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In the end even the fund beta does not matter. It is the total portfolio performance.
I used those funds but at the end of the day the portfolio beats the s&p with 15% less volatility because of the overall structure. So i never look at fund beta , only portfolio volatility is important .
By the same token if they are going to proclaim that indexing beats 80% of funds shouldn' t they be subtracting out those with a smaller beta number then spy ?
Also funds vary their beta from time to time . I get a beta rating on the funds weekly from insight , it changes.
Last edited by mathjak107; 11-20-2015 at 02:50 PM..
In the end even the fund beta does not matter. It is the total portfolio performance.
I used those funds but at the end of the day the portfolio beats the s&p with 15% less volatility because of the overall structure. So i never look at fund beta , only portfolio volatility is important .
It's great you never look at fund beta but the point still stands, something more volatile than the broad index should outperform in an upmarket and underperform in a down. On a risk adjusted basis things may or may not be different but you simply throwing this 6-7 year time frame for these fidelity funds is overlooking the obvious, they should be outperforming the index
take a look at 2010 target fund performance in 2008. they are supposed to be pretty conservative yet many lost 20%+, which is too much to lose for someone planning to retire in 2 years. even in a bad year like 2008, these should be losing 10% tops IMO.
take a look at 2010 target fund performance in 2008. they are supposed to be pretty conservative yet many lost 20%+, which is too much to lose for someone planning to retire in 2 years. even in a bad year like 2008, these should be losing 10% tops IMO.
I just countered your opinion with a a realistic timeframe, if that's your response then your already disclosed risk aversion isn't allowing you to see facts
lol, it depends on your level of risk aversion. i'm not going to tell you to be less risky if you know what you're getting yourself into.
when i get closer to retirement, it's much more about wealth preservation than growth even if i hope to live for 20-30 more years.
but then again, it depends on how much you have saved up. if you don't have much saved up, you may be more or less forced to take on more risk.
i.e., i don't think it's accurate for anyone to say "how much do you want to make in a year?" since there's no limit. but it is accurate to say "how much are you comfortable losing in a year?" and that can help assess asset allocation.
if you're retiring in 2 years (2016) and you're comfortable losing 25% in a year, then that's fine for you. in my case, i'm comfortable losing more like 10% in a year and would seek an asset allocation that will help me with my goals.
the answer to that question for my wife is "0 (little to no chance of loss)" so she tends to put all of her money into savings accounts and CDs.
lol, it depends on your level of risk aversion. i'm not going to tell you to be less risky if you know what you're getting yourself into.
when i get closer to retirement, it's much more about wealth preservation than growth even if i hope to live for 20-30 more years.
but then again, it depends on how much you have saved up. if you don't have much saved up, you may be more or less forced to take on more risk.
i.e., i don't think it's accurate for anyone to say "how much do you want to make in a year?" since there's no limit. but it is accurate to say "how much are you comfortable losing in a year?" and that can help assess asset allocation.
if you're retiring in 2 years (2016) and you're comfortable losing 25% in a year, then that's fine for you. in my case, i'm comfortable losing more like 10% in a year and would seek an asset allocation that will help me with my goals.
the answer to that question for my wife is "0 (little to no chance of loss)" so she tends to put all of her money into savings accounts and CDs.
Your statement was "target date funds are too aggressive" and the basis for it was 2008 with 2 years to retirement, which ignores the possible decades of investing horizon still ahead
If you would have said "target date funds are too aggressive for me" that would have been different
I've decided to consult a financial advisor because I simply do not have the time to manage my finances. It's very hard for me to give up the control, but I have to imagine they can do a better job than me. At the bare minimum, I'll use them for a year to get a plan in order.
Can you please tell me if the following is normal:
1) He is a fee-only financial advisor that has been working in finance for 30 years. The fee is 1% of managed assets (he waived a lot of his normal "getting started" fees due to my income and potential for growth).
2) I have funds with Vanguard, Fidelity, and a few others - he requires that we "transfer" these funds over to Charles Schwab as a custodian (which he is in no way affiliated with). I put transfer in quotes because I'm confused with this point in particular. He made it seem like I could keep the original funds if that made sense (e.g. I could keep VFIAX from Vanguard).
3) I need to give him my username/password to manage my employers 401k.
Thanks!
I guess I am confused if he is a fee only based advisor. My fee based person gave me a suggested plan, reviewed what I had, and suggested some changes but only gave me lists of investments that fit each part of their suggested plan. They never gave me specific companies to move things to. They also charged me a one time fee.
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