Most of us are unintentional, sideline investors who don't necessarily understand their assets they invest in. It's not something we learned in school and wasn't required for our jobs.
We enrolled in 401(k)s, 403(b)s, 457(b)s or whatever retirement plan was available as we knew we had to save for any type of retirement when pensions became obsolete.
We know the asset classes but not necessarily how they translate to modern day funds that we find in our retirement plans or our IRAs, Roth IRAs and Indexed funds that diversify our holdings hedging against our aversion to riskier endeavors (stock trading, crypto).
We also know that we need to hedge against inevitable inflation, now more than ever, and that only holding cash isn't going to bring us back to the 1980's when we enjoyed high interest-bearing savings and prolific hair bands.
Source: The Money Guy Show
There are things we should know about investing and technology that no one talks or writes about. It is assumed that you either know these things or you can figure it out for yourself.
I'm going to write more about what is missing to understand modern day investing, and it will require old school reading. I'm not going to charge you $4,000 because this is a knowledge domain that more people need access to. The intent is to make you an informed, literate investor.
Tony Isola keenly puts this, "Deep reading compounds, scrolling distracts and sensationalizes. Literate investors not only own assets, but they also understand them."
To illustrate this, I've always been curious how IPERS (Iowa Public Employees' Retirement System) was invested since this supplements Social Security for many (including parents).
These are the asset allocation targets. I had to match up the asset type to the definitions because even I didn't know what all of these were.
21% Domestic Equity: stocks of US based companies
13% International Equity: stocks of companies outside the US
5% Global Smart Beta Equity: stocks of world companies with objective of capturing factor exposures using a systematic, rules-based approach
25.5% Core Fixed Income: bonds issued by governments and companies throughout the world
3% Public Credit: high-yield bonds issued by North American companies, and bonds issued by governments and companies located in emerging, less-developed countries.
1% Cash: highly liquid, stable-value securities, such as money market instruments or funds
17% Private Equity: stock and debt of privately held companies. These investments are held in limited partnerships designed to limit IPERS’ potential losses.
5.5% Private Credit: partnerships that make loans to private middle-market companies and partnerships that make loans to finance commercial real estate.
9% Private Real Assets: commercial real estate located in the US, and partnerships that invest in timberland and farmland in North America.
The actual asset allocation for 2025 can be found on page 19 of this 101-page Investment Summary slide deck.
Several investment assets surprised me including the percentages of Private Equity and Private Credit since these are relatively new offerings. There is a copious amount of information in the 2025 Investment Summary that few people will read and understand (parents included). For them, the funds were invested without their selection and knowledge and all they know is the monthly amount deposited into their accounts.
Much like how Social Security funds are invested in entirely U.S. Treasury securities which is in addition to the annual tax income deducted from your paycheck. Social Security ran a surplus every year until 2021 when total costs exceeded its total income.
The decision is no longer whether or not to invest or stay invested, the decision now is what do I invest in.
Literacy Is Your Investing Hedge - A Teachable Moment
Understanding the Social Security Trust Funds | Center on Budget and Policy Priorities