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Fired my financial adviser
06-18-2019, 02:49 PM
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#1
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Dryer sheet wannabe
Join Date: Dec 2015
Posts: 18
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Fired my financial adviser
And his 1 percent fee. In the two years I have used him I have 6 k less than I started with! So I知 looking for some simple index vanguard funds. Trying to keep it simple. Maybe three funds. This is money that we don稚 plan to use but want it reasonable invested. Maybe 60 40. I知 looking at Wesleyan and Wellington and maybe a small percent in international. No rush I知 in an all cash position. For some reason I知 feeling very empowered!
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06-18-2019, 02:55 PM
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#2
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Recycles dryer sheets
Join Date: Feb 2018
Posts: 98
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IMO
I'd stay all cash for a little bit to see what this market is going to do. Buy in after the correction is most likely on the horizon.
This is just my opinion and I know many here don't think the market will correct anytime soon
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06-18-2019, 03:13 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,308
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"The Coffeehouse Investor" by Bill Schultheis
You can download the first chapter: https://www.coffeehouseinvestor.com/
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06-18-2019, 03:28 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
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Wellington and Wellesley are not index funds, so since you are looking for index funds, then you probably should not be looking at them.
Vanguard Balanced Index fund is 60/40 US equities and bonds without International. It is one of a handful of superb choices for a tax-advantaged account.
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06-18-2019, 03:52 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,871
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Put 60 in a FIDO or VGD total market index fund and walk away. Put the 40 in CDs or a bond fund.
__________________
Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
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06-18-2019, 05:28 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Jan 2007
Location: Minneapolis
Posts: 1,172
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Quote:
Originally Posted by jjflyman
IMO
I'd stay all cash for a little bit to see what this market is going to do. Buy in after the correction is most likely on the horizon.
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And what percentage drop exactly do you recommend "buying in" after the correction?
5%
10%
15%
20%
25%
30%
35%
40%
50%
? ? ?
And what do you Watch
The DJIA, The S&P 500 ? or ?
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06-18-2019, 05:50 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,204
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If tax efficiency isnt a concern... for example the money is all tax-deferred... I would plunk the whole lot in Wellington or the Balanced Index Fund and declare victory.
If you're concerned about the market being so high you could do 25% now and 10% a month until the cash is fully invested.... but if it was in a 60/40 combination you could rationalize just going in all at once which is what would have happened if you stuck with your FA (less the 1% AUM fee of course).
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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06-18-2019, 06:09 PM
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#9
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Recycles dryer sheets
Join Date: Jun 2018
Posts: 441
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Quote:
Originally Posted by retired2015b2d
And his 1 percent fee. In the two years I have used him I have 6 k less than I started with! So I知 looking for some simple index vanguard funds. Trying to keep it simple. Maybe three funds. This is money that we don稚 plan to use but want it reasonable invested. Maybe 60 40. I知 looking at Wesleyan and Wellington and maybe a small percent in international. No rush I知 in an all cash position. For some reason I知 feeling very empowered!
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I also had some cash come available. I'm heavy enough on stock so put in 2+% MM for now. If market keeps going up, I'm good. If it dips, I have a little fire power to buy low.
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06-18-2019, 06:18 PM
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#10
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Moderator
Join Date: Nov 2014
Posts: 9,070
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Quote:
Originally Posted by retired2015b2d
In the two years I have used him I have 6 k less than I started with!
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Any insight as to how he lost $6K? Seems like the last two years have been pretty good. How壇 he screw that up?
__________________
Every day when I open my eyes now it feels like a Saturday - David Gray
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06-18-2019, 06:19 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Jan 2007
Location: Minneapolis
Posts: 1,172
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Quote:
Originally Posted by Jerry1
Any insight as to how he lost $6K? Seems like the last two years have been pretty good. How壇 he screw that up?
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+1 -- That takes a 'special' kind of talent!
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06-18-2019, 07:49 PM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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He's one of the guys that give FA's a bad name.
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06-18-2019, 07:56 PM
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#13
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Moderator Emeritus
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,593
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Quote:
Originally Posted by RobbieB
He's one of the guys that give FA's a bad name.
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Believe me, he's on a long list.
__________________
*********Go Astros!*********
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06-18-2019, 08:52 PM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,204
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Quote:
Originally Posted by retired2015b2d
And his 1 percent fee. In the two years I have used him I have 6 k less than I started with!...
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Quote:
Originally Posted by Cut-Throat
+1 -- That takes a 'special' kind of talent!
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+2 Just a generic 60/40 would have returned 5.0% for 2017-2018... less 1% AUM would be +4%... not negative!
https://www.portfoliovisualizer.com/...al2=0&total3=0
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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06-18-2019, 10:17 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Sep 2011
Location: Placerville
Posts: 1,788
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I have the exact situation. After firing them, I immediately put 30% in a Dow index, another 30% in S&P500 index and the rest is in core position, buying in the remaining 40% at 5% a month into these two funds until I'm 100% invested.
Like you, I don't plan to draw on this as income in the near future, most likely no draws until RMD at 70.5 years old, so why 60/40 split? I can ride out any market fluctuations if I am not planning on spending it. If we ever have extensive health expenses or medical live-in care needed, we can use it for that.
I live fine on my pension and early SS, about $2,000 a month less than that take-home actually. I use this extra for new car every 4 years, gifting and charity.
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06-19-2019, 07:07 AM
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#16
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Thinks s/he gets paid by the post
Join Date: May 2016
Location: Mid-Atlantic
Posts: 2,642
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Quote:
Originally Posted by jjflyman
IMO
I'd stay all cash for a little bit to see what this market is going to do. Buy in after the correction is most likely on the horizon.
This is just my opinion and I know many here don't think the market will correct anytime soon
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No offense, jjflyman, but I drove myself nuts trying to do that early on. My 2 cents, I've found that my best tactic is, as soon as I conclude that I want a change in strategy I try to implement it ASAP. Otherwise I wind up trying to time the markets, and that's been a frustrating experience for me; more than once I would have done better if I had implemented sooner rather than later. Even if the markets go way down, deciding when to buy in can be really difficult! At least when I've decided on a strategy, I regret it less if I have short-term losses following it, since I'm more concerned about long-term results.
__________________
-Looking to FIRE in the mid-2020s, which would be our mid-50s.
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06-19-2019, 09:13 AM
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#17
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Thinks s/he gets paid by the post
Join Date: Nov 2015
Posts: 2,690
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Quote:
Originally Posted by jjflyman
IMO
I'd stay all cash for a little bit to see what this market is going to do. Buy in after the correction is most likely on the horizon.
This is just my opinion and I know many here don't think the market will correct anytime soon
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Perhaps, but then people have been saying this for at least 3 years now, suggesting that the market is due for correction. And maybe it is, but then could be you continue to miss out on the gains from those years. Seems the usual advise is to never try to time the market.
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06-19-2019, 09:21 AM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,308
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Quote:
Originally Posted by bobandsherry
... Seems the usual advise is to never try to time the market.
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+1 And for good reason.
@jjflyman: If you have verified talent in identifying the correct buy points during a correction, please be kind enough to advise the rest of us clueless investors when that point comes.
Thanks in advance.
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06-19-2019, 09:59 AM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,134
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Mr. OP, You've received some very good advice to think about in this thread. And the cost is zero, other than your time. I wish others would be as open to the kind of advice above as you are. Alas, many are not, and they continue to give away a huge chunk of their gains (if any) every year.
A friend's nephew works for SpaceX and has a t-shirt that says "Yes. It is rocket science." Thankfully, that is not true for his investing decisions.
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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06-19-2019, 11:47 AM
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#20
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Posts: 1,155
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As much as I'm a HUGE fan of Wellington and Wellesley (and own both within a much broader and highly diversified portfolio), neither fund gives you broad exposure to the equity markets as each holds < 100 stocks - total. More specifically, Wellesley holds 68 and Wellington holds 93 as of the latest reporting.
Assuming you're looking for broader diversification, either VTSAX (Total Market) or VINIX (S&P500 index) + optionally VEXAX (Extended Market) if you also want broader Mid and Small-Cap exposure would be good choices. If you'd like, you can hold Wellesley/Wellington and these other funds - I just wouldn't recommend all of your eggs in the VWINX/VWELX basket..
I just read a great article the other day on Seeking Alpha that studied the performance of a combination of Wellesley, Wellington and a S&P500 index fund. Wellesley provided the "ballast" (worst year was < -10%) while Wellington was more conservative than a pure stock fund (having ~35% bonds). The S&P fund then gave the growth - if you could live with the potential 50+% drawdowns along the way. Backtesting this gave some pretty solid results as Wellesley and Wellington provide some bond exposure (albeit, with a heavy tilt toward corporates and less Treasuries than would be ideal) while the stock components of the 3 funds provide upside during market rallies. If you really want/need Treasuries also, adding VBTLX (Total Bond) or a pure Treasury fund like VFIUX would do that..
ETA - as great a fund as Wellington is, there have been periods of extended drawdowns that you need to be aware of..I don't have the data at hand at the moment, but if memory serves me right, the worst was ~3 years underwater. Of course, that beats the heck out of the S&P - for example, starting back in 2008. Wellesley predictably given it's greater bond holdings was less (~18 months IIRC)..
Hope that helps! Good luck in whatever you decide to do.
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