Photo Credit: Jewish Press

A central theme of Purim is v’nahafoch hu, meaning that things appear to be backwards or topsy turvy. The origin of the concept is from a phrase in Megillat Esther: “… the very day on which the enemies of the Jews had expected to get them in their power, the opposite happened [v’nahafoch hu]” (Esther 9:1). Over the holiday, this idea of things seemingly being backwards is expressed in a lighthearted way through dressing up, being silly, and eating lots of candy.

In the world of personal finance, there are also products and advice that are backwards or opposite of what is sensible. This sort of investment advice is often received in a casual setting from friends, possibly over a bowl of cholent at a kiddush. Implementing these ideas results in a portfolio with a hodgepodge of imprudent investment strategies, which I’ve coined “The Kiddush Club Portfolio” (KCP). Unfortunately, the consequences of investing in such a manner are no joking matter.


The KCP is often the result of social pressure from one’s community and circle of friends. It’s quite common for people to exhibit conformity bias, where they behave according to, and make decisions based on, what others around them deem acceptable. However, since every person’s goals and financial situation are different, adapting your investment approach to be similar to that of your friends and family can be detrimental to achieving your personal financial goals. Furthermore, what people typically share with their friends are the investments that seem exciting, which generally translates to risky, that may make sense for a small group of institutional investors but are not actually appropriate for the masses.

Below are some examples of what is found in the KCP and why most investors should avoid them.

Day Trading: Day trading is gambling. When gambling at a casino, the deck is stacked against you. It is possible to win. However, the house holds an edge over the players, so the longer you play, the greater the odds that you will walk away a loser. Similarly, it’s possible to get lucky day trading by buying a stock right before it skyrockets in price and then selling just before it falls. However, any long-term strategy that is trying to time when to go in and out of stocks will not succeed since short-term market moves are impossible to predict.

On the other hand, the broad stock market indexes tend to move up in value over the long-term. Historically speaking, the longer your time horizon, the better your odds of experiencing positive results as long as you’re able to implement a prudent strategy and stay out of your own way. Day trading and gambling at the casino are forms of entertainment. Successful investing is not supposed to be entertaining.

Using Options: An option is a contract that gives the investor the right to buy or sell a financial product at an agreed upon price for a specific period of time. Options are available on numerous financial products, including stocks and ETFs. They’re complicated and unnecessary to achieve your financial goals. Furthermore, few people can execute an option strategy successfully. You are not one of those people.

Cryptocurrency: Cryptocurrency is not a business, has no cash flow, is not transparent, is illiquid, and its price is driven by pure speculation. Is it real or just an apparition? I’m not sure how to classify it, but I can say that it is the definition of unbridled speculation and not a place to invest your family’s nest egg.

Private Equity (PE): PE funds typically invest in companies that are not publicly traded. Some common examples are venture capital and leveraged buyout funds. Most PE firms are exclusively open to high-net-worth investors. While there is the potential for high returns, investors need to be comfortable parting with their money for an extended period of time, sometimes between five and 10 years, while the strategy is implemented. In addition to the lack of liquidity and layers of fees, there is also the possibility that the investments won’t work out or will substantially lag the public markets.

Hedge Funds: Hedge funds are actively managed pools of capital whose managers use a wide range of aggressive strategies to try to deliver outsized returns. This may include using borrowed money to make investments and trading more esoteric assets. There are thousands of hedge funds and each one should be evaluated based on their own merits. However, in recent years, hedge funds have been broadly criticized for their high fees and lackluster returns relative to the overall market.

Real Estate Syndication: Real estate is a wonderful asset class with which many investors are familiar. One way to get exposure to this area of the market is through a real estate syndication, where investors pool funds to purchase income-producing properties. The success of these types of deals depends on the location of the opportunity, type of property, management of the project, and experience of the deal manager. It’s important for an investor to do their own due diligence of all those factors to increase their likelihood of success. This is also a friendly reminder that real estate investments frequently don’t achieve their intended performance targets and may not outpace the US stock market.

Hard Money Loans: A hard money loan is money lent by an individual or company instead of a bank. They are known as a loan of last resort, often a short-term way for individuals denied traditional financing to raise money quickly. These loans are much riskier than loans through traditional channels and, as a result, their yields are often much higher.

Hard money loans generally rely on collateral rather than the financial position of the applicant. Consequently, a default by the borrower may still result in a profitable transaction for the lender through collateral collection. Alternatively, it can lead to the borrower defaulting on the loan and the lender owning an asset they do not wish to own that may drop significantly in price.

Initial Public Offerings (IPOs): An IPO is the process of offering shares of a private corporation to the public through a new stock issuance. There is a lot of excitement when a popular company comes to market, allowing investors to own shares of it. There is even more enthusiasm among those who can buy the stock before the general public. Unfortunately, all the exuberance creates a tendency to make bad decisions, such as purchasing a company without doing your own proper due diligence or short-term trading to try to lock in an immediate profit. These behaviors won’t contribute to achieving long-term success. If you are fortunate enough to participate in an IPO, it’s far more prudent to know what you own, why you own it, and to hold the company for the long-term.

When discussing the above strategies with friends, it’s common for folks to emphasize the sizzle and not the steak. Everybody will share the exciting features of these strategies and investments. However, few will share their overall successes and how it compared to a simple portfolio of stocks, bonds, and cash.

In the spirit of v’nahafoch hu, let’s turn the kiddush club on its head and focus instead on the tried-and-true methods that drive one’s ultimate financial success. This includes spending less than you make, investing your savings, utilizing boring plain vanilla investments, and getting the overall asset allocation of your portfolio correct. At the end of the day, investing should be more similar to watching paint dry than a day at the racetrack. While the former is less likely to impress your friends, it does increase your probability of financial success.

Happy Purim to all!


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Jonathan I. Shenkman, AIF® is the President and Chief Investment Officer of ParkBridge Wealth Management. In this role he acts in a fiduciary capacity to help his clients achieve their financial goals. He publishes regularly in financial periodicals such as Barron’s, CNBC, Forbes, Kiplinger, and The Wall Street Journal. He also hosts numerous webinars on various wealth management topics. Jonathan lives in West Hempstead with his family. You can follow Jonathan on Twitter/YouTube/Instagram @JonathanOnMoney.