chinacat
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Post by chinacat on Aug 20, 2022 5:43:38 GMT -8
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chinacat
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Post by chinacat on Aug 20, 2022 6:13:28 GMT -8
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Dave
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"It's tough to make predictions, especially about the future." Yogi Berra
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Post by Dave on Aug 21, 2022 1:21:03 GMT -8
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chinacat
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Post by chinacat on Aug 21, 2022 6:08:58 GMT -8
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4aapl
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Post by 4aapl on Aug 21, 2022 19:19:28 GMT -8
It's not that easy. There are always risks. Maybe the risks weren't explained sufficiently, or maybe she didn't hear them as risks. I've had covered calls go "south", meaning the share pricing went too far "north". So, I made money. It just wasn't maximized. Maybe AAPL was on a tear and went up 50% in a year, and I "only" made 30%. First world problems, but it still stings. We just had the pleasure of fighting a somewhat similar case like this, where the former trustee had trust assets in risky stuff. Everyone was fine with it when things go up. But when it then goes down, and someone is no longer around to defend themselves and find the notes on conversations of both parties being willing, then suddenly there is a potential lawsuit. Fun times. In that sense, Gregg's comment of "manage your own stuff" is right on. Conversely, some people just don't understand the risks. "I want more income, but with no added risk". Or "I want less risk", but not understanding the tradeoffs. A non-profit I help with is wanting to set up an endowment fund. But they don't want to put more than 50% of the long term investments in stocks, and plan to pay a company .75% annually to run it. So over time they are looking at something like 4% returns (instead of S&P ~8%), and then paying roughly 20% of that in fees. All to be "lower risk". If looking at decades out instead of just a few years out, that's just a bad choice. But "lower risk" means lower volatility, while also lower returns. Different people have different preferences, including with savings and investments. Options aren't for everyone, even with covered calls. But I doubt that both sides said she wasn't informed about the risks, and at some point settling out of court is the only way to go, especially when talking small (relatively) numbers like these.
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Dave
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"It's tough to make predictions, especially about the future." Yogi Berra
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Post by Dave on Aug 22, 2022 1:53:12 GMT -8
In 2006 I was faced with an financial advisor that was actively managing my nest egg, and was actively losing my money. After repeated conversations I decided that I could lose my own money without the need to pay a management fee. With a little research, and having picked the right company in the mist of a raging bull market, the promised 10% return that he offered became an obvious joke. I never looked back and I’m thankful that I was willing to step out and take control. I’ve often wondered why so many of these money managers are working 9 to 5 jobs and not sitting on their own private island somewhere in the Caribbean, kicked back on the beach enjoying a drink, watching their money grow. Many times, we have no one else to blame for our situation other than ourselves. Just sayin’.
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4aapl
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Post by 4aapl on Aug 22, 2022 7:57:54 GMT -8
In 2006 I was faced with an financial advisor that was actively managing my nest egg, and was actively losing my money. After repeated conversations I decided that I could lose my own money without the need to pay a management fee. With a little research, and having picked the right company in the mist of a raging bull market, the promised 10% return that he offered became an obvious joke. I never looked back and I’m thankful that I was willing to step out and take control. I’ve often wondered why so many of these money managers are working 9 to 5 jobs and not sitting on their own private island somewhere in the Caribbean, kicked back on the beach enjoying a drink, watching their money grow. Many times, we have no one else to blame for our situation other than ourselves. Just sayin’. The same can be said for larger funds, except that the head people running those probably had to make it through a few things first. Still, stories say that most lose in comparison to the averages. But individual financial advisors, it is a much lower bar to start with, especially before they get years of service to get their certification. OTOH, even though the markets have always gone up over time, some individual investors manage to lose money. I figure many on this board are in the minority that have managed to do much better than the averages. Let's say that's true for 10% of investors. Then there's maybe 70% that are closer to the averages, plus or minus some amount, and taking into consideration the risk load they take and aim for. But then there's also some percent, in this case I am calling it 20%, that lose money. Buy high sell low? Irrational exuberance during a bubbly top and then selling out in a crash? Some lose it all. Others just lose a lot. Either way, they lost compared to the averages. There are bad investors and there are bad advisors. Replace a bad investor with a good advisor, or even an average one, and accounts improve. But replace a good investor, or even an average one, with a bad advisor? That's bad.
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platon
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"All we can know is that we know nothing. And that's the height of human wisdom.? Tolstoy
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Post by platon on Aug 22, 2022 20:48:38 GMT -8
I agree with Gregg. I have invested my money for the last 20 years and done OK, my IRA has doubled 4 times during that period, but that is not the reason I do it. If the investments are bad I want to have nobody to blame other than myself. I watched my BIL lose half his 401K when he went with a guy who was known as a very successful financial advisor. My BIL never recovered and the advisor who had been so successful lost so much money for his clients that he committed suicide. This was during the big downturn after 9-11. I lost money too but I held and it recovered. During the time the market was down I was mad at no one but myself. I like it that way, even though I know there are a lot of advisors out there that could have done much better than I did. I have always been OK with taking responsibility for my mistakes, and investing is no different.
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Dave
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"It's tough to make predictions, especially about the future." Yogi Berra
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Post by Dave on Aug 23, 2022 3:07:43 GMT -8
I agree with Gregg. I have invested my money for the last 20 years and done OK, my IRA has doubled 4 times during that period, but that is not the reason I do it. If the investments are bad I want to have nobody to blame other than myself. I watched my BIL lose half his 401K when he went with a guy who was known as a very successful financial advisor. My BIL never recovered and the advisor who had been so successful lost so much money for his clients that he committed suicide. This was during the big downturn after 9-11. I lost money too but I held and it recovered. During the time the market was down I was mad at no one but myself. I like it that way, even though I know there are a lot of advisors out there that could have done much better than I did. I have always been OK with taking responsibility for my mistakes, and investing is no different. I realize that I tend to paint with broad brushstrokes, and I don’t mean to imply that all financial advisers are not to be trusted as I know that is not true, there are many that are very qualified and should be trusted. But each person should have at least some knowledge of such an important subject. And with knowledge comes responsibly. I find that I’m quick to question everything and hopefully discover something that is new to me that can either change my viewpoint or reinforce it. Time is a commodity that is unknown to each of us and should be used wisely, this we all should agree on. But how is that wisdom acquired? Through experience, either our own or through someone else’s? Actions have consequences. Sometimes those consequences are good and sometimes they are not so good. I guess we each have to follow our own path. P.S. Thanks for posting Platon, your wisdom and knowledge is appreciated.
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4aapl
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Post by 4aapl on Aug 26, 2022 9:53:19 GMT -8
I agree with Gregg. I have invested my money for the last 20 years and done OK, my IRA has doubled 4 times during that period, but that is not the reason I do it. If the investments are bad I want to have nobody to blame other than myself. I watched my BIL lose half his 401K when he went with a guy who was known as a very successful financial advisor. My BIL never recovered and the advisor who had been so successful lost so much money for his clients that he committed suicide. This was during the big downturn after 9-11. I lost money too but I held and it recovered. During the time the market was down I was mad at no one but myself. I like it that way, even though I know there are a lot of advisors out there that could have done much better than I did. I have always been OK with taking responsibility for my mistakes, and investing is no different. I realize that I tend to paint with broad brushstrokes, and I don’t mean to imply that all financial advisers are not to be trusted as I know that is not true, there are many that are very qualified and should be trusted. But each person should have at least some knowledge of such an important subject. And with knowledge comes responsibly. I find that I’m quick to question everything and hopefully discover something that is new to me that can either change my viewpoint or reinforce it. Time is a commodity that is unknown to each of us and should be used wisely, this we all should agree on. But how is that wisdom acquired? Through experience, either our own or through someone else’s? Actions have consequences. Sometimes those consequences are good and sometimes they are not so good. I guess we each have to follow our own path. P.S. Thanks for posting Platon, your wisdom and knowledge is appreciated. I imagine that the ideal advisor would help you recognize and understand the risk level that you are invested in (so that you don't get unexpectedly crushed, or sell out at a low), while also being able to show the potential advantages of taking on a little more risk (not being only in bonds when you have 40 years until retirement). But how many are like that? Or how often is the "there is no downside" pushed, when there actually is one. We've had times here with AAPL that it seems like "there is no downside". Like car talk, sometimes this is a sign.
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