Exclusive insights into how high-earners think, invest, and build wealth.
Welcome to The Smart Portfolio, where each week, we share ultra-wealthy strategies, high-earner survey data, and real investment case studies.
In this issue:
Why many investors get poor results despite strong markets
What retired millionaires regret the most
Should you invest in multi- OR single-manager hedge funds
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1. Why many investors get poor results despite strong markets
Podcast: The Money Alchemist, The Shocking Truth Behind Terrible Returns: How to Align Your Goals with Market Mechanics (September 27, 2025).
Two advisors explain why many investors earn poor results despite strong market history: returns arrive in lumps, short-term valuation calls are noisy, and behavior drives the gap between index returns and investor returns. That sets up three practical decisions:
Deploying new cash: History favors investing sooner. Vanguard finds lump sum beats dollar cost averaging about two thirds of the time across markets. If full lump sum feels tough, use a fast glide like 3 tranches over 90 days so you keep most of the edge while easing nerves. (Vanguard Corporate)
Reading valuations the right way: Valuation levels are poor indicators for timing 1-year returns but matter more over multi-year horizons. Higher starting PEs tend to mean lower long run returns and vice versa, so use them to set expectations and size risk, not to call next month. Note that current broad US valuations screen rich by several measures. (LSEG)
Planning for lumpy returns and withdrawals: The S&P 500 delivered about 0.95% annualized from 2000 to 2009, the classic lost decade. Build a withdrawal plan that can survive that kind of path. “Sequence of returns risk” is the danger of hitting a bad patch early in retirement; a simple fix is a bucket approach that keeps near term spending in cash and high quality bonds so you are not forced to sell equities low. The idea behind this is to give each dollar a specific job (i.e., pick investment timeframes that match your distribution needs). (Dimensional)
Bottom line: You can’t control the sequence of the market’s returns, but you can control your rules (investment timeframes matched to distribution needs). Invest cash quickly, size risk with valuation context, and shield withdrawals so compounding can do its job.
2. What retired millionaires regret the most
Podcast: Joe Knows Retirement, Season 1 - Ep 194, What Retired Millionaires Regret Most (September 28, 2025).
The top 5 regrets among retired millionaires are:
Waited too long to enjoy life
Didn’t travel while healthy
Let relationships slide
Delayed estate cleanup
Started with an advisor too late
Some ideas on what you can do about these…
Front-load the good years: Turn bucket-list ideas into dated trips and budgets in years 1-10. Tie this to a withdrawal plan that still protects late-life needs. (thebahnsengroup.com)
Program relationship time: Create a “relationship” line item: quarterly family visits, hosted gatherings, and one multigenerational trip per year. Treat it like any other goal (with explicit dates, dollars, and project owner).
Retire to something, not from something: Test part-time work, mentoring, volunteering, or a small venture before a full stop. Model income, taxes, and Medicare effects so there are no surprises.
Estate hygiene: Run a beneficiary and titling audit across all accounts/policies. Confirm will, health proxy, and any trust updates. (Trust & Will)
Make accountability explicit: Use a 1-page quarterly scorecard: experiences completed, relationship spend, estate fixes, and any tax/drawdown moves. If items stall for 2 quarters, simplify or delegate (e.g., hire a travel agent).
3. Should you invest in multi- OR single-manager hedge funds?
Performance, Risk, and Operational Efficiency in Multi-Manager Versus Single-Manager Hedge Funds (September 8, 2025) - link to paper
The paper compares multi-manager “pod shops” (many PM teams under one roof with centralized risk) to traditional single-manager funds. It finds multi-managers deliver smoother rides (lower volatility and smaller drawdowns) and higher Sharpe ratios, while single-managers show higher raw returns and alpha but with bumpier results. Fees tend to be higher at multi-managers, and PM turnover is higher too. Net: lower risk and more consistency vs higher upside with more risk.
Why this matters now
Investor demand has shifted toward multi-managers because recent 10-year data show stronger risk-adjusted results and roughly half the volatility vs the broad hedge fund universe. That demand helped pod shops grow AUM ~175% from 2017-2023, far faster than the rest of the industry. (Goldman Sachs Asset Management) Morgan Stanley also reports a decade of higher returns with lower volatility for a multi-PM peer group. (Morgan Stanley)
Key takeaways
Return profile trade-off
Multi-managers: steadier returns, tighter risk control, smaller drawdowns. Single-managers: more dispersion, higher potential upside, higher downside. Match to client risk budget and liquidity needs.Fees and “pass-through” costs
Pod shops often layer higher management fees and pass-through expenses. Industry studies show hedge fund fees have been a large slice of gross gains, and multi-manager models can push averages higher. Push for full fee transparency and compare to potential risk benefits. (Financial Times)Due diligence checklist
• Risk: limits, stop-outs, and centralized oversight. Evidence that risk is enforced in practice.
• Fees: base, incentive, pass-throughs; what is capped. Net return history after all costs.
• Capacity: how the firm scales teams without crowding trades.
• Liquidity: notice periods, gates, and side pockets. Many multi-strategy platforms run monthly or quarterly liquidity with 30-90 day notice.
• Persistence: 5-10 year Sharpe and drawdown, not just YTD. Cross-check with independent sources.
Bottom line: If you value consistency and risk control, a high-quality multi-manager can be a core alt sleeve. If you’re seeking higher upside and can tolerate bigger swings, a concentrated single-manager can make sense.
Disclaimer
This newsletter is for informational and educational purposes only and should not be construed as personalized financial, tax, legal, or investment advice. The strategies and opinions discussed may not be suitable for your individual circumstances. Always consult a qualified financial advisor, tax professional, or attorney before making any decisions that could affect your finances. While we strive for accuracy, we make no representations or warranties about the completeness or reliability of the information provided. Past performance is not indicative of future results. All investments involve risk, including the possible loss of principal. The publisher, authors, and affiliated parties expressly disclaim any liability for actions taken or not taken based on the contents of this publication.