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 ...
- 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-...
- 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 ...
- 2,126
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, ...
- 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 ...
- 75.7k
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 ...
- 5,087
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 ...
- 7,422
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 ...
- 75.7k
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 ...
- 115k
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 ...
- 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 ...
- 41.5k
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 ...
- 75.7k
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 ...
- 1,375
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 ...
- 7,422
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 ...
- 2,620
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 ...
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 ...
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)....
- 10.2k
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-...
- 10.2k
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 - ...
- 5,868
11
votes
Accepted
Rebalancing a portfolio
Generally speaking, when rebalancing portfolios, what should be done
here? Should I sell off the 1080 USD as profit, to take my speculative
investment back to 10% of my current portfolio value?
...
- 160k
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 ...
- 32.7k
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(...
- 32.7k
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':
...
- 41.5k
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. $...
10
votes
Do mutual fund companies deliberately "censor" their portfolios/funds?
Do mutual funds edit/censor underperforming investments to make their
returns look better, and if so, is there any way one can figure out if
they are doing it?
No, that's not what the quote says.
...
- 160k
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 -...
- 129k
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., ...
- 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 ...
- 15k
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 ...
- 190
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