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Old 02-23-2015, 04:02 PM
 
Location: Great State of Texas
86,093 posts, read 72,515,954 times
Reputation: 27565

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Quote:
Originally Posted by golfingduo View Post
I am pretty sure I know that the prospectus tells the story. If a person gets a 401k or any other investment, I know it comes with it. So why does anyone think the federal government will do a better job. Don't we have enough intervention in our lives?
Obama said he's doing this to save the middle class (probably from themselves)
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Old 02-23-2015, 04:28 PM
 
Location: Baltimore, MD
3,745 posts, read 4,218,356 times
Reputation: 6866
Quote:
Originally Posted by golfingduo View Post
I am pretty sure I know that the prospectus tells the story. If a person gets a 401k or any other investment, I know it comes with it. So why does anyone think the federal government will do a better job. Don't we have enough intervention in our lives?
Ha ha. Try to imagine deciphering the prospectus and making complex financial decisions when you're eighty. There are good reasons why seniors frequently fall for scams. But, of course, you may be the exception to the rule.
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Old 02-23-2015, 04:40 PM
 
Location: Idaho
4,627 posts, read 4,466,840 times
Reputation: 9050
Quote:
Originally Posted by golfingduo View Post
I am pretty sure I know that the prospectus tells the story. If a person gets a 401k or any other investment, I know it comes with it. So why does anyone think the federal government will do a better job. Don't we have enough intervention in our lives?
Unlike some of the more financial astute folk here, I have never been able to completely grasp the detail or functioning of financial investments. It is overly complicated and prospectus are written in such language that one must to have taken several accounting classes in college to fully understand them. It's way beyond me.

I can analyze satellite imagery in the study the earth's natural resources and can monitor and command space instruments . . . but financial investing leaves me bewildered. I've been fortunate in that when I first started investing at my employer, I put half of my money in a guaranteed account that pays a little bit less interest, but is guaranteed against loss. The other half I put into a fund that only invests in companies that don't trash the environment. It was a 'feel good' decision and has worked out very well because it has been the best performing funds at the 403(b) management firm.

However, I do know, partially based on personal experience, that 'most' investment advisers have a vested interest in getting you to purchase 'stuff'. It's because of the commissions and fees they earn when you buy something or other. And, a lot of times, that investment is not in our best interest. I don't care for the current occupant of the White House and never did. He's too radical for a center-right country; but I do applaud this move, especially if it happens, (however, he's usually just all talk). Sometimes, government oversight is worthwhile. Usually not, I admit, but in this case where our own money is at risk in a system that is overly complicated, just maybe forcing financial advisers to be honest with their naive customer is warranted.

I totally believe in the advice of Clark Howard and he takes a dim view of financial advisers who sell stuff. He recommends getting advice from a 'fee-only financial adviser'. I have an appointment with one at the end of April to go over my financial portfolio. Since I retire in less than two years, I need to get a better idea what will happen when I throw away the alarm clock.
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Old 02-23-2015, 06:31 PM
 
Location: Central Massachusetts
4,800 posts, read 4,847,776 times
Reputation: 6379
Quote:
Originally Posted by volosong View Post
Unlike some of the more financial astute folk here, I have never been able to completely grasp the detail or functioning of financial investments. It is overly complicated and prospectus are written in such language that one must to have taken several accounting classes in college to fully understand them. It's way beyond me.

I can analyze satellite imagery in the study the earth's natural resources and can monitor and command space instruments . . . but financial investing leaves me bewildered. I've been fortunate in that when I first started investing at my employer, I put half of my money in a guaranteed account that pays a little bit less interest, but is guaranteed against loss. The other half I put into a fund that only invests in companies that don't trash the environment. It was a 'feel good' decision and has worked out very well because it has been the best performing funds at the 403(b) management firm.

However, I do know, partially based on personal experience, that 'most' investment advisers have a vested interest in getting you to purchase 'stuff'. It's because of the commissions and fees they earn when you buy something or other. And, a lot of times, that investment is not in our best interest. I don't care for the current occupant of the White House and never did. He's too radical for a center-right country; but I do applaud this move, especially if it happens, (however, he's usually just all talk). Sometimes, government oversight is worthwhile. Usually not, I admit, but in this case where our own money is at risk in a system that is overly complicated, just maybe forcing financial advisers to be honest with their naive customer is warranted.

I totally believe in the advice of Clark Howard and he takes a dim view of financial advisers who sell stuff. He recommends getting advice from a 'fee-only financial adviser'. I have an appointment with one at the end of April to go over my financial portfolio. Since I retire in less than two years, I need to get a better idea what will happen when I throw away the alarm clock.

Really it isn't rocket science here. The prospectus tells you what the fees are in general. A rule of thumb here is a fee of less then 2% is good. Under 1% better but then you need to look at track record. Outside of that not much more then that. The funds are invested with a strategy. It is all written out. I am no financial wizard here either but I listen and hear. Then I make informed decisions. I never let a salesman talk me into something I don't understand.
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Old 02-23-2015, 06:41 PM
 
Location: Central IL
15,238 posts, read 8,532,850 times
Reputation: 35672
Quote:
Originally Posted by luv4horses View Post
So what has been happening up until now? Have they not been behaving responsibly?
They've been charging outrageous loads and service charges...and offering very poor and very limited fund choices in some cases.
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Old 02-23-2015, 07:17 PM
 
Location: Elysium
6,584 posts, read 3,638,317 times
Reputation: 4578
Quote:
Originally Posted by luv4horses View Post
So what has been happening up until now? Have they not been behaving responsibly?
By selling you product X even if it was not the best product for you because that company kicked back a sales fee to them. As a fiduciary your well being not theirs or the company which pushes products through them becomes their primary ethical and legal requirement.
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Old 02-23-2015, 08:30 PM
 
Location: Amongst the AZ Cactus
7,074 posts, read 4,925,427 times
Reputation: 7701
Quote:
Originally Posted by HappyTexan View Post
The best person to take care of YOUR MONEY is YOU.
And if you don't know about investments then you need to take it upon yourself to learn about them before you retire and have a boatload of money that you now need to manage.

All during my working years I came upon countless number of folks in my company that had no clue about investments and stuck all their 401K money into whatever the newsletter told them.
Spot on. I think the same thing can be said for many things in life, including taking care of one's own health.
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Old 02-23-2015, 11:17 PM
 
Location: Living rent free in your head
31,071 posts, read 13,598,798 times
Reputation: 22130
I don't know why anyone would object to this, it's common sense..right now fiduciaries do not have to put your interest ahead of theirs when recommending investments. The rule change would not be necessary if these greedy pigs weren't out there trying to *********r eyes out and recommend not the best portfolio but the one that yields the highest fees for them
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Old 02-23-2015, 11:39 PM
 
Location: Florida Gulf Coast
4,406 posts, read 5,926,580 times
Reputation: 7121
Quote:

Unlike some of the more financial astute folk here, I have never been able to
completely grasp the detail or functioning of financial investments. It is
overly complicated and prospectus are written in such language that one must to
have taken several accounting classes in college to fully understand them. It's
way beyond me.
Totally agree. I'm not stupid either, but reading prospectuses (prospecti?) -- this type of stuff is overwhelming for most people. When I did my first 401K elections, we had 10 choices. Not knowing what any of it meant, I put 10% in each fund. Luckily, it actually worked out OK that way.

When the market started tanking in '08, I had a gut feel to move some of my money out of stocks into bonds. I was 58 at the time. Called a few friend/co-workers to see what they were doing, and they were even more clueless than I was. Ended up not listening to my gut and therefore lost more money than I should have. Of course, the market later rebounded so I probably would have recouped my losses....but I wasn't listening to anyone at that point other than my own gut. When you see your retirement fund evaporating before your own eyes, it's pretty difficult to listen to the "experts" saying "don't panic".

I'm still using my gut as my financial adviser....
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Old 02-24-2015, 08:06 AM
 
Location: Central Massachusetts
4,800 posts, read 4,847,776 times
Reputation: 6379
Quote:
Originally Posted by Avalon08 View Post
Totally agree. I'm not stupid either, but reading prospectuses (prospecti?) -- this type of stuff is overwhelming for most people. When I did my first 401K elections, we had 10 choices. Not knowing what any of it meant, I put 10% in each fund. Luckily, it actually worked out OK that way.

When the market started tanking in '08, I had a gut feel to move some of my money out of stocks into bonds. I was 58 at the time. Called a few friend/co-workers to see what they were doing, and they were even more clueless than I was. Ended up not listening to my gut and therefore lost more money than I should have. Of course, the market later rebounded so I probably would have recouped my losses....but I wasn't listening to anyone at that point other than my own gut. When you see your retirement fund evaporating before your own eyes, it's pretty difficult to listen to the "experts" saying "don't panic".

I'm still using my gut as my financial adviser....

Timing the market is not very successful. Yes you may have lost more then you might have but if you tried and timed it wrong the point at the sale and subsequent purchase of stocks to bonds you would have certainly locked in those losses at a worse point. Some here disagree with a buy and hold strategy. They are right. It should not be that strategy. Buying and holding fast in a down market is bad. If instead you held and increased holdings you would have been buying low there-by minimizing your losses. and in fact possibly increasing them. Just my opinion but it has been done many times before by many people and they are okay too.
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