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Originally Posted by tcxr750
After 15 years of paying advisors their one percent annual fee I've decided it's time to move my IRA to Vanguard. A year ago I created several model portfolios. One based on my current professionally managed IRA. This portfolio consists of 28 different funds and etfs.
Another based on a portfolio designed on the Vanguard website consisting of four funds. Plus two others. Bottom line the four fund Vanguard folio matches in performance the professionally managed fund , without the one percent fee.
That one percent fee is significant. If you take out four percent a year, the one percent fee equals 20% of the $$$ coming out of your account. Of course with Vanguard you don't get the free cup of coffee that is offered when you meet with your advisor.
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You have stated your PROFESSIONALLY MANAGED IRA contains 28 different funds and ETFs. If, what you are saying is that YOU can choose from 28 funds and ETFs that might make sense BUT, then YOU are the manager by making the choices from that menu. If, you are saying your IRA is in a fund of funds with 28 DIFFERENT funds and ETFs you are paying not only the management fees for all those funds but if you look either you or your former company are paying a firm to manage this. Also, you have a holding in the entire market and could hold the same in ETF form at far less cost. MAKING THINGS COMPLEX IS HOW THE PROF JUSTIFIES HIS COST.
Your view seems to be based on a book titled, THE SMARTEST INVESTMENT BOOK YOU'LL EVER READ," by Daniel Solin. In 2007 when the market tanked. bonds tanked and stocks tanked GOLD did well and CASH at least did not go down. HINDSIGHT IS ALWAYS 20/20. We a living in a time where our government is MANIPULATING WEALTH. They even tell you they WANT 2% INFLATION.
Even the inflation rate is MANIPULATED. REAGAN controlled inflation because he took the two items rising the fastest at the time out of the calculation- fuel and housing. QUANTITATIVE EASING-folks that is buying your own debt with PRINTED MONEY. The stock market is up because OUR GOVERNMENT does not give you any other place to put your SAVINGS and get a HISTORICALLY NORMAL RETURN. That 2% inflation target-why does the government need this? Inflation makes it possible for the debtor to pay back with less valuable money. OUR GOVERNMENT OWES TWENTY TRILLION BUCKS. At 2% inflation your SAVINGS will need to double in 36 years to buy the same merchandise and services.