I take my YouTube algorithms very seriously. In fact, if there’s a video I want to watch but that I don’t want to be served more of after, I’ll open the link in Incognito or an alt account (even sacrificing my ad-free Premium privileges in the process). Similarly, if I’m going to check out financial content, I’m going to do so using my Money@30 channel. Given this careful curation, I was surprised to see a YouTuber I follow post an investing video last week — and, after watching it, I thought it was worth discussing.
The video in question comes from none other than Hank Green. Known for being a co-founder of VinCon, a science communicator, and a comedian — as well as being the brother of author John Green (The Fault in Our Stars, Everything is Tuberculosis) — his aptly named Hank’s Channel is often eclectic. For example, whether he’s talking about how many fries you get from Five Guys or covering a political development, he may just follow it up by playing a round of Connections.
Anyway, as I mentioned, Hank recently posted a video that caught my attention because it included the magic word in the title: Money. Specifically, he called the clip “I’m Changing How I Manage My Money Because of AI.” Taken at face value, you might assume that this video is about roboadvisors or other AI-powered tools that he’s suddenly embracing. Instead, it’s actually about how weighting in some index funds works and why he’s feeling less diversified these days.
As he explains, due in part to the rise of Nvidia and other tech stocks, his S&P 500 index funds are now heavily weighted towards these companies (as they’re designed to be). This has resulted in 36% of his holdings now being represented by just 10 companies! While that’s not exactly a problem, it does have Hank thinking about making some changes to compensate.
In response to this, Hank explains that he now intends to take a portion of his portfolio and do a few different things. These include buying an S&P 500 value fund, a mid-cap stocks fund, and an international index fund. Hank notes that, for him, this is actually a pretty big deal as he’s not one to worry much about his investments and perfers the simplicity of what he’d been doing.
You can check out his whole analysis and other thoughts in the full video:
So, should you follow Hank’s lead here? Well, as he notes at the top, he’s not a financial advisor — and neither am I. However, I do think he brings up an interesting point that I wouldn’t have really considered otherwise. Personally, while I don’t intend on shifting assets now, I might consider buying some different indices the next time I make a contribution to my IRA.