Mom's FA says to sell IBM

[ERD50]

I'm up 6 bucks a share and collected $563 in dividends for a total profit of $2818.

Up 5% in 45 days. Way to go Merrill Lynch -

Roughly the same as SPY in that time - ~ 4.72% (and SPY has a dividend not yet paid out).

Way to go Mr. Market -

-ERD50

 

[Sunset]

Everyone is Brilliant at picking stocks ... oops.....

 

[RobbieB]

I'm not that's why I hire the job.

 

[Totoro]

I'm not that's why I hire the job.

How do you know who to hire?

 

[jimbee]

I'm not, that's why I index.

 

[ERD50]

I'm not that's why I hire the job.

How do you know who to hire?

+1

I'm not, that's why I index.

And another +1.


-ERD50

 

[Moemg]

. She's being somewhat evasive about this whole thing. Whether she doesn't want me to point out she's being taken or whether she doesn't trust my opinions, I'm not sure. Funny, mom and dad took many financial risks with my smooth-talking, substance-abusing brother, and lost a lot in the process. But they haven't much cared to hear advice from the quiet, millionaire-next-door-type daughter. Go figure.

My Mom also got very evasive as she got older so I would not take that personally . I think it may be a trait a lot of older people have.

 

[bobandsherry]

I'm not, that's why I index.

You have essentially hired someone to manage your portfolio.... Not that it's bad, but still some skim from your portfolio.

What's interesting, I'd bet that if you invested in Berkshire B (Buffet's fund index more or less) probably would have had a better return over S&P and most other indexes.

 

[RobbieB]

How do you know who to hire?

I started out with 3 different brokers and kept the one with the best performance.

 

[Chuckanut]

Everyone is Brilliant at picking stocks ... oops.....

That's easy. Do the opposite of me when buying and selling individual stocks.

 

[jimbee]

You have essentially hired someone to manage your portfolio.... Not that it's bad, but still some skim from your portfolio.

Yep, 0.04%, all in.

What's interesting, I'd bet that if you invested in Berkshire B (Buffet's fund index more or less) probably would have had a better return over S&P and most other indexes.

I'm not trying to out perform the market, owning it is good enough.

 

[Brat]

To be direct, is your main concern for your inheritance or for her well being?

If it is for her well being, tell her that you cannot do this for her without complete information of what is going on. Then if she continues to be coy, cut her loose. Parents have no right to want services and help from their children then put blocks in the way of the son or daughter who is trying to help.

Ha

Agree.

One option would be to talk to her old accountant and express your concerns. Some accountants care for their clients, some do not. Tell him/her that you understand the conflict of interest issues in managing her finances but he could spot churning of her account.

While the OP's mother may appear to be of sound mind and body I suspect she has judgement issues and could easily be taken advantage of by a sharp operator.

 

[Brat]

You have essentially hired someone to manage your portfolio.... Not that it's bad, but still some skim from your portfolio.

What's interesting, I'd bet that if you invested in Berkshire B (Buffet's fund index more or less) probably would have had a better return over S&P and most other indexes.

I purchased that earlier this year and it is on fire!

 

[kcowan]

While the OP's mother may appear to be of sound mind and body I suspect she has judgement issues and could easily be taken advantage of by a sharp operator.

I think that applies to most people.

MIL was sharp as a tack and knew her money to the penny. But she trusted the portfolio manager and was being ripped off even though the MER was only 1%. Bad investment decisions. She had her niece look at the statements every month. When I asked the niece about it, she said she was just checking the math!

Of course the monthly statements were aimed at obfuscation.

 

[Running_Man]

Well hopefully the FA did not sell IBM yet as it is up 9 percent today. This is somewhat continuing a trend of the time to buy a large cap DOW stock is after Berkshire announces they have done a major sell.
In 2011 Warren dumped JNJ and since it has outperformed BRKA 170% to 130%.

In 2009 Berkshire sold Home Depot, since then Berkshire is up over 200 percent, Home Depot 700 percent.

He sold Nike in 2010 and since Berkshire is up 150 percent while NIKE is up 250 percent.

He did though sell PG in May 2016 and since Bershire is up 26 percent while PG is only up 20 percent.

 

[CyclingInvestor]

from my favorite comic xkcd

 

[O2Bfree]

Well hopefully the FA did not sell IBM yet as it is up 9 percent today. This is somewhat continuing a trend of the time to buy a large cap DOW stock is after Berkshire announces they have done a major sell.

Nope, mom hung onto it.

The FA's recent push is to sell some of her Microsoft, which is doing pretty well these days. I showed her the MSFT chart, and she decided to hang on to it.

 

[RobbieB]

WooHoo, I'm up 20 bucks a share, 14% -

 

[flintnational]

While I don't normally follow individual stocks, I suspect net of fees, IBM will perform better than the FA.

FN

Hey, my crystal ball was working well that day! Unfortunately its a little cloudy today (and almost all other days).

FN

 

[BUM]

IBM for me is a “forever hold”. FMs make money on the churn. Sell this, buy that... JMO

 

[ESRwannabe]

I think IBM is a value trap. They have had 22-23 straight quarters of revenue decline. Most of their services/products are in secular decline. If I owned IBM stock I would definitely sell after this recent rally.

 

[YVRRocketSurgery]

I think IBM is a value trap. They have had 22-23 straight quarters of revenue decline. Most of their services/products are in secular decline. If I owned IBM stock I would definitely sell after this recent rally.

A lot of the legacy tech companies, including IBM, are trying to make the transition from legacy Enterprise IT Services to cloud based services, infrastructure, and AI where companies like Amazon and Google have a jump. It's been a slow slog but IMO they'll be able to eventually capitalize on the IoT tidal wave building over the next 5 years which will rely on cloud services and AI. Just my opinion.

 

[Golden sunsets]

Well, I gave my mom the AARP article on what to ask an FA, and tried to talk to her about what to consider when an FA wants you to sell stock. She did not seem interested in either topic. I'm hoping she just needs some time to adjust to the idea of being wary of a finance professional. Or maybe she just wasn't in the mood to discuss investments that day.

I'll continue gently prying into the issue. Thanks everyone for your input!

At 88, your Mom should have a designated POA. Ideally that should be a family member such as yourself. At her age someone ought to be more involved with her finances. It sounds as though you should be that person and you are trying to be. What would happen if she became incapacitated? One's cognitive abilities start to decline at ages less than your Mom's.


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[O2Bfree]

At 88, your Mom should have a designated POA. Ideally that should be a family member such as yourself. At her age someone ought to be more involved with her finances. It sounds as though you should be that person and you are trying to be. What would happen if she became incapacitated? One's cognitive abilities start to decline at ages less than your Mom's.

She gave me POA when dad began to decline mentally. She and dad (who died in 2014) always took care of those kinds of details. I've been helping her in other ways for the past 6-7 years, but the money thing...some people are protective about that I guess.

 

[RobbieB]

My FA bought IBM on 8-21 for 140.19.

And today I got notice that he sold it for 147.08.

Not bad. I made 5% on the price over 8 months not including dividends.