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How do you know that?
Do those DIY investors you are talking about have two portfolios (one they manage themselves, and one is managed by fund)? Are they in DIY mode and in the funds at the same time?
I'm sorry, but this is useless "bumper sticker wisdom"
Wrong! When evaluating doctors we have objective scientific criteria to work with.
When it comes to investment guidance we have nothing of a sort.
show us one academic study that shows us as a group small investors are doing just fine on their own. we don't really care what you think is happening .
i would have done roths instead for so many reasons as i am finding out now . there is so many perks , taxes and surcharges linked to retirement income that i did a great job accumulating assets but now giving back more in tax than i could have.
i would have split assets up differently as well . the old obsolete rule about keeping income generating stuff in the deferred accounts and equity's in the taxable account because of low capital gains rates is not likely correct .
they never looked under the hood to find out even a 1% distribution in dividends or gain distributions over decades wipes that out . growing bonds and cash in the mean time taking up space in a deferred account at these rates is stupid .
i would have over funded my life insurance policy with money i kept as cash . i didn't know there are no fees or commissions on anything over funded up to mec limits.
i had a 4% minimum floor and could have borrowed it out tax free as income now in retirement .
by not having enough tax free sources i am not getting a medical subsidy since i am only 62 and taxable income is over the limit
my ss will have 85% taxed
i can't take advantage of zero capital gains brackets
the rmd's will be a killer and what you pay for medicare is linked to income .
i can go on and on about what i didn't know or for see . now it is to late and conversions will not help .
had i seen an adviser like ed slott or his trained deciples decades ago the out come tax wise would have been very different .
Good insights, especially regarding insurance/medical
show us one academic study that shows us as a group small investors are doing just fine on their own.
That's not what I claim, so don't ask me to back up something I'm not claiming.
What you are claiming that, the SAME investor would do better with investment guidance than he would do on his own, Prove it. Or show the study that would prove it.
Again, not just general individual investor vs funds/newsletters.
Particular investor on his own vs him in the fund.
Anything else would not prove your assertion that investment guidance has any value.
That's not what I claim, so don't ask me to back up something I'm not claiming.
What you are claiming that, the SAME investor would do better with investment guidance than he would do on his own, Prove it. Or show the study that would prove it.
Again, not just general individual investor vs funds/newsletters.
Particular investor on his own vs him in the fund.
Anything else would not prove your assertion that investment guidance has any value.
Vanguard did their own study and concluded that an advisor could add 1.5-3% annually to total returns net of fees vs what a person does on their own. I believe mathjak posted a version of it already
yep , they did a study right on their own customer base . the results showed while a limited bunch investors did well most of their customer base jumped all around failing to get even the returns the funds they were in got and lagged by as much as 3% .
the biggest reason was they lacked discipline and pucker factor to do their own investing .
Vanguard did their own study and concluded that an advisor could add 1.5-3% annually to total returns net of fees vs what a person does on their own. I believe mathjak posted a version of it already
And that is because uniformed dollar cost averaging into the market (that what adviser will do for you) is that much more beneficial than uniformed "trading" in the market (that what person will do to himself on his own)
But if I will dollar cost average into the market on my own I will beat adviser's performance pretty much exactly on the amount of fees he charges.
So called "discipline factor" will help you 50% of the time and will cost you 50%of the time. So it is irrelevant.
And that is because uniformed dollar cost averaging into the market (that what adviser will do for you) is that much more beneficial than uniformed "trading" in the market (that what person will do to himself on his own)
But if I will dollar cost average into the market on my own I will beat adviser's performance pretty much exactly on the amount of fees he charges.
So called "discipline factor" will help you 50% of the time and will cost you 50%of the time. So it is irrelevant.
The asset allocation is another aspect you are leaving out. But I can tell you the discipline factor is not a 50/50 coin. If that's how you feel you are more than welcome to that opinion
dollar cost averaging is time frame sensitive . it usually does not produce as good results as lump sum since markets are up 2/3's of the time normally and only down 1/3.
if it worked consistently to produce better results we would all reach our designated allocations , sell everything off and start all over from zero again .
obliviously you can see that would rarely produce as good results as lump sum and letting it ride most of the time .
it has surpassed dollar cost averaging over just about every single 15-30 year accumulation period since markets have been around . there are very few exceptions where not lump summing in would have not done better over long periods of time.
do you think we all don't sell and start over again from zero for no reason ?
think about it you can't find any time frame longer than 15 years where stocks wouldn't have been higher and under that 2/3's of the time they are up so long term odds are dca will cost you quite a bit of money .
"of course, dollar cost averaging will win if your start date falls right before a dramatic crash (like October 1987) or at the start of an overall 12 month slump (like most of 2000). But unless you can predict these downturns ahead of time, you have no scientific reason to believe that dollar cost averaging will give you an advantage.
you can try it yourself here . 2/3's of the time dollar cost averaging will be the loser .
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