Personal Investments • Leaving wealth manager->Tbills/CDs/MM?

Appreciate the fast responses! All excellent points.

Completely pulling out of the stock market for any length of time may very will result in an unnecessary opportunity loss. Your father has been invested here for quite some time with these fees. A few more months won’t hurt.

I would stay in the market. Otherwise it results in market timing that could prove to be an unwise decision that you recommended.

Cheers

Very true. The market could go up a lot in the next couple months, and he would miss out. OTOH, it could also crash, and then he would be selling at a loss. The goal is to get out of active management and so he will definitely need to liquidate those positions at some point. I guess I'm more worried about a loss than missing out on gains. The Fed is going to cut rates in a couple days. Makes me nervous...The allocation should definitely be higher in bonds, and in low cost funds in the IRA. If he doesn't sell soon, and the market tanks, stocks will crash and won't bonds become more expensive since there would be a flight to safety? Maybe I'm not thinking about this clearly...

Disagree with the poster above. If the fees is costing "several thousand" a month, I would suggest to sell everything in the IRA and buy T bills to staunch the bleed.

How much time does it take really to come up with an asset allocation, and redo the portfolio to conform to that AA? There is trivial tax cost (very low gains in taxable, and zero cost in IRA) to pay once a decision on AA is reached.

Consider "Age-10" in fixed income, as a starting point.

Thanks. So you wouldn't spread it around in CDs and MM as well?

That is not really a bad total fee. Until recently, many would have considered that fee to be below average. His portfolio could easily drop or increase more than the annual fee in a single day. Controlling taxes and fees are always part of good money management. But the actual goal is to have more money to spend.

My only hesitation is that you posted earlier that you felt the allocation was too equity heavy. You could simply ask the advisor to move 10% of the account currently in stocks to fixed income for the time being to move towards your desired asset allocation. The stock to fixed income decision will have a much greater effect than the specific details anyway.

Good points. That's not a bad compromise. He would still be paying the fees though. Maybe that's acceptable for the time being...I have discussed AA with him several times, but he and I are both unsure what it should be at this point. He has multiple sources of income, high expenses, but also fortunately not poor so dealing with these investments seems a lot to take on to both of us, hence looking for a financial planner's guidance. The investments are not being touched right now because income from SS, annuity, rentals, and part-time consulting are covering expenses.

Statistics: Posted by PassivePanda — Mon Sep 16, 2024 7:14 pm — Replies 4 — Views 258

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