How are my Rate of Return in my Roth IRA?

[F.I.R.E User]

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Originally Posted by SecondCor521 You've probably delegated investment authority on your account to your advisor at the firm. If you have done so, and they are not a fiduciary, then they can do this. Even if they're a fiduciary, they might be able to do this. That advisor will put you in multiple funds for several reasons: 1. It makes investing look hard, so you're less likely to take control back. 2. They also might be able to convince you to pay account management fees. 3. They can move your money around more frequently, resulting in higher fees (transaction fees, trading fees, front end loads) to them. 4. It gives the appearance that you are broadly diversified. 5. It makes it harder for you to benchmark your performance, which means they can hide their fees and underperformance from you. Probably more, but those are the ones I can think of offhand.

After all these years. I could have just used VTSAX and sit back/relax?

[SecondCor521]

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Originally Posted by F.I.R.E User After all these years. I could have just used VTSAX and sit back/relax?

That's what I was suggesting back in post #13 on this thread:

https://www.early-retirement.org/for...ml#post2599485

You probably would have had less stress, more money, and paid less in taxes too.

But I wouldn't beat yourself up. EJ does this to millions of people, and what's done is in the past. What can you do now is more important.

[F.I.R.E User]

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Originally Posted by SecondCor521 That's what I was suggesting back in post #13 on this thread: https://www.early-retirement.org/for...ml#post2599485 You probably would have had less stress, more money, and paid less in taxes too. But I wouldn't beat yourself up. EJ does this to millions of people, and what's done is in the past. What can you do now is more important.

Someone else said I may have beaten the average S&P 500 market with EJ.

[SecondCor521]

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Originally Posted by F.I.R.E User Someone else said I may have beaten the average S&P 500 market with EJ.

That was me in post #30:

https://www.early-retirement.org/for...ml#post2600316

I retracted that claim and admitted I had messed up the math in post #33:

https://www.early-retirement.org/for...ml#post2600342

You very likely did not beat the S&P 500 over time, especially after taxes and risk are accounted for.

[F.I.R.E User]

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Originally Posted by SecondCor521 That was me in post #30: https://www.early-retirement.org/for...ml#post2600316 I retracted that claim and admitted I had messed up the math in post #33: https://www.early-retirement.org/for...ml#post2600342 You very likely did not beat the S&P 500 over time, especially after taxes and risk are accounted for.

EJ FA also manages my 401k. If I leave EJ I will be on my own to manage it.

[SecondCor521]

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Originally Posted by F.I.R.E User EJ FA also manages my 401k. If I leave EJ I will be on my own to manage it.

That's likely a false dichotomy. There are other asset managers out there with better reputations and lower fees than EJ.

https://en.wikipedia.org/wiki/False_dilemma

You could certainly move your Roth IRA. You probably can't move your 401(k), but it might be possible for another asset manager to advise you on your 401(k) even if EJ continues to hold the account and the assets.

[F.I.R.E User]

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Originally Posted by SecondCor521 That's likely a false dichotomy. There are other asset managers out there with better reputations and lower fees than EJ. https://en.wikipedia.org/wiki/False_dilemma You could certainly move your Roth IRA. You probably can't move your 401(k), but it might be possible for another asset manager to advise you on your 401(k) even if EJ continues to hold the account and the assets.

My company offers Financial Engines at a fee to manage 401k. Use that?

[SecondCor521]

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Originally Posted by F.I.R.E User My company offers Financial Engines at a fee to manage 401k. Use that?

Up to you. I try very hard not to give advice. I don't want to be responsible, and I don't know your whole situation.

[F.I.R.E User]

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Originally Posted by SecondCor521 Up to you. I try very hard not to give advice. I don't want to be responsible, and I don't know your whole situation.

You can always put a disclaimer if you want.

[F.I.R.E User]

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Originally Posted by dirtbiker There is also the Dave Ramsey investment calculator. It's fairly simplistic, but easy to use. Put in your starting investment and the average of how much you invested monthly, and then play with the annual return until you get your actual total. Then compare this annual return with the S&P 500 annual return over the same time period. https://www.ramseysolutions.com/reti...ent-calculator

S&P 500 says it has returned about 12% since 1928.

Should I put 10% to be a little conservative?

[F.I.R.E User]

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Originally Posted by Exchme None of this is getting at the risk adjusted returns. If the EJ portfolio is riskier than the market, it might well have beaten it, but you may still not want to own the EJ portfolio in a downturn if it takes a bigger beating. I think you can get useful information about risk adjusted returns by using Portfolio Visualizer with a hypothetical investment in your fund vs. others and it gives you information about risk like the Sharpe ratio, Sortino ratio, standard deviation and maximum drawdown that will give you a better feel for the risk adjusted return. I would either look up when your fund was founded and go back that far or at least try different dates in Portfolio Visualizer and let it tell you when data became available for your fund. But even with data, how would you separate luck from skill? Maybe it was a Tech fund and this has been the era of Tech, just like past eras were dominated by coal, railroads, autos or oil. But maybe the next decades will be the era of genomics or space or nuclear or solar or robotics or even crypto and your fund could be left in the dust. The market is an information processing machine so once something is known, it's in the price before you can blink. Since none of us get to see the future, we are equally clueless about what the market will do next. So two things matter - diversification so you get the market return and the cost to get it. I would get out of EJ and get to a low cost, broadly diversified fund, like a total stock market fund. Vanguard, Fidelity, Schwab all have low cost total market funds available.

What is wrong with a bigger beating in a down market? I benefit from DCA.

I do have just VTSAX at Vanguard for my non retirement account.

[F.I.R.E User]

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Originally Posted by pb4uski What you could do is to do a Portfolio Visualizer Run for each deposit comparing what Fast Eddie has you invested in to some benchmark consistent with the AA that Fast Eddie has you invested in... comparing the performance of each deposit... you could even then add them up if you want to. I did an exercise similar to this for a friend a few years ago... she had an old 401k that was invested in certain funds... I compared her last 3 year performance with an index fund with a similar AA as her 401k investments... not surprisingly the index portfolio won by a wide margin.

Is that free to do?

[F.I.R.E User]

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Originally Posted by disneysteve More info is needed to answer that. How is the EJ account invested? What funds are you in? You need to make sure you're doing an even comparison to see how those funds performed compared with comparable index funds.

I posted what AF Class A funds I am invested in. Please take a look.

I am trying to compare with VTSAX.

[F.I.R.E User]

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Originally Posted by disneysteve Exactly. Actively managed funds are supposed to beat the indexes; they do not.

So how are these fund managers keeping their jobs?

[F.I.R.E User]

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Originally Posted by bloom2708 Rather than looking at your past results, look into the future. https://www.dinkytown.net/java/compa...ment-fees.html Use 3 different fee structures. Use your actual numbers and contribution rates. Use a reasonable return rate. 4% maybe. Our all up cost at Vanguard is .06% Use .10% 1% and 1.5% (or your best guess based on your funds and fees at EJ). Look out 30 years. Well, you may not want to. Just 1% is quite awful over 30-40 years.

$54K divide by about 13 years?

[OldShooter]

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Originally Posted by dirtbiker There is also the Dave Ramsey investment calculator. It's fairly simplistic, but easy to use. Put in your starting investment and the average of how much you invested monthly, and then play with the annual return until you get your actual total. Then compare this annual return with the S&P 500 annual return over the same time period. https://www.ramseysolutions.com/reti...ent-calculator

If I understood the OP correctly, he has added assets to the account, so those will look like account growth to any calculator. He has to subtract the current value of those assets from the account value before he tries to get a rate of return.

But the real world is that if he has been paying front end loads to Fast Eddie, his return will be in the toilet vs the S&P. Just that fact is enough; no mathematics necessary.

[F.I.R.E User]

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Originally Posted by OldShooter If I understood the OP correctly, he has added assets to the account, so those will look like account growth to any calculator. He has to subtract the current value of those assets from the account value before he tries to get a rate of return. But the real world is that if he has been paying front end loads to Fast Eddie, his return will be in the toilet vs the S&P. Just that fact is enough; no mathematics necessary.

What is my actual ROR after fees?

[Whisper66]

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Originally Posted by F.I.R.E User So how are these fund managers keeping their jobs?

Ask yourself why you are with EJ. They provide you something you value. Only you can answer what that is. But you allow them to manage your money without understanding the real monetary returns they are providing. If you understand why you’ve stayed with them this long, you will understand why they are keeping their jobs. They fill a need for some people.

[pb4uski]

Yes

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Originally Posted by F.I.R.E User Is that free to do?

[Sunset]

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Originally Posted by F.I.R.E User So how are these fund managers keeping their jobs?

People are bad at math.
People want someone to handle the "complex stuff".
People have no interest in saving or investing, often don't even know what the interest rates are of loans, savings, etc.
People don't read EVERY page of the annual report that the brokerage sends them so they never see the 1%->2% fee.
People think 1% is only 1 out of 100 so that's low.