No. of Recommendations: 0
I am considering using the Motley Fool recommendations for my IRA. I am a long time but very inactive investor (buy and hold has worked well). I did an experiment with my IRA 9 years ago, I split it in half and put half in a professionally managed portfolio and half in ETFs. I recently compared the results and they have both done well but the ETFs are now worth about 7% more than the managed account. That is a little less than the difference in management fees.
Thus I am thinking about splitting the managed account in half and following MF advice for that half. I recently signed up for MF "Rule Breakers" and have been hit up for the MF One service. Would MF One be worth the extra? As a long term investor, RB seems to be my style. I don't want to spend a lot of time on this and don't want to be overwhelmed with information I won't read but I thought this might be an interesting experiment. So my question is is RB right for a portion of my IRA and/or would adding MF One be better?
This account would have a fairly significant amount of money in it but not a big portion of our life savings.
Print the post Back To Top
No. of Recommendations: 2
Buy an S&P 500 Index fund. Then use the cost of the subscription to take your wife/husband/significant other/random stranger out to dinner.

--Peter
Print the post Back To Top
No. of Recommendations: 1
Buy an S&P 500 Index fund.

If you feel like doing something more active, put 60% into the S&P 500 index fund and the remaining 40% into Berkshire Hathaway. Then read the BRK board once a week. When folks there start talking about the stock getting close to IV (you'll learn what that is by reading the board), sell half the BRK and reinvest it into the index fund.

On the day you sell, go out to that nice dinner spot again. You'll likely be able to well afford it.

--Peter
Print the post Back To Top
No. of Recommendations: 0
Buy an S&P 500 Index fund.

Ugh.

With all due respect, that is horrible advice. Perhaps you were being facetious but since this is a new poster to MF, they have no way of knowing such.

We don't know the risk tolerance of the OP, their timeline, or their income needs for such an investment. The only thing we know is that they have little interest in managing their own money. Telling them to go invest 100% of their money in a domestic large cap stock index is akin to malpractice.


For the OP: I don't follow the fee-based services of TMF so I cannot provide you an informed opinion on how well they do or if they would be better or worse than what you have done on your own or in your managed account.
Print the post Back To Top
No. of Recommendations: 5
Telling them to go invest 100% of their money in a domestic large cap stock index is akin to malpractice.

Well, it would provide market-average returns from the date invested to the date withdrawn. Which, if I recall correctly, beats something like 80% of the financial advisers out there.

Which one sounds like malpractice to you?

--Peter <== feeling grumpy today for some reason
Print the post Back To Top
No. of Recommendations: 0
Well, if you want an index fund, why should it be the S&P? Look at a chart of IWM, QQQ, and SPY. IWM does the best. QQQ is second.

If you want a list of stocks to consider, look at the "Overlaps" on the MI boards. These are stocks picked by some of the MI systems. They make good candidates for consideration.

So far as MF advice on stocks, I once (quite some time ago) followed their model portfolios. They bought 3COM and rode it for a double. Then they rode it down and finally sold it for a loss. "Pathetic", said Eeyore, "and no better from this side." Anyway, I gave up on following their stuff after that. I did make money on 3COM, though.
Print the post Back To Top
No. of Recommendations: 1
Which, if I recall correctly, beats something like 80% of the financial advisers out there.

Link?

I think what you might be trying to quote is the performance of the S&P vs actively managed mutual funds.

And even that stat is rather suspect when when considers diversified alternatives. From 2002 - 2012, the best performing asset class to buy would have been MSCI EME with an average return of nearly 17%. REITs were second at almost 12%. The S&P was further down the list below R2000, and EAFE.

Perhaps more imporantly, the S&P was BELOW a diversified mix of:

25% S&P
10% Russell 2000
15% EAFE
5% EME
30% Barc Agg
5% Market Neutral
5% Commodity Index
5% REIT

With annual rebalancing.
Print the post Back To Top
No. of Recommendations: 0
Perhaps more imporantly, the S&P was BELOW a diversified mix of:

25% S&P
10% Russell 2000
15% EAFE
5% EME
30% Barc Agg
5% Market Neutral
5% Commodity Index
5% REIT

With annual rebalancing.


Do you have a link to share that has this analysis? This is not too far off from what I have targeted except I'm not investing in bonds at this time...
Print the post Back To Top
No. of Recommendations: 0
Thanks for the input.

Just for your information, the other half of the IRA is 25% each of IWM, IWR and IVV. The other 12% is RWR, EFE and ANDRE with a few individual stocks thrown in.
The professional manager has a very diversified portfolio.

I could/would follow the MF rule breakers lists but I do not want to make this a full time job/hobby.

While this is quite a bit of money, it is not the rent or food money.
Print the post Back To Top
No. of Recommendations: 1
bschne1909

Well, You noted that the managed portfolio was really only below the index by the management fee. David Gardner (Fool) is providing a management platform with the Rule Breakers and at 499 for two years, that is probably less that what you were paying (depending on your "quite a bit of money" amount and trading). So from that angle, seems like for you it might be a good idea for you.

You could buy the market index as suggested by Peter (which is sound advice for passive investing and really not malpractice) and I might also suggest sticking with some index funds because you said you probably wouldn't even read the paper, just take the suggestions and run.

But it seems like you don't want to double up on the index and you would like to experiment, or swing a little harder for the fence with some "play" money. So, I can say that I had Hidden Gems (which was Tom's paper) for a while ((and I still didn't get the route 66 symbol, Whats up with that???) Anyway) and I think the Brothers both put effort and quality into their papers which for 200 a year, that is relatively cheap.

I can't speak for the specific paper....But following the advice is easy, comes in your mail and you just buy. I say go for it with the caveat that this is free internet rambling (not advice) from some one you don't know! But also I suggest you spend a couple of minutes reading them just to make sure you have some diversification if your only going to pick a few of them!

DrTarr
RB/dT

Who quit Hidden Gems cause he went to work for a Broker-Dealer with really good research and who is still bitter about the Old School Route 66 symbol - :)
Print the post Back To Top
No. of Recommendations: 0
Do you have a link to share that has this analysis?

Unfortunately no. I just have printed material on it but if you have access to a Morningstar analysis, you can create your own.
Print the post Back To Top
Advertisement