How's Your Investment Portfolio?

[+ newguy]

Whoever you get as a financial advisor, be sure to ask if he/she will have a "fiduciary duty" in his/her relationship to you. "A fiduciary duty is a legal duty to act solely in another party's interests. Parties owing this duty are called fiduciaries. The individuals to whom they owe a duty are called principals. Fiduciaries may not profit from their relationship with their principals unless they have the principals' express informed consent."

 

If a financial advisor is in a fiduciary relationship with you, he/she MUST disclose to you whether he is making ANY profit when he recommends any type of investment. I've learned the hard way that certain advisors get kickbacks if their clients make certain investments, not always in your best interest. I would be especially wary of the large management companies. If I had to do over again, I would have taken a more active and direct role in determining which funds to invest in - and would have been more careful in observing the "management fees" that these companies charge. When you snooze, you lose.

 

BTW, my portfolio has doubled since Obama became prez. It's probably time to take some profits before investors realize that the market is overpriced. Could happen any day though I suspect it will happen in first quarter of next year.

____________________________________________________

*****MORE ABOUT THE FIDUCIARY RELATIONSHIP RULE****

The above poster is giving excellent advice about making sure that one's

financial planner acts in your own best interests, and has no conflict of interest.

 

I believe that Trump rolled back that regulation. I'm not certain. Below

is a report from "Forbes" on this issue. I'm copying the first paragraphs of the article

and also providing the link https://www.forbes.com/sites/jamiehopkins/2017/02/03/trump-signs-executive-order-shelving-fiduciary-standard-for-financial-advisors/

 

Trump Signs Memorandum Shelving Fiduciary Standard For Financial Advisors

________________________________

President Donald Trump signs an executive order in the Oval Office of the White House in Washington, Friday, Feb. 3, 2017.  (AP Photo/Pablo Martinez Monsivais)

 

At about 1:30 p.m. Eastern time on Friday, February 3, 2017, President Donald Trump signed a memorandum to roll back the Department of Labor’s fiduciary rule by asking the DOL to review the rule again and likely to delay its April 10th implementation (although at the time of this article a delay has not yet occurred but it is likely coming). Why does this matter? Simply put, the DOL fiduciary rule was designed to make sure that, if you hired a financial advisor to help with your retirement planning and assets, the financial advisor acted in your best interest, avoided conflicts of interest when possible, and was transparent with you about his or her compensation and fees. Many people are surprised to learn that such a rule does not already exist for financial advisors since financial advice, at its core, would appear only to be needed precisely to ensure the best interests of the consumer. While the fiduciary rule was not supported by everyone in the financial services industry, it has been hailed as a workable rule that is a step in the right direction for financial services, and the delay in implementation is expected to be the first step in terminating the rule as it exists today....

 

 

[Guy Fawkes]

You're going to need to use your fall-back hedge fund buried in front of the house. The parked funds were found with the aid of a metals detector.

 

If by investment portfolio, you really mean a satchel full of money buried in a park by my house....

 

If any money wizards have any recommendations about finding a financial planner, please feel free to PM.

[+ Keith30309]

I took responsibility for my investments over 15 years ago. That's the reason I was able to retire in my 40s. I acknowledge there are reputable investment advisers and financial planners, but if you use one, always do your own homework. Study the financial markets and learn the reasons why varying asset classes rise and fall. Ask tough questions and never blindly trust any of these guys or gals to look out for your best interests.

 

What he said.

[+ newguy]

What he said.

Give us a link or two to explore these issues further. I have a significant and balanced portfolio but am too busy to study why specific asset classes rise or fall. A case example would be so much appreciated, especially if written for lay investors.

PS be assured this would be taken only as informal information

[+ Keith30309]

Give us a link or two to explore these issues further. I have a significant and balanced portfolio but am too busy to study why specific asset classes rise or fall. A case example would be so much appreciated, especially if written for lay investors.

PS be assured this would be taken only as informal information

PM sent

[JayCeeKy]

Was at a seminar last evening presented by a major investment company. They stated, what most of already know, that we are "late" in the Business Cycle and that, even though we are no where near a recession, growth and expansion of the American economy will be slowing in the next few months. Thus, stock prices will likely decline. If you feel a need do invest in stocks, choose those that tend to remain somewhat steady during declines such as Utilities, Energy, Consumer Staples, and Healthcare - even though those sectors are overpriced as we speak. Overseas markets (esp Japan and Brazil) present possible investment opps though they are in the "middle" of the Business Cycle and probably don't present much room for upticks. The presenter suggested that we consider moving a major portion of our portfolios out of equities and into Bonds (NOT high-yield corporate bonds) even though the Fed has stated that it will raise interest rates at least one more time this year. Janet Yellen will likely not be re-appointed Fed Chair next year and it is not clear where interest rates might end up next year.

[+ glutes]

I'm wondering if it is time to get out of the casino...

 

Major averages face biggest drop since July 6 3 Hours Ago | 03:58 CNBC

U.S. equities fell on Thursday as tensions between the United States and North Korea persisted.

 

The Dow Jones industrial average fell about 150 points with Goldman Sachs contributing the most losses.

 

The S&P 500 declined 1.1 percent, with information technology and financials leading decliners. The index also dipped below its 50-day moving average, a key technical level, for the first time in a month.

 

The Nasdaq composite lagged, pulling back 1.8 percent, with Apple, Alphabet, Amazon and Netflix all trading lower.

[jjkrkwood]

Major averages face biggest drop since July 6 3 Hours Ago | 03:58

CNBC

U.S. equities fell on Thursday as tensions between the United States and North Korea persisted.

 

The Dow Jones industrial average fell about 150 points with Goldman Sachs contributing the most losses.

 

The S&P 500 declined 1.1 percent, with information technology and financials leading decliners. The index also dipped below its 50-day moving average, a key technical level, for the first time in a month.

 

The Nasdaq composite lagged, pulling back 1.8 percent, with Apple, Alphabet, Amazon and Netflix all trading lower.

 

All good things come to an End

[wild2east]

I just finished reading Tony Robbins' book "Unshakable" about personal financial planning. If you endure some of his psycho-babble, there's some really sound financial planning advice embedded in the book, which came from some of the most famous & successful investors/money managers in US history.

[Vato Loco]

Are you implying that the king of bankruptcy, could lead you all to failure and disappointment?

[bigvalboy]

NYSE breaks into cheers when news of Bannon being fired is announced...

 

https://www.youtube.com/watch?v=ZQZDA-I3Yto

[rustyrex]

I attempted to take matters into my own hands a couple years ago. I do a side thing with trading extra money. It's a wild ride to watch, my heart has had palpitations a couple times seeing the gains and losses. Most of my stuff in tech stocks and a few legacy stocks but for the most part I see small returns. I understand a few things but not enough to quit my day job. I recently trusted a lady that I met many years ago to take some extra cash I save and invest, she's done ok from what I've seen. But I worry....I may not have enough to retire at a comfortable age.

[+ quoththeraven]

I think active investment is a fool's errand, although I understand some of you have succeeded at it. (Research shows that over time active management as a whole doesn't outperform the market.) Read John Bogle's book Bogle on Mutual Funds (he founded Vanguard) and invest in a mix of low-cost index funds. Most mutual fund companies can help devise an asset allocation that meets your risk tolerance and investment objectives. General rule of thumb is to invest in asset classes that counterbalance each other, meaning that if one asset class is performing poorly, the other is performing well. (Examples: stocks v. bonds, growth v. value stocks, small cap v. large cap, domestic v. foreign.)

[Kevin Slater]

I think active investment is a fool's errand, although I understand some of you have succeeded at it. (Research shows that over time active management as a whole doesn't outperform the market.) Read John Bogle's book Bogle on Mutual Funds (he founded Vanguard) and invest in a mix of low-cost index funds. Most mutual fund companies can help devise an asset allocation that meets your risk tolerance and investment objectives. General rule of thumb is to invest in asset classes that counterbalance each other, meaning that if one asset class is performing poorly, the other is performing well. (Examples: stocks v. bonds, growth v. value stocks, small cap v. large cap, domestic v. foreign.)

 

I agree with all the above, but would add that it's ok to allocate some small portion of your portfolio (say five or ten percent) to pick individual stocks / play your hunches / gamble. That may help scratch that itch and will most likely show why you're smart to index the rest. Besides, it can be a hell of a lot of fun.

 

Kevin Slater

Edited August 19, 2017 by Kevin Slater

[+ bashful]

I think active investment is a fool's errand, although I understand some of you have succeeded at it. (Research shows that over time active management as a whole doesn't outperform the market.) Read John Bogle's book Bogle on Mutual Funds (he founded Vanguard) and invest in a mix of low-cost index funds. Most mutual fund companies can help devise an asset allocation that meets your risk tolerance and investment objectives. General rule of thumb is to invest in asset classes that counterbalance each other, meaning that if one asset class is performing poorly, the other is performing well. (Examples: stocks v. bonds, growth v. value stocks, small cap v. large cap, domestic v. foreign.)

 

Agree. I don't know enough to actively trade stocks, so I let the target funds in my 401k's do the work. However, I'm thinking I might exit out of Fidelity management (many funds with high fees), and go over to Vanguard.

[Kenny]

Although Trump probably really has nothing at all to do with the markets success, its the only thing I can give him Thanks for.

Financial reporter Ali Veshi is pretty clear: "This market started going up on March 9th, 2009. And if you have a ruler it is pretty much a straight line. There is nothing Donald Trump has done to cause the market to be where it is."

 

So, I say thank you Obama. And when that straight line up makes a U-turn, probably later this year, it will be entirely the fault of Trump, who is a terrible businessman.

[+ quoththeraven]

I agree with all the above, but would add that it's ok to allocate some small portion of your portfolio (say five or ten percent) to pick individual stocks / play your hunches / gamble. That may help scratch that itch and will most likely show why you're smart to index the rest. Besides, it can be a hell of a lot of fun.

 

Kevin Slater

That's assuming you have accumulated the funds to be able to buy individual stocks.

 

Time is a valuable commodity. In most instances, I can't imagine why it would be worth it to me to follow the market and look at the relevant statistics to the extent necessary in order to pick individual stocks and time when to sell them. But when it comes to such things I am risk-averse, though my portfolios are generally heavy on stocks, but that's because over time they outperform all other investment classes.

 

I also meant to plug dollar cost-averaging and forgot.

[+ quoththeraven]

Agree. I don't know enough to actively trade stocks, so I let the target funds in my 401k's do the work. However, I'm thinking I might exit out of Fidelity management (many funds with high fees), and go over to Vanguard.

Vanguard and TIAA-CREF are about the lowest cost of the major mutual funds. Both are committed to low fees as a matter of policy (index funds by definition should have low fees), although Vanguard is more vocal about it. Vanguard has a wider selection of funds; TIAA-CREF has the edge when it comes to customer service (Vanguard is efficient but brusque) and social conscience.

[+ WilliamM]

Time is a valuable commodity. In most instances, I can't imagine why it would be worth it to me to follow the market and look at the relevant statistics to the extent necessary in order to pick individual stocks and time when to sell them. But when it comes to such things I am risk-averse, though my portfolios are generally heavy on stocks, but that's because over time they outperform all other investment classes.

 

I agree. But, other people have done well on their own, as you mentioned above. With due respect, most people who have posted in this thread already know about Vanguard.

[Kevin Slater]

Vanguard and TIAA-CREF are about the lowest cost of the major mutual funds. Both are committed to low fees as a matter of policy (index funds by definition should have low fees), although Vanguard is more vocal about it. Vanguard has a wider selection of funds; TIAA-CREF has the edge when it comes to customer service (Vanguard is efficient but brusque) and social conscience.

 

It's also worth looking into ETFs. They generally have lower fees than mutual funds, are more tax efficient, and you can trade them throughout the day.

 

Kevin Slater

[rod]

The Simple Path to Wealth by JL Collins is one of the best books I've ever read on the topic. It's on Audible. I agree with Kevin on a very small percentage of individual stocks if you feel the need to play the market, but only with money you are willing to lose. If you still feel you need an advisor find a fee only adviser who doesn't sell anything but his or her time.

 

You need to know where your money is going, Mint (free) is a great app for tracking every penny and your net worth.

 

Your investment strategy should depend on your goals, short term, retirement etc. Vanguard for me is best as they have the lowest fees and do not answer to shareholders of the company as there are none. Here is all the investment advice you will need and it fits on an index card. http://www.npr.org/sections/alltechconsidered/2016/01/08/462250239/when-an-index-card-of-financial-tips-isnt-enough-this-book-is-there

 

I have a pension so everything else sits in the Vanguard Total Stock Market Fund, if you're queasy about loosing too much in a short period then putting 25% of it into a Total Bond Market Fund will ease the lows and the highs with no great loss in return. And remember you don't lose anything if you don't sell.

 

 

Good luck

Edited August 23, 2017 by rod

[+ SundayZip]

Agree. I don't know enough to actively trade stocks, so I let the target funds in my 401k's do the work. However, I'm thinking I might exit out of Fidelity management (many funds with high fees), and go over to Vanguard.

 

Tell me if I'm wrong, but I wonder if you and some other posters to this thread are conflating two separate things. One is owning mutual funds (or ETFs) managed by Vanguard versus Fidelity. The other is using Vanguard versus Fidelity for managing your investment portfolio. Both Fidelity and Vanguard offer low cost funds (I agree that Vanguard funds tend to be lower cost). But, for a number of reasons, I prefer Fidelity for managing my portfolio. I can buy or sell any of the major Vanguard funds through my Fidelity account. My investments are weighted heavily toward low cost Vanguard funds (mostly ETFs) although I manage them through a Fidelity account.

[LivingnLA]

It looks like some people are talking about different things. One factor is who manages your investments. Do you have a personal advisor, use one of the big firms like Fidelity, or do it yourself? Also, there are the automated investment "advisors" like WealthFront. The other factor is what do you invest in? Stocks? Bonds? Mutual Funds? ETFs? Commodities? Currencies? REITs? and on and on. Historically, it's generally smart to be diversified with your diversification varying based on your risk tolerance, age, plans, health, and life goals.

 

We've done very well for many years with the guy who manages about 90% of our investment portfolio. The remaining 10% has done insanely well because the experimental investments have been crazy good. Sometimes things don't work out, but this year, we've done incredibly well with Bitcoin and Inverse VIXs, more than doubling our money in the last year. But, I suspect the VIX ride may end this year or so if volatility returns.

 

If you're curious about ETFs, check out these links for a place to start:

 

https://en.wikipedia.org/wiki/Exchange-traded_fund

 

https://money.usnews.com/funds/etfs

[+ Keith30309]

It looks like some people are talking about different things. One factor is who manages your investments. Do you have a personal advisor, use one of the big firms like Fidelity, or do it yourself? Also, there are the automated investment "advisors" like WealthFront. The other factor is what do you invest in? Stocks? Bonds? Mutual Funds? ETFs? Commodities? Currencies? REITs? and on and on. Historically, it's generally smart to be diversified with your diversification varying based on your risk tolerance, age, plans, health, and life goals.

 

We've done very well for many years with the guy who manages about 90% of our investment portfolio. The remaining 10% has done insanely well because the experimental investments have been crazy good. Sometimes things don't work out, but this year, we've done incredibly well with Bitcoin and Inverse VIXs, more than doubling our money in the last year. But, I suspect the VIX ride may end this year or so if volatility returns.

 

If you're curious about ETFs, check out these links for a place to start:

 

https://en.wikipedia.org/wiki/Exchange-traded_fund

 

https://money.usnews.com/funds/etfs

Kudos on your VIX wins; good luck on the BTC's I'm imagining your balls are made of solid iron.

I've watched my BTC's quadruple then fall 90% in an astoundingly short period. I can't decide if I'm avoiding capital gains or capital losses...lol

Funny thing: I saw an ad in an online journal: "Convert Your IRA to BitCoins! " It was not a joke.

[+ bashful]

Tell me if I'm wrong, but I wonder if you and some other posters to this thread are conflating two separate things. One is owning mutual funds (or ETFs) managed by Vanguard versus Fidelity. The other is using Vanguard versus Fidelity for managing your investment portfolio. Both Fidelity and Vanguard offer low cost funds (I agree that Vanguard funds tend to be lower cost). But, for a number of reasons, I prefer Fidelity for managing my portfolio. I can buy or sell any of the major Vanguard funds through my Fidelity account. My investments are weighted heavily toward low cost Vanguard funds (mostly ETFs) although I manage them through a Fidelity account.

 

In my case, my company 401k is with Fidelity, is still there as I just recently retired, and we are allowed to leave it there after retirement. However, they have revised funds in the last year or two. My target funds are Vanguard's (through Fidelity) that have an expense ratio of .05%, and I have some $ in an equity index fund with only a .02% expense ratio.

 

Other than the target funds available as part of the company 401k options there are not that many other options, and all but 2 have an expense ratio from .41% to .44% (yes, no zero after the decimal, $4.10 to $4.40 per $1,000). So that is why I am thinking of leaving. However, I have not yet talked to a Fidelity rep to see what options they have now that I'm retired, and I would still want to talk to a Vanguard rep to see what they have to offer.

 

To be honest, I wasn't planning on retiring at that time, so hadn't started any advance planning, but as often happens, when presented with the option, you take it and run, and sort it out later.