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  1. How have you responded to the recent volatility in the markets the past few months? Have you been nervous, or have you been taking advantage of the bear market by buying low? Have you had thoughts about selling some of your portfolio? If so, which parts and why do you feel that way?
  2. What is your goal? Do you want to minimize your volatility and maximize your returns? What is your time horizon before you might need these funds? 1 year? 3-5 years? Over 5 years? Let me ask you this: On a scale of 1 to 10, where do you feel that you fit on a risk/return scale if: 1 = CDs 5 = S&P 500 Index 10 = Black Jack (Double down, double or nothing) Where do you feel that you fit? A second question, did you pay a load on MMUFX? If so, how long ago? (I'm not a huge fan of MFS mutual funds myself.) These are just my initial questions. I'll do a more detailed analysis later on.
  3. I can give SUGGESTIONS online and you can take it for what it's worth. The difference is that I cannot be held liable for you following or not following any suggestions posted. Ideas are a dime a dozen, but people are really paying fees for a professional service that requires a fiduciary duty to the end client. As we are talking online, we don't have any formal agreement, therefore I cannot charge you and you cannot hold me liable. I cannot and will not give advice on individual stocks, except to say that investing in that way is TOO risky for the novice investor. To do it well, you need at LEAST 2 dozen stocks properly weighted and correlated with each other. So, go ahead and post it if you'd like! (You might want to do it in a seperate thread.) I would need the ticker symbols of your funds and the % it makes up of your portfolio. Then I'd need to know what other funds might be available to you or other funds you've considered and why. Then I can give you my opinion and some suggestions for you to research further, if you'd like. If anything, I can show that not "all of us advisors" are just glorified salespeople. Yes, there's few of us, but we're out there!
  4. Thank you for the compliment! I agree with you that many other reps are just salesmen that pick a few favorite funds, memorize a presentation and sell what they want. I consider myself an ADVISOR - whose job it is to give quality advice and to make sure that my clients are better off because of it - whether they choose to work with me or not. I've only been in the financial advisory business for just over 3 years, so based on that I'm relatively inexperienced. Having worked with several mentors, I've gained a lot of insight in a much quicker way. My last mentor had studied for the CFA certification in the past and was drilling asset allocation strategies into me. I'm able to use "non-loaded" funds in a very different way. For fun, I'll try to explain here. When I work with clients, I explain that we are a partnership. You are the CEO of your household. I'm working to be the CFO of your household. We determine our objectives, we work out the best route to help you achieve those objectives. With that said, I'm the CFO. I'm going to hire some general contractors to help us manage your money to help us get there. One "contractor" will be a STRATEGIC money manager. We will hire them to put together a PASSIVE asset allocation that will primarily keep it's consistency through most of the market trends (as MOST portfolios are constructed). We might choose a STRATEGIST that currently manages the CA Teachers Pension plan. Typically, this strategy does better in BULL markets. The other "contractor" will be a TACTICAL money manager. This money manager will be looking for key opportunities in the immediate, short-term markets to take advantage of opportunities. They will manage your money in a very ACTIVE manner. This manager might be Goldman Sachs. Typically, this strategy does better in BEAR markets. Put the two ideas together, and 1 portfolio will outperform the other. The goal would be asset preservation according to your risk profile. These firms apply the Modern Portfolio Theory to the portfolio on a daily basis. I do it on a conceptual basis, but they do it DAILY. I'm only ONE person. They have firms of dozens to hundreds of people. All we do is manage the managers and I help to manage the risk profile of the client. There are fees charged against the portfolio, but they are quite reasonable. So, they're "no-load" funds, but a completely different strategy. This strategy tends to work best and be the most cost-effective for amounts above $250k. In addition to money management, I help people with retirement planning strategies, business succession planning, life insurance evaluations, and many other financial topics.
  5. You can read this thread for an idea on how to find out your MUTUAL FUND fees. http://creditboards.com/forums/index.php?showtopic=332056 Admittedly, these fees are SEPARATE from the 401k management and adminstrative fees that are passed on to the participant. Let the lawyers worry about it. Let them sue the plan fiduciaries. You just keep socking money away. I agree with Cactus Flower - some money is ALWAYS better than NO MONEY.
  6. Another way to think about "loads": EVERYTHING HAS A LOAD or a "mark-up". You don't ask the people at Starbucks how much their "mark-up" is. You just take it as the price. Well, financial services has the same thing. What I look at is a 5-year cost of ownership. How much will it cost ON AVERAGE for each year for the first 5 years to own that fund? Compare it to a no-load. What's the difference? (I know there will be a difference.) Is it worth while to work with me as your personal financial advisor for that extra little bit of expense? If so, great - let's move forward. If not, okay. Get out of my office.
  7. It's up to the choice of the investor - of course. Each fund must be evaluated INDIVIDUALLY and not as a whole. Below I'll outline a couple of American Funds and a Franklin Templeton. Not all American Fund MF are stellar and not all Franklin Templeton funds are crap. Not all "no loads" are doing "just as well". Each fund must be evaluated separately. Sometimes loaded funds make more sense than non-loaded funds. You just need to know how to evaluate them. Here's how I do it: There are 3 main factors in choosing an investment of ANY nature: - Risk (Volatility) - Potential Return - Cost (your expenses to acquire and hold the investment) These 3 factors apply to mutual funds, business ventures - EVERYTHING where you hope to earn a profit on such an investment. Key question: When would a loaded fund make MORE sense than a no-load? 1. When the investor needs a voice of reason to help them avoid making foolish decisions during an emotional or economically turbulent time. Will the investor be more calm working with an advisor than not? 2. When the Risk, Potential Return and Costs are factored in can greatly OUTWEIGH the potential risk, returns and costs of the no-loads. This includes the fact I manage INVESTORS, not the market. It's about TOTAL RETURN, not just about fees. I’m going to get REALLY technical and nerdy going forward here. For reference, I like “Google Finance†because I can see MPT (Modern Portfolio Theory) statistics for each mutual fund. For Example: Alpha – return factor compared to an index o If it’s greater than zero, then you are getting a GREATER return than the benchmark index. o If it’s LESS than zero, you’re getting LESS return than the benchmark index. Beta – RISK factor compared to an index o If it’s 1, then it IS an index. o If it’s GREATER than 1, it is MORE volatile than the index. o If it’s LESS than 1, it is LESS volatile than the index. R-squared – how much of this fund’s return is attributable JUST because of market fluctuations. o If it’s 100, then 100% of the returns of the fund is attributable to the market. o If it’s less than 100, (for example: 70) then that % of the returns are attributable to the market. o In an inverse way, if 70% of a funds returns are attributable to the market, then the other 30% is attributable to fund managers and other factors NOT directly related to market performance. VTSMX – Vanguard Total Stock Market Index http://finance.google.com/finance?client=ob&q=VTSMX VGTSX – Vanguard Total International Stock Market Index http://finance.google.com/finance?q=VGTSX&hl=en VGMFX – Vanguard Total Bond Index http://finance.google.com/finance?q=VBMFX&...mp;meta=hl%3Den Because these are ALL index funds, the Alpha is near 0, the Beta is 1 and the R-squared is 100. Why does this matter? - Because not everyone can stand the tolerance of being on the same RISK factor as the market. - What if you can REDUCE your volatility (risk) and INCREASE your returns? Take a look at my 2 favorite funds (and you’ll begin to see why they’re my favorites): CAIBX – American Funds Capital Income Builder – A http://finance.google.com/finance?q=CAIBX&...mp;meta=hl%3Den Let’s look at a 5-year time horizon (my recommended time horizon to invest): (As of 4/19/2008) Alpha – 2.04 (HIGHER return compared to index) Beta - .91 (LOWER volatility compared to index) R-Squared – 74.00 (Attributable to investment manager style) Why take on more risk if you don’t have to? CWGIX – American Funds Capital World Growth & Income – A http://finance.google.com/finance?q=CWGIX&...mp;meta=hl%3Den 5-year time horizon for this one: Alpha – 2.89 (again HIGHER return compared to index) Beta - .84 (again LOWER volatility compared to index) R-Squared – 91.27 (attributable to the fact that international markets have just done quite well) Now, how about a BAD fund: FTCAX – Franklin Technology – A http://finance.google.com/finance?q=NASDAQ%3AFTCAX Alpha – -2.36 (not quite as good as the other two I mentioned) Beta – 1.60 (VERY volatile compared to the index) R-Squared – 67.00 (low factor, normally good, but the return and risk aren’t) Why would I invest in this portfolio, when I can LOWER my risk and INCREASE my return with the (GASP!) loaded funds? BTW, since I did mention expenses/fees, you can see the expense ratios on each of the links I posted. You'll see that each Vanguard fund has VERY low expenses. Compare it to American Funds, and AF is a little higher. Take a look at the Franklin fund I posted. 1.86%!!! Do you think that might have an additional affect on your realized return? I would think so. You can use these factors to help you evaluate ANY mutual fund and compare them one with another. Remember to compare RISK, RETURN AND COSTS. Just a little bit on how I evaluate mutual funds for my clients.
  8. Let me add that if you liquidate now, and eat the 6% fee, DO NOT GO INTO A NEW LOADED FUND! Even if you choose a new "A-share" fund, that'll charge you as much as 5.75%. Now you'd be out 11.75%. Move it into a new no-load fund that you choose. Make sure you can get into it and out of it when you want. (There may be a 30-day wait period between buying and selling.) Later on, you can choose to work with an advisor, but I wouldn't do it to be hit on those fees "coming AND going".
  9. Billy, He just wants to get paid more for servicing your account. On page 20 of the prospectus, you'll see a place where it talks about "Dealer Allowance" at 4%. On page 15 of the prospectus, you'll see a place where it talks about "12b1" fees at 1%. That's 1% per year. 4% up front, 1% per year for 6 years = 10%. Compare this to A-shares on page 19 and you'll see that he'd only make (at the highest %): 5% Then the A-share 12b1 fee would be .25% Let's see, that makes it 5% up front, .25% for 6 years or 1.5% = 6.5%. Which makes the most sense for HIM? The B-shares. In his mind, if he's going to take a smaller client, he's going to earn the most - even on a smaller amount. Who ends up paying for the priviledge for him to be paid more? YOU DO. Now, I have NO PROBLEM with anybody making money to help other people with investments. I DO have a problem with B-shares because they just won't do as well as A-shares long-term or C-shares short term because of the expense structure. I DO have a problem with ongoing contributions where each contribution is tied up for 6 years before you can move it without a fee. The worst part is that there are MUCH better funds that are "B-Shares" that will do MUCH better than this one. He would've gotten paid the SAME, but your investment experience would've been vastly different. If you want, take a look at CIBBX and CWGBX. These are 2 of my favorite funds as a B-share. If you want to change the investment, move the account. Go to ScottTrade, TD Ameritrade or Fidelity and complete a new account application. Then complete an account transfer form. Bring a copy of your most recent statement. On the transfer form, indicate to LIQUIDATE ASSET before transferring. Then once the cash arrives, you'll be able to choose whatever investment you want. If you leave it there, you'll probably have to listen to whatever your bank rep would recommend - and so far I'm not sure I'd put a lot of stock into his recommendations (pun fully intended). End of rant.
  10. First, I don't know your tax bracket. Second, I DO know that your annual expense ratio on your mutual fund is 2.07% based on Google Finance and the prospectus. (Link to the prospectus is below) The good news is that you didn't pay 5% to get into this fund. The bad news is that it's WORSE than that. You're in a "B" share which means that you are STUCK with this family of funds for 6 years. You can move WITHIN these funds, but you can't liquidate without incurring a penalty. With the higher expenses, and being stuck in the fund for 6 years, you've FINANCED any up-front expense you could've incurred using A-shares. Now (get this), each time you ADD money to this fund, the clock starts over for that piece of money! So, if you've been putting in $50 per month, you're paying 2.07% management fees and you are stuck with it in that fund for 6 years. See pages 15 & 20 of the PDF below of the prospectus: https://evergreen.mktingfulfillment.com/Mer...3553_021308.pdf Now, let's suppose you're in the 15% tax bracket. That means that for your $600 annual contribution ($50 x 12 months), you're able to save $90 on your taxes. Basically, if you're paying interest that's equal to or higher than your tax bracket - pay that off first. Then continue to fund your IRA - but do it with a new mutual fund family. Now, here's the speculative part - do you think you'll ALWAYS be in the 15% tax bracket? Do you think taxes will be higher or lower in retirement? I think that taxes are quite low right now and will only go higher - no matter who gets elected to office. So, you could be saving 15% now just to pay 20% or 25% in taxes when you take it out. I'd look into a Roth IRA if I were you.
  11. What makes you think that SOFTWARE would help you? Money management is a BEHAVIOR issue, not an accounting issue. At least that's what you're describing to me in your post. Every $1 you spend should get you at least $1 worth of value. When you buy something with that $1, you should care for that item as though it is money. You aren't - at least with the case of the chicken you talked about. You're simply being careless with your money - like 95% of the rest of America. Let me tell you something from personal experience: Software cannot and will not change human behavior. It'll just help you keep better track of what you should've been doing, but aren't - thereby increasing your feelings of financial inadequacy. Budget tips: 1. Are you saving before spending, or are you spending then saving? 2. After you account for saving, then allocate what you need to your FIXED expenses. 3. Figure out your VARIABLE expenses - electricity, food, clothes, etc. 4. Take care of the things you DO buy so you can get every $1 worth of value out of that purchase. 5. Don't forget to LIVE. Budgets should be GUIDELINES, not a crash financial diet. You don't need Money or Quicken. If you do, you can probably download a trial version before spending MORE money at a problem that is a BEHAVIOR problem, not an organizational problem. I prefer Excel as well.
  12. I'm going to bring up some other things to consider: 1) Are you a homeowner with a FIXED rate mortgage? (Avoid interest-only mortgages) 2) Do you own your own life insurance policies? 3) Are you contributing at least to MAXIMIZE your company's match? If not, you need to review your finances. I'd suggest taking a look at your tax withholdings. Start here with the IRS Tax Withholding Calculator: http://www.irs.gov/individuals/article/0,,id=96196,00.html That will help you determine if you're withholding too much or too little in taxes from your paycheck. If you're withholding too MUCH, then it will tell you what adjustments to make. Then, go here: www.paycheckcity.com Input your information and see what you're take home pay will look like once you've put in your optimal tax withholding amounts and the maximum MATCH contribution. Adjust as necessary. As far as being a homeowner and owning your own life insurance policies - this is a somewhat advanced concept, but some people need as much hope as they can get that they can have an ideal lifestyle in retirement without feeling like they have to 'penny-pinch' their entire retirement years. If by the time you retire, your house is nearly paid off - you've done well. Let's also suppose that you use your life insurance policy as an ADDITIONAL savings vehicle. In retirement, let's also suppose that you spend through your ENTIRE 401k. You now can access the cash values of the life insurance policy. If you structure it right, you can take the money out TAX-FREE! Also, with the death benefit in place (as long as it's PERMANENT insurance), you can choose to get a reverse mortgage KNOWING that there is life insurance in place to give the benficiaries the OPTION to pay it off or not. If this idea appeals to you, find a licensed life insurance agent in your state to discuss your situation with. I'd suggest you find one that is a CLU or Chartered Life Underwriter.
  13. The "I" in IRA stands for INDIVIDUAL. There is no such thing as a "Joint" IRA. You can open an IRA and your spouse can open a separate IRA. Depending on your income, you can BOTH contribute the MAXIMUM to that IRA. The limits for 2007 contributions are $4,000 each. If you wish to contribute for the 2008 tax year, you're right - you can contribute a total of $10k ($5k each). In the event of divorce, the accounts are already separate, so it's a non-issue.
  14. If you sell, do you have the money to make up the difference so the title can be transferred easily? Also, if you're concerned about reliability, you had better get an inspection done and all maintenance on your Geo before letting the truck go. You will need to factor in repairs/maintenance that may be an additional ongoing cost (although it will be much cheaper than maintaining another car payment). Go for it!
  15. Minimize each necessary expense as best as possible. Turn as many expenses into investments/savings as possible to provide additional sources of cash (home, life insurance). EGO has a "O" at the end for a reason. (ZERO net worth) Buy things of value that can be resold after using them, instead of junk that only has one destination (trash heap). (Think of the nice baby furniture you see in Babies R' Us! Buy it, use it and re-sell it and minimize your cost of ownership!) Just some of my initial thoughts.

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