OK, I will admit it: I have a chunk of money with Bernstein (the investment research company). Thus far, they have beaten with a 70:30 balance the returns I would have gotten on my own by about 1%* -
net of fees. So it is not a loser for me, and I appreciate not having to fuss with it with my busy life.
But... my confidence is growing and I plan to eventually take it back. They have about 65% of my holdings all in all.
Meantime, Bernstein has me at about a 70:30 balance. While I feel OK about the equity side for the time being, it occurred to me that for that 30% in bonds they are using mostly their own bond index funds (the stocks are mostly individual companies - lots of them). So:
1. I am paying the bond funds' expenses in addition to my advisory fees
2. At bond yields in the 4-7% range, the advisory fee (on balance under management) is eating up 15-20% of my bond yield. Net of fees, I can do better.
So I am thinking of advising my manager to keep the assets he has, but move them all to stocks. I will adjust my other holdings to rebalance the whole deal to 70:30 or 65:35, whatever. As long as I am paying him it might as well be for investments where their resources can really shine, rather than in bonds which I can probably do better on my own.
Does this make sense? See what trouble you guys are causing, getting me all feisty about this stuff?!*
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