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IRA self management

5K views 23 replies 9 participants last post by  Richard11111 
#1 ·
I have made the decision that I cannot afford to pay the 1.25% yearly fee I currently have to get my nest egg actively managed.

I am going to start a 3 or four fund "lazy" portfolio that I will rebalance myself 0nce a year. I also need to set up an income stream from my pile.

Has anyone done this or know someone that can help guide me through that process ? Right now, I know what I want the final product to fundamentally look like I just dont know how to make that happen
 
#2 ·
I do not have any specific advice, just words of encouragement.

First- what do you want your "product" to look like?

I manage my own portfolio and recently took over a relative's with a few mm in it. I let Fidelity keep half of that portfolio and we'll see who does better after a year.

I bet you will not have much difficulty improving the performance of your portfolio.
The one I took over has underperformed the market every year since forever. I had 3 meetings trying to understand fidelity's reasoning for staying in investment products that underperform year after year, forever. I came out of those 3 meetings still not understanding.
The only number I want to see is performance over 3, 5, 10, 20 years. Don't keep my money in something that loses money year after year for 10 years for the sake of diversity.
If you improved investor's balances by playing defense, show me in which downturn you performed.

As far as lazy man goes- you should be able to see what your advisors have had you in the last few years. Or, you can see what they have you in now and research those historic performances.
I can tell you how to invest in a 70/30 stock to bond mix that underperforms the market by 50%.

With all the access to information and to analyst forecasts online these days, I suggest you look at individual stocks within each mutual fund. Stick with historic performers with unanimously positive projected forecasts and avoid the losers with poor history and projections.
I have been managing my portfolio for 6 years now and have beaten the market every year without exception, by 200% to 300% of S&P 500 returns. That's enough of a track record for me. It will take a long long long market correction for a defensive investment strategy to beat where I have gotten.
We'll see what Fidelity can do vs. me in the next 12 months.

Anyways man. You can do it.
Check cnnmoney, zacks, and yahoo finance for analyst ratings on individual stocks. When they all align, you may want to invest some in that company.
Good luck.
If you want to test without committing, shift half of your portfolio to a self managed account.
 
#6 ·
I do not have any specific advice, just words of encouragement.

First- what do you want your "product" to look like?

I manage my own portfolio and recently took over a relative's with a few mm in it. I let Fidelity keep half of that portfolio and we'll see who does better after a year.

I bet you will not have much difficulty improving the performance of your portfolio.
The one I took over has underperformed the market every year since forever. I had 3 meetings trying to understand fidelity's reasoning for staying in investment products that underperform year after year, forever. I came out of those 3 meetings still not understanding.
The only number I want to see is performance over 3, 5, 10, 20 years. Don't keep my money in something that loses money year after year for 10 years for the sake of diversity.
If you improved investor's balances by playing defense, show me in which downturn you performed.

As far as lazy man goes- you should be able to see what your advisors have had you in the last few years. Or, you can see what they have you in now and research those historic performances.
I can tell you how to invest in a 70/30 stock to bond mix that underperforms the market by 50%.

With all the access to information and to analyst forecasts online these days, I suggest you look at individual stocks within each mutual fund. Stick with historic performers with unanimously positive projected forecasts and avoid the losers with poor history and projections.
I have been managing my portfolio for 6 years now and have beaten the market every year without exception, by 200% to 300% of S&P 500 returns. That's enough of a track record for me. It will take a long long long market correction for a defensive investment strategy to beat where I have gotten.
We'll see what Fidelity can do vs. me in the next 12 months.

Anyways man. You can do it.
Check cnnmoney, zacks, and yahoo finance for analyst ratings on individual stocks. When they all align, you may want to invest some in that company.
Good luck.
If you want to test without committing, shift half of your portfolio to a self managed account.
I have a fidelity wealth managed account that I do the same thing with. They manage some roll over stuff from previous employers and I manage my current stuff. Usually in down years they are better, in up years I am. But they we are invested in different things I show up for my reviews with them with my spreadsheet that I started in the the ‘90s and we compared it to their model. They run 1000s of scenarios and I adjust my current year spreadsheet. My current self managed stuff is all Roth with a growth mindset that I rebalance every 6 months, the fidelity stuff is more conservative and will be passed to my kids in 30 years unless I lose all my self directed stuff. I had always managed my own and did well, but I like them checking in with me when the market or oil or China gets screwy and they keep me focused. Is it worth 0.45%, I don’t know but I think of it as a risk management tool and something that my wife can call them some day and say I dropped dead and they take care of the money details.


Sent from my iPhone using Tapatalk
 
#5 ·
I have always done it myself. Moved everything from fidelity to vanguard about 28 yrs ago & never looked back. I currently have our 401ks/IRAs allocated to 4 funds (mostly in bonds for monthly income as we are in our 70s).

VEIRX - Vanguard Equity-Income (Stocks)
VFIDX - Vanguard Interm-Term Investment-Grade Bonds
VBTLX - Vanguard Total Bond Market Index
VTXVX - Vanguard Target Retirement 2015 (Balanced)
 
#11 ·
I used to have a private client account with x (x=pick any of them). I would have quarterly phone meetings to listen to their suggestions which I always went with. I always looked at my account and noticed I was 0.66 of benchmark. I always wondered why I couldn't just have the bench mark. After cutting back at work I decided to take charge of my own account and save the fee (was at $20K when I scaled back). After studying youtube I realized I could own the benchmark by basically using a fisherman's, coach potato, lazy man's portfolio. These all the same in that they are index broad market stock and bond mix for my age. I now always beat the benchmark since I never own foreign.
It is well known that most advisors don't beat the market though they try and charge you for it. I instead went with Jack Boggles suggestion of not trying to beat the market but be (buy) the market.

I've been beating the market now for 7 years which is the time I've been in control of my money.
 
#13 ·
The market is the US economy. I own basically the S&P 500(US economy in the large cap category) and 10 yr Bond index and other things to make it interesting. The % split of stock to bonds is based on age. I also learned a lot from lurking on boglehead forum personal investing (https://www.bogleheads.org/forum/) and later asking questions for guidance. A lot of people want to chase the latest sexy things. Remember that it's not about timing the market but time in the market to get good returns. If you sell because you think something else may be better than what you got means you get to pay taxes on capital gains. It does appear to be overwhelming at first but after a while it becomes easy to grasp.
 
#15 ·
You won’t go poor doing the index
SPY is the S&P 500
- what you don’t realize is the top 50 names make up 50% of that index
XLG is the top 50 names- if you want to play them

you could take a balance approach to the S&P and do RSP - which is the Equal weight of all 500 names in the S&P

at different periods these all out preform SPY ….

where one might be fearful is during a downturn of an extended time or sideways movement
- a licensed advisor with a good firm can guide you through this

would you do a major overhaul on your outboard before a big offshore trips, where if the motor fails you die? ( yes that’s an extreme analogy )
  • my point is, the advisor your with is someone you trust with your financial life
  • if you don’t trust them find one you do, but having an advisor keeps you from going to a fishing board or YouTube for advice

our behavior is our biggest enemy when it comes to finance
its why there are a ton of Behavior Financial classes for those in the business … good FA’s follow the practice and keep calm and follow a process based on FACT not emotional decision

just my 2-cents gentleman

the above information is not financial advice. Please seek a professional opinion and not a fishing board chatter
 
#16 · (Edited)
You won’t go poor doing the index
SPY is the S&P 500
- what you don’t realize is the top 50 names make up 50% of that index
XLG is the top 50 names- if you want to play them

you could take a balance approach to the S&P and do RSP - which is the Equal weight of all 500 names in the S&P

at different periods these all out preform SPY ….

where one might be fearful is during a downturn of an extended time or sideways movement
- a licensed advisor with a good firm can guide you through this

would you do a major overhaul on your outboard before a big offshore trips, where if the motor fails you die? ( yes that’s an extreme analogy )
  • my point is, the advisor your with is someone you trust with your financial life
  • if you don’t trust them find one you do, but having an advisor keeps you from going to a fishing board or YouTube for advice

our behavior is our biggest enemy when it comes to finance
its why there are a ton of Behavior Financial classes for those in the business … good FA’s follow the practice and keep calm and follow a process based on FACT not emotional decision

just my 2-cents gentleman

the above information is not financial advice. Please seek a professional opinion and not a fishing board chatter
To use a financial advisor adds 1% (industry average cost) to the cost of being invested. S&P cost is likely 0.04% expense ratio, XLG and RSP cost is 0.2%. I have had different "advisors" over about 15 yrs with schwab managing my money. At no point did any of these guys get beyond 66% of benchmark. Anything that cost to be in the market means loss of money you would have in your account and it's compounding power.
To not be in invested in the market means loss of the growth of money which gets you a -2%return on money (inflation). Of coarse being in the market without the emotion/fear is paramount.
Of coarse 66% of benchmark is better than nothing so if a person feels that they are not equipped with the ability to educate themself then than is better than -2% return from not being invested.

I'm not sure if it possible but will see if I can post a link that will compare the various indexes mentioned above.
Click on various time periods to see that each has it time where it outperforms the other. Just buy and hold.
As I stated time in the market outperforms market timing .

Click on link below for comparison.


https://finance.yahoo.com/chart/XLG#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-
 
#17 ·
Great info, thank you all.
What I keep reading time and time again is about small cap asset class and value asset classes (large and small cap value). What all of these asset classes have in common is they are also a part of the US economy and all of them over the last 20, 50 and 75 years have outgrown the S&P 500 (large-cap stocks), by 2-4% per year. So I understand wanting to save 1% but are we really just costing ourselves more by not participating in the real “entire market”.
staring to think people don’t even know this world exists. All the TV refers to is Dow and S&P, kinda like they are BSing us.
 
#18 · (Edited)
Great info, thank you all.
What I keep reading time and time again is about small cap asset class and value asset classes (large and small cap value). What all of these asset classes have in common is they are also a part of the US economy and all of them over the last 20, 50 and 75 years have outgrown the S&P 500 (large-cap stocks), by 2-4% per year. So I understand wanting to save 1% but are we really just costing ourselves more by not participating in the real “entire market”.
staring to think people don’t even know this world exists. All the TV refers to is Dow and S&P, kinda like they are BSing us.
The size ($ value) of a company determines if they are small, mid or large cap. Small cap are very volatile so you will see large swings in their value which made me uncomfortable. Because of this I do not own. Because small caps dont have the reserves of larger companies they struggle in hard times.


I will post a sample of a small cap vs mid vs large cap return chart in a few minutes

You are asking good questions before jumping in. That's great
 
#19 · (Edited)
Ok here is a copy of a screen that should pop up when you click on link I will attach. The left red arrow is where to add various ETF, mutual funds, or individual stocks to compare. The second arrow is time range to compare over. Notice The 2 yr is bolder which is what this date range is comparing. I use schwab ETF since these are what I know symbols for. Fidelity and Vanguard have their own same product just different symbols. To verify just punch in the comparison. They should overlay about the same.

Past performance does not guarantee future returns. I'm sure you've seen this disclaimer.

Product Rectangle Slope Azure Plot


https://finance.yahoo.com/chart/SCHX#eyJpbnRlcnZhbCI6IndlZWsiLCJwZXJpb2RpY2l0eSI6MSwidGltZVVuaXQiOm51bGwsImNhbmRsZVdpZHRoIjo4LjcxNDI4NTcxNDI4NTcxNCwiZmxpcHBlZCI6ZmFsc2UsInZvbHVtZVVuZGVybGF5Ijp0cnVlLCJhZGoiOnRydWUsImNyb3NzaGFpciI6dHJ1ZSwiY2hhcnRUeXBlIjoibGluZSIsImV4dGVuZGVkIjpmYWxzZSwibWFya2V0U2Vzc2lvbnMiOnt9LCJhZ2dyZWdhdGlvblR5cGUiOiJvaGxjIiwiY2hhcnRTY2FsZSI6InBlcmNlbnQiLCJwYW5lbHMiOnsiY2hhcnQiOnsicGVyY2VudCI6MSwiZGlzcGxheSI6IlNDSFgiLCJjaGFydE5hbWUiOiJjaGFydCIsImluZGV4IjowLCJ5QXhpcyI6eyJuYW1lIjoiY2hhcnQiLCJwb3NpdGlvbiI6bnVsbH0sInlheGlzTEhTIjpbXSwieWF4aXNSSFMiOlsiY2hhcnQiLCLigIx2b2wgdW5kcuKAjCJdfX0sInNldFNwYW4iOnsibXVsdGlwbGllciI6MiwiYmFzZSI6InllYXIiLCJwZXJpb2RpY2l0eSI6eyJwZXJpb2QiOjEsImludGVydmFsIjoid2VlayJ9fSwibGluZVdpZHRoIjoyLCJzdHJpcGVkQmFja2dyb3VuZCI6dHJ1ZSwiZXZlbnRzIjp0cnVlLCJjb2xvciI6IiMwMDgxZjIiLCJzdHJpcGVkQmFja2dyb3VkIjp0cnVlLCJldmVudE1hcCI6eyJjb3Jwb3JhdGUiOnsiZGl2cyI6dHJ1ZSwic3BsaXRzIjp0cnVlfSwic2lnRGV2Ijp7fX0sImN1c3RvbVJhbmdlIjpudWxsLCJzeW1ib2xzIjpbeyJzeW1ib2wiOiJTQ0hYIiwic3ltYm9sT2JqZWN0Ijp7InN5bWJvbCI6IlNDSFgiLCJxdW90ZVR5cGUiOiJFVEYiLCJleGNoYW5nZVRpbWVab25lIjoiQW1lcmljYS9OZXdfWW9yayJ9LCJwZXJpb2RpY2l0eSI6MSwiaW50ZXJ2YWwiOiJ3ZWVrIiwidGltZVVuaXQiOm51bGwsInNldFNwYW4iOnsibXVsdGlwbGllciI6MiwiYmFzZSI6InllYXIiLCJwZXJpb2RpY2l0eSI6eyJwZXJpb2QiOjEsImludGVydmFsIjoid2VlayJ9fX0seyJzeW1ib2wiOiJTQ0hBIiwic3ltYm9sT2JqZWN0Ijp7InN5bWJvbCI6IlNDSEEifSwicGVyaW9kaWNpdHkiOjEsImludGVydmFsIjoid2VlayIsInRpbWVVbml0IjpudWxsLCJzZXRTcGFuIjp7Im11bHRpcGxpZXIiOjIsImJhc2UiOiJ5ZWFyIiwicGVyaW9kaWNpdHkiOnsicGVyaW9kIjoxLCJpbnRlcnZhbCI6IndlZWsifX0sImlkIjoiU0NIQSIsInBhcmFtZXRlcnMiOnsiY29sb3IiOiIjZmY4MGM1Iiwid2lkdGgiOjIsImlzQ29tcGFyaXNvbiI6dHJ1ZSwic2hhcmVZQXhpcyI6dHJ1ZSwiY2hhcnROYW1lIjoiY2hhcnQiLCJzeW1ib2xPYmplY3QiOnsic3ltYm9sIjoiU0NIQSJ9LCJwYW5lbCI6ImNoYXJ0IiwiZmlsbEdhcHMiOmZhbHNlLCJhY3Rpb24iOiJhZGQtc2VyaWVzIiwic3ltYm9sIjoiU0NIQSIsImdhcERpc3BsYXlTdHlsZSI6InRyYW5zcGFyZW50IiwibmFtZSI6IlNDSEEiLCJvdmVyQ2hhcnQiOnRydWUsInVzZUNoYXJ0TGVnZW5kIjp0cnVlLCJoZWlnaHRQZXJjZW50YWdlIjowLjcsIm9wYWNpdHkiOjEsImhpZ2hsaWdodGFibGUiOnRydWUsInR5cGUiOiJsaW5lIiwic3R5bGUiOiJzdHhfbGluZV9jaGFydCIsImhpZ2hsaWdodCI6ZmFsc2V9fSx7InN5bWJvbCI6IlNDSE0iLCJzeW1ib2xPYmplY3QiOnsic3ltYm9sIjoiU0NITSJ9LCJwZXJpb2RpY2l0eSI6MSwiaW50ZXJ2YWwiOiJ3ZWVrIiwidGltZVVuaXQiOm51bGwsInNldFNwYW4iOnsibXVsdGlwbGllciI6MiwiYmFzZSI6InllYXIiLCJwZXJpb2RpY2l0eSI6eyJwZXJpb2QiOjEsImludGVydmFsIjoid2VlayJ9fSwiaWQiOiJTQ0hNIiwicGFyYW1ldGVycyI6eyJjb2xvciI6IiNmZmU3ODYiLCJ3aWR0aCI6MiwiaXNDb21wYXJpc29uIjp0cnVlLCJzaGFyZVlBeGlzIjp0cnVlLCJjaGFydE5hbWUiOiJjaGFydCIsInN5bWJvbE9iamVjdCI6eyJzeW1ib2wiOiJTQ0hNIn0sInBhbmVsIjoiY2hhcnQiLCJmaWxsR2FwcyI6ZmFsc2UsImFjdGlvbiI6ImFkZC1zZXJpZXMiLCJzeW1ib2wiOiJTQ0hNIiwiZ2FwRGlzcGxheVN0eWxlIjoidHJhbnNwYXJlbnQiLCJuYW1lIjoiU0NITSIsIm92ZXJDaGFydCI6dHJ1ZSwidXNlQ2hhcnRMZWdlbmQiOnRydWUsImhlaWdodFBlcmNlbnRhZ2UiOjAuNywib3BhY2l0eSI6MSwiaGlnaGxpZ2h0YWJsZSI6dHJ1ZSwidHlwZSI6ImxpbmUiLCJzdHlsZSI6InN0eF9saW5lX2NoYXJ0IiwiaGlnaGxpZ2h0IjpmYWxzZX19XSwic3R1ZGllcyI6eyLigIx2b2wgdW5kcuKAjCI6eyJ0eXBlIjoidm9sIHVuZHIiLCJpbnB1dHMiOnsiaWQiOiLigIx2b2wgdW5kcuKAjCIsImRpc3BsYXkiOiLigIx2b2wgdW5kcuKAjCJ9LCJvdXRwdXRzIjp7IlVwIFZvbHVtZSI6IiMwMGIwNjEiLCJEb3duIFZvbHVtZSI6IiNmZjMzM2EifSwicGFuZWwiOiJjaGFydCIsInBhcmFtZXRlcnMiOnsid2lkdGhGYWN0b3IiOjAuNDUsImNoYXJ0TmFtZSI6ImNoYXJ0IiwicGFuZWxOYW1lIjoiY2hhcnQifX19fQ--
 
#21 ·
Yeah I was reading about the higher volatility in small cap and value stocks. That’s when I started looking up “what is diversification” and found Dr. Harry Markowitz Nobel prize research of modern portfolio theory.
It says that when you own multiple asset classes like small and large and value that you actually lower your risk below just “S&P (large)” because they are Non Correlated asset classes. They all don’t go up or down always at the same time.
I was really glad to see this since I knew the S&P had a -1% return for 10 years. That would be devastating to my wealth had I been in my 40’s or 50’s.
Multiple non correlated asset classes seems to be my answer to risk management
 
#23 ·
Could they be suggesting only a small % of small cap so when we look at our portfolio compared to the media referenced S&P, we see it performing similar and are content. I’d be interested in looking at their empirical data that suggests having the largest portion of your money in the lower returning as a class like the S&P large cap and only a small portion of the highest returning asset class like small cap or value stocks. Something doesn’t seem right
 
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