Quote:
Originally Posted by peter12
Man, Slava gives a good pitch. I take back what I said about the 2.7%, it was an exaggeration!
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Its really not a pitch though. I just think that its the cold hard facts of dealing with retail investors!
Quote:
Originally Posted by heep223
This is all fine and dandy. I don't disagree with any of it.
The one most important point that you miss though, that makes it all moot, is that "professional advice" in this industry, in 95% of cases, is coming from sales people with very little actual knowledge of investment principles, conflicts of interest all over the place, and no fiduciary responsibility. Which is what the poster I was responding to was talking about and he was bang on.
You guys are going to have a very difficult time convincing me with rational argument otherwise. I should note that I work in the industry and I'm a CFA charterholder. That doesn't mean anything per se other than the fact that I have in-depth knowledge and experience in this industry and I've seen multiple sides of it.
Not to say the industry isn't getting better, with the emergence of index products, more transparency, better and easier access to markets, fees coming down, more fee based advice. But 90% of the industry is still based on the conventional model that is broken.
So, I will continue to argue that the best way for the average retail investor to manage their portfolio is to educate themselves, keep fees very low, build a passive diversified portfolio and stick to it.
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I don't mean any disrespect at all, because I think you're an excellent poster. But you know there are shortcomings with indexing. You yourself post here about loading up on oil stocks because you think that the bottom is in, and other rationale. I'm not arguing that opinion (neither the time nor the place), but that is not indexing in the least!
I want to go through here and list a bunch of reasons why I believe that, but I'm seriously busy contacting all my clients in the midst of the current market issues. (Don't worry, I'm sure the robo-advisors are doing the same thing). But this is my personal annoyance with the index-ideologues. They profess this vision of pure market efficiency and why no one else can possibly do better, and then proceed to make asset and tactical allocation calls with their own money.
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Originally Posted by HockeyIlliterate
Because I believe that debt should be avoided at all possible costs, as it ultimately restricts your options and reduces your opportunities.
As a simple example, if you do not have any debt and you only need X amount to live and you do not like your current job, you can conceivably quit your job and go do something else that pays X+1 (or just X; or nothing at all, and live off your dividends, interest, and capital gains to recreate X). But if you have debt, you now need an amount equal to X+debt-service-amount in order to live, and the debt-service-amount can be such an amount that makes other lower-paying, or non-paying, jobs not realistically available to you.
I'll tell you this much:
I started working when I was 25, and I'm 39 now. I've worked every year during that period of time, except for about a year when I backpacked around the world and then came back home to look for work (a trip that was paid for in cash entirely out of my own savings). During the period of time in which I've worked, I have consistently saved at least 50% of my gross income (or 70% of my net income) each and every year.
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I don't want to get into the whole debate, but that bolded line makes you a complete outlier. So while its something everyone could do, its something that a very small percentage of the population actually does.