The Unspoken Reality

[pedorrero]

Have to agree with Nords and Rich in Tampa: Best to learn to manage your own funds yourself. A lot of education is NOT required. If you accept this premise: simplest (and cheapest) may be best. You can do as simple as the Couch Potato portfolio (stock, bond mutual fund). A lot of what goes on in investing (and here!) is mostly ego, and therefore 99% bulls--t (rhymes with "pulpit" -- also a frequent source of that substance!) ... or more like this -- you can make investing as simple or as complex as you like.

I pitch these books as anti-high-fees and anti-investment advisors:
Edesses, Michael: The Big Investment Lie
Edelman, Ric: The Lies about Money

You may be a "captive retiree" like me -- I am the beneficiary of trusts (which I have bitched against elsewhere) and pay 1-2% for their services. As noted earlier in this thread, many people don't need to pay these seemingly small annual charges, which really are unnecessary and chisel away at money you could be spending yourself.

 

[cute fuzzy bunny]

Are you speaking from experience, knowledge, or opinion?

I think that given the scenario of all assets in a Target Retirement Fund, with a CPA to do the taxes...that it would be pretty intuitive that an advisors role would be pretty limited.

 

[FinanceDude]

I think that given the scenario of all assets in a Target Retirement Fund, with a CPA to do the taxes...that it would be pretty intuitive that an advisors role would be pretty limited.

That may be true. I for one am not "sold" on said retirement strategy funds, they are too new...........

If people are paying folks 1% for a mutual fund portfolio, that's ridiculous. Paying 1% to manage an equity portfolio in these times may not be so ridiculous............

 

[cute fuzzy bunny]

Well, it sure would render your existence pretty meaningless if an indexed, computer balanced fund beat smart money managers over a 20 year period, so I understand not being sold on them.

 

[clifp]

Have to agree with Nords and Rich in Tampa: Best to learn to manage your own funds yourself. A lot of education is NOT required. If you accept this premise: simplest (and cheapest) may be best. You can do as simple as the Couch Potato portfolio (stock, bond mutual fund). A lot of what goes on in investing (and here!) is mostly ego, and therefore 99% bulls--t (rhymes with "pulpit" -- also a frequent source of that substance!) ... or more like this -- you can make investing as simple or as complex as you like.

...

You may be a "captive retiree" like me -- I am the beneficiary of trusts (which I have bitched against elsewhere) and pay 1-2% for their services. As noted earlier in this thread, many people don't need to pay these seemingly small annual charges, which really are unnecessary and chisel away at money you could be spending yourself.

I spend a couple of hours on investments a day (including reading these boards), but Pedorreo is mostly right. Much of the financial discussion you see on this board is some combination of hobby and ego.

There is almost no evidence that all of our activity result in higher returns but certainly involves more time. A simple "couch potato portfolio" which involves sticking somewhere between 50-75% of your money in the Vanguard Total Stock Market Fund, 10% or so in Vanguard Money Market, and the remainder in the Vanguard Total Bond Market fund involves almost no effort or time. Essentially once a year you look at your portfolio and rebalance it by selling either stocks or bonds and buying the other to achieve your desired asset allocation. It requires no more time than meeting with a financial advisor every six months and Vanguard will literally save you thousands of dollars in fees you'd pay an advisor.

I realize couch potato portfolio sounds too simple to be so good but it is.

 

[RetireeRobert]

A simple "couch potato portfolio" which involves sticking somewhere between 50-75% of your money in the Vanguard Total Stock Market Fund, 10% or so in Vanguard Money Market, and the remainder in the Vanguard Total Bond Market fund involves almost no effort or time. Essentially once a year you look at your portfolio and rebalance it by selling either stocks or bonds and buying the other to achieve your desired asset allocation. It requires no more time than meeting with a financial advisor every six months and Vanguard will literally save you thousands of dollars in fees you'd pay an advisor.

I realize couch potato portfolio sounds too simple to be so good but it is.

Amen.

 

[FinanceDude]

Well, it sure would render your existence pretty meaningless if an indexed, computer balanced fund beat smart money managers over a 20 year period, so I understand not being sold on them.

Their track records thus far can't even beat a highly rated balanced fund.............

 

[cute fuzzy bunny]

What? Did they have a sale on "."'s today?

Looks to me like the 'since inception' returns on the 2003 versions of the TR funds in the 2015 and up range are returning 11.5-12.5%, and all the managed vanguard balanced funds in that same time period are doing about the same or not quite as well.

"Since inception" ROR's for the lifestrategy series, who have a little more time in them...are also in line with or better than similar allocated managed funds at vanguard.

So i'm still looking for the reasons to throw in that extra 1%. I know you guys have your days and sometimes the days stretch to years, but the data says that a long range investor parking their money in an indexed allocation fund does as well or better than sitting in the same managed fund. And I still cant find an indicator that says which one of you guys is just about to start doing better than mr. market.

But I guess my actual point was that it was something that you'd obviously reject out of hand, since (right or wrong) your livelihood depends on it. It'd be like a cop saying that a little crime is good and doesnt really cause any harm.

Plus you're a big scary moderator guy with a lot of dots on his side, so maybe i'm wrong!

 

[free4now]

What amazes me is that nobody has written the book that the world clearly needs: something that shows with historical data that index/target investments beat managed, and then goes on to recommend a simple approach to assett allocation for the efficient frontier using low cost funds/ETFs. The Bernstein 4 pillars book is good, but not easy reading for a newbie.

"A wise man is he who knows the relative value of things." - William Ralph Inge

 

[cute fuzzy bunny]

I agree, its a tough read.

So try this!

http://www.early-retirement.org/forums/f28/book-report-four-pillars-investing-14508.html

 

[barbarus]

The Random Walk Theory seems to be the most accurate evaluation of equity investing, but some seem to prove this wrong and,indeed, make a handsome living out of stock picking (Brew?).

Virtually every study of actively managed funds shows that they offer inferior returns and should be avoided.

 

[nphx]

Websites I use are this one, Online Coupons | Cash Back, ....
2Cor521

I looked at that Cash Back fatwallet.com site just now - so is it legit?

Are you saying I can locate a deal on newegg, walmart, sears, travelocity etc... see a good price - then open a different browser using fatwallet and get the same price plus the 1-4% cash back? Any restrictions on how you pay?

Has that been your experience or when you go through fatwallet are the prices different? I see how a site can set up for "affiliate" programs and i guess their model is to share a portion of the kickback (ok by me) if its not scammy in not gettign same price as going direct.

 

[REWahoo]

Fatwallet is legit.

 

[cute fuzzy bunny]

Very legit, been using them for a long time. Basically you create a fatwallet "fatcash" account, go to their site, go to 'cash back and coupons', select the merchant and use their link to the merchants site. Between 1-6 months later you get an email that the merchant has credited your fatcash account, and once it reaches a balance (either $10 or $25, I forget), you can request a check.

The rebates are anywhere between 1% and as high as 10+% depending on the merchant and some offer higher rebates for certain time periods. For example, Sears was having a 5% cash back sale, and I teamed that up with items already on sale, a sears $10 off any online order, and my penfed card to knock about 1/3 off the price of a bunch of items that my wife assures me I dont need. Heck, including the sale price I got some stuff for half price.

Only caveats are that if something is already in your shopping cart at the merchant site before you click on the fatwallet link, or if you have that merchant open in another browser/tab, it may not credit you.

So when I find something I want to buy, I go look at fatwallet to see if its a sponsored merchant, and if there are any additional coupon codes. If so, I empty my cart, close my session, use the FW link, and voila. Free money.

Only other gotcha is that if you call up the merchant and cancel items from your order, or they change your order because something was out of stock and they substituted a different model of something, it usually invalidates your fatcash.

 

[nphx]

Very legit, been using them for a long time.

Thanks - i'll give it a try. In my 'day job' I have one client who asked me to code some dynamic pricing and offer pages - these vary depending on what page you saw before shopping, what your entry point into the site was, had you visited before and even what city/state you are in.

When i'm shopping in the "wild" of the internet and i locate a product im going to purchase my standard steps are:
- Try search for that sku in google AND in ebay
- Try search google for store coupon codes
- If i found the site from a link or google ad I open up a different browser (like firefox if i am using IE so cookies are not portable) and do some investigating.

We decided that newegg is best for hardware purchases and have great customer service. So with an avearge 3-5k a month from them a 1% kickback can put *some* gas in the tank.

 

[cute fuzzy bunny]

I get a few hundred+ a year out of fatcash. Better than a poke in the eye with a sharp stick.

 

[unclemick]

Don't read books!

'Do or do not - there is no try' - Yoda

Vanguard Balanced Index - a 60/40, 0.20% expense index fund. Dreamers can pretend they will live forever and take 5% variable or do the 4% SWR dohickey. That are the Chevrolet aka the 'policy portfolio.'

Cool cats who like more exotic stuff - heh heh heh - pssst Wellesley(you knew that one ! - right), Lifestrategy, Target Retirement Series, a little Wellington, Dodge&Cox Balanced when availible.

The usual suspects - cool tires and rims, A/C, mudflaps, chrome trim, sunroof, etc, etc.

heh heh heh - Even the pro's get stupid and have to customize:
P&I Top 200 Pension Funds/ Sponsors - 2006:
61% equity, 27% bonds, 10% other(don't ask!), 2% cash.

P.S. I wasted forty years reading books and I'm in Kansas(not really) not a villa in the Bahamas - alas if I'd only done instead of read. Plus: all my pro teams are losing this weekend - except Eli/Giants.