Let’s start with a reminder this week that will lead me into a bit of blatheration (feel free to skip ahead to the first ****, this might veer into sanctimonious lecturing): Don’t double down with your retirement money.

Taking extra investing risks might be appropriate for some folks who don’t have enough exposure to equities and need to boost their returns a little, I suppose, but nobody should be rolling the dice like the extreme example that was covered by the Wall Street Journal this week, (a guy who sadly gambled his retirement on leveraged ETNs to try to ‘catch up,’ and lost it all).

Here’s the lead-in from that Wall-Street Journal article:

“When William Mark decided to get back into investing after the 2008 financial crisis, he looked past stocks and bonds. Needing to play catch-up with his retirement portfolio, the piping engineer decided to bet on a complicated product he hoped would deliver double-digit annual returns.

“It worked so well—earning him 18% a year in dividends, on average—that he eventually poured $800,000 into the investments, called leveraged exchange-traded notes, or ETNs. When the coronavirus pandemic hit, he lost almost every penny.

“I’m 67 years old and I’m basically bankrupt in just two weeks,” Mr. Mark said.

Individual investors can generally get above average returns over time just by avoiding overreaction and emotional investing (the average investor gets less than the average “market” return, because too many people follow the herd to sell at the bottom and buy at the top), and sometimes we can even beat the market by picking better stocks and being patient over the long term… but we’re not going to beat the market by saying “put it all in that 3X the market ETF, please” or, as in this case, getting attracted primarily to obviously wildly high dividend yields from investments whose risks we don’t really understand.

Institutions and professional managers tend to avoid those day-trading leveraged ETNs and ETFs for good reason (they’re terrible long-term investments, for a variety of reasons), and always have in their mind the cruel math of leverage that the rest of us often forget: Taking a 50% loss means you need a 100% return just to get back to zero… and a 90% loss means you need nearly 900% returns to claw your way back to “even.”

And man oh man, ...