Episode summary
Adam Grossman: Asset Allocation Is an Investor’s Best Defense
The Long View
· · 45 min · Guests: Adam Grossman
Summary
Adam Grossman argues that good investing is usually simpler than the industry makes it seem. He explains why he founded Mayport as a flat-fee advisory firm, saying the traditional 1% of assets model can become illogical as portfolios grow, and that a basic mix of index funds, stocks, bonds, and cash often does the job better than stock-picking or more exotic allocations. He also says clients with larger portfolios, most of whom are near or in retirement, tend to value the predictability and alignment of flat pricing.
A major theme is how to handle risk without trying to predict markets. Grossman emphasizes asset allocation as the best defense for people approaching retirement, especially keeping several years of withdrawals in bonds and cash so a bad market stretch does not force a sale of stocks at the wrong time. On inflation, he says TIPS help but are imperfect, and he thinks stocks are often the strongest hedge because companies can raise prices over time.
He is skeptical of gold and Bitcoin because he does not see intrinsic value in either, and he prefers investments that produce something. He also argues that Social Security should be treated with both math and emotion in mind: the numbers often favor waiting until 70, but personal circumstances can justify earlier claiming.
Key takeaways
- Grossman says a flat-fee model fits most investors better than charging 1% of assets because the work of managing a portfolio does not rise much with account size.
- He believes a simple stock-and-bond portfolio, plus cash, is usually enough and that private assets, commodities, and Bitcoin are unnecessary for most clients.
- For retirees, Grossman says the best defense is asset allocation: keep several years of spending in bonds and cash to reduce sequence-of-returns risk.
- He thinks stocks are the best practical inflation hedge because companies can raise prices and defend margins better than many other assets.
- Grossman says Social Security math often favors waiting until 70, but the decision should also reflect how a household feels about claiming.
- He is not a believer in gold or Bitcoin because he sees no intrinsic value in either.
Notable quotes
“so to me, the simplest way in investor's best defense is through asset allocation”
“I think that the combination of stocks and bonds, the negative correlation or at least very low correlations are a very very powerful combination”
“in my view there's no one perfect inflation hedge but I do think stocks maybe are the best”
“One of my little mottos is that there are two answers to every financial question. There's what the math says and then there's how you feel about it”
How the episode opens
Please stay tuned for important disclosure information at the conclusion of this episode. Hi and welcome to the long view. I'm Christine Benz, director of personal finance and retirement planning for Morning Star.
And I'm Amy Arnot, portfolio strategist for Morning Star. Our guest on the podcast today is Adam Gman. Adam's the founder of Mayport, a fixed fee wealth management firm.
He's also a regular contributor to Humble Dollar, the website founded by late financial writer Jonathan Clemens. Before founding Mayport, Adam worked as an investment adviser or analyst at several firms including Middleton and Company, Balentine Partners, and MFS Investment Management. He also founded About Face Software, a social networking software firm.
Adam received his undergraduate degree from Williams College and his MBA from MIT's Sloan School of Management and he's also a CFA Charter holder. Adam, welcome to the Long View.
Thank you for having me.
Well, thanks for being here and we wanted to start with your contributions to Humble Dollar where you're a prolific contributor. This is the website that was founded by the late financial writer Jonathan Clemens. Can you talk about how your collaboration started?
Sure. It got started back in 2016. I was working at another wealth management firm here in Boston and I was feeling a little frustrated because I wanted to do more writing but there were compliance issues and so for some odd reason I decided that the solution to all my problems was to reach out to Jonathan Clemens.
And I didn't know Jonathan. We'd never communicated. But in his usual gracious style, he responded to my email at about 6:00 a.m.
the next morning and then we spoke on the phone and the timing was fortuitous because he was getting Humble Dollar started at just that time and so he was looking for writers and I was looking to write and so that was how things got started.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- asset allocation
- flat-fee advice
- inflation risk
- retirement portfolio protection
- ai in financial advice
Companies and tickers mentioned
- Mayport
- Humble Dollar
- Middleton & Company
- Ballentine Partners
- MFS Investment Management
- About Face Software
Watch the episode
Watch “Adam Grossman: Asset Allocation Is an Investor’s Best Defense” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Long View, this episode and its artwork belong to Morningstar, Christine Benz - Director of Personal Finance and Retirement Planning, Ben Johnson - Head of Client Solutions, Amy Arnott - Portfolio Strategist. Octagon is not affiliated with the show; this page is an independent summary.
