Professional money managers

Father Demon · June 22, 2007, 01:19:07 PM

Anyone here use them? Good stories? Bad stories?

I've always thought I would be better off managing my own investments, since it's always been a hobby and I majored in finance (not that I ever use that in my sales and engineering role, but that's a whole different story), but frankly I don't pay that close attention to my stuff. I mostly buy, hold, and almost always forget about it. I spend more time managing the investment club I run than I do my own stuff. Seriously bass-ackwards type stuff.

What should I be looking for in a money manager? What questions should I be asking? Any personal information on fee structures?

Susquehanna Birder · June 22, 2007, 01:47:37 PM

I don't use one, pretty much for the same reasons you said. I try to not complicate my life so much that I need somebody to tell me how to manage my shtein.

The only real advice I can give is that if you want to use a financial advisor, get one that uses a flat fee, rather than working on commission. Takes away the temptation for them to stir your portfolio (for the sake of skimming off some commissions).

MURP · June 22, 2007, 01:48:37 PM

Quote from: Father Demon on June 22, 2007, 01:19:07 PM
I mostly buy, hold, and almost always forget about it.

you are already on the right track. Investing for the long term is the way to go. Trying to micromanage investments often leads to problems. Buy good funds or stocks, hold them for a long time. If you have so many different investments that you cant even manage to track them yourself once and a while maybe you should pare em down to something managable. I just never understand wanting to pay somebody else to do it for you. Money managers are there to make themselves money.

Susquehanna Birder · June 22, 2007, 01:52:21 PM

I want to buy and hold...but the media and all the cool internet resources force me to look at my position, and it's really hard to keep my mitts off.

MURP · June 22, 2007, 02:03:34 PM

you guys should check out This book , while it is no joke at 640 pages the writings of Graham are sumarized up to date at the end of each chapter which makes it easier to read.

Susquehanna Birder · June 22, 2007, 02:07:17 PM

Thanks for the rec. I did read this one, and it was pretty good. I also read a lot of the Motley Fools stuff, which follows a similar philosophy.

Wingspan · June 22, 2007, 02:10:09 PM

Basically do you research before hand. Then buy and hold.

If you dont want to look at it ever, and just let it gain (hopefully) go with a mutual fund. If you want to manage it a little. Buy stocks and let it sit...let them go for at least 3 months at a time. Don't overreact to a bad week, or even month.

If you want to micromanage your money and investments. Go to school and learn how.

Wingspan · June 22, 2007, 02:11:47 PM

By the way, if there were any professional money managers on this board reading this right now. Don't do any business with them, they should be paying attention to someones money right now.

Father Demon · June 22, 2007, 02:56:03 PM

I'm also a big fan on Motley Fool, and overall I've done OK with things. I just wonder if someone trained (and paid to do so) could do better than I am. If I take out my one stock that is +600% in 6 years, and the other that is up 150% in one year, my averages are, well, just average.

The guy my parents uses was +20% last year, with a portfolio built to appreciate the value enough so they can take quarterly dividends and never touch the balance and never reduce the core value.

At 41 years old, I just feel like I should have more. I've been doing mostly the right things, but feel like I'm not making enough leeway.

Does that make sense?

Susquehanna Birder · June 22, 2007, 05:10:28 PM

Perfect sense (coming from a guy who is 46).

Do you contribute to your retirement accounts (401k and IRA) fully? I was pretty stupid with my 401k many years ago, and I know it hurt my long-term accumulation. But I'm back on it now, and I'm actually able to put in the legal maximum. I figure with that and my Roth IRA, any other investments I make are gravy.

Your parents' guy - was that 20% after his take, or before? And what would their portfolio have done without the cost of his expertise?

Since you read the Fools, you understand the magic 11% average annual return of the S&P500...and that anything over that is goodness. I get the Stock Advisor newsletter, and overall, they are at least doubling the S&P. That's good enough for me. If there comes a time when I don't want to be active any more, I know I can plop it all in some index funds and relax a bit. But I'm having fun for now. (That said, I've also made some great choices and some stupid ones. It's all part of the game, I guess.)

Diomedes · June 22, 2007, 05:39:26 PM

TrollJoel manages my estate, and FFMoneylover audits his books for me. They both ma bitches, but I pays nice so they slurp it up.

Father Demon · June 22, 2007, 07:14:00 PM

Contribute the legal max to my 401(k0< but nothing to my IRA. Big slacker there. My parents' guy made the 20+% after his take, which is astounding. I asked my dad, and he said he made the same thing last year.

I also subscribe to the MFSA, and the investment club I run is built 100% behind their newsletter -- it's perfect for lazy investors like me. Trouble is, a bunch of our partners quit this month when our original 2 year agreement was up, so we have to scrap almost everything and start from scratch (looking for new members). Next time, it will be a 5 year commit.

Anyway, I'm going to talk to this guy on Tuesday, and just looking for the right stuff to ask beyond fee structure and churn.

Butchers Bill · June 23, 2007, 01:09:24 AM

Consult a CFP and as someone else suggested, go with a flat fee.

phattymatty · June 26, 2007, 02:27:59 PM

I started trading pennies today. Because it's probably the riskiest thing to do with your money other than throwing it down the shteinter. I'm that good with my money.

phattymatty · June 27, 2007, 02:03:09 PM

picked a winner this morning....then blew it.

picked a small internet company that just made some deal with iTunes, started out at .0018 this morning. i bought 25,000 shares at .0045. only about $100. anyway, it shoots up 200% within 5 minutes, then starts going back down. i pussed out and sold with a $20 profit because i had a meeting. when i got back later it was flying back up again and peaked at over .018. over 1000% for the day. instead of coming out with over a grand i come out with $20. i'm disgusted.