Hidden fees?

[TheDuke]

Did any of those indicaters predict the DOT.Com or the 2007 crash caused by the mortgage crash? If they did you might be onto something. If not then they are just numbers.

Look back to some of the dire predictions on posts here. The can be funny in hindsight.

[KandJBm]

The focus on "prediction" in the above comments seems confused about what I am trying to do by looking at historical statistical data on stock market valuations. My goal is not to predict the next big downturn in the stock market. Nor is it to get rich from making such a prediction.

 

I am trying to make an estimate of the current valuation of our retirement portfolio in the sense of: is it overvalued, undervalued or "fairly" valued in terms of long term statistical data on valuations of stocks and bonds. I want to be somewhat conservative in estimating a realistic value of our investments for the purpose of withdrawals. As I said in some previous reply, professional money/financial managers make no mention of a realistic appraisal of ones current portfolio valuation. They just seem to assume its current value is realistic and will grow according to some average nominal rate of return around 6% to 8% over the long term. Well I think that approach is half blind, given that current valuations of stocks may be (who knows?) two standard deviations above long run statistical means according to various valuation techniques. Again, this is not about predicting when the next big move down is going to happen.

[mkc]

I am trying to make an estimate of the current valuation of our retirement portfolio in the sense of: is it overvalued, undervalued or "fairly" valued in terms of long term statistical data on valuations of stocks and bonds. I want to be somewhat conservative in estimating a realistic value of our investments for the purpose of withdrawals.

 

Since you've been reading some great books (Bogle, Bernstein), are you familiar with Bogleheads.org? GREAT discussion forum and Wiki with great contributors. They can help you with backtesting, etc.

 

Also check out Firecalc.com for testing (and the more detail you can put in the simulation the better. Go through each tab).

 

Bogelheads Guide to Retirement Planning is another good read.

 

We got started in 1998 with a fee-only planner who helped with our asset allocation/risk tolerance and educating us about mutual funds and what to look for. She helped us with initial diversification and retirement planning, we had a few quarterly then annual meetings with her to make sure we were on target and properly rebalanced, and we continued on our own since (with one sanity-check analysis from a Vanguard CFP a couple of years ago).

 

Michelle

[KandJBm]

 

Since you've been reading some great books (Bogle, Bernstein), are you familiar with Bogleheads.org?

 

 

Yes, thanks. We joined bogleheads.org and get their now and then with all the other stuff we are reading. This is a fascinating new field for us to use our math backgrounds and it is fun, but we are pretty ignorant otherwise about finance and economics. We are learning though, probably just enough to be getting a big head.

[Ron]

Lots of folks who need, or think they need, a "professional" financial planner are being ripped-off. As many others have mentioned it's certainly best to select an advisor who is a CFP and works on a fee-only basis. This article explains why you need to dig a little deeper into EXACTLY how your planner is compensated and if he/she is an accredited CFP. Beyond that it's important to decided how your fee-only planner determines his/her fee. IMO many/most folks could save a great deal of money by using a fee only planner who charges an hourly fee for services.

 

---ron

 

[Kirk W]

Lots of folks who need, or think they need, a "professional" financial planner are being ripped-off. As many others have mentioned it's certainly best to select an advisor who is a CFP and works on a fee-only basis.

If any financial adviser or broker is not willing to explain to you exactly how he makes his fees and where they come from, don't do business with him.

[Ron]

IMO Chris DeMuth is one of the better writers on Seeking Alpha. IMO this article has some very good advice/insights for retires concerned about converting their savings into income and making that income last at least as long as they do.

 

---ron

[Ron]

IMO Chris DeMuth is one of the better writers on Seeking Alpha. IMO this article has some very good advice/insights for retires concerned about converting their savings into income and making that income lasts at least as long as they do.

 

---ron

 

Sorry for the double post. The website is acting a little strange for me this morning!

[Ron]

There's at least one "mutual fund" with no hidden fees. Not only that but it is managed by a couple of the most successful managers ever, with track records that go back several decades. Not only that but they invest right alongside you, you are actually getting a small piece of their portfolio. You can purchase or sell units of this "mutual fund" in any amount you choose for just a few bucks at any discount brokerage. It trades under symbol BRK.b or BRK-b or BRK/b depending on which web site you are using - b shares of Berkshire Hathaway. Warren Buffett and Charlie Munger do not jump in and out of the market (market timing), pay no attention to indicators that try to forecast the "market" but rather they are always on the lookout to purchase all or parts of companies that their own research indicates are under-priced by "the market". This is a long term strategy and about one third of years BRK under-performes "the market". But over the long term their good years make up for their bad years in a very big way. Looking at long term charts it may not be a bad time to take a position in BRK if you have money you to invest and won't need for a few years. It's been a very good investment for me over the years. As always - do your own research - this is just my opinion.

 

http://www.investopedia.com/articles/markets/100815/markets-are-tanking-time-buy-buffett.asp?partner=YahooSA