Presented By: The Early Bird from MarketBeat

Hello again, Investors!

I recently read a great newsletter from Scott Galloway (written by guest author Greg Shove) about using AI as a thought partner, and it got me thinking...

Lately, there's been a trend on YouTube about "Brutally Honest Subscriber Portfolio Reviews."

These are fun but probably only for some... so check it out; I have a way for you to have your portfolio reviewed privately!

Imagine a financial expert who could give honest, unbiased advice about your investments without judgment or privacy concerns.

Well, guess what? Artificial Intelligence (AI) might be the solution you've been looking for, and the possibilities are truly endless!

Why AI for Portfolio Reviews?

AI is a powerful tool trained on vast amounts of financial data that can:

• Spot inefficiencies in your portfolio
• Identify potential blind spots you might have missed
• Suggest optimizations based on your age, goals, and risk tolerance

And the best part? It's completely private. You don't need to share your personal info with anyone!

How to Get Your AI Portfolio Review

1. Take screenshots of your portfolio
2. Upload them to an AI chat tool (like ChatGPT or Claude)
3. Ask for a "brutally honest portfolio review"

It's that simple! You'll get insights that could potentially save you from costly mistakes (like holding EPD in a tax-advantaged account – oops, been there, done that!).

What to Ask the AI

To get the most out of your AI review, try asking:

• "What sectors am I overexposed or underexposed to?"
• "Are there any tax-inefficient holdings in my portfolio?"
• "How does my asset allocation align with my age and risk tolerance?"
• "What potential blind spots do you see in my investment strategy?"
• "How can I optimize my portfolio for growth and income?"

Real-Life Example: My AI Portfolio Review

After uploading screenshots of my Schwab and 401K accounts, I recently tried this myself and asked a few of the questions listed above.

And wow – eye-opening! Here's what Claude.AI told me:

Overall Assessment

Your investment approach shows a concerning lack of coherence across accounts, with each seeming to follow its own strategy. This piecemeal approach risks creating unintended concentrations and gaps in your overall allocation.

Account-Specific Issues

Bridge (Taxable) Account

1. Over-reliance on large-cap, dividend-paying stocks: While these can provide stability, you're potentially sacrificing growth at age 46.
2. Sector imbalance: Heavy on consumer staples and healthcare, but underweight in technology and financials.
3. Lack of international exposure: Your all-U.S. portfolio misses global diversification benefits.

SDIRA (Self-Directed IRA)

1. Dangerous REIT overexposure: Your heavy REIT allocation makes you vulnerable to real estate downturns and interest rate hikes.
2. Narrow focus: Concentrating on REITs and energy stocks leaves you exposed to sector-specific risks.
3. Yield trap potential: Some high-yield REITs might sacrifice long-term growth for current income.

Roth IRA

1. Extreme concentration risk: Having only five holdings is dangerously un-diversified. The large HROW position (a small-cap stock) is particularly concerning.
2. Inconsistent strategy: The mix of individual stocks and broad-market ETFs suggests a lack of clear direction.
3. Tax-inefficient use of account: Holding dividend-focused investments in a Roth IRA may not maximize its tax benefits.

401(k)

1. Over-concentration in VVIAX: While it's a solid fund, having your largest allocation here creates single-fund risk.
2. Limited diversification: Your three-fund approach, while simple, may not provide optimal diversification across all market segments and global regions.

Major Concerns

1. Home country bias: Your portfolios are overwhelmingly U.S.-centric, ignoring potential international opportunities and diversification benefits.
2. Dividend obsession: Your focus on dividend growth investing may be causing you to overlook total return opportunities, which could be more beneficial at your age.
3. Lack of growth focus: At 46, you have time to take on more growth-oriented investments, but your portfolio skews conservative.
4. Inefficient tax management: Holding high-dividend stocks in taxable accounts and REITs in tax-advantaged accounts suggests a lack of tax-efficient planning.
5. Potential for overlap: Without a clear overall strategy, you risk unintended duplication across your various accounts.

Recommendations

1. Develop a coherent, overarching investment strategy across all accounts.
2. Increase international exposure significantly.
3. Consider reducing your dividend focus in favor of a total return approach.
4. Rebalance sector allocations, particularly increasing exposure to technology and reducing REITs.
5. Implement a more tax-efficient approach, moving high-dividend stocks to tax-advantaged accounts.
6. Diversify your 401(k) further, possibly by including more specialized funds or increasing international exposure.
7. Reassess your individual stock picks, particularly concentrated positions like HROW.
8. Consider consolidating some accounts for easier management and more coherent strategy implementation.

Remember, while your portfolio shows some strengths, these significant issues need addressing to align with your age, risk tolerance, and long-term financial goals. Don't let emotional attachments to certain stocks or strategies prevent you from making necessary changes.

My Take

How cool (and kinda scary) is that?

I may not agree with everything, but the point of the exercise was to gain a fresh and unbiased perspective.

The entire process took about ten minutes from start to finish, and I have several things to think about...

Your Turn!

Now, it's your chance to get personalized insights. Try an AI portfolio review and let me know what you learned.

Did it spot any inefficiencies? Suggest any changes? Share your thoughts (without revealing specifics, of course) by replying to this email.

And remember, while AI can provide valuable insights, it's not a substitute for professional financial advice. Always consult with a qualified advisor before making major investment decisions.

P.S. Curious about what others learned from their AI reviews? Stay tuned for the next newsletter, where we'll share anonymous insights and lessons learned!

😁THANK YOU to everyone who responded to the last newsletter!!

Check out the portfolios and podcasts, or see what’s cooking on YouTube.

And now, here is this week's portfolio activity...

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Dividends Received ~$337.32

• ExxonMobil (XOM) | $41.80
• Chevron (CVX) | $24.45
• Johnson & Johnson (JNJ) | $140.12
• Prudential Financial (PRU) | $41.60
• Realty Income (O) | $52.60
• Main Street Capital (MAIN) | $36.75

Dividends Received Year to Date~

$5,184.71

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Stocks Sold (AVERAGE)

• 1 Johnson & Johnson (JNJ) 10/4/24 $172.50 Call | $93.00 (Interestingly, less than two days after I sold this, it had dropped into the upper $30s, where I could have repurchased and closed it for a gain of almost 60%. But I didn't!)

Stocks Bought (AVERAGE)

• 1 Nexstar Media (NXST) | $157.50
• 4 Nike (NKE) | $78.95
• 2 Schwab US Dividend Equity ETF (SCHD) | $81.25
• 10 Vanguard Total Stock Market ETF (VTI) | $276.44
• 10 MLP & Energy Inf. Fund (MLPX) | $53.20

Notable Ex-Dividends This Week + SSD Score

• 9/16 MERCK (MRK), 2.66% | 90VS
• 9/16 ALTRIA (MO), 7.70% | 55BS
• 9/16 Meta Platforms (META), 0.38% | 70S
• 9/18 VICI Properties (VICI), 5.09% | 50BS
• 9/19 Best Buy (BBY), 3.82% | 60BS
• 9/19 Broadcom (AVGO), 1.26% | 67S
• 9/20 Dick's Sporting Goods (DKS), 2.03% | 80S
• 9/20 Restaurant Brands Intl. (QSR), 3.35% | 45BS

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🎙️Podcast of the week🎙️

If you're looking for a short and sweet podcast, check out Morgan Housel, an author we all love.
​
His latest podcast covered short, unrelated, but useful short stories and thoughts...and it's only 14 minutes long!

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🎦If you missed it, 4 STRONG BUY Dividend Stocks w/ Short Squeeze Potential!!

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Investing Newsletters You Might Like

⭐Ryne Williams writes a free weekly dividend newsletter and creates multiple top-notch YouTube videos every week.

🤑Rick Stambaugh from Orange Mountain Financial brings you ‘Grow Retirement Income.' He’s a seasoned pro with over 30 years in trading and a passion for guiding folks to a prosperous retirement.

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Congratulations!

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That said, have a WONDERFUL week, and I'll see you in the next one.