Comparing a managed investment fund to DIY

[sammyg2]

One of the investment companies I work with had been after me to do the managed fund thing for a long time but I always said no thanks.

This week they offered the full-service for .79%, not bad. Lots lower than I've been quoted before.
So I caved and gave them a little bit to manage.
I defined the goals mid and long term for risk tolerance, we'll see how it goes.
Note this is money that I'll never need to withdraw, it'll just sit there until the kids get it.

The plan is to compare the fund they manage to the performance of my ETFs that are similar in structure but have under a .1% load over time to see if there is any advantage or if I'm just better off self-managing.
After a year or so I'll either pull the plug or dump more in.

I'm going in with the attitude that the only advantage to paying them to manage the $ is that it might keep my greedy little paws off it and I'll be less likely to do something dumb with it. Not that I ever would ....

[Bill Verburg]

Originally Posted by sammyg2

One of the investment companies I work with had been after me to do the managed fund thing for a long time but I always said no thanks.

This week they offered the full-service for .79%, not bad. Lots lower than I've been quoted before.
So I caved and gave them a little bit to manage.
I defined the goals mid and long term for risk tolerance, we'll see how it goes.
Note this is money that I'll never need to withdraw, it'll just sit there until the kids get it.

The plan is to compare the fund they manage to the performance of my ETFs that are similar in structure but have under a .1% load over time to see if there is any advantage or if I'm just better off self-managing.
After a year or so I'll either pull the plug or dump more in.

I'm going in with the attitude that the only advantage to paying them to manage the $ is that it might keep my greedy little paws off it and I'll be less likely to do something dumb with it. Not that I ever would ....

There are good money managers out there, the problem is identifying them among the vast majority who are less than worthless

The idea of experimenting w/ some 'fun' money is a good one

[dw1]

I agree with your approach. Btw, the % you got for a full-service account is quite good.

I have a history of making poor investment choices (i.e. to tech-heavy & thus too volatile) so I'm letting the professionals handle most of my investments. I have several different ones: one for the 401(k), a different one for another large diversified account, and yet another for IRA's.

I do keep a bit for dabbling in start-ups and other stocks that pique my interest.

[thor66]

any other fees or costs, like say in any mutual funds they might buy?

[Tidybuoy]

I manage my own account and use TD Ameritrade.

With the many ETF's and Mutual Funds, I don't see myself needing a management company. Vanguard has a very good reputation and many low cost ETF's. TD Ameritrade does not charge for ETF of Stock Trades. They do have a charge for mutual funds which I think is $49 buy or sell.

In my opinion, everyone should be knowing what their money is doing, regardless if self managed or you have a manager. That said, I like to manage my own and have done very well. I have most everything in ETF's and Mutual Funds and I have about 15 stocks which are all blue chip. I have one penny stock (actually about $2.50/share) and that is just for playing.

[sugarwood]

They will take their .79%, and invest the rest into your .1% funds

[hbueno]

It took a while, but I finally found my way to a simple fund/ETF strategy with low fee funds:
Vanguard VTI (VTSAX), VWENX, VWINX, VBTLX

Set the asset allocation to your liking and watch your money grow.

[sammyg2]

Originally Posted by thor66

any other fees or costs, like say in any mutual funds they might buy?

no funds, no compounding fees. Just shares of around 100 different companies.

Based on what I've seen so far, the distribution is not that much different that a few of the dividend ETFs I'm invested in.
But that's just going off the proposal, they haven't populated the fund yet:
VIG
DGRO
VYM

[sammyg2]

One thought I keep going back to:

It's easy when it's easy.
Anyone who hasn't made 30 or 40% over the past year and a half should prolly invest in CDs.
I've done really well just like everyone else but that won't last forever.

So what happens when it hits the fan? Will I ride it out or panic?
I did well in March and April 2020 with timing the market but that was probably just luck and was stressful as all get out. Don't want to do that again.

I really like studying, learning about investing, and monitoring my investments. When they go up.

[thor66]

Originally Posted by sammyg2

no funds, no compounding fees. Just shares of around 100 different companies.

Based on what I've seen so far, the distribution is not that much different that a few of the dividend ETFs I'm invested in.
But that's just going off the proposal, they haven't populated the fund yet:
VIG
DGRO
VYM

sounds like a good test - let us know the results after a few years

[Esel Mann]

The problem has always been, one rides the escalator going up, but is forced to take the elevator going down when others manage the monies..... so tired of the excuses.

Folks, such as FIREs can't have that elevator. The only one with a vested interest in your well being is.... YOU!
Further the only way one is making 30-40% gain on their entire portfolio is that are all in with no substantial cash side lined and/or taking sizable risks.

[Esel Mann]

Oh and i will also proffer a tea leaf. Its all good n neat to focus on one's retirement accounts. Why not, ez monies, it builds sans taxes? Well make your non-retirement account(s) work just as hard cuz well the folks in DC are beatin off in restrooms and salavating over that 'untapped well' of retirement accounts. Multiple people in finance look at me crazy when i say that. Impossible, not gonna ever happen. To that i say, watch n lurn!!

[stomachmonkey]

I dunno, using someone that has to offer discounted rates to gain clients seems counter intuitive.

Took me a while and a couple of turkeys to find the guys i’ve been using the last decade or so.

They won’t pick up the phone for less than a certain minimum to place with them.

My 12 month year to date as of today is 28.95% increase in my portfolio.

They get a flat 2% and i’d happily pay them more.

[stomachmonkey]

Originally Posted by Esel Mann

Further the only way one is making 30-40% gain on their entire portfolio is that are all in with no substantial cash side lined and/or taking sizable risks.

I disagree, vehemently.

My portfolio and risk profile is conservative.

One can make a nice return if one knows what one is doing.

With the markets I don’t so i hire smarter people than me.

Sammy and i don’t see eye to eye on a lot, if anything really, but he’s also someone i consider one of the more intelligent on the board, even if he’s wrong about most things we disagree on, so i have little doubt he knows what he is doing.

And no i’m not taking shots at him, i’m sure (i hope) he’d say the same about me and the areas where i know my poo.

[cantdrv55]

Personal Capital?

[Esel Mann]

Originally Posted by stomachmonkey

I disagree, vehemently.

My portfolio and risk profile is conservative.

One can make a nice return if one knows what one is doing.

With the markets I don’t so i hire smarter people than me.

Sammy and i don’t see eye to eye on a lot, if anything really, but he’s also someone i consider one of the more intelligent on the board, even if he’s wrong about most things we disagree on, so i have little doubt he knows what he is doing.

And no i’m not taking shots at him, i’m sure (i hope) he’d say the same about me and the areas where i know my poo.

If what I posted was taken as a pot shot at Sammy all I can say is it wasn't.

Now of course it would be nice to be able to hand over the portfolio to someone and say, go manage it. As Bill noted the good ones are out there but sadly connecting with them is the difficult part. Like hunting for unicorns lol.

In a portfolio there is typically a sizable portion that is making nothing or next to nothing. There may also be real estate which makes something but no where near the 30-40% return say over 1.5 years. Then there is the portion of the portfolio associated with equities (stocks, funds/etfs, options et al.). My point is, in order for the portfolio to have a 30-40% return in say 1.5 years, it's got to be coming from the portion associated with equities. That being the case, and further that not comprising 100% of the portfolio or anywhere near 100%, well, I'll let one do the math as to what returns need to be generated from the portion associated with equities so that the portfolio has a 30-40% return over say 1.5 years. I'm not saying it can't be done, I'm saying is such is done but with elevated risk. Makes my tiny little balls twitch.

[stomachmonkey]

Originally Posted by Esel Mann

If what I posted was taken as a pot shot at Sammy all I can say is it wasn't.

.....the good ones are out there but sadly connecting with them is the difficult part. Like hunting for unicorns lol.

Was not intimating you were taking pot shots at Sammy, just wanted to make sure he knew that I wasn't because we tend to do that to each other.

And yes, I completely agree, the good ones are tough to find, took me a long time to get the guys I have now. The 1st few years I trickled them pennies until they proved themselves. I had PTSD from previous people I'd used and didn't trust anyone.

[sugarwood]

Originally Posted by stomachmonkey

My 12 month year to date as of today is 28.95% increase in my portfolio.
They get a flat 2% and i’d happily pay them more.

SPY returned 32% over the last 12 months.

[jyl]

Originally Posted by sugarwood

SPY returned 32% over the last 12 months.

Do you recommend stomach allocate 100% to SP500?

[hbueno]

I just checked my portfolio - up 32% from last August - Vanguard VTSAX, VWENX, VWINX, VBTLX.

Seems comparable to the managed funds being discussed, but with low fees. I admit to being all-in on the Bogleheads philosophy.