I need a pep talk

[Bestwifeever]

Quote:

Originally Posted by ziggy29 The lowest my retirement portfolio has ever been is zero, as late as 1988 before I made my first 401K contribution. I guess that's one way to feel like we're coming out ahead....

See, don't you feel better already?

[A854321]

My experience with SB is that the 1.5% fee is assessed QUARTERLY. It doesn't sound like much, until you look at your statements.

In round numbers, and in a VERY basic example:

On a $1 million portfolio, SB takes $15,000 out every quarter, and lists it on a small line in the 6 page report. That means that every year you pay them $60,000!

Look at that from the perspective of being retired and realize you are paying $60,000 every year and it really starts to add up. That money comes out of your funds first.

20 years with SB Trak, and you have paid them in excess of $1.2 million!!!!

[Rustward]

Quote:

Originally Posted by A854321 My experience with SB is that the 1.5% fee is assessed QUARTERLY. It doesn't sound like much, until you look at your statements.

Are you sure that is quarterly? That is an enormous fee.
Could it have been 1.5% per year, assessed quarterly? Even that would be a lot.

[2B]

Quote:

Originally Posted by Rustward Are you sure that is quarterly? That is an enormous fee. Could it have been 1.5% per year, assessed quarterly? Even that would be a lot.

I believe we've reached general agreement that no management fee is ever justified and that complicated financial products are best avoided.

[Art G]

I know many on here will advise index funds, however, I would instead advise finding funds that will hold cash. The mutual fund manager who is forced to be 100% invested will merely try to find the best of a bad situation. Instead, find a manager who can actively manage. JMO

[2B]

Quote:

Originally Posted by Art G I know many on here will advise index funds, however, I would instead advise finding funds that will hold cash. The mutual fund manager who is forced to be 100% invested will merely try to find the best of a bad situation. Instead, find a manager who can actively manage. JMO

Feel free to disagree with every research study ever done that says actively managed funds routinely underperform their index and none do it consistently.

Hope springs eternal for that really smart guy or gal that can.

[willowbeezer]

Momentum is down on the indexes. we continue to get bad news from the financials / housing. Credit is tightening up increasing the cost of capital for financials and businesses. job market is challenged. and frankly, folks are coming home to see their portfolio decimated and some may call their brokers in the morning.

I am wondering if it makes sense to reallocate more to cash until the uncertainty subsides (no need to catch the bottom). My risk tolerance is moderate and in my opinion the riskiness of holding positions (ie. overnight/over the weekend / long term with an allocated portfolio) seems like too much risk for me (its not investing right now, its a roll of the dice). I've been 95% in cash since around June and missed much of the bloodbath - also been shorting the indexes intraday during the massive drubbings.

I've been lucky so far and am slightly up for the year, primarily by going to cash when the market momentum started to go down.

Perhaps I won't be in the market when this market turns but at this point, I am okay with that. I do believe in an allocation strategy but i just don't know if this is the right time.

With regards to the managed SB fund.. I don't know if I would pay 1.5% for the privilege of getting market returns which suck. I would also diversify my holdings and keep them in different accounts - don't put all your eggs in one basket - you just don't know which bank will get squeezed next.

Just my humble opinions.

Best of luck to all.

[Art G]

Quote:

Originally Posted by 2B Feel free to disagree with every research study ever done that says actively managed funds routinely underperform their index and none do it consistently. Hope springs eternal for that really smart guy or gal that can.

Soooooo, why not instead find those funds that HAVEN'T underperformed the index consistently? Just because your friends are jumping off the bridge, does that mean you have to?
Sorry, but I always find it silly for people to say, yeah, but they have outperformed 70% of the funds out there. It seems to me I've now got 30% of the funds in the world to investigate. JMO
BTW, American Funds do it consistently. Check your stats.

[FinanceDude]

Quote:

Originally Posted by A854321 My experience with SB is that the 1.5% fee is assessed QUARTERLY. It doesn't sound like much, until you look at your statements. In round numbers, and in a VERY basic example: On a $1 million portfolio, SB takes $15,000 out every quarter, and lists it on a small line in the 6 page report. That means that every year you pay them $60,000! Look at that from the perspective of being retired and realize you are paying $60,000 every year and it really starts to add up. That money comes out of your funds first. 20 years with SB Trak, and you have paid them in excess of $1.2 million!!!!

Your are wrong. The 1.5% is assessed on an annual basis, but paid quarterly, so .375 or $3,750 is billed quarterly. Keep in mind that does NOT include the ER of the underlying funds that SB puts in there, so the REAL number is undoubtedly means you're paying in excess of 2% a year.

It's still way too much to pay, but I digress.........

[FinanceDude]

Quote:

Originally Posted by 2B I believe we've reached general agreement that no management fee is ever justified and that complicated financial products are best avoided.

VG charges management fees too...........so I guess you're 100% in cash..........making you smarter than Warren Buffet........

[2B]

Quote:

Originally Posted by Art G Soooooo, why not instead find those funds that HAVEN'T underperformed the index consistently? Just because your friends are jumping off the bridge, does that mean you have to? Sorry, but I always find it silly for people to say, yeah, but they have outperformed 70% of the funds out there. It seems to me I've now got 30% of the funds in the world to investigate. JMO BTW, American Funds do it consistently. Check your stats.

I just checked one. AMPCX is a large cap growth fund for the benefit of any readers. It failed miserably and I'm assuming that the numbers don't include the load.

1 Year 3 Year 5 Year Since Incep.
AMPCX -14.73% +1.09% +4.26% +2.57%
Category -9.28% +3.47% +6.05% --
Index -11.14% +3.66% +6.92% +10.78%
as of 8/31/2008

I could check the other 77 American funds. I'm sure I could find one or two that might have beaten their index consistently.

I think it's kind of silly for trolls to make incorrect statements and not have them checked. If you would like, post a list of the 78 funds and give 1 star for beating either the 1, 3 or 5 year performance of the index. You could make it even shorter if you'd post the ones that have beaten the 1, 3 and 5 year index performance (the 3 star funds). For these it would be nice to know if they also led the 10 year performance. These are the 4 star funds. Of course, subtract the load from the performance.

[2B]

Quote:

Originally Posted by FinanceDude VG charges management fees too...........so I guess you're 100% in cash..........making you smarter than Warren Buffet........

VG charges less than 0.3% on any of my funds. Most are under 0.1%. If I could get a lower cost index fund, I would. I'm stuck paying 0.6% in my 401k and it chaffes my butt.

Back in the old days, there wasn't a choice of low fee funds. The 1+% was the cost of being in the game. There's no reason to pay more than necessary.

[FinanceDude]

Quote:

Originally Posted by 2B I just checked one. AMPCX is a large cap growth fund for the benefit of any readers. It failed miserably and I'm assuming that the numbers don't include the load. 1 Year 3 Year 5 Year Since Incep. AMPCX -14.73% +1.09% +4.26% +2.57% Category -9.28% +3.47% +6.05% -- Index -11.14% +3.66% +6.92% +10.78% as of 8/31/2008

Which index are you picking? It needs to be large cap growth index if you want apples to apples...........:confused:

[Art G]

2B....interesting, you chose the C share version because....perhaps their fees were a tad higher?
It's not their best fund, but no matter....

AMCAP most recent I could find.....

1yr. -14.72
5yr 5.89
10 yr.5.58
lifetime 11.66

S&P Index

1 yr. -13.11
5 yr. 7.58
10 yr. 2.88

So, after 5 years, the Index never comes close. I appreciate you showing how stats can be manipulated when need be.

[FinanceDude]

Quote:

Originally Posted by 2B VG charges less than 0.3% on any of my funds. Most are under 0.1%. If I could get a lower cost index fund, I would. I'm stuck paying 0.6% in my 401k and it chaffes my butt.

PSSSTTT........ETF's..........

[Art G]

I doubt his 401k offers ETF's.

[FinanceDude]

Quote:

Originally Posted by Art G I doubt his 401k offers ETF's.

I was referring to lowering his VG expense.

[2B]

Quote:

Originally Posted by Art G 2B....interesting, you chose the C share version because....perhaps their fees were a tad higher? It's not their best fund, but no matter....

They were selected at random. I didn't want to take the first one on the list. I think I picked the third one. I didn't compare any fees or even look at a second fund. One loser was enough.

It's always hard to know which one will be the best fund over the next 10 year period.

It would be interesting to see a list of 4 star funds.

[2B]

Quote:

Originally Posted by FinanceDude PSSSTTT........ETF's..........

Some ETFs are too thinly traded and frequently have large bid/ask spreads. I have SPY and IWD.

My 401k is through Hartford and I have an S&P index fund with about a 0.6% fee.

[Art G]

Quote:

Originally Posted by 2B They were selected at random. I didn't want to take the first one on the list. I think I picked the third one. I didn't compare any fees or even look at a second fund. One loser was enough. It's always hard to know which one will be the best fund over the next 10 year period. It would be interesting to see a list of 4 star funds.

I believe FD has on several occasions listed how American Funds has performed vs. the S&P, and I'm pretty danged sure that every American Fund has beaten the index at worst over the last 10 years and most over the one, three, and five year time period. However, they don't have that many funds so you should check out their A funds, maybe 15 of them or so?