Investing for Financial Freedom

[Captain Awesome]

Yes, I beleive it is the best way. Find one that is paid a base rate (.75% of assets), plus a performance fee if they outperform the index. Always use one that keeps track of their performanc. You can also use one to do a portfolio consultation once or twice a year. But, if you are doing a good job yourself, why would you want someone else doin it for you?

Well, I don't consider myself an experienced or knowledgeable investor - I know some basics and can probably make an informed decision given choices, but something tells me a professional way might be better.

[Homeownertoo]

What are you investing in that you doubt your ability and feel you need to resort to a pro. If your portfolio is small, it's a good opportunity to learn. If its large, do you really trust a pro to care about as much as you do. It's not rocket science. If you have average intelligence you can learn enough not to need a pro.

[NAB]

Any thoughts pro or con regarding the following two funds over the next two years appreciated...

-CI Signature High Income

-TD Monthly Income - A

Nab

[fvkasm2x]

I don't know a thing about investing. Met with an advisor last fall. I've lost $1000 in the last 6 months. Awesome!

[Homeownertoo]

Any thoughts pro or con regarding the following two funds over the next two years appreciated...

-CI Signature High Income

-TD Monthly Income - A

Nab

Why are you thinking of buying mutual funds.

[NAB]

Why do you ask that question homeowner?

Nab

[Static]

Nab, because mutual funds are a waste of money.

[NAB]

Well static, I didn't ask for an opinion on mutual funds in general. I asked for some analysis as to what those two specific funds are likely to do over the next ONE year (given their content and history of course), mainly as an exercise in how one might approach analysing such things in making a decision whether or not to get involved with one or even both - ...or even if one is already involved perhaps get out and do something different with the money ....(which I think may be what Homeowner might have been alluding to with his question). Both of those funds might be suitable for someone with a very conservative risk tolerance????

Not everyone is at the same place, with the same skill level, interest and/or time availability, under the same circumstances and stage of life, nor with the same objectives or even tolerance for risk - so to me it's very dangerous to filter everything through our own personal lenses and situation and only make such general statements as a result, .....or even think that it has some universal (or even any) application for everyone else.

Nab

[Homeownertoo]

Why do you ask that question homeowner?

Nab

Because, frankly, mutual funds are for suckers. You hand over your money to a fund-flogger who charges you hefty fees, usually accompanied by redemption fees, for performance that any reasonably intelligent chimpanzee can best. And at the end of the day, you know no more than you started with, and are probably a good deal poorer. There are so many better options that it boggles the mind anyone still falls for this money-trap. You're no dummy, Nab, despite some questionable opinions. Educate yourself and you'll have an investment advisor who cares far more about what happens to your money than any fund flogger, and who probably knows more about investing. It's not rocket science.

[Homeownertoo]

I didn't ask for an opinion on mutual funds in general. I asked for some analysis as to what those two specific funds are likely to do over the next ONE year

If you just want to park your money for a short time period such as two years, put it into a money market fund or high interest account that does not involve locking it in for any time period.

(given their content and history of course), mainly as an exercise in how one might approach analysing such things in making a decision whether or not to get involved with one or even both - ...or even if one is already involved perhaps get out and do something different with the money ....(which I think may be what Homeowner might have been alluding to with his question).

I appreciate you have some trepidation about making investment decisions yourself. If I may, I suggest you could put some of your Castanet time to much more profitable use by reading about investing. The point is, you are capable of doing a more than adequate job. If after educating yourself, you want opinions (from people whose names you don't even know), come back with some ideas you are looking at and ask how they might fit into your investment plan.

I have said this before and I'll keep saying it where needed. Investing decisions are the final decisions you make in a financial plan. If you have no plan, you should not be investing, because it is the plan that determines the kinds of investments you should have. At that point, the only question is whether specific stocks/bonds/annuities/etc. are appropriate for your plan based on their performance profile.

Both of those funds might be suitable for someone with a very conservative risk tolerance????

Not really. They fit a number of different profiles depending on what the person requires of them. Don't get locked into labels such as conservative risk tolerance, etc. Consider, rather, what you want your savings/investments to do for you.

Not everyone is at the same place, with the same skill level, interest and/or time availability, under the same circumstances and stage of life, nor with the same objectives or even tolerance for risk - so to me it's very dangerous to filter everything through our own personal lenses and situation and only make such general statements as a result, .....or even think that it has some universal (or even any) application for everyone else.

Which is precisely why I have provided the answers I did. I am actually very sympathetic toward people who are jeopardizing their financial futures because they are making the wrong financial decisions. And these decisions include buying mutual funds, but more broadly, they are because people needlessly doubt their ability to make the right decisions themselves and so put their security into the hands of people whose agendas may be compromised by self-interest or, and you seldom hear this, because the 'safe' thing to do with clients' money is to put it into funds that deliver diversity even if it is at the expense of performance and it fits a predetermined profile that is conventional wisdom in the industry but which dooms the client to underperformance. And that's before the advisors take out their various cuts.

Why is this scenario so bad? Because if you have to recover all those fees to make a decent return, then you have to chase speculative returns, and that is not investing and you will get burned. 'Investments' that involve 2-3% in fees will always underperform badly over the long run. That is inescapable. That is why you have to avoid mutual funds. That is why you either need a good fee-only advisor or you need to learn to do it yourself. There are no other alternatives. Don't wait till it's too late to learn that lesson.

[NAB]

If you just want to park your money for a short time period such as two years, put it into a money market fund or high interest account that does not involve locking it in for any time period.

Fair enough on that front, although note I said (on two occasions now) ONE year, not two. Suggestions on that basis?

Edit to add: BTW, for what it is worth I have managed my own financial affairs personally my entire working life, and have never used an investment advisor. That said, I have probably lived through different times and circumstances than many (most?) here may have experienced. Even then, I can honestly say I have never had to deal with a set of circumstances such as those we have faced during the past 5 years or so. Fortunately, I managed to luck in and make some good decisions before the crap hit the fan, so came thorugh it in a lot better shape than many others I know (including some "pro's") did. But then, I can also honestly say I really didn't think we would still be where we are today at the time, so failed on that front - hence my current uncertainty.

Edit further. Also FWIW, I have never dabbled in Mutual Funds either, so have nil experience in that regard.

Nab

[Homeownertoo]

One year? Then my objections were understated.

[NAB]

One year? Then my objections were understated.

Ya, I am beginning to understand that LOL.

Nab

[Homeownertoo]

BTW, for what it is worth I have managed my own financial affairs personally my entire working life, and have never used an investment advisor. That said, I have probably lived through different times and circumstances than many (most?) here may have experienced. Even then, I can honestly say I have never had to deal with a set of circumstances such as those we have faced during the past 5 years or so.

Not many of us have. It's been a bit of a learning experience.

Fortunately, I managed to luck in and make some good decisions before the crap hit the fan, so came thorugh it in a lot better shape than many others I know (including some "pro's") did. But then, I can also honestly say I really didn't think we would still be where we are today at the time, so failed on that front - hence my current uncertainty.

You are not alone here, either.

Edit further. Also FWIW, I have never dabbled in Mutual Funds either, so have nil experience in that regard.

And there's no time like the present to keep staying away from them. If what you did in the past worked then, it probably will still work today. Anyway, the goal is not great returns, it's returns appropriate to your situation. And practising the line "Do you want fries with your burger?"

[NAB]

If what you did in the past worked then, it probably will still work today.

I'm not as sure as you seem to be about that as a generalization. In fact, I feel it could be very dangerous for many if they take that view.

Nab