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Lost Money in the Markets? Wall Street Thinks It's Your Own Fault
Old 11-02-2015, 09:34 AM   #1
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Lost Money in the Markets? Wall Street Thinks It's Your Own Fault

Here's an interesting article with this title

https://news.fidelity.com/news/news....13345679&IMG=N

All the more reason to stay away from Full service brokers and/or rogue financial advisors.
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Old 11-02-2015, 09:46 AM   #2
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Pretty scary article, I agree.

Wall Street can think what they want. I'm just small potatoes to people like that, and there is no way I would hire someone to make my investing decisions for me.

Nobody cares as much about my money as I do. For me, it's DIY all the way, through Vanguard.
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Old 11-02-2015, 11:06 AM   #3
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My brother uses MStanley and seem to believe all this broker(FA) says. When I came for a visit, he even introduce me to him. Over dinner I told them I am a big fan of Jack Bogle, and that's it. And added, whatever stocks I buy I do it my own way. The conversation didn't go very far.
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Old 11-02-2015, 04:10 PM   #4
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So if I understand that last case correctly, the brokerage firm has gone to court to overturn the arbitration result. The "binding" arbitration agreements they force customers to accept when opening an account are binding that customers accept the arbitration results but not binding on the brokerage to accept the results, even when they stack the arbitration panels with industry insiders. This is begging for legislative action.
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Old 11-02-2015, 05:05 PM   #5
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Excerpt from the linked article in the OP:
Financial firms can be aggressive in arguing that losses are someone else's fault. Consider the document that Oppenheimer & Co. filed with Finra on Jan. 2 in response to a complaint by an 85-year-old widow.

The widow had claimed that, over a 3- year period, she lost $65,000 from churning and unauthorized trading in her $186,000 account and paid $101,000 in commissions.

In its answer, provided to me by the woman's Kansas City, Mo., lawyer, Diane Nygaard -- arbitration filings are not available to the public -- Oppenheimer cited market volatility as one reason the portfolio turned down. But the firm also pulled out the ratification defense: Because the widow never complained about unsuitable investments, she thus gave her blessing to what was going on.


Note the above numbers that I made boldface. Does it mean that the 85-year old now has $186K - $65K - $101K = $20K left? YIKES!

Her broker was playing the roulette on the market with the client's money. I guess for him, the thrill beats going to Vegas, and at somebody else's expense to boot.
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Old 11-02-2015, 05:09 PM   #6
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Note the above numbers that I made boldface. Does it mean that the 85-year old now has $186K-$65K-$101K = $20K left? YIKES!
Apparently so. I used to arrest people who did that kind of thing. Evidently it is legal if a brokerage does it.
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Old 11-02-2015, 05:16 PM   #7
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I find that I sleep better knowing that my S&P fund is generally safe and sound. Returning almost as much as any 'high dividend' stock portfolio. And there are no fees from a FA. That certainly beats a FA being able to pick stocks.

And I am beating the market...
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Old 11-02-2015, 05:20 PM   #8
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I find that I sleep better knowing that my S&P fund is generally safe and sound. Returning almost as much as any 'high dividend' stock portfolio. And there are no fees from a FA. That certainly beats a FA being able to pick stocks.

And I am beating the market...
How does a S&P fund beat the market? The appropriate market comparison would be the S&P 500 index. Your fund should trail that by the expense ratio.
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Old 11-02-2015, 05:31 PM   #9
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Originally Posted by W2R View Post
Pretty scary article, I agree.

Wall Street can think what they want. I'm just small potatoes to people like that, and there is no way I would hire someone to make my investing decisions for me.

Nobody cares as much about my money as I do. For me, it's DIY all the way, through Vanguard.
And full auto! Vanguard Target Retirement.

heh heh heh - Now being male - never over $5 on a football game or 5% of total retirement stash on 'a few good stocks'. Of course 'good stocks' can only be bought during football season.

And yes the Wife MADE ME watch the World Series! Saint's won also.
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Old 11-02-2015, 06:31 PM   #10
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Originally Posted by W2R View Post
Pretty scary article, I agree.

Wall Street can think what they want. I'm just small potatoes to people like that, and there is no way I would hire someone to make my investing decisions for me.

Nobody cares as much about my money as I do. For me, it's DIY all the way, through Vanguard.
Definitely scary.

Although I do have almost everything in Vanguard Target Retirement 2040 VFORX so it appears I'm quite content paying Vanguard 0.10 bp to make investing decisions and do rebalancing for me.
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Old 11-03-2015, 09:27 AM   #11
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Does a person that manages to get a lower return than some benchmark lose money in the market even though their return was >= inflation?
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Old 11-03-2015, 10:20 AM   #12
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Can't say I'm surprised at all, just more routine pilfering, happens all the time to the uniformed and trusting souls who give their money to others to manage.
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Old 11-04-2015, 11:37 AM   #13
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I have lost money and it IS my own fault. I have proven many times I am perfectly capable of losing my own money, thank you. I do not have to pay someone to do it for me.

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Old 11-05-2015, 05:13 PM   #14
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Quote:
Originally Posted by W2R View Post
Pretty scary article, I agree.

Wall Street can think what they want. I'm just small potatoes to people like that, and there is no way I would hire someone to make my investing decisions for me.

Nobody cares as much about my money as I do. For me, it's DIY all the way, through Vanguard.
+1 and a bit more.

I don't even talk with the Vanguard representative assigned to me. The last one I communicated with (before he left and got replaced), I exchanged emails and said "Don't call me, I'll call you" . DIY all the way here too.
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Old 11-05-2015, 05:26 PM   #15
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I have lost money and it IS my own fault. I have proven many times I am perfectly capable of losing my own money, thank you. I do not have to pay someone to do it for me.
+1. Many of my hot stock from ~2000 are no longer listed. Others I sold at a loss have gone on to soar.

The S&P is a much better alternative for me.
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Old 11-05-2015, 08:37 PM   #16
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Quote:
Originally Posted by Ed_The_Gypsy View Post
I have lost money and it IS my own fault. I have proven many times I am perfectly capable of losing my own money, thank you. I do not have to pay someone to do it for me.

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+1

I paid someone who then in turn paid managers to lose my money for a while.

Alas, I couldn't afford how good they were at it and had to go back to my own, less effective rate of wealth destruction

Seriously, at that point in my life I paid someone to manage my money but mowed my own lawn. Now I manage my money and pay someone to mow my lawn. Much better use of both my dollars and my time!!
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Old 11-08-2015, 08:41 AM   #17
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Yeah. Why find new ways to lose money when the old ones were working so we'll!

Seriously though... I wish there was better general education here. The people who make money on transactions can spend so much on marketing and advertising that they can really get the word out. No one makes money saying "reduce fees, taxes and transaction costs" . I learned it the hard way but I was pretty young and since then stopped paying experts.

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