The Next 10 Years Will Be BRUTAL for Investors… | The Money Guys

Added: 2026-05-24

[00:00:00]When it comes to investing, I'm curious because Vanguard now predicts lower than average returns over the next like decade.

[00:00:06]>> I saw your I saw your Substack and I chuckled to myself. You have to know, Graham. I have to I have I chuckled when I literally went because every year and you go we could probably go pull the tape cuz we react to that every year Vanguard >> one of these years.

[00:00:21]Vanguard tells us you know what you ought to expect from the market going forward about 3.8 to 4%. They tell you that every year realistic does it not seem >> that's got to be the easiest job. I want that guy's job. I want that guy's job.

[00:00:34]>> It's always back uh coming out of the great recession we saw some really really good years 2009 2010 all the way up to 2012 and then 2013 I think the market made like 32%. And they said it again all right market has recovered poised for below average returns. And they say it over and over and over again. And at that point in time you would have suggested man well doesn't it look like this? Look at all the stuff going on. Look at what's going. It always quote unquote looks like that and yet it doesn't manifest. Now, could there be a period of of underperformance?

[00:01:06]Perhaps. Yeah, that could be a thing.

[00:01:08]But is there something going on right now distinctly that would suggest the next period is going to be under performance? I don't think so. They literally said 10 years ago that over the next 10 years you're going to average 4% 5%. If you look at what the broad markets have done, it smoked it over >> 17 to 20%.

[00:01:24]every year there's typically a 14 to 15% intrayear up and down anyway and if you think about what we've seen historically like broad markets like the S&P that we've already had all these conversations they typically do what's called a V-shaped recovery they will either get overpriced really quick or underpriced really quick in the and you see snaps you know it's the you know it pops like we call it the rubber band effect you know is so that's why if you just dollar cost average I know it's boring I know it's not sexy but if you just consistently buy you get to capture all that stuff. It's a great volatility um protector from yourselves is just being consistent with your behavior. The difference is like real estate because I know you have so much background in real estate. It's more of a, you know, a U-shaped recovery. You know, you it's not uncommon that you'll see the real estate market not do V-shaped recoveries. They're more much slower moving. And I think that's why sometimes we have trouble, at least the public does, differentiating that different things act completely different. And that's why when Vanguard tells me 3.8 8 or 4.8%. I'm always like that a moment in time. I mean, last April, were we down 20%. I mean, it was So, if you were basing decisions off of that, I think you would drive yourself crazy.

[00:02:34]>> But I also think it's like the weatherman, right? If the weatherman predicts a beautiful sunny day and it rains, you get pretty upset. But the weatherman predicts a rainy day and all of a sudden it's shiny, everybody's in a good mood. I think that's what they >> That's what I've often thought. They've had their thumb on the scale. Say, "We're going to get you 4.8% and then voila." Oh, another year we got 8% or 12% this year.

[00:02:56]>> Expectations.

[00:02:56]>> That's right. Underpromise, overperform.

[00:02:59]>> Yeah. Well, speaking of overperformance, what do you think about investing in Pokemon cards?

[00:03:03]>> It's there's a lot of people.

[00:03:04]>> I watch a lot of content on that though, by the way. I don't do it myself, but I've watched all those seasons. I'm fascinated by the collectors. And what's wild like so my brother he has my him and my nephew have kind of gotten into it and they'll do the thing do the packs and he's opened a couple packs that had like some very valuable and he's actually showed me how they have everything like cataloged by like what it is how much it is what the ro and it's wild now it's a collectible like anything else I I I would not call that investing that would not be my nomenclature but it is a collectible that does have the ability to increase in value over time no different than other types of collectibles that can increase in value >> I've always wondered now look I'm I'm I do not I'm putting the disclaimer out there, but it's just like I I'd be curious and maybe somebody knows this and they put in the comment section like Elvis now maybe because the new movie came out it's it's back the market's back up or what? But I've often wondered cuz that audience is aging out >> are his collectibles like still worth as much as they were because I memorabil I I have to believe is there some eb and flow of the people. Exactly. That's the inefficiency they're taking advantage of. The future collectible is going to be Justin Bieber and Taylor Swift.

[00:04:13]>> Oh, really?

[00:04:14]>> Yeah.

[00:04:14]>> Huh. But I I would imagine their memorabilia is already >> It is. But imagine in 30 years from now when a lot of those people have a lot of money and maybe they're not performing as much.

[00:04:23]>> Mhm. Well, I think like Pokemon is a big thing when I was when I was a kid, right? And it seems like there's been this new resurgence that now young kids these days it's still a big thing. So I don't feel like if it were going to be a collectible be a long time for >> but you realize you are getting to the age now where things are you're going to see the boomerang >> is because things from your childhood will now become the hot commodity just because of you are the age of you're the parents the generation of kids >> consumption is profitable so there are people who are out there creating markets to take advantage you'll see the movies the music everything is going to be catering to your group to when they're creating all this this creative content.

[00:05:02]>> Let's rock it.

[00:05:02]>> So, what percentage of a portfolio should be allocated to Pokemon cards?

[00:05:07]>> I mean, look, I if you want to because we let people do speculative stuff. So, if you want to if you want to dabble with 3 to 5% of your portfolio, go go knock yourself out. It's more but it falls into back to the to the jack category of hobby.

[00:05:18]>> Mhm.

[00:05:19]>> I mean, because that's what I'm not picking on you about that. It's just But you said you get fun out of that.

[00:05:23]>> I do get fun out of it. Yes. I say less than five less than 5% of your liquid portfolio would be okay to do something if if collectibles are your thing or individual stocks your thing or you know cover call option strategy is your thing I would try to limit it there.

[00:05:35]>> Here's what I found really interesting is that there's a theory out there that says that young people are not buying houses because houses are so expensive.

[00:05:43]So instead they're putting their money in collectibles like Pokemon cards, >> watches and cars. And that's why a lot of those things are going up in value because think about it. Maybe buying a $600,000 house is unobtainable. Buying a $20,000 Pokemon card, you can't theoretically obtain that. Or buying a $80,000 sports car.

[00:06:01]>> But the thing, can I tell you the only problem I have with collectibles is kind of like cuz I went through a watch phase myself. Um, now I'm all seems like the wealthier I get, the more gizmo I get instead of looking at the luxury watches.

[00:06:13]>> The thing nobody ever talks about is the market drag cost to actually turn what the market value is into liquid value.

[00:06:21]because you usually have to go through brokers. You typically have to or a trading site that's going to have a some type of trading cost to it. So the market what and we all get frothy and excited about it, but if you actually I think it took into account all the cost that you'd have to turn that into liquid cash, I don't think it's actually as valuable as as people say. I think it's great if you sell that. Like I think Mr. Golden probably does a great living being the marketplace for that stuff because he get it's a pretty nice rake on that, doesn't he? But I mean, but if you thinking this is how I'm going to build my wealth. It's the same thing if you're trying to sell watches or jewelry, they're going the market is very inefficient on what they're the costs are going to be for you to turn that into liquid cash.

[00:07:01]>> Yeah. And and they're all unique products. So, you'd have to I'd want to you'd want to feel pretty confident you had the right one, right? Not all Pokemon cards are designed the same. So, you hope that you buy it for $20,000 today and it's worth more in the future, but it's only worth more in the future if someone else is willing to pay more than you pay for it. I would tell that young person, hey, if you have $20,000, instead of doing the Pokemon card, if you're going to set yourself for a higher probability of success, go buy $20,000 of the S&P 500, and you have a higher probability that in the future that S&P 500 will be worth more than it was when you purchased it. But I do want to give one one exception is that because I've had two examples. We we had a client of the firm who was making six figures trading Disney pins >> um because he was just an expert at the market. And there are a lot since it's such an inefficient marketplace. He'd go find pins, you know, in, you know, whether it's eBay or elsewhere and people not know what they're worth. He go basically steal them. It's kind of like your story.

[00:07:53]>> That's an active that's an active steal, by the way. He knew that he knew the knowledge. We also because you always hear people say, "Don't buy boats. The best two days own a boat is the day you buy and the day you sell it." But then we we had we had a client that also made a great living >> buying trading boats. But once again, it's because he was an expert. It's back to my point earlier bringing it full circle. Sometimes it takes 10, 15 years to develop the expert where you can see stuff that nobody else can, but you have to take into account there's a skill set or a time component that that also went into that that that offic that you've built a skill that the market doesn't have. And that's why it's easier just to buy the index if you can't go out there and spot that. If you don't know if you're the expert or not, then you're probably not.

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