<p>Hi! We’re trying to take better control over our finances and I’m now weighing what we should do about investing – our joint funds as well as retirement funds. Pros & cons of self-directed vs. several different options to have account managed.</p>
<p>The self-directed is pretty straight forward, WE would make the various investment decisions & choices. The directed is much more confusing:</p>
<ol>
<li> We can use Schwab financial advisor at a % of assets management charge;</li>
<li> We can use independent fee only financial advisor (Schwab has a recommended very short list or find our own);</li>
<li> Schwab has a new Windhaven managed account that protects against the downside risk of a lot of these catastrophes (used to be called Windward but has been bought by Schwab & renamed); also charged a % of assets managed</li>
</ol>
<p>Any pros & cons? We admittedly have been very lazy to date at keeping track of our holdings and rarely trade. We should be able to live comfortably on H’s pension, so these funds would be our safety net and legacy to our kids/grandkids.</p>
<p>My brother is very good at investing and done quite well; the rest of us muddle along mostly.</p>
<p>Here’s more info about the Windhaven, protection against downside risk model in an article I found on the web by searching Windward downside risk protection.</p>
<p>According to the promotional material, even after fees, Windward outperformed the index on the upside in the 8 years it’s been in existence (& since its name has been changed by Schwab to Windhaven–with the same employees). I am pondering perhaps having them manage a portion of our funds with us managing the rest ourselves.</p>
<p>My IRA is with TIAA-CREF because I joined when I worked for a non-profit. Everything is on autopilot. Happydad’s 401(k) is in a small caps fund through the brokerage firm that handles his employer’s retirement fund. That’s basically autopilot. Happydad has his own Roth with E*TRADE. After losing ridiculous amounts of money by hand-picking his own investments, about three years ago he began to subscribe to Motley Fool and has been following their advice. His account has recovered, but I haven’t done the math required to determine whether this recovery is worth the money he spends for the Motley Fool subscription. That he is no longer obsessed with the market and losing money is good enough for me!</p>
<p>HImom - If you’re confident in your decision-making, you’ll probably do perfectly fine doing your own investing. It takes decreasing effort over time, as you develop your own approach to investing.</p>
<p>Fifteen years ago I had the same types of questions in your OP. I met with a variety of financial planning firms, both large and small. None was interested in any investment plan excepting their own. Not one expressed the slightest interest in our views. That made our decision to “go solo” very easy. YMMV of course.</p>
<p>I use Schwab and self-direct our investing. I like ETFs (exchange-traded funds) because they have low costs. I like the ones that cover a wide segment of the market: QQQ (for NASDAQ), IWM (2000 small-to-medium cap companies), and SPY (the S&P 500). I put a small amount of our investment dollars in stocks that I consider gambles. Right now, for example, I have 250 shares of Citibank (at $4.30 a share) in the gambling section of the portfolio. Back in the '90s, one of my gambles was Starbucks–that paid off ;-)</p>
<p>Yea, my investment savvy bro is not enamored by managed funds. He says he has about 2/3s in individual stocks & 1/3 in mutual funds. One drawback of mutual funds is that you have to pay taxes on dividends. He is much more on top of his investments & financial things than I have ever been.</p>
<p>We have ~ 20% variable Annuity with an escalating feature; 20% MF retail selfdirected; 20%, 401k that is selfdirected MF and company stock (need to move to rollovers); and 20% selfdirected stock IRAs; and 20% in pension and cash. </p>
<p>Just check out got some retirement planning books. Probably will attend a CC fee class on financial-retirement planning put on by insurance agents. I think I taken care of most contigencies except for the political and stupidity risks. </p>
<p>I got a brother who is in risk management at a big bank. You’d think that he understand the risks-What he didn’t know is that They will never tell you everything.</p>
<p>subscribe to Bob Brinker’s news letter and follow his investing advice. he uses 6 or 7 very low fee funds; Vanguard Total Stock Mkt index fund. a vangurd international, barons, meridian , as well as others…he is the only person i knew to pull the money out at the height of the market in 2000 and go back in close to the bottom…he missed the 2007 but so did everyone else. the news letter is around $190/year. worth every penny…he has a radio station too.</p>
<p>All I know is that my Madoff Investments has paid a consistent 11%/year for nearly two decades. I haven’t checked an account statement in years!</p>
<p>I have a Vanguard fund of funds that contains a domestic stock index (~60% of my portoflio), an international stock index (30%), and a bond index (10%).</p>
<p>Im pretty young so a 90/10 stock/bond asset allocation is what I’m after. The fund rebalances and gradually increases my bond investment the closer I get to retirement. The management fees are next to nothing, and the trading costs are low since rebalances are about the only trades made.</p>
<p>I’m a big believer in passive investing and index funds. I don’t know how much time you have on your hands, but “A Random Walk Down Wall Street” makes a pretty strong case against trading and against managed investment accounts.</p>
<p>split them up. I will do management heavy and self direct light. Because I personally just don’t have that much time and could not handle the extra stress.</p>
<p>It takes time and resources to understand a company. For example, the stock of my employer went down to sub $7 pershare in 2008. Since I work here and understood the products and management, I went very heavily into buying the stock. The stock is now around the historical high (around $50). This leads me to believe that unless you know the company well, your investment may be based on speculation.</p>
<p>That being said, it is fun something to speculate a little. Start small - $25K to 50K in Scott or etrade. Who knows, your intuition may work fabulously.</p>
<p>For folks like dstark and BCEagle who are very svvy investors having self-directed strategies make a lot of sense to me. However for me managing my money does not make a lot of sense for two reasons … 1) I do not have the time or desire or interest to really stay on top of things … 2) I am not knowledgeable to make very informed decisions … when dstartk and BCEagle start debating economic topics I’m usually good for about 1 paragraph each and then they are way over my head … I do not have the knowledge they do. </p>
<p>So for me the question was which is worse … the fees of paying for someone else to manage my money … or the inefficiency of my managing my own money (due to my lack of knowledge and intermitant attention with lowers my ROI). For me, after years of resistance, I switched to a managed account with Fidelity … and so far it has been great … I no longer worry about what I am screwing up and so far (a couple years) my portfolio has performed quite well. Again for me … there is a psychological advantage to the change … I no longer beat myself up for the bone-headed mistakes I made (for example, during the tech boom I forgot to make a sale and lost a boat load on a stock that then crashed).</p>
<p>yea, a lot to contemplate; maybe we’ll self manage a while & see how we do or perhaps have some of it managed & self manage the rest. wonder if bro will let me pick his brain a bit as he’s so good with this stuff.</p>
<p>Dad II…are you speaking from personal experience? Where did YOU get between $25k and $50K to invest in stocks with two kids in college and with your very POOR low income status? </p>
<p>Most folks here who have multiple kids in college don’t have that much expendable income.</p>
<p>T1. As you know, both of our kids are attending universities now. So, I am coming to CC for fun only. Occasionally, when my know something, I would love to share/help.</p>
<p>With too many bad experiences, I have decided to make some changes of my CC participation:<br>
ignore certain poster, don’t read their posts nor answer any of their questions.<br>
stop arguing. There is not such a thing as winning an internet argument
stop explaining. I write what I want to and leave it to the readers to interpret whatever way they want. </p>
<p>My earlier post was a perfect example. One reader would say he/she agrees with me. You, on the other hand, is the only person who will question how much money I have. What does that have anything to do with OP’s question and everyone’s discussion?</p>