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Did anyone's financial advisor see this coming?
Old 03-21-2020, 11:13 AM   #1
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Did anyone's financial advisor see this coming?

I manage my own finances, and am not a market timer.

However, I keep kicking myself for not seeing/anticipating how this virus would impact the markets once it hit the U.S., and doing some defensive measures.

Did anyone's financial advisor give early warning before the market went crazy?

I know it's little comfort, but if they didn't see it coming either, my backside won't be as sore!
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Old 03-21-2020, 11:17 AM   #2
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Financial advisors don’t know any more than the rest of us. We went through Ebola, SARS, MERS, and H1N1 and the world did not shut down. This one is clearly different and the first time in modern history that it has caused such a dangerous pandemic that it required such a massive lockdown of the human population.

Apparently the only people who had advanced notice of it were those senators that sold massive amounts of stock right before it hit.
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Old 03-21-2020, 11:24 AM   #3
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Yep. You can't "beat" insider information. FA, do not know.

OP. Proper "allocation", based on your "age", IMHO, is the best approach.

Currently, I'm making small purchases, of Vanguard, total stk mkt.

Follow Warren Buffet's advice.
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Old 03-21-2020, 11:43 AM   #4
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Originally Posted by RetiredAt55.5 View Post
... I know it's little comfort, but if they didn't see it coming either, my backside won't be as sore!
Consider the old metaphor of monkeys at typewriters. It's the same thing in investing. There are thousands of monkeys at keyboards typing random nonsense, hustling clicks for advertisers and newsletter sales, hoping to become internet and television monkeys.

Inevitably a few monkeys' guesses line up with reality. These will then be designated "genius" monkeys and be consulting by the television and internet monkeys until the next exciting thing happens and the next genius monkeys are selected by the event. Rinse and repeat.

So ... long story short, there are inevitably FA monkeys who guessed right. But that is not evidence of any kind of skill.

The most widely known investment approach, Modern Portfolio Theory, is based on a model of market pricing as random. The Efficient Frontier, Markowitz' Nobel Prize, etc. all based on the random market model.

So sooth your backside by drinking a glass of cabernet, sitting on a nice pillow, and listening to some good music. Pachelbel's Canon, maybe. Stop looking at the market. Checking back in a couple of years is plenty good enough.
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Old 03-21-2020, 11:49 AM   #5
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I have an "unpaid" FA at Fidelity. No warning there.
Was kicking myself a bit too, as when this started I felt "this time" there is a clear reason for the decline, so why not get out until cleared up, but my buy and hold theory overcame that.
Still nervous, as my LTD portfolio is now down 8.5%.
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Old 03-21-2020, 11:51 AM   #6
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I suspected it was coming when China started shutting down. I wasn't confident enough to dump all stocks but I did go to a more typical AA and I'm glad I did. I still expect stocks to drop by >50% before this turns around, but I've certainly been wrong before and I hope I am this time. Fortunately, I shouldn't need any of my stock investments any time soon, if ever.
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Old 03-21-2020, 11:56 AM   #7
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I didnít hire my Vanguard PAS advisor for his market timing omniscience. I hired him as a mistake prevention insurance policy. Heís had us in a more conservative 50/50 AA for two years than I had us in as a DIYer, and I am grateful.
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Old 03-21-2020, 12:00 PM   #8
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I think Brewer1234's did.
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Old 03-21-2020, 01:27 PM   #9
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Originally Posted by Ready View Post
Financial advisors donít know any more than the rest of us. We went through Ebola, SARS, MERS, and H1N1 and the world did not shut down. This one is clearly different and the first time in modern history that it has caused such a dangerous pandemic that it required such a massive lockdown of the human population.

Apparently the only people who had advanced notice of it were those senators that sold massive amounts of stock right before it hit.
Thanks Ready, that's a good analysis of why this one's different.

In regards to those politicians, at least it's only 2 that have been accused of this, according to the Washington Post article I read.
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Old 03-21-2020, 01:39 PM   #10
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From the time of the great depression until now, FA's have never added any value, almost mathematically never can. The urban ignorance around this is that there is no competence to be found, however hard one looks.

One of the very best books (&hilarious) was written by Fred Schwed; Where are the customers' yachts? around 1940. He was the son of a depression era and a keen observer of human behavior in the investment world. I roll around laughing while learning the sobering facts about the investing world. I have read it numerous times. Please read if you haven't.
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Old 03-21-2020, 01:46 PM   #11
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No, but personal capital called and asked whether I was fine and whether I'd be interested in them managing my finances. I didn't quite appreciate this so I had a nice talk with him about how much he knows about investing.
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Old 03-21-2020, 01:56 PM   #12
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Originally Posted by RetiredAt55.5 View Post
I manage my own finances, and am not a market timer.

However, I keep kicking myself for not seeing/anticipating how this virus would impact the markets once it hit the U.S., and doing some defensive measures.

Did anyone's financial advisor give early warning before the market went crazy?

I know it's little comfort, but if they didn't see it coming either, my backside won't be as sore!
I started to the Thursday before the Friday drop where it never came back, so I was a little late. Up to that time the market had always come back from each drop. I cashed in almost $100K with plans to do a little more at a time, but it just kept going down from there so I never followed through.
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Old 03-21-2020, 02:09 PM   #13
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From the time of the great depression until now, FA's have never added any value, almost mathematically never can. The urban ignorance around this is that there is no competence to be found, however hard one looks.

One of the very best books (&hilarious) was written by Fred Schwed; Where are the customers' yachts? around 1940. He was the son of a depression era and a keen observer of human behavior in the investment world. I roll around laughing while learning the sobering facts about the investing world. I have read it numerous times. Please read if you haven't.
Yes, I also believe that (which is why I don't use one).

However, I'm not talking about stock picking. In this one instance, I thought that perhaps some of them might be better informed about the seriousness of the virus and how it would rock the markets as a whole. Like those 2 senators.
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Old 03-21-2020, 02:35 PM   #14
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Hindsight 20/20. I wish I'd sold my Roth stock index fund, entirely, uhhh, one month ago today.
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Old 03-21-2020, 02:44 PM   #15
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Originally Posted by free2020 View Post
From the time of the great depression until now, FA's have never added any value, almost mathematically never can. The urban ignorance around this is that there is no competence to be found, however hard one looks.

One of the very best books (&hilarious) was written by Fred Schwed; Where are the customers' yachts? around 1940. He was the son of a depression era and a keen observer of human behavior in the investment world. I roll around laughing while learning the sobering facts about the investing world. I have read it numerous times. Please read if you haven't.
Yes. He's great. I am too lazy to look up the exact quotation but on the subject of customers' money he said that at the end of the day the brokers take all the money and throw it in the air. The money that sticks to the ceiling is the customers' money.
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Old 03-21-2020, 02:59 PM   #16
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Yes. He's great. I am too lazy to look up the exact quotation but on the subject of customers' money he said that at the end of the day the brokers take all the money and throw it in the air. The money that sticks to the ceiling is the customers' money.


Many more like this. The one I’ll never forget is his definition of an investor versus a speculator

A speculator is one who, unsuccessfully, hopes to turn a little money into a lot, while an investor is one who tries to prevent a lot of money from becoming a little!!

And this,

They told me to buy stock of ABC railroad for my old age. I did, and within a week I was old
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Old 03-21-2020, 03:56 PM   #17
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My wife's company hired a new FA to help people with their 401K's. As luck would have it, he met with the employees individually the week before the big selloff began in February. He told DW that her 45/55 AA was much too conservative for her age (62) and recommended she go to 70/30. I often wonder if he talked anybody into it. Of course, the REAL reason for his meeting was to try and get our other assets under his astute management for the low, low fee of 1.25%.

Once stocks started cratering I quickly found out that our 45/55 AA was indeed way too invested in stocks for our liking. I thought I wouldn't have any problems riding out any downturns, just like I did in 2001 and 2008. Not so, anymore. Too close to full retirement and with no pensions and only our SS and savings to live on, we decided to drastically lower our AA and put most of it in cash.
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Old 03-21-2020, 04:40 PM   #18
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Seems only FA's that gave advise were for politicians that had inside knowledge of the real overall impact and just happen to sell off millions worth of stock before the market dropped.
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Old 03-21-2020, 06:05 PM   #19
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Never do they call to sell anything.

Last April I thought things were getting a bit frothy and sold all positions in two IRA type accounts moving them to cash. Although I bought "some" corporate bonds in one of the accounts. ugh!

Last week and this week, she called and tried to sell me something. I didn't byte.
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Old 03-21-2020, 06:52 PM   #20
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I'm my own FA and I told myself, self, do nothing.
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