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Old 02-19-2017, 12:23 PM
 
71,557 posts, read 71,730,589 times
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You pay 1% a year on the asset amount regardless of gains or losses.

Imagine paying a lawyer every year for the past work over and over even though nothing new was done.

You would think that was silly.
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Old 02-19-2017, 12:25 PM
 
Location: SoCal
13,226 posts, read 6,326,744 times
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The stock market, what else? Dow 30,000 is going to be here soon!
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Old 02-21-2017, 11:52 PM
 
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I'm with NewbieHere. Of course it all depends on your appetite for risk. I'm a big fan of the Vanguard Index funds. I've had my money there in various funds for over 30 years. They have extremely low fees and a nice mix of stock, bond and sector funds to choose from. Wellesley and Wellington are just two of them. I prefer index ETFs vs actively managed mutual funds. Lower fees and better performance over time. Much more flexible to get in and out of than mutual funds. If you are very risk averse you can put a large portion in a bond index fund and a small amount in the stock funds to achieve a little more growth. The Vanguard folks can help you with asset allocation decisions or you can get tons of advice from the bogleheads website which you can google. They are Jack Bogle-founder of Vanguard-devotees and extremely helpful and patient with new investors. Jack is still preaching the gospel of low cost index funds on CNBC and at conferences world wide. You can trust Vanguard. It's owned by its investors which helps keep fees low and has over 4 trillion in assets I believe at this time. Stocks will always fluctuate but if you are patient and buy on the dips you can usually ride it out you can enhance your holdings over time. Good luck!
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Old 02-22-2017, 09:33 AM
 
9,151 posts, read 7,214,181 times
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Quote:
Originally Posted by mathjak107 View Post
You pay 1% a year on the asset amount regardless of gains or losses.

Imagine paying a lawyer every year for the past work over and over even though nothing new was done.

You would think that was silly.
Yes that is silly.

Is there a point where it would be worth it? I saw an article on a management firm here that only works with amounts of 20 to 50 million. They also said they charge around 1%. So if you had 50 mil and they made 5% for you that would be 2.5 mil and they would take half a mil before taxes. That seems unreasonable. Would they make more than 5% on that investment?

If not, I assume they'd be doing more for you than investing? Would they be managing your tax load too? Maybe picking up ur dry cleaning and taking ur kid to school too? lol
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Old 02-22-2017, 11:15 AM
 
Location: Pennsylvania
12,500 posts, read 4,227,357 times
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Quote:
Originally Posted by xenxes View Post
Lowest risk are bonds and CDs, but obviously rates are low.

Another option might be peer to peer lending, like lendingclub.com, A-grade/risk are typically 5-7% but minimum 36 mos term.

Another option might be dividend stocks, these are usually low volatility and consistent dividend returns, NYSE:ECC might be one example.

Another option might be mutual funds, but these are long term looking, healthcare/biotech still have good fundamentals such as VGHCX or FBIOX.

Do your own research, diversify (don't put all your eggs in one basket), and as others have said, timing is key... “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” - Warren Buffet.
Always good advice to quote Buffett and guess what folks -- people are getting too greedy and the market has run up too much right now. If you are near retirement age, better keep a lot in CASH.
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Old 02-22-2017, 11:18 AM
 
71,557 posts, read 71,730,589 times
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why ? even at 65 you have money you will not be eating with for 20-30 years .

keeping plenty of cash has hurt retirees more than helped them historically.

even if a retiree had the nerve to be 100% equity they did a whole lot better than had you gone the other way and had a whole lot of cash .

fixed income has had way to many failures already to even be considered safe .

the whole idea of a safe withdrawal rate and a high success rate allocation is just so you don't have to time the markets which rarely ends well

Last edited by mathjak107; 02-22-2017 at 11:55 AM..
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Old 02-22-2017, 11:56 AM
 
Location: Haiku
4,071 posts, read 2,574,551 times
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Quote:
Originally Posted by LillyLillyLilly View Post
Yes that is silly.

Is there a point where it would be worth it?
Some large hedge funds have access to private equity investments. PE has generated better returns over the last 20 years or so than stocks, bonds, commodities, or derivatives. But I am not sure if it is worth the money they charge. Hedge funds often charge "2/20", 2% of assets and 20% of any gains over a certain amount.

I imagine some people are willing to pay the exorbitant rates because there is some status associated with being let into an exclusive hedge fund.
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Old 02-22-2017, 01:39 PM
 
Location: SoCal
13,226 posts, read 6,326,744 times
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Quote:
Originally Posted by BeerGeek40 View Post
Always good advice to quote Buffett and guess what folks -- people are getting too greedy and the market has run up too much right now. If you are near retirement age, better keep a lot in CASH.
I'm already retired and I'm in stocks. If you look closely, there's inflation, you need to be in stocks otherwise inflation will eat you alive. All restaurants we've frequented have raised prices to almost 50% at least. My house insurance shot up nearly 50%. Maybe not all in stocks, but have some in stocks.
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Old 02-22-2017, 01:43 PM
 
71,557 posts, read 71,730,589 times
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study's show the sweet spot is 40-60% equity for retirement if you want a 3-1/2 - 4% draw rate inflation adjusted.
retired and 40% equity myself .
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Old 02-22-2017, 02:47 PM
 
Location: Mount Airy, Maryland
10,461 posts, read 5,928,514 times
Reputation: 16156
Quote:
Originally Posted by Misquito View Post
I'm with NewbieHere. Of course it all depends on your appetite for risk. I'm a big fan of the Vanguard Index funds. I've had my money there in various funds for over 30 years. They have extremely low fees and a nice mix of stock, bond and sector funds to choose from. Wellesley and Wellington are just two of them. I prefer index ETFs vs actively managed mutual funds. Lower fees and better performance over time. Much more flexible to get in and out of than mutual funds. If you are very risk averse you can put a large portion in a bond index fund and a small amount in the stock funds to achieve a little more growth. The Vanguard folks can help you with asset allocation decisions or you can get tons of advice from the bogleheads website which you can google. They are Jack Bogle-founder of Vanguard-devotees and extremely helpful and patient with new investors. Jack is still preaching the gospel of low cost index funds on CNBC and at conferences world wide. You can trust Vanguard. It's owned by its investors which helps keep fees low and has over 4 trillion in assets I believe at this time. Stocks will always fluctuate but if you are patient and buy on the dips you can usually ride it out you can enhance your holdings over time. Good luck!


Welcome to the board Misquito. This is good solid advice but may be a bit much for the opening poster. But that happens on the internet all the time as the thread evolves way past just answering the OP's questions.


As for the following posts I once again find myself agreeing with MathJak. Too much cash is a terribly costly mistake unless you are like 89 years old.
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