Dropped the ball or not?

[ERD50]

Sorry if I offended anyone by not replying, probably because I still don,t know what to do , that's why its been five years . I,m at the point now that I have to start to withdraw from this acct to live. Maybe ive had my head in the sand, but again I apologize if ive offended anyone. ...

Not offended in any way, but I think you can understand a little frustration when you see the same person asking the same question several times over a period of years, with little in the way of updates/action.

Now I'm thinking about Vanquard and am going to call them I think it all stems to the fact I'm afraid to trust anyone!

I tend not to think in terms of 'trust' when it comes to financial decisions. I think in terms of - how and why could they screw me? What are their motivations?

For these retail FAs like EJ, they mostly have to spend their time getting customers, they do very little actual financial analysis. It's all cookie cutter, and mostly designed to make money for them, not you.

But the places that offer no-load, low cost funds (like Fidelity and Vanguard), they don't spend a lot on marketing to those types, and they seem to be doing well with the low expense ratios they charge. They attract people like on this forum, who just want a basic investment, and don't want to pay for anything beyond that. And the data shows that those low expense funds will generally outperform the higher cost funds that are pushed by the retail places. It is a win-win for those who see past the sales pitch.

So maybe this will be the year for you to take action?

-ERD50

 

[Lsbcal]

Sorry if I offended anyone by not replying, probably because I still don,t know what to do , that's why its been five years . I,m at the point now that I have to start to withdraw from this acct to live. Maybe ive had my head in the sand, but again I apologize if ive offended anyone. Now I'm thinking about Vanquard and am going to call them I think it all stems to the fact I'm afraid to trust anyone!

No, you didn't offend me or (I would guess) anyone. You are redeemed by replying here!

Regarding trust, I would trust Vanguard (since the 1970's for me) or maybe Fidelity. But one has to understand the risks in investing. People loose money by not understanding their risk tolerances. So your AA is the first thing to think about. Ultimately you are in the drivers seat.

 

[pb4uski]

...Heres my question . Although the account was down about $12,000 last month, when I went to get my taxes down, I ended up owing $300 to the feds and $200 to the state, along with losing about $700 I would have gotten back because of Capital Gains from the acct.Even though the acct lost a substantial amount the gains had to be shown as income therefore the tax consequences. My question is from a management standpoint am I being foolish thinking that the acct should have been looked at and adjustments made to take care of that,for example selling some off at a loss. any advice would be appreciated,thanks

I think the first thing you need to do is get an understanding as to why you ended up with taxable income and a tax liability even though the value of your account declined by $12k. It it likely that the funds they have you in generated dividends and capital gains distributions even though they had unrealized losses or perhaps EJ did some trading on your (and their) behalf that resulted in capital gains. While I'm not a fan of EJ, the fact is that it is unlikely that any brokerage would do a lot of tax planning for such a small account but until you understand what happened it is hard to assess whether EJ should have done anything differently.

 

[DrRoy]

Many in this forum are only planning to consume 2 1/2 to 3 1/2% of their portfolio to live on during retirement. Giving away 1 1/4% to a so called financial advisor is similar to saying that you want to give them 1/3 to 1/2 of your total income so they can manage your money.

+1 I had a similar guy for a few years but they really can't perform like the sales pitch you get. I also recommend firing the advisor. That is what I did.

 

[Sunset]

Sorry if I offended anyone by not replying, probably because I still don,t know what to do , that's why its been five years . I,m at the point now that I have to start to withdraw from this acct to live. Maybe ive had my head in the sand, but again I apologize if ive offended anyone. Now I'm thinking about Vanquard and am going to call them I think it all stems to the fact I'm afraid to trust anyone!

By not doing anything, you are in effect "trusting" whoever is managing your money right now.
Not paying attention to this matter is dangerous. Lucky for you it was not with Bernie Madoff.

 

[OrcasIslandBound]

Sometimes, the simplest approach is the best one. Either Fidelity or Vanguard will help you. They both have people that will take care of removing the funds from your accounts at EJ. You never have to set foot in EJ again. Then, until you figure out a better plan, you can have your new brokerage put half the money in a total stock market index fund and the other half in a total bond fund. You can then take your time over the next year or two and decide if that strategy is the best. It is a very good plan and is simple and quite safe.

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[ETFs_Rule]

1.25% will shave 11.8% off your savings after 10 years and 22.2% after 20 years. Investing in index funds is easy! So what is the point in having someone hold your hand?? Stop giving away your money and invest in plain old index funds like BND and SPY.

 

[rayinpenn]

I'll join the choir "1.5% fee" OMG No!

http://www.transparentinvesting.com/uploads/wholestory.pdf

Unless you have a very unusual circumstance I believe there never is any reason to go with an advisor.. Too expensive and what's worse many are unscrupulous ...


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[tmm99]

Sorry if I offended anyone by not replying, probably because I still don,t know what to do , that's why its been five years . I,m at the point now that I have to start to withdraw from this acct to live. Maybe ive had my head in the sand, but again I apologize if ive offended anyone. Now I'm thinking about Vanquard and am going to call them I think it all stems to the fact I'm afraid to trust anyone!

Good for you. Talking to Vanguard is a new, positive step forward, for sure. They will not promise you the solid 5% return like Edward Jones promised you, but they will give you realistic pictures of how they (or you) can manage your money. They believe in very low cost index funds (as many of the fee only financial planners, as well as many of the folks here) with a small number of funds in your asset allocation. I understand it's hard for you to trust anyone after your experience with Edward Jones. One way to regain confidence is to talk to someone like Vanguard like you are doing and ask a lot of questions. They are realistic bunch of folks and they will not promise any get rich fast schemes but they will give you a realistic plan your tolerance level can deal with. Their way is definitely not fancy but it works very well in the long run.

Another thing you could do is to read Jack Bogles book(s), like "The Little Book of Common Sense Investing" (He is the Vanguard founder) or books about his philosophies ("The Bogleheads' Guide to Investing") to get some basic understandings of investing. You don't have to understand the whole book (I don't) but just so you get to know some basics and their philosophies.

Good luck.


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