Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
I need a pep talk
Old 09-16-2008, 08:34 PM   #1
Recycles dryer sheets
 
Join Date: Apr 2005
Posts: 58
I need a pep talk

Haven't been on the board for sometime due to some significant life challenges. I would describe my risk/reward tolerance as moderate. Most of my retirement accounts are in my 401K and index funds. I'm 54 and was looking to retire in the next 3-5 years, but unless the market changes for the better, I'm going to change my target to 8 years.

My confidence in managing my finances has been bruised over the last 12 months. My total retirement portfolio has been on a steady decline since 3rd qtr 2007 and is down 12% over that period of time. I have some of my retirement funds with Smith Barney and met with my adviser recently.

My SB adviser and I discussed their TRAK/Wrap funds. We discussed the pros and cons. I'm considering moving 25% of my portfolio, the expense ratio is 1.5% total. My adviser and I have a similar attitude towards investing. He told me the TRAK accounts have been available for several years -- but he wanted to have some history with them before recommending them to clients.

Any comments greatly appreciated.

Thanks!!!
dwk
__________________

__________________
dwk is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-16-2008, 08:37 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 1,543
i'm a market timer, i think i might buy back in tomorrow
__________________

__________________
al_bundy is offline   Reply With Quote
Old 09-16-2008, 08:40 PM   #3
Moderator
Sarah in SC's Avatar
 
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,456
I know you know your situation better than I do, DWK, but I can't in good conscience recommend putting your portfolio in a SB wrap account charging 1.5%. There are just too many other places to put your money that are costing around 1% or better.
__________________
“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way

Sarah in SC is offline   Reply With Quote
Old 09-16-2008, 08:41 PM   #4
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
I don't know what a trak fund is, with a 1.5% ER there's no reason to.

Why pay large ER's when you can go to Vanguard and get an advisor for free.
__________________
73ss454 is offline   Reply With Quote
Old 09-16-2008, 08:53 PM   #5
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,905
Quote:
Originally Posted by dwk View Post
Haven't been on the board for sometime due to some significant life challenges. I would describe my risk/reward tolerance as moderate. Most of my retirement accounts are in my 401K and index funds. I'm 54 and was looking to retire in the next 3-5 years, but unless the market changes for the better, I'm going to change my target to 8 years.

My confidence in managing my finances has been bruised over the last 12 months. My total retirement portfolio has been on a steady decline since 3rd qtr 2007 and is down 12% over that period of time. I have some of my retirement funds with Smith Barney and met with my adviser recently.

My SB adviser and I discussed their TRAK/Wrap funds. We discussed the pros and cons. I'm considering moving 25% of my portfolio, the expense ratio is 1.5% total. My adviser and I have a similar attitude towards investing. He told me the TRAK accounts have been available for several years -- but he wanted to have some history with them before recommending them to clients.

Any comments greatly appreciated.

Thanks!!!
dwk
1.5% sounds pretty steep to me, but then I am used to Vanguard.

I would question that your risk/reward tolerance is moderate, since you are considering making a major move due to the recent market difficulties. I think you should consider the possibility that your risk/reward tolerance is low.

You probably know the steps to take - - determine your asset allocation, make an investment plan, invest accordingly, and stick with your plan.

I have found the books on this list to be helpful for me: Investment Books
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 09-16-2008, 09:05 PM   #6
Thinks s/he gets paid by the post
lazygood4nothinbum's Avatar
 
Join Date: Feb 2006
Posts: 3,895
i'm down about 30% & considering going back to work in a new career. feeling better now? always glad to be helpful. enjoy.
__________________
"off with their heads"~~dr. joseph-ignace guillotin

"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
lazygood4nothinbum is offline   Reply With Quote
Old 09-16-2008, 09:50 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Here's your pep talk: everyone is having a tough year, unless they're sitting in cash in which case they're going to have a whole lot of tough years.

Dont throw the baby out with the bathwater...saying "wow, after a single down market year I'm ready to throw 1/3 of my profits away to someone who will do no better at managing my money" is pretty close to "I'm bleeding a little, so I'm going to try throwing myself in front of a bus thats on the way to the hospital".
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 09-16-2008, 11:42 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Quote:
Originally Posted by dwk View Post
My confidence in managing my finances has been bruised over the last 12 months. My total retirement portfolio has been on a steady decline since 3rd qtr 2007 and is down 12% over that period of time. dwk
If I am not mistaken, this is a quite a bit better than the S&P. I think you have been doing fine. Are you getting pressure from wife or husband? This can be a valid reason to get outside management, just to have someone else as the lightning rod.

ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 09-17-2008, 03:20 AM   #9
Thinks s/he gets paid by the post
 
Join Date: Dec 2007
Posts: 4,764
Win one for the Gipper.
__________________
Notmuchlonger is offline   Reply With Quote
Old 09-17-2008, 04:22 AM   #10
Dryer sheet aficionado
 
Join Date: Apr 2006
Posts: 49
If you're only down 12% from the third qtr., then your not doing bad at all. If I were you I'd stick with what youre doing.

Rick
__________________
rickier55 is offline   Reply With Quote
Old 09-17-2008, 06:37 AM   #11
Full time employment: Posting here.
 
Join Date: Mar 2005
Posts: 557
ok, I'll give you a pep talk....no actually just a few words, everyone who tracks the market is down some, depending on their allocation. But overall, over the past 35 or so years, lows are followed by higher highs. Will it all end? I don't know, but unless that happens, now is probably starting to be the time to get back in, rather than out.

Does that help?
__________________
uncledrz is offline   Reply With Quote
Old 09-17-2008, 06:45 AM   #12
Recycles dryer sheets
 
Join Date: Jun 2007
Location: Oklahoma City
Posts: 275
Ok I must have lost something but the old rule of thumb used to be that if you were close to retirement or in retirement then you make sure your market exposure is small enough that a market collapse will not effect your staying retired or projected retirement date. Seems like more and more on these threads are the stories saying "I was going to retire but my portfolio just lost 10% and now it looks like I can't" or similar.

Have I missed something? I mean I totally plan to be OUT of the market with my NEEDS $$ within 5 years of retirement.
__________________
USAF Veteran -- Retired Air National Guard -- OSW -- ONW -- OIF
militaryman is offline   Reply With Quote
Old 09-17-2008, 08:04 AM   #13
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,905
Quote:
Originally Posted by militaryman View Post
Ok I must have lost something but the old rule of thumb used to be that if you were close to retirement or in retirement then you make sure your market exposure is small enough that a market collapse will not effect your staying retired or projected retirement date. Seems like more and more on these threads are the stories saying "I was going to retire but my portfolio just lost 10% and now it looks like I can't" or similar.

Have I missed something? I mean I totally plan to be OUT of the market with my NEEDS $$ within 5 years of retirement.
Right - - Naturally, some market exposure is necessary to deal with inflation in the long term. But for most of us this is long term money, and will not be needed for many, many years. So, while it is always a shock to see one's equities plummet, that shock can be tempered a little by knowing that one will be fine for many years and that markets go up as well as down.

When designing my ER strategies several years back, I assumed a worst case situation in the first years of retirement - - interest rates would be low, the market would be pretty bad, and inflation would be out of control. Actually, conditions are a lot better than that right now. I didn't foresee the housing crisis, but overall things could be worse. Next year I will retire and I am hopeful that the economy may be on better footing by that time.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 09-17-2008, 08:17 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by dwk View Post
looking to retire in the next 3-5 years, but unless the market changes for the better, I'm going to change my target to 8 years.
A 12% decline from close (not exactly) to the top equals to a 3-4 year delay. That doesn't feel right.
What multiple estimated retirement budget were your assets (Assets/budget) 12 months ago and now. That might help us understand and help.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 09-17-2008, 08:24 AM   #15
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
Compare where you are now with where you were two years ago, not at the height. Or compare where you are now with the lowest your portfolio has ever been.
__________________
Bestwifeever is offline   Reply With Quote
Old 09-17-2008, 12:46 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by dwk View Post
Haven't been on the board for sometime due to some significant life challenges. I would describe my risk/reward tolerance as moderate. Most of my retirement accounts are in my 401K and index funds. I'm 54 and was looking to retire in the next 3-5 years, but unless the market changes for the better, I'm going to change my target to 8 years.

My confidence in managing my finances has been bruised over the last 12 months. My total retirement portfolio has been on a steady decline since 3rd qtr 2007 and is down 12% over that period of time. I have some of my retirement funds with Smith Barney and met with my adviser recently.

My SB adviser and I discussed their TRAK/Wrap funds. We discussed the pros and cons. I'm considering moving 25% of my portfolio, the expense ratio is 1.5% total. My adviser and I have a similar attitude towards investing. He told me the TRAK accounts have been available for several years -- but he wanted to have some history with them before recommending them to clients.

Any comments greatly appreciated.

Thanks!!!
dwk
DON'T go into a wrap fee account. Those are money-makers for SB and I have yet to see a client do well in any "super duper hybrid can't miss" combo of those......

Talk to him about a diversified allocation of ETF's. I would be very interested in what he thinks about those, post his comments on here, if you would.......
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 09-17-2008, 12:51 PM   #17
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by Bestwifeever View Post
Compare where you are now with where you were two years ago, not at the height. Or compare where you are now with the lowest your portfolio has ever been.
The lowest my retirement portfolio has ever been is zero, as late as 1988 before I made my first 401K contribution. I guess that's one way to feel like we're coming out ahead....
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 09-17-2008, 01:32 PM   #18
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,465
I don't know if SB TRAK is the same it used to be, but I used Smith Barney TRAK when I first started investing - for my account and my kids college funds. I knew even less then than I know now...

It was a nightmare.

It's not about the fees they charge - which are unambiguously abusive.

It's the trading. TRAK trades monthly - constantly rebalancing - buying and selling. The tax impact alone was overwhelming .
My biggest problem, though, was that it didn't do as well as the first mutual fund I invested in - and that took me a whole day to research and select.

My advice - if the market has you down, choose a conservative Vanguard fund like Wellington or such - or one of their target funds. Any combo of Vanguard index funds - stock and bond - is bound to do better for you (but not for Smith Brney)

Michael
__________________
MichaelB is offline   Reply With Quote
Old 09-17-2008, 02:59 PM   #19
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
I think you'll find most of this forum opt for low cost index mutual funds, a fixed asset allocation and do not use a financial adviser. Research shows that a FA just lowers you return leaving you with less to spend in retirement. Search the forum for "reading list" and educate yourself. Take control of your money.

As of 2 days ago I was down 11.1% for the year. Today will push that safely over 12%. However, I saved myself a bunch this year by sticking with a solid, reasonable asset allocation (60% equities/40% fixed). My "old self" would have been plowing cash into equities this whole drop.

We are in a good old fashion market panic. We have left the field of reason long ago. Solids assets are being valued at near zero and everyone fears there's more to come. This will pass away soon in my opinion. A more normal market will return but panics are part of a normal market.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 09-17-2008, 03:16 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dawg52's Avatar
 
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 7,438
Quote:
Originally Posted by 2B View Post
I This will pass away soon in my opinion. A more normal market will return
I sure hope your right. Not sure my liver will hold up to the abuse I'm giving it right now.
__________________

__________________
Retired 3/31/2007@52
Full time wuss.......
Dawg52 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What's this National Service talk? DougViages Other topics 25 09-14-2008 01:22 PM
More Bubble Talk ScaredtoQuit FIRE and Money 37 05-14-2007 08:44 PM
Please talk me out of continuing to work! tangomonster Hi, I am... 31 07-11-2006 07:21 PM
Talk About Your Avatar TromboneAl Other topics 52 02-21-2006 03:57 PM
Talk like a pirate! moghopper Other topics 5 09-19-2005 09:24 AM

 

 
All times are GMT -6. The time now is 11:16 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.