OT: Investing - Stocks/Mutual Funds/Bonds/Crypto

[GBBucks]

So, assuming your fund has been around 30ish years, you’re claiming that after fees your investors have seen around a 17% annual return every. Single. Year.

Yeah. I’m calling bull ****. But feel free to post the fund name. We can easily see if that’s accurate. If it is, I’ll even invest in it.

35 Years and it's about 14% compounded annually. As I stated before, it's been across multiple firms, and I'm not really interested in sharing personal information, nor do I care about proving myself to anyone on here. I just don't want people who are part of a community I'm in to not have full information about things that impact their livelihood.

To SidneyLanier, 100% stocks are moving together in a much stronger correlation. As midranger pointed out, this is hugely impacted by passive investing. I would just be worried about what happens when the cycle turns and people start withdrawing/selling. It amplifies the way up and the way down. All this Liquidity could evaporate.

3 things matter for SP500 and other indexes funds going forward.
1. Revenue growth - can it continue to infinity faster than GDP?
2. Margin expansion - Can we expect this to continue in perpetuity?
3. Multiple expansion/contraction - Look at Shiller cyclically adjusted PE in link below. Higher than any time except for the 2000 dot com bubble (PEts.com, Yahoo, etc) That should be alarming to everyone.

https://www.multpl.com/shiller-pe

[midranger]

FWIW DJIA has returned 12.53% annually over 35 years with dividends reinvested, so if the fees of your fund are 1.5% or higher (including loads [which would be very typical]) it still comes out behind.

However, if not, the people who we lucky enough to pick that needle in a haystack fund would have done well for themselves.

[DigitalFool]

Let's say you had a windfall of $50,000 in cash today and let's assume the following:

rIRA is maxed out
401k maxed to company match
529 maxed for all kids up to tax credit
6 mo emergency fund already established

Besides holding in a high interest account, would you dump into market immediately, wait for a correction or do something else?

[midranger]

If no debt to throw it at, I’d personally keep it in high interest account and wait for an opportunity.

This goes against my typical “time in market” “don’t try to time the market” stance. But with an election looming and market at highs, I think a correction is near enough. Not to be political but the economy will be propped up through the next election cycle with the current free money approach. Also, The market tends to hate round numbers, maybe just human nature, but I could see things tanking at 30k if it hits it.

[Finn]

Let's say you had a windfall of $50,000 in cash today and let's assume the following:

Spoiler:

rIRA is maxed out
401k maxed to company match
529 maxed for all kids up to tax credit
6 mo emergency fund already established

Besides holding in a high interest account, would you dump into market immediately, wait for a correction or do something else?

I'd add some percentage (30-50%) to the emergency fund & dollar cost average the balance into some good no-load mutual funds.

[HaroldinGMinor]

I'd bet it all on a single spin of the roulette wheel.

[crkone]

I'd bet it all on a single spin of the roulette wheel.

Scared money don't make money.

[MickeyDavis]

When I got divorced I sold my wedding ring and bet it on one roulette spin. I lost. No surprise. She got all my other money too.

[Ryan5UW]

When I got divorced I sold my wedding ring and bet it on one roulette spin. I lost. No surprise. She got all my other money too.

I still keep wondering what to do with my ex's ring (not sure I want to trade/sell it and buy something with it - bad karma)... this isn't a bad idea.

[engelmartin]

I'd bet it all on a single spin of the roulette wheel.

you going red or black?

[HaroldinGMinor]

I'd bet it all on a single spin of the roulette wheel.

you going red or black?

Watch on YouTube

[midranger]

23 red, imo

[MickeyDavis]

My losing bet was red.

[Kerb Hohl]

Along similar lines, does anyone use a financial planner for anything?

I am basically along the lines of you guys. Just throwing the majority of my $ via 401k, Roth, eventually maybe other avenues into general stock market funds.

My wife's parents and wife are trying to suggest we should talk to one. They have one and like it but I don't know if they have the same outlook that I do that most of this is a waste of time/money. Do financial planners invest your money? Because if so, I'm well aware that they're just burning a % in commission fees while they make the same amount (sometimes less) as a return on your investment.

OK, this was discussed a few pages back but I discussed it with them further this weekend.

They do have the financial planner invest their money.

They said, "he doesn't take a percentage, he is just paid on commission from the company." Well, that commission has to come from somewhere, right? So most likely some of the funds he is investing in for them are siphoning a larger % than a Vanguard ETF that I'm in, right?

They were not pushing it too hard but were just giving high praise to him as they "paid off their mortgage early, put the kids through college, etc." with great investment returns. But, like, hasn't almost everyone? I have had my 401k and Roth since mid-2010 and I've gotten about 9.5% overall...and I still probably am not active enough in balancing some things out.

I'll probably ask what their returns have been but my guess is that it's no better than what I've gotten just blindly putting it in ETFs and some in a somewhat low % target retirement fund.

[Stannis]

Let's say you had a windfall of $50,000 in cash today and let's assume the following:

rIRA is maxed out
401k maxed to company match
529 maxed for all kids up to tax credit
6 mo emergency fund already established

Besides holding in a high interest account, would you dump into market immediately, wait for a correction or do something else?

I'm in the same boat as you.

I keep reading "Time in Market > Trying to Time the Market". But it just doesn't make sense for me to throw my money into the market at all time highs, during a 10 year bull run, and when the elections are near.

I'm still deciding for myself.

As of right now, I'm just bumping my 401k contributions so I can use dollar cost averaging. My checks are peanuts now, but that's what I have my savings for.

[Nowak008]

I just made a large bet on nuclear energy. I feel like we will eventually be moving in that direction and the Simpsons are always right.

[midranger]

Along similar lines, does anyone use a financial planner for anything?

I am basically along the lines of you guys. Just throwing the majority of my $ via 401k, Roth, eventually maybe other avenues into general stock market funds.

My wife's parents and wife are trying to suggest we should talk to one. They have one and like it but I don't know if they have the same outlook that I do that most of this is a waste of time/money. Do financial planners invest your money? Because if so, I'm well aware that they're just burning a % in commission fees while they make the same amount (sometimes less) as a return on your investment.

OK, this was discussed a few pages back but I discussed it with them further this weekend.

They do have the financial planner invest their money.

They said, "he doesn't take a percentage, he is just paid on commission from the company." Well, that commission has to come from somewhere, right? So most likely some of the funds he is investing in for them are siphoning a larger % than a Vanguard ETF that I'm in, right?

They were not pushing it too hard but were just giving high praise to him as they "paid off their mortgage early, put the kids through college, etc." with great investment returns. But, like, hasn't almost everyone? I have had my 401k and Roth since mid-2010 and I've gotten about 9.5% overall...and I still probably am not active enough in balancing some things out.

I'll probably ask what their returns have been but my guess is that it's no better than what I've gotten just blindly putting it in ETFs and some in a somewhat low % target retirement fund.

Probably the worst setup.

He probably takes loads and part of the fees from the funds. He’ll keep moving your money back and forth into high load/high fee funds to maintain money coming in. His motivation is to always be moving your money because that’s how he gets paid. It’s also to move your money into the funds with the highest fees, because again, that’s how he makes money.

At least in an AUM setup their agenda is aligned with yours (ie have as much money in your account as possible because they take a cut of it).

Run away.

[Kerb Hohl]

Along similar lines, does anyone use a financial planner for anything?

I am basically along the lines of you guys. Just throwing the majority of my $ via 401k, Roth, eventually maybe other avenues into general stock market funds.

My wife's parents and wife are trying to suggest we should talk to one. They have one and like it but I don't know if they have the same outlook that I do that most of this is a waste of time/money. Do financial planners invest your money? Because if so, I'm well aware that they're just burning a % in commission fees while they make the same amount (sometimes less) as a return on your investment.

OK, this was discussed a few pages back but I discussed it with them further this weekend.

They do have the financial planner invest their money.

They said, "he doesn't take a percentage, he is just paid on commission from the company." Well, that commission has to come from somewhere, right? So most likely some of the funds he is investing in for them are siphoning a larger % than a Vanguard ETF that I'm in, right?

They were not pushing it too hard but were just giving high praise to him as they "paid off their mortgage early, put the kids through college, etc." with great investment returns. But, like, hasn't almost everyone? I have had my 401k and Roth since mid-2010 and I've gotten about 9.5% overall...and I still probably am not active enough in balancing some things out.

I'll probably ask what their returns have been but my guess is that it's no better than what I've gotten just blindly putting it in ETFs and some in a somewhat low % target retirement fund.

Probably the worst setup.

He probably takes loads and part of the fees from the funds. He’ll keep moving your money back and forth into high load/high fee funds to maintain money coming in. His motivation is to always be moving your money because that’s how he gets paid. It’s also to move your money into the funds with the highest fees, because again, that’s how he makes money.

At least in an AUM setup their agenda is aligned with yours (ie have as much money in your account as possible because they take a cut of it).

Run away.

Yeah, I'd like to ask them what their ROI has been. I'm guessing it has not been as good as just throwing into ETFs. Thanks for the advice...they are not forcefully pushing us toward this and while they are wealthy enough regardless, they acknowledge that I "pay more attention to this stuff" so probably would not be offended if I said, "nah."

[Kerb Hohl]

Bringing that "$50k windfall" question back - I am nowhere near getting a $50k windfall, but in a little over a year one of my daycare payments goes away and a lot of other things wind down (car payment, mortgage insurance, also a 5x payment into one kid's college fund because I have tried as hard as I can to put everything I can into there up front and I'll phase that out in about a year)...point being I might finally have some $ to throw around again other than the company $401k match + loading up the college fund + the annual home improvement that has ended up showing up + Roth contribution if I can manage.

Has anyone ever done or looked into BRRRR? I have an eye on the idea. I'm not sure it's worth the risk, but I know some friends that have done it. If I really did it, I personally would want to farm out most of the management given that I don't have a ton of extra time. I don't know if that cuts enough into the profits to make it basically not worth it. I personally don't have great experience in property or handywork other than probably a better eye for research/value/statistics/interest over time...but I do have contacts and help in basically all fields.

Obviously the question is is it worth my time, or do I just throw more into ETFs (and maybe wait a bit given discussion of market) and let it grow or take a bit more of a swing for the fences on that? And is it worth it if I'm farming out a lot of the management work?

[jschligs]

Bringing that "$50k windfall" question back - I am nowhere near getting a $50k windfall, but in a little over a year one of my daycare payments goes away and a lot of other things wind down (car payment, mortgage insurance, also a 5x payment into one kid's college fund because I have tried as hard as I can to put everything I can into there up front and I'll phase that out in about a year)...point being I might finally have some $ to throw around again other than the company $401k match + loading up the college fund + the annual home improvement that has ended up showing up + Roth contribution if I can manage.

Has anyone ever done or looked into BRRRR? I have an eye on the idea. I'm not sure it's worth the risk, but I know some friends that have done it. If I really did it, I personally would want to farm out most of the management given that I don't have a ton of extra time. I don't know if that cuts enough into the profits to make it basically not worth it. I personally don't have great experience in property or handywork other than probably a better eye for research/value/statistics/interest over time...but I do have contacts and help in basically all fields.

Obviously the question is is it worth my time, or do I just throw more into ETFs (and maybe wait a bit given discussion of market) and let it grow or take a bit more of a swing for the fences on that? And is it worth it if I'm farming out a lot of the management work?

I have an old friend from when I worked at a bank that did BRRRR, he maintains the properties and bought them mostly during the recession. He was able to make enough income on that to scale back his finance position at the bank to 3 days a week. I've picked his brain and he says it's a lot of work, but has afforded him some great things. His timing was hard to beat, but it's something I will be looking to do when I have a little bit of that "windfall" cash everyone keeps talking about.

I'm a relatively handy guy, and I know the Madison housing market well and have a few people in the renovation industries that could help cut my costs down. It's something I fully plan on doing in the next 10 years.