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  1. good read for low cost mutual fund lovers. http://www.boomermarketadvisor.com/r/bmaMa...dfd6240551e8ea5
  2. hey guys, excuse the late commentary (I dont check this everyday). OK, lets assume there's not investment overlap when you throw these different funds into one bucket. You still have to return to basic risk tolerances. Let's look at Vince's Vanguard retirement 2015 fnd generally...I'll have to make some assumptions-let's say your retiring in 2015, you've worked for 30 yrs, started when you were 25 (in 1985) you're now 49 yrs old and this is the general makeup of that fund- 38% bonds, 49% stocks, 13% stocks-int'l/emerging mkts. As I said, not knowing anything about Vince this is less than a conservative blend. Generally, a 49 yr old shouldnt have only a 38% allocation to bonds. I admit there are many factors in there not taken into consideration but that adds to the argument that you cant make certain assumptions and then create a portfolio based on those assumptions. There arent fees associated with rebalancing to the client or the advisor. My return's--My 403b clients recvd between 15-19% YTD as of July 1st (and I know the market has been up another 10% since then), taking on less risk than Vince's Vanguard 2015 ( but you'd have to take my word on that, another factor "trust". Id like to say this is rocket science but it's not and you never know what tomorrow brings. Benchmarks-it's not an easy task and depends on the clients' risk level because of the limited amount of asset classes that a 403b has access to. It's not like you have this great range of funds but if figuring out what asset classes to use were that easy to do then I wouldnt be needed at all...good question
  3. The target date funds do rebalance regularly which is great but Im weary of them because most of them dont have a 5 year performance rating, let alone the 10 yr that I normally stick to. It's important to see how a manager has done not only in 2008 (when everybody took a beating) but at least to 2000 when the last major downturn occurred. Until they get to that point, Im not considering them. It sounds basic because it is. And if you're going to regularly rebalance, I'd recommend doing it quarterly.
  4. Tony, C'mon man..Im not trying to insult your intelligence. That would be a waste of my time. Im not talking about a fund manager's active allocations, because the truth is so many managers are not true to their allocations. And Im not talking about diversification (anybody can argue they're diversified correctly) Im talking about active portfolio rebalancing whether it is periodic, threshold, or percentage based...that's what creates returns over time. My school employees know they're getting this regularly which I know is unique to my services (no matter what fund family I use). My returns prove this--- even though you have the same access to the same funds as I do. I would also bet that 90 out of 100 people or advisors dont rebalance retiremnt plans. It's customer service and do I think I deserve a fee for it...absolutely. I understand some people are more fee conscious than others and thats got its ups and downs from my perspective. Unfortunately within a 403b, I cant negotiate with potential clients on price which probably loses me some business but you take the good with the bad. Joe, thanks for the book list. I read a Random Walk aways back. Mr. Malkiel made a comment 2 months ago in Barrons about "efficient market theory" Asking, if you were walking down the street and saw a $20 bill, would you pick it up? If you believed in efficient market theory then you wouldnt because the $20 bill would not really exist in a perfect world....I thought it was a good analogy
  5. Hi CJ, With the exception of Vanguard and TIAA, the fees are all going to be about the same. But as I said before, you get what you pay for. If you take a look at TIAA (i havent looked at Vanguard in a while) but there's overlap with investments, less than average quintile rankings and short term fund/manager history (especially with the target date funds) The point Im making is not to knock TIAA but just too explain fees shouldnt be on the top your list when making this decision. If I were you, Id stick with Amercian Funds or Oppenheimer (preferrably Oppenheimer...they give better service). Im sure that's not how most people feel on this board but I strongly believe in having an ACTIVE asset allocation (Brinson Study) and asset allocation, in many instances, gets extinguished when fees become an investors main focus. If you bought a handful of blue chip stocks 10 years ago and never sold or rebalanced the portfolio, as of today, you'd be right back to that investment amount...That's fact I realize that Im an advisor and that probably makes people question my motives but chances are I'm not likely to become your advisor so there's not much for me to gain in lying. Mike
  6. This is all I can send with regard to no-loads from MORNINGSTAR (3rd party mutual fund rating company) It seems these are the averages without the trading expenses I wish it were possible to send you my copy with the specifics Are No-Load Mutual Funds Free? Mutual Fund Category Average Expense Ratio Long Term Bond 0.89% Short Term Bond 0.98% Europe Stock 1.66% World Bond 1.20% Intermediate Term Bond 1.02% World Stock 1.62% Moderate Allocation 1.39% Conservative Allocation 1.42% Small-Cap Growth 1.61% Small-Cap Value 1.53% Mid-Cap Growth 1.52% Mid-Cap Value 1.38% Large-Cap Growth 1.40% Large-Cap Value 1.30% Source: Morningstar Principia 12/31/2007 I wish I had more proof for you folks but I have nothing to gain by misinforming you. Just trying to educate where I can. Im sure you all can help me when it comes to Pension plans and good ways to prospect teachers/school district members. Im clueless when it comes to that and my wife works within a school district:)--Im open to all ideas
  7. Thanks for the requiremnts but I was more curious about what the pledge looked like I can totally see your point. But it's definitely individual specific and debatable. I noticed all of the advisors within the directory are from small individual firms. I didnt notice any any global investment houses. That's why I cant get behind that from an investment standpoint. I would be more likely to trust and put my retirement dollars to rest with a Morgan Stanley Smith Barney as opposed to Tom and Bill's Securities or Bernard Madoff Equities. Not that Im comparing any of the advisors in the directory with that liar. But it is a fact that a bigger investment house undergoes many more compliance hurdles than a small investment company and obviously has a greater reach as far as research and analysts go. As an advisor, you have to stand by your opinion and do whats in the best interest of your clients ALWAYS (whether you sign a pledge or not). A pledge is only as good as the person or company that stands behind it.
  8. Hi Dan, It's hard to comment on that because Im not sure about the process that the advisors in the directory go through to claim this fiduciary responsibility. There's an inherent responsibility that every advisor has to his clients to act as a fiduciary. I would love to know the exact process in that. Im not really convinced that it's anyhting special but you never know. Outside of my 403b relationships I am solely a fee-based advisor and this serves the clients' best interest without a doubt as well as protecting myself from legal issues. If I could shift to this type of a relationship within 403's than I would but a C share is basically used in the same capacity. (annual charges for advice on an ongoing basis) As the assets grow in the funds, so does the compensation for the advisor. The clients and the advisors interests are alligned. I truly believe that the cheapest way is a C share route. It has to be done right though and then that would be a very good way to go. As a fee based advisor I know that my teachers in C shares are paying about .50% less than my fee-based clients for almost the same service. (It's just more work on my part with the C shares to rebalance them) I know Im back to price but in this case, it's in favor of the client.
  9. A vs C shares---from an advisor's point of view...A shares cost you about 5% up front but there's really no cost after that. C shares-- about 1% annually. I generally use C shares for a couple reasons. 1. You as an investor, have more of your dollars working for you (especially when the market's on sale as it is now). 2. As an advisor, I try to conduct more of an advisory relationship with all of my clients than merely just a transactional one. In an outside relationship (IRA or Retail investmnt acct), I generally charge 1-1.5% annually. So a C share is comparable within a 403 and it also lets the client know that Im still watching the acct. There are many advisors out there that will put people in an A share, get the commisiion and forget about that (part of the) portfolio. The fund could change managers, or fall out of a certain rating and the advisor wouldnt know because he's stopped watching it. and as a speculative play (which may or may not be true), Ive heard that it's a possibility that the IRS will be allowing in-service distributions (supposedly nexy year) which probably means in 3 yrs. But if that does happen I know I'll be rolling all of my teachers into IRAs where they'll have so many more choices and more efficient trading mechanisms through Morgan Stanley. So even if thats 4 yrs away, I could be saving them 1% as opposed to the A share. (as I said this is extremely speculative) I do have a hard copy of a bunch of funds that include Alliance, Berger, Fidelity, Janus, Scudder, etc. The costs involved in a mutual fund consist of expense ratios, trading costs, and sales charges(loads). If a fund is no load it simply means there's no sales charge. Let's take 1 fnd, Janus Mercury fund (according to my chart that's probably 1 yr old)--it's a no load but has an expense ratio of 1.12 and trading costs of 2.41 therefore the total cost % is 3.53 annually.. I'll attempt to find something on the web for you guys but I'm not going to crazy....Im limited per compliance about what I can send email-wise. To answer Steve about our fees within a 403--Morgan Stanley Smith Barney is did not sign the ISA agreement so we are no longer in the 403b bus. As I stated in an earlier post I'm an approved rep for American Fnds, Fidelity, and Oppenheimer (all who have good names within the mutual fund world) and I actually prefer this because it puts me in the position of being an unbiased 3rd party. So on avg I earn a very small % of the 1% involved with a C share (around .30%) I really dont think Morgan Stanley receives anything because the 403b is actually held at the fund company, Im just helping to facilitate the process in an efficient manner. I feel like we keep focusing on price but I assure you that this is no different from anything else, You get what you pay for. And I am a firm believer in paying an advisor for proper active asset allocation. According to the Brinson Study, asset allocation accounts for roughly 95% of portfolio returns. Stock picking and market timing account for the other 5% Active assset reallocation is crucial. Sure you can buy a bunch of funds but if one fund is doing better than the other 5, that will take over the market share of the portfolio and you may become much more aggressive or conservative than you should be. It must be active and that's where the advisor comes into play. Again if you do it yourself, you'll watch it much more closely but most of us dont have the time, inclination or the tools to stay on top of this on a regular basis. Sorry again to be so at length
  10. I agree with Tony that if you're on the "hands on" boat, no one will pay more attention to your retirement assets than you. But you have to MAINTAIN your asset allocation appropriately as you years progress. I am not a believer of everyone that retires the same year has the same allocation. There are so many different factors that go into it. You may have 2 people, both retiring on the same day with the same amount of years under their belt. Person 1 has been contributing different amounts into his 403 over time, has 2 kids and a parent living with him, owns home, etc. There is no way that his allocation should be the same as someone that doesnt have any of these things. As for charges, I would stay away from annuities. 99% of the time they have no place in a 403. In my business, I can use these if desired but my team's been in business for 20 years and are considered successful and probably have a max of 5 clients with annuities. The clients that do have it are worth in the area of $20 million + each. The fees are almost double that of a fund family and the commissions for the sales man can be upwards of 5%+. Fund Charges- they average about 1.32% but I know many teachers are always looking for the no-load funds and to be honest many of the no loads have more expensive fees than the loaded funds (they're just hidden) most people dont know that but if you think logically, they have to pay these fund managers (who make alot of $) and we know the schools arent doing it. The good thing about an advisor, you do have to watch for the "peddlers" but as many of my newer clients have learned in the case of certain funds you can use a C Share with an advisor, other wise your only choice is an A share. Sorry about the length, I'll quit now but if you'd like me to speak briefly on A vs C shares, let me know Have a good day, Mike
  11. Im a CRPC Advisor with Morgan Stanley Smith Barney. 403b's are a big part of my business and I have to say Im not a big believer in those age based funds. I only deal with American Fnds, Oppenheimer and Fidelity (all who have age based fnds) and most of the performance is either lacking or the fund hasnt been in existance long enough to get a true performance record. In many cases, if you have an advisor attached to your 403b, let them take care of it. The portfolio will be more actively watched and cheaper in many cases. I, for example, create about 5 or 6 different portfolios specific to that client's risk and time horizon. This way you're combining asset allocation with a better mix of funds. It's a more efficient way of doing it.
  12. I'm a CRPC 403b advisor with Morgan Stanley Smith Barney and I have to say that I've never heard of this company. Im assuming that American Funds wasnt an option for you or your advisor isnt an approved rep for American Fnds. In these cases, it's best to go with a name brand. Im partial to Oppenheimer, Fidelity, in addition to American Fnds. Unfortunately, it seems as though you're going to have to play the waiting game.
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