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sschullo

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Everything posted by sschullo

  1. OP. I remember the FEELING of paying off my mortgage when I was 57. What a relief! Here is another article that may help you decide: https://www.cnbc.com/select/what-age-to-be-debt-free/. In this day and age of tens of thousands of financial blogs, articles, discussions and podcasts, there are hundreds of articles on this one subject and multiple discussions on the Bogleheads forum. FWIW, it's not just the numbers, but the debt free experience that counts too. Heck, if you don't like being debt free, you can always borrow money and purchase Tesla stock like this fellow did: https://www.bogleheads.org/forum/viewtopic.php?t=330263
  2. After all of you newbies come here and get excellent information about changing from those annuities into something like Vanguard, Fidelity or NEA Direct Invest, you will get the returns that you deserve when you construct your diversified portfolio. I use mine as an example. My portfolio is very boring and conservative because I need my portfolio to fund my retirement. It's not for anybody who has pension(s) or are young. You want to be much more aggressive by increasing the stock allocation over the bonds. My Vanguard and TIAA portfolio YTD return is 6.8% for a 34/66 stock bond split after today's close. I am happy with this return. It's almost doubled from the Q3 report at the end of September. The second image is a report generated by Vanguard. It tells me I have too much value stocks, too little international bonds and stocks. Steve
  3. Hi Matt, To answer your question, as others have said, your allocation is NOT too conservative, its not even close to conservatism! My portfolio is definitely conservative because at 73 my bones are beginning to ache! LOLs:
  4. Pushing this announcement up. Everyone is welcome! Register here. Just by observing how Dan Otter, Scott Dauenhauer, Barbara Healy, (first pic below) the United Teachers Los Angeles Union Pre-Retirement Issues Committee Chair, Leonard Goldberg (2nd pic) and former Chair, Dr. Sandy Keaton, put on a financial literacy show that cannot be beat. You can beg, borrow or steal the excellent content presented and use it at your school or district. Dr. Sandy Keaton has been coordinating these workshops twice a year for Los Angeles teachers for over a decade. She is first on the agenda at 8:00 am Pacific time today. Valuable and FREE resources: When COVID is behind us, Dan and Scott are available to go anywhere in the country to provide a workshop for your teachers. If you are a professor at a college or university teaching future teachers, they are especially interested in providing future teachers the financial information they need long before the vultures come into their classroom trying to sell those despicable high cost 403(b) annuities. Tim Ranzetta has been mentioned before on this forum. But for new teachers here and are also interested in teaching your students financial literacy, get to know Tim and his incredible website, Next Gen Personal Finance Discovery. All of his thousands upon thousands of video clips, lesson plans, stock market games, excel spreadsheets, presentations and financial workshops on every conceivable financial topic are FREE. My friends and I have been taking these FREE certification courses: https://www.ngpf.org/certification-course/
  5. Pushing this announcement up: Los Angeles Teachers at L.A.U.S.D. You can get 5 P.D. hours attending. This Saturday on Zoom: Registration here.
  6. Mark your Calendars, Saturday, November 14 8:00-1:00. While the presentation will be geared towards Los Angeles Teachers, it is open to everyone.
  7. I express my political opinions in one place, the ballet box. I do like history. Had I started teaching again, I think I would like to teach history, specifically economic history. My portfolio reflects my life long experience of all the major topics of our life, first the obvious market bull and bear markets, then the economy, politics, social and cultural movements, the financial industry in their constant effort to part me from my money, and economical and political history, and this year, I can add on a health crisis, and my portfolio has worked as it was designed. We think times are bad now. While I was in the Oakland Naval hospital recovering from my Vietnam injuries, I thought I came home FROM a war zone. Within a month MLK and RFK were assassinated. That summer, rioting occurred all over the country. Detroit and the Democratic national convention in Chicago were war zones. In 1968, I came home TO a war zone. (The recent Chicago 7 is great. Highly recommended). In 1863, about 120 New Yorkers were killed in rioting because of the blatantly corrupted conscription regulation that young men could buy their way out harms way for $300.00 during the Civil War. We will get through 2020....American was badly wounded with our Civil War and during the 1960s and the terrible Vietnam War. Humans had political differences since we crawled out of the slime and created political parties.
  8. Hi Tina, Thanks for putting your AA up. I agree with the others that 100% stocks is not a good idea. Furthermore, it is not diversified. You have way too much of your portfolio in growth stocks 60%. Of course, growth has been rip roaring for a couple of years but sooner or later it will change to one or both of the other styles: Value and or Blend. I have all of my stocks in blend so I get reasonable returns over time. I was in growth stocks in the late 90s and I lost 70% in the tech wreck. I will never do that again. It is OK to have 100% stocks if you are a seasoned investor and already been through a rough period. If not scale back into some bond funds as the others have said. In the stock side make sure your AA cover both value and growth, not just one. The Total Stock Market Index and the Total International stock market index covers all stocks including value and growth. Best of fortunes, Steve
  9. Hi hut, Call Vanguard and ask them your question. Below is a real life example of what Tony and krow36 were saying. I created this table for my blog with my portfolio and the ERs. While it is not 100% accurate I simply multiplied the ER times the amount of money in each investment to get a fairly close estimate. For years I have paid between $1100 to $1300 annually. Disclosing in dollars is much clearer than saying I only pay .0064%. I have saved so much in costs, my portfolio went up in value despite taking large distributions occasionally for over a decade since I retired. Of course, I have been lucky that the stock market has soared since 2008 (except with a couple of years with near zero returns). Hope this helps, Steve
  10. Here is my wordy and totally unsophisticated "equation" that I remember learning from middle school: End of 2019 value of portfolio. Example: 100,000 Add in distributions (or subtract contributions) no contributions or distributions for this example Get a current value. Portfolio grew to 110,000. Obviously you have the answer just by looking, 10% YTD RETURN. But lets finish this example. Subtract the end of 2019 value from the YTD total value: 110,000 - 100000 = 10,000 Divide that difference with the end of the year value = the YTD return. 10,000/100000 = .1 or 10% (I still remember my teacher literally showing the class to move the decimal point two digits to the right, add the zero DON"T FORGET THAT ZERO! and replace the decimal point with the % sign). Check your answer by multiplying that RETURN by the end of 2019 value to get the growth of your portfolio: 100000 .10 = 10000 For a math phobic student, I know this is like climbing into the ring facing Muhammad Ali with all of the math power on this forum. You guys will have fun picking this apart! Go for it!
  11. Welcome MissHavisham. I hang out in both places. I also hang out on the presentations that Dan and Scott give on Zoom. They have investing presentations and the next one is next week. Registration: https://403bwise.org/events/details2/event-investing-basics-1 Regarding your concern about "missing out", please allow me to provide a perspective since I have history just based on my age :- ). When I started investing in the stock market in 1994 at the ripe young age of 46, the Dow Jones Industrial Average was an astonishing record high of about 4,500! I was nervous too. Yesterday it closed at 28,586! But during those years, I have also experienced 2 massive crashes and the short lived crash this year. You read CL Collins terrific book. He said to invest forever as the markets will go up OVER TIME 15-20 years. So, you are doing the right thing. I believe most of us here have a international stock market exposure to diversify. Collins follows Bogle's advice is that most people will trust the U.S. Stock market than any other country or style (value vs. growth). I disagree but its a tiny disagreement. My own portfolio is a little more complicated but not much. The point is that I understand how it works with the markets over time. Bonds are tough to understand at first. I read The Only Guide to a Winning Bond Strategy you'll ever need by Larry Swedroe and Bonds Investing for Dummies by Russel Wild. The best way to learn about bonds is to invest in them. Discover the differences in risk and return between short, mid and long durations and how bonds fluctuate when interest rates change. Learn how a bond fund works. But as others said, you are fine with 100% stocks now and slowly add a bond allocation in the future. Bonds do not necessary grow your portfolio, they reduce risk and keep your emotions and your portfolio in check. Again welcome, Steve
  12. I am sure most of you noticed that the market is going back up despite this mess we are involved. My boring portfolio is up YTD, 4.9%. What a year and it is not over yet.
  13. There are a gazillion calculators at every internet street corner! Why didn't I look at what is in my backyard? Bogleheads and Investopedia. Thanks again.
  14. Great, thanks for this! Since 2004 when I revamped my portfolio from the tech bubble disaster, I calculated a 5.9% return. Is that correct?
  15. Hi Scott, I was thinking about the complication when I talked about it at the Zoom presentation last week. As I said it boils down to the stock bond split and its not that complicated. But it was a hard sell. Yeah, I agree with you. At first glance I would have said the same thing. I did not have enough time to explain what I was doing and am not sure if the audience understands Value vs Growth, small and mid cap have a little higher return over time and the bond diversification. My portfolio is not a perfect example to present to teachers who have all levels of knowledge. But the regulars here have little or no problem as its pretty basic and simple. So, it gets complicated when tilted to large cap value (Wellesley) and mid and small cap stocks (Extended Market index). On the bond side I wanted inflation protection with Treasury Direct, international bonds for additional bond diversification, and the fixed 3% return from TIAA, where I take my IRA mandatory distribution. Just this year because I paid huge tax bills in 2018 and 2019, I added took a chuck of Total Bond Market index and bought the tax advantaged Vanguard Muni California bond fund. Since I live in California I get both a State and federal tax exemption. I have Wellesley for another reason. I have my Roth in Wellesley and half in total international bond market. I only wanted 35% equity exposure with my Roth but since I am so damn risk adverse, only because of my age, I have enough and I need every penny for retirement. I cannot afford massive losses again. Its the preservation stage of my life. YEAH! those bonds are rip roaring. Last year the total bond market index was over 8.0%! Looks like this year is another winner for bond investors. Who would have thought of this. As we know here, nobody knows nothing about the future. Since I have most of my money in bonds, I am a happy camper.
  16. Hi, I thought I would put my current portfolio to show newbies who want to get out of those costly annuities. This graph shows when my late spouse and I did after getting out of five horrible annuities in 1994 and learning about investing with mutual funds and stocks and bonds. Back in the 1990s, I did not know about diversification nor did I include enough of a bond allocation. The vertical line shows the evolution of my portfolio going from a 95% technology no-load mutual fund portfolio on the left side of the graph to the portfolio I have today with those modest returns and losses on the right. This AA on the right and my pie graph shows the same AA for 15 or 16 years, 30 to 35% stocks and 65 to 70% bonds. The stock bond split is of course a rule of thumb. My choice is what works for me as I am risk adverse, no descendants, I have won the game, and do not need to play any longer, and needed this money for retirement so I am in the preservation stage. If you have a lucrative pension benefit where you don't need to tap into your investments in retirement, HECK put 100% into stocks and let your descendants worry about it. If you are in your 20s and 30s you would have the opposite AA with 20% to 30% in bonds and the rest in stock index funds.
  17. He joined on Monday left his post and questions and never came back. Over the last 20 years, I have seen this happen many times here and cannot figure out what people are thinking.
  18. This case shows us that the defined contribution world is also a business, and very lucrative one, for the professionals who consult and keep records and unfortunately, teachers are the one group that is still unprotected. Its too bad we cannot find out more details such as who created this "system" that is suppose to be good for Florida's teachers?
  19. Hi Scott, Looks like you answered your question by Bogles speech. Here is another interview only about 7 months before his death: https://www.youtube.com/watch?v=3uJbHREmUs4 . I know you heard this before and I will repeat what Bogle preached, "Don't just do something, just stand there." There is plenty to worry about for our everyday life. These are terrible times. But the stock market operates differently from our ordinary life experiences, big shocker there! The stock market doesn't know how anything will affect our portfolios. Capitalization weighting vs. equal weighting of the indexes have been argued for 20 years. Who really cares? Nobody knows. I am wondering why the feds are buying up both government and corporate bonds. They never bought corporate bonds before. Is this move just to keep some companies in business when they should go bankrupt? Does all of the fed purchasing change the natural structure of how markets operate? The geniuses for the past decade have been warning us about fed's interference. I also wonder about my California muni bond fund when I hear that state governments are going to be in deep trouble because of COVID19 affecting their tax revenue. There is a lot to be worried about, but I let all of the emotions of other investors be expressed as it will certainly be expressed in some fashion that even investors don't know. The stock reflects the attitude and temperament of human beings, both professional and lay investors. As Newton said, "I can calculate the motions of heavenly stars but not the madness of crowds!" He was so upset when he lost a fortune in the 1700s tulip bubble. The madness continues to this day. Human beings, and their money, cannot help themselves. I am not changing a thing.
  20. Ben Graham's classic The Intelligent Investor (1973) has an entire chapter on seeking advice, he wrote: If the reason people invest is to make money, then in seeking advice they are asking others [Financial Professionals] to tell them how to make money. That idea has some element of naïveté. Businessmen seek professional advice on various elements of their business, but they do not expect to be told how to make a profit. That is their own bailiwick. When…non-business people rely on others to make investment profits for them, they are expecting a kind of result for which there is no true counterpart in ordinary business affairs.” On the other hand, Graham writes this which is out of date in 2020: We take a more critical attitude toward the widespread custom of asking investment advice from relatives or friends. The inquirer always thinks he has good reason for assuming that the person consulted has superior knowledge or experience. Our own observation indicates that it is almost as difficult to select satisfactory lay advisers as it is to select the proper securities unaided. Much bad advice is given free. The best financial information and advice has been FREE for over 20 years when this website 403bwise.com and Bogleheads forums were launched! Numerous tell-all books by everyday investors say that they are better off without an expensive adviser. In 2020 free investment information is everywhere on the internet. Also, index funds were not available until Bogle launched his S&P 500 in 1975.
  21. Did you know about this Ed? Good stuff and it's about time! \ SEC Charges VALIC Financial Advisors with Failing to Disclose Payments to Promote Services to Florida Educators SEC Also Charges VALIC Financial Advisors in Separate Action for Mutual Fund Selection Violations FOR IMMEDIATE RELEASE 2020-164 Washington D.C., July 28, 2020 — The Securities and Exchange Commission today charged Houston-based VALIC Financial Advisors Inc. (VFA) in a pair of actions for failing to disclose to teachers and other investors practices that generated millions of dollars in fees and other financial benefits for VFA. In the first action, the SEC found that VFA failed to disclose that its parent company paid a for-profit entity owned by Florida K-12 teachers’ unions to promote VFA and its parent company services to teachers. In the second action, the SEC found that VFA failed to disclose conflicts of interest regarding its receipt of millions of dollars of financial benefits that directly resulted from advisory client mutual fund investments that were generally more expensive for clients than other mutual fund investment options available to clients. VFA agreed to pay approximately $40 million to settle the charges in these two actions. In the first action, VFA agreed to cap advisory fees for all Florida K-12 teachers who currently participate (and, in some cases, those who prospectively participate) in its advisory product in Florida’s 403(b) and 457(b) retirement programs. This will result in significant savings for thousands of teachers. VFA Failed to Disclose Payments Made in Exchange for Referral of Teachers VFA is a financial services vendor in nearly every school district in Florida. According to the SEC’s order, VFA’s parent company, The Variable Annuity Life Insurance Company (VALIC), for 13 years made payments to an entity owned by the Florida teachers’ unions in exchange for that entity’s exclusive endorsement of VFA as its preferred financial services partner and the entity’s agreement to not promote or endorse VFA’s competitors. VALIC also provided the entity owned by the teachers’ unions three full-time employees to serve as “member benefit coordinators.” These coordinators – who deceptively presented themselves as employees of the entity owned by the teachers unions – promoted VALIC and VFA to Florida K-12 teachers, including at benefits fairs and financial planning seminars, and referred teachers to VFA for investment recommendations. The order finds that the member benefit coordinators increased VFA’s access to K-12 teachers in Florida, and that VFA did not disclose that the for-profit entity was paid to make VFA its preferred financial services provider. VFA (together with VALIC) earned more than $30 million on the products it sold to Florida K-12 teachers during the period covered by the SEC’s order. “Teachers need and deserve our attention, and we are dedicated to ensuring they receive all of the information they are entitled to when making decisions about their financial futures,” said Chairman Jay Clayton. “Too often educators are targeted with misconduct related to their investments. Our nation’s educators, and our Main Street investors more generally, are entitled to full and accurate information about the incentives and conflicts affecting their financial advisors.” “By failing to disclose to teachers that it was making payments to and providing employees for the union-owned entity in exchange for that entity referring teachers to VFA, VFA took advantage of the trust teachers placed in that entity,” said Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement. “Like all investors, teachers need full and fair disclosure.” “Financial relationships and affiliations in the K-12 teachers’ retirement sector can impact teachers’ financial interests,” added Steven Peikin, Co-Director of the SEC’s Division of Enforcement. “It is critical that teachers get the information they need to make informed decisions about their retirement options.” The SEC’s Office of Investor Education and Advocacy today issued an Investor Bulletin with tips to help teachers make informed investment decisions, including about retirement plans. The agency offers resources for teachers and investing and provides outreach and education to teachers through its Office of Investor Education and Advocacy, Retail Strategy Task Force, and its San Francisco Regional Office. VFA Failed to Disclose Millions of Dollars in Financial Benefits It Received for Investing Clients in Certain Funds The SEC separately charged VFA for making false and misleading statements about, and otherwise failing to disclose, conflicts related to its receipt of millions of dollars of financial benefits from client mutual fund investments. According to the SEC’s order, VFA’s wrap agreements with its clients provided that the advisory fee the client paid to VFA included the costs to execute securities transactions. The order finds that VFA either directly invested or instructed its primary sub-adviser to select new mutual fund investments for clients that were part of VFA’s clearing broker’s no-transaction fee program (NTF Program), and thus would not incur a transaction fee VFA would be responsible for paying. The NTF Program mutual funds were generally more expensive than other mutual funds available to VFA clients, including instances when a less expensive mutual fund share class for the same fund was available outside the NTF Program. The order finds that VFA’s participation in the NTF Program generated three key financial benefits to VFA, and that VFA not only failed to provide disclosures regarding these conflicts, but also provided false and misleading disclosures concerning the conflicts. The order sets forth that VFA received both 12b-1 fees and revenue sharing from the clearing broker for client investment in mutual funds within the NTF Program. In addition, according to the order, for clients with wrap agreements in which VFA was responsible for client execution costs, VFA financially benefited by not having to pay any transaction fees for mutual funds in the NTF Program. Despite being eligible to do so, VFA did not self report its receipt of undisclosed 12b-1 fees as part of the Division of Enforcement’s Share Class Selection Disclosure Initiative announced in February 2018. “Investment advisers must disclose conflicts between their financial interests and those of their clients,” said Mr. Peikin. “Here, VFA for years reaped million in benefits at its clients’ expenses while not only failing to disclose the conflicts, but while providing false and misleading information.” “VFA misled clients by telling them that their advisory fee would cover execution costs without also telling them that VFA would put them in more expensive mutual fund share classes and thus avoid paying those costs.” Ms. Avakian added. “By not disclosing these practices as well as the other financial benefits VFA received, the firm deprived its clients of essential information about their relationship with their adviser and violated core fiduciary obligations.” Investors can find additional information about how fees and expenses may impact their portfolios at Investor.gov. Summary of Settlement Terms The SEC’s order concerning Florida teachers finds that VFA willfully violated Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rules 206(4)-3 and 206(4)-7 thereunder. Without admitting or denying the SEC’s findings, VFA has consented to a cease-and desist order, a censure, and a civil penalty of $20 million. VFA has also agreed to set advisory fees for all Florida K-12 teachers who currently participate in its advisory product in Florida’s 403(b) and 457(b) retirement programs, or who currently or may within the next five years own certain other VALIC Financial Advisors products, at its most favorable rates in the Florida K-12 market. The SEC’s investigation leading to this order was conducted by Heather E. Marlow and supervised by Jeremy Pendrey, both of the Asset Management Unit and the San Francisco Regional Office, and supervised by Monique C. Winkler, Associate Regional Director, and Erin Schneider, Director, of the San Francisco Regional Office and C. Dabney O’Riordan, Co-Chief of the Asset Management Unit. The investigative team appreciates the assistance of Jill Persson of the San Francisco Regional Office Teacher Investment Outreach Team and Charu Chandrasekhar, Chief of the SEC’s Retail Strategy Task Force. The SEC’s order concerning VFA’s mutual fund fee disclosure practices finds that VFA violated Sections 206(2) and 206(4) of the Investment Advisers Act and Rule 206(4)-7 thereunder. Without admitting or denying the SEC’s findings, VFA has consented to a cease-and desist order, a censure, disgorgement and prejudgment interest of over $15.4 million, and a civil penalty of $4.5 million. The over $19.9 million in monetary relief will be placed into a fund for distribution to investors affected by this conduct. The SEC’s investigation leading to this second order was also conducted by the Asset Management Unit, including industry expert John Farinacci, senior counsel Frank Goodrich and senior trial counsel Jennifer Reece of the Fort Worth Regional Office, and supervised by Barbara Gunn and Ms. O’Riordan.
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