Nick Sciple: It was a large TV event, really felt that way, stars in the gang from MaCaulay Culkin to Vanessa Hudgens to Travis Scott, not to say the largest wrestling stars on this planet, John Cena, The Rock, Roman Reigns, Solo Sikoa. It really felt like a giant WrestleMania event, and that is, I believe the way in which the WWE treated it. You might have this primary launch on Netflix, one among the largest cable TV shows of all time, now moving to streaming, really a monumental moment when you consider how people eat media. But in addition take into consideration plenty of recent first time viewers within the US tuning into Monday Night Raw, since it’s on Netflix, since it’s at the highest of the banner, but more importantly, world wide. Netflix is the leading streaming provider in countries like India and the Middle East and Latin America. These are countries that have already got an interest in wrestling, but have not had access to the content previously because this has mostly been on US cable TV channels. I believe a very monumental moment for Netflix too. Again, continuing to maneuver onto these live TV events after the Christmas Day event and the Paul Tyson fight. That is going to occur every week now. In a way, that is just one other episode of Monday Night Raw, but I believe it represents a transition of how we eat media and really how Netflix is trying to herald customers.

Ricky Mulvey: It was one other episode, but they brought within the superstars. You are seeing John Cena, you were seeing Dwayne, The Rock, Johnson, each of whom didn’t wrestle. Nick, I do not watch a variety of skilled wrestling, I used to be reminded of how much of wrestling is standing and reacting to what other people have done as a crowd reacts. But this can also be a program that was dominant but saw some declines. Raw on the USA network saw about two-ish million average viewers in late 2019. That was right down to about one and a half million viewers in late 2024. This can be a platform change, and this can be a sporting entertainment product with a really devoted following. But do you’re thinking that this platform change goes to restart that long-term viewership growth for the WWE?

Nick Sciple: I might say yes and no. In some ways, yes, you get out from under the declines in cable subscribership that we have seen, eat away at viewership for the past variety of years. In other ways, no, part of what is seen all programs decline in an overall viewership is there’s more options. Within the Netflix era, you possibly can click on any potential program anywhere. I believe audiences normally are more fractured. I do think WWE goes to see an enormous jump in viewership by moving to Netflix, each due to what I said earlier, the brand new drive by viewers, that since it’s at the highest of Netflix, we will program but in addition folks world wide. Netflix, again, they’ve rights to Monday Night Raw within the US and world wide, but additionally they have rights to WWE’s other programming, NXT, SmackDown, and the premium live events world wide. That is going to be at the highest of the queue for folk globally that historically just have not had access, each WWE fans and non-WWE fans. Just getting access to those demographics, I believe, goes to be great for WWE. I believe on the opposite side, Netflix gets access to the WWE audience. They’ve over 100 million subscribers on YouTube. I believe plenty of those subscribers are outside the US, so the power to bring access to those viewers potentially goes to drive growth in Netflix subscriptions, particularly internationally.

Ricky Mulvey: I believe you are also going to have a younger viewer demographic that’s flipping through to see what’s on, and once they want to try this, they go to Netflix. Not a lot cable. Every Monday, there’s going to be an option of Monday Night Raw. There was a recent viewer of the WWE last night, and that was my fiance because I needed to put it on, and to order to prep for this, I made it through a bit of over two hours of it. I could not do all three, I didn’t get to the CM Punk versus Seth Freakin Rollins match, Nick. But I made it through most of it. My fiance she was pretending not to look at it. But then she began asking some questions, and I believed, how wonderful I’m talking to an authority on this company tomorrow let’s put it aside for him. These were her questions on the WWE, specifically in regards to the first match, which was tribal combat, Solo Sikoa versus Roman rains.

I’ll throw you the questions because I didn’t wish to answer then, so I’ll allow you to answer them. Listed below are the questions. Why are they out of the ring? Why is he throwing him on the announced table? I do not think I like this more of a comment. What’s tribal combat? Why is there a industrial break in the midst of the match, and why are random people coming into the ring? Nick Sciple, your thoughts?

Nick Sciple: I saw these questions ahead of time, tried to think about ways that did not sound ridiculous. Couldn’t do it. Completely satisfied Sam’s tuning in, plenty of viewers like her. But here’s how I answer it. This can be a story made for TV. That is why you are going to see a industrial break in the midst of the match. In the identical way you may see a industrial break after your favorite FX show goes to a cliffhanger. It has been running for over 1,500 episodes in an unbroken story about good guys and bad guys, sometimes with recent supernatural power. All is sensible within the context of the story. All of us must settle our conflict by fighting within the ring. That is what’s happening here with Roman Reigns and Solo Sikoa battling out for the [inaudible] and who could be the actual tribal chief of the bloodline.

But I believe really it’s great that recent viewers are tuning in to WWE through Netflix. There’s going to be a certain subset of oldsters that just change into those dedicated WWE fans. It isn’t for everyone and in case you’re an outsider, it could actually sound really ridiculous in the identical way that superheroes or reality shows do, but it surely has a dedicated audience that is all the time been around. This can also be a product that actually travels globally in the identical way those other ridiculous media programs and pieces of content do. That is WWE for you, that is my answer to Sam.

Ricky Mulvey: It was a singular viewing experience. I do not know if it was an energetic selection on Sam’s part to tune into this system. You mentioned the ads. Let’s discuss it because there’s a change within the business and alter that is meaningful for Netflix’s business with the introduction of ads, there at the moment are ads within the ring, which is recent for wrestling fans. Shout out to Snickers in Fortnite for sponsoring the motion. That is recent. Moreover, there have been commercials that we mentioned, and these felt, Nick, to me, old style. We’re talking subway sandwiches, candy commercials, Netflix ads. I used to be watching the Golden Globes a few nights ago, it was just about just pharmaceutical ads. You are seeing these almost older television style commercials going to this recent streaming service. You follow this more closely than me. Any reflections on the ads or how the WWE modified its broadcast since moving to Netflix?

Nick Sciple: Yeah. The character of the ads, I believe that just reflects who Netflix is selling to and the kind of advertiser possibly they are going after. I did notice a change within the ring in the case of the variety of ads within the ring. Previously, we would only seen Logan Paul’s and a Prime drink within the ring. This time we saw 4 different in ring sponsors. You saw Fortnite as you mentioned, the middle ring sponsors Snickers, Cricket Wireless Riyadh Center season, which we’ll come back to later. I believe, in Hulk Hogan’s Real American Beer, which I believe the promo for didn’t go the way in which they hoped and Hulk Hogan got here out. WWE management has talked about they’ve more flexibility in how they run industrial breaks within the US than they’d had on previous platforms. One thing I believe to look at Netflix will not be doing ads for international viewers doing special programming that goes to those folks, I believe, long-term. That is going to vary. I believe there’s going to be an ad in those platforms, not something you saw within the US, but something to keep watch over. Also on the WWE in-ring promoting. That is all 100% margin revenue for WWE, just slapping a logo on the ring, and something that we have seen more emphasis under recent management for the reason that TKO merger. I believe you expect to see quite a bit more of a lot of these deals as things go on with Netflix leveraging that audience.

Ricky Mulvey: Netflix deal for the WWE is 10 years, which could be very long for sports broadcasting rights. When it was reported, no exact numbers, but deadline reported that it was greater than five billion dollars. We have talked about one side of TKO Holdings. The opposite side is the UFC, Ultimate Fighting Championship, which is, Nick, a bit of bit more my speed. I’m happier to discuss that than the WWE. That is going to be up for a recent negotiation because the ESPN deal ends at the tip of this yr, in each of those businesses, for those listening, about half of the business of TKO. The revenue splits about half for WWE and the UFC. UFC is an interesting one for broadcasting rights since it’s enjoyed not only the cash from going to ESPN, but in addition an indication of legitimacy for a recent sport that was really frowned upon for the primary, I might say, few many years of its creation. I see that the UFC probably likes the legitimacy that ESPN offers. But while you’re seeing this take care of Netflix, the joy that is happening there, are you expecting the same move for the UFC to go to Netflix or what are you going to be watching here as these negotiations transpire?

Nick Sciple: A lot of folks appear to think Netflix is an option, plenty of reasons to point to Netflix, as you mentioned, just the drive by viewership, the routine tune in that Netflix has that perhaps you do not see on other platforms. But I believe likely that UFC sticks with ESPN because Dana White has said that he likes that relationship, legitimacy they get from ESPN. But the actual answer is, why not each? Identical to how most of the other big sports leagues, just like the NFL and the NBA have been in a position to split their rights amongst folks like Amazon, ESPN, the NFL just put a game on Netflix. I believe TKO is able to split up those UFC rights to have the option to get the highest dollar. Possibly it keeps the number UFC 305, 306, those sorts of events on ESPN and moves fight nights and that kind of programming to Netflix or Amazon. Possibly we see the minor leagues of UFC. Dana White’s Contender series on Netflix while we remain with ESPN for the remaining of this system. I believe there’s plenty of options. What TKO goes to do is maximize the cash that they’ll get from their potential partners. They’re in an excellent position here where plenty of people wish to do business with them, and all the opposite big sports leagues have done their deals already. That is the last big fish ignored there, they’re in an excellent position to be.

Ricky Mulvey: The opposite player that comes sprinting into the ring, I almost said from the highest rope, but that metaphor doesn’t make sense. Sprinting into the ring from the afters is the Kingdom of Saudi Arabia. Is announced last night the royal rumble goes to Riyadh. Say that five times fast. It’s interesting to me since it’s meaningful for the business of TKO. Saudi Arabia has taken a bigger interest in bringing combat sports and entertainment to its country. They’re bringing big heavyweight fights, they’ve already brought some UFC matches. Now they’re bringing more WWE over there. More sponsorship normally. There was an event at Sphere called Riyadh Season Noche UFC. What does this interest from the Kingdom of Saudi Arabia mean for the WWE and UFC parent company, TKO Holdings?

Nick Sciple: The short answer is money. WWE has had a relationship with the Kingdom of Saudi Arabia going back a lot of years. They were the primary of those big sports firms to perform events there, and it spent tens of hundreds of thousands of dollars every time they perform an event in Saudi Arabia. Also, now, again, as you mentioned, each the UFC and WWE generating sponsorship revenue from Riyadh Season and trying to advertise the game there. There’s been rumors that potentially Dana White goes to get into boxing with the assistance of the Kingdom of Saudi Arabia. But definitely having money focused on investing in your sport and marketing your sport has been great for the business of TKO Group. I believe more broadly than Saudi Arabia’s international interest in WWE has been extremely meaningful for this business. They only set a recent arena record for the gate for this event, the primary raw event on Netflix in Los Angeles. But that broke records set previously in 2024 in Berlin, in Leon, France, in other international markets. I believe the international ability to carry these events, receive rights fees, whether it’s from the Kingdom of Saudi Arabia or the Scottish tourism industry, all that is 100% margin in revenue for TKO, that every one goes to the underside line.

Ricky Mulvey: A bit of bit ago, actually, I picked up some TKO stock. A part of it’s after we had a conversation a few weeks ago about wanting to be an arms dealer on this media environment. Plus, my experience in Denver. There was an everyday UFC fight night between Rose Namajunas and Tracy Cortez. In case you do not know either of those names, the place was completely sold out for just an everyday fight night. It was so impressive to me. Many investors, though, have been burned by putting money into fight promotions, and on a forward earnings multiple. This can be a somewhat expensive stock. You are looking at something within the 50s here. But I do know you consider media, you consider valuation. I believe you are also an owner of TKO. What’s your bull case for the stock without delay?

Nick Sciple: I’m an owner of TKO, it’s one among my largest personal holdings. I believe we laid out a part of the bull case earlier in the case of rights fees. I believe the UFC goes to place up a very big number once they renegotiate their deal expected to be a ten yr deal for UFC later this yr. Also, in case you sit up for 2026 and further out, we have got the US rights for premium live events which might be up for renegotiation. That is for the WWE. Those are currently with Peacock, but that’s something I’d expect Netflix to choose up so as to add to those international premium live events. I believe each those rights fees, the UFC rights and people premium live events within the US, excuse me, are going to be a major step up and generate plenty of revenue, again, 100% margin revenue for TKO. Also, I discussed earlier, more site fees. We mentioned what is going on on with putting the royal rumble in Saudi Arabia. I expect that to be a record fee so as to get that event placed in Saudi Arabia.

I believe you are going to see more international events, higher site fees, and managements also talked about asking for site fees for things like fight nights, Monday Night Raw, SmackDown, that type of thing. Again, plenty of 100% margin revenue as you are in a position to get that. More promoting revenue. Again, at 100% margin. As we said earlier, they’d five ring sponsors this time around with Fortnite and plenty of of those others. Previously, you only had one or zero, and that is again, revenue that wasn’t there before for the corporate. At the identical time, you are still consolidating the UFC and the WWE teams. Initially of 2024, you consolidated the ad team between UFC and WWE that has fewer costs for the business at the identical time, generating significant improvements to operations, sponsorship revenue, through the third quarter of 2024 was up 50% yr over yr. You might have a business that is got several catalysts on the horizon with more site fees, growing audience with Netflix and more cost getting squeezed out of the business as those two firms consolidate. I actually like TKO going forward, I believe it’s in an excellent spot in media.

Ricky Mulvey: Nick, we ran a bit of longer on that story than we normally do, but you recognize what? If I actually have a Motley Idiot analyst telling me about an organization that is one among their largest personal holdings, I’ll hold space for it on the show. Appreciate you being here. Thanks in your time and your insight.

Nick Sciple: Thanks, Ricky. Anytime.

Ricky Mulvey: In case you enjoyed this conversation, and also you’re able to take your investing chops to the subsequent level, head over to idiot.com/signup to hitch Stock Advisor. That is our flagship Investing Service. As a Stock Advisor member, you will get two recent stock picks every month, rankings of an entire scorecard of firms, and access to all episodes of our premium podcast Stock Advisor Roundtable. That show is simply available to premium Motley Idiot members. It focuses on Silly recommendations and takes a deeper dive into the companies we cover, featuring Idiot analysts you already know from listening to Motley Idiot Money. Tom appears frequently on bonus episodes of Stock Advisor Roundtable to debate what’s recent within the Stock Advisor universe and to reply questions sent in from Motley Idiot members. That is idiot.com/signup and I will even include a link within the Show notes.

Up next, Robert Brokamp and Alison Southwick offer up some tactical ways to enhance your investing processes as you kick off the brand new yr.

Alison Southwick: I believe I’ve got the Christmas blues. Let’s go to Bicester Village and shop their extraordinary sale. As much as 70% off the unique retail price in select boutiques, including All Saints, coach, and the North Face until twenty sixth January. Bicester Village. Slightly below an hour from London. It’s shopping, but higher. Terms and conditions apply. Visit bicestervillage.com for more information.

January is the time of yr while you review how your portfolio performed. Evaluate the managers of your portfolio, yourself included, and possibly do some rebalancing. But it could actually even be a time to do some soul-searching about what type of an investor you wish to be.

Robert Brokamp: Yeah, as an investor, you actually have a variety of decisions to make. How much money you will put in various assets and the way you will get exposure to those assets? Are you going to purchase individual securities or simply put money into mutual funds or index funds? Are you comfortable together with your current portfolio or do you have to move to some things around? Finally, are you going to make all these decisions on your personal, or are you going to get some skilled help? The beginning of the Latest yr is the proper time to type of reevaluate all those decisions.

Alison Southwick: Now, those are a variety of big decisions. Where should someone start?

Robert Brokamp: Let’s start with something boring, money. Everyone needs it. It is advisable pay your bills. It is advisable cover expenses that you will have in the subsequent few years. That cash, after all, shouldn’t be within the stock market. It is a yr later. You are a yr closer to your goals, so it is perhaps time so as to add some money to your money cushion. Then there’s the emergency fund of 3-6 months’ price of essential expenses to cover in case you lose your job or you might have an unexpected big-ticket expense. I say this as someone who woke up on Christmas Eve morning to a busted water heater in a flooded basement, so you are going to have that cash put aside. Start by determining how much money you would like after which be certain that you are getting a competitive yield on it. The Federal Reserve cut rates a couple of times last yr, likely going to be one other cut or two this yr, but it surely’s still possible to get 4% or more in your money, a minimum of for now, but you might have to go seek for it. One place to go looking is Motley Idiot Money, a Motley Idiot website that has the identical name as this podcast, was often known as the Ascent and be certain that you do the identical for the money you might have in your brokerage account. The default options are sometimes well below what you would get from a money market fund or perhaps a higher-yielding money option within the brokerage account, but you only got to do a bit of more digging.

Alison Southwick: It starts with selecting how much to have in money and getting an honest yield on that cash. But how do you identify how much you must have in stocks and bonds?

Robert Brokamp: Well, you possibly can provide you with that on your personal or get skilled help with doing it. But even in case you go it alone, it could actually help to see what other professionals are doing, and the best approach to get each help and to see what Wall Street thinks is via goal date funds. These are funds which have an affordable mixture of money, bonds and stocks of every kind. They do all of the rebalancing for you, they usually progressively get more conservative because the retirement date within the name of the fund approaches. I took a have a look at the typical allocations for among the funds offered by BlackRock, Fidelity, T.R. Price and Vanguard, and here’s how they currently break down. So a goal date fund for 2025, in other words, someone who’s retiring this yr, average allocation, 46% stocks, 54% bonds in money.

A 2035 fund, so someone retiring in a decade, 66% stocks, 34% money and bonds, after which a 2045 fund, 85% stocks, 15% bonds in money. I believe those are reasonable starting points for somebody who has possibly a middle-of-the-road, moderate risk tolerance. In case you’re a more aggressive investor who’s more comfortable with risk, you would probably increase the stock allocations by possibly 5-10 percentage points. Also, in case you dig into the funds, you will see how they’re allocated to assets like small caps, possibly several types of bonds, international stocks. What could also be surprising in case you have a look at these is that they have a tendency to have greater than a 3rd of the stock allocation invested in international stocks, which really weighed on the performance of goal date funds since US has outperformed for well over a decade now. But one among these years, international stocks will outperform. We just do not know when.

Now, the downside to focus on date funds is that they are intended for a really broad audience, hundreds of thousands of individuals. In case you’re in search of more personalization, you may want to examine out Robo-advisors. Two of the larger providers of Robo advising is Betterment and Wealthfront though among the big name firms even have a lot of these services like Vanguard and Schwab. They charge a bit more around 0.25% a yr, but are more customized to your risk tolerance. Some also offer advantages like tax loss harvesting and possibly a bit of bit of economic planning. A 3rd option, in case you’re in search of skilled help, after all, is definitely hiring a financial advisor. This might be an excellent bit dearer, but you will have the option to fulfill frequently with an actual human being who also ideally can create a comprehensive financial statement for you. We like fee-only financial advisors. You pay them for his or her advice. There are fewer conflicts of interest by way of commissions and things like that, and yow will discover fee-only advisors on the Garrett Planning Network, G-A-R-R-E-T-T, NAPFA, National Association of Personal Financial Advisors, and the XY Planning Network. All that said, you’ll need more control over your allocations in addition to the way you do the rebalancing in case you do all of it yourself. Again, I believe the broad allocations and goal date funds are an excellent place to begin, which you possibly can then adjust in your risk tolerance. A few other Silly rules of thumb to contemplate are limiting the quantity of your portfolio in a single stock to 10% and limiting the quantity that you might have in a single sector to around 20%-25%. Those aren’t hard and fast rules, but it surely’s a sign that your portfolio is becoming more concentrated.

Alison Southwick: We do not really talk much about bonds here at The Motley Idiot because, well, unless you are Steve Broido, most Fools find them pretty boring. But additionally they haven’t been good investments. In truth, during the last five years, the Vanguard total Bond Market ETF has lost money, so do investors actually need bonds?

Robert Brokamp: Historically, you invested in bonds because they earned anywhere 1-3% above money, but that has not been the case for the last five years or so. In truth, we have been going through just in regards to the worst stretch for bonds in US history, because of a combination of really low rates of interest through the pandemic, after which the rise of rates of interest since then, because when rates rise, bond prices fall. The forward outlook for bonds looks higher today with a 10-year treasury yielding around 4.6%. I believe bonds are price considering, but you will get more predictability from owning individual bonds versus bond funds. If you own a person bond, you recognize exactly how much interest you will get. You may understand how much you will get when the bond matures, assuming the issuer continues to be in business. With bond funds, they move up and down, you do not have quite that certainty, aside from one kind of bond fund that I believe is price considering. They’re called goal maturity bond ETFs or defined maturity ETFs. They only own bonds that mature in the identical yr, so that you get among the advantages of owning individual bonds. Two of the largest issuers of those are Invesco, and a lot of these ETF through Invesco are called bullet shares, after which iShares, and such a bond fund is named an iBond, but it surely’s to not be confused with the iBonds that Uncle Sam issues. All that said about bonds, I won’t blame you in case you just wish to stick mostly with higher-yielding money or treasury bills lately because you are not getting that much extra yield from bonds without delay.

Alison Southwick: Now it is time to talk in regards to the investments near and dear to Fools’ hearts, stocks, or, as we sometimes pronounce it, stocks. There are a couple of ways to speculate within the stock market.

Robert Brokamp: Yes, the Motley Idiot was founded greater than 30 years ago on the assumption that the stock market is the most effective avenue for creating long-term wealth. The excellent news is that you would be able to actually buy your complete stock market via an index fund. Let’s start there. Unless you are an avid stock picker. I’m a giant believer in making index funds the inspiration of your portfolio. Essentially the most common selections are a fund based on the S&P 500 or an index fund just based on the overall US stock market, and people are great starting points. But there are also index funds based on several types of indexes, and you should use them as a approach to get diversified low-cost exposure to a segment of the market that you simply do not have, equivalent to international stocks, small-cap stocks, possibly different sectors, even a diversified collection of dividend payers. The underside line is that index funds are really hard to beat because they do not pay a team of fund advisors, managers to choose and select the investments, so their costs are very low. Over most 10-year periods, index funds beat 80-90% of actively managed funds they compete against, actively managed funds being those ones that do pay a team of managers to choose the investments. You’d think that they might beat an index fund, however the evidence is that the majority don’t. You can just stop there. You can construct a diversified collection of index funds, rebalance every year or so and spend your time on things apart from your portfolio. But in case you’re listening to this podcast, my guess is that you wish to devote more time to it and you wish to pick individual stocks, likely since you’re hoping to beat the market. If you go this route, while you move more of your portfolio into individual stocks, the range of potential outcomes widens. Greater potential reward, but in addition greater risk. For instance, three of the best-performing stocks in 2024 were Nvidia, which returned 171%, Vistra, which returned 260%, and Palantir which returned 341%.

Just over the past decade, Nvidia has returned a median of 75% a yr. You are not going to get those sorts of returns and index ones. Then again, you often won’t see an index fund drop 70-90% in a yr or simply lose every little thing as you’ll with individual stocks. You might also often hear that the US stock market has historically all the time recovered from a downturn, which is true. You may’t say that about individual stocks, and I’ll just provide you with one example. Cisco traded above $80 a share in 2000, then fell to $10 a share by 2002, and today it’s around $60. It’s still 25% below its all time high set almost 25 years ago. Owning individual stocks requires more time, more knowledge, and a focus. But in case your goal is to beat the market, it is the approach to go, and it could actually be very rewarding each financially and intellectually. In case you’re going to go that route, one Silly rule of thumb is to own a minimum of 25 stocks. Frankly, just be honest with yourself about whether it’s working for you. Select an appropriate benchmark. Might be the S&P 500, could possibly be a complete stock market index fund. Might be in case you’re just specializing in value stocks, just select a price stock index fund or simply a price stock index and keep yourself accountable. In case you’re not beating that benchmark after five or so years, despite all of your time and a focus, possibly you would be higher off just investing in an index fund and spending your time doing other things.

Alison Southwick: We have talked about tips on how to allocate someone’s current portfolio, money, bonds, stocks. But how should investors take into consideration account types and where to place recent contributions? We have covered asset allocation. Now let’s talk asset location.

Robert Brokamp: Yeah, and the account you select will depend on your goal, so for retirement, go together with a 401(k) or an IRA, you are going to get tax benefits. You wish to contribute to a 401(k) a minimum of to get the complete employer match, after which go to an IRA in case your 401(k) is not so great, meaning possibly it has high costs or limited investment selections. Possibly you wish to pick individual stocks, and you possibly can’t try this in most 401(k)s. Then again, it’s possible you’ll just follow the 401(k) in case you’re not eligible for a Roth IRA or you are not eligible to deduct your contributions to the standard IRA. Generally speaking, you will pay a penalty on withdrawals from retirement accounts before age 59.5, though there are some exceptions, so in case you need the cash before that age, you are probably higher off investing in an everyday brokerage account, but you will pay taxes every yr. You wish to lean toward tax-efficient investments, possibly stocks that do not pay dividends or index funds are literally pretty efficient, as well. You’ll use your retirement accounts in your tax-inefficient investments like REITs, possibly high-yield bonds. If you might have a Roth account, you’d select the Roth for the investments that you’re thinking that have the best potential, because that is the tax-free account, and that is the one you wish to grow probably the most. Then I’ll just add one other kind of account.

In case you’re saving to pay for an education, select a 529 or a canopy Dell. For each of them, withdrawals are tax-free, so long as the cash is used for qualified education expenses, the largest difference is with the 529, much higher contribution limits, really, there is not any contribution limit. Just about must select from a menu of mutual funds, the duvet Dell. You may only contribute $2,000 a yr, but you should use it to speculate in individual stocks. Then finally, on this topic, as you consider which accounts will receive recent money this yr, use those contributions to rebalance your portfolio. Put money within the assets that you’re thinking that you do not quite have enough in, could possibly be money, could possibly be bonds, could possibly be several types of stocks which might be lagging. Or in case you’re retired, use withdrawals to pair back over-weighted assets. Possibly you have had some stocks which have done very well. It is advisable to sell some shares of those to scale back your risk, but in addition that is how you are going to raise some money to pay your bills.

Alison Southwick: All right Bro, how I often end our little chats is by asking you to place a pleasant, big, pretty bow on it, similar to you almost certainly put a giant bow on that busted hot water heater. [laughs]

Robert Brokamp: I wish. Oh, my goodness gracious, what an expensive endeavor that has been. In any case, crucial thing really to have in mind is that with all these items I’ve talked about, they really aren’t mutually exclusive. You may do a bit of little bit of every little thing. Frankly, that is what I do. Most of my portfolio is in index funds, but I do have some actively managed funds that I attempt to stay on top of. About 30% of my portfolio is in individual stocks. I even have some goal date funds in my wife’s retirement account because I would like that to be a set-it-and-forget-it kind of fund or kind of account. You do not have to only select one or the opposite. Over the past month, I’ve heard of Motley Idiot members who were telling me that they decided they wish to move more from individual stocks to index funds, partially because they need more diversification. I’ve heard from others we’re going the opposite direction. One is because he retired and he has more time to spend on his portfolio. I believe the underside line is try a couple of avenues that appear compelling to you, then let your interest, your available time, and most significantly, the outcomes dictate how your investment strategy will evolve.

Alison Southwick: Completely satisfied investing.

Ricky Mulvey: As all the time, people on this system could have interests within the stocks they discuss, and the Motley Idiot could have formal recommendations for or against, so do not buy or sell stocks based solely on what you hear. All personal finance content follows Motley Idiot Editorial standards and will not be approved by advertisers. The Motley Idiot only picks products that it might personally recommend to friends such as you. I’m Ricky Mulvey, thanks for listening. We might be back tomorrow.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of directors. Alison Southwick has positions in Amazon. Nick Sciple has positions in TKO Group Holdings. Ricky Mulvey has positions in Netflix and TKO Group Holdings. Robert Brokamp has positions in Cisco Systems and Vanguard Total Bond Market ETF. The Motley Idiot has positions in and recommends Amazon, Cisco Systems, Netflix, Nvidia, Palantir Technologies, and Vanguard Total Bond Market ETF. The Motley Idiot recommends Comcast, T. Rowe Price Group, and TKO Group Holdings. The Motley Idiot has a disclosure policy.

An Investor’s Tackle the WWE-Netflix Partnership was originally published by The Motley Idiot