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Old 11-28-2008, 10:10 AM   #41
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Also, I am not trying to pick a "best" asset allocation, I just want to find a realistic, reasonable ballpark number based on my (more-conservative-than-usual) AA, to use for estimating purposes. Most of the information I've seen is for more aggressive portfolios than I want to use. If I make estimates using the return and std dev from a 50/50 stock/bond portfolio but my actual AA is 30/70, they'll be way off, won't they? And I also want to see if 50% "stable value"/50% stock is more or less equivalent in return & volatility to 30% bonds/70% stock.
Vanguard's website has a good feature (at least at the Voyager Select level - don't know if its available at other levels) called portfolio watch where they tell you the average rate of return for basically any allocation you come up with, the best and worst years for the period 1926 to 2007 and % loss and how many years with a loss out of the 82 years in the base period. They'll also compare your actual allocation with your target.
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Old 11-29-2008, 05:05 AM   #42
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I have a very "high end" FA here in Waterville Maine who caters to only people with portfolios above 100K -- they use LPLs "Strategic Asset Mgmt." approach - we're 42, with FIRE date of 52 and our FA even said that because we already had enough to FIRE "today", the main aim is to "protect it" yet he recommended a GI approach which has sunk us 30% give or take -- so yes, paying for the same performance I could've gotten myself with Vanguard VERY much annoys me. They use a "tweaked" indexing plan -- all they really do is use forecasting methods to tweak the allocation a little -- ie add higher percentage to large cap when their poised to outperform, etc. We only have a FA with a SMA because my wife feels secure knowing that if anything happens to me, there's someone taking care of things, and I respected this. But I'm afraid I'm going to start taking a LOT more control.
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Old 11-29-2008, 08:33 AM   #43
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Wouldn't it be cheaper and smarter to educate the women with a few beginner investment books than leave her unknowing ? I've seen to many recent widows being taken advantage of my so called advisors . It's like a car you at least have to have some basic knowledge so you can access what the mechanic is saying . I'm sure most of you have smart wives who can easily pick up the basics of investing .
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clarity on point
Old 11-29-2008, 12:58 PM   #44
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clarity on point

Oh, my wife is smarter than me ... she simply has no taste for investing, nor (so she says) the stomach for it. It would take someone far smarter than my FP to take advantage of her!!
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Old 11-29-2008, 02:17 PM   #45
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Wouldn't it be cheaper and smarter to educate the women with a few beginner investment books than leave her unknowing ? I've seen to many recent widows being taken advantage of my so called advisors . It's like a car you at least have to have some basic knowledge so you can access what the mechanic is saying . I'm sure most of you have smart wives who can easily pick up the basics of investing .
a strong SECOND from me on selling type FAs and widows being taken advantage of. it happens, but not to this kid. oh the phone calls i fielded...and threw the football right back at 'em in a perfect spiral. it was one of my rare joys.
to answer the original post, my FA method was a fee only based planner - CFP or not at all for me, being the credentials snob that I am . then i carried on independently while educating myself by reading no less than a dozen books over 6 years. Read those books, ladies!
i may revisit with my CFP just prior to marrying, just for a quick and dirty checkup.
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Old 11-29-2008, 03:36 PM   #46
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..............
i may revisit with my CFP just prior to marrying, just for a quick and dirty checkup.
Ummm- you may want to restate that differently....LOL
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Old 11-29-2008, 05:19 PM   #47
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Ummm- you may want to restate that differently....LOL
WHAT!? did I make a funny?
KUDOS to you for picking up on that oh-so-NOT-innocent line.
"i may revisit with my CFP just prior to marrying, just for a quick and dirty checkup."
at least i didn't say pre-nup tune-up.
your serve...
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Old 11-29-2008, 05:22 PM   #48
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Luckily I already knew the basics of investing when I was widowed . I also knew enough to just let things ride until my sanity returned . Some of the widows I knew were so intimidated by investing they cashed in their stocks and went to CD's . A lot of FA's are honest people but some just want to churn your account and if you do not know what is happening you are in trouble.
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Old 11-29-2008, 05:43 PM   #49
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Luckily I already knew the basics of investing when I was widowed . I also knew enough to just let things ride until my sanity returned . Some of the widows I knew were so intimidated by investing they cashed in their stocks and went to CD's . A lot of FA's are honest people but some just want to churn your account and if you do not know what is happening you are in trouble.
this lady is giving us some of the best advice for those who experience tragedy, or get unmarried, or lose a job, or become disabled, or owe big taxes to the IRS right now or else, or go thru a foreclosure, or face big medical bills...
UNTIL MY SANITY RETURNED and
IF YOU DON'T KNOW WHAT IS HAPPENING and
CHURN YOUR ACCOUNT
are key phrases here.
way to go, Moemg.
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Old 12-01-2008, 01:28 PM   #50
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No that's not the case. The 4% SWR turns out works pretty much over broad ranges of asset allocations and timespans. Sure, someone will come along and try to diddle with the numbers, but they really don't change all that much.
This is not my understanding of the trinity study.

100% equity needs a lower SWR than 80-20.
60-40 can have a higher withdraw rate than a more volatile 80-20 portfolio.
40-60 and 20-80 will not have the high returns of a 60-40, so although volatility is less, the returns are also significant less, so a lower SWR is needed.

Generally speaking.

It has been a while since I read the trinity study, but here was the premise as I remember:

100% equity 2% SWR would suggest you could live off dividends (IMO) and never sell a share.
80-20 3% SWR and a person could live off the dividends and interest and probably not sell a share.
60-40 was optimum because 4% withdraw rate had the portfolio generate enough returns to cover withdraws until portfolio was down to zero dollars 30 years later.
40-60 had a lower withdraw rate than 60-40 because the returns would not be high enough, so 3-3.5% was suggested.
20-80 would be a 2% withdraw rate because of inflation eating into portfolio at higher SWR.

Obviously exceptions to all of above (for given past performance)- I would question anyone suggesting 4% works on all portfolios. 100% cash and 4% SWR and 100% equity, 4% SWR do not make sense with reasonable success in most market conditions.
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Old 12-01-2008, 10:57 PM   #51
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Abused by FA

I am a health care professional in CA. I was too busy with my practice to study up on what I should do with my money. The FA I got hooked up with had mostly his own interests in mind, as I found out later. Some of the warning signs I should have recognized but didn't (until later):
1) Having me purchased an annuity within an IRA. (Huge commissions on annuities and annuities have no business being in a tax-deferred vehicle).
2) Strongly suggesting at almost every quarterly "review" that I need to sell "X" and purchase "Y" instead. (Nice fees for him with every purchase I made).
3) Advising me to put $100,000 in the Executive Life debacle in the 80's where most everyone lost up to 85% of their investment. (Only the FA seemed to do well with that investment).
Best advice: A simple, diversified portfolio through low-cost mutual funds.
Have the courage to stick with it. In the end YOU win.
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using a FA?
Old 12-02-2008, 07:02 AM   #52
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using a FA?

Well, since most everyone now has a PC and Internet?
Add the Upteen Sites for Both Basic and advance FA guides?
and then I've found just owning a simple Fund Like VWINX (ave 50/50 mix) and just adding Some Extra Fond Funds like VFITX, VFIIX and a Short term Bond like VFISX or Fido's New FIBIX fund has done as well as anyothers advice of a Portfolio...

Another Option for Higher Rtns? Other Balanced Funds Like ;
FPACX,OAKBX,PRPFX and WMRIX or WMMRX
For Those still working and About a few yrs Prior to and After Retirement? To add those Bond Funds to get a 40/60 mix and increasing the Bond side as one gets older..

Doing a past 10 yr on a Per $10k CB , those plans have done about the best with the Lowest Downside risk and ave 8-10% apy..

I recommed to those who want a simple and best Portfolio to just own a 50/50 mix like a VWINX and add seperate Bond Funds as one gets older.. Like VFITX & VFIIX... VWINX is Dwn about -15% YTD and with A 40/60 dnw only about -10% YTD ..and retirees ? age 65+ = a 35/65 mix is only down about -7% ytd..

J. Burton Came out with an Article supporting this as a 50/50 mix doing as well or better than most other mixes for the PAST 20 Yrs!
Link> How to invest well and sleep better, in good markets or bad - MarketWatch

And I have to Agree with him...
Hopefully New youngin's will learn from the rest of us and Follow this advice and not Listen to the likes of these FA's and CNBC types...

Since Those Wall Street People have to get us to Buy more Stocks and Equity funds to make their $.. & Supporting It's Wall Street Industry...vs Making very little selling Bonds..

even Warren Buffet sucmmed to More Bonds with his 10% Yld deal with GE..He wins on both sides with that deal, Unless GE Goes Bankrupt..and even then...

And once I reached Financial Retirement level? I went out and Interviewed over 10 Investment firms and 8 out of the 10 just used Index Funds and the other 2 used Non Index Funds and when Pushed to show me their recommened Ports for the previous 5 and 10 yrs?

They didn't want too, but showed they did either (a) worse or (b) the same as that VWINX type Mix of Funds..or those other Balanced Funds

And when Mentioning This to them? They HATED Balanced Funds! and people like Scott Burns, Fund Advice/Merriman and Paul Ferrells Lazymans Ports...

gee, I wonder why? LOL

could it be if people used them instead of using their firm, they wouldn't be needed anymore and they'd have to go back to being a Accountant for some firm again? or worse..Be a Analyiss for M*?
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