The Money Mustache Community

Learning, Sharing, and Teaching => Investor Alley => Topic started by: Daleth on March 04, 2015, 08:24:33 AM

Title: Good article on what kinds of funds to avoid
Post by: Daleth on March 04, 2015, 08:24:33 AM

Just saw this in the New York Times. It has some pretty striking math comparing passive index funds to actively managed ones:

http://www.nytimes.com/2015/03/04/business/americans-arent-saving-enough-for-retirement-but-one-change-could-help.html

Title: Re: Good article on what kinds of funds to avoid
Post by: 4alpacas on March 04, 2015, 12:14:05 PM

Thanks!  I'm trying to convince a friend that an adviser won't make him "more money."

Title: Re: Good article on what kinds of funds to avoid
Post by: Wolf359 on March 04, 2015, 02:05:28 PM

Quote from: 4alpacas on March 04, 2015, 12:14:05 PM

Thanks!  I'm trying to convince a friend that an adviser won't make him "more money."

Some people are hardwired to need an advisor or party outside themselves.  If that's the case, they should check out the robo-advisors like Betterment or WealthFront.

Lots of people here don't like them, but their rates are very low compared to live advisors. 

And they work -- they're simply following the low-cost passive indexing strategy touted at Bogleheads and here.  It's cheaper and just as easy to do it yourself.  But if you have to have an advisor, they're a better option than a full service advisor.

Title: Re: Good article on what kinds of funds to avoid
Post by: 4alpacas on March 04, 2015, 04:35:26 PM

Quote from: Wolf359 on March 04, 2015, 02:05:28 PM

Quote from: 4alpacas on March 04, 2015, 12:14:05 PM

Thanks!  I'm trying to convince a friend that an adviser won't make him "more money."

Some people are hardwired to need an advisor or party outside themselves.  If that's the case, they should check out the robo-advisors like Betterment or WealthFront.

Lots of people here don't like them, but their rates are very low compared to live advisors. 

And they work -- they're simply following the low-cost passive indexing strategy touted at Bogleheads and here.  It's cheaper and just as easy to do it yourself.  But if you have to have an advisor, they're a better option than a full service advisor.

Thanks!  I'll drop the Betterment recommendation the next time the topic comes up in conversation.

Title: Re: Good article on what kinds of funds to avoid
Post by: nanu on March 04, 2015, 05:00:50 PM

Or just offer to put it into index funds for him for a very minimal fee...

Title: Re: Good article on what kinds of funds to avoid
Post by: mizzourah2006 on March 04, 2015, 05:03:02 PM

Quote from: 4alpacas on March 04, 2015, 12:14:05 PM

Thanks!  I'm trying to convince a friend that an adviser won't make him "more money."

They may not make your friend more money, but they may save them money. There are a lot of people who are literally clueless when it comes to managing money. These are the type of people most likely to sell at the bottom and buy at the top. At least having to call a "professional" and tell them you want to sell allows for one more stop-gap.

but yes, an adviser will almost certainly not make them more money.