re: My Take On The DIY Debate

quote:

---

seriously, MPT... that's all you think we do.. hahahahahahahahhahahaha. that's great and all but you cant escape the anomalies with MPT which is why most who are competent dont rely on it.



"Advisor" freudian slip..... oh yeah dead giveaway i know amsterdam now... he's the wampa alter... jersey seriously!

also if col was sooo great and could beat all of the overpaid advisors (oops slip) he would be doing that charging whatever he wanted. blind squirrel finds a nut.....

and for the record i dont know a single high net worth person who does it himself. everyone tells me about the guy with the million dollar 401k that he made by day trading yadayadayada. great he made it. what about all the other chumps who tried and failed (theres a lot more of those). if your method was so good someone would have it cornered it, patented it, and made money on it. but i am sure you guys get the xm radio (did i give myself away again??) foolproof mail order DIY kit.

awesome... short the euro... buy gold...

anyone in here load up on tips when there was about a 2500bp spread on treasuries? should've

thats not advice cuz you missed the ride with the fraudulent diy crew.

---

that was all so desperate I'd think it might have been your way of conceding ... too many good points for you to try to argue and you know it

OK, sorry for the delay. Lots to do and all that.

quote:

---

I do think it is possible to manage your investments on your own and be successful at it. After all anything is possible. In my opinion in order accomplish this feat, you must be willing to dedicate a sizable portion of everyday to your portfolio and the news that is relevant to it.

---

I think it depends on what your goal is. Here's the thing - the value of information in a highly liquid market is very very low. Unless one has a really big portfolio it isn't worth the time even if you *do* get it right. Say I hypothetically would get 1% extra performance by working 4 hours/day. If you assume 250 trading days per year that's 1000 hours. If you have a $1 million portfolio, then that extra 1% only got you ten grand, for $10/hour. If you make the kind of money that got you to a million, ten bucks an hour isn't that great a return. Similar arguments apply to lesser portfolios.

quote:

---

then do yourself a favor and entrust your money to a financial advisor who does this everyday.

---

Well, since I've already argued that it isn't worth the trouble for the average investor, now let's consider an alternative. Do your own asset allocation (it doesn't take that long), buy indexes to meet the allocation, and forget about it.

This assume one knows how to do proper allocation to begin with. For someone who has no clue, I agree that consulting an advisor is probably a good idea.

quote:

---

If you are doing the neccessary legwork on your portfolio, and have found competent sources for your financial information(tigerdroppings isnt one of them) then you may be able to do this successfully without the aid of an advisor. Just do not get so arrogant that you think you can predict the market.

---

Yup. Index funds, anyone?

quote:

---

even the most savvy stock guru can need help in other areas.

---

Yes again - I'm only talking about managing a portfolio of assets in the financial markets. Insurance, trusts, etc. are a whole different ball game.

Good points about the difference between a CFP and a CFA. I just think that actively managed funds are almost always an inferior choice. Not a terrible one, but not all that good either. The simple fact remains that actively managed funds, chosen in advance, are routinely outperformed by whatever their index benchmarks happen to be.

So *my* advice to the individual would be to get help on all the other stuff, but stick with index funds and ETF's where possible.