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<p>People were begging him to let them into his fund too.</p>
<p>^ With a lot of those investments funneled to Bernie by other Financial Advisors, whose clients never knew their money wasn’t being invested directly … but was simply passed along to Bernie.</p>
<p>[Note: It does appear that those investors who figured out Bernie was running a Ponzi Scheme made out VERY WELL by receiving a nice premium when they withdrew their investments.]</p>
<p>Wow, thanks for all the responses, which I will cull through when I get home.</p>
<p>Just to clarify: Mom and Dad are in their mid-80’s. They have pensions, Social Security, and a monthly check from their long-term care insurance. All of that pays for most of their living expenses. They do have both an attorney and an accountant, so those bases are definitely covered. </p>
<p>Dad has managed the portfolio for decades. He educated himself and did very well, always investing wisely for the stage of life they were in, which has paid off in a comfortable nest egg. However, he is getting a little foggy, and we kids are concerned that he might make some kind of “mistake” with the current portfolio, or do something not-so-smart with the proceeds from the house. </p>
<p>I think we know what the goals are: primarily asset preservation, and possibly a little income. I just want to make sure that we get sound advice on how to accomplish that.</p>
<p>Sounds like dad has a wealth of knowledge that could be tapped. Perhaps he could just have his transactions double-checked by the kids.</p>
<p>I know about fumble fingers in transactions like buying 10,000 of something when I meant to buy just 1,000 or mixing up a ticker symbol. I guess that’s more of a problem as you get older.</p>
<p>I agree that it’s important to put the money into something safe so the money doesn’t just go “poof.” My friend’s H had that happen. He was a very successful MD & managing everything one day & then the next thing she knew, he had blown through all the money they made from selling their home & also not paid income taxes for many years. She’s taken out a loan to pay the back taxes & they are now renting. She has no idea where the money evaporated & her H is no longer able to handle funds. 
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<p>At this point, it doesn’t sound like you need to do anything fancy–treasury bills, highly rated bonds, some mutual funds and some money market funds might be good. Depending in the $ involved, it might even be worthwhile considering buying an investment property that provides a stream of income and helps hedge against inflation, with a property manager to handle tenants.</p>
<p>Better yet, if you educate yourself, buy dividend paying stocks, sell OTM calls against those positions for added income. In more speculative stocks, buy DITM calls, sell OTM calls against those positions and also sell OTM puts for added income.</p>
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<p>Isn’t this what happened in the credit/mortgage bubble?
The problem was that the W’s administration regulators, Banks, Hedge Funds, flipping house owners, parents trying to finance kid’s college (me, 2.5% 25 year student loans, and refi), (and keeping this post legal TOS), people consolidating debt, and finally retirement planning. Pyramiding is a wonderful concept.</p>
<p>BTW,
elderly parents often have some type of cash value LI, may be worth keeping-have discovered that many accountants/legal beagles, don’t have a clue.</p>
<p>Those folks that made out very well are getting clawed back.</p>
<p>“It took me several months for my first brokerage to add margin to my
trading account (you need margin for shorting). Since then, many
short, double short and triple short ETFs have been added. You can
double short the QQQQs by just buying the QIDs. The double-short is
probably a synthetic mix of put options.”</p>
<p>There is an interesting paper in trimtabs.com about ETF flows and market performance. Here is a sample of it:</p>
<p>observed that equity prices tend to fall after equity exchange-traded funds (ETFs) rake in large sums of money. Conversely, the market tends to rise after equity ETFs post heavy outflows.
Regression analysis suggests the probability that equity ETF flows are not a contrary leading indicator is less than 1%.
This study tests the robustness of that hypothesis. Does the relationship between equity ETF flows and market moves change if we use different smoothing periods for flows? What trading rules should investors use if they want to fade the ETF crowd?
We found that:
Monthly equity ETF flows (as a percentage of assets) and the returns of the S&P 500 one month later are negatively correlated to the tune of 21.4%.
The negative correlation rises to 45.6% for a two-month period, and to 52.4% for a three-month period. The correlation coefficients are statistically significant at the 1% level of confidence in all cases.
Short equity ETF flows are positively correlated with future stock returns, and these correlation coefficients are also significant. Simply put, ETF investors are exceptionally poor market timers in both directions.
We built a simple model that goes long the S&P 500 when equity ETF flows are below average, and short when they are above average. We tested it with moving averages of 1 to 100 days. The contrarian ETF portfolio significantly outperformed the S&P 500 in all cases, with average gains of 281 percentage points in the past decade. The outperformance was strongest for smoothing periods of one to four months.
We have two explanations for the strongly negative correlation between equity ETF flows and future market returns. First, ETFs are traded mostly by retail investors and day traders. These are the least informed and most emotional market participants—the ones most likely to lose money over time. Second, we suspect hedge funds use ETFs when liquidity dries up. Hedge funds were forced to close individual stock positions during the credit crisis, so they bought equity ETFs instead. Equity ETFs posted large outflows in 2009, when liquidity improved.
When we removed long and short equity ETF flows from the TrimTabs Demand Index, the model portfolio’s outperformance dropped 90%—but the “inferior” portfolio still beat the market by 70 percentage points.</p>
<p>Here is a great website that explains alot about financial planners [DOB:</a> Choosing A Financial Planner, Connecticut Department of Banking Publication](<a href=“Choosing A Financial Planner”>Choosing A Financial Planner) . </p>
<p>I agree the best way to go is to hire a FEE only financial planner, and do not let your CPA do your financial planning, it is best to separate those functions. If you want your current CPA to be your financial planner, find a different CPA for reporting and tax services.</p>
<p>Yes, my BIL tried using his tax preparer as his financial planner & there were a LOT of trades that were questionable (buy high, sell low & often). He was very upset & has since had to find a new tax preparer & financial planner. </p>
<p>Since your folks don’t want anything fancy, stick with the safe stuff to protect their assets and allow for slow but steady growth to keep up with inflation & COL. I would suggest not doing anything aggressive with their funds and it should last their lifetimes & perhaps leave an estate behind.</p>