Jump to content

bigred

Members
  • Content Count

    108
  • Joined

  • Last visited

Everything posted by bigred

  1. This mixed account does not allow the investor to accumulate as much or as little as he/she would like in the traditional 403(b) account and the Roth feature. To me this is a violation of the IRS rule that states a designated Roth account must be maintained. Joel, I guess I don't understand how they wouldn't be able to accumulate as much. If you max is 17k you can't go over it any way. I'm referring to the investor's desire to use the Roth for equity trades so that over time these profits, when withdrawn, will not be taxable. He is not being allowed to do this because of the pre-determined ratio of Traditional dollars to Roth dollars in a single account. Joel I've got you. My wife's account operates this way but it does allow to specify which source of money for each investment.
  2. This mixed account does not allow the investor to accumulate as much or as little as he/she would like in the traditional 403(b) account and the Roth feature. To me this is a violation of the IRS rule that states a designated Roth account must be maintained. Joel, I guess I don't understand how they wouldn't be able to accumulate as much. If you max is 17k you can't go over it any way.
  3. And you my friend are a large part of the problem. Where do you think these companies come up with the cash to pay you? I would be willing to guess that the lion's share of companies you work with are insurance companies peddling variable annuities. While they don't make a client write out a check are you aware of the fact the average cost of a variable annuity is over 2.5%? The clients are being charged, it's just whether the charge is transparent or not. I guess you are a noble securities dealer? And are you yourself not a peddler? I do not care if its a variable annuity account of if its mutual fund. While there are many differences, I have no preference to which a client decides to take advantage of, just as long as they take the step. If a client, and I assume you have some, has money invested with you do you not charge a fee based on how much they have in your book? Every time you make a trade do you charge them a fee? Anytime they want to take a distribution do you not charge them a fee? How about a fee for advertising? In Arkansas its about availability of advisers or sales people in a rural community, and if your heart is truly invested in helping people, as mine is, would you not recommended them to do what ever is available to them. Is doing something better than nothing? I agree the fees everyone charges are outrageous!! I believe that will change soon with some new legislation that is gaining momentum in California. I only look at the math, I do not get caught up in the sales tactics and bad mouthing that sales people do. I will ask honest questions and give my honest opinion. I do not peddle anything. I just make sure everyone follows the rules. As far as how I make my living. Yes we are a for profit firm just like you. If companies out there would have their own departments to handle what I do there would be no need for us, but it is not cost effective. If a school district could handle it they would, again it is not cost effective. So in a way I, and others like me help to hold consumer and producer cost down by reducing the number of people that fund companies and schools have to hire. As for those evil Variable annuity companies. THEIR CLIENTS ARE UNDER A CONTRACT THAT CAN NOT BE MODIFIED TO REFLECT THESE NEW CHARGES. I can not say this strongly enough, and when a large mutual fund outfit disclosed to me it had been collecting TPA fees, in some cases for six years, and not offering any TPA services or paying out to a TPA it made me question really who would want to business with them. I am in no way affiliated with any company, I have given up my appointments to all companies. Incidentally I have never marketed a variable product. One reason, I don't believe an Arkansas teacher, that makes less than $30k a year, has any business putting the only money they can save into any mutual or variable product line. Just an opinion not in any way advice It might be worth it for you to take a little to time understand how an RIA operates and who has a fiduciary duty to the client.
  4. And you my friend are a large part of the problem. Where do you think these companies come up with the cash to pay you? I would be willing to guess that the lion's share of companies you work with are insurance companies peddling variable annuities. While they don't make a client write out a check are you aware of the fact the average cost of a variable annuity is over 2.5%? The clients are being charged, it's just whether the charge is transparent or not.
  5. Aspire's standard charge for 403b's is $40/hd and 15bps annually. Aspire keeps $20 and $20 goes to the TPA. Some districts pay the cost themselves and in some participants pay it?
  6. Merv, Another good option is to get them to add Aspire Financial to the list of providers. It has a mutual fund menu as big as Wal-Mart's selection of various goods. That includes the cheap stuff from Vanguard. http://www.aspirefinserv.com/index.php
  7. DK - You may want to consider some rebalancing and sell some of those shares of the TIPS that did well in 2011 and buy back a portion of the emerging markets. It forces yourself to sell high and buy low.
  8. bigred

    Mf Global

    Steve, I'm going to have to disagree with you on 50% of MF Global. They used to be a sleepy old brokerage firm that placed orders for people. From my experience I knew plenty of farmers that hedged grain or livestock through accounts there. Now I believe that does add some value by having another firm in the market to keep commission rates down for producers. If I remember right you grew up in a farm in Wisconsin? Corzine grew up on a farm in Northern Illinois. He ran a good business into the ground and left a bunch of productive people out of jobs and without access to their cash. What is the other 50%? According to news reports, MF Global had investments in the most toxic bond funds in Europe: Greece, Italy, Portugal, etc. You are right, these types of firms "used to be a sleepy old brokerage firm that placed orders for people." Heck, the Wall Street banks used to be that way too, but those days are long gone. The systemic problem that MF is right in the middle of is this: 1. The corruption began with the advent of high speed powerful technology to facilitate nano-second trading, 2. the Wall Street Banks getting deregulated by Washington with the repeal of Glass/Steagal in 1999, 3. when the wall street banks began offering shares in the early 1980s, and 4. Consequently, the banks have two masters for the first time in history, their clients and now the shareholders, you can guess who their real master is. My point stands, they don't help ordinary folks, there is no incentive. My god, with millions of bonesus and they are going to make money loaning money to my parent's 140 acre farm in Wisconsin! My parents never hedged anything, of course it was a different era back 50 years ago. Futures contracts are hundreds of years old and served a good purpose for farmers, but now is the era of taking big risks, g ambling is more like it. My nephew and his wife have taken over the farming from my parents and my older brother and they are multi-milloinaire, big time farmers, they tell me they cannot get a loan with their 30 year history in the business and 900 milking cows. Steve The problem with MF Global was that Corzine tried to turn it into his own Goldman Sachs, where he was once a high ranking employee. He took MF's capital, levered it up and made huge bets. A totally irresponsible thing to do with shareholder money. I agree will agree with most of points. There is a huge difference between a farmer hedging a commodity and what Corzine did. I feel bad for the businesses whose cash is locked up by this and the employees that got screwed by a couple Goldman know it alls. Bring back Glass Steagll.
  9. bigred

    Mf Global

    Steve, I'm going to have to disagree with you on 50% of MF Global. They used to be a sleepy old brokerage firm that placed orders for people. From my experience I knew plenty of farmers that hedged grain or livestock through accounts there. Now I believe that does add some value by having another firm in the market to keep commission rates down for producers. If I remember right you grew up in a farm in Wisconsin? Corzine grew up on a farm in Northern Illinois. He ran a good business into the ground and left a bunch of productive people out of jobs and without access to their cash.
  10. Perhaps, but its the same concept. Active management vs. passive. I was just pointing out that Ferri provides data about managers underperforming the market whether is tactical, timing, throwing darts, looking for past patterns with highly paid elite quants trained from the ivy league schools using powerful computers, etc. etc. Steve, have you ever read "When genius failed"? It's about Long-Term Capital Management and their near implosion. I'm currently re-reading Buffett's biography by Alice Schroeder and there are lots of part in there about how "smart" those guys were. I'm hoping it's an interesting read based on their hubris and machismo.
  11. Really? There are hundreds of thousands of professionals working on Wall St. and virtually none have beaten the market over time. But you will? Best of luck on that plan. A more realistic plan is buy a blend of low cost index funds properly allocated and get the market return. In any event, I'm not aware of any 403b's that allow you to trade individual stocks. The IRS does not allow you to own stocks in a 403b so you cannot even buy and ETF of an index if you wanted to. The insurance industry really owns this one.
  12. Well you are paying the loan back with after-tax dollars to put money back into a pretax account.
  13. I have serious doubts that this will not take place. You will need someone to sign off on the distribution paperwork from the plan sponsor or TPA. You will save yourself a bunch of hassle by doing this upfront. Sorry for the bad news.
  14. I would split up how your monthly is going in monthly for the allocation you desire. ie You are roughly 60% stocks and 40% bonds so I would use the monthly flows to try and maintain that. That way you are dollar costing in throughout the year and if there is a market dislocation you can rebalance using what is in the portfolio.
  15. This is all short-term noise and you should not do anything. The only thing you should be ready to do is rebalance the portfolio if the market moves 10% in either direction.
  16. Congratulations on your selection to do it yourself. You have no idea how much money you've saved yourself over your lifetime! Just don't let the Ed Jones person talk you into anything, you know what to do.
  17. Brand New - If you want a very efficient way to get acclimated to invested and not have to do a ton of research please use on of Vanguard's Target Retirement Date funds. On just a rough guess based on your age a fund that anticipate a 2050 retirement date and use Vanguards funds. The ticker is VFIFX.
  18. How well is your fixed annuity doing after inflation over 40 years vs. a properly allocated (and annually rebalanced)portfolio of treasuries and indexed equity funds/etf's? If she "insists" then she's probably not coming to my presentation because her mind is made up. But if she does she can see where her portfolio is vs. where a balanced one is over a 40 year period. I guess the short answer is show a longer time period. The indexed annuity is invested in the same market with more expense-I put the question back on her. 1. No one has beat the market over a 40 year term. The markets are efficient. 2. The annuity is invested in essentially the same securities as an etf or fund but has more expense. Ergo, you won't have more money, you'll have less. For the 66 year old-that strategy is easier to argue against given recent events. How did that aggressive portfolio do in 2008? And now that you are retired and need to draw on your diminshed pot of money-how can you draw income and remain as aggressive as you need to be to grow your portfolio so it can last as long as you do? Or simply ask-how much money do you need? If you "need" to be that aggressive why not go to Vegas and place it on Black. You could double your money. The risks are the same. Can you survive the losses? If you're 66 and have saved 750k can you survie on 375k for 25 years? Because we don't know what event may lead to that type of loss. See 2008. Mark, How do you explain "markets are efficient?" When you say indexed annuity has more expenses, a teacher might show you his or her statement and ask, "I don't see expenses, I see a gain every month. Where are the expenses?" How do you explain what an ETF or a fund? Are any of your clients in a "Lazy Portfolio" type plan? Your responses have been right on. Why don't you apply to be on Otter's list of recommended fiduciary advisers? http://www.403bwise.com/advisordirectory/directory.html How much do you charge? Do you recieve 12b (1) fees? Do you charge a management fee, one percent, etc? Don't mean to be nosy, but the discussion around here has been that advisers like you cannot make a living unless they sell for an insurance company and make commissions, make transfers to gain more commissions and get more and more clients in annuities. As you know, TSAs are an lucritive money maker for advisers and agents, thats why they are fighting to keep the status quo for years. Is there a life after the 403b gets reformed? What's your experience? Or do you still sell annuities in 403b plans to make a living? I was shown one of those charts decades ago. I still remember the colored bar chart and saw how much money I would have just by saving $50 or month after 20 years. It was impressive. BTW, this was way before PPT. Steve These are very pertinent questions. I would say that this is not being done to run you off because it sounds like you have a good approach you just need to be vetted. Plenty of people will always work with an advisor and we shouldn't run off good ones if they are being truthful.
  19. Getting it outside of the rules/regs of 403b should be your #1 priority. That being said it appears that you still may be employed by the district and may or may not have the option to take that money outside of the rules of 403b. You will need to contact the plan administrator to check to see if they allow for in-service withdrawals.
  20. Buffett would not say that he could "beat the pants off the index." What he said is that I can beat the averages by about 2%, but not more. I personally think he gets the 2% because of his value orientation and he is on the boards of many of the companies he owns. I heard the 2% from Paul Merriman on Fundadvice podcast (Great podcasts BTW). 2% is significant but it’s all based on past data. Nobody knows what the performance will be going forward. None of us will be a Buffett but I will take his advice when he said for the average investor, index funds are the best choice. Bigred, when you say that there are exceptions to the efficient market, sure I can agree, but the question always remains: "OK, where, what and who are these exceptions going forward. If you can provide the names of the funds, manager, the exact date and time, I will put the house and the farm in those exceptions!" Of course, its silly, but so many people think they have that right manager or fund and they fail. We have only the future and the future is TOTALLY unknown. The exceptions are very clear IN THE PAST with exact dates, prices at the low and high, on the exact hour of the day and year when we can get in exactly and get out exactly. IT’S ALL THERE, and if we knew at that time what we know now, we would either all be billionaires or the stock market would like very different. We all can’t be billionaires. Besides all of that exact and correct data is in the PAST. Stock market data is totally known in the past and totally unknown in the future. Nowhere else in life can you provide an example of contradictory evidence that is so explicit in stock market "data." So, we have to act according, yes its been said before and will be said again and again, by just investing in the board economy via index funds both domestic and internationally, with all the assets classes covered and with an allocation in bonds, rebalance occasionally with low cost funds, never pay commissions, 12b1 fees, back end or front end loads and stay away from annuities in the accumulation stage. Tony, If if were my money, I would never use Bill Gross because his fees are over 1% which are high for a bond fund. Steve, In regards to the Buffett point, you know the powering of compounding so I would say that you concur that Buffett beating it by 2%/yr would be beating the pants off of it, but that's semantics anyway. That's why I leave that 10-15% of my portfolio in that basic idea and leave the rest to attempting to own a couple of individual stocks that I believe in, ie Berkshire. And really up until 1 year I really felt that was a great idea because Berkshire was not tracked in any of the indexes and I thought that a market cap weighted portfolio was really missing something not owning a company who had a 200B cap. Any additional insight?
  21. This is the stuff that really makes me wonder who reads it and who follows it? Jim Cramer admits he is mostly about the entertainment value and I get that but seriously there are so many flaws with the thinking it makes it impossible to start.
  22. I too believe in efficient markets but I believe there are a few more exceptions to the rule than their thesis allows. Somehow, someway Bill Gross has done it for an extended period. That is no guarantee he will continue to do it. Warren Buffett has done it for even longer and Warren thinks he could really beat the pants off of the index again invested in individual small caps and/or taking over the companies. But Berkshire Hathaway is too big and all that work "won't move the needle" very much and he has "reloaded his elephant gun" looking for big deals. Is it possible to yes. I'd rather be extremely comfortable owning the indexes and knowing that I will end up in the top 20-25% year in and year out of each category. Thoughts?
  23. I'm glad to see fear still sells well. If I would ever sell my soul to the devil I think they things would be easy to sell.
  24. Mine was 15.81% using mostly a mix of Vanguard funds but it is 100% equity.
  25. Steve, Here is another one that follows right down the same path. It looks to me that they are good firms with strong messages. http://www.evansonasset.com/
×
×
  • Create New...