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Everything posted by sschullo

  1. Thanks Tony. Every crash is a surprise and the causes are different. The usual posters here have planned for something like this for years, and now is the time to probably quit looking at your portfolio for a while. You are all smart enough to not do anything right now but to hang on tight. I am in an advantage because I won the game years ago (after a massive loss in 2000-2002), so I quit playing with my conservative portfolio. I learned to construct my portfolio after making huge mistakes 20 years ago and I was in my early 50s. The most immediate danger is not getting sick, and friends, neighbors, and family losing their jobs. My two nieces lost their jobs as waitresses.
  2. If the losses today hold, my YTD return will be 11% which is approaching the loss of 2008 of 11.8%. My portfolio is doing what its designed to do, protect what I have invested for the last 25 years. If you are younger, this is time to buy on the cheap, and rebalance like crazy to capture those low equity index funds. March 18: VTI is trading at about $113.00 now, down another $13.00 or 10% today, from the high in early February of $168.71. I know this is short term thinking but we talk about buying when stocks are lower, and now may be an opportunity to purchase cheaper stocks. But we don't know just how far down this could go because we have a major worldwide crisis that I had not seen since 9/11, and my parent's experience with the Great Depression. This is a rare event, and it could last just a few months, and economic and social activity go back to near normal, or it could last longer. These are the four reactions to "buy and hold": 1. Buy and hold because of experience with other crashes and bears markets, 2. Bailout of your in-depth, thought-out plan, "can't take it anymore" while feeling angry, NEVER get back in because you thought that a diversified portfolio protects you from declines, 3. Discover your genuine risk tolerance, adjust your stock/bond allocation as needed and keep it that way for the rest of your life because you have evolved into seasoned/experienced investor who seeks reasonable returns and is patient. 4. You read your tea leaves and got out several months ago. You are lucky. Nothing wrong with luck, it's also green too, but now you have the burden to try and get back in. That's a terrible position because you have to rely on luck again. Books have been written that warns against this strategy. I think the regulars here will do their due diligence and avoid the temptation to do #2 or #4.
  3. Hi Diane, Welcome to the site. Great question. Assuming you are transferring from an insurance product to an index or mutual fund, I think its a good idea because the indices and most mutual funds are cheaper than they were a month ago. But even if the market was not down, I think it's a great idea to get out of any 403(b) insurance product because of the fees and poor performance over time, and get into a genuine investment that grows overtime to keep up with the standard of living. However, that's a very superficial answer to a more complex subject. You said you been reading here and listening to the podcasts. So are you familiar with what you are getting to? Do you know enough about how free markets work over the long term?
  4. Either you started teaching when you were 12 years old or you are now 108. I have been retired for only 12 years. 😁 Yeah. I looked at the 40/60 allocation years ago on Vanguard model portfolios (https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations ) At the time (and I still think so) I thought it was too big a risk for me to only get a historical gain of about .6% more of a return with the 40/60 than what I choose years ago, the 30/70 of 7.1%. 7.1% is plenty for me. I have been a happy camper for about 14 years with my 30/70 allocation, and it's holding up as it should now. I recall now that you have been retired for a long time. You would be a good candidate for the FI community to hear your story on how you did it. Assuming that we are both about the same age, I know there was little if any objective information except to go to a broker or insurance agent for advice. Now, there are literary thousands of financial blogs, webinars, books, articles, TV, radio shows, online discussion forums etc., everywhere, and the FI community has been meeting face-to-face on a regular basis around the country. I did learn a lot from "Money Talk" hosted by Bob Brinker radio show back in the middle 1990s, and magazines. Then the Bogleheads launched in 1998 and the rest is history.
  5. I agree with whyme too. You are taking this way too seriously Tony. Nobody cares about anybody's political opinions. The fact is that our opinions only count, and I mean really count, in the ballet box. That's why political discussions are banned on Bogleheads! They are pointless. How about getting back to my original question: how is everybody doing? The market lost 10% today is worth talking about because this is where people find out their genuine risk tolerance and are they staying the course. WE ARE IN A GENUINE full-blown CRASH! This reminds me of 2000-2002 and 2008 and early 2009. Everything went down even my bonds! And I am not doing a thing as I have lived through two of the biggest stock market crashes in history. I have a decline of 8.0% YTD. For comparison to 2008, this 30/70 portfolio declined by 11.8%. Of course, I have an advantage as I have most of my money in fixed accounts and retired. But those who have 70, 80% or more in stocks, this is the chance to buy cheap stocks, either through rebalancing or other means, or will you ICTIA, (I can't take it anymore!) and let your emotions ruin a good plan.
  6. If I may chime in. You are talking to the wrong person. Is there somebody to talk to at SCCPSS so you can get objective information? Such as your HR department or benefits department? If not, I would not waste any more of my valuable time with an annuity salesperson. Go with the Roth until you get more information.
  7. I am happy I can feel fine when the market goes up and not so good during times like this. However, I am most jubilant about the extremely low costs of my portfolio and how much I have saved in those low fees for years! And we still don't know how much farther this crash could go. I agree that for most young investors, and some older who are risk-tolerant and don't need the money, its a buying opportunity.
  8. DK, I am very happy you posted this. It takes a lot of courage to admit to yourself first that you did something that could backfire, but then admit to us here takes a lot more courage. The lesson for all of us is never, ever attempt to time the market. And you admitted that you were LUCKY! Now your challenge is to get back to 90/10. I would not want that challenge at all. Are you taking on too much risk? Psychology is powerful and it will ruin a good plan. Thanks again for posting. Knowing how others are dealing with the psychology is tremendous support for sticking with your plan, no matter what. It is eerie that only a few of us are posting during this MAJOR crash. Steve
  9. Hi JC, On page 92 in my book Fighting Powerful Interests, section "My Head was Spinning," (free download from my blog), I document an almost identical story about fee "bait and switch." First the Valic rep said to the board of education 15 basis points but then the financial consultant said we had to add on 27 basis points for revenue sharing for a total of 42 basis points. Remember the revenue sharing days? This was 14 years ago. My point was even at that low cost, why didn't they just say 42 and be done with it, BUT THEY DIDN"T. Your example and mine are just a tiny bit of hideous evidence about the perverse motive of almost the entire financial industry with regards to public K12 school districts. For 40 years, nobody and I mean nobody cared and they got away with highway robbery for decades. But in the last 20 years, their secret began to crumble because of people like you JC who are courageously digging into this stuff and finding conflicting information everywhere, and reporting it here! Everybody in the world outside of k12 knows more about fee transparency than inside k12.
  10. Bringing this up: We may be heading into a bonafide stock market crash! What an opportunity for young people under 40 years old to buy. If it was me, I would not be buying just yet. I wonder what the older and retired folks who visit this forum are doing. So little discussion when there is a crash. Crashes get most people's attention, especially those who might have taken on too much risk. But for young people, crashes are great as long as you buy cheap shares. But it takes a lot of nerve to do this.
  11. I have also used TIAA in my 403(b) for years, and now have some of my fixed accounts in the Traditional annuity. Just to be clear, TIAA annuities are not like the other insurance companies selling terrible products that are loaded with fees, locked in for years and offer pathetic returns that will not keep pace with the standard of living. You are free to move it at any time. However, there is one annuity that pays a higher interest rate than the Traditional annuity but your money is locked up for 7 years. I DO NOT have that product, but everything else about it is great.
  12. The only thing we can trust is that the world economy will grow long term. If we don't trust that, what is the point of investing in stocks and bonds?
  13. Talk about China's safety standards and then there's Flint, Michigan and their terrible water which has not been cleaned up yet! That's why talking politics is pointless!
  14. What a week! We have a bonafide correction and the worst week since 2008. And we don't know if it's over. Nobody here has said anything about it and their reactions to their portfolios and the market. These are times that test our psychology. It takes a lot of nerve to rebalance out of bonds and into equities. But we are there yet. Wait till the market goes down 20%! Then our nerves will be tested. My portfolio is down about 3.5%. Equities have entered a correction which is defined as 10% down. My portfolio only has 33% equities so it makes sense that my portfolio should be down about a third of 10% or about 3.5%. What doesn't make sense is that my total bond market index has gone up almost 12.0% these past 12 months. I have almost a third of my portfolio in this one fund.
  15. Agree! keep up the great work.
  16. The staffer mentioned "pension issues." So, make sure you and the staffer are on the same page--defined contribution plan (403b) and not the defined benefit plan (pension).
  17. Pushing Up the Next Gen Personal Finance (NGPF) announcement. Two Financial Literacy Workshops for Teachers 1. As previously announced above: Middle and Senior high school teachers only for the (NGPF) FinCamp all-day paid sub and breakfast and lunch on Wednesday, March 25, 2020, in Glendale, CA. AND! 2. April 25, 2020, United Teachers Los Angeles (UTLA) headquarters: half-day Saturday workshop. Announcing an additional financial literacy workshop for all grade level teachers and all LAUSD employees including support staff, spouses or loved ones. Preregistration is required: https://www.utla.net/contact/2020_apr_25_financial_literacy_1 See attached flyer for details. Phone contact and name: Claudia Padilla UTLA Conference Admin. 213-487-5560 4-25-2020 Investment flyer.docx
  18. Tom Were you looking for an hourly fee-only advisor, or looking for somebody else? If you are looking for yourself, I wonder what you think about what Ed said. I agree with him 100% regarding the investment process and the psychology behind staying the course. But I think is fine to pay for an adviser as long as the client learns enough after a couple of years, and then do it yourself. It makes little sense to have a target-date fund or a balanced fund and have an adviser! I have paid the hourly fee to a financial advisor just to see if my diversified portfolio was on track years ago when I did not know what a diversified portfolio looked like. Nowadays, there is no excuse as hundreds of blogs and financial websites exist today that offer portfolio models. I still pay for help with my taxes and an attorney to set up my trust. But I have also discovered, with my head-scratching, is why so many smart people who have read up on investing and still don't get it (and they are not lazy).
  19. Hi Tom, I have a little more to say. Not sure if I answered your question because it is a systemic problem within the financial advice industry and the Garrett Planning Network and the National Association of Personal Financial Advisors. I cannot overemphasize that you brought up a touchy but needed topic. How can genuine fiduciary advisors earn a living for all they do? My discussion with an adviser who rejected the hourly pay model and had the audacity to say to me that "it doesn't work" which directly conflicted with the Garrett Planning Network's requirement that their advisers must provide hourly service, is puzzling to me too. Unless these advisers are reported, nothing more can be done. To be fair, people do not like writing checks either and end up "watching the clock" or go to another adviser who offers advice for "free." It is a complex problem with one possible solution for now. How about this business model, financial advisers? Forget the hour fee model because the vast majority of advisers need the AUM too and clients hate writing checks because they are so diluting thinking that they are getting this service for free! (Many surveys support this mistaken notion!). How about fiduciary financial advisors charging 2.0 or even 3.0% AUM for the first couple of years to cover the initial costs of looking at their client's total financial picture? Financial advisers do a lot because the days of creating a complex portfolio are over. It only takes a few minutes to construct a low-cost fully diversified portfolio. But advisers do other things too: estate planning, tax harvesting and planning, life insurance needs, cash flow especially those of us in retirement, but most importantly they serve as financial coaches and keep clients from panicking when the markets get crazy. Then after a year or two of that 2.0% or more AUM to cover the start-up costs (because people hate writing checks), FA can lower their AUM to under 1.0% because there is less work to do. I also refer to Scott Dauenhauer's book for professional advisers on how to make a living serving the public k12 market. The Wild West: Providing Fiduciary Advice to Public School Employees. He has several additional ideas of making money: https://www.amazon.com/Wild-West-Providing-Fiduciary-Employees/dp/B01F96WA2A/ref=sr_1_1?keywords=scott+dauenhauer&qid=1582117331&s=books&sr=1-1 That financial adviser you talked to will probably never read Scott's book or change his or her business model. We all wonder, I wonder, what is the average AUM for genuine fiduciary advisers who serve the K12 market?
  20. Hi Tom, Yeah, a couple of friends had the same response. They don't charge an hourly fee. Calling attention to the "fee-only," just a ruse that says they don't sell conflicted products. We all know that insurance agents or brokers are not bound by any fiduciary guidelines. And we all know that there is NO fiduciary regulations with annuities in 403(B) plans with public k12 school district 403(b). NONE because the vast majority selling these rip off products are insurance agents. The Certified Financial Planner (CFP) is trained to manage a portfolio and are the most likely to be a genuine fiduciary. Sure, they don't sell commissioned products but they found out they can make more money from the AUM than a one-time commission. Garrett Planning Networks will remove any adviser on their network who declines to service a client who just wants to pay by the hour. I have written a story about one such person and the Garrett Planning Networks was very upset and eventually removed that financial adviser. Read my write up here: https://latebloomerwealth.com/did-garrett-planning-network-pass-the-smell-test/ I am not happy with this development in recent years. Like you, I thought that the hour fee would solve all of the high-cost problems and conflicts of interest in one fell swoop. For the most part, it did solve the conflicts of interest part of the problem with selling commission-based products, but the AUM is WAY too high and merely replaced those hideous commissions. I can understand a .25% or .50% but 1.0% AUM or more is a big problem! That's way too much money. We all know how just 1.0% drains our portfolio over time. My plumber, my tax man or my prenup and estate planning attorney never charge an ongoing fee forever. They charge a flat fee and that's the end of it. Why can't financial advisers do the same? Because people are so intimated by the financial markets and financial planners, most people have little choice but pay the 1.0% or more AUM.
  21. I just wanted to bring your attention to LAUSD colleagues who might be interested in discovering how to teach your students personal finance. And you will discover insights into your retirement planning too. Next-Gen Personal Finance, which you will be learning and discovering more on this site and at the 403bwise Facebook page, will be offering a full-day workshop, called FinCamps, on Wednesday, March 25 in Burbank. The workshop includes breakfast and lunch, and your sub! Yep! you heard me correctly. The program will pay for your sub. Unfortunately, these workshops are available to middle and senior high school teachers only. Los Angeles area: registration page for the March 25 workshop in Burbank, CA: https://www.ngpf.org/account/#!/my-account-ngpf-academy-register/948744 Registration for the two-day workshop on July 9-10 in Culver City, CA: https://www.ngpf.org/account/#!/my-account-ngpf-academy-register/507857 Here is a workshop for San Diego teachers on March 27: https://www.ngpf.org/account/#!/my-account-ngpf-academy-register/650573 Here are the workshops offered throughout the country until late August: https://www.ngpf.org/pd/fincamps/ All are FREE with meals. Depending on which FinCamp you attend, there are travel and ho tel accommodations stipend. From the registration page: "For those traveling more than 100 miles (each way) to attend the FinCamp, to help offset the cost, we can reimburse up to $100 for your ho tel cost. You are responsible for organizing and paying for your ho tel accommodation. After attendance at the FinCamp, you will be provided with a form to complete to access your travel stipend. You will be required to upload a ho tel receipt in order for us to process this payment." FinCamps are one-day workshops held during the school year. FinCampPlus are two and sometimes three-day workshops held in the summer.
  22. and Next Gen Personal Finance: NGPF.org.
  23. I agree with Ed. Never trust an insurance company and their "reps." Those reps are not genuine fiduciaries or genuine investment advisers, they are sales personal 100%. Sure, you might start out with a great plan, then Lincoln changes.... What do you do then? American funds even without the loads are too expensive. We generally agree here to go with Vanguard, Fidelity, TIAA, or your states' 457(b) plan. Here in California, we also have a great 403(b) plan through our state teachers' pension plan.
  24. He talked with the WSJ and other publications but it is not a big story. What might be a bigger story that gets the attraction of the mainstream media is at the next NTSA convention, a group of us picket outside their next convention or picket outside NEA headquarters.
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