Money and Investing (formerly Pfizer Stock prices)
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FWIW here is my take on FA and other financial experts such has those who write for WSJ, Barrons:
I think that a FA can help those who want to set up portfolios for those people who are at various stages in their lives to manage risk/benefit.
For example when I was in my mid 20's I set up my portfolio keeping in mind that I was going to purchase and furnish a house several years hence and a certain amount of cash had to be available then regardless of the vagaries of the stock market. The rest of my portfolio was set up based a a healthy young guy with a decent amount of disposable income.
I didn't need a FA as I felt I knew what I was doing.
As far as where the market and the economy and/or stock market (not always going in the same direction) was going I don't think a FA can help nor do I think the financial experts do either.
So having a FA recommend to keep higher equity weights for him even though Trader had a feeling a correction was imminent is not a failing of the FA. An imminent correction has been forecast for past couple of years by financial experts along with other financial experts believing the bull market still had a few more years to run.
If you read this weeks Barons you can read about how their panel of experts missed their predictions for 2021 and trailed the benchmarks.
Nobody knows.
FWIW here is my take on FA and other financial experts such has those who write for WSJ, Barrons:
I think that a FA can help those who want to set up portfolios for those people who are at various stages in their lives to manage risk/benefit.
For example when I was in my mid 20's I set up my portfolio keeping in mind that I was going to purchase and furnish a house several years hence and a certain amount of cash had to be available then regardless of the vagaries of the stock market. The rest of my portfolio was set up based a a healthy young guy with a decent amount of disposable income.
I didn't need a FA as I felt I knew what I was doing.
As far as where the market and the economy and/or stock market (not always going in the same direction) was going I don't think a FA can help nor do I think the financial experts do either.
So having a FA recommend to keep higher equity weights for him even though Trader had a feeling a correction was imminent is not a failing of the FA. An imminent correction has been forecast for past couple of years by financial experts along with other financial experts believing the bull market still had a few more years to run.
If you read this weeks Barons you can read about how their panel of experts missed their predictions for 2021 and trailed the benchmarks.
Nobody knows.
What do you want from a FA? Because Fa’s are not good at making money. That’s a game for Hedge Fund managers and private equity and some Mutual Fund managers. FA’s are good at keeping you in a path towards the financial goals you should have established at your first meeting, and then updated each year. For the majority of investors, staying invested when you’d otherwise bail out of fear is far more important than beating an index by 100-200 basis points. If you have ice in your veins and are disciplined, then buy the index and close your eyes for 30 years. But in my almost 30 years of giving financial advice, I’ve never met someone that can do that. But my clients that have followed my advice, and stuck to my plan, have all achieved their goals prior to when they said they needed to. Just my humble opinion.
Maybe if I ever get to meet you will be able to say that you did meet someone like that.
Most of my investments have always been index funds/etf's with the following exceptions: I've invested in high tech companies that I've either consulted for or if I've used their products in products my company made where I felt that their products, in my opinion, were far superior to competitors and management committed (as did my company) to adequately fund R&D to continue improving their products.
These investments over the past 30 years have wildly improved my (although very good from the indexes) investment returns. All these companies were fairly small (although not small now).
I never invested, until recently (I'm getting old) in bonds, bond funds, preferred stock with the following exceptions: I played with heavily discounted (and hence high yield) convertible bonds that were thinly traded and where their niche products (some quite ordinary like in one case, a seat belt company) where there stock was so low that it was cheaper for a larger company to acquire the company than set up and manufacture the products themselves or purchase from suppliers. The high yield allowed me to wait out my theories and when acquired, the bonds were paid off at face. I don't do this anymore.
I do not think a FA would have approved of my allocations.
Most of my investments have always been index funds/etf's with the following exceptions: I've invested in high tech companies that I've either consulted for or if I've used their products in products my company made where I felt that their products, in my opinion, were far superior to competitors and management committed (as did my company) to adequately fund R&D to continue improving their products.
These investments over the past 30 years have wildly improved my (although very good from the indexes) investment returns. All these companies were fairly small (although not small now).
I never invested, until recently (I'm getting old) in bonds, bond funds, preferred stock with the following exceptions: I played with heavily discounted (and hence high yield) convertible bonds that were thinly traded and where their niche products (some quite ordinary like in one case, a seat belt company) where there stock was so low that it was cheaper for a larger company to acquire the company than set up and manufacture the products themselves or purchase from suppliers. The high yield allowed me to wait out my theories and when acquired, the bonds were paid off at face. I don't do this anymore.
I do not think a FA would have approved of my allocations.
You’re proving my point. Anyone that has the skill and discipline will not meet with me, because they don’t need to. If someone walks through my door, it’s because they can’t do what you do. Or don’t want to. Let’s face it, there’s a cost to asking someone to perform a task that you don’t want to. I could save a ton of money if I learned to fix my plumbing or wiring or mow my lawn etc. but I find that it’s a better long term value to hire someone that can do it for me.
and as far as your allocation? What’s wrong with it? I have clients in their 70’s and 80’s who only own stock because they don’t care about volatility and dividends and other income streams provide enough annual income so they simply want the best chance to grow their wealth for the next generation. That’s what financial planning is all about, IMO, determining goals and then building the right strategy to achieve them. Pretty simple, yet quite complex.
and as far as your allocation? What’s wrong with it? I have clients in their 70’s and 80’s who only own stock because they don’t care about volatility and dividends and other income streams provide enough annual income so they simply want the best chance to grow their wealth for the next generation. That’s what financial planning is all about, IMO, determining goals and then building the right strategy to achieve them. Pretty simple, yet quite complex.
Very valid thoughts here
OS points out-
AN FA keeps one on the right path, while a HFM will try and capitalize on the swings and look play the volatility—
Where does one find both- My million dollar question. I need the discipline ( which is why I don’t do it on my own) but, prefer to ..try.. and capitalize on the swings… A delicate balance
Will I be firing my FA- most likely not. My performance over the past years has been acceptable, considering the risk I comfortable with.. Access and customer service excellent… Keeping me in check, excellent, considering I am stubborn and do occasionally play Monday morning QB
OS points out-
AN FA keeps one on the right path, while a HFM will try and capitalize on the swings and look play the volatility—
Where does one find both- My million dollar question. I need the discipline ( which is why I don’t do it on my own) but, prefer to ..try.. and capitalize on the swings… A delicate balance
Will I be firing my FA- most likely not. My performance over the past years has been acceptable, considering the risk I comfortable with.. Access and customer service excellent… Keeping me in check, excellent, considering I am stubborn and do occasionally play Monday morning QB
No, I did not suggest I could or would do that…
I was addressing OS post highlighting the difference between a FA and Hedge Fund Manager..
On a side note-My FA ( rightfully so) has always dissuaded me from “day trading”.. At their suggestion, I opened a separate account to try and reap the rewards of excess volatility and the flavors of the day….I’ll be the first to admit- Despite years of experience, net- net I’m either side of zero on these short term trades..
I was addressing OS post highlighting the difference between a FA and Hedge Fund Manager..
On a side note-My FA ( rightfully so) has always dissuaded me from “day trading”.. At their suggestion, I opened a separate account to try and reap the rewards of excess volatility and the flavors of the day….I’ll be the first to admit- Despite years of experience, net- net I’m either side of zero on these short term trades..
yeah in the context of actually trying to time the market perfectly but not in terms of moving money across different investments as social and economic conditions change. That’s just prudent. I took a lot of profit coming into the year end even knowing I’d have to take the tax hit early because I also knew measures would be taken against inflation this spring. That’s not market timing. Now I have extra dry powder and am taking advantage of the current opportunities.
i think that is all Trader was talking about.
i think that is all Trader was talking about.
Obviously only God can time perfect so the question of perfect tlming is a silly discussion.
But if your moving to safe harbors within your stocks during times like these when you look back a few yrs from now you'd of been better off to have stayed long. When market hits bottom it can melt up ferociously and if your not it your opportunity costs can tremendous. Since no bell rings at the bottom the only way to assure you are in at that moment is to not sell.
But if your moving to safe harbors within your stocks during times like these when you look back a few yrs from now you'd of been better off to have stayed long. When market hits bottom it can melt up ferociously and if your not it your opportunity costs can tremendous. Since no bell rings at the bottom the only way to assure you are in at that moment is to not sell.