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tony

Callan Classic Periodic Table w/ 2019 results

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Low fees are a pretty good solution. Created a spreadsheet to help interpret the chart (see attached.) I stuck in 3 yellow cells to play with: Starting Amount, Annual Contribution, Fees

S&P 500, 10k starting, 12k contributions...

0% fee $706,351 ending bal

1% fee $631,872 ending bal

2% fee 566,105 ending bal

Then I started to mess around with rebalancing annually and % contributions, but I should get back to work...

 

jellybean.xlsx

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Scott O  your attachment doesn't open. So If my comment is off base please excuse.

 

Fees are important but  fees alone can't predict market performance of an asset class. Can someone paying more fees outperform someone paying lower fees? Absolutely depending on their allocation. Fees are only one thing in your arsenal that can help you get market returns. Diversification is just as important as is risk management. Leaving your investments alone and not trying to beat the market is another skill needed.

You must be a math guy. I'm awful at math but can pretty much figure the same without calculations.  I'm not knocking math and spreadsheets and models but often the numbers presented don't always pan out in the real world exactly as presented especially when it comes to investments.  I can still remember when working with Math teachers how they  had the world figured out by numbers and models. Problem is for anything that is random  and fluctuating like the financial markets its hard to predict outcomes. For figuring out  something like grade distributions,  numbers nail it. I hope this makes sense as I wrote this on the fly.

Keep posting Scott O

Regards 

Tony

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2 hours ago, krow36 said:

Emerging Mkt Stocks are usually on the top row or the bottom row! 

Learned my lesson with these years ago. Advisor put some money in them for me promising huge returns and they tanked after climbing rapidly for a while. I stick to mostly large cap internationals now but I'm sure a Total International  Index Funds has some emerging markets in it and that's enough for me. No more pure emerging market funds for me. Too volatile. Never made a penney in them or at least not for long.

 

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3 hours ago, tony said:

Scott O  your attachment doesn't open. So If my comment is off base please excuse.

 

Fees are important but  fees alone can't predict market performance of an asset class. Can someone paying more fees outperform someone paying lower fees? Absolutely depending on their allocation. Fees are only one thing in your arsenal that can help you get market returns. Diversification is just as important as is risk management. Leaving your investments alone and not trying to beat the market is another skill needed.

You must be a math guy. I'm awful at math but can pretty much figure the same without calculations.  I'm not knocking math and spreadsheets and models but often the numbers presented don't always pan out in the real world exactly as presented especially when it comes to investments.  I can still remember when working with Math teachers how they  had the world figured out by numbers and models. Problem is for anything that is random  and fluctuating like the financial markets its hard to predict outcomes. For figuring out  something like grade distributions,  numbers nail it. I hope this makes sense as I wrote this on the fly.

Keep posting Scott O

Regards 

Tony

Changed from xlsx to xls, maybe that'll help. (I messed up the Real Estate return in 2001 in the previous spreadsheet too - I'll re-up it.)

I look at fees as a guaranteed loss. The S&P 500 is going to perform the same way if I'm paying 2%, 1%, or 0% - so why lose?

Sometimes I feel like this callan chart is used to baffle beginning investors. Originally I was introduced to it as "the jelly bean chart." Ranking asset classes in a table isn't super useful. The lesson I get from it is that returns aren't predictable from year to year, so don't believe anyone who says they can avoid pitfalls, because at the same time they may be avoiding gains and charging you all the while for that bad advice. It seems best to buy and hold low cost index funds for a long period of time.

When I started investing in my workplace 403b through American Funds I had a guy who put me in a bunch of mutual funds with 5.75% front loads and like 1% expenses - terrible. All the good that a financial advisor could do by keeping me on track with my contributions, shielding me from bad decisions, or managing my portfolio, was completely undone by fund placement choices. 

jellybean.xls

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4 hours ago, ScottO said:

Changed from xlsx to xls, maybe that'll help. (I messed up the Real Estate return in 2001 in the previous spreadsheet too - I'll re-up it.)

I look at fees as a guaranteed loss. The S&P 500 is going to perform the same way if I'm paying 2%, 1%, or 0% - so why lose?

Sometimes I feel like this callan chart is used to baffle beginning investors. Originally I was introduced to it as "the jelly bean chart." Ranking asset classes in a table isn't super useful. The lesson I get from it is that returns aren't predictable from year to year, so don't believe anyone who says they can avoid pitfalls, because at the same time they may be avoiding gains and charging you all the while for that bad advice. It seems best to buy and hold low cost index funds for a long period of time.

When I started investing in my workplace 403b through American Funds I had a guy who put me in a bunch of mutual funds with 5.75% front loads and like 1% expenses - terrible. All the good that a financial advisor could do by keeping me on track with my contributions, shielding me from bad decisions, or managing my portfolio, was completely undone by fund placement choices. 

jellybean.xlsUnavailable

The usual practice is the 5.75% load is waived with tax-deferred retirement plans.

Dam shame on American funds for charging those outrageous commissions! 

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59 minutes ago, sschullo said:

The usual practice is the 5.75% load is waived with tax-deferred retirement plans.

 

Steve I was a victim too. I went to American funds to escape annuities initially and I too was charged that load in a 403b. As soon as Vanguard was added I dumped American. Then the new regs came and messed things up again and took Vanguard away. Finally discovered Aspire and then 457b plan.  No 403b investor should have to go through this but as we often read here they do.

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16 hours ago, tony said:

  Error code: 2C171/1   nope still won't open  . why not copy and paste

It's more fun when you can play with the numbers in the cells and see values change - trying Google Docs: https://drive.google.com/file/d/1KnMX-B4heFDJKhWd1EvtOXVVmKKI3-0b/view?usp=sharing

Spreadsheets help me understand numbers. The table of percentages is interesting, but I want to know how they relate to each other and affect an ending balance outcome. I don't use it to predict the future, it's more for determining how hard to kick my present self for not contributing more in the past 😋   

22 hours ago, krow36 said:

ScottO you can check your spreadsheet with one put out by the national CPA organization. https://www.360financialliteracy.org/Calculators/403-b-Savings-Calculator3?fpath=197 

^ that calculator is pretty cool.

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