Keep It Simple

[REWahoo]

Morningstar.com has an article today entitled "Portfolio Makeover: Getting Ready for Retirement".

http://news.morningstar.com/doc/article/0,,140032,00.html?hsection=Comm2

The author provides financial planning advice to a 62 year old widow who is retiring. Among other recommedations, the advice is to convert her existing portfolio to a diversified 60/40 "growth portfolio" containing an astonishing (to me, anyway) 10 bond funds and 25 equity/real estate funds.

Do you really need 35 funds to build a retirment portfolio? Whatever happened to simplicity and low cost investing? Oh yeah...fees, commissions, profits, and greed.

REW

 

[SteveR]

Can you say "commissions"? Lots of money to be made from fear. You scare the old(er) folks into an investment panic and send them to quacks financial consultants, and then they feel like they have done the right thing about their future. In the meantime, the FCs are screwing them with huge commissions while creating more fear because their account is not diverse enough forcing these ignorant folks to allow the FC to buy and sell more often; thus creating a nice cash flow for the FC so he can retire early.

 

[maddythebeagle]

geeze that is a lot. I think that I know a co-worker that does that (invests in a little of each fund available in our program). I think he thinks that diversifies him)

I think the main issue is that all of those funds are investing in the same areas and stocks so why do you need them all? not to mention not picking the lower fee options....

 

[unclemick]

One fund and one fund only is all it takes.

Then again millions of people in the middle ages went thru life thinking the Earth was flat.

 

[rmark]

35 funds is crazy. Period.

 

[rmark]

Seems like a few years ago it was published that Morningstars staff retirement accounts had beow average returns. Now I know why.