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Old 04-23-2015, 06:48 AM
 
71,708 posts, read 71,829,507 times
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Quote:
Originally Posted by Petunia 100 View Post
Thank you for finding that. So it is not possible for an individual investor to set a reasonable asset allocation plan, rebalance on a schedule, and stay the course? It is necessary to pay a third party to do it on your behalf? I did not know that.
possible ? sure it is, QUITE A FEW OF US DO IT . possible for most ? unlikely.

want proof ? on almost all funds Morningstar has two returns listed. the return the fund actually got and the small investor return tracking the flow of money. with few exceptions investor returns are lower.

investor actions are to blame. while we all know folks who are quite successful with funds most americans are far from bogleheads and have neither pucker factor or the knowledge to even know what to do or have a comprehensive plan.

academic study after study has shown that to be the fact.
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Old 04-23-2015, 10:10 AM
 
8,860 posts, read 5,143,460 times
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Quote:
Originally Posted by mathjak107 View Post
possible ? sure it is, QUITE A FEW OF US DO IT . possible for most ? unlikely.

want proof ? on almost all funds Morningstar has two returns listed. the return the fund actually got and the small investor return tracking the flow of money. with few exceptions investor returns are lower.

investor actions are to blame. while we all know folks who are quite successful with funds most americans are far from bogleheads and have neither pucker factor or the knowledge to even know what to do or have a comprehensive plan.

academic study after study has shown that to be the fact.
Yes, I am aware that "quite a few of us do it", being one of those people myself.

That statement was that a CFP can get you higher returns than you can get for yourself. This study does not prove that statement.

I maintain that anyone who is of average intelligence can set a reasonable asset allocation plan, rebalance on a schedule, and stay the course.

Whether or not an individual chooses to do so is a different matter from whether or not the individual can do so.
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Old 04-23-2015, 10:29 AM
 
Location: Central Massachusetts
4,800 posts, read 4,852,811 times
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Quote:
Originally Posted by Petunia 100 View Post
Yes, I am aware that "quite a few of us do it", being one of those people myself.

That statement was that a CFP can get you higher returns than you can get for yourself. This study does not prove that statement.

I maintain that anyone who is of average intelligence can set a reasonable asset allocation plan, rebalance on a schedule, and stay the course.

Whether or not an individual chooses to do so is a different matter from whether or not the individual can do so.

I also think that study points on individual investors buying and selling stocks not taking a mutual fund approach and riding on the backs of fund managers. Anyone investing on their own on individual stocks is risking much. If the money they are investing with is play money (money above and beyond) then by all means invest away. You could stumble onto the next Intel. Noticed I didnt say Microsoft or Apple.
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Old 04-24-2015, 02:05 AM
 
71,708 posts, read 71,829,507 times
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Quote:
Originally Posted by Petunia 100 View Post
Yes, I am aware that "quite a few of us do it", being one of those people myself.

That statement was that a CFP can get you higher returns than you can get for yourself. This study does not prove that statement.

I maintain that anyone who is of average intelligence can set a reasonable asset allocation plan, re balance on a schedule, and stay the course.

Whether or not an individual chooses to do so is a different matter from whether or not the individual can do so.
if what you say was true then results over all should be better for small investors since as a group our intelligence should lift results upward but according to ibbotson and morningstar who track results they are worse .

it has little to do with intelligence and everything to do with the fact the human brain is weighted to hate losing money more than it likes making money so human reaction when there is a fire is to run for the exits.

if you read jason zweigs book your money your brain you will see modern brain imaging equipment shows when we are under real time stress of making money decisions we use different parts of the brain which are not logical compared to when we plan hypothetically .

that leads most humans down the road to doing the wrong thing at the wrong time and tracking the actual money in and out of funds shows that to be true overall.

small investors lost 2-3%worth of gains as a group just following their own inner voices vs had they had they done nothing but stay the course . even using balanced funds helped less than 1%



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Old 04-26-2015, 06:06 AM
 
761 posts, read 639,357 times
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Quote:
Originally Posted by augiedogie View Post
I wouldn't touch one with a 10 ft. pole. Bernie Madoff anyone? I almost gave money to an Edward Jones rep. IT would have been a huge mistake. I might get better returns from an expert, but I don't have to worry about getting cleaned out either by a complete fraud.
I think this is a YMMV (your mileage may vary) situation. Not all CFP's or advisors are created equally nor are investors and I don't think it would be fair to cast a blanket statement against EJ because of the sins of Madoff.

Madoff was running his own firm and believed in nepotism, employing his brother, his brother's daughter and his own sons. His Ponzi scheme and his ego are what brought him down.

Something tells me that EJ, Fidelity and the like have a bit more integrity than good old Bernie.

I can see people being hesitant and skeptical about having an advisor run things for them, but I doubt you'll find Fidelity, EJ, Vanguard and the like getting involved in Ponzi schemes.

I still plan to go with an Edward Jones advisor and if I don't like the results, I pull out.
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Old 04-26-2015, 06:35 AM
 
71,708 posts, read 71,829,507 times
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even major firms can get tied up in questionable deals.

look at all the grief david lerner got in to selling the apple untraded reits. intentions were likely good but they turned ugly as the wrong sales tactics were used.

while they were not transparent there was no evidence of foul play. they were really just being sold inappropriately to folks it wasn't suitable for.

interesting enough after all the cries of foul play the shares are going public on or before may 18th on none other than the nyse.

perhaps it wasn't such a poor deal after all.

apple is expected to do a 500 million dollar share buy back at 10-11 bucks , the origonal costs prior to it going public. that would have given shareholders a 6-7% average return on a non volatile investment .

but the point is even major firms can get involved with potentially poor products.
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Old 04-26-2015, 08:51 AM
 
29,784 posts, read 34,885,423 times
Reputation: 11710
Quote:
Originally Posted by elliotgb View Post
I think this is a YMMV (your mileage may vary) situation. Not all CFP's or advisors are created equally nor are investors and I don't think it would be fair to cast a blanket statement against EJ because of the sins of Madoff.

Madoff was running his own firm and believed in nepotism, employing his brother, his brother's daughter and his own sons. His Ponzi scheme and his ego are what brought him down.

Something tells me that EJ, Fidelity and the like have a bit more integrity than good old Bernie.

I can see people being hesitant and skeptical about having an advisor run things for them, but I doubt you'll find Fidelity, EJ, Vanguard and the like getting involved in Ponzi schemes.

I still plan to go with an Edward Jones advisor and if I don't like the results, I pull out.
Don't know about your Edward Jonrs advisor but before giving them such lofty endorsements you may want to investigate their:
Corporate structure
Commission distribution
Hiring practices
Sales force retention rates
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Old 04-26-2015, 08:59 AM
 
29,784 posts, read 34,885,423 times
Reputation: 11710
Quote:
Originally Posted by mathjak107 View Post
if what you say was true then results over all should be better for small investors since as a group our intelligence should lift results upward but according to ibbotson and morningstar who track results they are worse .

it has little to do with intelligence and everything to do with the fact the human brain is weighted to hate losing money more than it likes making money so human reaction when there is a fire is to run for the exits.

if you read jason zweigs book your money your brain you will see modern brain imaging equipment shows when we are under real time stress of making money decisions we use different parts of the brain which are not logical compared to when we plan hypothetically .

that leads most humans down the road to doing the wrong thing at the wrong time and tracking the actual money in and out of funds shows that to be true overall.

small investors lost 2-3%worth of gains as a group just following their own inner voices vs had they had they done nothing but stay the course . even using balanced funds helped less than 1%


How much of the statistical difference is because of individual behavior or from having money in high fee mutual funds. Are you better off on your own with Vanguard or guided by a profit motivated advisor?
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Old 04-26-2015, 09:14 AM
 
71,708 posts, read 71,829,507 times
Reputation: 49273
zero is fee related .

fees are already included since they track the funds complete with fees vs tracking the investor money inflow and outflow from the same funds .
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Old 04-26-2015, 08:00 PM
 
89 posts, read 70,774 times
Reputation: 265
We've recently begun working with a CFP (fee only) in preparation for eventual retirement. Is a tax (specialist) accountant also needed to coordinate the financial advice with best tax strategies or will a good CFP incorporate that into their advice? Haven't needed an accountant so far but afraid I am very near, if not past, the limit of what I can understand. Terribly broad question, I know.
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