The situation in Ukraine is terrible and my thoughts and feelings go out to everyone in that struggle. There are a myriad of lessons to learn of course, but today I want to focus on personal investing.

When it comes to your personal investments, you should be personally invested. What I mean: know what you are investing into, understand the risks and rewards and be comfortable with the potential outcomes. Any single investment can be very volatile or go to zero. Diversification can help save your dollars from catastrophic losses. Even a country or sector is not immune to drastic fluctuations.

You may also want to consider your moral judgments when it comes to investing: do you want to invest in this country or that one? The major indexes are made up of many countries, so do a little research to understand where your investment dollars are flowing, what they are supporting.

Resources:

• FRDM Fund
• Freedom Investing

Find out more about Mike at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

Welcome to real financial planning, broadcast on WK, Excel available,

wherever you get your podcasts.

I'm Robeson.

I'm joined as always by Mike Morton, the host of why do you call it?

born the Morton podcast.

don't know what I'm calling my podcasts these days,

You know

Settle on something soon.

A L little lesson about marketing I don't know much about

marketing, but you have to know the name of what you're pushing.

Look, Mike Morton is also in addition to being a podcast or

also a financial advisor and we talk about individual investing.

So first of all, Mike, you are for our video viewers, you're giving me

a hard time here before we got on the air about the fact that I have

changed my zoom wall a little bit

Holy smokes.

Yeah.

For the listeners out there, I Matt joined and we record, and we can see each other.

as soon as he joined, I just started bursting out laughing because he used

to have a beautiful background of his kids' artwork right behind him.

And now he has hundred percent, a flag of the United States.

He's replaced his kid's artwork with a flag of the United And it was

I'm wrapping myself in the flag.

All let me, I'll tell

Alright, here we

I will tell you why.

I interviewed on Friday the third ranking Democrat in the us house

of representatives, Jim Cliburn on the beyond politics podcast.

And I felt that if you're going to interview one of the top government

officials in America, you probably need a slightly more formal zoom wall behind

or you.

just sort of be like pro us.

There there are multiple things going on here.

One is I thought I had to be a little bit more formal too.

There's actually a connection here.

In addition to being of the top leaders in America Jim Cliburn is

also one of the top ranking African American officers in our country.

And this flag behind me was actually given being by four.

Us Congressman Charlie wrangle.

It flew over the Capitol.

It's actually in memoriam to my father who worked with Charlie

Rangle back in the eighties.

And so you know it was kind of a personal for me, but also noting

that connection to Jim Cliburn.

And look nowadays.

We all have kind of freedom and patriotism on the brain, given the

situation abroad, which by the way, is I think what we want talk about today,

because there's so much uncertainty going on in the markets these days.

And I wanted to ask you about that a little bit.

What are you doing right now as financial advisor and as an investor yourself,

given the amount of market turmoil.

goals.

Yeah.

Yeah, no, it's a really good question, but I do love the flag

that used to be flying above.

The capital's now flying above your head right behind you

the video So That's fantastic.

Yeah.

So I did want to talk to you about Matt investing in world.

Has suddenly become very real, right.

So in the last, 5, 10, years, you your investments go up and down.

That's what happens.

Used to that.

But we are very in the U S we're very invested in the U S market pretty heavily.

And That's done really well, as well, but a lot of have investments overseas,

whether it's the M U S world market, the developed countries, the emerging

market, Or even an individual countries.

And now has suddenly become very real because if you had investments in Russia,

they are frozen and very likely, if they're in the public market anyway,

very likely to have gone to zero.

And so now it's brought into light for me and for investors all around

the world, know, be careful just know what you're invested in.

And be cognizant what you're investing in, where you're investing in the world.

And so it's brought that to the forefront for me.

So happy to have that conversation today.

One context.

Always comes up in, I'm putting preposition at the end of a sentence

like a barbarian, one context that always raises this question you go to

do your taxes of the year and you just happened to see in the statement you

get from wherever, IRA or whatever.

That you may be in mutual funds that have an international component.

You actually may not be fully aware, as you just said, where

your retirement assets or even your like 5 29 assets are parked.

And so it is, does that suggest that there's some upfront

homework that people can do?

Given the situation that it's now put it all firmly in our minds.

what should people be doing to investigate and maybe assert a little bit more

control over where their money is setting.

Yeah, it's a really good there's different areas of

the world where can invest in.

We can invest in the U S market, the S and 500, the total us stock market.

And that will be obviously in us companies, and track up and down,

with how those companies are doing.

There's the X, U S or the rest of the world.

And that typically makes up about 40 to 50% of total investible market.

So you have money there, it's going to be spread across many different

countries, according to how big the economy, basically is in those countries.

And so do you need to really dive into that?

You should be aware of which countries are heavily.

Whether it's Europe or Germany or the UK or Australia where the

money is sitting and then there's also, there's developed countries.

Those are the economies we think, oh, they're pretty far along,

they're like the U S when you abroad and then there's what we call

emerging markets.

And these are those markets that just have a little bit different characteristics.

There's no great like defining line, many people will have invested.

In emerging markets and Russia is an emerging market.

There's the big ones would be like China, Taiwan, India, And Brazil.

Okay.

But Russia makes up about 3% maybe of those emerging markets

funds and my clients have those, I own one of these funds.

And so 3% Of that fund, has basically gone to zero in the, last couple of weeks.

Now that's not a huge portion.

It's still 3% of a small, an overall portfolio.

But again, it's really good to be aware of where you're investing because

there are many different strategies.

And like you said, you probably do own, assets spread across the entire world.

I hear two dimensions in what you're One is some exposure to

geopolitical events and wars, and however international economies are to the.

a history, but there's also to some degree, and I'm not just

saying this because I literally old glory poised above my head.

There's also to some degree I think a moral component for many U S

investors, which is, if you ask the average person on the street, do you

want to be investing in assets that could be supporting Russia right now?

Most people would say, no, they don't want to have a part of that.

So to some degree, it sounds like you want to doing the checkup on these

things you may for your own peace of mind, want to be asserting a little bit

more control over where your money is landing and what it's supporting by.

Yeah.

I Just like there's been a movement over the last couple

of years in green investing ESG environmental, and governments and

Sri, socially responsible investing.

That's a big topic.

I agree with you, Matt, we should be looking around the world.

And where do you want to putting your dollars in terms of investments?

I just mentioned emerging markets as a group of countries that we

would sometimes invest in and China tops the list there and, 30 to 40%.

Um

Of assets that might be in emerging markets.

So you might really want to think about that, based on whatever China's going

to do next, the, obviously they've been in the, the news lot as well.

and so you just might want to consider if you have emerging market funds,

do you want that amount, invest in China or of these other countries?

The other thing that it brings up for me, Matt, and I've talked about

this on my podcast before is I call.

Investing.

And is investing in countries around the world that are more and that

both means individual freedoms, but also economic freedoms, which

is better for your investments.

If you think about like countries that support starting your own business,

owning your own business, getting the profits, trying to grow your business

and getting profits your business.

Those are the kinds of places I'd like to invest my money, to get a return

versus places where you start your own business, but maybe the government can

come along and own of that at their will.

That's so good for me as an individual investor.

So there's certainly a component to this freedom investing that I

think is really important as well.

I'm not suggesting.

In any way, by what I'm about to say that people shouldn't put in a little bit of

work and effort to stand for their values or just protect their own investments.

boy, it is complicated world out there of investing.

And we were saying, it's awfully hard to know sometimes if you're in a mutual

fund, if you have a financial advisors taking care of all of this for you.

We just talked about that in our last couple of episodes that,

you might be in that situation.

So the question is there a shortcut way to say, look, I want the diversification that

comes with being in I want some of the.

Headed risk slash growth that comes with being in emerging markets.

I want to draw a bright line of where you were placing it around

freedom investing, where I don't want to be in certain kinds economies.

I don't want to be investing in kinds of governments that may not be comporting

my sense of values in the world.

Is there a kind of way for assuring that you're exposed to emerging market?

But you're drawing those boundaries.

There isn't unfortunately there's not a lot products out there that you

can just say, oh good, one-stop shopping.

I buy this product this ETF or mutual fund and be good to go.

That said there is one that I know of that I like, haven't done a lot of research

on it, but it is called freedom, FRDM.

And this

Wait, that's really hard.

FRDM.

That's

Come on folks.

Just spell it the way you spell the word.

Ticker symbols, you can only be, you can only have so

many letters in these things.

my

So it's a ticker FRDM is symbol started by Perth toll and She's gone

basically doing what we're saying is wow, I would like to invest in more free

countries, but under this emerging markets umbrella, not the developed markets how we

define those different sets of countries.

And so that's what she's done is like looking at countries that are more

free and then investing in those.

And she's created an around that.

So you can look up that ticker and that ETF If you're interested in

drawing that line, but not doing a ton of research or, set and forget,

you can put in 20,000 bucks into that, into your emerging markets and feel,

maybe you feel better about that now in terms of the developed markets,

there's nothing that I'm aware of.

The listeners can send us an email.

But there's nothing I'm aware of that really is an ETF or mutual fund.

Around just the countries that are more Now you can innovate, you

can purchase individual countries.

Okay.

So you can purchase the, like a UK, an ETF or mutual fund just for the UK or

just for Germany or just for Australia.

And then you'll be invested into that market.

Just like you are here.

If you purchase the total us market, boom, like you own total

us market and Goldman down.

And this is where I said, knowing what invested in.

Russia has one of these two, there's a Russian ETF that you could be invested in.

And you were that trading got halted and basically gone to zero.

And so it's unlikely to get any money back out of accounts or

out of of those investments.

and so it's now just, again, brought to the forefront, being careful,

knowing what you're invested in, just being aware of that ahead of time.

Now, when you talked about buying countries, you're not saying

it to the same sense that former president Trump was he suggested that

we might buy Greenland, which by the way, I endorse that idea right now?

I think that's a great idea for Donald Trump to do.

I would like to elect president of Greenland.

I would like him to move there.

I'd like him to build a wall there to keep all the wall versus out.

'cause you don't want that.

And I'd like to suggest Marjorie Taylor green and Lauren Boberg to

the secretary of ice and seawater.

That's my political suggestion right here, but I do want to ask a little bit,

you, were just alluding to ability to buy the whole us market or an index that

reflects the S market or the S and P 500.

Is it possible to have a sufficiently diversified and the right risk profile

type portfolio without any exposure to emerging markets that you might troubling?

Do you need have some kind of international exposure?

that the thing to do is say, Hey, just again, I'm influenced by old glory here,

but like just keep it in the U S of

Yeah.

Yeah.

It's a really good point.

And it's funny mentioned that Matt, cause I was talking with one of clients earlier

today on this exact topic, which was, how much international should we have?

we have at all?

And remember, I, I defined it as there's kind of and then in the international

realm, sometimes we split it between developed countries and emerging market

countries, just to keep all those term that terminology separate, you can

have an entirely US-based portfolio.

And my advice would be.

You'll be fun I really don't have a problem with just being a hundred

percent us centric because it's 50 to 60% of the global market.

And the companies that, are the biggest companies you'd be investing

in are also global companies.

Apple sells iPhones everywhere in the world.

And if you're investing in those kinds of companies, you're already getting

lot of exposure to consumers across globe and what's happening with them.

I really wouldn't have a problem with it not my default recommendation.

However, I always go in with the default of being a little bit US-centric, but

again, if it's 55, 60% us and 45, 40%, the rest of the world, I might say 70

70% us and 30% the rest of the world.

And you can get that through very low cost index funds.

us stock market, total ex.

Total international market or total XUS and then bonds and

boom, set it and forget it.

Now you will have exposure in, there will be a a little bit of Russia, a little bit

of China some of these other countries.

So just realize that now from a return perspective, for your portfolio

for retirement or your brokerage or whatever it is, you're going to be fine.

As long as as.

Companies still make products that people want to buy as long as that's true.

And you're investing low cost across the entire globe.

You're going to fine.

I happen to believe that the S market will also be fine if that's the only place

you invest in because they're global.

It's the only country.

I would say that you're a listener in Australia, I would not recommend

putting or more of your assets into just the Australian market.

Every other market in the world a.

lot smaller than the U S and therefore they could bounce around a lot more.

I want to just say to our Australian listeners, this is, I'm not joking.

These podcasts I look at the data, they reach an astonishingly

big international audience.

I just want you to know that Mike Morton has actually lived worked in Australia.

He very very highly of Australia.

He is not dissing.

Australia, Do not throw a boomerang at him because first

of all, he doesn't deserve it.

And second of all, I've heard that those things come

back

This They come back

So I, in all seriousness obviously we all hope and pray that

we don't have kind of world situation.

All the time every year where, have a horrific war playing out somewhere.

And so this is, I hope an unusual set of but when these kinds of things

happen, what are sort of the checklist that people should do to see what

their exposure is to see, , are there things that they should do?

How do they, how do you go about thinking about that?

Yeah, no, that's a perfect question, Matt.

So I would look at your individual investments.

If you have any concentrations, I would really review that if you're

invested in target date funds, which we've talked about, if you're

invested low cost index funds that are massively diversified, I think.

Relatively say, oh, okay, I'm to go set it and forget it.

I think you'll be fine, but anytime you have a concentration and what I mean

is if you have five 10% or more of your overall portfolio in , in one thing,

that one thing could be a single country.

That one thing could be a single company.

Okay.

Or a single second If you have I would just really evaluate it and make sure,

you know what could happen to that sector, to that company or to that

country or industry, and make sure that you're comfortable with however,

that go, because it could go up or down significantly And from out of nowhere.

And that's what this you know showing us.

And you're referring to all kinds of products, stocks, bonds,

and other more exotic types of

Yeah That's exactly right Yeah.

I Even individual, real estate investments, Hey look, 30% of our

portfolios in this one apartment building and it's been doing great for 10 or 20

Well just make sure that you understand something could really go sideways.

With that single individual investment just be prepared for that.

So that's why all of my clients, I'm always looking at that and trying to

diversify as much possible, which means.

You might get, lower kind of returns because we're taking averages more, but

they're going to be more steady over time.

There's always that trade We did a great episode about that, about

understanding risk versus volatility and.

Sometimes the best strategy isn't to go for the absolute maximum rate of return,

remember no free lunch in the war.

And you're going to take a little bit more exposure the ups and

downs of the world and the market.

Alright on that note, I think we have to leave there.

Mike Wharton thanks for walking us through this.

And let's all salute the flag.

Thanks for that.

Appreciate it.

Thanks for joining us on financial planning for entrepreneurs.

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