Feeling a bit confused

[RocketGirl]

Hi All,

I am feeling confused and hoping to get some feedback on how others manage their investments as they sprint towards early retirement. Just turned 46 and due to work and family commitments I’ve been putting lacklustre ROI out of my mind in some of my accounts. (My husband has a smaller portfolio and is not confident in these matters and will be happy to follow suit.)

Although I’ve been using a financial advisor I’ve felt underwhelmed by what they’ve been doing and I’m looking to make a change - in the back of my mind I’m concerned if a new firm will result in more of the same and if I should be self-investing and realizing greater gains.

We have a fairly sizeable portfolio but not at 1M yet, we foresee a few large deposits in the coming years through selling rental properties as long term we’d like to be less tied down as it relates to landlord issues.

I should mention we’re in Canada - seems overall ROI is lower here than I see reported in what folks expect to achieve in the US.

Do FIRE members self-invest or work with professionals to get them closer to their retirement goals?

Thanks for the input

 

[VanWinkle]

Hi All,

I am feeling confused and hoping to get some feedback on how others manage their investments as they sprint towards early retirement. Just turned 46 and due to work and family commitments I’ve been putting lacklustre ROI out of my mind in some of my accounts. (My husband has a smaller portfolio and is not confident in these matters and will be happy to follow suit.)

Although I’ve been using a financial advisor I’ve felt underwhelmed by what they’ve been doing and I’m looking to make a change - in the back of my mind I’m concerned if a new firm will result in more of the same and if I should be self-investing and realizing greater gains.

We have a fairly sizeable portfolio but not at 1M yet, we foresee a few large deposits in the coming years through selling rental properties as long term we’d like to be less tied down as it relates to landlord issues.

I should mention we’re in Canada - seems overall ROI is lower here than I see reported in what folks expect to achieve in the US.

Do FIRE members self-invest or work with professionals to get them closer to their retirement goals?

Thanks for the input

You will very likely achieve a better return on investment by reducing fees and expenses paid to an advisor. You must be able to create a plan for investing. Simple is much better than the complicated mess some advisors come up with. Vanguard or some other low cost(not sure what is available in Canada) provider with low cost index funds is your best bet. If you panic when the market swoons and sell equities, find a low cost advisor service and
let them convince you not to panic. Continue to read (https://www.bogleheads.org) and learn how to keep things simple.
http://tuttle.merc.iastate.edu/Bernstein_If_You_Can.pdf is a good short read to help you get started.

Best to you,

VW

 

[RocketGirl]

Thanks for the reply. I’m not a skittish investor and don’t ever panic sell. I suppose I’m concerned about not having time to make changes or more smartly invest should some changes be needed between elder care, work and family. I appreciate the resource you’ve provided, I’ll read through and see how that helps us move forward.

 

[Jerry1]

Do FIRE members self-invest or work with professionals to get them closer to their retirement goals?

Thanks for the input

Both types of investors live here. I think the majority do self invest. You will get plenty of advice here if you would like to do it yourself. Welcome to the forum. Ask questions and you’ll be able to say goodbye to your advisor in no time if that’s your desire.

 

[38Chevy454]

Majority on the forum here are self directed. Also majority use low fees wide diversified funds vs individual stocks. Where the differences between the members show is in asset allocation, risk tolerance and timeframe of investments.
There is no reason to pay for a FA, you can do it yourself. If you are needing advice, there are many smart people here to help and provide their opinion on your questions. My suggestion is that you just need to prioritize some time, and read what you can on the forum here, as well as some investment books. There have been a lot of good suggestions if you just search the forum for books to read. Your self education is the best investment you can make, it will pay off from now and continuing into the future.

 

[Rianne]

^^^Agree. We are self directed. It might seem boring, but the Asset Allocation that seems to work is 60/35/5. Although some disagree, this approach has worked for us for 30+ years and we've not sold anything other than re allocating a bit. The bulk of our portfolio is in Vanguard. Take some time and examine the many posts and discussion here.

 

[OldShooter]

... I am feeling confused and hoping to get some feedback on how others manage their investments as they sprint towards early retirement.

Nothing to be ashamed of there. Anyone dealing with the financial services industry who is not confused has simply not been paying attention. Sowing confusion and fear is a strategy for retaining customers and keeping those Porsches in the garage.

I strongly recommend that you start here: "The Coffee House Investor" by Bill Schultheis https://www.coffeehouseinvestor.com/
Bill is a very laid-back guy and this book is a short and easy read. It will calm your nerves. It even comes with a recipe for pumpkin pie!

I know Bill slightly and last week he emailed me a PDF preprint of his second book, to be published next week. It doesn't duplicate or update the first book. Rather it is a next step for readers who enjoyed #1, which I think everyone does. (I have skimmed it and found no recipes. )

...I should mention we’re in Canada - seems overall ROI is lower here than I see reported in what folks expect to achieve in the US. ...

No reason for that to be an issue. Here is a video that you will probably find interesting: https://famafrench.dimensional.com/videos/home-bias.aspx

It is an interview with investment guru Ken French. The interviewer happens to be Canadian, so the discussion involves the fact that Canada represents only about 4% of the world market capitalization yet it is common for Canadians to have far more than 4% of their portfolios in Canadian stocks. From there it evolves to a discussion of home country bias, which is ubiquitous, and why that may not be a good thing.

 

[SnowballCamper]

Hi All,

Although I’ve been using a financial advisor I’ve felt underwhelmed by what they’ve been doing and I’m looking to make a change - in the back of my mind I’m concerned if a new firm will result in more of the same and if I should be self-investing and realizing greater gains.

If you are underwhelmed in the sense that your advisor has you in a few very low cost index funds (diversified around the world) and doesn't promote buying and selling, then that is what a good advisor does (IMHO).

If you know your asset allocation and have the discipline to follow it, there is little need for a financial advisor to select your investments for you. Just pick the lowest cost index funds in accordance with your asset allocation.

If you don't yet know about asset allocation, then you should read about it independently from what one commission (or Assets Under Management) advisor tells you.

 

[HI Bill]

Hi! To save on fees (and likely obatain similar or better results), I'd recommend investing in a simple three-fund (mutal fund or ETF) portfolio, similar to what the Bogleheads propose:

https://www.bogleheads.org/wiki/Three-fund_portfolio

I like the three-fund portfolio 80/20 (64% total stock market, 16% total international stock market, and 20% total bond market). Simple, complete, and low-cost diversification in just three funds. I'm not sure what equivalents you have in Canada, but this concept should get you off on the right foot. The web site has other distributions of the three-fund portfolio as well.