[sevensa]

Originally Posted by karim0028 »

The system is setup that way... Its made so that you are always invested and the pro's are the one's that make the money in fees and speculation..... I'll give you an example.. I had a 401k plan paid for by a company i work for, completely provided by them, i didnt add anything to it... I noticed the market beginning to turn and i wanted to sell it and go to cash, i wasnt allowed to, it had to always be invested.... I had to watch it lose half its value...

Let's be fair here. This is not the "system" that is setup this way. This is your company's 401K plan that sucks. Most 401K plans include a Money Market fund that you can use to go to cash. Or worse case, you could have moved to one of the bond funds. You might still have lost money, but not half the value.

Blaming the "system" is always the easy out, but if you just take the time to investigate further, you will many times find other options than throwing your hands in the air and blame the system.

Also don't be so quick to cast all financial advisors under the same net based on the handful you know. I know a couple of good ones that I respect, but I am not so naive to think this means that all of them are great. Just as I wouldn't think all of them are useless because I happen to know few who are.

[jonbig04]

Originally Posted by sevensa »

Let's be fair here. This is not the "system" that is setup this way. This is your company's 401K plan that sucks. Most 401K plans include a Money Market fund that you can use to go to cash. Or worse case, you could have moved to one of the bond funds. You might still have lost money, but not half the value.

Blaming the "system" is always the easy out, but if you just take the time to investigate further, you will many times find other options than throwing your hands in the air and blame the system.

Also don't be so quick to cast all financial advisors under the same net based on the handful you know. I know a couple of good ones that I respect, but I am not so naive to think this means that all of them are great. Just as I wouldn't think all of them are useless because I happen to know few who are.

I think it's absolutely a system. The top 10% of income earners own 90% of the stocks. Sure not all financial advisers are bad. But someone who is performance based is going to work much harder than someone who gets paid regardless of what happens to y our money. That's a no-brainer. Yet unless you are pretty wealthy, you aren't even allowed to take advantage of performance based money managers.

This because such managers are seen as "too risky" for every day investors. Risky is handing your money to someone who has zero accountability and using a strategy like buy and hold.

I'm not saying there some group of conspirators out there or anything like that, just that the world of finance is set up in such a way that is it tough for a layperson to get anything past mediocre performance, if that.

[karim0028]

Originally Posted by sevensa »

Let's be fair here. This is not the "system" that is setup this way. This is your company's 401K plan that sucks. Most 401K plans include a Money Market fund that you can use to go to cash. Or worse case, you could have moved to one of the bond funds. You might still have lost money, but not half the value.

Blaming the "system" is always the easy out, but if you just take the time to investigate further, you will many times find other options than throwing your hands in the air and blame the system.

Also don't be so quick to cast all financial advisors under the same net based on the handful you know. I know a couple of good ones that I respect, but I am not so naive to think this means that all of them are great. Just as I wouldn't think all of them are useless because I happen to know few who are.

Perhaps i am presenting it in a little of a jaded fashion... But, the markets by nature fluctuate and crashes do occur, i dont blame any body, quite honestly, i dont hold any equities and havent for several years, since for me the risk outweighs dividends and upside potential at this point, etc.. It just doesnt fit into my market view now... The account i was talking about was fully company funded, i manage my own assets.... Perhaps I am paranoid I started buying gold last year for a longer term hold against the soon to be debased currency....

What i am stating is that essentially, unless you follow some financial advisor who has proven himself like Marc Faber (or whoever you trust and makes sense to you) or someone along that caliber; some one from the likes of Fidelity (ie. cookie cutter) is usually just pitching his book (which he cant deviate from) and you will ride the rollercoaster up and all the way back down; erasing a generations worth of savings and profits..... Rarely will they ever tell you that its best to stay in cash, they dont make money keeping you in cash... A blatant conflict of interest... Obviously, not every advisor is an idiot, for every 4 idiots, there is that one diamond in the rough...

[karim0028]

To add to it; i think a financial advisor should have a good understanding of monetary an economic theory not just parrot company pushed stock picks...

A recent and pretty blatant example is gold, how many mainstream advisors have put clients
into gold? Over the last 10 years gold has jumped 300-400%, while stocks went down by 50% and the dollar has gone down by ~20% this year alone.... I dont know any advisor aside from advisors for high net-worth folks who mention it.... Most, still know nothing of it... They will put you into what produces fees.

I am of course talking about investing, nothing what so ever to really do with day to day trading... I am a big believer in doing my own homework....

[sevensa]

Originally Posted by jonbig04 »

I think it's absolutely a system. The top 10% of income earners own 90% of the stocks. Sure not all financial advisers are bad. But someone who is performance based is going to work much harder than someone who gets paid regardless of what happens to y our money. That's a no-brainer. Yet unless you are pretty wealthy, you aren't even allowed to take advantage of performance based money managers.

This because such managers are seen as "too risky" for every day investors. Risky is handing your money to someone who has zero accountability and using a strategy like buy and hold.

I'm not saying there some group of conspirators out there or anything like that, just that the world of finance is set up in such a way that is it tough for a layperson to get anything past mediocre performance, if that.

My remarks were pointed at blaming the "system" for losing 50% of a 401K when other options were most likely available.

But since you bring it up, where do you get the information from that top 10% of income owners own 90% of the stocks? I would think that mutual funds would be closer to have this distinction.

You are confusing money managers with hedge funds. There are plenty of other programs like managed futures accounts for example that is available to pretty much anyone who can afford the minumum deposit. If you look at hedge funds track records, they are not really that spectacular on average and the good ones have such high minimum deposits that the average person probably couldn't afford this anyway, even though they might be allowed to. From that viewpoint I can understand why "they" are trying to protect the average person. The average person might scrape enough money together to invest in such a fund, but is this really a good idea to invest all your money in one place? I think, the assumption is that the minimum deposit would be a smaller percentage of a qualified investor overall net worth. Of course, they still can be stupid and still invest everything, but no system is perfect and I would venture to say that the system probably protects more than it hurts.

I also wouldn't agree that this is a no brainer that someone getting paid based on performance would work much harder than one who doesn't. This depends on your definition of working harder. I'm pretty sure that many of fixed fee managers would be working harder to justify getting paid every month and might be more accessible to client and more customer service orientated. Someone who get paid on performance, might have the attitude that as long as they make money, they don't need to care about the customer any further. Just depends what you want.

I consider myself a layperson and arrived in the US 13 years ago with $800 in my pocket and two suitcases. Attached is a monthly equity graph of one of my IRA accounts compared to the S&P that I've been trading since 2008 based on a swing trading method. Not earth shattering results as this is my retirement money and I am content with smaller consistent performance, but I would be so bold to say still better than mediocre performance. I'm not privileged or a top 10% earner and if I can have better than mediocre results, there is no reason that anyone else cannot either.

Seems like you are making a lot of assumptions about the "system". The "system" is the same for everyone. If one person can succeed under it, there is no reason that you cannot as well. Blaming the system, the weather, your parents, the guy in middle school who stole your lunch money, your 11 toe, is always easier than to take responsibility. This is easy to complain and point fingers, but at the end of the day, you have no idea how fortunate you are to live in a country like the US. Do yourself a favor and travel to some of the less fortunate countries and you will quickly realize how lucky you are.

Ok, I'll get off my soap box now.

[karim0028]

Originally Posted by sevensa »

My remarks were pointed at blaming the "system" for losing 50% of a 401K when other options were most likely available.

But since you bring it up, where do you get the information from that top 10% of income owners own 90% of the stocks? I would think that mutual funds would be closer to have this distinction.

You are confusing money managers with hedge funds. There are plenty of other programs like managed futures accounts for example that is available to pretty much anyone who can afford the minumum deposit. If you look at hedge funds track records, they are not really that spectacular on average and the good ones have such high minimum deposits that the average person probably couldn't afford this anyway, even though they might be allowed to. From that viewpoint I can understand why "they" are trying to protect the average person. The average person might scrape enough money together to invest in such a fund, but is this really a good idea to invest all your money in one place? I think, the assumption is that the minimum deposit would be a smaller percentage of a qualified investor overall net worth. Of course, they still can be stupid and still invest everything, but no system is perfect and I would venture to say that the system probably protects more than it hurts.

I also wouldn't agree that this is a no brainer that someone getting paid based on performance would work much harder than one who doesn't. This depends on your definition of working harder. I'm pretty sure that many of fixed fee managers would be working harder to justify getting paid every month and might be more accessible to client and more customer service orientated. Someone who get paid on performance, might have the attitude that as long as they make money, they don't need to care about the customer any further. Just depends what you want.

I consider myself a layperson and arrived in the US 13 years ago with $800 in my pocket and two suitcases. Attached is a monthly equity graph of one of my IRA accounts compared to the S&P that I've been trading since 2008 based on a swing trading method. Not earth shattering results as this is my retirement money and I am content with smaller consistent performance, but I would be so bold to say still better than mediocre performance. I'm not privileged or a top 10% earner and if I can have better than mediocre results, there is no reason that anyone else cannot either.

Seems like you are making a lot of assumptions about the "system". The "system" is the same for everyone. If one person can succeed under it, there is no reason that you cannot as well. Blaming the system, the weather, your parents, the guy in middle school who stole your lunch money, your 11 toe, is always easier than to take responsibility. This is easy to complain and point fingers, but at the end of the day, you have no idea how fortunate you are to live in a country like the US. Do yourself a favor and travel to some of the less fortunate countries and you will quickly realize how lucky you are.

Ok, I'll get off my soap box now.

I wouldnt consider you a lay person Sevensa..... Anyone involved in the markets is not a layperson... Great job by the way on your IRA..

You understand the ins and outs of the market; a layperson deposits money into his 401k and takes a shot in the dark at what to invest it in...

BTW, in my case, there were no other options available... 100% invested in company stock, come hell or high water Due to the fact that it was the company putting in the money.... Trust me, i tried to go in cash, nope, not an option...

[brownsfan019]

Oh the things I could tell you guys about about brokerage firms REALLY work...

I've mentioned this here before, but prior to going full-time in my trading, I was one of those brokers you love to hate.

And the stories I could share with you would take me days and days to compile.

I'll try to keep this short as I really don't feel like getting in a massive rant tonight...

1) No one will care for your money more than you.
2) Brokers get paid when you buy/sell something or remain in the investment itself (as many pay trailers or ongoing fees as long as you stay in the investment).
3) Brokers earn ZERO if you sit in cash waiting for the optimal time to enter.
4) Brokers get paid regardless if you make money or not.
5) Mutual funds and annuities are the biggest ripoffs in the world and they've done a marvelous job at smoke screening how that industry actually operates.

I sold everything and sold it to completely uneducated people (on this subject) to those that had some knowledge and in the end, if you didn't buy, I didn't make any money. The markets at a high and could easily retrace? So what, buy today. Bonds are overvalued and will probably plummet in value soon? So what, get the return today. This CD we are selling is going to tank as soon as the fed raises rates? Oh well, just buy today b/c my quarter ends tomorrow and I gotta get this sale in to count for the vacation contest going on. This mutual fund has high fees and piss poor performance? But look at these pretty brochures they crank out and if I sell enough of them, they are going to send me some neat free stuff and probably send me on a vacation or two this year.

Here's what I tell anyone that will listen when it comes to what the average person should invest in - a few ETFs. That's it. Buy a nice basket of 3-5 ETFs and reinvest everything. Dollar cost average into it if you can.

Is buy and hold dead? I say no and that's b/c the majority of people out there have done it, will do it, will continue to do it and will teach their kids to do it. "Active" investing is an oxymoron to most people. If you are investing, you are not active in any way other than checking your statements (if you do that).

If you've never been in that industry, I suggest staying out of it. I saw so much crap being peddled it's not even funny. This was part of the reason I wanted out. I'm a very loyal person and was a loyal employee until I really saw what was going on. Then I spoke my mind and shortly thereafter I was being guided to the door... I was tired of playing the game. Any idea what it's like to go to bed wondering if that retiree's IRA you just brought over will do ok with the stuff your firm is selling that month? ....



It eats away at you and I got out before it was too late.

Regardless, tell your non-trading friends to educate themselves on ETFs and then use them. If their company has a 401k and offers a match, use it! That's free money! Even if the funds are terrible, you can probably park it in a money market account. And if you really want to educate them, after they learn about ETFs, teach them how to buy puts on those ETFs so that they now have 'insurance' on their money. It will blow their minds.

That's enough for tonight. A nice stroll down memory lane there. lol

[karim0028]

Thanks Brownie Just what i was trying to say; only coming from a previous insider... All you have to do is look at the blatant conflict of interest; if that doesn't spell it out for ya, i dont know what will...