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Old 09-06-2008, 05:16 AM   #21
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Yes, I agree with the others. I suggest you post your portfolio here and at the Bogleheads forums and do some reading. You deserve much better than 2% in fees. Look at how much 2% will detract from your portfolio over the decades. It's very substantial.
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Old 09-08-2008, 06:14 PM   #22
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Originally Posted by 2B View Post
Hey boys and girls. Stop beating this poor newbie up because he's fallen into the clutches of a high cost FA. We've all done as bad or worse. I sure know I have.

If he figured it out in only 2 years, he probably should get a "genius award" from the forum. I stumbled around getting screwed and doing stupid things for a couple of decades.

dorikin_86,

There's a suggested reading list available on the forum. Do a search and you'll find it. Don't go rushing off to find ETFs before you figure out what you want to do. Have a plan!

Google Scott Burns for his Couch Potato portfolio. That's a good place to start.
Thanks for the kind words!

I started reading a little bit about Vanguard and the different funds available. The recent issue of 'money' also included vanguard funds as one of their top picks so I will def. look into not just ETF's

Will post my strategy up for you veterans to give me some feedback.
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Old 09-08-2008, 06:50 PM   #23
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Poke around the Vanguard website - specifically the Target Retirement fund corresponding to your age - see if you in your own mind understand what they own and why they own it.

heh heh heh - 1966-2006, after forty years of reading, studying, investing, mis-investing, etc - my retirement runs on Target Retirement 2015. There are other approaches. At 65, I think of it as Pssst-Wellesley with chrome trim(a little forum humor) .
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Old 09-08-2008, 07:07 PM   #24
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Just for the fun of it, a portfolio that was half Wellesley and half Wellington would be up about 5.7 % from 3/31/06 thru today. Expenses significantly lower than 2% I would say...
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Old 09-08-2008, 07:10 PM   #25
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.......... The recent issue of 'money' also included vanguard funds as one of their top picks so I will def. look into not just ETF's .............
Here is another tip. Cancel your Money magazine subscription. Those idiots cost me a ton of money in my younger years chasing their 10 hottest stocks / funds of the month baloney. Their job is to sell you high expense funds and to encourage churning to the benefit of your broker. Seriously, pick a Vanguard Target Retirement Fund of the appropriate year, invest in it religiously and use your time for better things. It really can be that simple.
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Old 09-08-2008, 07:15 PM   #26
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Here is another tip. Cancel your Money magazine subscription. Those idiots cost me a ton of money in my younger years chasing their 10 hottest stocks / funds of the month baloney. Their job is to sell you high expense funds and to encourage churning to the benefit of your broker. Seriously, pick a Vanguard Target Retirement Fund of the appropriate year, invest in it religiously and use your time for better things. It really can be that simple.
Can I get a witness! (call and response)

Amen.



heh heh heh - every once in a while I crack - old Money mags in the waiting room - eye doc, dentist, etc. But action is not mandatory. .
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Old 09-08-2008, 07:32 PM   #27
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Here is another tip. Cancel your Money magazine subscription. Those idiots cost me a ton of money in my younger years chasing their 10 hottest stocks / funds of the month baloney.
Hear, hear!! and Amen to that! And it's like drugs because no matter what you want to start trying to hit home runs when you read some of that stuff. (Sorry for the mixed metaphor!)

Much better reading sources out there that will reinforce a disciplined, steady approach rather than chasing the latest sexy stock/fund/idea.
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Old 09-08-2008, 08:12 PM   #28
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hehe luckily I don't subscribe to Money - I just had a long flight today so I thought I'd entertain myself.

Looks like Vanguard has a good reputation everywhere in the world so I got a starting point.

I personally don't know if I can put all my dough in those target date retirement funds - My entire IRA is in that already so I'm looking to diversify even more with my extra funds.

I feel like I only have an IQ of 5 when I talk to you veterans....the learning curve SO steep...kinda wish I started earlier =)
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Old 09-08-2008, 08:24 PM   #29
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I read Money. For the same reason I keep ice cream in the freezer even though I'm diabetic and trying to lose weight. I like to prove to myself I have willpower. Plus I can give the mag to people with no financial knowledge. There's some basic good advice in there, amongst the shilling. While they are reading, I give them a bowl of ice cream. Then I warn them about the calories and the investment advice.
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Old 09-08-2008, 08:25 PM   #30
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hehe luckily I don't subscribe to Money - I just had a long flight today so I thought I'd entertain myself.

Looks like Vanguard has a good reputation everywhere in the world so I got a starting point.

I personally don't know if I can put all my dough in those target date retirement funds - My entire IRA is in that already so I'm looking to diversify even more with my extra funds.

I feel like I only have an IQ of 5 when I talk to you veterans....the learning curve SO steep...kinda wish I started earlier =)
You can do it. Here's the booklist from the Bogleheads forum, to get you started:

Investment Books

The books are all available at Barnes and Noble, Amazon, and sometimes even at your local library.
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Old 09-08-2008, 09:15 PM   #31
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hehe luckily I don't subscribe to Money - I just had a long flight today so I thought I'd entertain myself.

Looks like Vanguard has a good reputation everywhere in the world so I got a starting point.

I personally don't know if I can put all my dough in those target date retirement funds - My entire IRA is in that already so I'm looking to diversify even more with my extra funds.

I feel like I only have an IQ of 5 when I talk to you veterans....the learning curve SO steep...kinda wish I started earlier =)
That's the beauty of Vanguard's target retirement funds. In one fund you own almost the entire stock universe, domestic and international, developed and emerging markets, large and small caps, value and growth. Plus you own a piece of the entire US bond market. So target retirement fund are ideal for a core portfolio. And for all intended purposes, a core portfolio is all what people really need.

There are a few asset classes that are not represented in target retirement funds, such as REITs, commodities, international small caps and global bonds and while some of them are desirable diversifiers IMO, others are more debatable.

Once you learn about more about investing, you can also give a tilt to your portfolio, meaning you can overweight one or more asset classes. A popular tilt is small value for example, which means you would add a small value fund to your core portfolio to give more emphasis to that asset class.
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Old 09-08-2008, 09:43 PM   #32
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My two cents:

Read Bernsteins "Four Pillars of Investing"

Remember that you do not need to rush. You can spend a few months learning about things and making up an asset allocation strategy and then make a move. The 2% fees will kill you over the long haul, but not over the next few months.

Several months ago some wise person on this forum told me "figure out your plan before you rush into things". I am working on the plan and making adjustments little by little.
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Old 09-08-2008, 10:23 PM   #33
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So target retirement fund are ideal for a core portfolio. And for all intended purposes, a core portfolio is all what people really need.
Very true. A very large majority of people would be best served by being invested in these target funds in their 401K/IRA, etc. and then just forgetting about it. It would save them from the poor decisions that are made that result in the average investor so woefully underperforming the markets. God knows I would have been better off way back in my younger years if I'd been in one.

It's really kind of amazing in retrospect that they weren't developed much earlier.
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Old 09-09-2008, 12:37 AM   #34
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..kinda wish I started earlier =)
Almost ALL of us felt like that once.
I second joesxm's recommendations--the Bernstein book would be a great place to start, and having patience is important--you don't have to fix this in a week, or a month. Now--if your FA still has you in his clutches a YEAR from now, we'll have a little talk . . .
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Old 09-09-2008, 06:41 AM   #35
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dorikin - of the books on the Bogleheads forum, I really like the Bogleheads Guide to Investing. It's an easy read, very straightforward.

CJ
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Old 09-09-2008, 07:01 AM   #36
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I know exactly how much fees I'm paying - about 2% of my portfolio.
I agree with other posters -- the fee is high. If you still interested in active management, find a lower cost company. If you do not mind handling your own portfolio, start looking into ETFs and index mutual funds. Good luck.
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Old 09-09-2008, 07:53 AM   #37
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hmmmm never thought about using those target date things as the core of my portfolio...interesting concept though.

I need to wait for my current funds to recover from this dump then I'll take the money out and do it myself.
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Old 09-09-2008, 08:47 AM   #38
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hmmmm never thought about using those target date things as the core of my portfolio...interesting concept though.

I need to wait for my current funds to recover from this dump then I'll take the money out and do it myself.
Waiting "to recover" is a BIG mistake. Whatever amount your current funds go up, the ones you intend to buy when you switch will be up even higher because there should be less expenses associated with them. Get out of the behavioral finance trap of "loss aversion" that you are in.

Also if your funds are held in a taxable account, then selling now would be beneficial because you can make the IRS pay for a portion of your losses.

Bottom line: Get out as soon as possible!
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Old 09-09-2008, 08:56 AM   #39
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hmmmm never thought about using those target date things as the core of my portfolio...interesting concept though.

I need to wait for my current funds to recover from this dump then I'll take the money out and do it myself.
Target funds are not just the core of the portfolio - they ARE the portfolio. Look at the Vanguard site and see what is included in a Target Fund - it is virtually every investment type. You can duplicate this asset allocation in other investment vehicles (IRA, 401(k)) by choosing the same components in the same proportions.

Also, a lesson most of us have learned here is not to market time ("wait for my current funds to recover from this dump"). It is a little like saying I'll wait until the TV goes off sale before I buy it.

As others have said, read up, then act when you are ready, but not when "the markets have recovered".
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Old 09-09-2008, 10:25 AM   #40
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What company is charging 2%? Is it a big national company or some local, independent firm?

Did he only plan for you or did he manage your account, make the necessary trades, etc.?

Did you pay commissions on top of that 2%?
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