Investing...?

[SilentStalkr]

So, my company got sold and bought out recently and with that I have to decide what to do with my profit sharing trust. Do I take it and invest it myself through Vangard or Schwab or something like that or do I get someone to manage it for me? I’ve met with a couple of people and one seems eager to help and the other says I don’t have enough money lol. My big thing is whether or not these guys are salesman or if they genuinely want to help. It’s hard to tell at times to be honest. Why investors out there got any advice?

 

[diverdon]

I think you are better doing it your self. Keep to something simple you can completely understand. I've had a lot of friends get a pro to help them with fairly healthy 401k's. In the long run it seems they all get screwed.

 

[bigwatchpilot]

I spent 10 years looking for an 'advisor' rather than an 'investor'. Investors seem to be salesmen. Either a very specific product/vehicle to put my money in or life insurance. I finally found an 'advisor'...he could give a shit if I listen to him or not but he gives me options and he executes it. He has made me a lot of money. Find the right person you can trust.

I have done well with my Vanguard accounts. Primecap has always done well for me.

 

[Nik H]

My take on "money managers" are that they manage your money into their pockets. Unless you are a really high net worth individual, I would not go that route.

I like investing and controlling my own money. If I screw up, it is my issue not someone else.

Depending on your age and risk aversion, there are some good investment choices. If you aren't into actively investing, buying funds that mirror the S&P 500 is a good bet and it is really painless. Buy it and forget about it....

This being said, I don't know that I would jump into equities at the moment. However that is up to you.

 

[diverdon]

It does not have to be an all or nothing thing. You can put the money to work a little at a time. If the market crashes you will be buying some shares cheap, it it goes to the moon you got some now.

Do not count on an advisor to time the market. If an advisor claims this ability, RUN!

 

[Nik H]

It does not have to be an all or nothing thing. You can put the money to work a little at a time. If the market crashes you will be buying some shares cheap, it it goes to the moon you got some now.

Do not count on an advisor to time the market. If an advisor claims this ability, RUN!

That is why I do it myself. I timed it pretty well this time and in 2008. Still sitting on T-Bills now until the volatility subsides a bit.

 

[isofahunter]

If the discussion is all about return then you are being sold. If you do more talking in the first couple meetings about what you want and worry about you are being advised. Advice goes beyond the return on investment, it looks at what happens when thing go south and it is at that time good advice and planning is worth every penny.

 

[Bill Larson]

do your own investing............. sideline the middle man..... no one will treat your money as good as you do.....
omho
bill

 

[uffduh]

The one nice thing about going with an advisor is that there are products you can get into which aren't necessarily available to, or could be created, by the casual investor. I'm in several investment platforms that involve owning a put or zero cost colllars on the underlyin asset or equity. For some I give up unlimited upside through the call that's sold to pay for the put, but my investments is 100% protected to the downside. Other funds have a multiplier once a certain target is achieved and again have principal protection to the downside. I'm not advocating going in blindly with a manager as I agree that a lot of them are crooks and have been burned myself, but it's worth asking whether there are packages available from them that fit your investment timeline and risk appetite.

Happy hunting and good luck

 

[SilentStalkr]

Basically, I’m mid 30’s trying to make up for lost time.

 

[lightman]

Well, first of all Good on You for looking at your future and not going out and buying a boat, truck, sports car, ect with your money. If you want to invest it yourself look at Vanguard or Fidelity. They have many options with pretty low fees. When I retired I closed out my 401 plan and moved it to Wells Fargo Advisors with a trusted Friend. Look at stock indexes or ETF's and forget about picking individual stocks. This is a loosing game for all but a very few. If you are in the South I can recommend someone. Good Luck in whatever you do.

 

[SilentStalkr]

Well, first of all Good on You for looking at your future and not going out and buying a boat, truck, sports car, ect with your money. If you want to invest it yourself look at Vanguard or Fidelity. They have many options with pretty low fees. When I retired I closed out my 401 plan and moved it to Wells Fargo Advisors with a trusted Friend. Look at stock indexes or ETF's and forget about picking individual stocks. This is a loosing game for all but a very few. If you are in the South I can recommend someone. Good Luck in whatever you do.

Cool. I’m in the southeast!

 

[Dewey7271]

There are a number of things you can do.
Agree w the previous poster in that if you take the time to lay out what you want, things you don't like and set a strategy, not just buying a product, then you're with the right advisor.
If the conversation starts with product then that's a salesman, probably not the right move.
Strategy, risk tolerance, timeline and goals are key; product or products , within reason is the last decision,
There are endless possibilities in products and investing. Narrowing that down to what ones are appropriate is important.
Imo, the concept of 100% risk to reach X reward is crazy. A true advisor can show you ways to achieve the same numbers with significantly less risk, like 60% risk versus 95% reward which to me at least, makes a lot more sense.
I've jokingly but semi-seriously said for years I won't hide from people in the grocery store. I tell them all the risk, clarify our goal and then I monitor. I never quit researching either, though this deep in the career I really wouldn't have to if I didn't care to.
Ask your advisor how long they've been doing this and how many clients from early years are still with them? I have 2nd and third generation clients so no legit advisor should shy from that question.
I also agree if the advisors discussion hinges on returns, then run.
I run into clients all the time. We're still glad to see each other. Guess that's good.

 

[schmi015]

Maybe look into a Fiduciary / Advisor. The other option would be an etf that mirrors the S&P 500 or just stick to stocks that pay dividends and keep reinvesting those.

 

[Dewey7271]

You can buy ETFs, but you assume the risk of the security. They're the "hot" idea the past 5 or 10 years. The idea is mirroring an index or basket of securities without having to buy them all and periodically adjust. The concept has merit.
The other ETF rationale is expenses. A non-actively managed basket of stuff costs a lot less than paying for active management. Your call obviously.
My drawback is you have an awful lot of "investors " buying securities they actually know next to nothing about. It becomes pretty much set it and forget it, which historically is a bad proposition. There's going to be a lot of money lost in ETFs because people don't understand them and the ramifications in a down market. Remember, you get all the upside but all the downside too. And the money you're "saving" not having active management may have a significant downside cost also.
How do you know when the drop will be? What if it happens right before you need the money? What do you do then?
For grins and the more risk averse, here's an easy concept. Say you have 25 years. And 1000 bucks. Buy a high quality zero coupon municipal bond (the interest is tax-free). Current cost and yield 3.25% and cost of $450. In 25 years it will be worth the 1000 you originally had so you have no principal risk. Take the remaining 550 and invest it. ETF, funds, whatever you want but growth oriented. Say it does 9%. It'll be 4778. Take the 1000 from the bond and 4778 from the growth stuff, 5778. With zero risk to principal. (There is a time value of money risk though) Net rate of return 7.242%. So why would I take potentially a 100 percent principal risk when I don't have to take any? And for maybe 1 1/2-2 1/2 percent more? See what I mean by crazy?