Mutual Fund Companies
 

Who do you have to manage your money if you do. We have Fidelity and am wondering if it is worth it or is there a better way. Are local investment companies better? What is the normal charge at other companies? I know Fidelity charges over 1%, is that too much. They have started pushing annuities more & more. Which I try to stay away from. Please give me some insight into what other people do.

To this point I have managed my own investments. I would never buy an annuity as one pays horrendous commissions and is on the hook for early termination fees. That is why annuities are "sold", never"bought".

At some point in time I may need an outside manager and I will find a fee only firm or individual.

I own Vanguard index mutual funds. The S&P 500 stock index, a short term bond index bond fund, a total market bond index fund, a high yield corporate bond index fund, and a money market fund. Vanguard and Fidelity both offer similar funds, ETFs, and active management based on a percentage of your portfolio. However, I don't pay any portfolio percentage fee or the higher expense ratios required to own the actively managed mutual funds. Vanguard and Fidelity are both good companies, but I would suggest that you compare your total returns to the returns you would have achieved if you had invested in the index funds I listed, and paid no fees. You can also compare them to the Fidelity index funds. You may find that you have been wasting your money.

Another company that provides financial management using a portfolio percentage fee is Fisher Investments, but I think their fees are higher than Fidelity and Vanguard.

I would definitely stay away from annuities.

We have Fidelity and pay well under 1%. It’s a little more than what we pay at Vanguard but we also meet face to face at least once a year with our Fidelity advisor.

Worst returns ever these mutual funds they push

Rather front load
 

I would rather front load on a Fidelity Fund than pay a percentage

OP, when I recently had a meeting with Fidelity, they told me that they could manage my investments for a fee of 1 percent, but that the fee would only be applied to the portion of my portfolio that they were actively managing. So, if I only wanted them to manage half of my portfolio, the fee would be reduced by 50 percent. If you are paying a fee of 1 percent on your entire portfolio, you may want to discuss some type of segmenting of your portfolio.

Also, the current expense ratio for the Fidelity S&P 500 index fund is 0.015 percent as compared to the average expense ratio for their actively managed stock mutual funds, which range from about 0.5 to 1 percent. So, if your stock mutual funds are actively managed funds, you are actually paying fees of up to 2 percent, the fund expense ratio plus the Fidelity advisor fee. However, if you need a financial advisor, I don't think switching mutual fund companies would help you very much. Fidelity is a good company. Good luck.

On a front loaded fund you pay both. A front end fee and a yealry managment fee. I don't understand how this could be an advantage over an idex fund or ETF.

My obligatory post to anyone seeking investment advice.

Take time to read Paul Merriman’s 3 FREE ebooks.
1. First-Time Investor
2. 101 Investment Decisions
3. Get Smart or Get Screwed (read this first!)

Found at paulmerriman.com

Also on his site are recommended portfolios for using Vanguard, Fidelity, T.Rowe Price or Schwab for DYI'ers. Much good info, ignore the puffery and sales pitches.

Also, if you want to know too much about annuities, listen to Stan The Annuity Man® | Brutally Honest Facts About Annuities podcasts.

Podcast - Have Fun With Annuities(R) | The Annuity Man

Last recommendation is FIRECalc: A different kind of retirement calculator , a Monte Carlo simulation of your future.

FWIW

What are you net out returns?

Fidelity is a good company. They have a lot of mutual funds to choose from. I suggest an Equity Mutual Fund or an S&P 500 Mutual Fund. These funds invest in pretty much everything on the Dow or the S&P 500. Thus, reliably, when the market goes up, your holdings go up, and vice versa. This gets rid of a lot of the risk. Right now, with Biden in the White House (though it doesn’t really have anything to do with him), the stock market is the highest it has ever been. You don’t like inflation? Make it work for you. Make money off the companies that raise their prices and have stock prices. If gas goes up, make money off the profits. If pharmaceutical prices bother you, make money off them by owning a piece of them through a mutual fund.

If you look at a list of the various Fidelity funds, you will notice that some make more money than others and some lose more. This changes! Mutual Funds are safer than individual stocks, but even so, you have to be careful. For example, years ago I read that international stocks were going to go up a lot, so I moved a lot of my retirement funds to there. They did go up, but I don’t pay much attention to all this, so when I looked again, I discovered that they were actually going down now, and other funds were growing.

The nice thing about a good Equity Index Fund is that if one company or industry tanks, other companies may still be doing okay. In a sense an Equity Index Fund means investing in America and providing capital for industry. Another great thing about an Equity Index Fund is that the costs to you may be much lower because they just buy everything on the menu.

The tough thing is that with the market high, if you put in your money right now, if it goes down temporarily, you lose money. Buying low makes more sense, but how do you know when it’s low and not going lower. When Trump was elected, my mutual funds took and went up and up for several years. They nearly doubled! That’s why I could afford to move here. But then, while he was still president, Covid-19 hit, and the stock market tanked, and my funds dropped by several hundred thousand dollars. Ouch! His fault? No, but on his watch. I lost probably half of what I had gained. Buying in when the market is low is great, but it doesn’t work unless you have money to put into it at that moment.

I tried Fidelity managed back in 08. Got out in time. (my wife uses Vanguard) We have an excellent rep now with Fidelity, but they can only say so much..have done well over a million for me. But I'd bet at least half of people here have that much

Please tell us how much over 1%.

One percent is a common starting point in conversation about this topic. The more assets under management one has, the rate can be lower. And vice versa.

Local investment advisors also push annuities. Just say no if you don’t want one. But if you tell an advisor that you want a steady income and ~5% per year return does not produce enough income for your case, then expect any advisor to give you an annuity recommendation.

You know what your needs are better than an advisor and what goals you are trying to achieve. Not all advisors, but many will steer you to what is in their best interest. I'm not saying to ignore them all but do your homework. I'm in the market and also do have two annuities, each for different reasons, but I have set a goal, and this mix meets my needs.

I’ll probably be ridiculed for my answer, lol, but I use an Ameriprise advisor and have used one for 25 years. I’m paying much more than 1%, but he has helped me make some very good, measured, reasonable, decisions over the years that I probably would not have made on my own. Life changes, job changes, inheritances, long term planning, etc. Sometimes it’s more than just what you invest in but what you don't. I think everyone is different. Some enjoy money management. I do not. I value my relationship with my advisor and don't think I’d be where I am without his good advice and steady hand. Different strokes.

If you have the time and enjoy managing your portfolio, go for it. I do not. I use Edward Jones and enjoy meeting with my advisor twice a year and tweaking my investments. Depending on the investment in the account, charges are somewhere between .5% - 1%. But that is irrelevant. The important thing is your net return. For the last 20 years, my account has generated about 8%. Half of that is in reinvested dividends, the other half is growth in value. And I never have a day worrying about my money.

One of the best things for me is for tax season, my Edward Jones account downloads straight into TurboTax. One click and I am done with investment taxes.

I would stick with Fidelity one of the best investment firms in the industry. They have a great tax managed US equity fund thats up 35% 1yr and does a good job with tax loss harvesting so you show great gains with hardly any tax liability. Their managed fund fees are lower then any other investment firm I have reasearched. Their cash accounts earn 5.14% you get 3% back on credit card purchases and pay no ATM fees. They have great customer service, very responsive.

Forget annuities. Go to The Villages Investment Club Meetings to get in-depth answers to your questions.

local
 

I manage my own on Fidelity and I can buy ANYTHING on there. I buy what's going up and stop loss pretty quick I don't think they can keep up with the way my year has gone. BUT it takes alot of time and tracking to see who is going up NOW.

Contact CHARISSE Zinnia Wealth and Drew Capital Group heard their talk they seemed good and may use Drew to update my trust & will

Although I have always managed our assets, you can’t go wrong with one of the mega brokerages like Vanguard or Fidelity. If you want investment advice, at Vanguard you can speak to a Certified Financial Planner (CFP) as often as you please and pay a small 0.3% AUM fee. Their expense ratios ore among the lowest on the planet and, therefore, you will keep more of your returns.
Why would anyone hire a micro firm? It must be the sales pitch. Their expenses are likely to be substantially higher and will probably suggest high-commission products you don’t need. If you feel you need an in-person experience, then Fidelity has offices in TV.

I would be interested to know the name/symbol of the tax managed US equity fund that you mentioned. IIRC, Fidelity's credit card offers 2% cash back. Thanks.

Fidelity Investments
 

Fidelity is the best service company on the planet. Curt

I use to manage my own until
shortly after full retirement. Edward Jones takes care of most of my investments now with the exceptions of real estate and my T. Roe Price account I established through my previous employer. I highly recommend both companies. Price for mutual funds and Edward Jones for both stocks and mutual funds. I rarely look at either until tax time or annual meetings. Life is too short and we still have some “things” on our bucket list. But to each their own.

Hi. Fidelity Tax-Managed U.S. Equity Index Strategy is the name of the fund. Also for 3rd tier customers 3% is the cash back on their cards. Nick from Fidelity manages this for me; 630-577-1396 ext 79843.

Oh, it's a separately managed account or portfolio, not a publicy traded fund. Thank you.

How do you know whats "going up now" is not going to crash tomorrow.

We like Charles Schwab’s Intelligent Portfolio. There’s a flat fee of $30 regardless of the size of your portfolio.

The best mm you can possibly hire is yourself. At the end of the day the only person responsible for your finances/investments is YOU,

Agree with this
 

[Great advice!!!! QUOTE=petsetc;2314737]My obligatory post to anyone seeking investment advice.

Take time to read Paul Merriman’s 3 FREE ebooks.
1. First-Time Investor
2. 101 Investment Decisions
3. Get Smart or Get Screwed (read this first!)

Found at paulmerriman.com

Also on his site are recommended portfolios for using Vanguard, Fidelity, T.Rowe Price or Schwab for DYI'ers. Much good info, ignore the puffery and sales pitches.

Also, if you want to know too much about annuities, listen to Stan The Annuity Man® | Brutally Honest Facts About Annuities podcasts.

Podcast - Have Fun With Annuities(R) | The Annuity Man

Last recommendation is FIRECalc: A different kind of retirement calculator , a Monte Carlo simulation of your future.

FWIW[/QUOTE].

Buy what I sell and sell what I buy; you'll earn very high returns!

1% is huge! You might look at it in the short term and say not a big deal. But you look at the amount over 10 years, it’s huge. When I talked to the company referenced in this post, I would be paying them over $500k over a 10 year span. That’s crazy, and they couldn’t guarantee that they would do better than what I have been doing (35% in some index funds, a couple stocks over 100% gain, and other index funds making 12-23%, all with expense costs of .02-.2%). And, if the market tanks like it did in 2008, and in 2022, you still have to pay your broker the fee on top of your 35% loss (paper loss), that would be a kick in the pants.
Learn how to become a boglehead and you will retain your investments instead of giving a large chunk away.

To successfully invest, you can use any number of brokerage houses to buy most index funds out there. For example, you can use fidelity, or Schwab and buy vanguard index funds.

A lot of the time, when you use a broker, they will sell you managed funds with high expense costs and sometimes with front end or rear end load costs. Also, when you look at a managed fund, you can’t just look at the expense that they state, it can be 2-3x more than that. Also, managed funds have much more turnover so your taxes at the end of the year will be higher.

Getting an annuity is like giving your money away to a stranger. High fees, low profit, and you are not getting most of the profits that the market will have most of the time. Don’t let people scare you about losing your money in the market, because the worst thing you can do is get spooked and sell low and then wait too long to get back in. Recessions only last a couple years and the recovery is usually really good. Look at 2008 and 2020 downturns. Never sold a share and after each downturn was over, I had much more money than before the event happened.

I did sell everything after I heard that inflation will be transitory. Everybody knew that wasn’t going to be the case and it wasn’t. I went straight into a money market paying over 5%, and it’s safe with no fees. But since late last year, I have been getting back to my index funds and a couple stocks to get the earnings stated above.

If you require some hand holding, Vanguard has a personal advisor service for 0.3%. They will put you in Vanguard stock and bond products (that is a good thing, BTW). They also have a digital (robo-advisor) service for 0.15%. I have used neither so can't comment on any experiences but you can certainly call them up and see if either is something you might be interested in. I use Vanguard exclusively. Several years ago I spoke with several local investment firms, all with 1% costs, and the only one I would have considered was Ruggie Wealth Management. They were the only one who did not push annuities. I wound up staying with Vanguard and making my own decisions.

Many people do not know the difference between a stock mutual fund and an annuity. The owners of Fidelity mutual fund shares have actually ownership in the stocks that make up the fund. But, if you buy an annuity, you are buying a life insurance contract from an insurance company that may or may not have any underlying stocks. Theoretically, the insurance company can do whatever they want with your money as long as they pay you back in accordance with the terms of the contract. But, unlike a mutual fund, you have no actual stock ownership with an annuity. But, the most important thing to know about annuities is that they are often "pushed" by advisors because they pay the highest commission to the advisor than almost any other product.

Thats all fine, however sometime add up what this relationship is costing you and I think you will find that over a 20 to 25 year period it is costing you 50% of your portofilio.

You are correct. I posted this example last year and came up with a 40% reduction.

There have been many posts on TOTV concerning the AUM (assets under management) fee schedules that many financial advisors are charging. Personally, I have never paid such a fee.

The following example shows just how much money the advisor is pocketing over a 25 year period.
We need to make several assumptions.
1. $100,000 invested for 25 years.
2. 6% annual return.
3. NO AUM fees or other costs. OR
4. 1.25% AUM fee plus 0.75% other fees such as expense ratios and trades for a total annual cost to the consumer of 2%.

Now, get ready to gasp. Here are the results:
1. With zero fees: Account balance after 25 years - $460,000
2. With 2% total fees: Account balance after 25 years - $266,000

You have lost a whopping 40% of your account balance. Granted, there are costs with any investment but index funds at Vanguard, Fidelity and others are minimal. Obviously, your individual numbers will produce different results. Try running the numbers with a $1,000,000 portfolio.

There are people that should seek the help of an advisor but at least you now know how much it is costing you. Also, now you know how they can offer “free” dinners and polo tickets.

This is the rationale why so many people are suggesting very low-cost firms such as Vanguard, Fidelity, Schwab, etc. While not for everybody, it is a great way to build a substantial retirement portfolio.
Fees matter!