Should I take my money somewhere else??

[dorikin_86]

Entered the market in 1Q 2006 with a money mgmt company and after today's dump...i'm sure i'm going to be down more than 1% overall...

This means...my money did not grow in the past 2 1/2 years...geez...i know times are rough but I'm not sure what to do......

 

[LOL!]

You should PANIC and sell everything. The more people who PANIC and SELL, the sooner we will be through this small amount of volatility. Others who are not worried about this will be buying LOW.

 

[chinaco]

The only red flag I read in the post was money management company. Not sure what you meant by that... But if it means big fees and someone else controlling your money, I would be more worried about that than the market.

The market goes up and the market goes down.

IMO -Diversify across a portfolio of stocks and bonds using a low cost approach (mutual funds or ETFs). Rebalance to your target portfolio allocations periodically (not too often) and stick with the plan (assuming the plan is good).

 

[d]

if you invested in equities 2 1/2 years ago, with a 2 1/2 year horizon, you shouldn't have. equities are long term investments. if you have a long term horizon, just hang in! (better yet, it looks like a buying opportunity (once again))

 

[retire@40]

You are down 1% overall and you are worried?

What did you expect your average rate of return and standard deviation to be?

 

[rs0460a]

Entered the market in 1Q 2006.....

I entered the market in early '82 (last century ).

I'm following the same "advice" in the current market that I gave myself many years ago (through many, many "downturns") - that is, do nothing.

Remember, you are purchasing shares, not the current value of those shares. Assuming you have not sold anything, you still have those shares (and even more, if you've reinvested any gains). When the share price recovers, you will see that "buying on the way down" is more important than "buying on the way up". However, it takes a bit of "courage" to know/understand that concept, and stick with a plan.

If you are "well off" (financially) and don't care if you buy a product at full price (in other words, you never go to K/Wallmart ), then feel free to sell at a "loss". However, if you like to buy at a discount (in otherwords, "on sale") this market is made for you.

As for me (being in retirement, pre-SS, and drawing the majority of my monthly income from my rollover IRA) the structure of my funds (with a good size "cash bucket") I'll just sit back and wait till the "tide comes back in". It always does. When it does, I'll sell my gains and restock my cash bucket for the next time the "tide goes out" (as I have in the past).

- Ron

 

[Dawg52]

Stock market has been flat for the last 8 years. But it is true, over the long haul stocks have performed well. Just depends what your time frame is for investing.

 

[ERD50]

If you put the money in an ETF like SPY on Feb 15th 2006 (mid Q1 2006), you would be up about 0.8%. That is using the 'adjusted' prices on Yahoo, which accounts for dividends. The only fee not included in that would be the initial trade, as low as $5 depending on your broker.

124.03/123.05 = 1.007964242178

Tell us more about this 'money mgmt company'. I doubt they are doing you any favors. And if investing in the market is an appropriate place for this money, you can see just how simple it is to buy into 500 companies. One transaction, take a nap.

-ERD50

 

[ziggy29]

Stock market has been flat for the last 8 years

Not necessarily. If you were well diversified among many stock asset classes, including small caps, value stocks, international stocks, REITs and emerging markets, you're likely still ahead, and possibly by a significant margin.

 

[travelover]

The first question I'd ask is "Do you know what fees you are paying?" If you don't, ask yourself why not. Did your management company "forget" to make these clear?

Find out all what all your fees and loads are and compare them to a low cost investment company like Vanguard. Compare your returns to an appropriate index.

Please post back and tell us what you found.

 

[dorikin_86]

I know exactly how much fees I'm paying - about 2% of my portfolio.

I definitely want to retire with this portfolio and I put in as much as I can whenever I have spare cash. I am not worried about a down market...it does mean I get to buy into companies cheaper - my worry is that if someone hasn't made any money over the last 2 1/2 years....I wonder if he can maximize my money when the tide comes back in.....anybody look back 2 1/2 years and see how they made out?

The manager is a great guy but I can't retire based on the fact that he's a great guy....

All I know is, the nasdaq and dow is back where I entered the market and I'm in the red....

 

[REWahoo]

I know exactly how much fees I'm paying - about 2% of my portfolio.

The manager is a great guy but I can't retire based on the fact that he's a great guy....

I'll bet he thinks you're a great guy too! 2% per year? Jeeze louise....

 

[samclem]

I know exactly how much fees I'm paying - about 2% of my portfolio.

You are making several people very happy. Unfortunately, you aren't one of them.

You need to figure out a low-cost way to free yourself from this arrangement and get into a low-cost, diversified portfolio that meets your risk tolerance. There are a lot of folks here who can help.

You sound like you already know what the problem is, it's time to take the next step.

 

[travelover]

I know exactly how much fees I'm paying - about 2% of my portfolio............

OK, if you retire with a million dollars, using the generally accepted 4% safe withdrawal rate, you get to live on $20,000 a year and you give your friend $20,000 a year. How does it sound now?

I think you'd be much better off with a Vanguard Target Retirement fund or something similar.

 

[sidney]

Seriously, you should be paying closer to .2% instead of 2%. My expense ratio is approximately .08% but I am an extreme. 2/10 of a percent is doable for most.

 

[FreeAtLast]

I too have investments for myself and my children starting around the same time as you in 2006 using an investment advisor charging about 1%. That seems to be the going rate. I have had very good results up until the beginning of this year. I have started investing a portionon my own this year and plan to take charge of everyting within a year. I have made a few mistakes, however, I still have a respectable net gain on the money that I have invested.

I did some investing quite a few years ago when I was in business for myself so I knew where to start. More recently it has been the 401k investments until I started again in 2006.

T

 

[ERD50]

...i'm sure i'm going to be down more than 1% overall...

This means...my money did not grow in the past 2 1/2 years...geez...i know times are rough but I'm not sure what to do......

I am not worried about a down market...

Coulda fooled me!

I know exactly how much fees I'm paying - about 2% of my portfolio.

All I know is, the nasdaq and dow is back where I entered the market and I'm in the red....

Well, if you were paying the 0.2% fees in an ETF that matches the DOW or the nasdaq, you would be about even then. There's no free lunch - if your manager did manage to make up for the 2% in fees, he'd have to take additional risk. And if you are OK with that, you can do it for less than 2%, just select riskier ETF's or choose a riskier asset balance.


-ERD50

 

[dorikin_86]

I love the honesty on this board! Thank you all!

Will look into ETF's this week. I think it's time.

 

[FIREd]

You are paying 2% of your portfolio in fees? That's way too high. I pay about 0.37% on my portfolio, and it's only because the fees in my wife's 401K are high, nothing I can do about that.

I noted that so far nobody really gave you a quantitative answer as to their portfolio's return over the past 2.5 years, but I will divulge mine: portfolio up 4.0%, highly diversified mixture of stocks, bonds, REITs and cash.

 

[2B]

Hey boys and girls. Stop beating this poor newbie up because he's fallen into the clutches of a high cost FA. We've all done as bad or worse. I sure know I have.

If he figured it out in only 2 years, he probably should get a "genius award" from the forum. I stumbled around getting screwed and doing stupid things for a couple of decades.

dorikin_86,

There's a suggested reading list available on the forum. Do a search and you'll find it. Don't go rushing off to find ETFs before you figure out what you want to do. Have a plan!

Google Scott Burns for his Couch Potato portfolio. That's a good place to start.

 

[putty]

Yes, I agree with the others. I suggest you post your portfolio here and at the Bogleheads forums and do some reading. You deserve much better than 2% in fees. Look at how much 2% will detract from your portfolio over the decades. It's very substantial.

 

[dorikin_86]

Hey boys and girls. Stop beating this poor newbie up because he's fallen into the clutches of a high cost FA. We've all done as bad or worse. I sure know I have.

If he figured it out in only 2 years, he probably should get a "genius award" from the forum. I stumbled around getting screwed and doing stupid things for a couple of decades.

dorikin_86,

There's a suggested reading list available on the forum. Do a search and you'll find it. Don't go rushing off to find ETFs before you figure out what you want to do. Have a plan!

Google Scott Burns for his Couch Potato portfolio. That's a good place to start.

Thanks for the kind words! O0

I started reading a little bit about Vanguard and the different funds available. The recent issue of 'money' also included vanguard funds as one of their top picks so I will def. look into not just ETF's

Will post my strategy up for you veterans to give me some feedback.

 

[unclemick]

Poke around the Vanguard website - specifically the Target Retirement fund corresponding to your age - see if you in your own mind understand what they own and why they own it.

heh heh heh - 1966-2006, after forty years of reading, studying, investing, mis-investing, etc - my retirement runs on Target Retirement 2015. There are other approaches. At 65, I think of it as Pssst-Wellesley with chrome trim(a little forum humor) .

 

[ejman]

Just for the fun of it, a portfolio that was half Wellesley and half Wellington would be up about 5.7 % from 3/31/06 thru today. Expenses significantly lower than 2% I would say...

 

[travelover]

.......... The recent issue of 'money' also included vanguard funds as one of their top picks so I will def. look into not just ETF's .............

Here is another tip. Cancel your Money magazine subscription. Those idiots cost me a ton of money in my younger years chasing their 10 hottest stocks / funds of the month baloney. Their job is to sell you high expense funds and to encourage churning to the benefit of your broker. Seriously, pick a Vanguard Target Retirement Fund of the appropriate year, invest in it religiously and use your time for better things. It really can be that simple.