Knowledgeable Strategies for Wealth & Market Planning
Most investing mistakes don’t happen because someone is careless or uninformed. They happen because the behavior made complete sense at the time — and nobody was there to pump the brakes.
Dave Simon and his longtime partner Tom Cordes, CFA®, have been working together for more than 26 years. Between them, they’ve guided clients through the dot-com bubble, the 2008 financial crisis, COVID volatility, and whatever it is the market is doing right now. In that time, they’ve seen the same five mistakes show up repeatedly — across market cycles, across income levels, and across generations of investors.
Here they are.
Mistake #1: Letting Fear and Greed Make Your Decisions
This one is obvious when you name it. It’s almost invisible when you’re living it.
Both fear and greed pull investors toward the same outcome: acting at exactly the wrong moment. Greed drives people into crowded trades near the top. Fear drives them out of sound positions near the bottom. Neither response is irrational in the moment — the pain is real, the headlines are loud, and the instinct to do something feels overwhelming.
The job of a good financial advisor, as Tom frames it, is to manage the amplitude of that ride — keeping the highs from getting too euphoric and the lows from becoming panic. Not because volatility can be eliminated, but because an investor who stays in the plan through a down cycle is in a fundamentally different position than one who bails and has to decide when to get back in.
The market is up roughly 52 to 55% of trading days. That number surprises most people. It also means the market is down — or flat — nearly half the time. Checking your portfolio against that backdrop every day is a reliable way to make a bad decision.
Mistake #2: Ignoring Tax Implications — or Overthinking Them
Taxes are where two opposite mistakes coexist comfortably.
The first is ignoring tax implications when making investment decisions — buying and selling without accounting for short-term versus long-term capital gains rates, or failing to think about how a distribution will stack onto other income in a given year.
The second is the mirror image: refusing to sell a highly appreciated position because of the tax bill, even when holding it no longer makes sense. The tax tail wagging the investment dog is its own form of costly mistake.
What Tom adds — and this is worth slowing down for — is the distinction between asset allocation and asset location. Most investors think about what they own. Fewer think carefully about where they own it.
A certificate of deposit generating 4% held in a taxable brokerage account produces ordinary income every year. The same CD in an IRA keeps that full 4% compounding without an annual tax drag. The investment is identical. The after-tax outcome is not.
The same logic applies to Roth conversions. The goal isn’t simply to minimize taxes in the current year — it’s to optimize the lifetime tax burden. Paying 15 or 20% in tax now to avoid 24% or higher later is a legitimate strategy that deserves more attention than it typically gets, particularly for investors in their peak earning years approaching retirement.
Mistake #3: Watching Your Portfolio Too Closely
This one didn’t exist in 1999 the way it does today. You couldn’t pull up your brokerage account on a phone that lived in your pocket. Now you can check it between meetings, at dinner, and at 2 a.m. if the mood strikes.
The problem isn’t the information. It’s the cumulative behavioral effect of consuming it daily.
Tom references Roger Federer’s commencement address at Dartmouth, where Federer pointed out that even at the peak of his career, he won only about 54% of points played — and yet he was the best tennis player in the world. The lesson: short-term outcomes are noisy. What matters is being in enough points, staying in the game long enough for the long-term edge to compound.
Warren Buffett put it differently: in the short run, the market is a voting machine. In the long run, it’s a weighing machine.
Watching daily price movement and trying to explain it is a largely futile exercise. Financial media has to fill airtime, which means every session gets a narrative — and that narrative is frequently wrong the next day when the same inputs produce the opposite result. If you’re checking performance purely out of curiosity and it doesn’t change your behavior, fine. If it’s feeding anxiety and prompting decisions, that’s where the damage gets done.
Mistake #4: Benchmarking Your Portfolio Against the Wrong Index
When the Dow has a strong day, it’s tempting to open your account, see a smaller gain, and conclude something is broken. It usually isn’t.
If your portfolio holds 60% equities and 40% in bonds, cash, or alternatives, comparing your return to a 100% equity index is comparing apples to a completely different fruit. You are not running the same portfolio. You are not taking the same risk. Of course the numbers look different.
The relevant benchmark — if benchmarking is even useful — is something that reflects your actual allocation. And as both Dave and Tom note, even a balanced index comparison has limits, because your allocation is calibrated to your specific goals, timeline, and tax situation. There is no off-the-shelf index that captures that.
Measuring performance against the S&P 500 when your portfolio is built for something other than maximum equity exposure is a reliable source of unnecessary anxiety and poor decisions.
Mistake #5: Overvaluing Liquidity
This is the one most investors haven’t thought about — and it may be the most expensive mistake on the list for high-net-worth investors.
Tom’s argument is direct: investors systematically overestimate how much liquidity they actually need. Public equities — stocks traded on open exchanges — represent only about 15% of the total universe of investable companies. The remaining 85% are private. And private equity has historically outperformed public equity by roughly 2 to 4% per year over long cycles.
For a $5 million portfolio, the question worth asking is: what portion of this do I genuinely need access to tomorrow? In practice, for most investors at that level, the answer is a fraction of the total. Locking up a meaningful portion of capital in a private equity structure with a 5, 8, or 10-year horizon — for the portion of the portfolio that genuinely won’t be needed in that window — has historically produced meaningfully better outcomes.
There’s a psychological hurdle the first time you do it. Both Dave and Tom have experienced it with their own money. The payoff, in Tom’s framing, is that private valuations don’t reprice with the same volatility as public markets. In 2008, when public equities fell 40 to 50%, the intrinsic value of most private companies didn’t actually change by that magnitude. The public market was repricing fear. Private valuations were closer to the underlying reality.
One caveat worth noting from the conversation: the current push to include private equity and private credit structures inside 401(k) plans is something both partners are skeptical of. The lockup feature that makes these products effective for sophisticated investors is precisely what gets diluted when the products are redesigned for mass-market retirement vehicles. Worth watching.
A State of the Union on the Current Market
The episode closes with something worth paying attention to: a data-grounded comparison between today’s AI-driven market and the late 1990s internet bubble.
Tom’s research shows that over the past four years, earnings growth for today’s dominant large-cap technology companies is up approximately 75%, while the stocks themselves are up around 95%. In the late 1990s, earnings growth was similar — roughly 80% — but those stocks rose over 400%. The valuation disconnect then was extreme in a way that today’s market, so far, is not.
That said, current S&P 500 forward earnings multiples in the mid-to-high 20s are not cheap. The question both partners are watching is whether a meaningful pullback arrives to relieve some of that pressure, or whether late-cycle momentum and speculative inflows start to push valuations toward territory that looked like 1999.
The honest answer is that nobody knows whether this is 1995, 1997, or 1999. What they do know is what the warning signs look like — and they’re watching for them.
The Bottom Line
Fifty-plus years of combined experience tends to produce a few convictions. Among them: the investors who build real wealth over time are not the ones who find the best stock or call the top of the market. They’re the ones who manage their emotions, think carefully about taxes, resist the urge to stare at the ticker, benchmark themselves honestly, and stay open to opportunities their instinct toward liquidity might otherwise cause them to miss.
Those are learnable behaviors. They’re also a lot easier with a partner who has seen this movie before.
If any of these five mistakes sound familiar — or if you’re not sure whether your current portfolio strategy is working for you or just sitting there — give us a call at 636-214-1005 or visit our contact page. No pressure, no pitch. Just a conversation about where things stand.
