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my personal solution is to use a newsletter , that is correct and i do so for discipline . i know myself and i always try to outsmart things or think i know better, i am preoccupied planning my next move left to my own devices and i consider myself a very knowledgeable investor and experienced . i can put portfolios togther in my sleep but i like using them to keep me from myself.
for newbees or someone with little knowkledge i think they are an excellent cheap way to obtain the skills you need to be successful.
are they for everyone ? not at all.
but for the masses who hurt themselves left to their own devices they are the cheapest way to get on going managment, a balanced portfolio with good diversification without alot of fees.
if you have the discipline and knowledge by all means go about it on your own. but folks who come here asking what to do are generally not those folks. some could be one day with some knowledge but they are not yet and odds are they have no clue either as to how much pain they can tolerate before bailing ,losing money and never returning.
in a perfect world we could tell folks what to do and they would listen but when you are dealing with human emotions all bets are off. there is no guarantee folks will follow the newsletter either in tough times but at least they have a 3rd party calling the shots for them and using alot more knowledge and experience at staying the course than they have.
it is never an all in or out situation , but liker steering a ship it gets a nudge here and there to keep it on course. far better odds for these folks following instructions from a newsletter than sending them off into the wilds with a list of funds to buy and just leaving them to their own devices and decisions when they have neither knowledge or experience..
once they get their feet wet and have an understanding no reason they shouldn't go at it alone. but i have an issue just handing folks asking for help who have little understanding a list of funds and saying here have a nice life knowing zero about them..
I think you're being overly simplistic about it, and too dismissive of the average person's ability to learn investing. It is quite clear you like newsletters. Good for you. Not everyone does. But different strokes for different folks.
All you need to do is look at investor returns vs fund returns on Morningstar. 90% of the funds will have horrible investor returns based on money flows once volatility picks up.
You can check any of the ibbotson or Morningstar studies on small investors, the data speaks for itself.
Those of us that take an interest and did well are not representative of what the average person is getting
All you need to do is look at investor returns vs fund returns on Morningstar. 90% of the funds will have horrible investor returns based on money flows once volatility picks up.
As I've said before, "average investor" returns mean little, IMO, because the average investor is not a knowledgeable investor. Now, if there were statistics showing that 90% of SAVVY investor returns were horrible compared to fund returns, then you'd have an argument for getting guidance of some kind.
i think you are missing the point and that is why we are going around and around . i am NOT talking about us , i am not talking about any of the other successful investors that do things on their own.
i am talking about the folks with no knowledge and no experience that pop in to these forums and ask what to do with their money.
the answers fired back are buy a bunch of index funds or etf's and basically here is your list have a nice life.
what i am saying is sending these beginners off iinto the wilderness on their own without knowing a thing about these folks in my opinion is bad advice plain and simple.
for all we know the op may be maxing out his roth in a bond fund or stable value fund , we just do not know.
Last edited by mathjak107; 11-30-2014 at 12:36 PM..
the answers fired back are buy a bunch of index funds or etf's and basically here is your list have a nice life.
what i am saying is sending these beginners off iinto the wilderness on their own without knowing a thing about these folks in my opinion is bad advice plain and simple.
Well, yes, I definitely agree with THAT. I think I may have hastily confused this discussion with one of the many similar ones on this forum.
That said, I don't personally think a newsletter is the best option for someone with little investing knowledge. The newsletter isn't going to talk to the person to determine where their knowledge is lacking, what their risk tolerance is, etc. If one doesn't have the desire or ability to educate themselves, I'd suggest getting a fee-only advisor.
so would i but most are just not going to get an advisor. that is why they are here looking for free advice.
but the newsletter does not need to know much about the subscriber.
there are models to suit every investing temperment.
the difference is though if they pick something overly aggressive if they follow the weekley updates they stand a chance of protecting themselves from doing the wrong thing as opposed to if they are making the calls to bail or not themselves.
that is not to say they may not act hastily on their own ,they sure can but most of the folks i know who are amatuers at this and use newsletters do follow the advice..
that kept them in the game and fully recovered . some have toned things down to less aggressive models after getting a good scare but basically it kept them on the straight and narrow . that is something many of us who had substaintial amounts invested in that drop found very difficult to do ,especially if we had to make the judgement calls on our own.
the last downturn got to even the most experienced investors as they 2nd guessed themselves all the way through.
we were losing 5 digits a day for alot of that downturn and i think if the resonsibility for staying or fleeing were on my shoulders i can honestly say at this stage and close to retiring i am not sure i would have stayed .
thankfully i stayed the course ,followed the plan and all ended well.
Last edited by mathjak107; 11-30-2014 at 01:07 PM..
so would i but most are just not going to get an advisor. that is why they are here looking for free advice.
but the newsletter does not need to know much about the subscriber.
there are models to suit every investing temperment.
the difference is though if they pick something overly aggressive if they follow the weekley updates they stand a chance of protecting themselves from doing the wrong thing if they are making the calls themselves.
that is not to say they may not act hastely on their own ,they sure can but most of the folks i know who are amatuers at this and use newsletters do fiollow the advice..
/sigh.
Okay, a newsletter is a step-by-step series of instructions, right?
And you'd have to find a newsletter, right?
Then you have to follow the newsletter.
With the exact same effort, you could go to Bogleheads and get an index fund recipe that gives you step by step instructions.
Then you have to follow the recipe.
It's not rocket science, and newsletters are not automatically 'better' than index fund investing.
i think folks with limited experience would find it far easier to let a third party guide them than shoulder the responsibility on their own . as i said above i am quite a seasoned investor but i would be lying if i said when we were losing 5 digits a day that if i was calling my own shots i might have bailed and did the wrong thing.
i decided i was not going to decide a thing ,i was sticking to the guidance and bailing was not a thought .
most of the subscribers to the various newsletters like them for that reason.
when i used to do all my own investing i would spend all day contemplating my next moves, trying to find better allocations or second guessing my last moves. today i spend 30 seconds a week on a 7 digit portfolio.
some folks like the bogleheads like the hands on approach and there is nothing wrong with that . you can be just as succesful but you do need the discipline to do the right thing when the market is going to hell in a handbasket and the word stocks makes you want to vomit.
many do it yourself investors only recently developed a sizeable portfolio and the next downturn will test their ability to tune it all out . as tyson said so perfectly ,everyone has a plan , until they get punched in the face.
Last edited by mathjak107; 11-30-2014 at 01:29 PM..
Full disclosure required at this time. I think there is a certain factor about the newsletter MathJak and I both use. It has changed editors several times and in fact is now a merger of the Fidelity Insight and Fidelity Monitor newsletters. The original guru Eric Kobren had 75,000 subscribers in the 1990's and is long time gone. Aren't the changes at the top along with mergers the same things that can mitigate he future success of any active fund? Is it wise to evaluate Fidelity Magellan fund as a top fund five years after Peter Lynch left. Yes MathJak has had success over 25 years but is it fair to include the Eric Korbren and others in a current evaluation any more than including Peter Lynch in one about Magellan or any other active fund that has seen a change at the top?
The current ownership structure has been in place two years and it is important to clarify which of the merged newsletters we were with when stating historical results. Is it the one that got taken over or the one that did the taking over. We all know how merger and acquisition data can cloud things after the fact. Just with any fund their staff including analyst can go and as always previous returns are no predictor of future success. I think MathJak would agree their portfolio construction has undergone changes and is no longer as broad or inclusive.
actually fidelity monitor was always more aggressive and had slightly better returns although at higher risks.
since the merger they kind of met in the middle.
i think the issue today is while the allocations include less classes and segments the fact is we are in a different market with many asset classes either out of favor or over valued.
that really does not leave a whole lot at this stage.
as i posted ,i have been tracking the etf/index model that interests me just in case i don't like the future choices they make .
but so far the more conservative models i follow have blown away the more aggressive etf model as that took a nasty dip a few months ago and spent time retracing a whole lot more.
as of today the etf model is up 39k while the fidelity insight model i use is up 70k. they started life with equal amounts about 8 months ago. the etf is a 50/50 mix the insight model about 40/60
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