Quote:
Originally Posted by Enoch Root
AGAIN, I am absolutely astounded that you think that individual investors can simply manage risk the way you can. They are not all CFAs. The vast majority of investors have little understanding of risk, how it differs between investments, and how it can, AND CAN'T, be managed/controlled.
Second point, their emotions: If you think ANY investors, including professionals, can control their emotions (at the most critical and stressful times), well we'll just have to agree to disagree.
Taxes and fees: yes, keeping a lid on fees is a good starting point. But if you can't see that advice is valuable with respect to taxes, I just don't know what to say to you.
As Slava said (and I have already said), advice goes far beyond what you listed there.
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Yours and Slava’s point in regards to paying for the financial planning side of things is a good one.
In terms of the actual investment side though, I personally think that you aren’t giving people enough credit. If a professional that has amassed enough savings for a meaningful portfolio of financial assets can’t educate themselves on the basics of creating a balanced portfolio of ETFs, and the principle of rebalancing, then ok I agree go pay an advisor 150 bps to do it for you + the 100bps (minimum) MERs of the funds that you’ll be in.
My only retail experience has been informally with friends and family from all walks of life, and I can tell you that the vast majority of them, with a bit of guidance as to where to find the proper information, have figured out how to create a basic balanced portfolio for significantly less than 50bps. That has been far more effective at achieving their goals than the gongshow that their advisors put together for them.
Here, for giggles, is a long term portfolio earning a nominal 8%, with 50bps fees vs. 250bps fees.
Lastly – I will take some responsibility for not expressing myself properly and fully in these posts, but I’d appreciate it if you could try to limit the demeaning tone in your replies, just because I’m presenting a different view than you (ie. “I just don’t know what to say to you”, “as a Charterholder that should be obvious to you”, “I am absolutely astounded that you think individual investors can manage risk as well as you”). PS that last one I never said.
PPS. I'm going to report you for improper use of the CFA designation ("a CFA").
PPPS. ^ is a bad, nerdy joke
