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Investment question. In light of the political climate... Login/Join 
Partial dichotomy
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I prefer to handle my own (stock) investments. When it comes to my 401k, I've enlisted the help of Smart401k, as they know the manager's records and performance better than I.

I actually have sold some stock in the last week, but for an entirely different reason of needing cash for a real estate purchase. My IRA's are staying put in stock investments.

Time in the market....not timing the market.


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Posts: 33467 | Location: NW Indiana | Registered: November 22, 2002Reply With QuoteReport This Post
Don't Panic
Picture of joel9507
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Korea is a blip in the radar. Panic is not called for, IMO.

US companies earnings are good, consumer confidence is good, interest rates are historically low (albeit on a slow upward trend), favorable tax reform is on the horizon, and quite possibly a lot of cash locked up overseas may be coming back to slosh around our economy instead.

Those aspects of the political climate are far closer and far more likely than lil Kim being anything other than a bug on the windshield, in the global scheme of things.

"Sale on stocks, aisle three" Smile
 
Posts: 11624 | Location: North Carolina | Registered: October 15, 2007Reply With QuoteReport This Post
Master-at-Arms
Picture of apf383
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Thanks for all the insights, perhaps ill take a some off the table and lock in some profits with the bulk holding where it is. Good luck to all!!!



Foster's, Australian for Bud

 
Posts: 6764 | Location: Stuck in NY, FUAC  | Registered: November 22, 2005Reply With QuoteReport This Post
Better Than I Deserve!
Picture of LBTRS
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quote:
Originally posted by Fredward:
Handling your own investing without guidance is kind of like doing surgery on yourself. Yes, you're motivated well, but the skill set.....not so much.


Spoken like a true commissioned "financial advisor" who is simply a salesman.

My father-in-law has a sizable portfolio and has a super nice financial advisor who works on a commission. He is always having my father-in-law move money in and out of investments where he pays a commission every time. He is wasting money each year with these unnecessary moves but my father-in-law is stubborn and sticks with him.


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Posts: 4475 | Location: Phoenix, AZ | Registered: September 23, 2005Reply With QuoteReport This Post
I believe in the
principle of
Due Process
Picture of JALLEN
posted Hide Post
quote:
Originally posted by LBTRS:
quote:
Originally posted by Fredward:
Handling your own investing without guidance is kind of like doing surgery on yourself. Yes, you're motivated well, but the skill set.....not so much.


Spoken like a true commissioned "financial advisor" who is simply a salesman.

My father-in-law has a sizable portfolio and has a super nice financial advisor who works on a commission. He is always having my father-in-law move money in and out of investments where he pays a commission every time. He is wasting money each year with these unnecessary moves but my father-in-law is stubborn and sticks with him.


Investing is one of those activities that everyone is born knowing how to do, males anyway.

If you were to decide to build your own guns, let's say, you would want to do some studying, learn to use tools, learn about materials, sizes, calibers, review some designs, become familiar with the plusses and minuses of past eforts, maybe go to school. This might take quite awhile, years, even.

Investing the the stock market, OTOH, is simple. There are books, trading schemes, "how to do its" all over the place. A grown man needs no help. It's demeaning to pretend so.

The people who actually analyze and decide what investments to select at an institutional investor have usually been trained for some years. An MBA is not uncommon, and Chartered Financial Analyst designations are more and more common.

The salesmen who live on commissions mostly lack this depth of training. They are attractive, outgoing, social types, well dressed, suave and self assured. In my day, we were called Account Executives. Now they are Registered Investment Advisors. The training to be registered is basic indeed, learning the lingo mostly and the regulations so one knows how to avoid trouble. In terms of investment prowess, judgment, near zero. They often work for institutions who may suggest to them what to recommend.

Even for the thoroughly trained and long experienced, it isn't so easy. The problem is that no one can foretell the future with confidence. That is what makes it hard, and risky. Most schemes of investing rely on forecasting the future, and depending on observed past action to divine the future. Current investment purchases rely on a forecast that circumstances will be better in the days ahead, while worries of trouble ahead lead to exiting from positions.




Luckily, I have enough willpower to control the driving ambition that rages within me.

When you had the votes, we did things your way. Now, we have the votes and you will be doing things our way. This lesson in political reality from Lyndon B. Johnson

"Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." - Justice Janice Rogers Brown
 
Posts: 43147 | Location: Texas hill country | Registered: July 04, 2005Reply With QuoteReport This Post
Lawyers, Guns
and Money
Picture of chellim1
posted Hide Post
quote:
The salesmen who live on commissions mostly lack this depth of training. They are attractive, outgoing, social types, well dressed, suave and self assured. In my day, we were called Account Executives. Now they are Registered Investment Advisors. The training to be registered is basic indeed, learning the lingo mostly and the regulations so one knows how to avoid trouble. In terms of investment prowess, judgment, near zero. They often work for institutions who may suggest to them what to recommend.

This is a somewhat cynical view, though at least with a grain of truth.
While it's true that training varies from firm to firm, the DOL rules are imposing a fiduciary standard, and some will go kicking and screaming into such an environment.
For most RIAs, commission based sales are becoming increasingly rare. Fee based accounts are becoming the norm. Is it better? Probably. At least it will eliminate the "churning" for commissions.


"The United States government is the largest criminal enterprise on earth."
-rduckwor
 
Posts: 13033 | Location: St. Louis, MO | Registered: April 03, 2009Reply With QuoteReport This Post
I believe in the
principle of
Due Process
Picture of JALLEN
posted Hide Post
quote:
Originally posted by chellim1:
quote:
The salesmen who live on commissions mostly lack this depth of training. They are attractive, outgoing, social types, well dressed, suave and self assured. In my day, we were called Account Executives. Now they are Registered Investment Advisors. The training to be registered is basic indeed, learning the lingo mostly and the regulations so one knows how to avoid trouble. In terms of investment prowess, judgment, near zero. They often work for institutions who may suggest to them what to recommend.

This is a somewhat cynical view, though at least with a grain of truth.
While it's true that training varies from firm to firm, the DOL rules are imposing a fiduciary standard, and some will go kicking and screaming into such an environment.
For most RIAs, commission based sales are becoming increasingly rare. Fee based accounts are becoming the norm. Is it better? Probably. At least it will eliminate the "churning" for commissions.


Having worked in this sausage factory, I can tell you it is the opposite of your assertion. It is truth with a grain of cynicism, for flavor.

Depending in the product, commissions are pretty low. Fees cannot be based on performance unless the account is above a certain minimum, a couple million, IIRC. The conventional explanation is that performance fees would tempt advisors to exorbitant risks, but reality suggests everyone would want performance based fees and the advisors would go broke.




Luckily, I have enough willpower to control the driving ambition that rages within me.

When you had the votes, we did things your way. Now, we have the votes and you will be doing things our way. This lesson in political reality from Lyndon B. Johnson

"Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." - Justice Janice Rogers Brown
 
Posts: 43147 | Location: Texas hill country | Registered: July 04, 2005Reply With QuoteReport This Post
Member
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This says it all. Will take a half hour of your time.
 
Posts: 2514 | Location: MS GULF COAST | Registered: January 02, 2015Reply With QuoteReport This Post
Member
Picture of old rugged cross
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Going through life thinking you need to consult or hire an expert at every challenge in ones life would lead to an unfulfilled and ungratifying existence. A man needs to be able to forge his own path and figure things out. Not saying seeking help is a problem but trial and error is valuable trait for anyone. When you get knocked down. You get back up. Thinking someone else always has the answer because they are an "expert" is silly.




"Practice like you want to play in the game"
 
Posts: 11666 | Registered: September 21, 2005Reply With QuoteReport This Post
Member
Picture of mikeyspizza
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World stock valuations lost almost $1 trillion last week.

Rather than see the few paper pennies that have accumulated in my accounts evaporate, I decided to take some off the table. On Thursday morning I reduced by allocation to equities by 15% and increased my short-term bond holdings by 15%.
 
Posts: 2011 | Location: North Carolina | Registered: August 16, 2003Reply With QuoteReport This Post
I believe in the
principle of
Due Process
Picture of JALLEN
posted Hide Post
quote:
Originally posted by old rugged cross:
Going through life thinking you need to consult or hire an expert at every challenge in ones life would lead to an unfulfilled and ungratifying existence. A man needs to be able to forge his own path and figure things out. Not saying seeking help is a problem but trial and error is valuable trait for anyone. When you get knocked down. You get back up. Thinking someone else always has the answer because they are an "expert" is silly.


"Risk comes from not knowing what you are doing." -- Warren Buffett




Luckily, I have enough willpower to control the driving ambition that rages within me.

When you had the votes, we did things your way. Now, we have the votes and you will be doing things our way. This lesson in political reality from Lyndon B. Johnson

"Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." - Justice Janice Rogers Brown
 
Posts: 43147 | Location: Texas hill country | Registered: July 04, 2005Reply With QuoteReport This Post
Member
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Be fearful when others are greedy and greedy only when others are fearful.

Warren Buffett quote as well.
 
Posts: 2514 | Location: MS GULF COAST | Registered: January 02, 2015Reply With QuoteReport This Post
Member
Picture of grumpy1
posted Hide Post
quote:
Originally posted by LBTRS:
quote:
Originally posted by Fredward:
Handling your own investing without guidance is kind of like doing surgery on yourself. Yes, you're motivated well, but the skill set.....not so much.


Spoken like a true commissioned "financial advisor" who is simply a salesman.

My father-in-law has a sizable portfolio and has a super nice financial advisor who works on a commission. He is always having my father-in-law move money in and out of investments where he pays a commission every time. He is wasting money each year with these unnecessary moves but my father-in-law is stubborn and sticks with him.


Your FIL would almost certainly do much better investing in S&P 500 index fund or SPY for his stock portion of his portfolio by himself. His fees/costs for investment costs would be minimal and he would be shocked on how much he was saving on those fees/costs alone but I expect you already know that.


“When the people find that they can vote themselves money that will herald the end of the republic.”
― Benjamin Franklin
"The problem with socialism is that eventually you run out of other people's money."
― Margaret Thatcher
 
Posts: 7914 | Location: Northern Illinois | Registered: March 20, 2009Reply With QuoteReport This Post
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Picture of old rugged cross
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Yes, and a life with out risk is dull, boring and again, silly. You cannot live in a bubble and have other's make decisions so that supposedly you can live a risk free existence. No thanks. Adventure and some risk is a life I will choose tenfold and one worth living. And I have.

Me.

This message has been edited. Last edited by: old rugged cross,




"Practice like you want to play in the game"
 
Posts: 11666 | Registered: September 21, 2005Reply With QuoteReport This Post
Little ray
of sunshine
Picture of jhe888
posted Hide Post
quote:
Originally posted by JALLEN:

quote:
Imagine that in some private business you own a small share that cost you $1,000. One of your partners, named Mr. Market, is very obliging indeed. Every day he tells you what he thinks your interest is worth and furthermore offers either to buy you out or to sell you an additional interest on that basis. Sometimes his idea of value appears plausible and justified by business developments and prospects as you know them. Often, on the other hand, Mr. Market lets his enthusiasm or his fears run away with him, and the value he proposes seems to you a little short of silly.



This is what you are proposing to do. Don't do it.




The fish is mute, expressionless. The fish doesn't think because the fish knows everything.
 
Posts: 44457 | Location: Texas | Registered: February 10, 2004Reply With QuoteReport This Post
Don't Panic
Picture of joel9507
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For the uninitiated, there are three issues.

1) knowledge
2) incentives
3) costs

Knowledge.
If you don't know what you are doing, just jumping into investing is a great way to lose a lot of money learning things you could have learned going in. That said, not investing is a losers game, where your money sits, making banks boatloads of money. So either your money is invested by you, for you, or you deposit it and banks take it and loan it out for profit to someone with a better idea how to invest it. It is getting invested by someone.

There are people who genuinely know what they are doing. There are many more than that, who act/pretend/look like they know what they are doing and have your best interest at heart, but don't. If you know how to tell, you can avoid the latter. But that takes knowledge, too. The good news is there are many books and courses to help people learn the basics (and more than the basics).

Incentives.
And, if someone knows what they are doing investing...you may (should) ask, why should they bother investing your money instead of their own? The short answer is, they do it to earn money. And that comes down to pay and incentives.

Investment professionals tend to be smart and money oriented. People like that analyze the game rules to maximize their income. Incentive structures set the rules for their pay, and if you look at the incentive structure they work under, you will understand what their income rules want them to do.

Pay per transaction (commission)? -> lots of trades, smaller lots, in-and-out. Maybe you make money, maybe you don't, but definitely they do, as the commissions add up.

Pay a percentage of assets/gains? -> fewer trades, longer view. They can't help but make money (unless the assets go to zero) but the more assets, the more they make, so their interests and yours are aligned in that sense. But unlike the client, they have no participation in losses, so can be less sensitive to risk than the client. Their risk is that you get unhappy and leave - you bear all the financial risk.

Pay for advice? -> Probably the best approach, if you can find someone competent you can trust. But you have to understand the advice is at a point in time - when things change, you need more advice, so another fee.

Costs
Assuming you've weeded out the charlatans and poseurs (whose swindling and incompetent advice would cost you far, far more than fees/commissions) you will have costs to bear: cost of the advice itself, cost to implement the advice (commissions, account fees if any), and the costs/fees from the investment itself (mutual fund/ETFs have fees deducted from their asset values, etc.)
 
Posts: 11624 | Location: North Carolina | Registered: October 15, 2007Reply With QuoteReport This Post
I believe in the
principle of
Due Process
Picture of JALLEN
posted Hide Post
quote:
Originally posted by joel9507:



Pay a percentage of assets/gains? -> fewer trades, longer view. They can't help but make money (unless the assets go to zero) but the more assets, the more they make, so their interests and yours are aligned in that sense. But unlike the client, they have no participation in losses, so can be less sensitive to risk than the client. Their risk is that you get unhappy and leave - you bear all the financial risk.



It is actually illegal to do this now unless an account is above a certain minimum, $2 million, maybe.

Warren Buffett basically did this, with his dozen or so partnerships, to start back in 1956.

quote:
I got half the upside above a four percent threshold, and I took a quarter of the downside myself. So if I broke even, I lost money. And my obligation to pay back losses was not limited to my capital. It was unlimited.


Talk about lining up incentives!

This is the way it ought to be, IMnotalwayssoHO. Have some skin in the game, Mr. Hot Shot!

That would scare off all the sissies.




Luckily, I have enough willpower to control the driving ambition that rages within me.

When you had the votes, we did things your way. Now, we have the votes and you will be doing things our way. This lesson in political reality from Lyndon B. Johnson

"Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." - Justice Janice Rogers Brown
 
Posts: 43147 | Location: Texas hill country | Registered: July 04, 2005Reply With QuoteReport This Post
Only the strong survive
Picture of 41
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A lot of the indicators rolled over this week so I went to cash.

The new highs/new lows is one of the best indicators of the market topping.



"Donald Trump is the grizzly bear in The Revenant. If you get his attention, he’ll be awake, bite your face off, and sit on you.".. Newt Gingrich.

41
 
Posts: 9693 | Location: Herndon, VA | Registered: June 11, 2009Reply With QuoteReport This Post
Don't Panic
Picture of joel9507
posted Hide Post
quote:
Originally posted by JALLEN:
quote:
Originally posted by joel9507:
Pay a percentage of assets/gains? -> fewer trades, longer view. They can't help but make money (unless the assets go to zero) but the more assets, the more they make, so their interests and yours are aligned in that sense. But unlike the client, they have no participation in losses, so can be less sensitive to risk than the client. Their risk is that you get unhappy and leave - you bear all the financial risk.

It is actually illegal to do this now unless an account is above a certain minimum, $2 million, maybe.

Warren Buffett basically did this, with his dozen or so partnerships, to start back in 1956.

What if I told you the minimum these days is more like $25K? Smile
Link to Schwab Intelligent Advisory

It's kind of a hybrid of automation and personal advice, admittedly. I'd bet other firms are competitive with that in terms of fees and minimums. I'm just familiar with that because I'm a customer there. Anyway, it looks like Schwab doesn't see a legal issue charging a percentage on smaller advised accounts.

Now, I don't personally use that service because there's no way I would outsource the fun I have investing. That said, if I had funds I wasn't personally engaged in I would definitely consider giving them some to work with.
 
Posts: 11624 | Location: North Carolina | Registered: October 15, 2007Reply With QuoteReport This Post
I believe in the
principle of
Due Process
Picture of JALLEN
posted Hide Post
quote:
Originally posted by joel9507:
quote:
Originally posted by JALLEN:
quote:
Originally posted by joel9507:
Pay a percentage of assets/gains? -> fewer trades, longer view. They can't help but make money (unless the assets go to zero) but the more assets, the more they make, so their interests and yours are aligned in that sense. But unlike the client, they have no participation in losses, so can be less sensitive to risk than the client. Their risk is that you get unhappy and leave - you bear all the financial risk.

It is actually illegal to do this now unless an account is above a certain minimum, $2 million, maybe.

Warren Buffett basically did this, with his dozen or so partnerships, to start back in 1956.

What if I told you the minimum these days is more like $25K? Smile
Link to Schwab Intelligent Advisory

I'd bet other firms are competitive with that in terms of fees and minimums. I'm just familiar with that because I'm a customer there.

That said, I don't personally use that service because there's no way I would outsource the fun I have investing, but I would definitely consider giving them some to work with, if I had funds I wasn't personally engaged in.


It is ok to charge percentage of asset under management fees, but not percentage of gain on these smaller accounts.

You lopped off the Buffett example of what I meant.




Luckily, I have enough willpower to control the driving ambition that rages within me.

When you had the votes, we did things your way. Now, we have the votes and you will be doing things our way. This lesson in political reality from Lyndon B. Johnson

"Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." - Justice Janice Rogers Brown
 
Posts: 43147 | Location: Texas hill country | Registered: July 04, 2005Reply With QuoteReport This Post
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