What is the very best burger in Austin?
Your choices are Wendy’s, McDonald’s, and Burger King. If your best friend was coming to town for the first time, which one would you eagerly take him to?
What if we expanded this list to include Whataburger, Sonic, and Dairy Queen?
You might be struggling to answer because my list of choices is woefully incomplete. It’s made up of only national corporations with massive advertising budgets. They became household names for a reason – people like the food, it’s cheap, and you know exactly what you are going to get. But, if you are a burger fan in Austin, you know there is soooo much more out there if you look beyond the big national chains.
I think investing is like that these days. The massive financial institutions and the media outlets they fund with advertising dollars have created a false sense of what investing is – a woefully incomplete list of choices.
It’s as if investing is synonymous with mutual funds; as if retirement planning means choosing between Vanguard and Fidelity, active or passive, stocks or bonds. The 60/40 all mutual fund portfolio standardized in every 401(k) is like a combo meal passed through the drive-through window by someone who is not an expert. Don’t customize your order because it will slow down the line and it probably won’t come out right. Stick to the menu; it’s good enough for everyone else, it should be good enough for you.
Don’t misunderstand me, just like the fast food chains, I think the big brands in investing provide a good service, but there comes a time to recognize that there are more choices out there. When I was at A&M, I lived 200 yards from the McDonald’s on University Drive and ate at least five cheeseburgers a week. Given my budget and lifestyle at the time, it worked – but my tastes and circumstances have changed.
If you are just starting out or you only invest in a company-provided retirement plan, then you can successfully invest with the standard offerings. But if you have built a sizable portfolio with some complexity, then you need to expand your list. There is a reason the best investment talent at university endowments, pension funds, and family offices expand beyond stocks and bonds to grow and protect their money.
They know that alternatives (something other than stocks or bonds) can lead to higher returns and less risk. We are evaluating opportunities all the time, and we think the importance of alternatives has never been more important, given the current valuations and yields.
So, what’s my favorite burger place in Austin? I tend to take friends visiting Austin to Hopdoddy or Mighty Fine, but my current favorite is the Bacon, Egg and Cheese Burger at Nik’s Kitchen and Bar.