Managed Account from Fidelity---help!!!!!

[Sunset]

No idea the fee OP is paying for this service, I did read
"Every managed account Fidelity offers, including its robo-advisory service, carries an annual percent-based fee. Accounts start at 0.35% and go as high as 1.50%."

Plus I guess there could easily be actual fund fees on top of that.

Perhaps OP invested in this as didn't know about other choices ?

If this 401K is all of OP's retirement money, (IMHO) I feel being just in bonds is too risky, low interest and loss of capital value if interest rates rise (I think they will in years), will mean inflation eats up the buying power.

I'd suggest to OP to consider Vanguard Wellesley Income Fund, it costs either 0.16 or 0.23 fund fee and nothing else, and is 2/3 bonds and the rest stocks. No management to the brokerage is needed.

 

[38Chevy454]

It seems that OP is very risk averse and should discuss the situation with the Fidelity advisor. I also agree that 3 months is too short of time to evaluate the managed fund performance, especially given the recent bond market downturns that affect the majority of the holdings in the account.
I do think that being too conservative is potentially bad. OP may want to discuss this with the advisor at Fidelity. I think an in-person meeting or phone call is the best way to go over these items.

 

[LarryMelman]

Please help me from Fidelity purgatory. I was talked into turning my close to 1M into a managed account 3 months ago. I am 69, retired with other assets not on hand with FIDO. I was shocked to see how the most conservative portfolio has lost 0.87% in 3 months. Plus I am paying them to lose this. Never had this problem before. I am great at losing my own money, I don't need them. I need to get out now, correct?
Thanks----scared Calling my CFP today at 9am EST.
it has taken them over 2 months to transfer 400K from TRP.

The S&P500 is up about 4% YTD. You should be more worried about underperforming the market.

I am dumbfounded by this post and I wonder if it's really sincere.

Did Fidelity guarantee that on a day to day or week to week or quarter to quarter basis, that your account balance would never ever decline, no way no how no chance? No, surely they did not. Surely you signed paperwork saying that you understood what they told you. Clearly you did not.

Yes you should be "scared" but not scared of Fidelity.

 

[MichaelB]

I have no advice for the OP but can easily understand the concern, which seems legitimate to me, probably more common than some would believe. Helpful advice is always welcome, as reflected by most of the responses so far.

 

[disneysteve]

close to 1M into a managed account 3 months ago.



portfolio has lost 0.87% in 3 months.

Nothing really to add to what the others have said. I would just really emphasize that a dip of $8,700 in 3 months on a $1 million portfolio is virtually nothing. Our portfolio is about $1.6 million and the total value changes by thousands of dollars up or down every day. You definitely shouldn't let ultra-short-term performance drive your decisions if the asset allocation is appropriate for you.


If you truly can't stomach even a minimal and temporary decrease in your balance, then you need to stick 100% to CDs, savings bonds, money market accounts, etc. and you certainly don't need a professional manager for those sorts of things.

 

[Finance Dave]

Thanks VW-- I had the 1M in 401K's from CVS and Walgreens forever. The last 5 years or so put it all in stable value. It only paid @2 to 2.5% the last 3 years, but it was always positive. Was talked into changing it into IRA due to more possibilities. Wish stable value was one, but no luck. Just the bond dilemma. So here we are down 8700 for 3 months plus fees. After 2007-2008 promised myself never to lose money again. The jubilance of gaining 10,000 to me is not worth the misery of forfeiting 2,000.

This doesn't make sense. Are you saying that FIDO doesn't offer a stable value fund for you? That's not true. What do you mean "just the bond dilemma"?

When you say you were talked into "changing it to an IRA", that's not really a change...it's simply transferring it from a work plan to an IRA. That should have zero impact on performance...it's the investments WITHIN the plan that determine performance.

Something is not right here.

 

[Finance Dave]

The was no stable value fund so to speak in the family that I could find that would give me the 2 or 3% I had before. I would never try bonds on my own.No knowledge of such. And the most conservative one they have is mostly in bonds, no CDS or MM. For 0.9% fee they figure must at least beat that for you. MM would not do it.

Ah ha...that might be the issue. You are correct that stable value funds are not paying 2-3% AT THIS TIME. Over time this may change. What is more important is the "REAL" return of the portfolio. For example, are you ok earning 3% in a stable value fund if inflation is 7%?

You're either going to have to take some risk in the short term, or accept the fact that stable value funds are not returning much.

There are other options such as CD ladders that may get you around 2%.

 

[Finance Dave]

...

 

[OldShooter]

... After 2007-2008 promised myself never to lose money again. The jubilance of gaining 10,000 to me is not worth the misery of forfeiting 2,000.

We humans are wired this way by evolution -- risk averse. It affects many aspects of our behavior and often not positively. Few of us, though, would probably see it quite as dramatically as you do. If you are a reader, I would suggest these three books:

"Misbehaving" by Richard Thaler https://www.amazon.com/Misbehaving-Behavioral-Economics-Richard-Thaler/dp/039335279X

"Thinking Fast and Slow" by Daniel Kahneman: https://www.amazon.com/Thinking-Fast-Slow-Daniel-Kahneman/dp/0374533555

"Your Money and Your Brain" by Jason Zweig: https://www.amazon.com/Your-Money-Brain-Science-Neuroeconomics/dp/0743276698

I have found that understanding the behavioral economics factors that were wired into my by Mr. Darwin helps to make me a better investor. Hopefully you'll find the same benefit.

 

[disneysteve]

We humans are wired this way by evolution -- risk averse. It affects many aspects of our behavior and often not positively. Few of us, though, would probably see it quite as dramatically as you do. If you are a reader, I would suggest these three books:

If you aren't a big reader, I recommend listening to Choiceology, a podcast produced by Charles Schwab. Each episode focuses on a different behavioral factor that impacts how we make decisions, manage risk, invest, spend, etc. Richard Thaler, one of the folks mentioned above, has been a guest on the show at least a couple of times.