We’ve all heard the horror stories. Someone retires with what they thought was a rock-solid portfolio, only to watch 2008 happen and see half their savings evaporate. They thought they were diversified. They had multiple funds, different managers, various ticker symbols. How could this happen?
Here’s the uncomfortable truth: most people have no idea they’re driving toward a financial pileup at an intersection they didn’t even know existed.
The Crash You’re Not Prepared For
Nobody can afford a crash they haven’t planned for at the wrong moment. This isn’t just fear-mongering—it’s actually a math equation. And before your eyes glaze over at the mention of math, stay with us. If something is a math equation, that means we can see it, measure it, and most importantly, do something about it.
The technical term is sequence of return risk. What this means is simple but critical: when losses happen in your retirement matters just as much as if they happen.
Think about it this way. If your retirement portfolio takes a beating in your first few years of retirement, that has a dramatically larger impact on your lifetime spending than if those same losses occur 15 or 20 years into retirement. The market doesn’t consult with you about your plans. It doesn’t care that you just retired last month. The order in which returns happen makes all the difference.
The Problem Most Retirees Face
Almost no one who walks into our office can answer this question: “What would happen to your retirement if we had another 2008-style crash tomorrow?”
You shouldn’t feel pressure to know this answer before talking with us. However, you absolutely need to know it before you stop working. Almost no one who comes through our doors can measure what the effects of a major market downturn would be on their current portfolio.
Here’s why that’s terrifying. We’ve all heard someone say, “In 2008, I lost half my 401(k).” Maybe that was you. If you freaked out and went to cash, you locked in those losses. Even worse, if you were taking income from your portfolio when the crash happened, you had no choice but to sell assets at the bottom to pay your monthly bills.
You’re retired. The income has to come from somewhere. That means selling stocks, mutual funds, ETFs, and bonds at a 50% loss just to keep the lights on. That’s the nightmare scenario.
You Have Options (But You Need to Take Action)
The good news? You don’t have to be subject to major volatility. Just by knowing you have options changes everything.
However—and this is important—you will probably need to take some action. If you’re just going to close your eyes and cross your fingers, then maybe you should worry about the next crash. But you don’t have to live that way. You have agency over how you structure your retirement.
Think about Olympic downhill skier Lindsey Vonn. She recently suffered a horrific crash that likely ended her historic career. She’s no stranger to injuries. She knows the dangers of flying down a mountain at 80-plus miles per hour. But she went into her sport with eyes wide open. She had insurance—both literal and figurative—against the risks she was taking.
What’s your insurance? We’re not necessarily talking about an actual insurance policy here. We’re talking about what you have in place in your portfolio that protects against major volatility. Did you know you can actually plan for market crashes? And it’s probably not as complicated, daunting, or expensive as you think.
Are there volatile moments coming in the markets? The answer is always yes, because you never know when they’re going to happen. But do you have to be subject to them? You do not.
The Diversification Myth
Now, we know what you’re thinking. “I’m really well diversified. I own multiple ETFs across different fund families. I’ve got Vanguard funds, Fidelity funds, some sector-specific investments. I don’t just own the S&P 500.”
This is where we need to have an honest conversation.
Here’s a question we ask people all the time: “What stocks are in your ETFs?” You probably can’t answer that. Most people can’t. They assume that by buying different ETFs from different companies, they’re achieving true diversification.
Let’s dig deeper. How do you ensure that your Vanguard ETF isn’t buying the exact same stocks as your Fidelity ETF? Just because they have different names, different Morningstar ratings, and different expense ratios doesn’t mean they own different underlying assets.
One of the very first reports we run for new clients is called a stock intersection analysis. It’s one of the most powerful tools we have. What we find, literally every single day, is shocking.
Those 15 different ETFs you own? They all bought NVIDIA. They all bought Microsoft. They all bought Meta, Broadcom, Tesla, Eli Lilly, and Google. Even though you have 100 different ticker symbols that are supposed to be diversified, you might discover that 15% of your entire portfolio is concentrated in just two stocks. And you had no idea.
You thought you were being smart. You invested in ETFs and mutual funds because they handle diversification for you. Then you went above and beyond by buying multiple funds to diversify the diversifiers. You felt so well diversified it would make anyone’s head spin.
Until you see the stock intersection report.
The Traffic Light Problem
Here’s a helpful way to think about this. Imagine you’re driving north through an intersection. Someone else is driving east-west. What keeps you from crashing? Traffic lights, right?
Every time you add another ticker symbol that owns the same stocks as your other holdings, you’re adding another manager to your portfolio. The Fidelity manager and the Vanguard manager are two different people making independent decisions. They don’t know each other. They definitely don’t know you. They’re not trading for your benefit—they’re trading for their fund’s objectives.
It’s like adding more and more traffic lights to the same intersection. Pretty soon you’re driving down the road, you come to an intersection, and you’re staring up at 14 different sets of traffic lights all showing different signals. You don’t know which one to follow. Eventually, you’re going to have a pileup.
You think you’re diversified, but really you’re just creating chaos.
The Hidden Cost of “Diversification”
Here’s what makes this even worse. If you’re using mutual funds, you’re literally paying fees for this confusion. You’re paying fund managers to not diversify you. You’re paying multiple fees to different managers who are all buying the same stocks and trading them without you in mind.
If you have a financial advisor who’s using mutual funds, you’re paying your advisor a fee and you’re paying each mutual fund manager a fee. That’s a fee on a fee. Double the cost for less actual diversification than you thought you had.
How many people realize how much they’re paying in fees? We see this confusion every single day.
How People Actually Discover This Problem
Here’s the question that should concern you: If you don’t go through some sort of analysis—we call it a stock intersection, but whatever you want to call it—if you don’t do that deeper dive, how will you find out you’ve been overinvested and under-diversified?
The answer is pain.
You’ll feel the effects before you know the cause. You’ll look at your portfolio one day and see that the S&P 500 is down 2%, but your portfolio is down 8%. You’ll wonder how you could be so divergent from the broader market. You’ll feel something is wrong, but you won’t immediately know what.
If you’re able to get under the hood—which most people can’t because it requires expensive analytical tools—you might eventually discover that 12% of your portfolio was concentrated in one stock that had a bad day.
Most people find out through catastrophic pain. They wanted to retire next year. Then a market correction happens. Suddenly they discover that 40% of their portfolio was in tech stocks. They had no idea because they thought their 50 different ETFs meant true diversification. Now they either have to hope for a quick rebound or work several more years.
What a shame. You can find out sooner. You can know the reality of your situation before the pain teaches you the lesson.
The Secret Method That Costs $5,000
Before we move on, let’s address something we’ve been seeing lately. People are getting approached by advisors claiming to have a “secret method” for doing Roth conversions without paying taxes. Oh, and this secret will only cost you $5,000.
If you hear “secret method” when it comes to your finances, every red flag should be waving. We’ve got recent news right here in Atlanta about a major Ponzi scheme that defrauded people of around $300 million. You can bet there were conversations about secret methods that would work out great if you just trusted them and didn’t tell anybody.
Every single year, people read the tax code and try to come up with workarounds and loopholes. Sometimes these boutique tax plays work. Often they don’t. When they don’t work, you end up with what’s called a listed transaction—basically raising your hand to the IRS and saying, “Hey, I did something in the gray area. Please audit me.”
We had a client call a couple of weeks ago asking about tax strategies. When we discussed what he’d done in the past, he mentioned trying one of these special methods. It worked for a year. Then he got audited. The experience was horrible.
Anytime someone offers a secret method or secret methodology, that is the gold medal of red flags. Be extremely careful. You’re probably exposing yourself to far more risk than you realize.
Our Approach: Transparency Before Fees
We believe the burden of proof is on us to show you value before you become our client. That’s why our process doesn’t cost you a penny. All it costs is some time to go through our three-step retirement planning process.
We want to show you exactly where you stand. Are you well diversified? What control mechanisms do you have to ensure proper allocation? What would happen if we had another 2008 tomorrow? You can know all these answers before you pay us a single fee.
Even if you just want to know what your stock intersection looks like—whether you have that 50-car pileup at an intersection you didn’t know existed—we can show you. You don’t have to commit to anything. Just find out where you actually stand.
The alternative is finding out through pain, through losses, through having to delay retirement or reduce your lifestyle. That’s the expensive way to learn this lesson.
Recognized Excellence in Retirement Planning
Best Financial Planner in Woodstock, GA for 2023, 2024, and 2025
We have built our reputation on this kind of transparent, educational approach to retirement planning. We have been recognized for our commitment to helping adults in and near retirement understand exactly where they stand financially. We don’t believe in secrets or hidden methods. We believe in clear analysis, honest conversations, and strategies built on solid financial principles rather than gimmicks. Our recognition in the financial planning community stems from our dedication to putting clients first and ensuring they understand every aspect of their retirement plan before making any decisions. We use institutional-grade analytical tools—the same technology that costs thousands of dollars per year—to give you insights into your portfolio that most people never see until it’s too late.
Take the Next Step
You’ve worked hard to build your retirement savings. You deserve to know whether your portfolio is actually positioned to protect you when markets get volatile. You deserve to understand if you’re truly diversified or if you’re unknowingly concentrated in a handful of stocks.
We offer a complimentary three-meeting retirement planning process designed to give you complete clarity about your financial situation. There’s no cost and no obligation. We simply walk you through where you stand today, what risks you’re facing, and what options you have to address them.
Visit our website at www.vincentplanning.com or call us at 770-485-1876 to get started. If you’re not sure whether we’re the right fit for you, we also offer a “Can We Help” call where you can speak with us to discuss your situation and see if our approach aligns with your needs.
For personalized financial guidance, reach out to Vincent Financial Group today to schedule a consultation.