OT: Anyone ever fire their financial guy before?

[Dawg1976]

I'm a psychologist half the time.
If I need a psychologist I will go to a Dr with a degree in psychology.
If you don't have a clue or care to learn about the market, you need an advisor.

The catch really is your asset size. If you have $100k, you won't get good advice, because good advisors won't have time for you, so you should be in mutual funds.If you have substantial assets, over $500K, I would say the average person needs an advisor.
Mutual funds or etf's works for millionaires too. Check out Bogleheads.org or early-retirement.org.

I would hate to think I needed to pay .7 to 1% a year for some hand holding. Along with the high fee products that are recommended. Does one really to pay several thousand dollars just to be told 'stay the course'? But if one needs that, well it's their money. But most should be able to handle their investments with just some basic reading and common sense. If not, then hire a fee-only adviser. See below.

John Bogle, former Vanguard Group CEO and the father of low-cost index investing, agrees and says the choice is clear.
“Mr. Bogle suggests fee-only advisers, saying their interests tend to be better aligned with their clients’ than those of advisers paid in other ways, such as by commission. (Advisers paid that way usually hope to sell you a product.)”
From....http://www.chartingyourfinancialfut...should-you-really-be-managing-your-own-money/

 

[Dawgbite]

How much money do you need to invest in stocks or mutual funds?

This question comes from a broke guy that is extremely ignorant to financial ****

I started a Sharebuilder account 15-20 years ago by setting up an automatic transfer of $50 per month into the account from my checking account. With such a small amount you have to be very carefull of trade fees. I noticed that Fidelity has a deal for 300 free trades with a new account. You got to start somewhere, start small but start.

 

[philduckworth]

2 quick things.

1) Vanguard did a study that says financial advisors add 3% of value per year. That is huge over the long term. Of course all advisors aren't created equal so go with a good firm and interview 3 different advisors and find the right fit.

2) everyone can contribute to a 401k and pick good funds. The challenge comes in retirement when you are looking for good distribution strategies and income strategies to live off of your savings and not run out of money. A good advisor definitely earns his/her 1% fee in this situation.

 

[jdbulldog]

Can anyone advise a feller who has a thousand dollars to invest?

 

[tatedog]

Black on roulette.

 

[8dog]

Yall are really underestimating the number of people who know nothing about investing and also need a psycologist like he speaks of.

Even people picking good funds or stocks need someone between them and the button. Or they just sell low and buy high

 

[dawgphd]

Can anyone advise a feller who has a thousand dollars to invest?

Wealthfront or Betterment

 

[DawgAmerica]

Some good advice in here. Things to keep in mind:

- Fees are your ENEMY. They will eat you alive. Everything you read about the power of compounding interest, the same holds true on flip side for fees. The more your money grows the more you have to pay!!!
- Financial advisors, fund managers, even hedge funds under perform the market 90+% of the time
- Index funds are best friend
- maximize your tax deferred/tax beneficial savings first (401k, IRA, Roth, etc)
- If you do pay a financial advisor make sure it is a fixed fee not commission and/or percentage fee (see points 1 & 2)
- If you invest in low fee index funds, contribute regularly, do not withdraw then over a working life time (20 to 45 years) you will out perform 90+% of investors and will retire a millionaire even if you are putting as little as $150 month into the funds.
- You have to control the man in the mirror. You are your best financial advisor!
- AVOID high fees - they are hidden everywhere: In Mutual Funds, In "Financial Advice", In Target Funds, In 401k Fees.
- Anybody who tries to sell you a 'managed' fund is not your friend, he is a businessman looking for the biggest slice of your money that he can get.
- Index funds are your best friend
- Buy and hold! (index funds)
- Slow & Steady really does win this race!
- Read, learn, study.
- Resources:

- https://www.amazon.com/Bogleheads-G...d=1483889479&sr=8-1-spell&keywords=broglehead
- https://www.amazon.com/Little-Book-...rd_wg=mtJ49&psc=1&refRID=B0NN58MRTZFD5ZC274N4
- https://www.amazon.com/MONEY-Master...1483890228&sr=1-1&keywords=money+tony+robbins
- https://www.amazon.com/Total-Money-...83890273&sr=1-1&keywords=total+money+makeover
- https://www.amazon.com/Retire-Inspi...rd_wg=iaQwW&psc=1&refRID=1PXTBT1143QBTNFJJSB8

 

[TheStateUofMS]

It never ceases to amaze me.

Yall are really underestimating the number of people who know nothing about investing and also need a psycologist like he speaks of.

Even people picking good funds or stocks need someone between them and the button. Or they just sell low and buy high

Most people who have significant assets also have unique needs in an ever changing tax and regulatory environment. They don't understand settlement dates.

I work with folks who think a check can be written against their stocks.

 

[WhiteShepherd07]

I'm not completely disagreeing with you here but to your point of most active managers under perform the market... 90% of the funds under perform, yes. But that's 90% of 7,000 funds. So 10% or 700 actively managed mutual funds beat the market.. that's not too hard to miss. I would think higher performance would justify higher fees, no?

Ok, but a different perspective. Most advisors, at least fee based advisors are going to be goal oriented. So let's say with your goal hypothetically of retiring in x years, your risk tolerance, and your given savings that a modest 6% average return will achieve that goal. Why would an advisor try to take on more risk for you, of trying to achieve an average of 9% return with the s&p500 when the previous will suffice?

 

[Dawg1976]

Perhaps there is a market for those not willing to learn a few basic money managing concepts and/or have little will power. Learning how to handle money and basic investing should be as important to someone as reading and writing. But many can't even do those 2 things.

 

[BulldogBlitz]

What do I really need an Edward Jones or Hancock guy for?

Is this a euphemism? Use more dales.

 

[Msubulldogfan1]

What about buying individual shares and slowly buying more and slowly diversifying. Robinhood seems to allow that and I don't have a sum of cash at the moment...but have wanted to dip my toes in the market for a while.

 

[8dog]

Its generally not the same 10% each year though

 

[TheStateUofMS]

I agree it should be taught in schools.

Perhaps there is a market for those not willing to learn a few basic money managing concepts and/or have little will power. Learning how to handle money and basic investing should be as important to someone as reading and writing. But many can't even do those 2 things.

Don't understand why it's not.

 

[MSU601Dawg]

Some good advice in here. Things to keep in mind:

- Fees are your ENEMY. They will eat you alive. Everything you read about the power of compounding interest, the same holds true on flip side for fees. The more your money grows the more you have to pay!!!
- Financial advisors, fund managers, even hedge funds under perform the market 90+% of the time
- Index funds are best friend
- maximize your tax deferred/tax beneficial savings first (401k, IRA, Roth, etc)
- If you do pay a financial advisor make sure it is a fixed fee not commission and/or percentage fee (see points 1 & 2)
- If you invest in low fee index funds, contribute regularly, do not withdraw then over a working life time (20 to 45 years) you will out perform 90+% of investors and will retire a millionaire even if you are putting as little as $150 month into the funds.
- You have to control the man in the mirror. You are your best financial advisor!
- AVOID high fees - they are hidden everywhere: In Mutual Funds, In "Financial Advice", In Target Funds, In 401k Fees.
- Anybody who tries to sell you a 'managed' fund is not your friend, he is a businessman looking for the biggest slice of your money that he can get.
- Index funds are your best friend
- Buy and hold! (index funds)
- Slow & Steady really does win this race!
- Read, learn, study.
- Resources:

- https://www.amazon.com/Bogleheads-G...d=1483889479&sr=8-1-spell&keywords=broglehead
- https://www.amazon.com/Little-Book-...rd_wg=mtJ49&psc=1&refRID=B0NN58MRTZFD5ZC274N4
- https://www.amazon.com/MONEY-Master...1483890228&sr=1-1&keywords=money+tony+robbins
- https://www.amazon.com/Total-Money-...83890273&sr=1-1&keywords=total+money+makeover
- https://www.amazon.com/Retire-Inspi...rd_wg=iaQwW&psc=1&refRID=1PXTBT1143QBTNFJJSB8

Listen to this guy... and for all you dolts w Edward Jones, they put you in mutual funds that have 5-7% front end load fees. 5-7% of your $ gone as soon as you give it to them, not to mention those same mutual funds have 1% or more 12b-1 fees each year (some of which goes back to Edward Jones). Those mutual funds companies pay Edward Jones to put their clients in those funds.

Fee only of you need an advisor to avoid the above, but index funds with as low of fees as possible are the way to go and offer the "diversity" that everyone is taught to look for. You don't need an advisor to have a vanguard total market fund and a total bond fund

 

[Hoover Dawg]

What a bunch of poors itt, no wonder we can't get any decent football croots

^^ Rivals Main Boarder

 

[Bulldog from Birth]

It depends on your objective. If you just want to park $1,000 for 10+ years and get good compounding interest, I'm a big fan of IVV. It is just a low-fee ETF fund that tracks the S&P 500 index. But that carries with it the risks of the stock market. It's certainly susceptible to ups and downs, so if you aren't willing to let it ride for multiple years, it's not a good choice. If you think you will need funds sooner, then high dividend ETF's like HDV or VYM are good. They don't usually get the same growth as the market but you're trading that for consistent dividend payouts which are typically more stable. If you're willing to gamble your money for significantly higher returns, then just research into some particular company stocks and buy one you want to take a shot with. I'm no finance guy, just your average guy in the rat race doing his own investing.

https://finance.yahoo.com/quote/IVV?p=IVV

 

[Bulldog from Birth]

Depends on what you mean by "investing in stocks or mutual funds." If by this, you mean your investment in retirement accounts (401k, Roth IRA, Traditional IRA, etc), and you are not getting any kind of substantive pension from your employer, then you should be investing something on the order of 15% of your salary every year assuming you are starting this in your mid to late 20's.

 

[Bulldog from Birth]

I like picking out individual stocks and trying to beat the market. But I only do that with investments I do OUTSIDE of my retirement accounts, money that I'm not relying on for anything than trying to take a chance for a nice return. Unless you are building retirement investment portfolios of upwards of a million bucks and up, you are probably better off to just use low fee ETF's/mutual funds rather than trying to mimic the market by buying individual stocks.

 

[Moe Cabelle]

I'm with you, I've got my safe stuff but it fun to beat the market. Frack sands have been delightful to hold the past year.

 

[DawgAmerica]

I'm not completely disagreeing with you here but to your point of most active managers under perform the market... 90% of the funds under perform, yes. But that's 90% of 7,000 funds. So 10% or 700 actively managed mutual funds beat the market.. that's not too hard to miss. I would think higher performance would justify higher fees, no?

As stated below, the 10% changes every year. I am not smart enough to know which 10% are going to outperform the S&P this year. Even if I could, the in & out fees every year chasing the 10% will eat up that margin.

Ok, but a different perspective. Most advisors, at least fee based advisors are going to be goal oriented. So let's say with your goal hypothetically of retiring in x years, your risk tolerance, and your given savings that a modest 6% average return will achieve that goal. Why would an advisor try to take on more risk for you, of trying to achieve an average of 9% return with the s&p500 when the previous will suffice?

Going with a fee based advisor is 100x better than a commission-based, I will give you that. So if you feel the need for an advisor that is the route to go, you are correct that your goals will be more aligned than with someone who is only trying to get commissions. I don't know if he is going to try to take on anymore risk, but he is also going to be reluctant to say ' here buy the S&P 500 index fund, its your best long term investment'. He does want you coming back every year so he is going to prove his worth by getting you into a mix of funds. My recommendation, benchmark his performance vs. a similar mix of index funds (S&P, Total Market, Bond Index, etc.).