Seeing Nvidia jump over 7% after hours really got the whole US semiconductor sector firing up again.
Writing every single day has become such a habit for me lately that if I skip a day, I feel like I haven't accomplished anything meaningful. Looking at the market today, I noticed that while the semiconductor ETF (SMH) is climbing back up, the healthcare sector (XLV) is slightly pulling back.
If you are an investor in your 40s or older thinking about retirement, you probably know I usually write about strategies to maximize returns. I've spent a lot of time testing how to mix 2x (QLD) and 3x (TQQQ) leveraged ETFs to boost 30-year long-term profits.
But running all these simulations
made me realize something. Even if you build massive wealth through real estate or QQQ, there comes a day when we all have to step away from our jobs. When that time comes, how do we cover living expenses, medical bills, and taxes? I've been thinking really hard about what kind of asset allocation portfolio can generate enough cash flow through dividends to support my family in our senior years.
I used to think paying monthly health insurance premiums was a waste of money—I'd rather buy more ETFs. But after seeing backtests covering 50 years of historical data, my perspective has totally shifted. Birth, marriage, illness, and eventually passing away are just normal seasons of human life. I finally accepted that once you cross 80, health issues pile up, and having health insurance to cover those monthly hospital bills is absolutely essential. Also, if you end up unconscious in an ICU at 75, you need someone to handle the messy, difficult caregiving tasks. That realization pushed me to finally sign up for nursing care insurance too. Since the minimum payment period is 20 years, I really should have done this when I was younger, but I ended up getting both policies only after crossing the midpoint of middle age.
Back in my 30s, I naively thought my investments would make me rich enough to retire comfortably by my 40s. But after working for over 20 years, paying for family living expenses, parents' medical bills, and endless weddings, I realized the actual cash going into my investments every year isn't even 10% of my salary. And once the kids hit high school, it feels like I'll be running a deficit. It's not just me—most of my coworkers are in the same boat. We joke that at least we're all broke together, which makes the corporate grind a bit less lonely.
Lately, I'm reminded almost daily that my primary career doesn't have much time left. The tasks I get assigned now are way simpler than before, and colleagues my age are essentially treated like old dinosaurs by the company. Times like these make me struggle to find my center in life.
Studying asset allocation, I know that beaten-down ETFs like INDA will likely rebound once global conflicts end and cheap oil flows in. But every day, we are bombarded by SNS and YouTube screaming about Nvidia's surge and SK Hynix bottoming out. That creeping FOMO gets into my head, and before I know it, I'm throwing Micron and Samsung into my retirement portfolio.
If I were strictly practicing asset allocation, I should be looking at the sectors that have dropped the most. Right now, commercial REITS and defense sector ETFs have dropped over 17%, entering very cheap territory. Country-wise, the CSI Overseas China Internet index and Hong Kong Hang Seng TECH ETFs are down over 22%.
Meanwhile, the sectors finding a bottom and bouncing back are semiconductors (SMH), energy (XLE), and utilities (XLU). XLE and XLU have super low expense ratios of 0.09%. XLE saw massive inflows due to oil spikes from geopolitical tensions. XLU is steadily climbing because AI data centers fall under utilities, and power demand is exploding.
Will dollar-cost averaging into XLU and XLE now improve my retirement portfolio's return? I have absolutely no idea. Beyond trusting almost religiously in the steady growth of the US and global economies and pinching pennies to buy fractional shares, I don't really see a better alternative.
Please take your time reading the posts below to calmly build a portfolio with a low Maximum Drawdown (MDD).
Test your own portfolio's CAGR and MDD with this handy calculator.
Discover how Hive's ecosystem and Clarity Act can boost your crypto yields over 15%.
Here is a quick fix and review of STRL with solid return metrics.
Learn the asset allocation know-how to protect retirement funds against global shocks, maintaining a low MDD under 15% and stable CAGR.
Find out how to easily buy Korean stock ETFs via IBKR to diversify your portfolio.
This guide explains how to limit your retirement portfolio's Max Drawdown (MDD) to 15% while keeping steady growth.
Check out these backtest results showing exactly how to rebalance during a market crash to recover your CAGR.
