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Meeting with a financial planner
Old 10-16-2007, 06:02 AM   #1
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Meeting with a financial planner

I posted a thread here about the pct of bonds in my portfolio. The advice was to raise bonds to 20%. I ran it by the broker/advisor that administers our 401k and he agreed - so I went to 20%. I have an appointment with him tomorrow to discuss where to invest money that I've saved for the last 2 years. My combined cash accounts total 5 times more than 6 months worth of expenses. He is going to recommend some place to put the excess cash.

Where do the wise investors of this board invest their excess cash? I really don't feel comfortable putting the excess cash lump sum in stocks or stock funds at this time given market conditions.

I'm in the beginning of a 4 year downshifting semi retirement where my wife and I will be retired in July, 2011.
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Old 10-16-2007, 07:52 AM   #2
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In my regular brokerage acct, I put excess cash in short term cd's. If you are talking about your 401k acct, I would stick it in a short term bond fund or maybe a stable value fund. Brewer and the rest may have some better ideas.

http://www.stablevalue.org/P&I3281.web.pdf
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Old 10-16-2007, 08:04 AM   #3
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I mentioned on another post capitalist pig hedge fund.
100K minimum and I feel it as safe as a bond that is only
breaking even with real inflation. Not always stellar returns
but safe returns and from past 7 years a chance for great
returns, even in down markets..

Capitalistpig LLC
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Old 10-16-2007, 08:20 AM   #4
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I would suggest you use the extra cash to make whatever adjustments to your existing portfolio you feel are necessary. So if it is light on bonds/commodities/foreign stocks/beav3r chee5e futures/whatever, that is where I would put the money.
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Old 10-16-2007, 05:17 PM   #5
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It sounds like you have 3 years of savings in cash, is the 20% bond portfolio in addition to the 3 years of cash or is it included?

If you aren't comfortable with investing in the market currently. Then watch these forums or the forums at Fat Wallet to find the best places to get high CD rates. You unfortunately just missed the 6% rate Pen Fed Credit union was offering.

Schwab has a ultrashort bond fund Schwab Yield Plus which has been hit hard due to the credit crunch. It is currently yielding between 5.5-6%.
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Old 10-16-2007, 08:40 PM   #6
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thanks for the ideas. I failed to mention that the bonds are in my 401k.

Clifp - The 3 years of cash is in CD's and is in addition to the bonds. I was looking at the Pen Fed 6% but didnt buy.

Brewer - I like the idea of using the cash to make adjustments. I'll take a look at the taxable portion and see what I can do.
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Old 10-17-2007, 08:38 AM   #7
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The 20% in bonds was intended to include any fixed income including your 3 years of income in cash. This means that most would go to equities. As an alternative why not consider convertible debentures or preferred shares? They act like fixed income but offer some upside in the event the markets continue up. Select a beaten down segment (like banks) and cherry-pick. YMMV
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Old 10-17-2007, 01:29 PM   #8
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I dont see the point of running ideas by people here and then also using an advisor. What are you going to do when the advisor disagrees with people here?

If you go with the advisors suggestion , then theres really no point in asking the questions here.

If you go with the boards suggestion, then why pay an advisor?

I would bet that the combined responses from well respected posters here are much better than any financial advisor / planner.
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Old 10-17-2007, 04:05 PM   #9
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Originally Posted by utrecht View Post
I dont see the point of running ideas by people here and then also using an advisor. What are you going to do when the advisor disagrees with people here?

If you go with the advisors suggestion , then theres really no point in asking the questions here.

If you go with the boards suggestion, then why pay an advisor?

I would bet that the combined responses from well respected posters here are much better than any financial advisor / planner.
I think that the point of posting here is that you get another perspective. One that you may not have considered. So there is a lot of value in doing so. 2nd opinions are good for financial matters too.
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Old 10-17-2007, 11:45 PM   #10
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I dont see the point of running ideas by people here and then also using an advisor.
I see a big point in getting as much advice from as many diverse sources as possible.
Quote:
Originally Posted by utrecht View Post
What are you going to do when the advisor disagrees with people here?
I wont have to worry about this because today he suggested a bond fund like at least three others have suggested here.
Quote:
Originally Posted by utrecht View Post
If you go with the advisors suggestion , then theres really no point in asking the questions here.
I see a big point in getting as much advice from as many diverse sources as possible.
Quote:
Originally Posted by utrecht View Post
If you go with the boards suggestion, then why pay an advisor?
I'm working with him primarily because he has been the broker for my 401k for the last 20 years, is familiar with my other issues such as my LLC, 1031 exchanges, my sale of private company stock, real estate holdings, and my wife's company pension. I only anticiapte paying brokerage fees.
Quote:
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I would bet that the combined responses from well respected posters here are much better than any financial advisor / planner.
I agree, but adding him to the mix of combined responses here only increases my chances of maximizing my portfolio gains
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Old 10-19-2007, 01:27 AM   #11
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Originally Posted by megacorp-firee View Post
I think that the point of posting here is that you get another perspective. One that you may not have considered. So there is a lot of value in doing so. 2nd opinions are good for financial matters too.
Ok where to start!

I think you say it well yourself here.
Never to late to start investments with another planner and approach. Then you have more to base your present returns on. I find it hard using the S&P returns as the sole benchmark to performance.

10 years ago I had one full service broker.
8 years ago myself and full service broker.
4 years ago I added a hedge fund.
Today I have 2 hedge funds and a full service broker.
No problems to date.
So far I seem to be doing good! Making money in the
market the last few years seems to be anyone could do
it. Now the times are getting more tactful I hope one
out of the 3 still does good while the other two just hold their own.

The soon new position opening I will take up.
Spending/retirement advisor
Learn to spend wisely while having fun travel and adventure. It will not be the common duties of feed the dog and watch the computer, done that during the working years.
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Old 10-19-2007, 01:37 AM   #12
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Ok where to start!

I think you say it well yourself here.
Never to late to start investments with another planner and approach. Then you have more to base your present returns on. I find it hard using the S&P returns as the sole benchmark to performance.

10 years ago I had one full service broker.
8 years ago myself and full service broker.
4 years ago I added a hedge fund.
Today I have 2 hedge funds and a full service broker.
No problems to date.
So far I seem to be doing good! Making money in the
market the last few years seems to be anyone could do
it. Now the times are getting more tactful I hope one
out of the 3 still does good while the other two just hold their own.

The soon new position opening I will take up.
Spending/retirement advisor
Learn to spend wisely while having fun travel and adventure. It will not be the common duties of feed the dog and watch the computer, done that during the working years.
Good luck in the future, you may need it.
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Old 10-19-2007, 01:43 AM   #13
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I agree with you 100% and facts do speak well.
Here is some facts
About Hedge Funds - Advantages of Hedge Funds over Mutual Funds
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Old 10-19-2007, 11:45 AM   #14
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I agree with you 100% and facts do speak well.
Here is some facts
About Hedge Funds - Advantages of Hedge Funds over Mutual Funds
Another fact:
Hedge Fund Says It Lost $4.6 Billion - washingtonpost.com
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Old 10-19-2007, 12:31 PM   #15
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Sept 2006 going back a ways to find that didn't ya. Others
had problems this year not long ago like Bear Sterns.

Yep it happens as well as it does to mutual funds going down
the same. Lucky there is more than 5,000 hedge funds and
8,000 worldwide. Most use strict guide lines on leverage and diversifcation. Hope he stuck to his or the fund could be held liable. I would say 99% of hedge funds cannot risk more than 10%
in any one investment.

Mutual funds have the same problems and close down all the time, maybe not quite as fast but definetly more.
The Truth Behind Mutual Fund Returns
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Old 10-19-2007, 12:41 PM   #16
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Conclusion
Perhaps John Bogle (founder of Vanguard) had it right when he started advocating the idea that index funds are the only mutual fund investors should buy. When you take into account the super-low management fees, this argument for index funds becomes even stronger.

The issues of survivorship and creation bias demonstrate the importance of being skeptical of mutual fund performance claims, particularly when the claims are coming from the company itself. Like we say so often, the key is to do your research. Before buying, always dig a little deeper into the prospectus to see what the true returns of a fund have been.
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