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Old 01-19-2018, 07:17 PM
 
11 posts, read 5,502 times
Reputation: 34

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Hello everybody!

Now that the IPs have been in place for a few years, what has been your experience with the overall product? I realize the “cash drag” has been pointed out as a negative but Schwab points out it can minimize losses in a down market. Has anybody found this to be true?

From a moderate risk perspective, it looks like the returns are positive (about 10%), but not near the levels of the overall 2017 market returns. Is this a good “set it and forget it” diversified, income generating product?
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Old 01-19-2018, 08:40 PM
 
Location: Orlando
1,983 posts, read 2,631,742 times
Reputation: 7538
Quote:
Originally Posted by GeorgeHanson View Post
Hello everybody!

Now that the IPs have been in place for a few years, what has been your experience with the overall product? I realize the “cash drag” has been pointed out as a negative but Schwab points out it can minimize losses in a down market. Has anybody found this to be true?

From a moderate risk perspective, it looks like the returns are positive (about 10%), but not near the levels of the overall 2017 market returns. Is this a good “set it and forget it” diversified, income generating product?
I guess it depends on how old you are and how risk-averse you are. For me, it's OK. I'm 70 and pretty risk-averse, and I'm happy enough with what my Schwab portfolio has done this past year. Haven't yet had a down market with it to see how the cash thing works.
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Old 01-19-2018, 10:11 PM
 
14,253 posts, read 23,969,886 times
Reputation: 20035
Quote:
Originally Posted by GeorgeHanson View Post
Hello everybody!

Now that the IPs have been in place for a few years, what has been your experience with the overall product? I realize the “cash drag” has been pointed out as a negative but Schwab points out it can minimize losses in a down market. Has anybody found this to be true?

From a moderate risk perspective, it looks like the returns are positive (about 10%), but not near the levels of the overall 2017 market returns. Is this a good “set it and forget it” diversified, income generating product?


Here is an analysis from an analyst:

Simplicity Vs. Schwab
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Old 01-20-2018, 09:40 AM
 
Location: Florida
4,356 posts, read 3,689,532 times
Reputation: 4084
I do not like the cash drag so I pay no attention to the product. If the cash was used in down markets for withdrawals (and you were making withdrawals ) so securities would not have to be sold then I would be more impressed with the product. But the cash is not used for this so it just adds to the cost and poor performance. But if I was a stockholder in Schwab I would probably be very impressed on how they have been able to sell it.
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Old 01-20-2018, 07:29 PM
 
Location: Wisconsin
21,534 posts, read 43,962,244 times
Reputation: 15135
You'll get more answers, here:

http://www.city-data.com/forum/investing/
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Old 01-21-2018, 12:41 PM
 
Location: Loudon, TN
5,768 posts, read 4,822,990 times
Reputation: 19387
Quote:
Originally Posted by GeorgeHanson View Post
Hello everybody!

Now that the IPs have been in place for a few years, what has been your experience with the overall product? I realize the “cash drag” has been pointed out as a negative but Schwab points out it can minimize losses in a down market. Has anybody found this to be true?

From a moderate risk perspective, it looks like the returns are positive (about 10%), but not near the levels of the overall 2017 market returns. Is this a good “set it and forget it” diversified, income generating product?
I have a medium/high risk setting for the portion of my portfolio that is invested in the Schwab IP, and I earned 24% from the IP last year. I love it! I have other sources of income, so I can handle the risk.
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Old 01-21-2018, 02:09 PM
 
Location: Mount Airy, Maryland
10,457 posts, read 5,917,794 times
Reputation: 16141
Quote:
Originally Posted by rjm1cc View Post
I do not like the cash drag so I pay no attention to the product.
Bingo. When I first moved to Schwab I was a novice and looked into the IP. Understanding nothing is free I dug deeper and this was what I found. You pay for the free service by being being forced to commit a certain percent to cash, cash they then use to invest and make money.

I found a simple set of diverse index funds worked well but that's not to say others could not benefit from the Intelligence Portfolio.
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Old 01-21-2018, 03:53 PM
 
Location: Ypsilanti, MI
2,431 posts, read 3,657,283 times
Reputation: 4758
I don't believe there is any "Set It and Forget It" investment. My personal experience with Target Date funds during the Great Recession was horrible. They lost 40% just as the market did.

My experience was that Target Date funds are chartered to aim for maximum capital appreciation when the target date is years out, regardless of current wide-spread market conditions, and capital preservation only comes into play when the date becomes near term.
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