dex
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Oct 28, 2003
- Messages
- 5,105
The OP is getting a lot of great research and insights into investing from posters.
The OP is getting a lot of great research and insights into investing from posters.
Kabekew - go back and read your first few posts. Had you said something to the effect:And why the antagonism here? You guys seem really bitter about something.
Hmmmm, maybe that's the misunderstanding here. I wasn't asking for anything, I was contributing a sample portfolio of what "professionals" are currently putting a near-retiree in, who wants to pay no taxes or only minimal long term capital gains rates instead of paying higher ordinay income rate on dividends like from an income fund.But why ask in the first place?
Hmmmm, maybe that's the misunderstanding here. I wasn't asking for anything, I was contributing a sample portfolio of what "professionals" are currently putting a near-retiree in, who wants to pay no taxes or only minimal long term capital gains rates instead of paying higher ordinay income rate on dividends like from an income fund.
If you don't like my free contribution, don't read it!
How about we just agree to disagree, you continue doing everything yourself while I use professional advisors, let's not worry about each other, and just move on to the next thread?
And sorry for any earlier sarcasm, I'm not here to make enemies.
If so, let's just leave it a that, and recognize that this forum isn't too supportive of the idea that the "pros" are able to consistently outperform a relatively simple DIY strategy, largely due to the extra fee/expense drag down. Those people either collectively have their head in the sand, or maybe there is something to it. Hang around, and maybe you'll get a sense of why that is.
So, welcome to the forum - see ya' in the next thread.
-ERD50
I was just reminded of what Dale Carnagie said in his book "How to Win Friends and Influence People"
When a man asks how you like his tie, after he bought it, he is not looking for your true opinion, he is looking for your approval. After all, he went to the store, made his choice and paid his money. So, for you to tell him you don't like his tie is to tell him he made several bad decisions.
Hmmmm, maybe that's the misunderstanding here. I wasn't asking for anything, I was contributing a sample portfolio of what "professionals" are currently putting a near-retiree in, who wants to pay no taxes or only minimal long term capital gains rates instead of paying higher ordinay income rate on dividends like from an income fund.
If you don't like my free contribution, don't read it!
Well, as a professional advisor, I think 42 funds are way too many. Find out WHOM put this portfolio together, your advisors or someone else?
You could probably duplicate this portfolio with ETF's and a couple funds. If you are getting good results and like the advisor, noone's going to change your mind. However, you DID ask if you should be doing things yourself.........
I could, but I think the idea is to spread everything out, with some funds performing flat or negative, some at market average, and some above market average. Then when I withdraw my annual retirement payments, I take it out of the lowest-performing funds and pay lower taxes versus cashing out a straight index fund.You could probably duplicate this portfolio with ETF's and a couple funds.
I could, but I think the idea is to spread everything out, with some funds performing flat or negative, some at market average, and some above market average. Then when I withdraw my annual retirement payments, I take it out of the lowest-performing funds and pay lower taxes versus cashing out a straight index fund.
I could, but I think the idea is to spread everything out, with some funds performing flat or negative, some at market average, and some above market average. Then when I withdraw my annual retirement payments, I take it out of the lowest-performing funds and pay lower taxes versus cashing out a straight index fund.
If the biggest problem most of them had was that they had index like performance minus 2% in fees it would have been AN ABSOLUTE GIFT for most of them.
Interesting thread, have been reading on and off for a few days.Hmmmm, maybe that's the misunderstanding here. I wasn't asking for anything, I was contributing a sample portfolio of what "professionals" are currently putting a near-retiree in, who wants to pay no taxes or only minimal long term capital gains rates instead of paying higher ordinay income rate on dividends like from an income fund.
As another person here in the business I will add this.
I have looked at the statements of hundreds of individual investors over the last 11 years with portfolios from the low six figures to the high 8 figures.
... The average investor does a TERRIBLE job with their investments. ...
If the OP is anything like the typical retail investor he will do better having some hand holding, and possibly other services from Fido.
I agree. But one problem is that many "hand-holders" won't stop at even 2%. My friend was the victim of 8% front-end loads on some of her funds, which she wasn't even aware [-]had been stolen from her[/-] she had paid.
This thread got me thinking about the tax efficiency aspect that the OP brought up. Not trying to change any minds here, just trying to understand if I'm looking at this correctly. If I am, I fail to see how paying 1% to gain tax efficiency can be beneficial.
Take the case of a retiree following the typical 4% SWR plan, and investing in index or other funds that don't kick off a lot of annual capital gains (until you decide to sell some). That person shouldn't have any more realized gains than what they withdraw.
So, let's make the generous* assumption that the entire 4% withdraw from this portfolio is taxable at a 25% marginal rate (the average tax rate would likely be much lower). 25% of 4% is.... 1%. So, it would seem like the best they could do is break even if they eliminated all taxes - and that would also imply no dividends or taxable interest from that portfolio, since those are not offset by capital losses.
And of course, harvesting losses now tends to increase the unrealized gains in the portfolio, which just delays the inevitable. It may help, but it's still no "free lunch", it could even possibly work against you, depending on future tax rates.
Does that sound about right?
* - I say "generous" because any equities sold (maybe to rebalance a portfolio) would not be fully taxable unless their cost basis was essentially zero.
-ERD50
Who charges 8% on funds? I haven't heard of that since the 70's.........
But it's still easy to find funds with very high loads. American Funds, at 5.5% or so (last time I heard), is one well-known example. I'm sure there are worse.
So, let's make the generous* assumption that the entire 4% withdraw from this portfolio is taxable at a 25% marginal rate (the average tax rate would likely be much lower). 25% of 4% is.... 1%. So, it would seem like the best they could do is break even if they eliminated all taxes - and that would also imply no dividends or taxable interest from that portfolio, since those are not offset by capital losses.
...
Does that sound about right?
-ERD50
American Funds equity funds:
Just to be precise.........
American Funds equity funds:
$1- $24,999 - 5.75%
$25,000-$49,999 - 5.0%
$50,000-$99,999 - 4.5%
$100,000-$249,999 - 3.5%
$250,000 - $499,999 - 2.5%
$500,000 - $749,999 - 2.0%
$750,000 - $999,999 - 1.5%
$1 million plus - NAV
Just to be precise.........
Of course, *if* one were to split a $800,000 portfolio across 42 funds, that would be about $20,000 in each fund, getting into that 5% range.
-ERD50