Market commentary you deem relevant

[OMF]

@Z Barebow,

Agreed - real time info wasn't as readily available back then. Also, are we the same person?? I'll give a chuckle and a "me too" regarding Mutual Fund magazine and Louis R. on PBS. Even when I was on a run of night shifts I would wake up to watch him.

Same on no load mutual funds back then. That's how we did our first IRAs when we started our "real" jobs. We just moved/combined those first IRA accounts we had through Wells-Fartgo after I got totally fed up with them. Some of those no load funds we started buying in 1989.

 

[Z Barebow]

@Ross,

Well said (written?)!! To think that anyone is truly interested and working towards your financial well-being other than you is seems pretty foolish and naive to me. After watching my parents struggle, especially my mom, I realized very quickly that NO company or financial person is going to really help me with my financial goals and retirement.

+2. I have always had the mindset "The best person to look out for my best interests is me."

 

[Z Barebow]

@Z Barebow,

Agreed - real time info wasn't as readily available back then. Also, are we the same person?? I'll give a chuckle and a "me too" regarding Mutual Fund magazine and Louis R. on PBS. Even when I was on a run of night shifts I would wake up to watch him.

Same on no load mutual funds back then. That's how we did our first IRAs when we started our "real" jobs. We just moved/combined those first IRA accounts we had through Wells-Fartgo after I got totally fed up with them. Some of those no load funds we started buying in 1989.

We are (almost) the same person! I too dumped Wells-Fargo. (For mortgage servicing issues) I started IRA in 1985. (A whopping $500 contribution for the entire year! But when you make $6.50 an hour and living on your own, that was real money for me.)

 

[HornPorn]

+2. I have always had the mindset "The best person to look at for my best interests is me."

I agree with this. But if anyone is using an advisor, I hope they are doing 100 (or less) basis points, based on value of assets, so the FAs earnings are tied to the performance of the portfolio. But even then, they aren't going to pay nearly as much attention to your accounts as they do their own.

 

[Beendare]

Yep. It ain’t well diversified across 500 stocks. So someone in or nearing retirement better be ok with all that tech risk and volatility.

Good point.....it all depends on what you want. It's easy to check the makeup of these ETF's and whether they are weighted [concentrated ] or diversified.

There are times when I want a sector ETF to be concentrated....say if I want to own only the big solid oil companies and not every mom and pop across the board. FENY is 22% Exxon, 15% Chevron and 66% is in the top 10 oil companies.

A much different strategy than owning a broad market ETF that doesn't have more than 2% in any one company.

 

[def90]

Anybody watching the collapse in commercial real estate in our large cities. Large office buildings selling for 40 to 50% of what they were worth 4 or 5 years ago. The negative pricing is starting to move into the large apartment buildings now.

I’m just wondering if this is indicative of the larger national debt bubble being pricked? Is so, what’s the impact on housing prices and equities

I don't know that i would put much into watching commercial real estate, most of those buildings are paid off in the first few years of operation. It's not uncommon for perfectly good commercial property to be razed in order to make room for the next churn and burn.

 

[Beendare]

I agree with this. But if anyone is using an advisor, I hope they are doing 100 (or less) basis points, based on value of assets, so the FAs earnings are tied to the performance of the portfolio. But even then, they aren't going to pay nearly as much attention to your accounts as they do their own.

I had 2 horrible experiences with FA's back in my 20's- which worked out good in the long run as I became a student of the game.

I think most FA's now are OK, fairly conscientious and they aren't going to rip you off.

Unfortunately, The Citadels [Ken Griffin] are few and far between for folks with less than $10m to invest. The avg FA builds you a diversified portfolio of funds and ETF's based on age and goals- usually pretty generic stuff. Some are better than others...but the good ones don't want to deal with small sums of money.

 

[ChrisA]

@Ross,

While I tend to agree, back in the 80's and 90's information wasn't as easy to come by. It was mostly hard cover books that were "out of date" by the time they were printed, print magazines, and the lies from brokers. I feel that it's only been in the last 15 years or so that good info has been readily available.

I listened to Bruce Williams' show on AM radio a lot back in college. Because of him, I maxed out both 401k and Roth IRA instead of credit cards when I entered the work force. I agree though, you couldn't Google anything back then, let alone carry a powerful computer in your pocket.

 

[MattB]

I don't know that i would put much into watching commercial real estate, most of those buildings are paid off in the first few years of operation. It's not uncommon for perfectly good commercial property to be razed in order to make room for the next churn and burn.

As a former banker who did lots of commercial real estate loans, I will tell you that is absolutely not the case in the markets I worked. The loans typically had 20-year amortization’s and debt service (net operating income/(P+I)) coverage was rarely north of 2x and generally more in the 1.5x-1.75x range. It would take closer to 15 years to pay off that loan if all excess cash flow was used to prepay principal.

CRE is a big deal right now because the decline in value of office will very likely challenge the solvency of regional banks in the next 2-4 years.

 

[Beendare]

Well said Matt…its a huge problem that only gets the press in focused financial sites.

I’ve turned my focus to macro stuff now that I’m officially old…but there are a lot of very smart younger folks that will probably make a lot of $$ shorting and then solving this problem with office buildings.

I know one guy trying to buy these on the cheap and convert them to residential but it’s not as easy as you think Due to the building core not being conducive to many residential units.

There was one building in SF that sold for something like $300m 5 yrs ago that just auctioned for $80m about a yr ago….They took a huge hit.

 

[sandhillhunter]

Index fund on your own or you're doing yourself a massive disservice. That would be my only recommendation for anyone.

I've recently worked with a friend on reviewing the funds his financial advisor has him in... what a joke. It actually pisses me off. Front load fees, irresponsibly poor performance, plus the AUM fees around 1% or more. It is laughable.

Learn to use index funds and enjoy being anything but sexy about it. Investing isn't gambling. If you are a good gambler, I'm happy for you, but I won't try to be you.

I do feel for those who are late to the game though.

Edited to add that anyone who hasn't seen The Retirement Gamble, should:

Interesting video. I wasn’t sure where they were headed with the story before they started promoting Bogle and Index funds.

They definitely didn’t talk about the employee/ investor risk involving pension funds when all of the employee’s and retiree’s risk was tied up in the company they worked for.

And they mentioned only 43% years of employees had pensions back in the day.

I’m a fan of Jack Bogle and index fund investing.

To the point of the video, I’ve only recently worked for a company that offers a 401k and their fund choices are not that great. The lowest fee fund choices are index funds with an expense ratio of 0.35%.

In comparison, funds I have in my taxable account are as low as zero% (Fidelity Zero Index funds) or 0.07% for Fidelity Total Stock Market.


Sent from my iPhone using Tapatalk

 

[Fowl Play]

Not to knock on advisors, but I find it very hard to find their worth. Especially with so many cheap target retirement funds these days. This is an easy button for essentially what the majority of advisors do for you, for 0.08% . A fraction what most charge. Companies like Vanguard have made this stupid easy and accessible to anyone.

I know we have several on the board, so If I'm out of line, let me know.

 

[MattB]

Well said Matt…its a huge problem that only gets the press in focused financial sites.

I’ve turned my focus to macro stuff now that I’m officially old…but there are a lot of very smart younger folks that will probably make a lot of $$ shorting and then solving this problem with office buildings.

I know one guy trying to buy these on the cheap and convert them to residential but it’s not as easy as you think Due to the building core not being conducive to many residential units.

There was one building in SF that sold for something like $300m 5 yrs ago that just auctioned for $80m about a yr ago….They took a huge hit.

I've talked to a few knowledgeable people on this, and apparently the newer office buildings are harder to convert to residential than older buildings. Time will tell, but it is my sense that it is mostly fools who think converting office to apartments is a quick fix.

 

[NRA4LIFE]

One of my guys in a meeting last week said he didn't think the fed would lower rates later this year, if at all. He might be right.

 

[SDHNTR]

Not to knock on advisors, but I find it very hard to find their worth. Especially with so many cheap target retirement funds these days. This is an easy button for essentially what the majority of advisors do for you, for 0.08% . A fraction what most charge. Companies like Vanguard have made this stupid easy and accessible to anyone.

I know we have several on the board, so If I'm out of line, let me know.

View attachment 669200

Only a small fraction of what a good financial advisor actually does is select investments. Financial planning is where the true value is experienced.

 

[SDHNTR]

Not to knock on advisors, but I find it very hard to find their worth. Especially with so many cheap target retirement funds these days. This is an easy button for essentially what the majority of advisors do for you, for 0.08% . A fraction what most charge. Companies like Vanguard have made this stupid easy and accessible to anyone.

I know we have several on the board, so If I'm out of line, let me know.

View attachment 669200

Additionally, as a counter to your specific point, if you care about risk adjusted returns (you should) there are better ways to do it than just blindly throwing money at an index, especially for older investors. Some index funds (even some Vanguard funds touted here) have abysmal risk adjusted numbers.

 

[Beendare]

I've talked to a few knowledgeable people on this, and apparently the newer office buildings are harder to convert to residential than older buildings. Time will tell, but it is my sense that it is mostly fools who think converting office to apartments is a quick fix.

I saw a thing on- I think- CNBC where they were converting a couple office building to residential in NYC. They guestimated $700/sqft which makes it a worthless proposition in anything but areas like Manhattan with very expensive RE.

 

[Fowl Play]

Only a small fraction of what a good financial advisor actually does is select investments. Financial planning is where the true value is experienced.

I guess, I’ve just never found a good one. I spent years looking for a planner who would help me navigate ISO’s, AMT, credits, tax planning, etc. I never found the mythical planner/cpa who would actually bring value to me. So picked up some books and learned it myself. I’m sure they are out there though. But me, nor 100’s of my colleagues ever found one.

I’m part of a financial group chat with 250 other engineers (aerospace) who compare/contrast different investments, financial planners, etc. even in that format of searching for one. With many of us trying 3-5 unique ones. Never found one who did what I needed for less than 1.8%.

Sorry for derailing the thread a bit. Market Commentary that I deem relevant is listening to tech or engineering summits that talk about new or emergent technology. Then trying to find an angle to invest in it, either companies that would benefit directly from the new technology OR companies that produce components to feed the new technology. Example would be NVDA. As soon as I realized that graphics cards were being used to mine crypto, I invested heavily in NVDA and AMD. The whole metaverse/ AI boom was icing on the cake. Of course, I’ve had just as many flops as winners. So… I still throw money at companies I think will 100x, but bulk of it is in boring investments.

 

[Afhunter1]

I am more than capable of managing my own assets (accountant/mba) but I use a hybrid robo/investor company called Empower. They used to be known as Personal Capital but recently rebranded or whatever. I would urge anyone looking for a little more aggressive financial planning to check them out. I have been happy with the returns I am seeing.

I don’t use any of their financial planning because I don’t need it but it seems like it is fairly robust as well.


I used to be all index but I wanted a little more risk.

 

[Jstumbaugh]

We use Empower through my work. Been happy with them so far.