Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[Hog's Gone Fishin]

Originally Posted by Cornstock

So maybe a new topic that hasn't been expanded on lately, for those of us who work with financial advisors:

We're entering a new market that we haven't been through for a while. Perhaps, gone are the days of blindly picking an ETF linked to the S&P500 and being able to return 20%.

In an era of potentially elusive returns, what advantage do you see in having an FA choose an allocation appropriate for you within a fund family and paying the sales charge for an A share, vs choosing an actively managed fund with a higher yearly wrap fee that can theoretically keep your portfolio constantly balanced, and (depending on how aggressive your strategy) position the portfolio to take advantage of opportunities based on that particular firm's research?

From a pure numbers perspective, an A share's upfront commission would buy you approximately 3 years worth of management in an actively managed portfolio. Since the actively managed portfolio assesses the fees as you go, more of your money is invested earlier on, so you're better able to capture gains early on.

After the first 3 years, is the fee worth it? If we look at the last couple years I wouldn't think so, but in a more challenging market that expertise may be able to seek out higher returns.

Thoughts?

I set my daughter up an account with Edward Jones and discussed with them where to invest. They charge 2% in and 2% out. Then I set up a custodial account on Etrade for her and put the rest of her money in the same funds he used. This way i have a professional I can use for advice without them stealing my /her money.

And i realize that although the more money they make you the more they make for themselves but they aren't as attached. I just don't believe in buying stocks or mutual funds and not keeping an eye on performance. what good is a stock that you bought at $20 and over 10 years goes up to $70 but at the end of the 10 years it's sitting at $20 again .

[Cornstock]

Originally Posted by Hog's Gone Fishin

I set my daughter up an account with Edward Jones and discussed with them where to invest. They charge 2% in and 2% out. Then I set up a custodial account on Etrade for her and put the rest of her money in the same funds he used. This way i have a professional I can use for advice without them stealing my /her money.

And i realize that although the more money they make you the more they make for themselves but they aren't as attached. I just don't believe in buying stocks or mutual funds and not keeping an eye on performance. what good is a stock that you bought at $20 and over 10 years goes up to $70 but at the end of the 10 years it's sitting at $20 again .

Yeah, Edward Jones has a reputation for being kinda expensive. They have their niche; local reps dealing with clients who are financially illiterate. There are much better options out there for cost as well as investment options.

I'm taking about actively managed portfolios with aggressive strategies. Kind of like a hedge fund lite.

EJ will sell you a mutual fund but that thing probably won't adapt to the market like active mangement.

[Amnorix]

Originally Posted by petegz28

Weekly of the SPY closed right at the first Fibonacci retracement (25%). It broke through it but came back and closed at it. The low today, yikes, is probably or at least hopefully an intermediate bottom. I suspect we will see some consolidation over the next couple of weeks. Given the current economic environment I wouldn't expect too much more selling. The economy is strong and one article today tried to say "too strong" in which I call bullshit. We are coming out of the slowest economic recovery in our history. Things that are happening now should have been happening for years.

The one risk is that the Federal Reserve should have started raising rates a long, long time ago so now they may have to play catch up.

That being said, people freaking out over 3% rates on the 10 year bond are idiots.

For anyone who doesn't know, Pete is referencing some terms relating to an approach to the stock market generally called "technical analysis". To a large degree it relates to trying to focus more on the psychology of the INVESTORS themselves, and not the actual fundamental strengths or weaknesses of the companies, or the economy as a whole. (that is a gross oversimplification).

Most experts don't hold technical analysis in high regard, though it has gained more traction generally over the last 10 or whatever years.

https://www.investopedia.com/university/technical/

[DaFace]

Originally Posted by Hog's Gone Fishin

I set my daughter up an account with Edward Jones and discussed with them where to invest. They charge 2% in and 2% out. Then I set up a custodial account on Etrade for her and put the rest of her money in the same funds he used. This way i have a professional I can use for advice without them stealing my /her money.

And i realize that although the more money they make you the more they make for themselves but they aren't as attached. I just don't believe in buying stocks or mutual funds and not keeping an eye on performance. what good is a stock that you bought at $20 and over 10 years goes up to $70 but at the end of the 10 years it's sitting at $20 again .

Can't say I understand the mentality of doing as much active trading as you do but losing 2% of it to EJ...

[Amnorix]

Originally Posted by DaFace

Can't say I understand the mentality of doing as much active trading as you do but losing 2% of it to EJ...

I may be misunderstanding, but I think he means he's putting a small amount into an account EJ manages -- or where they make recommendations -- and a vastly larger amount into an ETrade account which he will use to mirror what EJ is doing/recommending. That way he pays the 2% fee on only a small portion of the total amount that is being invested using the EJ strategy.

[Hog's Gone Fishin]

Originally Posted by Amnorix

I may be misunderstanding, but I think he means he's putting a small amount into an account EJ manages -- or where they make recommendations -- and a vastly larger amount into an ETrade account which he will use to mirror what EJ is doing/recommending. That way he pays the 2% fee on only a small portion of the total amount that is being invested using the EJ strategy.

Bingo. Having an account with them just gives me access to their recommendations.

[DaFace]

Originally Posted by Amnorix

I may be misunderstanding, but I think he means he's putting a small amount into an account EJ manages -- or where they make recommendations -- and a vastly larger amount into an ETrade account which he will use to mirror what EJ is doing/recommending. That way he pays the 2% fee on only a small portion of the total amount that is being invested using the EJ strategy.

Originally Posted by Hog's Gone Fishin

Bingo. Having an account with them just gives me access to their recommendations.

Gotcha. That makes a lot more sense (though I don't personally get much out of their recommendations - to each his own).

[Hog's Gone Fishin]

Originally Posted by DaFace

Gotcha. That makes a lot more sense (though I don't personally get much out of their recommendations - to each his own).

my last conversation with them I asked what he looked for in analyzing a stock.

His reply)
1. Insider buying
2. FCF
3. A wide Moat

Those would be 3 signs of good potential

Also I asked him about several individual stocks I was looking at and he emailed me a detailed report on each one. so that was helpful

[Buehler445]

Originally Posted by Hog's Gone Fishin

my last conversation with them I asked what he looked for in analyzing a stock.

His reply)
1. Insider buying
2. FCF
3. A wide Moat

Those would be 3 signs of good potential

Also I asked him about several individual stocks I was looking at and he emailed me a detailed report on each one. so that was helpful

Is that EJ guy out of Liberal?

[Hog's Gone Fishin]

Originally Posted by Buehler445

Is that EJ guy out of Liberal?

No He's down by Waco

[Cornstock]

Originally Posted by Hog's Gone Fishin

my last conversation with them I asked what he looked for in analyzing a stock.

His reply)
1. Insider buying
2. FCF
3. A wide Moat

Those would be 3 signs of good potential

Also I asked him about several individual stocks I was looking at and he emailed me a detailed report on each one. so that was helpful

It's a slippery slope for financial advisors to get into, recommending individual stocks to clients while simultaneously managing a diversified portfolio for them. All kinds of room for conflicts of interest.

But, Edward Jones. So...

[Cornstock]

Has anyone else checked out their paychecks since the new tax law went into place? I had tried to calculate what my take home increase would be but I actually underestimate by quite a bit!

#trumpmoney

[eDave]

Originally Posted by Cornstock

Has anyone else checked out their paychecks since the new tax law went into place? I had tried to calculate what my take home increase would be but I actually underestimate by quite a bit!

#trumpmoney

Mines a little funky as my per paycheck tax deduction went up. And that's after I put $500 more per paycheck towards 401k catch-up. Even without the tax cuts, my tax deduction should be down due to the increased 401k deduction. But it's up $7.

Need to investigate.

[Buehler445]

Originally Posted by eDave

Mines a little funky as my per paycheck tax deduction went up. And that's after I put $500 more per paycheck towards 401k catch-up. Even without the tax cuts, my tax deduction should be down due to the increased 401k deduction. But it's up $7.

Need to investigate.

I forget, does AZ have state income tax? Kansas can suck my cock.

[eDave]

Originally Posted by Buehler445

I forget, does AZ have state income tax? Kansas can suck my cock.

We do. I'm just referencing Fed.