Fired my financial adviser

R

retired2015b2d

Dryer sheet wannabe
Joined
Dec 13, 2015
Messages
18
And his 1 percent fee. In the two years I have used him I have 6 k less than I started with! So I’m looking for some simple index vanguard funds. Trying to keep it simple. Maybe three funds. This is money that we don’t plan to use but want it reasonable invested. Maybe 60 40. I’m looking at Wesleyan and Wellington and maybe a small percent in international. No rush I’m in an all cash position. For some reason I’m feeling very empowered!
 
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
 
Good for you! Use than 1% for a nice vacation someday!

Here are some articles I used to help me pick our AA. I was pretty new to this too:
https://www.morningstar.com/articles/882670/how-our-vanguard-model-bucket-portfolios-have-perf.html

https://www.theretirementmanifesto.com/a-simple-guide-to-targeted-asset-allocation/

And this one from Boglheads, where I believe this is discussed frequently on their board: https://www.bogleheads.org/wiki/Three-fund_portfolio

Good luck to you! Just being nosey - did he try to talk you out of it?
 
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.
 
Put 60 in a FIDO or VGD total market index fund and walk away. Put the 40 in CDs or a bond fund.
 
jjflyman said:
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.
Click to expand...


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 :confused:?
 
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).
 
retired2015b2d said:
And his 1 percent fee. In the two years I have used him I have 6 k less than I started with! So I’m looking for some simple index vanguard funds. Trying to keep it simple. Maybe three funds. This is money that we don’t plan to use but want it reasonable invested. Maybe 60 40. I’m looking at Wesleyan and Wellington and maybe a small percent in international. No rush I’m in an all cash position. For some reason I’m feeling very empowered!
Click to expand...

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.
 
retired2015b2d said:
In the two years I have used him I have 6 k less than I started with!
Click to expand...

Any insight as to how he lost $6K? Seems like the last two years have been pretty good. How’d he screw that up?
 
He's one of the guys that give FA's a bad name.
 
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.
 
Last edited:
jjflyman said:
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
Click to expand...


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.
 
jjflyman said:
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
Click to expand...
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.
 
bobandsherry said:
... Seems the usual advise is to never try to time the market.
Click to expand...
+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.
 
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.
 
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.
 
Last edited:
Here's the article I mentioned from Seeking Alpha..

One interesting take-away is that the ending value for a portfolio that included (apparently in equal %s although I didn't see it stated specifically) Wellesley and the S&P500 was 140.1% total return between 10/9/2009 through 9/24/18 - which obviously included both bear and bull markets. The performance of the S&P 500 fund alone was only 134.4% (!!) and presumably had some significantly greater volatility (and sleepless nights!). Interestingly, Wellesley + Wellington alone were 108.5%. It follows logically that VWINX + VWENX would do less than VINIX (500) due to the heavy % of bonds, but what is surprising is that VWINX (Wellesley) + VINIX actually beat VINIX alone - even with the 65% bonds that Wellesley averages in it's portfolio..
 
So, when I glanced at Wellesley and Wellington in months past, the expense ratios seemed too high. Did I miss something?
 
.5 or less. Actually, now I am seeing .26 and .25 respectively. That’s pretty good. I’ll have to look into this again.
 
Last edited:
You must log in or register to reply here.

Similar threads

M
leveraged risk parity portfolios
2
Replies
26
Views
1K
mathjak107
M
L
61 y/o in Atlanta, mostly retired
2
Replies
43
Views
2K
pacergal
P
R
Seeking Advice - for retiring at 52.5
2
Replies
44
Views
5K
LateToFIRE
L
T
AA with TIPS for FI
Replies
3
Views
711
GravitySucks
GravitySucks
T
Hello to all from MrTeight…..
Replies
14
Views
1K
MarieIG
M

Latest posts

Back
Top Bottom