You’ve heard the term “diversification” countless times—but are you actually doing it right? As the financial landscape continues to evolve, understanding how to properly diversify your investment portfolio is more crucial than ever. In this episode, we’re going to get into the investing fundamentals we consistently stick to in order to help achieve the highest probability of success.

Here’s some of what we discuss in this episode:

📊 Diversification ≠ Just owning a few different stocks

📉 Most portfolios are too heavily tilted toward large-cap tech

🏦 Own the full asset class—don’t try to pick winners

🔄 Rebalance regularly to reduce risk & stay disciplined

Learn more: https://caffeinecashflow.com/

Get in touch with Michael-

Web: https://www.westpacwealth.com/team/michael-schulte

Email: michael.schulte@westpacwealth.com

Phone: 702-767-4897

March Madness is here, and just like filling out a bracket, picking individual stocks can feel like a thrilling gamble. But the odds of winning big are slim. In fact, history shows that most stock picks, like most brackets, end up busted.

Many investors can’t resist chasing big wins, even though diversification is a smarter play. One economist, Hendrik Bessembinder, analyzed the returns of nearly a century of stock performance. Let’s compare what he found to March Madness history and uncover what March Madness can teach us about investing!

Here’s some of what we discuss in this episode:

• What Hendrik Bessembinder found from his study of 29,078 stocks
• The perfect March Madness bracket has never happened
• The odds of sustainable success are slim
• Very few teams repeatedly win
• The most familiar choice doesn’t often lead to victory

Learn more: https://caffeinecashflow.com/

Get in touch with Michael-

Web: https://www.westpacwealth.com/team/michael-schulte

Email: michael.schulte@westpacwealth.com

Phone: 702-767-4897

Today we’re going to piggyback of our conversation in the last episode by focusing in on recency bias and show you how the concept plays itself out among investors. As Michael will explain, recency bias is the tendency to give more weight to the most recent information when making decisions, which can often lead to skewed perceptions and poor financial choices.

Here’s some of what we discuss in this episode:

• A look at the numbers from stock returns since 1928.
• Treasury bill rates are indicative of what you could be receiving inside money market accounts.
• We're almost right at historical averages for mortgage rates going back to 1964.
• How we build investment strategies with these biases in mind.

See the graphs referenced in this show:

Mortgage Rates: https://caffeinecashflow.com/wp-content/uploads/2025/01/Mortgage-Rates-since-1964-LBS.pdf

Treasury Bills: https://caffeinecashflow.com/wp-content/uploads/2025/01/Treasury-Bills-historical-rates-LBS.pdf

Large Company Stocks: https://caffeinecashflow.com/wp-content/uploads/2025/01/Large-Company-Stocks-LBS.pdf

Learn more: https://caffeinecashflow.com/

Get in touch with Michael-

Web: https://www.westpacwealth.com/team/michael-schulte

Email: michael.schulte@westpacwealth.com

Phone: 702-767-4897