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87 votes

Why not invest in precious metals?

Precious metals have primarily been useful as a stable store of value, not a way to make a profit The best argument in favor of precious metals has generally been that they hold their value against ...
BrianH's user avatar
  • 11.7k
62 votes

What are the benefits and disadvantages of investing $60-70K in the following methods?

Typical Human Advisor: Advantages: They can recommend funds and allocations that fit to your portfolio. Disadvantages: Those who are just fund salespeople in disguise will usually recommend poor-...
Shorlan's user avatar
  • 904
52 votes

Fee-only financial advice vs. asset management (which includes advice)?

If you have $1 million, it makes no sense to pay a 1% of the $1 million annually for asset management on only $500k (the brokerage account). That is basically paying 2%. I agree with the other answers ...
mattm's user avatar
  • 2,136
51 votes

Why should a person approaching retirement age make their portfolio less risky?

What occurred in 2000 and 2008 is "why this is true". If one were to have retired in 2007, with a major portion of their retirement invested in stocks, their portfolio value dropped significantly, ...
Norm's user avatar
  • 1,184
35 votes

Fee-only financial advice vs. asset management (which includes advice)?

After doing it myself for 35+ years, I considered turning it all over to an asset management company last year. After meeting with a number of them, I found a knowledgeable financial adviser that I ...
Bob Baerker's user avatar
  • 76.8k
31 votes

Why should a person approaching retirement age make their portfolio less risky?

Presume that you are using the safe withdrawal rate of 4%. So if your retirement account is $1,000,000, you are withdrawing $40,000 a year. If there is a market correction, and your retirement ...
Magua's user avatar
  • 5,097
30 votes
Accepted

Why would long-term investor care about volatility?

If you really do not need to withdraw the money, it is just for psychological reasons. Excessive volatility makes many people uneasy and probably rightfully so given the amount of money involved after ...
Manziel's user avatar
  • 7,442
23 votes
Accepted

As a 22-year-old, how risky should I be with my 401(k) investments?

At 50 years old, and a dozen years or so from retirement, I am close to 100% in equities in my retirement accounts. Most financial planners would say this is way too risky, which sort of addresses ...
Pete B.'s user avatar
  • 76.8k
23 votes

$1.44 million in holdings: Help my non-retired, 80-year-old dad invest it

This is not the answer you were hoping for. I recommend that you stay out of it and let your parents do what they want with their money. They are obviously very good savers and very thrifty with ...
Ben Miller's user avatar
  • 116k
22 votes
Accepted

What is the real return of a portfolio? Markowitz vs "real" return

Analysis in the Markowitz model is intended to be done over a single investment period (source). Here you've stretched it out to 5 annual periods, so you're outside the bounds of the model. The ...
glibdud's user avatar
  • 740
21 votes
Accepted

What is the difference between fund and portfolio?

A "Fund" is generally speaking a collection of similar financial products, which are bundled into a single investment, so that you as an individual can buy a portion of the Fund rather than buying 50 ...
Grade 'Eh' Bacon's user avatar
18 votes

Fee-only financial advice vs. asset management (which includes advice)?

This is a very opinion based question, but it has a lot of merit. IMHO, you do not need a FA. You guys have done really well up until this point and you are probably astute at picking mutual funds ...
Pete B.'s user avatar
  • 76.8k
17 votes

Why should a person approaching retirement age make their portfolio less risky?

Which would you be more happy with: less money or no money? The interpretation of the word "risk" in this context is "potential to lose it all", enough reason for anyone to think twice about highly ...
TheEnvironmentalist's user avatar
16 votes

Do bond funds have an inherent advantage over individual bonds within a portfolio?

Your main advantage is diversification. As an individual investor it can be hard to just buy individual bonds. The bond market is targeted towards institutional investors with larger portfolios. Many ...
Manziel's user avatar
  • 7,442
15 votes

Why should a person approaching retirement age make their portfolio less risky?

Okay, I'm seeing a lot of answers/comments that hinge on sharp downswings and avoiding them (aka, '2008'). That's not the danger of using S&P or similar for your post-retirement holdings. The ...
Kevin's user avatar
  • 2,640
14 votes

Fee-only financial advice vs. asset management (which includes advice)?

Beware: two-handed financial advisor Nobody seems to have picked up on this. But the "financial advice fee-based advisor and the "asset management" commission-based advisor are the same guy. This ...
Harper - Reinstate Monica's user avatar
12 votes

Fee-only financial advice vs. asset management (which includes advice)?

Decades ago I read a brochure put out by Vanguard titled "The Triumph of Indexing". It focused on the returns of managed funds vs a low cost S&P index. The concept to grasp is that if the index ...
JTP - Apologise to Monica's user avatar
12 votes

Do bond funds have an inherent advantage over individual bonds within a portfolio?

I am considering investing the entire bond component in the individual bond A special risk-free savings bond with slightly higher yield than the bond ETF above (for the same duration as the bond ETF)....
base64's user avatar
  • 10.5k
12 votes
Accepted

Questions on a 60/40 portfolio outperforming stocks over the last 20 years

Final Edit: End Value of 60/40(10-Year Treasury) is worse than S&P 500. Instead of blindly deriving the Bonds Fund price from Yield to Maturity, this time using the oldest available proxy to 10-...
base64's user avatar
  • 10.5k
12 votes
Accepted

What is the point of portfolio diversification?

You're right that diversification isn't the way to maximize your return irrespective of risk. If you want the highest return possible, you need to select investments that can give you that return - ...
Stan H's user avatar
  • 7,551
11 votes

How to rebalance a portfolio without moving money into losing investments

A strategy of rebalancing assumes that the business cycle will continue, that all bull and bear markets end eventually. Imagine that you maintained a 50% split between a US Treasury bond mutual fund ...
NL - Apologize to Monica's user avatar
11 votes

As a 22-year-old, how risky should I be with my 401(k) investments?

At 22 years old, you can afford to be invested 100% in the stock market. Like many others, I recommend that you consider low cost index funds if those are available in your 401(k) plan. Since your 401(...
NL - Apologize to Monica's user avatar
11 votes

Is there a quantitative answer to how frequently I should optimize my portfolio?

You are applying theoretical financial concepts to the practical world. There are two (potentially significant) factors you haven't mentioned at all which can create significant 'slippage': ...
Grade 'Eh' Bacon's user avatar
11 votes

Questions on a 60/40 portfolio outperforming stocks over the last 20 years

The video authors ignored 2 decades of dividends resulting in a false conclusion See the index for S&P Total return. End of Dec 1999 (i.e. Jan 2000) = 2021.40 End of Oct 2021 = 9558.33. Divide. $...
JTP - Apologise to Monica's user avatar
9 votes
Accepted

Should retail investors learn and use the capital asset pricing model (CAPM)?

At a basic level, yes. Most finance websites will quote a "Beta" for a stock, which is the sensitivity the stock has to the price of the underlying market. It's also a rough measure of risk -...
D Stanley's user avatar
  • 137k
8 votes

Why should a person approaching retirement age make their portfolio less risky?

If 2 different people both retired at age 60 at the start of 2008 with $1,000,000 in capital, and one took all their capital out of the stock market and placed the funds in savings earning 2%p.a., ...
Victor's user avatar
  • 21k
8 votes

Why should a person approaching retirement age make their portfolio less risky?

Actually, finance theory doesn't suggest a general relationship between one's age or proximity to retirement and the riskiness of one's portfolio. According to modern portfolio theory, the riskiness ...
farnsy's user avatar
  • 15.1k
8 votes

What is the word for the sum of percentage gains from different investments?

This isn't named because it doesn't represent any actual thing. Let's call it X though. For example, let's say all investments return 10%. If you put $20 into one investment and it returned 10%, then ...
Ryan Cavanaugh's user avatar
7 votes

How aggressive should my personal portfolio be?

You're completely missing the most important thing you can do: minimize fees. There is no reason whatsoever to pay a yearly account fee. Take your business to a broker that does not take such fees. ...
Michael Borgwardt's user avatar
7 votes

As a 22-year-old, how risky should I be with my 401(k) investments?

Current evidence is that, after you subtract their commission and the additional trading costs, actively managed funds average no better than index funds, maybe not as well. You can afford to take ...
keshlam's user avatar
  • 48.4k

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