--- title: "What I Don't Do" author: Brandon Grundy, CFP® --- # What I Don't Do 11 Aug, 2026 *Before I begin, this will be my last post for a few weeks. I’ll still be working on everything else, just not writing this blog so that I have some extra time with family and friends during what remains of summer.* I’ve probably mentioned this several times in the past but part of what I do for clients is, in a sense, dominated by what I don’t do. I remember the advice of a colleague when I was just starting out – the first rule, he said, was don’t blow anybody up. It might sound funny, but that simple concept has stuck with me. So, I don’t put a client’s money at unnecessary risk. And since risk shows up in a multitude of ways and under different guises, knowing how to avoid it feels like half the battle.   Along these lines, here are some of the investment concepts I avoid. I don’t use leverage – You’re familiar with how leverage works and how it’s a critical part of our economy, especially when it comes to home ownership and business investment. But things get complicated when it comes to using shorter-term leverage in the markets. It can work well if you play your cards right, don’t let hubris creep in, and you’re lucky. If you don’t and you’re not, leverage can quickly turn into your worst enemy. This was the case with a private investment fund that made news lately. Situational Awareness was and still is heavily invested in the AI business and is run by the 24-year-old “Nostradamus of AI”, according to sources referenced by the Wall Street Journal. The fund was riding high on elevated stock values and a ton of debt. Then stock prices fell and the firm’s 4-to-1 leverage ratio (roughly double the leverage used by a typical hedge fund) forced distressed sales of stock holdings due to margin calls from lenders. Various articles suggest the fund ultimately lost close to 70% of its value last month alone. Still, the fund survived and may end up thriving, especially since management now plans to use a lot less leverage going forward. Another example of overusing leverage comes from the South Korean stock market, which has also been riding the AI wave this year. The iShares MSCI South Korea ETF was up over 120% this year by late-June before dropping about 40% last month on similar AI-related volatility that impacted Situational Awareness. The government incentivized this massive runup in several ways including by allowing single-stock leveraged ETFs (a nutty innovation that should be banned, in my humble opinion) into the market just this spring, as I recall. Apparently retail investors, who were already up to their ears in leverage, were able to use even more to buy these funds that themselves were leveraged maybe 2-to-1 on the single underlying stock. In hindsight this must seem to the South Korean regulators like they poured gasoline on a campfire and then hit it with a leaf blower; exciting in the moment right before the fire burns out of control. I don’t buy private investments – Private investment funds are the private equity and hedge funds you’ve heard of but also funds that buy office complexes and apartment buildings, portfolios of loans made to smaller companies, and “special vehicles” designed to get you “exposure” to trendy assets like pre-IPO companies. These funds usually charge high fees ranging from 2% to 5% per year plus maybe 20% of your performance. They’re known for being relatively opaque when it comes to valuing shares and, perhaps more importantly, can be illiquid as stone if you need to get your money out early. These types of funds are often in the news for various reasons but lately it’s because of shenanigans related to convincing individual investors that they were getting early access to companies like SpaceX prior to going public, only to find out the exposure no longer existed after the IPO, and that all the investors owned was shares of the fund itself which had far less value than anticipated. I see these private deals frequently and understand the allure, at least in general – you think you’re getting access to something special and maybe you are; it can be tough to tell. From a financial perspective, you’re hunting for the so-called illiquidity premium that often doesn’t materialize for a variety of reasons. However, each deal I look at ends up having the same old issues related to locking up investor money, valuation, opacity around fees, and so forth. But ultimately it’s the first issue, locking up investor money, that keeps me away. Put simply, I never ever want to have to ask a third party’s permission to access your money when you need it, and that’s a given when it comes to private investments.   I don’t let third parties invest client money – While I happily use publicly traded ETFs, mutual funds, and various technology to support my work, I don’t use separately managed accounts (SMAs) or turnkey asset management programs (TAMPS) when working with clients. In my humble opinion, these are overcomplicated vehicles for overcharging clients. One of the main selling points that providers use when trying to sell me on their programs is efficiency; not yours but mine. Let someone else worry about the investing part of your client relationship, they say. Connect us to your client’s accounts, pick a model, and we’ll handle the rest. You’ll free up lots of time to do other things, such as getting more clients who then can be enrolled in more SMAs. It’s a virtuous cycle for which the SMA or TAMP charges anywhere from maybe 0.25% to 2.25% per year. Some advisory firms use TAMPS and SMAs at the same time. I’ve seen portfolios built like this that end up looking like an expensive mess, but they were built by big-name firms so that somehow makes it okay?   I suppose these types of arrangements make sense for the advisory firms who target efficiency above all else, but it’s never made sense for me. The issue is that much of the important work we do for clients is inherently inefficient, and that’s okay. I like the responsibility that comes with having discretion over a client’s account. And I like placing trades for clients myself and feel closer to the client when doing so. This saves the client money and allows more customization, which I think ends up creating better long-term risk-adjusted and fee-adjusted returns. So, that’s all pretty negative in terms of what I don’t do. In contrast, *what I do* is to only look at publicly traded investments for clients: stocks, bonds, mutual funds, ETFs, and so forth. The public markets offer far more than enough to choose from. I keep transaction costs low and liquidity/access high. I consider a client’s long-term plans and tax situation at all times. I build portfolios that are relatively easy to understand while sticking to investing principles that have worked for my clients for 20+ years, and for others much longer than that. In short, I try not to overcomplicate an already complicated process, which is harder than it seems. Have questions? Ask us. 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