quote:

Originally posted by RogueJSK:

quote:

Originally posted by Fly-Sig:
True, but... for most people these days their retirement will be self-managed savings rather than a pension. Which means most people will have some awareness of how their portfolio is doing and what the markets are doing even if they hire someone to manage the investment details.

He's not saying to ignore your portfolio or the market performance.

He's saying that you have to have the temperament to not panic during bear markets/recessions, and the patience and discipline to ride it out without making stress-induced bad decisions.

If you are honest with yourself and recognize that you don't have the necessary temperament for that, then you don't need to be self-managing your portfolio. Entrust it to someone else with the right temperament, like a fiduciary financial advisor, as discussed earlier in the thread.

My point is that except for the few who will have lucrative pensions, everyone will be an "investor". Everyone will have to make decisions. Nobody will be "not an investor" regardless of temperament. That luxury no longer exists.

If someone is very emotional they still need to recognize that aspect of themselves even if they hire out the details. Will they be ultra conservative and buy into a life insurance or annuity, at the expense of upside? Will they be overly aggressive (maybe to make up for insufficient savings) and tell their manager to go high risk growth, and get slammed in bear markets?

The original quote relates much more to a bygone era when only a few, who were likely high income and uncommonly knowledgeable about investing, had significant investments.

quote:

Originally posted by Fly-Sig:
If someone is very emotional they still need to recognize that aspect of themselves even if they hire out the details. Will they be ultra conservative and buy into a life insurance or annuity, at the expense of upside? Will they be overly aggressive (maybe to make up for insufficient savings) and tell their manager to go high risk growth, and get slammed in bear markets?

Well, that just sounds like paying a financial advisor while running a self-directed portfolio.

If you recognize that you don't have the right temperament for investing, you shouldn't be dictating that your advisor do anything - on either end of the spectrum - with your investments... You should be asking them "What's the best plan here for my financial situation", and then trusting the professional fiduciary to make the decisions that are in your best interest. Like a fiduciary is expected to do.

Part of the role of that advisor is also to talk you down from the ledge when you get all in a tizzy because the stock market has dropped 20% and you think it might be a good idea to pull everything out into cash. Or to talk some sense into you when you think that an annuity sounds like it could be a pretty sweet deal. Or to slap you if you just watched a Youtube video and as a result have decided that ParaCoin and SigForum NFTs are the wave of the future and you want to go all-in with your retirement funds.


In short, this doesn't mean "don't invest at all", because as you correctly pointed out that the only way that the majority of people would ever be able to retire. Rather, "find someone else with a more suitable temperament to manage your investments".

(Also, that quote isn't from a bygone era... It's from the 2009 Berkshire Hathaway shareholder's meeting, in response to the 2008 recession.)

Most "financial advisors" are just salesmen trying to get you to buy what gets them commissions. Anyone tied to an insurance company is in the commission business. Rule every one of these guys out.

For self-directed accounts, discount brokerages are best - Fidelity, Schwab, E-trade etc. Especially for qualified money in IRA's or rollovers from 401K's. I haven't looked into JPMorgan/Chase that much because I bank with them and they are bad about fees. I would not bother looking for a "small" one.

Edward Jones is generally a retail brokerage and you will pay commissions when you move into a new fund family (6% is typical).

I have heard that Fisher's performance with managed accounts is not really that great.

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Originally posted by Lefty Sig:
Most "financial advisors" are just salesmen trying to get you to buy what gets them commissions. Anyone tied to an insurance company is in the commission business. Rule every one of these guys out.

Yep, those would be non-fiduciary financial advisors. They do what's in their own best interest, which typically involves pushing whatever products get them the highest commissions or other extra incentives to make themselves more money.

Whereas fiduciary financial advisors are required to do what's in their client's best interest, rather than their own.

Another good tool is Zacks. Put in a fund trading number and get instant results on how they rate it from 1 Strong buy, to 4 dump if you can, along with technical data and comparisons on how it stacks up to similar funds. I don't take this a real investing advice. It's just something else to look at when considering buying a fund along with the tools your investment company provides. Fidelities research tools are pretty good, and I'd guess any of the big names are equally good.

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Originally posted by NavyGuy:
Fidelities research tools are pretty good, and I'd guess any of the big names are equally good.

I'll say that's where Vanguard actually falls short, compared to some of the others like Fidelity. Their research tools aren't as robust or as user-friendly.

But you can still invest through Vanguard and just utilize better non-Vanguard research tools.

And robust research tools aren't as important if you're talking the lazy/easy route with stuff like passive investing through market index funds or target date funds, versus researching and picking individual stocks or more specialized mutual funds.

Vanguard is geared mostly towards these passive index fund investors, as they were founded by John Bogle back in the day (1970s) specifically to focus on index fund investing, a concept that Bogle himself had originated a few decades before that. That doesn't mean that you can't invest in individual stocks via Vanguard, but it does makes sense that designing robust individual stock research tools wouldn't be as high of priority for Vanguard as a result of this passive investing focus.