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Everything posted by FrenchTeacher

  1. He chooses not to participate. You did, in fact, ask me to ask him his opinion on this question. I've done nothing more than provide it. What a shocker that you malign him...after all, since he disagrees with you, he must be little more than a "shark"! No doubt you'd be quite satisfied with me quoting him if his reaction had been more like "Actually, he's right."
  2. Hey, a few pages ago, you asked me to go to him for his opinion. Well, here it is. If you don't like it, just do what you do with all the other dissenting opinions you're presented with and ignore him!
  3. Ira, Nice chatting with you! In the end, I do understand the appeal of indexing. It's low-maintenance, and it virtually assures that you're not trailing the averages by more than a handful of basis points. Of course, that brings me to the downside of indexing: it's low-maintenance (i.e., no "detective work" involved, which I'm starting to like), and it virtually assures that you are trailing the averages, even if only by a handful of basis points. :-) So yes, I feel kind of schizophrenic in my approach. At the end of the day, I think when my life gets too busy (as it sometimes threatens to do), I'm going to yearn for the less active role to play, which will probably mean a few steps towards your approach.
  4. Ira, as to your first point, I wasn't arguing that indexing is a crapshoot, merely that different index funds seem to achieve different correlations to the index they are trying to capture. I will certainly concede your point that the correlation level is usually (if not always) quite high, regardless. In the previous discussion, didn't we collectively conclude that indexing makes a lot more sense when we're chasing the returns of the large-cap indices, and that active funds held an advantage when it came to small-cap and foreign indices? That was at least being debated. In the end, of course, if you're happy with a 100% large-cap allocation, then I guess a pure indexing approach can work; if you practice any kind of asset allocation, though, it would seem to make some sense to look at actively-managed small-cap and global/international funds. I'm not sure how you can substantiate when you say that "the [active funds] that do better can be attributed to chance." Do you seriously believe there's no talent involved in beating the index consistently, year after year? What scientific basis is there for writing such outperformance off to chance? I'll read Bogle's book, since it's summertime and as of next week I'll have nothing but time on my hands. But it doesn't shock me, right away, to learn that the former CEO of Vanguard is a proponent of no-load, passive investing. That's kind of like reading a book by Merrill Lynch's CEO and discovering that he's a proponent of ownership of individual stocks, no? Nevertheless, I will read it; as someone who wants to learn more about investing, I'm open to all points of view. In the end, Ira, I wonder if the allusion to "doubters" that you make is the most telling of all. I'm not here to spread the gospel of active investing, nor am I here to become a disciple of passive investing. I want to learn more about each, and to keep an open mind to whatever works. I would hope that that's everyone's approach.
  5. His direct response: "Who IS this guy? Everyone knows fixed annuities don't have M&E fees!"
  6. The full designation I used was "the likes of Sierra." And I stand by that. I wouldn't subject someone I DIDN'T like to the likes of you, much less someone whose advice and input I value.
  7. Call it whatever you'd like. "The LIKES OF Sierra" (don't take that too personally, pal) means the generally anti-agent people who roam this board, and who might well decide to take up their agenda with him. You are only one of them, much as you'd like to be considered synonymous with this board. Besides which, even if you promise, cross your heart and hope to die, is there some reason I should trust you? I don't even know you.
  8. Let's abandon this one early, folks, OK? I'm not posting the name of my rep here. He's read the board, and no doubt can post his own name if he so chooses. If he does, I'll happily vouch for him, but I'll not toss him to the wolves myself.
  9. I agree that we should not treat the unlikely as impossible...but neither should we treat the unlikely as likely. Joes (no relation, right?) may have overstated his case when he referred to fixed annuities as riskless, but the "going under" of an insurance company is a fairly rare event, and seldom comes out of the blue. You're absolutely right that a check of the company's rating is usually sufficient to have confidence in all their stated guarantees.
  10. Sierra, is it possible that you have the name of the company wrong or something? I googled "Mutual Benefit Life Insurance Company" and couldn't find any references. Would like to read more about the failure of this company.
  11. Ira, I have mentioned in this space before that my account is with ING, and I have gone through which investments as well...I'd be happy to do so again next time I have my statement in front of me. I think you'll see when I do that my asset allocation is not rocket science, nor is it necessarily "better" or "worse" than anyone else's. It has simply worked out for me so far, and it's something that I never would have done on my own. The advice I have gotten has indeed been well worth everything I've paid. Will it continue to be worth every penny in the future? Good question. I've learned a lot in the past year or two, and may not feel the need to pay an advisor in the future, especially as my balance grows. As for the name of the advisor, I have indeed shared his name with a couple of people on this board via PM, and with many others in "real life" in my district. You'll understand, I'm sure, if I don't post his name here, so that he can be haunted by phone calls for the rest of his life by the likes of Sierra. HIs qualifications, for the record, including being a certified financial planner, and a graduate of a four-year college, though I have no idea which one.
  12. Steve, how is this lack of guarantee any less true for an index fund? If you do a little reading on how an index fund is set up, you know that it isn't the index per se, but a fund of investments that frequently include options and forward contracts, all designed to perform almost exactly like the index. And yet, some index fund mimic the index much more accurately than others. How do we know which ones will replicate the index the most successfully in the future? Most of the passive investors on this board recommend index investments based on...gasp!...past performance. They have always come close to the index's actual performance in the past, so they are likely to do so in the future. Well, guess what? Active investors make their decisions in the same way. And just as past performance serves as a guidepost, not a guarantee, for passive investors, so does it indicate what is likely, not guaranteed, for future performance. I'll grant you that the active investor has more to keep an eye on than the index investor, including most importantly whether the fund manager stays in place. But it's silly to wave off an entire class of investments merely because they, like ALL OTHERS, are not "guaranteed" to perform in a certain way in the future. I've said before, and I'll say again: anyone looking for guarantees has no business in the equity market to begin with.
  13. I think I said 1%, not 2%. At any rate, that 1% is costly, but improper asset allocation and/or a complete lack of participation at all is even more costly. Given that, the expense ratios that I pay in my VA are more than reasonable, I find. The people that I was referring to in my comment are those that are paying 1%, realizing little or nothing in exchange for that 1%, and proceeding under the wrong assumption that 1% annually is an insignificant amount of money. It certainly IS a significant amount of money, and anyone paying it better be getting something valuable in return for that money.
  14. There's probably no good way to measure this metric (how many people want service vs. how many people don't). I think a lot of the people who are buying from agents wouldn't necessarily list "great service" as the reason they're doing so, but I'm just guessing. By the same token, I have a really hard time believing that people "don't know about no load funds." In my district, there are three no-load carriers offered, and while they don't dominate the market in my local, everyone is well aware of them. On a larger scale, it's even harder to imagine that people are unaware of no-loads: Fidelity, TIAA-CREF, et al sure seem to spend a decent amount of advertising dollars. What I CAN imagine, though, is that an awful lot of people aren't really aware of how 1% less per year on their returns will impact their savings in the long run.
  15. This is a half-truth, at best. I believe that certain advisors do not go out of their way to fully disclose costs, so you have a point. By the same token, all such funds are sold by prospectus only, and the prospectus discloses ALL costs. So the consumer bears some burden for his/her ignorance, as well. To me, that is the TRUE value of a site like this one: it might bring enlightenment to investors who are otherwise unaware of such costs, even though they should be. In a perfect world, ALL advisors would do their proper footwork and educate their clients accordingly. I'm not sure what percentage do so, but I do know the number falls short of 100%.
  16. Financial Services = Big Tobacco. Merchants of death, both. Hang 'em all, I say. ;-)
  17. I find it interesting that you claim to have read this quote three days ago, yet chose to omit it from your original citation from the prospectus. The reason couldn't be more obvious: it's the only place where the prospectus clearly and directly addresses the subject of M&E charges, and it clearly refutes what you are saying. The line is simple and clear: "These charges are only applicable to the variable funding options." There is no "interpretation" needed, unless you are trying to spin the meaning. The charges DO NOT APPLY in any way, shape or form to the fixed option. They are ONLY applicable to the VARIABLE funding options. I'd find a simpler way of phrasing it if there were one. Joel, it's clearly your intention to spin any possible meaning back towards your misinterpretation, and that's fine. As I said about twelve days ago, I'm perfectly content to agree to disagree with you. Common sense, which you so frequently cite as your guide in these matters, should tell you that if the prospectus says something in such a clear and concise way, then that's the way it is. But if you choose to see things a different way, so be it. Either way, we have exhausted this subject.
  18. Keep reading, Joel. Page 14 of the same prospectus, under "Contract Charges": "We do not deduct mortality and expense risk charges and other asset-based charges that may apply to variable funding options from GAA. These charges are only applicable to the variable funding options." Read that again, slowly: "These charges are ONLY APPLICABLE to the VARIABLE funding options." Thanks for pointing out to me that I had a copy of this. You're quite right that I was entirely unaware that I had it, since as I said earlier, I do not own a fixed annuity. But now that we DO know that fixed annuities have a prospectus, and now that we read in that very prospectus, in the clearest possible English, that "These charges are only applicable to the variable funding options," can we for the love of God put this subject to rest once and for all? Thank you.
  19. ...except now here we are quoting from one. I'll be darned. Since we can't even agree on the existence of a prospectus (from which you are now quoting, ironically and comically enough), let me agree with TR, Dan, and everyone else out there and let this go.
  20. I could have SWORN there was no such thing as a prospectus for a fixed annuity...
  21. Darlene, it may be oversimplifying a bit, but until you get yourself a good grasp on how asset allocation works, the beauty of a fund with a target retirement date (like the Vanguard 2035 fund you mentioned) is that it will take care of the asset allocation for you, in a way that will probably suffice until you yourself feel sufficiently well-read enough to take it on with other funds. The important thing is that you're making great progress towards building retirement savings. Whether you are using the "perfect" or the "ideal" system to get there is immaterial (especially since I firmly believe there's no such thing...100 investors could come up with 100 different ways of investing, and they might all be great ways of ultimately getting where you're going). Good luck!
  22. Joel, if you'd like to bring Scott back into this pointless discussion, why don't YOU heed his advice: "This is just a stupid argument, please just drop it." Amen.
  23. Given the fact that every representative from every company that either you or I has spoken to has agreed with me so far, what makes you think for a moment that my CFP will agree with you? TR's a financial planner, and he doesn't. Chadposner is a financial planner, and he doesn't. FT our French Teacher: How do they say in French? "You need to speak with an actuary" Don't you ever get tired of this crap, Joel? "Ask a financial planner; they'll agree with me!" "I did...I asked two of them, and they both disagree with you." "Well, you need to ask a company that issues annuities; THEY'll agree with me." "I called TIAA-CREF and ING; they both disagree with you." "Well, you have to ask an actuary; an actuary will surely agree with me." "TR called an actuary from Genworth; he doesn't agree with you." and now... "FT, you have to call an actuary." Presumably, this will be a different actuary? I repeat TR's question from before: how many actuaries have to disagree with you before you will AT LEAST agree to disagree? I have actually done all the fact-checking you've asked me to do, and haven't found a single voice to lend credence to what you're saying. Obviously, I'm not going to continue this little charade. I said before, and I'll say again: you think you're right, and can cherry-pick quotes to "prove" your point. Bully for you. I began this discussion not at all sure, and asked a number of different people, none of whom agree with you. So I'm now convinced that fixed annuities carry no M&E fee. Hunting down one more CFP like Scottyd or one more like TR will do nothing to settle this. It's over. Let. It. Go.
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