Reply to Talk to me about why we should or should not use a financial advisor

Forum Index » Money and Finances

Reply to "Talk to me about why we should or should not use a financial advisor"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous]
I am the poster who started this debate and this actually captures my sentiment.   I would also add -- inanticipate making significant monthly deposits and I also have wondered -- do I just spread this evenly?   These issues are not always as simple as people on here make them seem.

[/quote]

What our advisor seems to do (I get the trade confirmations but don't look at them too closely) is spread it to get our portfolio in balance. For example, let's take a macro case like you want to be 70% equities and 30% bonds, and you invested $100k ($70k and $30k). Now let's say the equities went down a bit so you're at $67k in equities and $30k in bonds. They'll allocate the new money to get your portfolio back in line.

That's a simple case. The more common scenario is that in your equities basket, you want to be 20% tech, 20% commodities, 10% international, etc. You're in 20 different funds, one is the S&P500, another the Russell 2000, etc. Tech is doing well, so now your portfolio across all your funds is now 25% tech... but you only know that by analyzing the holdings across all your funds, to see what stocks is in each.. for example maybe 3 of the funds hold Apple stock and 2 hold Google stock. They'll run the numbers to figure out how much $ to put into which funds to rebalance it. Of course, they're just using fancy software and you can work this out on  your own with many hours of work and Excel... but I just don't have that time.[/quote]

But if one sector is a larger part of the market then owning the market means owning more of that sector. Why mess with that?[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics