Walk through any backyard at the shore this summer and you’ll hear the all too familiar refrain: “Just buy the index. Nobody can beat the market.” For young investors with decades ahead, a low-cost S&P 500 ETF can be a solid foundation. But for many families in their 40s, 50s, and early 60s, that advice often falls short.
As the saying goes, “if you torture the data enough, it will tell you whatever you want to hear.” Some studies claim that most managers underperform the S&P 500 over time, but they conveniently ignore the ones who succeed. More importantly, they ignore whether the portfolio actually matches your timeline, objectives, or how you’ll react when markets drop sharply right as you near retirement. “Sequence-of-returns risk” is very real: a major drawdown in your early withdrawal years can permanently damage your nest egg, even if the market eventually recovers. This risk also applies to those still many years from retirement in the form of missed opportunity. At its core, the purpose of investing is to capture the full benefit of compounding. Since active management can meaningfully improve that outcome with better risk control, it deserves serious consideration. Too many basic advisors plug clients into a handful of funds and walk away, treating every situation the same. That passive approach can quietly become one of the riskiest strategies for pre-retirees.
With more than 25 years of experience, I’ve seen firsthand how an actively managed approach better addresses these challenges. While many advisors spend their time out of the office building relationships, I typically stay at the desk doing the real work: systematic and proactive position management. I build and adjust each client’s holdings to fit their specific life stage. That often means adding to early, high-conviction winners on weakness, trimming those winners only as they mature, cutting losses early, and shifting exposure when market conditions change. These deliberate decisions prioritize long-term compounding rather than letting the market dictate outcomes.
Individual stock selection is a key part of that edge for clients who want greater results. I focus on established companies with strong competitive positions and consistent performance. Owning a managed basket of these names alongside targeted non-index ETFs reduces the extreme concentration risk now embedded in many indexes, where a few mega-cap stocks dominate returns. This gives me more influence over what my clients actually own, more controlled tax outcomes when needed, and the ability to respond to opportunities or risks that a pure index strategy ignores.
None of this means that index funds are bad—they still play a role in some of my portfolios. But if you’re 40 to 60 and serious about protecting and growing your investment returns, it’s time to move beyond “set it and forget it.” Take control with a plan that’s actively managed around your goals, your taxes, and your timeline.
This is especially true for retirement accounts, such as old 401(k) rollovers and IRAs. Most people assume these accounts are “fine” because there are no immediate tax consequences, but that’s exactly why active management can be even more powerful inside them. Without tax friction, we can compound more effectively through better position sizing, stock selection, and decision making.
If you’ve looked at your statement recently and wondered whether your current portfolio is actually right for your stage of life, give me a call. We can sit down for a coffee and review where you stand.
732-206-6015 | ryan@jspmllc.com | jspmllc.com
Ryan Morse is the owner of Jersey Shore Portfolio Management and a Point Pleasant resident for more than a decade.
This article is for informational and educational purposes only and does not constitute personalized investment, tax, or legal advice. Past performance is not a guarantee of future results. Consult a qualified professional before making investment decisions. Visit the firm’s website for more information and disclosures specific to this business.
