My Worst Investment Ever Podcast
Business:Investing
BIO: Dr. Carolyn McClanahan is a physician turned financial planner. In addition to working in her financial planning practice, she speaks regularly on the interplay between health and financial issues, particularly regarding aging, chronic illness, end-of-life, long-term care, health care reform, and health care costs.
STORY: Carolyn lost a good chunk of her portfolio while doing active management.
LEARNING: There’s nobody out there who can be consistently smart to beat the market. Know your money goals. Be careful of overconfidence bias.
“We (doctors) think just because we’re smart at medicine, that we can beat the market, we can pick the best investments, and get rich.”Carolyn McClanahan
Guest profile
Dr. Carolyn McClanahan is a physician turned financial planner. In addition to working in her financial planning practice, she speaks regularly on the interplay between health and financial issues, particularly regarding aging, chronic illness, end-of-life, long-term care, health care reform, and health care costs. She is an Investopedia Top 100 advisor, serves on the CNBC Financial Advisor Council, and writes for various publications. She is quoted regularly in the Washington Post, New York Times, and CNBC.
Worst investment everCarolyn started experimenting with investing in the 90s when she was in her 30s. Her husband inherited a little money from his parents, and they invested it. The investment did super well because it was the mid-90s.
Her husband didn’t want to be an engineer anymore. He wanted to be a track coach and a photographer. The couple tried to find a financial planner to help them plan their finances to accommodate the husband’s wishes. All the financial planners wanted to do was take over the couple’s money and charge a fee to put them in a bunch of mutual funds. They didn’t do actual financial planning.
That’s why Carolyn decided to go back to school. She did stuff like day trading along the way, which was crazy. Carolyn also became a financial planner and got to learn about mutual funds. She spent so much time picking these great mutual funds that were supposed to grow beyond everything else. She also started investigating alternative assets.
The stock market crashed in 2008-2009, and Carolyn suffered a massive loss due to active management.
Lessons learnedKnow your money goals and your time horizon, and make sure you have an investment policy statement that you follow and stick to through thick and thin, and you’ll be okay.
No.1 goal for the next 12 monthsCarolyn’s number one goal for the next 12 months is to start her succession plan, so she’s hoping to hire three new advisors, grow the practice a little more, and get ready to launch herself in the next five to 10 years.
Parting words“Just live life fully every day because you won’t get another one.”Carolyn McClanahan
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Connect with Carolyn McClanahan
William Bernstein – Never Invest Based on the Headlines
ISMS 32: 5 Signs of Impending Recession
ISMS 31: Global CPI saw 2nd MoM uptick in August
Swen Lorenz – Carefully Consider Liquidity in Your Portfolio
Paul Merriman – What You Do When You Are Young, Is Golden
Vikram Mansharamani – Liquidity Will Not Always Be There
Gino Barbaro – Buy Right, Finance Right and Manage Right
Robin Wigglesworth – You Can’t Outsmart the Markets
Sheryl Garratt – Shove Your Ideas Out There and See What Happens
Kim Ades – Slow It Down
Nick Hutchison – Have a Proof of Concept Before You Dive Into the Big Idea
ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
Laurie Barkman – Quit Often Quit Fast
Mark Venables – Do Your Best to Secure Your Crypto
Tania Reif – You Can Be Right and Lose Money
Mark Neuman – Constrained Capital and ESG Orphans
Ryan Dusick – Invest Yourself in Something That’s Meaningful
Thomas Chua – Have a Proper Sell Thesis When Investing
Kat Merchant – Do It Today
Laurent Lequeu – Sizing Is Crucial When Trading
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