Portfolio Disaster

Here goes:
YTD 7.65
LAST 12 MONTHS 7.65
LAST 3 YEARS (3.45)
LAST 5 YEARS 10.57
SINCE INCEPTION 0.04
ANNUALIZED INCEPTION TO DATE 0.01

PORTFOLIO INCEPTION DATE: JULY 20, 2011
MARKET RETURN FROM JAN. 1, 2011 TO JAN. 1, 2017 = 40%

THIS IS WHAT HAPPENS WHEN ONE TRUSTS THEIR MONEY TO SOMEONE ELSE TO MANAGE. IS THERE ANY GOOD NEWS HERE?
I apologize in advance if this isn’t the right board to post to. My relationship to this board has been one-sided. I have been reading Saul’s board for awhile and frankly I need some advice. This is my first post here and to be honest I am somewhat intimidated. I have purchased stocks which I have in another portfolio based on input from this board and SA. The stats above are from my IRA. My broker account is doing better although it is the smaller of the two.

Gen

12 Likes

Gen,
I’ll give you my thoughts. 1)A base of low cost index ETF’s. For most of us it is hard to beat the index’s consistently, Vanguard is my favorite. 2) A few of the SA starter stocks. 3) A few of Saul’s stocks. 4) Maybe few of Buy and Wins dividend payers. 5) Manage your own investments if you can.

Wishing you and us all a prosperous 2017.

Kindest Regards,
Steve

6 Likes

THIS IS WHAT HAPPENS WHEN ONE TRUSTS THEIR MONEY TO SOMEONE ELSE TO MANAGE. IS THERE ANY GOOD NEWS HERE?

Gen:

Sorry to hear about your experience but IMO, your statement is NOT accurate. It would be better read as “this is what happens when one trusts their money to the WRONG PERSON to manage”.

Picking an advisor is a pretty painstaking process of background checks through various sites such as:

brokercheck.finra.org

https://adviserinfo.sec.gov/

You should also ask for no less than 6 references of longer term clients and actually call them and inquire about their experience.

IMO, you should be aware that just as most investors cannot beat the market, so too is the experience with the average broker.

But some have special access to detailed investment reports or have actual access to the company’s principles and make visits to the companies and checks their channel sales, etc.

Furthermore and not to appear to be preaching to you, what you give your broker as a guideline for investment (growth, high risk, preservation of capital, income, etc.) will also affect the investment strategy and the annual return.

Just because on portfolio yielded 40% and the other 1% doesn’t mean they were equivalent strategies or that in a down market, the portfolio returns could have strongly favored the opposite conclusion.

As a last comment, I have often referred to the “effort related returns”…know thyself…if you enjoy being tied to your computer and building/maintaining spreadsheets…then this board is a great place for you. But remember also, this board has NOT been through a bear market yet…I will predict that when that occurs, it could get a little testy around here.

IMO, diversifying amongst several approaches can be very liberating and reduces stress…SPY or mutuals, brokerage accounts (that has been properly vetted), your own investments, etc…just never favored the everything in a single basket approach…but then you may prefer to concentrate your strategy and risk…your call of course.

6 Likes

try bogleheads.org, and/or google “3-fund portfolio”, which is Total Stock Market index fund,
a International Market Fund, and a bond fund, all with minimal fees so you don’t end up spending 30% of your portfolio on 1% fees over a 30-year investing career. lots of folks at bogleheads.org follow this investing theory and seem to do well.

there’s risk involved in picking stocks. see CMFAnurag’s posts on risk allocation over the years.
some folks aren’t good at picking 15 out of 300 rec’d stocks that diversify risk over time and sectors and cost/PE…etc. this 3-fund portfolio approach helps with this difficulty.

there’s also many folks across the paid subscriptions and the free boards who invest in funds/REITs/bonds/etc, who are very open to helping their fellow Fools figure it out. there’s NO one way to invest in your future. keep asking questions.

wandern

2 Likes

Gen,
A lot has to do with your age and your goals, but let’s just for now that you want your money to at least return what the market returns and feel comfortable going forward, or at least not intimidated.

Calmly open a discount brokerage account at a place like Etrade or TDAmeritrade or one of the other big ones. Would even be better to find an office near you and have them guide you through this process.

From there you have to then decide what stocks you want to hold and what stocks you might want to sell. You might even decide that individual stocks are not for you until you understand more about investing. If that’s the case then I would suggest placing your money in SPY, which is the S&P index fund. This fund mirrors the returns of the 500 largest companies in the market. This way your returns mirror the market in good and bad times.

As for active managers, historically about 75% can’t even match the S&Ps returns. So step up to the plate and make the switch. You gave this person a chance and they failed. Time to move forward.

Chris

1 Like

Thanks to those who gave advice. I am going to make a change of advisors if I can vet them well enough. If not I may look at adding to some of my winners in my broker account. If I were to begin an index fund where would be the best place to start? i.e. is there another board that is more suited for that info.?
Gen