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Hi all,
I have some friends who are asking for my advice. I am in turn coming to you.
Husband (71) and Wife (68) with about $4M invested 60%/40. Most of the 60% is in LTBH individual stocks in IRAs and joint taxable account. I think the 40% is in a mixture of investment grade corp bonds, muni bonds, and CD's. I don't know the taxable/nontaxable ratio.
Husband enjoys doing the individual stock thing - research, annual reports, following the stocks, etc. Wife likes DRIPs. Husband is considering simplifying their investment picture for the sake of the wife in case he dies first. Husband is evaluating handing the port over to his former-broker-turned-financial-advisor. Husband understands about fees (85 basis points on first $1M then 75 bp on further millions, I think, 25 bp for bond portion). Has been handed a somewhat slick table showing investment returns beating the S&P net of expenses over the past 5-7 years, but there are a number of caveats and footnotes of course -- excludes accounts closed prior to a certain date, no mention of risk-adjusted returns, no discussion of investment strategy or policy are a few I saw and mentioned right off the bat. Husband is comparing his performance but isn't calculating it right and doesn't seem to care when I point that out.
So. What are the pointed questions I should be asking? What are decent alternatives for this couple? I have so far thought of Couch Potato, Coffeehouse Investor, 60/40 VTSMX/VTBMX, and Vanguard Retirement 20XX as all relatively low fee, low maintenance, decent return types of investments.
2Cor521
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"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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