the markets and not check it, especially when the markets are down.

Benz: And you indicated to me that one of your concerns is what is the alternative to maintaining an equity-heavy portfolio? You're just not seeing great return potential from bonds and cash.

Benjamin: Exactly. Fixed income is giving you nothing right now. Cash is less than nothing if you factor in inflation. So, I mean, what is the alternative? You have to be in the equity markets unless you just want to continue to kind of pick apart your savings.

Benz: When you think about other sort of looming to-do's in your financial plan, things that you and I talked about, what are some of the key things that you plan to kind of jump on?

Benjamin: I need to get a will written. I don't know why I put it off so long, but just as an FYI, I have an appointment in about three hours from right now to talk on a conference call with my wife and I and an estate attorney to get a will written. So, that's going to be done shortly, hopefully. And long-term care insurance. I never really thought about it and I know I guess I should, because the one thing I think my wife and I do not want to leave our son is a financial burden. So, we might not be leaving him with millions and millions of dollars, but I don't want him to have to have the financial strain of taking care of me or my wife.

Benz: Well, Jeff, I'm so grateful that you're willing to do this for us. I have really enjoyed working with you, and I know that our viewers and users will really appreciate getting sort of the personal view. So, thank you so much.

Benjamin: Thank you. Thanks. It's been great.

Benz: Thanks for watching. I'm Christine Benz for Morningstar.com.