Cullen Roche, the founder of Discipline Funds, has managed money for more than 20 years. As he modeled different portfolios of stocks, bonds and other holdings for his clients, he realized that those portfolios can end up looking very different from the model. That got him thinking: what if he took a step back and looked at not just a few ways to package investments and savings? What if he looked at a whole gamut, from extreme approaches, like all stocks, to balanced approaches, like a classic 60% stock 40% bond mix, to blockbuster favorites like the Boglehead Three-Fund approach, to mimicking the complexity endowment portfolios? The result is “Your Perfect Portfolio: The ultimate guide to using the world’s most powerful investing strategies,” published last month.

Roche, a Georgetown University graduate who lives in Encinitas, spoke with The San Diego Union-Tribune about his new book and how people might approach today’s volatile markets. The interview has been condensed and edited.

Why did you write this book?

Part of what makes portfolio management really hard is that your life is going to change a lot over the course of time horizons. The goal of the book is to identify a lot of different styles and strategies that investors will confront over time, and help them understand all of this, so that they can then break these things down and understand how a certain style or strategy might fit that. So that they can find their own perfect portfolio. That’s the main thrust of the book: There isn’t really a perfect portfolio. There’s only a perfect portfolio for you, and that’s the portfolio that is suitable for you, that matches your financial goals and needs.

Why are you the right person to write about this?

I was originally a Merrill Lynch financial adviser. I worked on a big team there. I’ve been independent now for probably about 20 years. And my firm manages about $200 million in assets. We have a number of our own publicly listed ETFs. I wouldn’t say even my professional credentials are the main reason anyone should believe me. I would say that I have spent an absurdly huge amount of time obsessing over this particular topic because, for my own profession, I have tried to refine this into something really clean, that I can utilize for people, and help them implement something that is low fee, simple, but also sophisticated enough.

How complex is too complex?

You can take a diversified portfolio and you can make it so diverse that you actually end up making it worse by layering different strategies and styles, and making it so sophisticated that you’re actually doing something that’s counterproductive, especially from a management perspective. That’s the one thing that I’ve certainly discovered over the course of my career — I try to simplify things in large part because I’ve found that if you make something too complex, it just becomes too hard to manage over time. You’ll bungle it.

It can (also) end up getting very expensive, because when you start layering things where you have, for instance, hedge fund style strategies and funds that are mimicking private equity, or if you’re going into private equity-type instruments or venture capital, the fees on all these things are much higher. So you can start embedding a lot of extra costs, a lot of tax inefficiencies. You (could) also end up with a lot of accounts in different places, and it’s a lot to manage. It almost ends up, for a lot of people, feeling like a full-time job.

When should someone outsource their investing strategy versus DIYing it? 

I’m a huge advocate of DIY because, and I emphasize this in the book, fees add up to a lot of money in the long run. … I’m pretty critical of AUM (asset under management) fees. A lot of people talk about how the S&P 500 might generate 10% a year. The reality is that — gosh, if you’re paying an adviser 1% a year — back that out, then back out inflation, then back out taxes. That number might be 4% or so after all of that. That’s the number you can then actually go out and spend for retirement. That 1% sounds low, but 1% of 10% or 1% of 4% is actually a really, really big number. And that adds up to a very, very big number in the long run.

Obviously, as a financial adviser, I’m biased, because I’ve seen the real value that financial advisers can add. There’s always this debate about: what is the level where a financial adviser becomes potentially counterproductive? I think it depends on the level of service they’re providing. … One thing I’m very critical of: financial advisers that basically only do portfolio management. I think that good financial advisory should go well beyond that. It should go into budgeting and through retirement planning, helping people understand: How am I taking my distributions over time? How am I planning my portfolio so that my assets are achieving certain goals across different time horizons, whether that’s college planning or retirement planning, or whether it’s just day-to-day living.

How important is it to scrutinize 401(k) fees?

A lot of people won’t realize that there are advisers to these plans, and they’re getting paid in ways that are not always very transparent. A lot of 401(k) plans are loaded to the gills with super-high-fee mutual funds. Even mutual funds that are 0.5% or more in fees per year, these days, that’s a very, very high fee. … So I would say that is maybe the most important place actually to be really mindful of advisory fees. You should be paying very, very low fees in a 401(k), and especially conscientious of it because you’re going to be paying that fee for 20, 30, 40 years. The compounding effect inside of that thing is going to be gigantic.

There is no one perfect portfolio, so you include a few options that target retirement. What is key to consider about that stage?

I did emphasize a number of retirement planning strategies in the book because I have found in the course of my career that retirement is the biggest hurdle behaviorally, for almost everybody. … (Your professional) income is all of a sudden just one day going to disappear. And you have to start living off of the nest egg that you’ve built. And that’s just a big behavioral adjustment for everybody. Some people go through it really easily. Some people really struggle with it. Building your portfolio in a way to make that transition easier is really important.

What would you say to people who are looking at today’s markets and feeling uneasy — or revved up?

I think this moment in history is one of the most challenging environments to think through, because there’s just a lot of political weirdness. There’s the geopolitical stuff that’s all going on. The valuations in the United States are very, very high, by any metric. … I think for a lot of people, you could be caught up in pockets of this, where I think you have to be very careful about chasing performance. Don’t chase the shiny object that everybody is talking about, necessarily. I think that in an environment like right now, where the geopolitics are really weird and the valuations are really high, it means that things can go a lot of different directions. And the potential that there’s going to be much higher volatility in an environment like this is much higher than it is on average. I think people have to be much more diversified and skeptical of everything in general, because we don’t know how the AI boom is going to play out. We don’t know how geopolitical events are going to play out. We don’t know whether the United States is going to continue to outperform foreign markets like they have over the course of the last 10 years. I think the argument for really broad diversification, not being greedy, being consistent, is more valuable than ever right now.