The Full Motley -- 3Q, 2016

It has been an active quarter since my last reallocation with the domestic stock markets setting all-time highs amid global jitters, which in the past couple weeks have subsided and seemingly reversed. In my last quarterly update, I compared a portfolio to a collective unit of investments working toward the same goal as opposed to the way people often view them, which is as a group of investments trying to outperform the rest of the group.

To my surprise, this reallocation shifted about 1.5% of my balance (most of the time, it is under 1% and typically way less), pulling from Vanguard Total Bond Market Index, Vanguard Explorer Fund and Vanguard PRIMECAP Fund, as listed from the most highest amount remove to the least (although, all three were almost the same amount). Those assets mostly were directed into Vanguard International Stock Index Fund, and the remainder split between Vanguard High-Yield Corporate Fund and Vanguard Total Stock Market Index Fund.

The fact that bonds performed so well in the past quarter caught me by surprise. I had known that small-caps were on a rise because I own a triple-leveraged small cap ETF in an unrelated brokerage account, which has had phenomenal performance in the past couple months. I was further surprised to see my actively managed large-cap fund outperform my total market index fund. While the index fund had gained assets, it lost pace to the higher performers.

The best part of this reallocation was that I moved a large portion into my international index fund on August 10, 2016, which is the date I have set for my reallocations, and in the following days, that sector has performed relatively strong against domestic stocks. It was not market timing in the sense that the shift was anticipated, but I unwittingly found the best moment to reallocate based on the disciple of rebalancing quarterly.

Are The Poor Greedy?

Last week, I proposed an unexpectedly intriguing question. "Are the poor greedy?" It reminded me of an episode of The Simpsons where Kent Brockman introduced his segment with Marge Simpson by posing a similarly contrarian question and adding, "Most people would say 'No, of course not! What kind of stupid question is that?' But one woman says 'yes'."

As I researched the thought online, I found what was most intriguing was not the conclusion itself, but rather the schools of thought attributing greed to the poor to reach that conclusion. Equally interesting were schools of thought engaging but ultimately rejecting the notion without outright dismissing it.

Defining greed as "wanting more than enough," then the poor may often qualify. For the poor who are in debt, they bought items before earning money to spend likely in a distorted sense of entitlement or simply for instant gratification. While volunteering at a shelter that provided food to the homeless, I saw a few occasions where people tried to take more than they were allotted either by rigging the system or by sneaking more items (for the record, the overwhelming majority of recipients detested those few; in large part because they threatened the entire distribution system).

In his podcast characterizing the poor as greedy, Robert Kiyosaki started the conversation by clarifying that what we often call "greedy" should actually be called "corrupt" (an abuse of power to benefit excessive) and what greed truly is boils down to expecting to benefit before acting or earning.

Other examples can include keeping up with the Joneses, living in excess, taking shortcuts, avoiding generosity, and gambling.

All in all, the answer is a matter of some conjecture and attained through a confirmation bias. If you want to believe that the poor are greedy, then there are plenty of reasons behind it. Conversely, if you believe that the poor cannot be greedy by definition or on principle, there are reasons to support it.

There was a slow paradigm shift that occurred in the American workforce, as well as the American Dream itself. It used to be that an American man could get hired by a company, work a full shift each day, support a family, and own a home and two vehicles. Through a variety of reasons (for those who want to look beyond the simplistic portrayal of it being solely corporate corruption), the American Dream was no longer enough for a large portion of the younger population. It was as if Americans started rejecting the simple American Dream as complacent and average, and the result of wanting more predictably ended in getting less.

In a March 2008 blog, John Mayer wrote, "What I want to do is to shed a little light on why we're all in the same boat, no matter the shape of the life we lead: because every one of us were told since birth that we were special ... We were promised we could be anything that we wanted to be, if only we believed it and then, faster than we saw coming, we were set loose into the world to shake hands with the millions of other people who were told the exact same thing."

Granted, that shift was not perpetrated through that mindset, and the other side of its disappearance involved corporations demanding the same work for less money (or more work for the same pay) through a variety of methods. I would be remiss to overlook it. However, many others are overlooking their own participation in where they are now and inflating the impact of influence corporate decisions by the corrupted greedy have on their lives. While those negative forces could be a setback, the individual decisions of inaction through a chosen belief in futility is what empowers them.