Greatest thing he did for the average investor was to create awareness how much of a waste it is to pay someone to manage your investments. Monkeys can do as as humans, so take the total market at a low cost and hold for a lifetime. That’s what he preached yet too bad entitled investors beg for advisors to lie to them when they ask “what can you do for me?”
Any relation to Bob Bogle (RIP), one of the founding individuals of the instrumental group the Ventures ? (Hawaii Five O and many other hits). As you can see by another thread, like clockwork flag posts a smartass thread retort to RIP.
As a financial advisor myself I take issue with what Meat said, however for the average american saving he is right. The real issue comes in when you have an event occur and how to adjust your money. So people like Meat who believe they can do it themselves should continue to go about their investing.... It is interesting that the most successful investors use advisors.... Bill Gates, Warren Buffett, etc. Just like the most successful athletes have private coaches
Apparently Bogle was a good guy and regularly gave half his salary to charity. Must of pissed of the rest of Wall Street to suggest that the average investor is better off without any advice. Bogle had multiple heart attacks starting in his early 30s and lived to be 89.
Compare to John Thain at Merrill -- famous for creating CDOs during the financial crisis -- who remodeled his office for $800K, including a $30K toilet.
Dadillac, the people you mentioned are uber/super rich, so of course there is value in an advisor to help organize all those assets and investments. You are correct that the average investor doesn’t need an investment advisor, yet they could stand to hire a life coach to help hold them accountable. Too many average investors are looking for an investment advisor to make them more money than they think they can do on their own. The empirical evidence shows passive strategies, or buy and hold, outperforms any active management. The value active management has is putting up a wall between the investor who reacts emotionally to market volatility and sells, like many did in December 2018 when equities swooned. Whatever strategy an average investor uses to keep his/her hands off from tinkering with it is the correct strategy. If you’re an emotional investor and need to hire an advisor to keep your hands off, go ahead and pay the extra cash. If you’re a cost efficient investor just buy your equities and hold them for your lifetime, no matter if the markets go up or down, and you’ll outperform any investment manager. This was the Jack Bogle model.
Where the majority of people need some advice is at major events.... deaths, marriages, retirement, etc... I also tend to have couples where one spouse knows exactly what to do but wants to hire me to guide their spouse when they die.
A pretty good example of a time that people need an advisor is at retirement..... how do you convert your 401k to an income stream? If you take a systematic withdrawal direct deposited into your checking account then you are giving back the advantage of dollar cost averaging that helped you amass the nest egg. Only an amateur would make that mistake but that is what most do.
@Meat what people with complicated finances, such as small business owners, don't have a company that set up a 401 or other retirement savings plan and really don't know what other avenues are open to them.How about elderly folks that have no local family, and need to be secure in their finances, there are many reasons people use financial advisors, just because you feel confident doesn't mean every one is actually capable.
Dadillac and 25, you bring up good points on advisors but let’s get back on point to the original topic of investment performance, which is what Jack Bogel championed. He never advocated against working with an advisor, he simply helped prove that you can get much better performance with passive investing while paying much less than the active money managers.
I’m in the industry myself my entire career like Dadillac, but operate my business with my investment clients way differently than all other brokers. My main issue is we can beat the pants off all of my competitors investment performance by Keelung costs low and buy and hold with a diversified portfolio you can handle for a lifetime(passive). By the way, I have over a 98% retention rate with the people I work with over the past 20 years because they’ve seen first hand throughout the ups and downs of the market how this strategy outperforms all of the hit shot investment brokers.
I believe you guys are confusing my point of paying for investment advice with working with an advisor; two totally separate issues. Most people think working with an advisor equates to higher investment returns, which is generally not true, other than the situations I mentioned before for those emotionally incapable of keeping their hands off during volatility.
It’s true during life circumstances people need an advisor, but investing can be quite simple. That’s what Jack Bogel did for us, he made it easy and low cost which is the opposite of what brokers do. Do you know why they’re called brokers? Because you leave broker than before you started doing business with them (investment wise).
I agree Meat, most people confuse financial advice with investment advice. I have offered both for 28 years now. By and large I use ETF's or individual securities if the portfolio is large enough, with the goal of holding long term. The only way an advisor helps increase your returns is by talking you out of stupid ideas from some guy at the club lol.
Rick, you may be right however I have met plenty of CPA's and Attorneys that knew their business very well but really did not know how to do income planning, man of them believe they know it all, most of them do not know it all though. In my Certified Financial Planner exam I met an attorney who is still a friend. He claimed the CFP exam was the hardest exam he ever took because of the breadth of knowledge they expect you to retain. He failed the test and never re-took it, I passed the first time
@RickDugan I use a CPA and two different attorneys none of them has the resources available to them that my advisor has in his office BTW I use the wealth management department of my business bank and I pay less than .6% annually.
^^^ You’re right about the majority of CPAs and attorneys don’t know the nuances and idiosyncrasies pertaining to retirement planning and life changes during inheritances. I’ve had so many clients tell me bad information they were given bybtgem like it was the gospel because the person they talked to was a so called “expert@, then I have to retrain them by showing literature to support my knowledge. Personal finance is specific so make sure you work with a CFP.
20 comments
Compare to John Thain at Merrill -- famous for creating CDOs during the financial crisis -- who remodeled his office for $800K, including a $30K toilet.
A pretty good example of a time that people need an advisor is at retirement..... how do you convert your 401k to an income stream? If you take a systematic withdrawal direct deposited into your checking account then you are giving back the advantage of dollar cost averaging that helped you amass the nest egg. Only an amateur would make that mistake but that is what most do.
I’m in the industry myself my entire career like Dadillac, but operate my business with my investment clients way differently than all other brokers. My main issue is we can beat the pants off all of my competitors investment performance by Keelung costs low and buy and hold with a diversified portfolio you can handle for a lifetime(passive). By the way, I have over a 98% retention rate with the people I work with over the past 20 years because they’ve seen first hand throughout the ups and downs of the market how this strategy outperforms all of the hit shot investment brokers.
I believe you guys are confusing my point of paying for investment advice with working with an advisor; two totally separate issues. Most people think working with an advisor equates to higher investment returns, which is generally not true, other than the situations I mentioned before for those emotionally incapable of keeping their hands off during volatility.
It’s true during life circumstances people need an advisor, but investing can be quite simple. That’s what Jack Bogel did for us, he made it easy and low cost which is the opposite of what brokers do. Do you know why they’re called brokers? Because you leave broker than before you started doing business with them (investment wise).
Rick, you may be right however I have met plenty of CPA's and Attorneys that knew their business very well but really did not know how to do income planning, man of them believe they know it all, most of them do not know it all though. In my Certified Financial Planner exam I met an attorney who is still a friend. He claimed the CFP exam was the hardest exam he ever took because of the breadth of knowledge they expect you to retain. He failed the test and never re-took it, I passed the first time