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Be More Aggressive

Be More Aggressive

This week, Matt Robison and I discuss the concept of being aggressive in your investment strategy, especially when you have time on your side. 

Over a 40-year period, historical data shows that investing $10,000 in the U.S. stock market could grow to an impressive $650,000, assuming an average annual return of 11%. Even in the worst-case scenario over the past century, where returns were just under 9%, that $10,000 investment would still grow to a substantial $300,000. 

In contrast, conservative investments like bonds would only see your initial $10k grow to around $50k over the same time frame. This stark contrast illustrates the potential rewards of being more aggressive with your investments.

But, what about Target Date Funds?

Many people rely on target date funds to simplify their investment decisions. These funds automatically adjust your asset allocation based on your expected retirement date. While target date funds are a solid starting point, they tend to include up to 10% bond allocations even when you have decades until retirement.

But, what if the stock market tanks?

One of the main reasons people shy away from aggressive investing is loss aversion, a psychological bias that makes us fear losses more than we desire gains. It’s a natural instinct, but it can hinder your financial progress if you’re overly cautious.

To overcome this bias, it’s essential to evaluate your investments rationally. Consider the worst-case scenario when it came to that $10k investment discussed earlier. Even at the lowest returns, it is still almost 83% more than the return on bonds.

In summary, being aggressive with your long-term investments can significantly enhance your financial success. While caution has its place, don’t let fear hold you back from embracing an aggressive investment strategy. Consider your long-term goals, evaluate your risk tolerance, and explore opportunities for higher returns. With the right approach, you can harness the power of aggressive investing to secure a brighter financial future.

Are you ready to create your ideal lifestyle? Let’s Connect.

Learn more about Mike and my services at and connect at



Mike Morton has a message for you and it’s be aggressive, be aggressive, be aggressive, be aggressive, be aggressive. I’m Matt Robeson, I’m joined by my co-host, Mike Morton of Morton financial advice. Mike, you’re a cheerleader now.


What is this? Is this a spelling podcast now? What was it you spelled out there?


World’s dumbest podcast. It’s a spelling podcast, what the heck would that be like? Oh my gosh. Actually, you know what, a podcast about the spelling bee would be kind of interesting. I would totally listen to one or two episodes of that.


Behind the scenes all the drama


There’s a great documentary called spellbound from 20 years ago. It is so freaking interesting, I highly recommend it. You’re not here to talk about spelling and you’re not here to cheerlead. You’re trying to get people to be more aggressive. What do you mean?


Wait, first of all, I love cheerleading, it’s one of my favorite roles that I get to play with my clients is to cheerlead everything they do. It’s, it’s called coaching. No, I do cheering as well. Because this is hard stuff, man. First of all, it’s hard and it’s annoying stuff. And when my clients go through and either have to track some expenses, or make some trades, or do their estate planning, I’m there to cheer them on man. That’s a good job. That’s hard work.


I think I’m gonna quibble with you. I think what you’re doing in that circumstance is you’re supporting, you’re playing theme music, you’re playing walk, you know what there was a great ad was like a coffee ad like 10 years ago, where it was to the theme of eye of the tiger. There’s this guy named Roy, Roy walks out of the elevator and it’s just like, Roy, Roy, Roy. And it’s like, this is the music he hears in his head, it’s, I would pay for that service. If you are someone who could would walk behind me and just go, Matt, Matt, Matt, I would be into that, like, I would like to be encouraged all the time.


I think you need to get one of your kids to do that. Offer them some money.


Their version of that would be very different and very dejected.


All three of them walking behind you, man.


That’d be fantastic. At that point, I might as well dress them in tuxedos and give them little earpieces and pretend that I have my own personal secret service. Alright, you want people to be more aggressive? Why you want them to be jerks?


You need to be more aggressive with your investments, my friend. So and this is an episode, I had to take my own advice on this episode. So I’m going to go back and listen to this one and see how I do.


You listen to all our episodes anyway.


Well, actually, spoiler I do. I listened to all of them before releasing them to make sure Matt didn’t screw something up that he wasn’t supposed to say, but be more aggressive with your long term investments. Okay. And so things like your 401k, you’re in the middle of your career, you’re working another 10 years, and you got young kids still at home. You could be more aggressive, get more aggressive with that investment. Target date funds are good, but they’re not aggressive enough. You could be more aggressive with the investments and I’m not saying almost like first caveat about saying be like invest in a single stock like a moonshot, you know, hey, this could go to 10x or zero, not that kind of aggressive. We’re just stocks versus bonds, that dial of hey, how many stocks am I going to own? How many bonds are we going to own? How much cash or how have the markets been doing recently? No, no, no, no, in your long term investments, you need to be more aggressive in the stock market. Why? Because stocks are for the long run, my friend, when you look at returns over longer time periods in any one year, okay, the stock market could go up or down, 20, 30, 40% up or down, okay, up or down in any one year, now, it tends to go up a little bit more than down. So let’s say it can go up 30%, down 20% in any one year, but two out of three years, it goes up. Alright, two thirds of the time the stock market goes up into the right. So if you have to spend cash in the next year or so now, like you’re not going to risk that money, you’re not going to go into the casino and try to double your money like you really you know, I’m gonna buy a car, I got $20,000 bucks, I’m going to buy a car. We’re not going to try to double it to buy a nicer car because it could go to zero, and then I get no car. Okay, so you’re not going to do that with money for the next year, the next couple of years. But let’s look at returns over 40 year time horizons. Now this is a pretty good time horizon 40 years. And the reason why is because even if you’re 30, the dollars you put away today you’re going to spend when you’re 70. Right, so that’s 40 years from now. So a 40 year time horizon is a pretty good time horizon for looking at things. If you look at the US stock market 40 year time horizon you invest $10,000 okay, historically speaking, average returns 40 years, you invest $10,000 today and in 40 years it’s going to grow to $650,000 from 10. That’s pretty substantial to $650,000 is great. Now it is 40 years. All right? I’m not like glossing over too long time. Alright, average of 11% return in the US. Large Cap just us total stock market. Okay. But then you’re like, Mike, I hear you that’s averages. Well, what if I get the worst? What if I get the worst 40 year return from now till then, and I’ve been really aggressive? You know, I took your advice, and I put it in the stock market. Well, the worst historically speaking last 100 years, every 40 year time horizon, they studied right, over the last 100 years. So historically speaking, all right, the worst was just under 9% return. So your 10,000 would turn into $300,000 not $600,000, only through only $300,000. That’s the worst 40 year return. Okay? And the best is over a million. Okay, the best 40 year return, historically speaking. So now you’re getting a sense, like when you have a longer time horizon what’s the difference between Best and Worst gets narrower? Alright, it’s still between 300,000 to 1 million, that’s a wide range, but you started with only $10,000. So it’s not like it only grew to 20 or even just stay flat, it grew significantly, even in the worst case. So that’s why when you’re looking at longer time horizons, you can be more aggressive with your investments.


So you said a moment ago that target date funds are great, but not really. I like my target date fund. I don’t have to do anything. It’s just, hey, here’s how old I am. Like, and you’re telling me no, why?


Two problems with target date funds. Ready, Matt? First, I love target date funds. I love them. And if you’re a listener, and you’re doing it yourself, and you’re managing investments, target date funds start there. They’re great. You know why? Because Matt just said it super easy. You don’t have to do anything. And I’d rather the listener be invested be fully invested in that target date fund, then not then get scared to say, Oh, I’m going to do it myself. And then not do it, not pull the trigger, or get scared and keep it all in cash or something like that. So that’s why start there target date funds, one stop shop, they’re good. The reason they’re not the best, okay? Even if you’re 20 years old, and you say I’m going to pick that target date, what would that be Matt? 2060? Okay, I want to pick the target date fund in 2060. That target date fund still has 10% bonds. Okay. 90% stocks, 10% bonds. Why do you have any bonds? You don’t need it. I just told you, okay, your money is going to grow $10,000 is going to grow to $300,000 in the worst case, you know what bonds would do? They don’t grow anything. They grow till 50,000. Your 10,000 goes to 50,000. All right. So we don’t need 10% bonds so that’s the first problem. The second problem is as you get close to that retirement age, let’s see Matt’s like the 20-I’m gonna guess here 2033 target date fund.


Mine is next week.


Next week? Oh boy.


Yeah, the way I get paid from this show I am out of here. By the way, I’d like to announce my retirement from this show.


No, you’re out of here for a different reason. Not for retirement, you got funding. So you’re retiring in 10 years, five or 10 years. The other problem is 10 years your like, Hey, I’m still working another 10 years, your target date fund, which would be like a 2030 has 30% bonds. And I still think that’s not aggressive enough. There’s no reason to have bonds I just told you in a 10 year timeframe, you could still have 100% stocks. You don’t need any bonds if you’re not spending the money for more than 10 years from now. And we just had an episode, right? If you’re invested, if you’re going to spend dollars more than 10 years from now, you could be 100% in stocks. So why does your target date fund have 30% bonds?


So here’s how I’ve hacked this. I do not I was gonna ask you, it’s like, alright, how do you start to tell like when long is no longer long enough, right? It’s I have a 20 year horizon, and I’m 90% in stocks. And it’s like, I’m already confused. So the way I’ve hacked this is I just made my target date slightly later. My mind is actually 2040 which is it’s out there. It’s not wrong, but I mean, is that kind of like the easy if you want to keep people from having to do a lot of math? Was that the easy thing to do? It’s like, Hey, if you’re currently 2040 make it 2045.


Are you ready to create your ideal lifestyle? Let’s discover what’s most important to you and design a plan to have more of that in your life. Go to meet Mike all one word, meet Mike Matt, I love that hack. And I definitely do that now and then with clients as well. Hey, let’s just pick the the target date fund for this in the future. Get the 90% stock 10% bond. Now, again, caveats across all this custom to you, you’re in, you’re living your own life, your own situation. And I’m not saying, Hey, if you’re retiring in 5 or 10 years, you can be 100% stocks, like go for it. Be careful, if you have money that you’re going to be spending in 5 or 10 years, you’d like to be conservative, you want to know that money is going to be there, when you retire in 2033, then yes, bonds are great use for that, or fixed income or other things are great use for that. I’m just speaking to like, the people that have invented, you know, have a good range of investments, and you can be more aggressive. And I find a lot of people on the conservative end and so that’s why I thought it was important to raise.


I have a suspicion about this, I think that like you, the people who set up these target date funds can do math. And there’s probably a reason that they set them up less aggressively than they should, which is loss aversion, or risk aversion or both. And I think it’s a marketing thing. That’s my suspicion, they know full well, like you do that if you’re maximizing returns, if you’re optimizing for what is the best chance of making the most money over time, you’re going to go 100% stocks, if people are long term. But the reason they ratchet these things a little bit more direct a little bit more toward the bond side, is people are afraid of the loss. Loss aversion is very real. And they’d rather give people a slightly lower risk profile, even if it’s going to make them a little bit less as a comfort level thing. Am I onto something?


Well, that’s definitely true. But I think the other big reason is you’re just working with the law of averages. Target date funds are for millions and millions and millions of people. And so you don’t know everyone’s situation. Most of my clients make pretty good money and are good savers. And so have a good portfolio. Actually, they usually walk in like that.


Hey, it turns out all of my clients follow a really good investment strategy. Yeah, no kidding, Morton. Amazing.


But, and so you’ve just got to realize that these target date funds are made for the averages. And so I would design them this way too, because if I don’t know you at all, then yes, you might be on a fixed income, you might be getting ready to retire in three or four years. And most of the income you’re going to need from your portfolio is for housing and groceries.

Then yeah, you’ve got to be, fairly conservative. Like you’re going to live for a while. So you need some stocks to be able to keep up with inflation and grow, but you also need a good amount of bonds to just be spitting off income, be safe so that you can live It’s too bad, really, but the more flexibility you have in your spending, the more aggressive you can be. So if less percent is for the groceries and your housing and more of your portfolio is used for vacations and other things that you just enjoy that are fun to do and fun to have. The more aggressive you can be with your portfolio because if it doesn’t work out too well in five years you can ratchet down your spending a bit.


The reason that I leaned into the first theory that a lot of this is it’s kind of the the the Vanguard way of dealing with everybody’s loss aversion is I wonder how much of that bleeds into the rest of our lives. And a lot of what you do is this mixture of I’m giving you financial advice, but it’s really about, you know, how you kind of construct your life, right? And I just-knowing seeing that how this plays out on the financial side, and that we just have this propensity to be a little bit more direct than we should and to be less aggressive than we shouldn’t. Do you see that playing out with all of your clients in the rest of their lives is loss aversion, causing them to not be as aggressive as they should?


Yeah, 100% I think and I’m not going to say just my clients, but I would say from the things that I read as well, you’ll see this, we talked about regrets. And using that as an anchor for like, what would you regret, if you are no longer you know, here, this was your last day, and using that to help design your life because you don’t, but that you end up with regrets because of the loss aversion. It’s just it seems risky to do that. But if this was your last day, you’re like, that’s not risky. Like I’m not, I’m not going to be here anyway. So like, go for it, who cares? And so I think that’s a good framing. And it’s funny, you mentioned that too, with what you’re just talking about. The more flexibility you have with your spending, the more aggressive you can be and that goes for all of you your life, the more you build up a portfolio of your time, energy and money, and bank it for the future, the more aggressive you can be with how you want to spend that time, and energy. And you can have the trade offs between those. So again, like I know a lot of people that are saving aggressively, and so they had the flexibility for I’m not sure what I want to do in five years, okay. But if we save aggressively now, it gives you the flexibility to design your life more in the future.


And just to clarify a little bit of what we’re talking about here, because I think we’re assuming that people are familiar with the idea of loss aversion, but it’s a cognitive bias in which people value what they already have, and the prospect that they might lose it more than the exact same amount of potential gain that they might have. It’s like, easy come easy go, essentially. So you can do all these clever cognitive experiments and behavioral economists do these experiments. And you can show that people care a lot more, and they react a lot more strongly to the prospect of, you’ve got 10 bucks, and you might lose it, versus the prospect of you might gain 10 bucks. And in fact, if it’s like a coin flip 50/50, you’re going to be much more-your expected value is the same, right? Your loss and gain mathematically are exactly the same. But you fear the loss. And now look, that’s not bad. That’s not necessarily wrong. But the awareness of it, I think, can be very helpful. Because knowing that we have this little thumb on the scale of our brains toward loss aversion can help us to correct not overcorrect. You don’t have to go nuts. But it can help you to recognize and there are some clever ways that you can do this. I’ll give you an example. A few years ago, I was working a full time job. And I was considering ratcheting that way down to a light part time level, and going off and pursuing things that, you know, I felt passionate about, which is what I ended up doing, by the way. But I was very nervous about it. I was really, you know, like the idea of becoming a poorly compensated writer, radio host podcast host was a little nerve racking. And a very clever friend of mine said, alright, let’s interrogate this a little bit. Let’s think about what’s your reality in negotiations it’s called a BATNA, right, a best alternative to a negotiated agreement. What’s your floor? Here was the worst case scenario. Actually, if you can reframe for yourself, what’s your maximum loss likely to be? It’s sort of a small antidote to that loss aversion. It worked on me. And so anyway, I just my view is I would just encourage people to first step recognize situations where you might be having a little bit of loss aversion, label it, and then really go through the process of thinking about, Okay, what’s my actual downside here? What’s my actual loss likely to be? And it can help balance out the mental scales of the choice you’re making.


I love that. I love that, Matt. So the research, you’re saying the loss aversion, just for our listeners, usually two to one, like you really hate losing more than you like winning almost doubly as much. I love that fear setting, I would call it where it is okay. I’m thinking about making this decision. Okay, should I do A or B? One thing you can do is what’s the worst that could be that can happen? Like you just said, Matt, and write it down, jeez, if I take this pay, cut or pursue this other thing, I won’t make money and my wife and kids will leave me and I’ll lose my house. And it’d be terrible. Or you’re like, yeah, actually, I don’t think it’s going to be that bad at all, that’s probably not gonna happen.


No, I’m glad you said that out loud. Because that’s what’s rattling in your head, right? And see, okay, that’s exactly like going back to, you know, my own example. But I mean, there, there are millions. That’s exactly kind of what was underneath. It’s the, I have a really good job right now. And if I lose that, I’m losing. I’m visualizing all these things. This is what I’m losing. And what my friend said to me is like, Matt, you’re being silly. If you were to, which you’re not even doing if you were to entirely leave that job. If you needed to get another similar job. You could. And I was like, oh, that’s actually probably true. I think you’re right about that. And all of a sudden, all of these downstream risks and losses that I was afraid of it’s and then my children will think I’m a failure they kind of evaporated.


Yeah, that’s exactly right. I think that fear setting exercise is a really great thing to do when you’re facing a choice. Hey, should I make this choice? Just write down what’s the worst that could happen? You know, and then really think about the other thing I like to do sometimes is start from scratch. Hey, because of the loss aversion I already got the $20 in your pocket? Like I don’t want to leave that I don’t want to risk my $20. What if you didn’t have what if it was starting from zero? Hey, so in your case, I’m thinking about taking the job and thinking about taking this corporate job and having this nice salary, I’m thinking about doing this other thing that I’m really interested in to see if I can make it. If I didn’t have anything, I had no job right now, which one would I pursue? So always trying to start from scratch. And I’ll use this also when it comes to in a financial context, when you get bonuses that are stock. Okay, so if they give you stock in your own company. Cool, man, that’s great, you got $10,000 worth of stock and of Google stock.


This literally happened to me. This is creepy. What do you think I’ve been looking at in my portfolio? I’m going to go to one password protection.


Increase your password protection there. Okay, that’s great. I’m glad you got a bonus, fantastic. If I gave you $10,000 of cash, would you go buy the Google stock? Or would you invest in somewhere else. And usually, they’re like, I’m already working at Google. I’ve already got a bunch of Google stock. And I know I’m gonna get more bonus’ next year and my RSU is in the stock options, blah, blah. So it’s like, then just sell that. Because that’s what they’ve done. A lot of these are bonuses, you’re paid RSUs. They come in, and it’s just as if they gave you the cash, but they’re given stock because they’re incentivized to do that, blah, blah. But that’s the point. It’s like, start from zero. Hey, if I just gave you this, would you make that? What choice would you make with that?


This actually comes up in government policy a lot as well, where there have been a ton of economic studies on government likes to be highly prescriptive, when they give out benefits, there’s a lot of political reasons for that. Turns out, people would just be better off, and they would overwhelmingly use it responsibly if you just gave him the money, because people are pretty good at optimizing for their own decisions, their own preferences, and they would use it according to what they would want. But I do, I’ve actually used this kind of a hack inadvertently, in other realms of my life. I used to when I was running political campaigns, our communications director is one of the most paranoid human beings walking the face of the earth. His paranoia setting is that 11, I’ll give you an example. When the movie Rise of the Planet of the Apes that great documentary came out, I just mentioned the title of the movie and he, under his breath, said, I wouldn’t want to be around a gorilla, who would attack me. And the point is, he always sees the threat everywhere. It’s like gorilla, the first thing that springs to mind is rampaging monster coming to kill me. And this was highly useful to me professionally, because I knew that ever, if there was a threat coming our way, he would detect it first. And so if he wasn’t in my ear, saying, we’ve got a problem, we’ve got a problem then I knew I was okay. It was like the canary in the coal mine. So but that’s a kind of extreme example of thinking through in a realistic way, what your downside is, what your real loss is. And that’s back to your example of the worst 40 year return in history, just under 9%, your $10,000 bucks turns into $300,000 bucks, is it? It does, I know, like we’re kind of straddling between the finance and life, but it does. Applying this, the thinking from the finance side, I think can be very helpful in all kinds of decisions. And it doesn’t mean you need to be in people’s face, but being a little bit more aggressive about your choices, and recognizing what the psychological landmines are, I think can help people to make better decisions.


100%. And I often just frame it, Matt, as just being aware and making conscious decisions about how to spend your resources rather than the ads coming in the societal norms coming in, oh, this is what I’m supposed to do. Just waking up showing up. Be conscious of your decisions. You have one life, you only a one day, one week, one month, so be conscious with how you’re doing things. And typically, that means you can be a little more aggressive.


By the way, this technique works in other realms, it’s been studied in overcoming stage fright, of all things, if you have a fear of public speaking, going through the mental process of what’s realistically, the worst thing that can happen here. Now, look, that doesn’t necessarily work for everything. I’m not like you I make no guarantees here. But it does help a lot of people because when they go through that process, they really think about that. I mean, the other hack that works, by the way, is reminding yourself that nervousness is your body, being excited for what it’s about to do. I find that one very, very helpful, but, you know, going through that process, in all kinds of realms of really thinking about, okay, what’s the worst thing that could happen and why am I feeling nervousness about the decision? And it’s because of excitement. And the excitement is because of the reward of the potential upside of what’s coming. It’s what you’re looking forward to. Trying to reorient yourself that way, I think is generally a good idea. And it sounds like it’s definitely a good idea in finances. Yeah.


And that’s why we’re here doing this podcast, Matt. What’s the what’s the worst thing can happen when talking into a microphone and putting it out there for the world?


What’s the absolute worst thing that could happen? Well, years ago, I made a decision to give up my well compensated corporate job and to start doing this and now we have a demonstration. So if you liked it, then I feel great about it. If you didn’t, you know, I’m not that worried about it. So look, I think that’s a great note to sign off on. For Mike Morton, I’m Matt Robison. We’ll see you next time.


Thanks for joining us on financial planning for entrepreneurs. If you liked what you heard, please subscribe to and rate the podcast on Apple, iTunes, Google Play Spotify, or wherever you get your podcasts. You can connect with me at LinkedIn for Morton financial I’d love to get your feedback. If you have a comment or question, please email me at financial planning . Until next time, thanks for tuning in. This recording is for informational purposes only and should not be considered for investment advice or opinions expressed as our as of the date of recording. Such opinions are subject to change. We do not guarantee the accuracy or completeness of the data presented here.

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