IG Live: wHealth Advisors speaks with The Wisemen Project

Wisemen

wHealth Advisors co-founder, Dennis McNamara, recently spoke with Christian Valeriani of The Wisemen Project regarding men’s health and the constant juggling of priorities men face as parents, partners, and professionals.

The conversation centers on the intersection of health and habits and making “investments” in your health to maximize your long-term ROI (both personally and financially).

Instagram Live: Dennis McNamara & Christian Valeriani talk shop

NOTE: Conversation gets going around the 4-minute mark.

If this conversation piqued your interest be sure check out the upcoming Wisemen Experience and note that the early bird discount has been extended to January 1st, 2022.

The Role of Alternative Investments in Your Portfolio

For decades, pundits have taken a stab at writing the obituary for the traditional 60/40 portfolio (i.e. 60% stocks/40% bonds).

At first glance, this seems laughable. Over the last 90 years, a traditional 60/40 portfolio returned over 8% per year – like the S&P 500 which returned 9.5% over that period – but… with 40% less volatility!

However, these days, when accounting for historically low interest rates and rising inflation (which may or may not be transitory), the 60/40 bears may have their strongest case in recent memory.

This then begs the question: what now?

For a variety of reasons, there is still plenty of merit to 60/40 portfolios. However, we do appreciate the potential of certain investments to increase portfolio diversification. For investment opportunities beyond that of traditional stocks and bonds, we classify these in the portfolio as Alternative Investments (or, alts).

What are alternative investments?

Alts are essentially a catchall for any investment besides stocks, bonds, and cash (or cash equivalents). They provide an opportunity to gain exposure to areas not traditionally captured in a stock/bond portfolio that may or may not offer above market returns. Some of the more common types of alternative investments include:

  • Real Estate – crowdsourced or private commercial/residential property ownership, private/public Real Estate Investment Trusts (REITs)
  • Commodities – such as crude oil, corn, soy, wheat, and coffee
  • Precious metals – such as gold, silver, and lithium
  • Cryptocurrency – purchasing coins, NFTs, or investing in public companies at the fore of crypto/blockchain/web3
  • Private Equity – locking up funds with a private equity firm to invest in non-public, private companies often via leveraged buyouts and/or venture capital
  • Collectibles – tangible assets such as art, fine wine, and vehicles

What are the benefits of alternative investments?

  • Diversification. This is the primary benefit. Alternative investments are typically a counterweight to conventional stock/bond assets and may perform well even if stock/bond returns are poor due to low correlations.
  • May have greater upside. Alternative investments, often due to their concentrated positions, can potentially offer outsized returns compared to traditional mutual fund/ETF investments.
  • Expertise can be an edge. An example of this would be an experienced real estate fix-and-flipper who can spot an opportunity and has the team/know-how to carry out the vision. Another example might be an art collector that knows how to spot undervalued works of art. All this to say, unique skills/interests in niche areas can set you apart.

What are the drawback of alternative investments?

  • Illiquidity. Many alternative investments may be illiquid and difficult to exit. In the case of most non-tradable private REITs, your investment might be tied up for 7+ years before you can access the funds.
  • Lack of regulation. Reporting requirements for many alternative investments are minimal compared to those of public companies in the stock market. This can create difficulty when valuing the alt’s underlying assets, which can make pricing and price transparency less straightforward.
  • Investment platforms can fail. Many online platforms for alternative investing are start-ups that may or may not succeed. You need to understand how your funds will be handled should the company fail or be acquired.
  • Investment minimums may apply. High investments minimums are common and may make certain alts impractical/inaccessible for smaller investors.
  • High fees. Alternatives can have many fees that are unique to the investment. Private equity typically charges large asset management fees. Real estate can have many unplanned repair/maintenance/legal expenses. Wine collecting through Vinovest charges 2.5%-2.85% for climate-controlled and insured wine storage! Compare those fees to traditional index funds which have small expense ratios, no purchase fees, no redemption fees, and no 12b-1 fees.
  • Complexity. Alternative investments are often complex instruments and may require a higher level of due diligence. If you are considering alternative investments, you also want to be sure that you research and understand the potential tax implications associated with them.

Takeaway

Ultimately, investors need to be aware of both the upside and downside potential of any investment. The suitability of any given alternative investment should be considered against an individual investor’s:

  1. time horizon
  2. appetite for risk
  3. ability/capacity to take on outsized risk, and
  4. any unique skills/interests that strengthen the odds of making a profitable investment.

Four simple tips to take back your health

Take back your health

While genetics certainly play a role, the overwhelming majority of our health outcomes are a product of our nourishment (including the content our brains consume!), rest, activity, and habits. Wherever you are in your health journey, consider these four steps to improve your health.

1. Eat The Rainbow

Phytonutrients—special plant chemicals that interact with your biology – can act like switches on your DNA to heal your body (called epigenetics). Phytonutrients can be found in blueberries, arugula, broccoli, bok choy, raspberries, purple cabbage, and more. Functional medicine practitioner, Dr. Mark Hyman, suggests making vegetables the bulk of your meals, and add in a small serving of quality protein, like grass-fed meats, organic or pasture-raised poultry, or wild-caught fish, while also being generous with healthy fats (think: avocado, nuts, seeds, and olive oil).

2. Do Not Neglect Your Sleep

Our screens (TVs, laptops, smartphones etc.) all emit blue light. This confuses our body and suppresses melatonin which impacts the quality of our sleep and can disturb our circadian rhythm. Consider purchasing blue light blocking glasses and/or not looking at your phone or TV for at least one hour (ideally two) before going to sleep.

Upon waking up, consider starting your morning with meditation/journaling, 15 minutes of sunlight, and a tall glass of water.

Keeping your room cool and dark and maintaining a consistent sleep and wake schedule also help support a healthy sleep routine.

3. Move Your Body

No, you don’t need a gym. All you need is your body and a little bit of space for some HIIT, yoga, or stretching. Exercise increases the number of mitochondria – or the “powerhouse” of the cell –  improving your body’s ability to produce energy. In other words, the more mitochondria you have, the more energy you can generate during exercise, the faster and longer you can exercise, and the more resilient you become to aging, illness, and disease.

Here are three workouts on YouTube. They are for different levels of fitness, so be sure to consult your trainer or physician if you’re just getting started:

4. Reduce Stress and Anxiety

One of the risk factors for worsened COVID-19 is fear and anxiety, which, let’s face it, most folks have been struggling with throughout 2020 and 2021. We can’t change the facts, but we can change our response to what is happening around us. Just taking the time to breathe, do a digital detox, spend time in nature, connect with loved ones, and do joyful things can significantly reduce anxiety. Eating whole, balanced meals reduces anxiety because it keeps our blood sugar balanced.

Take note of how you spend your time daily and what sorts of inputs you allow into your life. If you are constantly doing things that feed your anxiety, it’s time for some habit changes. Make a list of things that reduce feelings of stress and anxiety, and make time for them daily.

Takeaway:

Start with these four simple strategies to improve your health, and you’ll be surprised at how much better you feel. For the men, also be aware of the upcoming Men’s Health Retreat with The Wisemen Project.