[retiredguy123]

Originally Posted by mmastin

Hi, my name is Mike. I read all of the information and as a matter of fact, there is a lot of misconception as to rates of returns and fees.
I've been an accountant for over 40 years and have studied these investments as per my job for 40 years. There has never been any body that has made any where close to 8% return per year. In fact, the largest I've ever seen is 1% per year. The actual way to determine this is simple interest that every one learned in high school. Market value minus your cost basis = unrealized gain or loss divided by the number of years you have had the money invested.
The other thing I want to mention is the actual fees charged by mutual funds are not 1% or .5% per year. It is a deception. The real thing is expenses are always ratio'd against income, never assets, and when you look up the annual reports of each fund, including Vanguard, you will see the "expense to income ratio" is more like 60% of the income. Therefore, they take around 6-7% of your money every year before you make anything. So the market is going down, you still lose an additional 7%. Since the high of the DOW and the NASDAQ and the S&P 500, which is 95% of the market, it has lost as of today 21%, it will take you 30% to gain it back, but what are you gaining back to? A 1% per year rate of return.
These are just facts, not lies, that are presented to you by brokerage firms and mutual fund companies as they do not have a fiduciary responsibility, like accountants or doctors do, which means they can lie to you. There are many lawsuits currently going on that "so called financial advisors" are suing the department of labor not to implement the fiduciary law. In other words, they want to lie to you. These are not opinions. They are facts.
If you have any other questions regarding any of this, feel free to reach out to me via private message.

-- Mike Mastin
Accountant

Sorry, but I don't understand anything in your post. Where should people invest their money?

[mistervin]

Thanks

[Stu from NYC]

Originally Posted by mmastin

Hi, my name is Mike. I read all of the information and as a matter of fact, there is a lot of misconception as to rates of returns and fees.
I've been an accountant for over 40 years and have studied these investments as per my job for 40 years. There has never been any body that has made any where close to 8% return per year. In fact, the largest I've ever seen is 1% per year. The actual way to determine this is simple interest that every one learned in high school. Market value minus your cost basis = unrealized gain or loss divided by the number of years you have had the money invested.
The other thing I want to mention is the actual fees charged by mutual funds are not 1% or .5% per year. It is a deception. The real thing is expenses are always ratio'd against income, never assets, and when you look up the annual reports of each fund, including Vanguard, you will see the "expense to income ratio" is more like 60% of the income. Therefore, they take around 6-7% of your money every year before you make anything. So the market is going down, you still lose an additional 7%. Since the high of the DOW and the NASDAQ and the S&P 500, which is 95% of the market, it has lost as of today 21%, it will take you 30% to gain it back, but what are you gaining back to? A 1% per year rate of return.
These are just facts, not lies, that are presented to you by brokerage firms and mutual fund companies as they do not have a fiduciary responsibility, like accountants or doctors do, which means they can lie to you. There are many lawsuits currently going on that "so called financial advisors" are suing the department of labor not to implement the fiduciary law. In other words, they want to lie to you. These are not opinions. They are facts.
If you have any other questions regarding any of this, feel free to reach out to me via private message.

-- Mike Mastin
Accountant

Sorry do not believe mutual funds take anywhere close to 7% in fees

[jimjamuser]

Originally Posted by mmastin

Hi, my name is Mike. I read all of the information and as a matter of fact, there is a lot of misconception as to rates of returns and fees.
I've been an accountant for over 40 years and have studied these investments as per my job for 40 years. There has never been any body that has made any where close to 8% return per year. In fact, the largest I've ever seen is 1% per year. The actual way to determine this is simple interest that every one learned in high school. Market value minus your cost basis = unrealized gain or loss divided by the number of years you have had the money invested.
The other thing I want to mention is the actual fees charged by mutual funds are not 1% or .5% per year. It is a deception. The real thing is expenses are always ratio'd against income, never assets, and when you look up the annual reports of each fund, including Vanguard, you will see the "expense to income ratio" is more like 60% of the income. Therefore, they take around 6-7% of your money every year before you make anything. So the market is going down, you still lose an additional 7%. Since the high of the DOW and the NASDAQ and the S&P 500, which is 95% of the market, it has lost as of today 21%, it will take you 30% to gain it back, but what are you gaining back to? A 1% per year rate of return.
These are just facts, not lies, that are presented to you by brokerage firms and mutual fund companies as they do not have a fiduciary responsibility, like accountants or doctors do, which means they can lie to you. There are many lawsuits currently going on that "so called financial advisors" are suing the department of labor not to implement the fiduciary law. In other words, they want to lie to you. These are not opinions. They are facts.
If you have any other questions regarding any of this, feel free to reach out to me via private message.

-- Mike Mastin
Accountant

am pretty sure that Warren Buffet makes over 1% per year.

[tvbound]

Originally Posted by jimjamuser

am pretty sure that Warren Buffet makes over 1% per year.

I'm pretty sure, that you are absolutely correct.

I have to say though, I found it amusing reading Mr. Mastin's convoluted and amazingly incorrect analysis regarding investing.

[tvbound]

The latest jobs report shows almost 3M more are out of work just last week, so it's hard to imagine that the markets won't react to that.

I think we would be doing well, if even 75% of those jobs come back after a full reopening. My fingers are crossed.

[Stu from NYC]

Originally Posted by tvbound

I'm pretty sure, that you are absolutely correct.

I have to say though, I found it amusing reading Mr. Mastin's convoluted and amazingly incorrect analysis regarding investing.

Was scratching the remaining hair on my head constantly while reading it.

[tophcfa]

Call me old school, but I have always believed the value of any stock should be discounted future earnings. Future earnings are of course an estimate, but it is very reasonable to expect most companies future earnings to be much lower in light of the global economic upheaval caused by Covid 19. The rate used to discount future earnings should represent a risk free rate (US Treasury rate) appropriately adjusted for risk. Again, in light of the incredible amount of uncertainty currently existing, a much higher risk premium needs to be added to the discount rate. So lower expected earnings and much more uncertainty means stock prices SHOULD BE much lower. However, that’s not the case.

The current market represents values boosted by the Federal Reserve pumping absurd amounts of money into the system to artificially support the market above what the underlying fundamentals justify. This is not sustainable, very dangerous, and the cost of this will come back to haunt future generations. You know something is very wrong when the market does best when we get bad economic numbers, because that gives the market comfort that the Federal Reserve will keep acting irresponsibly. This is VERY SHORTSIGHTED!

[Rlord]

I'm in a similar situation but we sold and bought a home recently in the Villages. Things are crazy in the stock market and it may be overvalued. Thinking about selling everything and going into cash since the market has regained and because of market uncertainty .

I've put stop loss limits on some big gainers like Amazon and I'm selling aggressive covered calls in hopes of getting income on the looser stocks that I own. Also selling puts to create income instead of going to cash. Some sectors are doing fine but I will continue to be vigilant.

[Stu from NYC]

Originally Posted by Rlord

I'm in a similar situation but we sold and bought a home recently in the Villages. Things are crazy in the stock market and it may be overvalued. Thinking about selling everything and going into cash since the market has regained and because of market uncertainty .

I've put stop loss limits on some big gainers like Amazon and I'm selling aggressive covered calls in hopes of getting income on the looser stocks that I own. Also selling puts to create income instead of going to cash. Some sectors are doing fine but I will continue to be vigilant.

Too complicated to my way of thinking

[Duane McCartney]

I have been out of the market for over 5 years now as the market is just too much of a roller coaster ride as I was nearing retirement age. I moved all my retirement funds into different real estate investments. I have a diversified portfolio among office buildings, apartment building, trailer parks, and I own a lot of mortgage notes. As a former landlord, I discovered that being the banker (lender) on a property is far better than being the landlord (owner) of a property. The mortgage note business has changed my life for the better and has allowed me to retire without financial worry.

[tvbound]

Contently standing on the sidelines and watching the DJIA this morning, only one word comes to mind.


Icarus.

[TNLAKEPANDA]

50/50 annuities and index funds. The annuity returned 14% between 2/19 and 2/20.

[retiredguy123]

Originally Posted by TNLAKEPANDA

50/50 annuities and index funds. The annuity returned 14% between 2/19 and 2/20.

If you are referring to a stock market based indexed annuity, a 14 percent return was about 6 percent less than the S&P 500 return for that period. But, you really can't calculate the return on an annuity for an arbitrary one year period. There are so many fees, surrender penalties, loopholes, etc. And, the guarantee that you will not lose money usually only applies to how much you invested vs how much you cash in years later and does not include the fees. Annuities are so deceptive that the companies that sell them will not even allow you to read the contract until you have already bought it. I have asked several insurance companies to send me a copy of their annuity contract, and they all refused to send it to me.

[tophcfa]

Originally Posted by Stuart Zaikov

Was scratching the remaining hair on my head constantly while reading it.

The only thing the post actually explains is that one should not take investment advise from an accountant.