Why hire an investment advisor/planner/counselor?

[huge-pigeons]

My experience talking to these sort of firms/people, and what friends and family have shared with me on their experiences, I have no desire to go with these investment advisors.
Most of these investment advisors have 1 main goal, and that’s how can they make money. Your goal is the same, how can I make the most money on my investment dollars?

In my experience and a couple of friends experience, a few advisors wanted over $40,000-$60,000 per year to manage my/their investments. Which is a lot of money, but take that amount and extrapolate that for 10 years: that’s around $400,000 - $500,000 or more in fees alone. On top of those fees, you might have some funds that have high expenses or loads. OR worse, you could be talked into an annuity.

The most beneficial way to handle investments IMO is for you to learn how to manage your money yourself, or learn enough to know when an advisor is worth the money you are paying him.

[Decadeofdave]

Do research and make your own decisions. I buy 8 hrs per year from a fiduciary planning firm for $1200.00. Some years don't use all the hrs.I like it better than giving someone 1% of total.
I have done all my own investing for the last 40 years.

[Stu from NYC]

I also do my own but do read a lot and follow my investments closely

[Caymus]

The reason I am looking is to have a system in place when my cognitive ability to make financial decisions declines. I have no desire to have an AUM based advisor especially since my investments will eventually be in ETF's.

[Robbb]

Do research and make your own decisions. I buy 8 hrs per year from a fiduciary planning firm for $1200.00. Some years don't use all the hrs.I like it better than giving someone 1% of total.
I have done all my own investing for the last 40 years.

Who do you use? I have not been able to find one.

[snbrafford]

I don't want to take the time to do my own investing. I have some friends that do and spend hours every week making trades. I have been with them for at least 10 years. Over the last 5 years (with all the stock market turmoil), I have averaged 4.8% return. In good years, it has been as high as 22%. There is a monthly fee based on the amount of investments managed. I get a call at least every quarter from my financial advisor with trade recommendations - doesn't do any trades without my approval. I can call/message anytime and he gets right back to me. They have a portal (not unique here) where I can check stuff as often as I want. Before retirement, I had my 401K money "managed" by other firms but never got any investment advice and had to pick my investment locations (which fund(s) to invest in and percentage) myself. As soon as I was able, I pulled funds out of 401K and put with EJ where I believe it is actively being managed by someone for me. I've been very happy.

[manaboutown]

The reason I am looking is to have a system in place when my cognitive ability to make financial decisions declines. I have no desire to have an AUM based advisor especially since my investments will eventually be in ETF's.

You are being smart. I can see that sometime out on the time horizon, maybe sooner rather than later, I will be facing the same issue if I live long enough.

Hopefully we will see some productive posts!

I do have a RLT which names a trust company located where I hold commercial real estate. This company can manage it and the rest of my estate if I become incompetent and/or after my demise. They do charge for their services but I feel I have no choice as none of my beneficiaries/devisees are capable of stepping in and managing my estate.

Each person's situation is unique, at least to some extent. Thoughtful planning is always a good idea.

[CoachKandSportsguy]

The reason I am looking is to have a system in place when my cognitive ability to make financial decisions declines. I have no desire to have an AUM based advisor especially since my investments will eventually be in ETF's.

great planning ahead goal. . .

The goal will be keep a conservative cash / bond / investment portfolio balance with proper rebalancing, preferably by quarter.

I just ran a momentum based monthly rebalancing scenario on my laptop in python, and the statistics for drawdowns are phenominal over twenty years, just using the 9 SP500 subsectors and only being invested in 1/2 of the sectors at any one time. The key is NOT the gains, but the minimizing the drawdowns, which over twenty years was less than 20%, from 2000 to 2020 as my first class taught portfolio.

The key for minimizing equity risk is rebalancing and the key for longevity is a conservative equity portion and the remainder in bonds.

in a few weeks after driving back north this week and working on perfecting the python financial packages, I can offer some interesting suggestions for equity portfolios to discuss with a financial advisor. . only for those who are interested who want to look at portfolio construction and results. .

and the portfolios can be made up of etfs and/or individual stocks, and/or bond funds, or a combination of all three. .

[CoachKandSportsguy]

I don't want to take the time to do my own investing. . . . As soon as I was able, I pulled funds out of 401K and put with EJ where I believe it is actively being managed by someone for me. I've been very happy.

also a very valid reason for wanting someone else to do what you don't want to do, given the time and the resources and the skill/knowledge/abilities. .

sounds like a great plan.

[oldtimes]

I don't want to take the time to do my own investing. I have some friends that do and spend hours every week making trades. I have been with them for at least 10 years. Over the last 5 years (with all the stock market turmoil), I have averaged 4.8% return. In good years, it has been as high as 22%. There is a monthly fee based on the amount of investments managed. I get a call at least every quarter from my financial advisor with trade recommendations - doesn't do any trades without my approval. I can call/message anytime and he gets right back to me. They have a portal (not unique here) where I can check stuff as often as I want. Before retirement, I had my 401K money "managed" by other firms but never got any investment advice and had to pick my investment locations (which fund(s) to invest in and percentage) myself. As soon as I was able, I pulled funds out of 401K and put with EJ where I believe it is actively being managed by someone for me. I've been very happy.

:agree:

[Blackbird45]

Before you do any type of investing you have to plan on what type of return you want to get on your investments and how much time you want to invest. If you're looking for a modest return, somewhere in the 4% range you should defiantly do it yourself. Today you can achieve this from dividends on utilities or bank CDs which are paying near 5%. You purchase CDs at 4 banks at $250K each, that will cover a million and it's FIDC insured. If you're thinking about speculating, that you better do your homework or rely on a professional.

[Babubhat]

Ask how their RISK adjusted return beat the benchmark after fees. You have a very high probability of being disappointed. If they even bother to answer the question.

Many advisers use a computer model to allocate investments that can be found for free. Save the fees. They have no magic formula. Ask Warren Buffett.

I had a friend in the business. His educational credentials were no better than a car salesman. He used a computer program and collected a nice fee.

I find it bizarre that one thinks they have special insight. Otherwise they would be billionaires.

Caveat Emptor

[dewilson58]

These threads are becoming dog poop threads.........kind'a silly.

$40k to $60k in fees are nothing on a $100mil portfolio.
$40k to $60k in fees are painful on a $1mil portfolio.
"In my experience....." :ohdear::ohdear::ohdear:

Thank you Mr. Obvious:
"Most of these investment advisors have 1 main goal, and that’s how can they make money. Your goal is the same, how can I make the most money on my investment dollars?"
"The most beneficial way to handle investments IMO is for you to learn how to manage your money yourself, or learn enough to know when an advisor is worth the money you are paying him."

:shrug::shrug:

[huge-pigeons]

4% gains? You are losing money every day if that’s all you are making. Average annual gains over decades is way over 4%. Earlier this year it was very easy to make over 100% gains in certain equities. Money markets are over 5.1% and have been all year and they won’t be going down anytime soon.You can get equities that pay 4% dividends. If you are only making single digit gains, then I would look for help.

It’s not only how much you make, but after a certain age, it’s how much you preserve to live on for the rest of your life. Financial freedom outlined in many good books is the ultimate state to be in financially. Every year since retirement, we make more money in passive income than what we spend.

As for getting an advisor after you reach “old age”, why? If something happened to me, my wife will be just fine not touching the portfolio for many years into the future, just living off the dividends. Thats 1 of the many benefits of low cost index funds.

[La lamy]

I've been doing my own for many years now. Only bought stocks from companies I studied and believed in that offered a decent dividend. Now I check them once a month to make sure all is in good order, so it's not much work at all, and no fees to anyone. Being in it for the long run and being patient with ups and down is the way to go IMO.

[huge-pigeons]

These threads are becoming dog poop threads.........kind'a silly.

$40k to $60k in fees are nothing on a $100mil portfolio.
$40k to $60k in fees are painful on a $1mil portfolio.
"In my experience....." :ohdear::ohdear::ohdear:

Thank you Mr. Obvious:
"Most of these investment advisors have 1 main goal, and that’s how can they make money. Your goal is the same, how can I make the most money on my investment dollars?"
"The most beneficial way to handle investments IMO is for you to learn how to manage your money yourself, or learn enough to know when an advisor is worth the money you are paying him."

:shrug::shrug:

If you calculate what an advisors fee will be on your investments, you will be surprised what you have paid over a 10 year period.
Let’s make it simple: most advisor fees range from .7% to over 1.5%, so let’s take 1%. If you had $1M in investments, your cost for the fee is $10,000 per year, $3M in investments is $30,000 in fees per year.
Now if you had a $100M portfolio, you would be spending a little more than $40-$60,000 a year, you will be spending $1M a year in fees.

My point in this post was to share what your expenses might be hiring an advisor over a 10 year period of time on a portfolio that you spent decades building up. $500,000 (even if it is only $100,000), in advisor expenses over a 10 year period is a lot of money.

[Dave-Katherine]

Why not take care of your own medical and dental needs while you are at it. And do all of your own car repairs, home maintenance and lawn work.
In my opinion there is real value in hiring a professional to take care of these things. Of course, its your money, and your time, spend it as you wish.

[PVR]

My experience talking to these sort of firms/people, and what friends and family have shared with me on their experiences, I have no desire to go with these investment advisors.
Most of these investment advisors have 1 main goal, and that’s how can they make money. Your goal is the same, how can I make the most money on my investment dollars?

In my experience and a couple of friends experience, a few advisors wanted over $40,000-$60,000 per year to manage my/their investments. Which is a lot of money, but take that amount and extrapolate that for 10 years: that’s around $400,000 - $500,000 or more in fees alone. On top of those fees, you might have some funds that have high expenses or loads. OR worse, you could be talked into an annuity.

The most beneficial way to handle investments IMO is for you to learn how to manage your money yourself, or learn enough to know when an advisor is worth the money you are paying him.
I'm not sure where you are getting your information.
My broker has always made investments grow. I make way more than his fees. If I don't make money then he doesn't. Been with the same company over 30 years

[MidWestIA]

when I get like that I'll pay Fidelity to do it in their pgm not an analyst who knows if they are any good

[Bearlythere]

I'm not sure where you are getting your information.
My broker has always made investments grow. I make way more than his fees. If I don't make money then he doesn't. Been with the same company over 30 years Investment Advisors make money even when you don't.

[Bobendres]

My experience talking to these sort of firms/people, and what friends and family have shared with me on their experiences, I have no desire to go with these investment advisors.
Most of these investment advisors have 1 main goal, and that’s how can they make money. Your goal is the same, how can I make the most money on my investment dollars?

In my experience and a couple of friends experience, a few advisors wanted over $40,000-$60,000 per year to manage my/their investments. Which is a lot of money, but take that amount and extrapolate that for 10 years: that’s around $400,000 - $500,000 or more in fees alone. On top of those fees, you might have some funds that have high expenses or loads. OR worse, you could be talked into an annuity.

The most beneficial way to handle investments IMO is for you to learn how to manage your money yourself, or learn enough to know when an advisor is worth the money you are paying him.
Absolutely right. Just diversify on your own.

[Blackbird45]

What is your position and what do you need. Do you have income sources other than your investments. In other words, if you have a decent pension and make a fair amount on your social security and don’t have to rely on your investments, fees might not matter. If you want to leave an inheritance and you want security on the principal, dividends might be the answer. Many posters have given you advice, but you have to understand their advice is based on the position they are in. My advice is to sit down with pen and paper, figure out what are your needs and wants from your investments. I believe that should be your first step.

[Justputt]

I did do mine own, but I found life too busy to stay on top of it. As a result, I missed some timing to bail out or jump in, as result of that I lost a bunch for missed making money just camped out in big "safe" funds. I use mostly Fidelity now, because I cannot watch things as closely as someone that has it as their all-day everyday job. I would have substantially more had I made the change years ago. Everyone can make money when times are good, but then there's 1987, 2008-9, and 2020.

[Mrfriendly]

I did do mine own, but I found life too busy to stay on top of it. As a result, I missed some timing to bail out or jump in, as result of that I lost a bunch for missed making money just camped out in big "safe" funds. I use mostly Fidelity now, because I cannot watch things as closely as someone that has it as their all-day everyday job. I would have substantially more had I made the change years ago. Everyone can make money when times are good, but then there's 1987, 2008-9, and 2020.

And probably 2023

[Boomer]

Investment Advisors make money even when you don't.



I know. Right.

That thing they say about how they make money when you do is missing one word — more.

They make more money when you do. But they still make money even when you don’t. What happens with some of them is that they get to dip in quarterly to your money that is sitting there — up or down — they get paid.

That does not mean it is a bad decision to use an advisor if that is your comfort level. I just find the implication that they only make money when you do to be disingenuous.

I think a respectable, trustworthy advisor would be upfront and transparent about how and when they get paid. They are not doing charity work, of course, but they should be direct about exactly how they are paid — every single fee. If not, move on.

Boomer

[Boomer]

What is your position and what do you need. Do you have income sources other than your investments. In other words, if you have a decent pension and make a fair amount on your social security and don’t have to rely on your investments, fees might not matter. If you want to leave an inheritance and you want security on the principal, dividends might be the answer. Many posters have given you advice, but you have to understand their advice is based on the position they are in. My advice is to sit down with pen and paper, figure out what are your needs and wants from your investments. I believe that should be your first step.


Hey, Blackbird45, thank you. You wrote what I was going to write next. Absolutely. That’s it.

We each have our individual wiring when it comes to how we deal with money. I think a lot of it is based on Nature/Nurture — why we do what we do. Know Thyself is my number one rule of investing.

Boomer

[dewilson58]

(a) If you calculate what an advisors fee will be on your investments, you will be surprised what you have paid over a 10 year period.

(b) My point in this post was to share what your expenses might be hiring an advisor over a 10 year period of time on a portfolio that you spent decades building up. $500,000 (even if it is only $100,000), in advisor expenses over a 10 year period is a lot of money.

(a) Since you are saying "you"...... I have calculate, I have never been surprised.

(b) Again, thank you Mr. Obvious. There have been posts after posts after posts about broker fees and the cost over five years, ten years, twenty years.

:icon_bored::icon_bored::icon_bored:

[Babubhat]

I'm not sure where you are getting your information.
My broker has always made investments grow. I make way more than his fees. If I don't make money then he doesn't. Been with the same company over 30 years

This statement is meaningless. What are the benchmarks and actual returns? Making more than fees. He better be. No idea how much risk was taken. If you want. Outsized returns invest in hedge funds

Long term stocks go up. Use index funds and avoid the fees.

[Flanman]

Why not take care of your own medical and dental needs while you are at it. And do all of your own car repairs, home maintenance and lawn work.
In my opinion there is real value in hiring a professional to take care of these things. Of course, its your money, and your time, spend it as you wish.
Agree 100%

[retiredguy123]

Why not take care of your own medical and dental needs while you are at it. And do all of your own car repairs, home maintenance and lawn work.
In my opinion there is real value in hiring a professional to take care of these things. Of course, its your money, and your time, spend it as you wish.
Apples and oranges. The problem is that anyone can claim to be a "professional" financial advisor. The term has no real meaning.
Some are good, some are bad, and some are crooks who just want to steal your money.

[Robbb]

I did do mine own, but I found life too busy to stay on top of it. As a result, I missed some timing to bail out or jump in, as result of that I lost a bunch for missed making money just camped out in big "safe" funds. I use mostly Fidelity now, because I cannot watch things as closely as someone that has it as their all-day everyday job. I would have substantially more had I made the change years ago. Everyone can make money when times are good, but then there's 1987, 2008-9, and 2020.

Respectfully disagree, NO one knows when to get in or out, so the only option is to set your allocation and stay in. Remember the vast majority of times a monkey throwing a dart against a listing of stocks will beat the "professional analysts" 99% of the time. And that's just your average monkey.

[DAVES]

My view. We all know when you talk money, few speak truth and few know truth. Warren Buffet called the greatest stock picker has stated he does not often beat the S&P average and we are best off simply buying the S&P. Another option, Buffet like, you can buy shares of Berkshire Hathaway.
Things have changed. Used to be commissions were far higher. Information was not as easy to find and you would pay more if you did not buy round lots of 100 shares. Today, you can buy with no commission and you can buy partial shares.
Compared to the S&P. Truth, my brokerage statement prevents me from lying to myself. In ten years on a yearly basis I beat the s&p twice. Over the ten years the S&P BEAT ME.
MONEY is just a number. It is simply a tool of exchange. You spend money after TAXES and INFLATION is simply another TAX.
Woulda, shoulda, coulda. This is REALITY. There are no do overs.
Further REALITY. Buffet like, if I remember Jr High English has become an adverb. I recall reading Buffet lost 44 million on some trade. REALITY, Buffet Like, if I lost 44 million there would be a lot of people wondering why they were foolish enough to LEND ME that much money. It is perhaps interesting that Buffet called the greatest stock picker also makes mistakes. Returns in the stock market should be higher to justify the RISK.
I read a lot and expect, no demand it makes sense. It seems we no longer middle aged are investing like we are younger than we are. Will it bite us? Where to hide? That too beats me.

[dewilson58]

My view. We all know when you talk money, few speak truth and few know truth. Warren Buffet called the greatest stock picker has stated he does not often beat the S&P average and we are best off simply buying the S&P.

Jus as a FYI...............

Mr. B does not pick stocks, he picks companies and management.

Also, since 1965 he has beaten the S&P 39 out of 58 times.......he often beats the S&P.

:wave:

[DAVES]

Respectfully disagree, NO one knows when to get in or out, so the only option is to set your allocation and stay in. Remember the vast majority of times a monkey throwing a dart against a listing of stocks will beat the "professional analysts" 99% of the time. And that's just your average monkey.

Of course that is so. Buffet like-Buffet has said stocks are the only thing that people do not buy when it is on sale. That is of course true but to buy stocks on sale you need to have CASH. Has changed recently. You can now get roughly 5% on almost zero risk money market funds. The dow has just turned negative for the year. Inflation first of all many do not understand the math. We are told it is 4%. It is 4% on top of previous numbers. If your top tax bracket is 30% and inflation is 4% you need to get 5.2% to be even. At 4%, rule of 72, in 18 years you will need two dollars to buy what one dollar buys today.

Is now a good time to buy or a shoulda sold time. That beats me.

[askcarl]

My experience talking to these sort of firms/people, and what friends and family have shared with me on their experiences, I have no desire to go with these investment advisors.
Most of these investment advisors have 1 main goal, and that’s how can they make money. Your goal is the same, how can I make the most money on my investment dollars?

In my experience and a couple of friends experience, a few advisors wanted over $40,000-$60,000 per year to manage my/their investments. Which is a lot of money, but take that amount and extrapolate that for 10 years: that’s around $400,000 - $500,000 or more in fees alone. On top of those fees, you might have some funds that have high expenses or loads. OR worse, you could be talked into an annuity.

The most beneficial way to handle investments IMO is for you to learn how to manage your money yourself, or learn enough to know when an advisor is worth the money you are paying him.

To pay 40 to 60K a year at a 1% fee is a $4-6Million portfolio. I'll not cry for anyone in that horrible position this late in life.

[Topspinmo]

I need to find me good insider trader for advisor. They’re ones that have money to manipulate the market. Plus the always know when to sell.

[DAVES]

Jus as a FYI...............

Mr. B does not pick stocks, he picks companies and management.

Also, since 1965 he has beaten the S&P 39 out of 58 times.......he often beats the S&P.

:wave:

As it is said hindsight is always 20-20. Buffet is over 90 and his partner Munger is older than he is. A guy of 90 saying he invests long term does make me wonder. Buying and selling companies? Frankly beyond my experience. The largest sale I was ever involved in was 14 million dollars.

[DAVES]

To pay 40 to 60K a year at a 1% fee is a $4-6Million portfolio. I'll not cry for anyone in that horrible position this late in life.

This is probably not the right place to post such information. In terms of paying a 1% fee, I would check. If, an advisor is charging you 1% of your portfolio to put you into funds and etfs, it is on top of the management fee for the fund or the ETF. Some of the brokerages offer lower fees for the same fund if you have a larger balance. Vanguard makes it public and calls it Admiralty shares.
Fidelity offers the same exact funds with a different code on which a lower fee is charged they are offered to 401k plans.

[retiredguy123]

This is probably not the right place to post such information. In terms of paying a 1% fee, I would check. If, an advisor is charging you 1% of your portfolio to put you into funds and etfs, it is on top of the management fee for the fund or the ETF. Some of the brokerages offer lower fees for the same fund if you have a larger balance. Vanguard makes it public and calls it Admiralty shares.
Fidelity offers the same exact funds with a different code on which a lower fee is charged they are offered to 401k plans.
I only invest in mutual funds and I do not pay any advisor fees. But, if you are going to pay an advisor, I would suggest that you only pay a percentage fee on the funds where the advisor is actively buying and selling individual stocks. There is no reason to pay a percentage fee on money that is invested in bonds, mutual funds, or cash. I understand that Fidelity will allow you to exclude the money from the fee structure that is not being actively managed by an advisor.

[DAVES]

I'm not sure where you are getting your information.
My broker has always made investments grow. I make way more than his fees. If I don't make money then he doesn't. Been with the same company over 30 years

Beware that is not so. If, I don't make money he doesn't. Unless he is a stock fund manager collecting a disclosed fee, he makes money on commissions when you buy of sell. A fund manager makes his or her management fee as a percentage of what is in the fund and they make money whether the fund goes up or down. If, the fund does well, more people put money in and so 1% of two million is far less than 1% of ten or 100 million. Funds have closed because the amount in the fund is to small to justify the work required, government required paperwork, accounting etc,

[DAVES]

I only invest in mutual funds and I do not pay any advisor fees. But, if you are going to pay an advisor, I would suggest that you only pay a percentage fee on the funds where the advisor is actively buying and selling individual stocks. There is no reason to pay a percentage fee on money that is invested in bonds, mutual funds, or cash. I understand that Fidelity will allow you to exclude the money from the fee structure that is not being actively managed by an advisor.

Far too complex to discuss here. In terms of bond funds,etfs you will find that they achieve above market returns by leveraging,borrowing against bonds they own to buy more bonds and buy buying lower than investment grade bonds.

Terms of paying an advisor. I do not either. Perhaps for some it is worth the fee to have someone besides themselves to blame.

Endless opportunities for free lunches. We went to ONE. I was truly interested. They handed out forms. They had roughly 30 people there. They asked stuff like ss# net worth where your money is. We got a free meal. If,I recall we even got a pen. I did not even give them my name.
As it is said you get notin for nothin. I've never gone to another.

[DAVES]

I need to find me good insider trader for advisor. They’re ones that have money to manipulate the market. Plus the always know when to sell.

A true story. I had a friend and a customer with a store just off Wall Street. His line was I don't usually do this but I like you. I just heard that the guy who pushed bottled water to make millions is now stating a company to sell table wine. The stock will open tomorrow at four bucks a share. I got side tracked and didn't place an order. Another friend worked for a brokerage. I told him to buy me a hundred shares as long as it was less than 4. 50 a share. I bought 800 shares at 2 dollars each. They launched the product in Florida. I asked my father-in-law to try some. Review-it is awful.
After a year or so we got memos that the other partner is a crook. Long story short. That is how 1600 turned to zero and a tax loss.

[Sully2023]

My experience talking to these sort of firms/people, and what friends and family have shared with me on their experiences, I have no desire to go with these investment advisors.
Most of these investment advisors have 1 main goal, and that’s how can they make money. Your goal is the same, how can I make the most money on my investment dollars?

In my experience and a couple of friends experience, a few advisors wanted over $40,000-$60,000 per year to manage my/their investments. Which is a lot of money, but take that amount and extrapolate that for 10 years: that’s around $400,000 - $500,000 or more in fees alone. On top of those fees, you might have some funds that have high expenses or loads. OR worse, you could be talked into an annuity.

The most beneficial way to handle investments IMO is for you to learn how to manage your money yourself, or learn enough to know when an advisor is worth the money you are paying him.

I used Fidelity and Fisher Investments in the past. I ended up moving my money back to Vanguard. Great mutual funds, low cost, it worked for 39 years for me. Not sure why I made the change and did full circle.

[Robbb]

I used Fidelity and Fisher Investments in the past. I ended up moving my money back to Vanguard. Great mutual funds, low cost, it worked for 39 years for me. Not sure why I made the change and did full circle.

I did the same. Not to change topics but when does the investment club meet in the Villages. From many of the comments here I think I could learn something from them, and I consider myself a pretty well read investor.

[Stu from NYC]

As it is said hindsight is always 20-20. Buffet is over 90 and his partner Munger is older than he is. A guy of 90 saying he invests long term does make me wonder. Buying and selling companies? Frankly beyond my experience. The largest sale I was ever involved in was 14 million dollars.

Buffet and mundt have lots of smart people younger than themselves working for them. Suspect back office is now doing most of the work

[dewilson58]

Buffet and mundt have lots of smart people younger than themselves working for them. Suspect back office is now doing most of the work

Think of the value of that training manual.

:eclipsee_gold_cup:

[Stu from NYC]

Think of the value of that training manual.

:eclipsee_gold_cup:

Very true but do wonder how much do both of the founders contribute.

Will say the smartest investors I have ever heard of.

[dewilson58]

Very true but do wonder how much do both of the founders contribute.

Will say the smartest investors I have ever heard of.

Exactly what I'm talking about..............picking those brains day in / day out.

[manaboutown]

AAPL is now nearly 50% of BRK. Back in 2016 Todd Weschler, one of Buffett's lieutenants, had acquired $1B of AAPL. This is the story of what thereafter caught Warren's attention and got BRK into far more AAPL. How A Lost iPhone Led To Warren Buffett Investing Billions In Apple (https://www.indiatimes.com/worth/news/how-a-lost-iphone-led-to-warren-buffett-investing-billions-in-apple-569497.html)

[huge-pigeons]

When you go with an investment advisor, they charge their fee on all the money you give them to manage, it doesn’t matter I f they invest in bonds, funds, money market, or stocks.
Also, don’t get confused with advisor fees and fund expenses, 2 different fees. You have to know what you are doing when investing. For example, I helped a friend that just gave an advisor that was a friend of a friend and this person was paying almost 5% in total fees, and on top of that, they were making no money on their investments.
Each fund you buy has many fees that can cost you more in yearly taxes (for example, high turnover) or when you sell. Sometime, look to see exactly what expenses you are paying for a managed fund compared to an index fund, it will blow you away, and that doesn’t include your advisor fees.

The only way to make money is investing in the stock market, working and saving your money in your mattress or savings deposit box will just lose you money, and your money still needs to grow after you retire

[retiredguy123]

When you go with an investment advisor, they charge their fee on all the money you give them to manage, it doesn’t matter I f they invest in bonds, funds, money market, or stocks.
Also, don’t get confused with advisor fees and fund expenses, 2 different fees. You have to know what you are doing when investing. For example, I helped a friend that just gave an advisor that was a friend of a friend and this person was paying almost 5% in total fees, and on top of that, they were making no money on their investments.
Each fund you buy has many fees that can cost you more in yearly taxes (for example, high turnover) or when you sell. Sometime, look to see exactly what expenses you are paying for a managed fund compared to an index fund, it will blow you away, and that doesn’t include your advisor fees.

The only way to make money is investing in the stock market, working and saving your money in your mattress or savings deposit box will just lose you money, and your money still needs to grow after you retire
Your first sentence is not true with Fidelity Investments. They will only apply their percentage fee to the funds that they actively manage. If you have "buy and hold" investments in bonds, money market funds, or index funds with little trading activity, Fidelity does not charge a percentage fee on those funds.

[SusanStCatherine]

What I have learned for myself - may not be what's best for you though: Diversified funds covering all sectors is basic to investing. When one sector is up, another is down. The funds are diversified themselves and managers of the funds are buying stocks before they become "buy" stocks and selling stocks before they change to "sell". You can't time the market. In retirement, you need to have three years in cash. There is much more to financial planning than investing. When to take Social Security? Creative tax strategies. Estate planning. Insurance needs may include umbrella coverage, especially in later years. Paying for advice may yield more in return than cost of the advice. Each person has different goals, risk tolerance, etc. Either self educate or hire a fiduciary (or neither). It's all up to you.

[CoachKandSportsguy]

Cost should not be the deciding factor, but the after fees and taxes on gains return. . a 25% return with 5% taxable gain and a 2% fee vs a 20% return with a 15% taxable gain and a 0.5% fee are not the same after tax return. :read: Its highlighted as the typical consumer puts a heavy weight on cost savings, as their only differentiating and controllable choice.

Vanguard has trademarked a mutual fund tax strategy, which reduces/eliminates taxes annually on certain mutual funds. So before you say "Great!, they minimize the annual tax bill, but that increases the taxable gain bill when sold, meaning a larger portion of the sale price are taxes and less return of capital. So the increased amount will be taxed at the capital gains amount, for index gains and the saved tax gains each year. So pay a small amount annually or pay a larger amount when sold. Of course doesn't matter inside an IRA/401K or other qualified plan, but the after fees and taxes return is the correct metric to evaluate any investment.

Is that easy? not always, because it's not always published what the turnover and the annual taxable gains are, as it's inconsistent annually, and not required by law. . or i haven't seen as a tear sheet item.

good luck all

former finance guy

[dewilson58]

former finance guy

Once a finance guy, always a finance guy.

[CoachKandSportsguy]

You can't time the market.

The only way to avoid losses is to market time by selling when risks and valuations are high, and buying when risks and valuations are low. This behavior is in fact what you are paying a mutual fund manager to do on your behalf. not the same with ETFs, now you become the portfolio manager.

A portfolio manager rebalancing a portfolio is in fact a market timing exercise, by eliminating the poor performers and buying the better performers at fixed time intervals. . .

The number one reason why the mutual fund industry sells the notion that you can't time the market is to convince you that they can manage your money better and give it to them please. . .

always ask yourself "who is making money" from what I am hearing. . . my dad was sold a mutual fund, and after 15 years, there were no gains. .

chat again later. . and yes, everyone should watch "The Big Short", to realize how financial alchemy or sausage is done. and more than once. There are some great scenes in that movie, especially the woman from the rating agency wearing light blocking glasses, the ones which you get after your eyes are dilated, who admitted to always making up numbers.

[CoachKandSportsguy]

Once a finance guy, always a finance guy.

its on 24 x 7 , now more of a curse :Screen_of_Death:

[Stu from NYC]

The only way to avoid losses is to market time by selling when risks and valuations are high, and buying when risks and valuations are low. This behavior is in fact what you are paying a mutual fund manager to do on your behalf. not the same with ETFs, now you become the portfolio manager.

A portfolio manager rebalancing a portfolio is in fact a market timing exercise, by eliminating the poor performers and buying the better performers at fixed time intervals. . .

The number one reason why the mutual fund industry sells the notion that you can't time the market is to convince you that they can manage your money better and give it to them please. . .

always ask yourself "who is making money" from what I am hearing. . . my dad was sold a mutual fund, and after 15 years, there were no gains. .

chat again later. . and yes, everyone should watch "The Big Short", to realize how financial alchemy or sausage is done. and more than once. There are some great scenes in that movie, especially the woman from the rating agency wearing light blocking glasses, the ones which you get after your eyes are dilated, who admitted to always making up numbers.

We can agree to disagree on this. Do not believe anyone can consistently time the market. I do maintain invest in a good basket of diversified no load mutual funds and as long as they perform keep them.

Good portfolio managers can do a better job than I can.

Over the long run have found this works for me.

[BlueStarAirlines]

Why not take care of your own medical and dental needs while you are at it. And do all of your own car repairs, home maintenance and lawn work.
In my opinion there is real value in hiring a professional to take care of these things. Of course, its your money, and your time, spend it as you wish.

This sounds good, but there is a huge fallacy in the statement. We know what a medical or dental "professional" had to do to become that "professional". There was additional schooling, there were boards to pass, continuing education.

What are the requirements for someone to become a financial "professional"? The answer is absolutely nothing! Most do get certifications such as the CFP and if you want to sell securities one needs to pass the Series 7 or General Securities Representative License test....but its a pretty low bar.

To put a doctor or dentist on the same shelf as a finance advisor is silly. I'm not knocking financial advisors, but due diligence examining their credentials, certifications, and education would be prudent.

[Stu from NYC]

This sounds good, but there is a huge fallacy in the statement. We know what a medical or dental "professional" had to do to become that "professional". There was additional schooling, there were boards to pass, continuing education.

What are the requirements for someone to become a financial "professional"? The answer is absolutely nothing! Most do get certifications such as the CFP and if you want to sell securities one needs to pass the Series 7 or General Securities Representative License test....but its a pretty low bar.

To put a doctor or dentist on the same shelf as a finance advisor is silly. I'm not knocking financial advisors, but due diligence examining their credentials, certifications, and education would be prudent.

We have gone to a number of financial seminars where so called financial advisors try to get you to allow them to manage your money.

They will rarely tell the crowd their qualifications of doing this and I will always ask either to the entire room or by myself.

Have gotten answers that they were former math teachers and have a program that will advise how to allocate funds and time the market or in one case a former salesman decided he had the knowledge to invest others money.

Or they take the easy way out and push annuities.

Always amazes me that I typically am the only one to ask such a question.

[manaboutown]

Some people for whatever reason(s) are better off using a financial advisor. They do not have the time, the interest, the capability or any combination thereof to manage their assets. The problem for them is finding an honest and capable individual who understands their situation and can assist them at reasonable cost, preferably fee only, not fee-based or AUM.

The problem is finding a good advisor to help them. The best FAs handle only very large accounts, as in hundreds of millions of dollars and the best of them are not taking new accounts. Over the years I have read the CVs of FAs at most of the popular retail brokerage houses. They are anything but impressive. I have yet to find one to manage my securities when I am no longer able to do so. Most of my assets are in real estate so I have a trust company lined up to handle them. This particular trust company will coordinate with one's estate attorney, accountant and FA. It does not have in-house FAs so I suppose I need to find one. Good luck to me!

[Caymus]

This sounds good, but there is a huge fallacy in the statement. We know what a medical or dental "professional" had to do to become that "professional". There was additional schooling, there were boards to pass, continuing education.

What are the requirements for someone to become a financial "professional"? The answer is absolutely nothing! Most do get certifications such as the CFP and if you want to sell securities one needs to pass the Series 7 or General Securities Representative License test....but its a pretty low bar.

To put a doctor or dentist on the same shelf as a finance advisor is silly. I'm not knocking financial advisors, but due diligence examining their credentials, certifications, and education would be prudent.

Another difference, my unscientific search indicates there are multiple more FA's seeking clients than Doctors seeking patients.:angel::angel: