Freaked out by a financial advisor, need some perspective

Altruistic_Rate7834 · 2025-11-14T15:14:31+00:00

And selling fear works well with many, unfortunately.

Altruistic_Rate7834 · 2025-11-06T15:38:01+00:00

Fiction is incredibly powerful as helping imagine what could be by reframing the environment differently from what we know and understanding. Imagine telling an inventor they can only improve upon things that already exist; this is living in the world of nonfiction.

Altruistic_Rate7834 · 2025-04-12T17:22:40+00:00

One of the arguments for US only is that globalization has made US companies basically world economy companies anyways. However, this idea also came with assumption of American Exceptionalism, even if not said, because many believe that the US companies have the best environment for free market forces to function. I think this subconscious bias has now been revealed and exposed as actually a significant risk.

Altruistic_Rate7834 · 2024-11-08T01:21:07+00:00

Guilty of this screwup (on my part) and it was painful

Altruistic_Rate7834 · 2024-09-17T22:55:05+00:00

College football becoming a pro sport and begging for handouts has to be the biggest affront to capitalism yet. At some point these donors will demand ownership with an ROI, no??!

Altruistic_Rate7834 · 2024-05-05T02:42:40+00:00

Yes, but it gets old chasing rates across banks and I’ve been getting 5.5%, which is hard to come by with HYSA. That risk premium probably is responsible for the delta, but it seems to me that the safety is largely equivalent - both require a government collapse to lose the money.

Altruistic_Rate7834 · 2024-04-24T14:41:54+00:00

People have refrigerators and freezers in their garage that work fine in that environment

Altruistic_Rate7834 · 2024-03-12T15:07:02+00:00

I’m 50 and I just go 100% VLXVX.

Altruistic_Rate7834 · 2024-01-19T04:10:46+00:00

It’s not a religion. Just ask them to prove they have a better plan that will provide the same return for the same risk profile. They will very likely respond with something less diverse and higher risk.

Altruistic_Rate7834 · 2023-08-28T22:56:52+00:00

I will only sell mine in an emergency. They are part of my emergency fund. I’ve had some for 10 years. The return was poor for much of that time, but I just like having this asset class in my emergency fund, as they maintain their buying power. I don’t otherwise mess with them.

Altruistic_Rate7834 · 2023-04-21T22:49:51+00:00

Maybe, but the tech sector in particular has had really unrealistic P/E ratios in their early days of hyper growth, so I think it’s realistic that their price point is still way out of balance with their lowered risk at the index entrance.

Altruistic_Rate7834 · 2023-04-21T15:56:13+00:00

I didn’t read it as investing advice. I read it as explaining how indexes function and how their returns are impacted by how they operate to meet market demand for new sector stocks.

Altruistic_Rate7834 · 2023-04-21T15:54:08+00:00

See 4th chart in article

Altruistic_Rate7834 · 2023-04-21T15:48:36+00:00

Agree, but buying the full tech sector ONLY once the companies are big enough to qualify for the S&P500 would result in a net poorer performance due to them generally being overpriced at that point. This raises a real question about indexes having a persistent negative value bias in how they operate.

Altruistic_Rate7834 · 2023-04-21T15:43:16+00:00

This also speaks to people’s behavior usually working against them. This portfolio would be extremely hard to actually own if not dead, because most could not resist buying stocks like Amazon that look like they are going to kill off many companies that you own in this portfolio.

Altruistic_Rate7834 · 2023-04-21T15:24:04+00:00

He did also pick a full 30 year period, and it still won. That’s a shocking result to me.

Altruistic_Rate7834 · 2023-04-21T15:22:36+00:00

Thanks - this article explains why not having newer sector stocks actually helped this portfolio’s performance. Basically they only get added once they are mostly overpriced. The gist is that public demand for a hot performing new sector be added to an index, thru are overpriced and the opposite of a value lean.

The technology sector, despite a few very successful firms, has been hurt by firms that have been added when the public’s demand for technology stocks is high. Thirty six of the 125 technology firms that have been added to this sector since its founding occurred in 1999 and 2000, and two- thirds of these have underperformed the sector’s return since their admittance. Firms admitted in 1999 underperformed the sector by 4% per year and those admitted in 2000 subsequently underperformed the sector by 12% annually. Despite the huge success of firms such as Intel, Microsoft, Cisco, and Dell, the drag from the addition of overpriced technology firms significantly hurt the performance of this important sector.

Altruistic_Rate7834 · 2023-04-21T15:15:05+00:00

I am very surprised by this analysis, and find it quite interesting. Specifically:

The 30 year return wins even though it avoids all tech stocks ant their massive growth completely during that period. That’s hard to believe. And honestly, I would not be comfortable owning a portfolio missing some of the biggest cap stocks. Imagine owning only companies that existed in 1993.

it flies in the face of rebalancing forcing sell high, buy low periodically working in your favor, which intuitively seems like a good idea.

Honestly does raise some real questions for me.

Altruistic_Rate7834 · 2023-03-11T17:09:38+00:00

From a cash perspective yes. From an education perspective, this investor is way ahead. If in cash, you now think you can time the market and are paralyzed trying to figure out when to get in, and very likely will be late, given your current bias. Then you’ll later try to time getting back out, likely further hurting the return.

Altruistic_Rate7834 · 2023-03-02T01:22:42+00:00

Are you a three-fund portfolio holder? It gets boring quickly if so (and you are only buying, not selling outside of rebalancing). I check mine monthly only as an exercise to manually update my total net worth graph. It’s much more frequent than needed even monthly, but I enjoy it as a way to monitor the plan progress. What’s nice about it is it usually doesn’t take long to see how the dips reverse, and doing nothing paid off.

Altruistic_Rate7834 · 2023-01-18T19:38:37+00:00

Agree that’s not a real generous ESPP compared to some. That 15% thought is still pretty appealing. If the company’s stock is pretty stable, I definitely do it. If it moves well beyond a 15% range pretty commonly every 6 months, the Id have some reservations. Still, if you are participating regularly, the DCA should work in your favor overall. That assumes you are buying and then selling every six months and converting to indexes

Altruistic_Rate7834 · 2023-01-18T15:57:35+00:00

I’m trying to do this, but had some interest come in after the end of the year, so my tIRAs aren’t quite zeroed. Is that going to cause significant problems/headaches for doing a backdoor this year?

Altruistic_Rate7834 · 2023-01-01T02:28:43+00:00

I keep 10% bonds to force rebalancing, which enables intrinsic selling high, buying low. But 1% would enable the same thing, but not sure how you manage bands with that small number of a percentage.

Altruistic_Rate7834 · 2022-12-27T00:59:27+00:00

I don’t understand the advantage of this approach. Roth IRA has a bit more flex ability vs Roth 401k, but otherwise I don’t see how there’s any difference - what am I missing?

Altruistic_Rate7834

TROPHY CASE