HOLY CRAP if I could invest and get 5% a month thats an annual yield of 60% I would be rockstar and could make a killing in the financial markets...

I stopped reading at that point.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

If your going to invest, either on your own or with an investor. Make sure you know what you mean when you say you are ok with mid-level "risk". You are on a good first step with having the word risk in qoute's, since the financial world loves to use that word in place of fluctuation, and then convince everyone that a lower avg return with less fluctuation is less "risk" than a higher avg return with more fluctuation. Even if you plan on investing your money for 30yrs.

Personally, Go buy the Vanguard S&P fund and forget about it. A co-worker who I have almost convinced to do this, asked his financial advisor, Hey, you guys always compare your results to the S&P why am I paying you to hit that benchmark when I can just go buy it myself. His response... Cause in a down market most will not leave it and will sell. If you can truely buy it and forget its a better play.

Good luck to you.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

It would be more like 80%... compounding is your friend

Well I calculated it based on a 5% annual return compounded monthly, but it was more of an exercise to illustrate a point--if I had compounded 5% monthly the return would've been enormous over 15 years, 10s of millions of dollars, but I'm sure you noticed the difference.

Anyway the percent gain wasn't the point, it was the percent taken by an advisor. I was more aggressive than I should've been but if you look at historic monthly returns you find about 4% return, on average, every month.
https://www.yardeni.com/pub/stmktreturns.pdf

You stripped this out of my post but as I said, you can cherry pick stretches where the market loses or gains huge chunks but every 10 years or so you start getting smoother returns that, if you just buy index funds and leave the money alone, will give you a fairly normalized return without throwing percentage points away.

So Steve, what way did you go? I have been looking into WealthSimple for my 2017 and future RSP contributions and it is looking pretty attractive.

I asked a financial adviser friend (he doesn't hold any of my money) what his thoughts were on robo-investors and it took him 30 minutes to say that, at the end of the day, you don't get the benefit of a broker's advice. I've always been very cynical about the value of advisers. Given a choice between a likely higher return to me and higher fees for them, there's no question in my mind which investment they would recommend.

The value of an FA today is to get you access to product you cannot otherwise access and to execute on complex strategies that you are not well situated to design and effect. For example, in a low yield environment, an FA should have access to expertise to help you devise laddered bond strategies that deliver higher returns and lower risk. Or an FA should be able to get you into sector specific private equity funds that fit with your investment strategy. Our FA got us into a fund that makes loans to local home builders at attractive interest rates. Since we know the market, we are comfortable with the risk. In return we are getting a 10% - 11% annual yield. As part of a diversified income strategy it make sense and boosts returns. If an FA can get you into bespoke products today, their fees are not worth it given the low cost self directed options. The value of an FA is best borne out when markets turn south.

I'm a fee only financial adviser to high net worth individuals and I would say 95% of individuals do not need my service. I would probably be of little value to them in terms of service and value added other than emotional support. The fees for a robo advisor are nothing but a waste. Let's fill all the buckets, call it diversification and rebalance your portfolio periodically. Blah Blah - spend a few hours, educate yourself, and go to Vanguard and buy a few products and be done with it. Evaluate your holdings periodically.

I have 40 clients and it all boils down to trust and not whether you are beating the market or under-performing the market. However, I have brought significant value through managing their assets, tax planning, employee benefits from options to restricted stock to 10b5 plans. I've had significant impact on helping them structure their employment contracts, to analyzing their pension and other benefits. Today, I worked on managing their cash positions. While it may only be worth a 1% increase on their cash yield, that 1% can be a few thousand a year in value from what they would be doing with a robo adviser or themselves. Today, I also swapped out of a fund into a lower share class given the amount of assets under management. It saves 10bps a year for the client, maybe only worth $1,000 on a $1.0M position, but they would not be eligible for the share class based on their individual holding alone. Sometimes it's the little things that can add up to significant value.

I always say, savings trumps returns.

You have to take charge and manage your own money. It's one of the most important things an adult must learn and the earlier the better. I ran into a guy that wanted to be my financial adviser back in the early part of the century. He was 70+ and still working. I'm was thinking to myself if this guy was any good WHY is he still working when I am retired? Does he love his job? Bwahaha.

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"The great pleasure in life is doing what people say you cannot do."

Financial advisors are synonymous with compounded loss.

Spend a few evenings perusing the boglehead website to get a sense of what how best to take control of your own money. Or better yet, spend some time reading some good books on personal finance. It is not that difficult to manage your own money from a practical standpoint. Not bailing when the market turns takes some emotional fortitude though.

The keys are to make sure you have a decent emergency fund and have eliminated high interest debt prior to investing money. With your investments, first determine your level of risk (stock/bond ratio), and then select low-cost index funds (like Vanguard). While some hold complex portfolio's, you can do quite well with a very simplified portfolio. I currently hold just four funds: US Stock Market Total Index Fund, US REIT Index Fund, Total Stock Market International Fun, and Total Bond Market Fund. These funds are spread across my employer-based retirement account, a health savings account, a Roth IRA, and a taxable account. This costs me nothing and takes about an hour of my time every year to make sure these assets are allocated in the percentages that I have set for myself.

It is highly likely that your retirement money is partially being used at present to help pay for your advisor's retirement.

Here is the truth. 9 out 10 finance professionals will not outperform SPY over the long run. Normally, their outperformance is simply a function of levering up and juicing the returns - which works until the market moves against them.

Dollar cost averaging into a broad index fund like VTI and perhaps keeping 5-10% of your assets in bonds is the way to go in my opinion.

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Next races on the schedule: none at the moment

Warren Buffett just won the bet proving that.

https://www.investopedia.com/...kb.asp#ixzz54dIcBSeS

In 2008, Warren Buffett issued a challenge to the hedge fund industry, which in his view charged exorbitant fees that the funds' performances couldn't justify. Protégé Partners LLC accepted, and the two parties placed a million-dollar bet.

Buffett has won the bet. The Protégé co-founder, who left in the fund in 2015, conceded defeat ahead of the contest's scheduled wrap-up on December 31, 2017, writing, "for all intents and purposes, the game is over. I lost."

Buffett's ultimately successful contention was that, including fees, costs and expenses, an S&P 500 index fund would outperform a hand-picked portfolio of hedge funds over 10 years. The bet pit two basic investing philosophies against each other: passive and active investing.

At the end of 2016, Buffett's index fund bet had gained 7.1% per year, or $854,000 in total, compared to 2.2% per year for Protégé's picks – just $220,000 in total.

Totally my suggestion was, of course, simply something that I picked up years ago after reading Buffet's books. He is the man.

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Next races on the schedule: none at the moment

Let me know how those REIT funds perform and the Total Bond Market Fund perform when rates rise? I'm betting you need to shorten your bond portfolio duration as the reflation trade is gaining momentum. If you look at the Barclays Aggregate Index, which is what you are buying, you will notice its duration has steadily increased to over 6 years, which means you are taking on more interest rate risk. Most advisors have a very limited understanding about duration, convexity, spreads, and credit quality when it comes to bonds. Buying an index fund is okay for most but there is a lot of value that can be brought within the bond market if you know what you are doing.