How do you pick funds - REALLY!

Point & Figure Charting methodology by Tom Dorsey. Look up Dorsey, Wright, & Associates. This could be the answer your looking for to help make sense of  managing portfolios by managing risk. The 3rd edition to his book was just released.

[quote=Ashland]


The question: What is your specific methodology to manage portfolios & what do you do to stay ahead?



Thx.[/quote]



1.) I know what I’m doing.



2.) Think in pictures. Decide on a top down allocation, and then have
some good choices for funds for each asset class. There are a huge
amount of mediocre funds out there. Most funds with hot track records got that way b/c of luck and not manager skills. So look for cheap funds with steady returns.

Read some books.

[quote=Ashland]I've been in the biz since 1998 & have just been confronted w/ an uncomfortable truth:

I don't know my arse from a hole in the ground when it comes to picking, measuring, managing and reallocating portfolios.

Yeah, I use Principia, and I've been talking upside/downside w/ clients since 2002 but that's not the it.

For instance, have you noticed w/ American Funds that it doesn't matter which 5 funds you pick you pretty well get to the same place? And isn't that all rear view mirror during a period when value stocks have really rocked?

The reason I ask the question is I've recently started doing a lot of wrap biz & it's not just about Franklin, American, and Hartford... It's about how do you create not only a strategic allocation, but manage that thru and ahead of the curve. For certain clients it makes sense to self-manage.

The question: What is your specific methodology to manage portfolios & what do you do to stay ahead?

Thx.[/quote]

Mutual Funds suck. Any numbskull can use them. Find something else to do and you will get a lot more business.

He asked a good question.  How do some of you knuckleheads survive?  Read a book???  That is history.

You have to use forward looking research.  Not what has happened in the past, but which funds are going to perform in the future. 

We have unbiased, internal research, that recommends funds.  PM me if you want to know more.

And they are NOT just American Funds, Franklin, etc.  Some great small shops like Keeley and even T Rowe.

[quote=vbrainy]

He asked a good question.  How do some of you knuckleheads survive?  Read a book???  That is history.

You have to use forward looking research.  Not what has happened in the past, but which funds are going to perform in the future. 

We have unbiased, internal research, that recommends funds.  PM me if you want to know more.

And they are NOT just American Funds, Franklin, etc.  Some great small shops like Keeley and even T Rowe.

[/quote]

How many of them consistently beat the indices?

[quote=Philo Kvetch][quote=vbrainy]

He asked a good question.  How do some of you knuckleheads survive?  Read a book???  That is history.

You have to use forward looking research.  Not what has happened in the past, but which funds are going to perform in the future. 

We have unbiased, internal research, that recommends funds.  PM me if you want to know more.

And they are NOT just American Funds, Franklin, etc.  Some great small shops like Keeley and even T Rowe.

[/quote]

How many of them consistently beat the indices?

[/quote]

You win the award for idiotic question of the day.  You are still talking about the past.  Believe it or not, some people want protection in good times and bad.  You get the best possible asset allocation, re balance it, and service the client.

You cannot control the market.  You control your service.

[quote=vbrainy][quote=Philo Kvetch][quote=vbrainy]

He asked a good question.  How do some of you knuckleheads survive?  Read a book???  That is history.

You have to use forward looking research.  Not what has happened in the past, but which funds are going to perform in the future. 

We have unbiased, internal research, that recommends funds.  PM me if you want to know more.

And they are NOT just American Funds, Franklin, etc.  Some great small shops like Keeley and even T Rowe.

[/quote]

How many of them consistently beat the indices?

[/quote]

You win the award for idiotic question of the day.  You are still talking about the past.  Believe it or not, some people want protection in good times and bad.  You get the best possible asset allocation, re balance it, and service the client.

You cannot control the market.  You control your service.

[/quote]

Nice sidestep, but no prize.

I think we can safely assume that the answer is, "None of them."

Why don't you use individual equities and guard them with stops?

Chris Davis, Tom Marsico, Dan Fuss. Those three right there have consistently outperformed their benchmarks for all conceivable time periods. And I would sleep well knowing a little Bill Gross and Marty Cohen were busy managing my money (even Nick Calamos, with his recent underperformance, would make the line up...).

The fact is, there ARE excellent managers out there. You simply need to fully understand their process and have faith in their ability to run money.

My point is that one can do equally as well with individual issues or ETFs, with less of a downside risk to the client.  Of course, the commissions are lower…

Chris Davis, Tom Marsico, Dan Fuss. Those three right there have consistently outperformed their benchmarks for all conceivable time periods. And I would sleep well knowing a little Bill Gross and Marty Cohen were busy managing my money (even Nick Calamos, with his recent underperformance, would make the line up...).

The fact is, there ARE excellent managers out there. You simply need to fully understand their process and have faith in their ability to run money.

Mutual Funds suck. Any numbskull can use them. Find something else to do and you will get a lot more business.

Unless they are inside a VUL or annuity?

[quote=silouette]

Mutual Funds suck. Any numbskull can use them. Find something else to do and you will get a lot more business.

Unless they are inside a VUL or annuity?

[/quote]

I don't use them in VA's, either, and I've never sold a VUL.

My methodology:

Use asset allocation, customized to client's personality. " Push" the allocation tactically, a little, based on market performance expectations.

Funds: work with my preferred providers, now Fidelity, Oppenheimer and Columbia, some ETFs, some individual securites mainly. Why? Train clients to expect steady performance, and branded, top down management of the fund managers themselves. Fidelity is not too shabby - if a fund manager develops a drinking problem, they are usually on it pretty quickly.

Lots of things work, simplification is pleasant. If you train your clients to focus on performance, that's what they focus upon...

Bobby is right, mutual funds are not very unique. But the you can sell sizzle and still enjoy the traditional benefits of diversification, professional management, liquidity and so on. There is so much BS about alternative investments, it is true high net worth expect more, but I think we are talking 5m AUM +.

I don't use them in VA's, either, and I've never sold a VUL.

Well then if you stop molesting mom, you might get an apology.

[quote=silouette]

My methodology:

Use asset allocation, customized to client's personality. " Push" the allocation tactically, a little, based on market performance expectations.

Funds: work with my preferred providers, now Fidelity, Oppenheimer and Columbia, some ETFs, some individual securites mainly. Why? Train clients to expect steady performance, and branded, top down management of the fund managers themselves. Fidelity is not too shabby - if a fund manager develops a drinking problem, they are usually on it pretty quickly.

Lots of things work, simplification is pleasant. If you train your clients to focus on performance, that's what they focus upon...

Bobby is right, mutual funds are not very unique. But the you can sell sizzle and still enjoy the traditional benefits of diversification, professional management, liquidity and so on. There is so much BS about alternative investments, it is true high net worth expect more, but I think we are talking 5m AUM +.

[/quote]

Yawwwwwwwnnnnnnnnnn.......

I’ll mention this…



If you use Principia, you might consider adding their asset allocation

module. It is virtually the same thing as the Ibbotsen Allocator Pro

software - it’s portfolio optimization software.



Yes, they give you the historical risk/return numbers, and yes… you are

looking in the rear-view mirror to judge risk/return numbers.



But…



You have the ability to construct your OWN risk and anticipated return

expectations within the software in order to construct portfolios for your

clients. If you think high yield will have 50% more risk, and 30% less

return than its historical average, then make the adjustment within the

software. You can do this for each individual asset class. At that point,

you are using an historical reference as your guideline, making

adjustments according to YOUR expectations about underperforming/

outperforming asset classes going forward.



Once you’ve completed your inputs, you complete the model and the

software will provide you with an optimum allocation based on your

assumptions.



At the least, it’s a methodology that allows you to use your own expected

returns, while optimizing the blend based on YOUR anticipated risk/

return expectations. You can then move along the efficient frontier, and

build different portfolios for each level of targeted risk for each client

group (aggressive, moderate, conservative). It will provide you with the

appropriate allocation, and you pick the funds to fill the segments.



Asset allocation software is just over $1k. Good product, great support.



C

[quote=Captain] I’ll mention this…



If you use Principia, you might consider adding their asset allocation

module. It is virtually the same thing as the Ibbotsen Allocator Pro

software - it’s portfolio optimization software.



Yes, they give you the historical risk/return numbers, and yes… you are

looking in the rear-view mirror to judge risk/return numbers.



But…



You have the ability to construct your OWN risk and anticipated return

expectations within the software in order to construct portfolios for your

clients. If you think high yield will have 50% more risk, and 30% less

return than its historical average, then make the adjustment within the

software. You can do this for each individual asset class. At that point,

you are using an historical reference as your guideline, making

adjustments according to YOUR expectations about underperforming/

outperforming asset classes going forward.



Once you’ve completed your inputs, you complete the model and the

software will provide you with an optimum allocation based on your

assumptions.



At the least, it’s a methodology that allows you to use your own expected

returns, while optimizing the blend based on YOUR anticipated risk/

return expectations. You can then move along the efficient frontier, and

build different portfolios for each level of targeted risk for each client

group (aggressive, moderate, conservative). It will provide you with the

appropriate allocation, and you pick the funds to fill the segments.



Asset allocation software is just over $1k. Good product, great support.



C[/quote]



Bobby… this is how you write a good response. Take notes.

My point is that one can do equally as well with individual issues or ETFs, with less of a downside risk to the client. Of course, the commissions are lower…

How many of them consistently beat the indices?

No offense intended Ashland, but have you ever met a real client?



Here’s the scenario:



Broker A is talking with a HNW prospect. He says, "It’s not about beating

the indices. It’s about providing enough return while measuring the

downside so we can achieve the w/d rate that we need to or hit the lump-

sum at the right time.



That 10 - 12% rate of return doesn’t make a bit of difference when we’re

20 yrs old & have $2000 to invest but makes all the difference in the

world at 64 and 2 yrs from turning on the tap. Most people at 64 go to an

overly conservative portfolio because of the downside fear - the exact

opposite of what they need to do. "



Broker B says, "Look. We can buy individual issues or ETFs. We can

establish a stop/loss base 15% below current prices, and move them up

as the stock or ETF moves up. That way, if there’s a fallout 15% or

greater, you’re on the sidelines in cash, locking in a large portion of your

gains. What you’re left with are investments that haven’t fallen, and a pile

of cash from those that have."



Do you honestly think that Broker A is going to get the business?



I don’t think so.

[quote=Philo Kvetch] No offense intended Ashland, but have you ever met a real client?



Here’s the scenario:



Broker A is talking with a HNW prospect. He says, "It’s not about beating

the indices. It’s about providing enough return while measuring the

downside so we can achieve the w/d rate that we need to or hit the lump-

sum at the right time.



That 10 - 12% rate of return doesn’t make a bit of difference when we’re

20 yrs old & have $2000 to invest but makes all the difference in the

world at 64 and 2 yrs from turning on the tap. Most people at 64 go to an

overly conservative portfolio because of the downside fear - the exact

opposite of what they need to do. "



Broker B says, "Look. We can buy individual issues or ETFs. We can

establish a stop/loss base 15% below current prices, and move them up

as the stock or ETF moves up. That way, if there’s a fallout 15% or

greater, you’re on the sidelines in cash, locking in a large portion of your

gains. What you’re left with are investments that haven’t fallen, and a pile

of cash from those that have."



Do you honestly think that Broker A is going to get the business?



I don’t think so.[/quote]



We obviously live in different world. I’m a bank-based rep & you live in Wirehouse/Indy-ville. I take 3 - 4 of your $200 - $500K clients ever quarter because you can’t do what you’re talking about with them.

And what makes you think that I can’t?



I can do it in a managed account at say 1.25%, and still blow the doors off of

your MFD portfolio from a cost standpoint. You can’t take the client,

because the client is making more in up years, and losing nothing in down

years.

[quote=Ashland]


We obviously live in different world. I’m a bank-based rep &
you live in Wirehouse/Indy-ville. I take 3 - 4 of your $200 - $500K
clients ever quarter because you can’t do what you’re talking about
with them.[/quote]



And then the plucky little RIA says that bank brokers have the lowest
payouts in the industry and so they push the highest comission products
(VA’s and A-shares) to make up for it. Meanwhile the private
banking/trust folks try to keep as much money as possible tied up in
deposits.



Banks have no business with money.



Meanwhile the 5 years +/- retirement are the “red zone” where you need
to be extra cautious, untill the retirement situation stabilises.

[quote=Ashland] [quote=Philo Kvetch] No offense intended Ashland, but have you ever met a real client?

Here's the scenario:

Broker A is talking with a HNW prospect. He says, "It's not about beating
the indices. It's about providing enough return while measuring the
downside so we can achieve the w/d rate that we need to or hit the lump-
sum at the right time.

That 10 - 12% rate of return doesn't make a bit of difference when we're
20 yrs old & have $2000 to invest but makes all the difference in the
world at 64 and 2 yrs from turning on the tap. Most people at 64 go to an
overly conservative portfolio because of the downside fear - the exact
opposite of what they need to do. "

Broker B says, "Look. We can buy individual issues or ETFs. We can
establish a stop/loss base 15% below current prices, and move them up
as the stock or ETF moves up. That way, if there's a fallout 15% or
greater, you're on the sidelines in cash, locking in a large portion of your
gains. What you're left with are investments that haven't fallen, and a pile
of cash from those that have."

Do you honestly think that Broker A is going to get the business?

I don't think so.[/quote]

We obviously live in different world. I'm a bank-based rep & you live in Wirehouse/Indy-ville. I take 3 - 4 of your $200 - $500K clients ever quarter because you can't do what you're talking about with them.[/quote]

I had a feeling you were gay. What bank do you work for?

[quote=Bobby Hull]

[quote=Ashland] [quote=Philo Kvetch] No offense intended Ashland, but have you ever met a real client? Here’s the scenario: Broker A is talking with a HNW prospect. He says, "It’s not about beating the indices. It’s about providing enough return while measuring the downside so we can achieve the w/d rate that we need to or hit the lump- sum at the right time. That 10 - 12% rate of return doesn’t make a bit of difference when we’re 20 yrs old & have $2000 to invest but makes all the difference in the world at 64 and 2 yrs from turning on the tap. Most people at 64 go to an overly conservative portfolio because of the downside fear - the exact opposite of what they need to do. " Broker B says, “Look. We can buy individual issues or ETFs. We can establish a stop/loss base 15% below current prices, and move them up as the stock or ETF moves up. That way, if there’s a fallout 15% or greater, you’re on the sidelines in cash, locking in a large portion of your gains. What you’re left with are investments that haven’t fallen, and a pile of cash from those that have.” Do you honestly think that Broker A is going to get the business? I don’t think so.[/quote] We obviously live in different world. I’m a bank-based rep & you live in Wirehouse/Indy-ville. I take 3 - 4 of your $200 - $500K clients ever quarter because you can’t do what you’re talking about with them.[/quote]

I had a feeling you were gay. What bank do you work for?

[quote=Philo Kvetch] No offense intended Ashland, but have you ever met a real client?



Here’s the scenario:



Broker A is talking with a HNW prospect. He says, "It’s not about beating

the indices. It’s about providing enough return while measuring the

downside so we can achieve the w/d rate that we need to or hit the lump-

sum at the right time.



That 10 - 12% rate of return doesn’t make a bit of difference when we’re

20 yrs old & have $2000 to invest but makes all the difference in the

world at 64 and 2 yrs from turning on the tap. Most people at 64 go to an

overly conservative portfolio because of the downside fear - the exact

opposite of what they need to do. "



Broker B says, "Look. We can buy individual issues or ETFs. We can

establish a stop/loss base 15% below current prices, and move them up

as the stock or ETF moves up. That way, if there’s a fallout 15% or

greater, you’re on the sidelines in cash, locking in a large portion of your

gains. What you’re left with are investments that haven’t fallen, and a pile

of cash from those that have."



Do you honestly think that Broker A is going to get the business?



I don’t think so.[/quote]



So you lose 15%, when do you get back in? I guarantee you miss it. I take an avg. of 5 clients per month from the wirehouses every month, north of 200K.   Here are the bigger transfers I have done this month, we are only half way through April:



750K-Wachovia

500K -Merrill

300K - SB

225K - Merrill

200K - Merrill

So you lose 15%, when do you get back in? I guarantee you miss it. I take

an avg. of 5 clients per month from the wirehouses every month, north of

200K.   Here are the bigger transfers I have done this month, we are only

half way through April:



750K-Wachovia

500K -Merrill

300K - SB

225K - Merrill

200K - Merrill"

____________________________________________________________ __

Of course you do.



Where did I say I lose 15%? If your reading comprehension is no better

than that, I suggest you stay at the bank and continue to ‘put up those

big numbers’.

[quote=bankrep1] [quote=Philo Kvetch] No offense intended Ashland, but have you ever met a real client?

Here's the scenario:

Broker A is talking with a HNW prospect. He says, "It's not about beating
the indices. It's about providing enough return while measuring the
downside so we can achieve the w/d rate that we need to or hit the lump-
sum at the right time.

That 10 - 12% rate of return doesn't make a bit of difference when we're
20 yrs old & have $2000 to invest but makes all the difference in the
world at 64 and 2 yrs from turning on the tap. Most people at 64 go to an
overly conservative portfolio because of the downside fear - the exact
opposite of what they need to do. "

Broker B says, "Look. We can buy individual issues or ETFs. We can
establish a stop/loss base 15% below current prices, and move them up
as the stock or ETF moves up. That way, if there's a fallout 15% or
greater, you're on the sidelines in cash, locking in a large portion of your
gains. What you're left with are investments that haven't fallen, and a pile
of cash from those that have."

Do you honestly think that Broker A is going to get the business?

I don't think so.[/quote]

So you lose 15%, when do you get back in? I guarantee you miss it. I take an avg. of 5 clients per month from the wirehouses every month, north of 200K.   Here are the bigger transfers I have done this month, we are only half way through April:

750K-Wachovia
500K -Merrill
300K - SB
225K - Merrill
200K - Merrill
[/quote]

You're a liar.

Here are the bigger transfers I have done this month, we are only half way through April:



750K-Wachovia

500K -Merrill

300K - SB

225K - Merrill

200K - Merrill

[/quote]



   The bank biz is high volume, but that’s really high there!

For you rookies, I have been at the same desk for over 4 years, I pull in over 2 Mil. every month consistently. I certainly did not start out at this volume. Believe what you want, the only one I am out to impress is myself of course.

At bank payout rates, you’d better be doing numbers that good or better.



That assumes, of course, that you’re not fibbing.

Philo out payout if your doing over 400K is 38% + bonuses starting at 500K

[quote=Philo Kvetch]


Where did I say I lose 15%? If your reading comprehension is no better

than that, I suggest you stay at the bank and continue to ‘put up those

big numbers’.[/quote]



Cmon’ Ashland is an insecure bank rep. Humor him.



However, he is right that it is fairly easy to take business from ML
and other wires. Bank brokers have time to service clients at thier
desk, vs the wire brokers who are constantly moving for the next kill.

Cmon’ Ashland is an insecure bank rep. Humor him.



However, he is right that it is fairly easy to take business from ML

and other wires. Bank brokers have time to service clients at thier

desk, vs the wire brokers who are constantly moving for the next kill.

[/quote]



Allreit - All of us are constantly moving for the next kill, but you got it right. Because I know where the money is & I get to deal with so many more people than you do I get to spend more time with each of them. Therefore I get to do the retirement, insurance, etc. planning that you find it difficult to do for my the $200 - $500K customer. And don’t think I’m not chasing your $2MM customer, too! I do $800 - $1MM in packaged product sales on a monthly basis & easily add $500K to wrap products monthly.



If any of you are looking for an easier way to do this that will get you to your goals faster - pm me!

 I love it.  

Ashland is cool.

[quote=Ashland]Allreit - All of us are constantly moving for the next
kill, but you got it right. Because I know where the money is & I
get to deal with so many more people than you do I get to spend more
time with each of them. Therefore I get to do the retirement,
insurance, etc. planning that you find it difficult to do for my the
$200 - $500K customer.[/quote]



I’m an RIA, I do only investment management/planniong. I collect my 1%
and I don’t care who does the rest. Most of my book is either
sophisticated enough, or naive but wary enough not to fall for all the
crap sold by “financial advisors” be they at a bank or at brokerage.



In my experience, bank brokers tend to push lots of high commision products and/or keep lots of money tied up in bank deposits. I get a kick whenever I see annuity brochures next to brochures advertising CD’s at better rates.



The whole idea of investing in a contract where the sponsor gets to pick the crediting rate is stupid on its face. An annuity is basicly locking yourself into an assured below market rate. It’s a dumb idea, and anyone who sells a 5 year annuity when 5 year CD is available, is a crook.

But many bank customers likely just want peace of mind, and don’t really give a rip about the details.

[quote=AllREIT] [quote=Ashland]Allreit - All of us are constantly moving for the next

kill, but you got it right. Because I know where the money is & I

get to deal with so many more people than you do I get to spend more

time with each of them. Therefore I get to do the retirement,

insurance, etc. planning that you find it difficult to do for my the

$200 - $500K customer.[/quote]



I’m an RIA, I do only investment management/planniong. I collect my 1%

and I don’t care who does the rest. Most of my book is either

sophisticated enough, or naive but wary enough not to fall for all the

crap sold by “financial advisors” be they at a bank or at brokerage.



In my experience, bank brokers tend to push lots of high commision products and/or keep lots of money tied up in bank deposits. I get a kick whenever I see annuity brochures next to brochures advertising CD’s at better rates.



The whole idea of investing in a contract where the sponsor gets to pick the crediting rate is stupid on its face. An annuity is basicly locking yourself into an assured below market rate. It’s a dumb idea, and anyone who sells a 5 year annuity when 5 year CD is available, is a crook.

[/quote]



I know some banks still have the annuity pushers, but I think you would be suprised at what some reps are doing in banks. Management in most cases wants advisors not annuity sales people.

[quote=bankrep1] Philo out payout if your doing over 400K is 38% +

bonuses starting at 500K [/quote]



You’d better get a move on if you’re going to try to hit $400 K this year.

[quote=Philo Kvetch] [quote=bankrep1] Philo out payout if your doing over 400K is 38% +
bonuses starting at 500K [/quote]

You'd better get a move on if you're going to try to hit $400 K this year.[/quote]

Especially with the haircut that the bank worker never sees.

[quote=Bobby Hull]

[quote=Philo Kvetch] [quote=bankrep1] Philo out payout if your doing over 400K is 38% + bonuses starting at 500K [/quote] You’d better get a move on if you’re going to try to hit $400 K this year.[/quote]

Especially with the haircut that the bank worker never sees.

[quote=bankrep1] [quote=Bobby Hull]

[quote=Philo Kvetch] [quote=bankrep1] Philo out payout if your doing over 400K is 38% + bonuses starting at 500K [/quote] You'd better get a move on if you're going to try to hit $400 K this year.[/quote]

Especially with the haircut that the bank worker never sees.

[/quote]

Are you a moron. There is no haircut. There is at Merrill though. E.g. I do a 7 yr. annuity I get paid 7.25% if the guy at Merrill writes the same biz he gets like 5% to his grid.[/quote]

Since you make more money than any bank worker in the history of the world, I have to believe that you don't get haircuts. The bank wouldn't want to upset someone as productive as you.

Bobby shouldn’t you be out knocking on doors finding your next victim.

[quote=bankrep1]Bobby shouldn't you be out knocking on doors finding your next victim. [/quote]

No. I'd rather hover at the teller window waiting for somene to deposit a 4 figure check that could go into a CD or fixed annuity.

C’mon boys… good natured jabbing is OK. This personal s*it has got to stop.

[quote=Ashland]C’mon boys… good natured jabbing is OK. This personal s*it has got to stop.[/quote]



Why do people respond to Bobby? Why hasn’t forum mod banned him?

Me and Bobby go way back 5 or 6 screen names for him at least. Your’re right no one with any money goes to a bank…

[quote=AllREIT] [quote=Ashland]C'mon boys... good natured jabbing is OK. This personal s*it has got to stop.[/quote]

Why do people respond to Bobby? Why hasn't forum mod banned him?
[/quote]

I'm usually good for a month or so before I get banned. Then I come back as someone else. I won't be hard to spot when I come back and then we start the cycle all over, again.

"You bring up Calamos, do you think he was preparing for a crash that never happened?"

I think Calamos and his son are fine managers.  They have a good track record through many market cycles, with fine proprietary research and trading disciplines.

Calamos Growth has lagged severely due to a couple factors in my opinion. First, the asset bloat in recent years (the fund has exponentailly increased in asset size) has made it more difficult for them to properly invest these new dollars. Some managers can handle the large inflows- Calamos has shown that they havent been as adept as others.

The other big factor is that they went heavliy into technology a couple years ago, with the thought that the sector would rebound. Also, they were predicting that LC Growth would begin to emerge again as a market leader. Still waiting for that to gain traction...

All in all, I have been slightly trimming positions in the fund, but am hoping that they regain their prowess for making the NAV rise...

[quote=Bobby Hull]

[quote=AllREIT] [quote=Ashland]C’mon boys… good natured jabbing is OK. This personal s*it has got to stop.[/quote]

Why do people respond to Bobby? Why hasn’t forum mod banned him?
[/quote]

I'm usually good for a month or so before I get banned. Then I come back as someone else. I won't be hard to spot when I come back and then we start the cycle all over, again.

[quote=joedabrkr] [quote=Bobby Hull]

[quote=AllREIT] [quote=Ashland]C'mon boys... good natured jabbing is OK. This personal s*it has got to stop.[/quote]

Why do people respond to Bobby? Why hasn't forum mod banned him?
[/quote]

I'm usually good for a month or so before I get banned. Then I come back as someone else. I won't be hard to spot when I come back and then we start the cycle all over, again.

[/quote]

Why don't you pick out your next screen name now and share it with us, say like "Barclay Plager", so we will know it is you!
[/quote]

Keep an eye out for "joedapolesmoker."

His next screen name will be "Stu Grimson" (aka The Grim Reaper).  Keeps with the Chicago Blackhawk theme and correctly identifies what he is doing with regard to the investment options that are in the clients' best interest:

Killing them.

[quote=The Judge]

His next screen name will be "Stu Grimson" (aka The Grim Reaper).  Keeps with the Chicago Blackhawk theme and correctly identifies what he is doing with regard to the investment options that are in the clients' best interest:

Killing them.

[/quote]

Actually, I was thinking of using "Stan Mikita."

Nah.  Although both were instrumental as far as today's NHL goes.  Story has it that Mikita had his stick get caught in a door and "bend" the blade.  He discovered the bended/curved blade made the puck to crazy things (i.e. drop, curve, etc).  He stuck with it and today you have all different sorts of curves.  In addition, apparently Bobby Hull was clocked at 118 mph on his slapshot.  Never been equaled.  The Golden Jet.....

Hope you had an opportunity to see a game at the old Chicago Stadium.  I wish I would have.  Must of been exceptional.

P.S. Please send me a pizza from the original Uno's; now that's good pizza.

[quote=The Judge]

Nah.  Although both were instrumental as far as today's NHL goes.  Story has it that Mikita had his stick get caught in a door and "bend" the blade.  He discovered the bended/curved blade made the puck to crazy things (i.e. drop, curve, etc).  He stuck with it and today you have all different sorts of curves.  In addition, apparently Bobby Hull was clocked at 118 mph on his slapshot.  Never been equaled.  The Golden Jet.....

Hope you had an opportunity to see a game at the old Chicago Stadium.  I wish I would have.  Must of been exceptional.

P.S. Please send me a pizza from the original Uno's; now that's good pizza.

[/quote]

We had season tickets in the late 60's and 70's. The roar during the national anthem never failed to leave me with goose bumps on my arms. I still can't believe it's gone.

The Silo, in Lake Bluff, is the best pizza I've ever eaten. Even better than Uno's.

I prefer the dart board method.

I have picked a set of managers who have strong, lengthy tenure.  For the majority of my clients, I use c-shares.  I use SMA's for the larger clients.  I take about 5% of the portfolio and leave it to 'tactical' allocation, whereby I take advantage of proprietary research using ETF's, structured products, etc.

I turned a prospect away on Wednesday because he had a 300m portfolio that was very well put together using no-load funds and individual bonds.  I don't look to do business with people who can do it for themselves. 

I think we can all agree that only a very small percentage of all investors could invest for themselves and achieve even close to market returns buying individual securities and even, yes, ETF's (commissions, b/a spreads, taxes, emotion, etc.)  [1984-2004, average investor: 5.3% return, institutional investor, 12.x% return, average stock fund 13.x% return, needs a citation]  Similarly, I believe we can all agree that as a whole, financial products are a good thing (if not, I'd suggest you exit the business). 

Boast passive management all you want, but I think we all know that there isn't such an animal as a 'passively managed' index.  Moreover, attaching a 1% wrap fee to an ETF doesn't make you any better than a portfolio manager who consistently laggs his index by 1.2%.

burn me

[quote=drewski803]

Boast passive management all you want, but I think we all know that there isn’t such an animal as a ‘passively managed’ index. [/quote]

No such thing as a 'passively managed' index? Pray that you explain this?

[QUOTE] Moreover, attaching a 1% wrap fee to an ETF doesn't make you any better than a portfolio manager who consistently laggs his index by 1.2%.[/quote]

[quote=AllREIT] [quote=drewski803]

Boast passive management all you want, but I think we all know that there isn't such an animal as a 'passively managed' index. [/quote]

No such thing as a 'passively managed' index? Pray that you explain this?

It is important to remember that the index is not entirely passive: it does change over time. although a great deal of care goes into the selection of the index, it nevertheless represents a specific view of the market. For example, in the effort to be representative, there is an inevitable tendency to include "newer' industries in an index. These industries tend however to be more actively traded and often have higher price-earnings ratios than more established industries. The consequence of modifying the index to include these industries is therefore to exaggerate increases in the value of the index, and distort the picture of the broader market. 

-The Mutual Fund Bible

[QUOTE] Moreover, attaching a 1% wrap fee to an ETF doesn't make you any better than a portfolio manager who consistently laggs his index by 1.2%.[/quote]

Sure it does, because the lag is capped to 1.2% vs an active manager who could lag the index by a much greater amount.

I'm more concerned about keeping my clients in the market because I believe the long-term ownership of stocks is the correct strategy.  To do so, I must limit their downside.  We know that to cover redemptions, mutual funds typically have a cash component, and thus tend to out-perform indexes in down markets.  If I can show my clients that my funds are beating the indexes when they are down, they are more likely to not jump-ship.  Also, as He puts it:

“Two rules:
1. Preserve the principal
2. When in doubt see Rule #1”

Good luck with your SPDR over the next 12 months.

[/quote]

[quote=drewski803]No such thing as a ‘passively managed’ index? Pray that you explain this?

It is important to remember that the index is not entirely passive: it does change over time. although a great deal of care goes into the selection of the index, it nevertheless represents a specific view of the market. For example, in the effort to be representative, there is an inevitable tendency to include "newer' industries in an index. These industries tend however to be more actively traded and often have higher price-earnings ratios than more established industries. The consequence of modifying the index to include these industries is therefore to exaggerate increases in the value of the index, and distort the picture of the broader market. 

-The Mutual Fund Bible

[/quote]
As I see it, the Mutual Fund Bible doesn't have a prayer. But then active management is an act of faith, so it makes sense to have a bible.

Fundamentally an index is a deterministic set of stocks and weightings that are selected based on a set of fixed rules. E.g Russell 1K, Wilshire 5000, Morningstar large cap value, S&P Dividend aristocrats,

Some (although they tend to be the most notable indexes) are set up by committee. E.g The S&P 500 and DJIA.

Newer older etc, all depends on how the index rules are set. Some indexes strive to represent the market (Russell/Wilshire/M*/MSCI) and so include the good/bad and indifferent of the market. Because that is what it is.

Others like the S&P Dividend Aristocrats (50 highest yeilding Companies that have raised dividends for at least 25 years) aren't going to have anything New in them.

[QUOTE][QUOTE] Moreover, attaching a 1% wrap fee to an ETF doesn't make you any better than a portfolio manager who consistently laggs his index by 1.2%.[/quote]

Sure it does, because the lag is capped to 1.2% vs an active manager who could lag the index by a much greater amount.

I'm more concerned about keeping my clients in the market because I believe the long-term ownership of stocks is the correct strategy.  To do so, I must limit their downside.  We know that to cover redemptions, mutual funds typically have a cash component, and thus tend to out-perform indexes in down markets. [/quote]

Which you can do exactly the same thing by keeping 5% of the account in cash and the remainder in the market.

Also maybe the mutual funds's stock picking and expense ratio cause it to lag more than a passive index after adjusting for cash balances, which is typical of most mutual funds.

Thanks to ETF's/Futures most mutual funds (e.g those that have a fully invested mission) don't even carry cash balances w/o market exposure.

[quote]If I can show my clients that my funds are beating the indexes when they are down, they are more likely to not jump-ship.  Also, as He puts it:

“Two rules:
1. Preserve the principal
2. When in doubt see Rule #1”

Good luck with your SPDR over the next 12 months.[/quote]

And mutual funds are related to principal preservation how?

If you want safety of principal hold cash. If you want more return, buy something else.

Why don't you just buy the individual securities if you're so fee-conscious?  Insitutional pricing?  Hmm, probably don't get that on the actual ETF share. 

burn!

Few things:

-Point and Figure Charting by Dorsey is awesome but you have to spend a lot of time studying I never finished but a great system that uses economics which never loses.

-Beating an indice is not always most important, lowering volatiliy should be king.  A simple excercise is to say a stock, index, fund, etc. gains 10% the 1st year 10% the second 10% the third then drops 10% the fourth.  What return has to be made the fifth year to avg 10% a year over the 5 year period.  A mutual fund tries to avoid the 4th year and that is a huge value.

-Studies show (for me it is fact in my mind) that allocation is 92% (something like that) of the success story rather than selection.  This means the appropriate allocation for a risk profile will usually make you look like a genius no matter what you pick.

-Basically your fine just study on allocation then you can do ok with not being the best picker.

I haven’t gone through all 7 pages of replies, but I find ETF’s the way to go.  You can do broad diversification with Widsomtree, first trust, powershares, etc… and specific industry allocations as well.  Best of all, if you find you made a mistake and an industry is not doing as well as you projected, your clients can get out relatively easily.

How well did your indices perform in the late 60’s and through the 70’s? Yes, indices and ETF’s are terrific investments - these last several years. But not always, and there are certain asset classes that it makes sense to have active mgmt and always will: Int’l, Emerging Mkts, Real Estate, Small Cap,etc.



Deciding that one way is right is the equivalent of buying all Putnam Funds in 1998 because they were the fund company(or just the right style of mgmt) of the decade and could do no wrong. Even w/o the style drift you got your head chopped off.

Actually as far as the real estate goes, unless you are looking at non-listed reits, active management is not a significant advantage to just purchasing a listed quality diversified Reit.  Either way you are buying management (same can be said for non-listed reits but let's keep them separate) and the whole group of quality reits moves in cunjunction with most of the REIT mfd's I've compared.  As for the other classes you mentioned, you better be pretty confident that the mfd manager of the groups in question isn't just riding a wave. 

The etf's in those classes have performed as well as managed mfd accounts, or better, in every comparison I have ever done.  Now note that I have not done every study possible, so there is always exceptions to the  rule so to speak. 

Finally, as for the 60's and 70's, if you are comparing the S&P to a mutual fund, be sure you are adding back in the dividends.   Some hypo tools that are out there do not acurately account for the dividends paid by the S&P, as indexes in and of themselves, do not pay a dividend since they are simply a scorecard.  A much more accurate comparison for that time frame would be to compare vfinx (which I personally don't use with my clients but have no problem with) with reinvestments at least as far back as '76.  If you need to go back farther than a 30 year cycle, I am not confident in suggesting where you might look.  Even proper diversification cannot prepare someone for every eventuality, and 30 years is a pretty good timeframe. 

Also if you look at most of the dividend leaders index's, (wisdomtree, First trust, vanguard, powershares and I am sure others) and compare their back-tested data with most of the g&i funds out there, in both the domestic and international categories, and in most of the various cap size you are looking for, you may possibly compelled to to revise your opinion....

... Or not since it is really just my opinion

Just noting that I said some hypo's don't account for the S&P dividend rate, but most do.  You just need to make sure what datasource you are using for your final value figures.

[quote=new_indy]

Just noting that I said some hypo’s don’t account
for the S&P dividend rate, but most do.  You just need to make
sure what datasource you are using for your final value figures.

[quote=AllREIT] [quote=new_indy]

Just noting that I said some hypo's don't account for the S&P dividend rate, but most do.  You just need to make sure what datasource you are using for your final value figures.

[/quote]

This is a classic trick for fluffing up the returns of active management.

Compare the total return of Fund XYZ vs the S&P Price Return.

Even then, alot of funds still come up bruised and bloody.
[/quote]

A HELL of a lot of funds come up bloody.

[quote=AllREIT] [quote=new_indy]

Just noting that I said some hypo's don't account for the S&P dividend rate, but most do.  You just need to make sure what datasource you are using for your final value figures.

[/quote]

This is a classic trick for fluffing up the returns of active management.

Compare the total return of Fund XYZ vs the S&P Price Return.

Even then, alot of funds still come up bruised and bloody.
[/quote]

When you say "Price Return" do you mean "Total Return"?  I've never heard of Price Return.

[quote=deekay][quote=AllREIT] [quote=new_indy]

Just noting that I said some hypo's don't account for the S&P dividend rate, but most do.  You just need to make sure what datasource you are using for your final value figures.

[/quote]

This is a classic trick for fluffing up the returns of active management.

Compare the total return of Fund XYZ vs the S&P Price Return.

Even then, alot of funds still come up bruised and bloody.
[/quote]

When you say "Price Return" do you mean "Total Return"?  I've never heard of Price Return.

[/quote]

Price return doesn't capture reinvested dividends.

[quote=Bobby Hull][quote=deekay][quote=AllREIT] [quote=new_indy]

Just noting that I said some hypo's don't account for the S&P dividend rate, but most do.  You just need to make sure what datasource you are using for your final value figures.

[/quote]

This is a classic trick for fluffing up the returns of active management.

Compare the total return of Fund XYZ vs the S&P Price Return.

Even then, alot of funds still come up bruised and bloody.
[/quote]

When you say "Price Return" do you mean "Total Return"?  I've never heard of Price Return.

[/quote]

Price return doesn't capture reinvested dividends.

[/quote]

That's what I figured.  Thanks.

But I don't understand what he's trying to prove.  I found several funds in about two seconds that have beaten the S&P with dividends reinvested.  How can a fund company 'fluff up' returns?  All their hypos have to be NASD approved. 

Frankly, I think the whole 'active vs. passive' argument is done to let blowhards hear themselves talk.  Do right by your clients, give 'em a little of what they want, and our job is done.

[quote=deekay][quote=Bobby Hull][quote=deekay][quote=AllREIT] [quote=new_indy]

Just noting that I said some hypo's don't account for the S&P dividend rate, but most do.  You just need to make sure what datasource you are using for your final value figures.

[/quote]

This is a classic trick for fluffing up the returns of active management.

Compare the total return of Fund XYZ vs the S&P Price Return.

Even then, alot of funds still come up bruised and bloody.
[/quote]

When you say "Price Return" do you mean "Total Return"?  I've never heard of Price Return.

[/quote]

Price return doesn't capture reinvested dividends.

[/quote]

That's what I figured.  Thanks.

But I don't understand what he's trying to prove.  I found several funds in about two seconds that have beaten the S&P with dividends reinvested.  How can a fund company 'fluff up' returns?  All their hypos have to be NASD approved. 

Frankly, I think the whole 'active vs. passive' argument is done to let blowhards hear themselves talk.  Do right by your clients, give 'em a little of what they want, and our job is done.

[/quote]

When you compare some beat-off managed money strategy to the S&P 500 without dividends, it appears to do a much better job than it really does. These managed money guys are a bunch of crooks, except for my buddies that do managed money.

[quote=Bobby Hull][quote=deekay][quote=Bobby Hull][quote=deekay][quote=AllREIT] [quote=new_indy]

Just noting that I said some hypo's don't account for the S&P dividend rate, but most do.  You just need to make sure what datasource you are using for your final value figures.

[/quote]

This is a classic trick for fluffing up the returns of active management.

Compare the total return of Fund XYZ vs the S&P Price Return.

Even then, alot of funds still come up bruised and bloody.
[/quote]

When you say "Price Return" do you mean "Total Return"?  I've never heard of Price Return.

[/quote]

Price return doesn't capture reinvested dividends.

[/quote]

That's what I figured.  Thanks.

But I don't understand what he's trying to prove.  I found several funds in about two seconds that have beaten the S&P with dividends reinvested.  How can a fund company 'fluff up' returns?  All their hypos have to be NASD approved. 

Frankly, I think the whole 'active vs. passive' argument is done to let blowhards hear themselves talk.  Do right by your clients, give 'em a little of what they want, and our job is done.

[/quote]

When you compare some beat-off managed money strategy to the S&P 500 without dividends, it appears to do a much better job than it really does. These managed money guys are a bunch of crooks, except for my buddies that do managed money.

[/quote]

The fact that any advisor compares any investment strategy (divs. reinvested) to the S&P500 (w/o divs. reinvested) is  FOS, regardless if it's an SMA, MF, VA, EIA, whatever. 

At the same time, any advisor that truly believes that indexing is the end-all, be-all of investment management is doing a disservice to his clients.  Period. 

There's a reason why institutions, pensions (i.e. smart money) hire active and passive managers.

hmmmmm.... I don't believe I said indexing is the end-all. be-all of investment management.  I believe I said that the array of index funds compared to comparable mutual fund categories is the method I choose to use.  I also find pure bonds to be a better option than bond funds (high quality stuff mostly), and individual high quality reits over long periods of time (as long as you don't buy one with an inflated price and reduced yield).  As far as the dividend reinvestment issue on the S&P, there are some hypo's even at large firms that only look at the price appreciation without the reinvested dividends.  Simply request the detailed by year screen and look for yourself.  Most provide the dividend in the equation and some don't.  I simply stated that you needed to verify the data to get the complete picture.

Now for that "disservice to your clients.  Period." shot you took:  

Pumping funds at 5.75% plus annual expense ratio's plus 12b-1 fees plus revenue sharing can be a disservice as well, without empirical evidence proving higher returns, unless there is a truly compelling reason.  Such as the need to DCA $100/mo or do a sytematic withdrawal. (certainly other reasons as well) 

Managed funds assuredly have their place, and are very convenient for specific applications.  Just like VA's are appropriate at times.  Every situation is different.  The question posted asked how we pick our funds and fund families.  ETF's no longer only track sp500, djia, and the nasdaq.  Backtesting the indexes that are available show little or no benefit to mfd's (other than as an specific application) on any of the hypo's I have run.  Stating that, you may well find some funds that outperform during any given year or short time frame, I certainly haven't tested them all.  I do frequently have to double check to make sure the etf I am looking at is a category and style match to whatever fund I am trying to compare it to.  If they are different, it isn't that hard to find one that matches up.  (simple example, a large cap value fund cannot be accurately matched up against the S&P, but there are plenty of available large cap value etf's in the world.  Same can be said for emerging markets, commodities, etc...) 

As for institutions and pensions, they hire money managers for several reasons including the hope of higher returns.  Some of the other reasons could be shared liability, available capital exceeds in-house experience level, the constant need for available short term cash positions, etc..., or just cuz it gives the perception that someone is doing something.  As I've only been a rep for one mid-sized pension, and it was just a short term bond account, I can't really answer the why of their thought process. 

I will tell you that a very good mfd manager who has beaten the S&P for most of his career once noted that when you are dealing with the large sums of money he works with, you only need to be right 10% of the time.  Meaning that institutions and pensions can take some risks, and are presented with some opportunities, that an average investors just aren't able or willing to take. 

I echo that: you are a moron!

[quote=deekay][quote=Bobby Hull][quote=deekay][quote=Bobby Hull][quote=deekay][quote=AllREIT] [quote=new_indy]

Just noting that I said some hypo's don't account for the S&P dividend rate, but most do.  You just need to make sure what datasource you are using for your final value figures.

[/quote]

This is a classic trick for fluffing up the returns of active management.

Compare the total return of Fund XYZ vs the S&P Price Return.

Even then, alot of funds still come up bruised and bloody.
[/quote]

When you say "Price Return" do you mean "Total Return"?  I've never heard of Price Return.

[/quote]

Price return doesn't capture reinvested dividends.

[/quote]

That's what I figured.  Thanks.

But I don't understand what he's trying to prove.  I found several funds in about two seconds that have beaten the S&P with dividends reinvested.  How can a fund company 'fluff up' returns?  All their hypos have to be NASD approved. 

Frankly, I think the whole 'active vs. passive' argument is done to let blowhards hear themselves talk.  Do right by your clients, give 'em a little of what they want, and our job is done.

[/quote]

When you compare some beat-off managed money strategy to the S&P 500 without dividends, it appears to do a much better job than it really does. These managed money guys are a bunch of crooks, except for my buddies that do managed money.

[/quote]

The fact that any advisor compares any investment strategy (divs. reinvested) to the S&P500 (w/o divs. reinvested) is  FOS, regardless if it's an SMA, MF, VA, EIA, whatever. 

At the same time, any advisor that truly believes that indexing is the end-all, be-all of investment management is doing a disservice to his clients.  Period. 

There's a reason why institutions, pensions (i.e. smart money) hire active and passive managers.

[/quote]

Actually, EIA's aren't credited with dividends, so it's fair to compare them to the stripped down S&P.

[quote=Bobby Hull][quote=deekay][quote=Bobby Hull][quote=deekay][quote=Bobby Hull][quote=deekay][quote=AllREIT] [quote=new_indy]

Just noting that I said some hypo's don't account for the S&P dividend rate, but most do.  You just need to make sure what datasource you are using for your final value figures.

[/quote]

This is a classic trick for fluffing up the returns of active management.

Compare the total return of Fund XYZ vs the S&P Price Return.

Even then, alot of funds still come up bruised and bloody.
[/quote]

When you say "Price Return" do you mean "Total Return"?  I've never heard of Price Return.

[/quote]

Price return doesn't capture reinvested dividends.

[/quote]

That's what I figured.  Thanks.

But I don't understand what he's trying to prove.  I found several funds in about two seconds that have beaten the S&P with dividends reinvested.  How can a fund company 'fluff up' returns?  All their hypos have to be NASD approved. 

Frankly, I think the whole 'active vs. passive' argument is done to let blowhards hear themselves talk.  Do right by your clients, give 'em a little of what they want, and our job is done.

[/quote]

When you compare some beat-off managed money strategy to the S&P 500 without dividends, it appears to do a much better job than it really does. These managed money guys are a bunch of crooks, except for my buddies that do managed money.

[/quote]

The fact that any advisor compares any investment strategy (divs. reinvested) to the S&P500 (w/o divs. reinvested) is  FOS, regardless if it's an SMA, MF, VA, EIA, whatever. 

At the same time, any advisor that truly believes that indexing is the end-all, be-all of investment management is doing a disservice to his clients.  Period. 

There's a reason why institutions, pensions (i.e. smart money) hire active and passive managers.

[/quote]

Actually, EIA's aren't credited with dividends, so it's fair to compare them to the stripped down S&P.

[/quote]

Good point.  My mistake.

Actually, EIA's aren't credited with dividends, so it's fair to compare them to the stripped down S&P.

Actually, it's not fair to compare EIA's to the S&P without dividends.  If one invests in the S&P and doesn't reinvest the dividends, the dividends don't disappear.  The investor still gets the dividends.  They are just choosing to reinvest them elsewhere or using them to buy a new pair of shoes.

The S&P pays dividends so the dividends need to be included to have any sort of meaningful comparison.

[quote=anonymous]

Actually, EIA's aren't credited with dividends, so it's fair to compare them to the stripped down S&P.

Actually, it's not fair to compare EIA's to the S&P without dividends.  If one invests in the S&P and doesn't reinvest the dividends, the dividends don't disappear.  The investor still gets the dividends.  They are just choosing to reinvest them elsewhere or using them to buy a new pair of shoes.

The S&P pays dividends so the dividends need to be included to have any sort of meaningful comparison.

[/quote]

YOu don't quite get it, but I'm too lazy to explain it. Since I see EIA's as CD/Bond/Fixed Annuity substitutes, I like to compare them to those rates and not the S&P. When you present them like this, you get much bigger tickets than if you present them as an alternative to equities.

Bobby, I completely get it.  I'm just saying it doesn't make sense to compare ANYTHING to the S&P without dividends.  Comparing an EIA to the S&P with dividends also doesn't make sense.

Since I see EIA's as CD/Bond/Fixed Annuity substitutes...

I completely agree with you.   I see EIA's as nothing more than fixed annuities with a different crediting method.

How do I pick my funds?  Hmmmm....lets see Ameircan funds are at the top of the list ...let's look at those.....Good enough!   Oh wait the VanKampen guy just gave me a pen....let's see those.....good enough too!  Where is that dart board?

[quote=anonymous]

Bobby, I completely get it.  I'm just saying it doesn't make sense to compare ANYTHING to the S&P without dividends.  Comparing an EIA to the S&P with dividends also doesn't make sense.

Since I see EIA's as CD/Bond/Fixed Annuity substitutes...

I completely agree with you.   I see EIA's as nothing more than fixed annuities with a different crediting method.

[/quote]

using the s&p 500 without divs is a gimmick used my the sleazy managed money people to make their sh*tty strategies look good and smooth out the effect of their fees. i wouldn't use it for anything, either.

[quote=anonymous]

Actually, EIA’s aren’t credited with dividends, so it’s fair to compare them to the stripped down S&P.

Actually, it's not fair to compare EIA's to the S&P without dividends.  If one invests in the S&P and doesn't reinvest the dividends, the dividends don't disappear. 

[quote=AllREIT] [quote=anonymous]

Actually, EIA's aren't credited with dividends, so it's fair to compare them to the stripped down S&P.

Actually, it's not fair to compare EIA's to the S&P without dividends.  If one invests in the S&P and doesn't reinvest the dividends, the dividends don't disappear. 

[/quote]

EIA's are credited based on the S&P Price Index, not the S&P Total Return Index.

So on that basis alone, a direct investment in SPY would have 1.9% annual advantage over the EIA. That is of course before the EIA's crediting caps and limited participation.

As usual, annuities are a bad investment for everyone except the broker and insurance company. As we used to say in Greenwich, 2 out of 3 ain't bad.


[/quote]

You fail to point out in your comments that both Anon and Bobby use EIAs as an alternative for FIXED investments.  Any comparison to an all-stock index doesn't make sense.

As far as your comments about annuities being bad for all except the insurance company and the broker - why is a guaranteed lifetime income a bad thing?  Why is guaranteeing zero loss of principal a bad thing? 

For all the good things you post, Allreit, you seem to have a nasty habit of painting others with a broad brush.  Come to think of it, you sound like another so-called "expert" - a Ms. Suzy Ormon.

FTR - I've sold exactly three annuities in my life - when it was needed and was appropriate.  Please don't think I'm "all annuity all the time".

NotREIT is just a polack.

Shut your gaping mouth hole, little dick.

deekay,

Good post.  For fair disclosure, I do believe that EIAs should be compared to fixed investments because that is what they are.  I think that they are often sold in a shady manner, but this doesn't make them bad products, but it does mean that there are some bad EIA salesmen (like any other product).  I do not use EIAs in my practice.  I do a small amount of fixed annuity business and about 10% (depending on the year) of my equity business is VA's.

[quote=crashcourse]Shut your gaping mouth hole, little dick. [/quote]

You're use of the word "gaping" reminds me of a story about your mom.....

She said, " Bobby, VLP,  short man, very little penis, very big mouth." Bobby VLP. Thanks for clarifying how I know.

Shut your gaping mouth hole, little dick.

[quote=crashcourse]

She said, " Bobby, VLP,  short man, very little penis, very big mouth." Bobby VLP. Thanks for clarifying how I know.

Shut your gaping mouth hole, little dick.

[/quote]

Did she mention that I was just one in a long line of black men?

Mom's color blind. She said, " His penis is very small, he's short, and apparently he is happiest (smiles) when he is typing his computer."

The way I pick funds ... is to use UITs!  Why?  Many funds have fairly high cash positions while UITs are virtually "all in."  Most investors presume a stock fund is invested in, well, stocks ... and not such a high percentage of cash equivalents.  The added equity exposure makes a big difference. 

Also, since many UITs are assembled through rigorous rules-based quantitative screening and selection methods, the vulnerability of human emotion in the buying and selling process is absent. 

Think of UITs this way:  Screen to identify the very best seeds to plant.  Plant them and let them grow for 15 months (or whatever the term), then harvest the crop and repeat the process. 

I present two alternatives -- classic asset allocation and strategy investing.  One can meticulously assemble a great mix of asset classes from around the world using individual securities or funds from one or more families ... or one can employ back-tested UIT strategies that have consistently and substantially beaten the averages over all the benchmark periods irrespective of asset class weightings. 

Do yourself a favor and explore the First Trust and Van Kampen web sites and look at the methodology and performance of their Target and Alpha strategies, respectively.  Amazing stuff!

[quote=FL Broker]The way I pick funds … is to use UITs! 
Why?  Many funds have fairly high cash positions while UITs are
virtually “all in.”  Most investors presume a stock fund is
invested in, well, stocks … and not such a high percentage of cash
equivalents.  The added equity exposure makes a big
difference.  [QUOTE]

Why not use ETF's? They are cheaper than UITs

[quote]Also, since many UITs are assembled through rigorous rules-based quantitative screening and selection methods, the vulnerability of human emotion in the buying and selling process is absent. [quote]

How about the extremely human tendancy to data mine (back test) for interesting patterns in though random data?

[quote]Think of UITs this way:  Screen to identify the very best seeds to plant.  Plant them and let them grow for 15 months (or whatever the term), then harvest the crop and repeat the process.[quote]

While collecting extra rent at each harvest, for a total lifetime cost far in excess of A-shares.

[quote]Do yourself a favor and explore the First Trust and Van Kampen web sites and look at the methodology and performance of their Target and Alpha strategies, respectively.  Amazing stuff![/quote]

[quote=AllREIT][quote=FL Broker]The way I pick funds … is to use UITs!  Why?  Many funds have fairly high cash positions while UITs are virtually “all in.”  Most investors presume a stock fund is invested in, well, stocks … and not such a high percentage of cash equivalents.  The added equity exposure makes a big difference.  [QUOTE]

Why not use ETF's? They are cheaper than UITs

[quote]Also, since many UITs are assembled through rigorous rules-based quantitative screening and selection methods, the vulnerability of human emotion in the buying and selling process is absent. [quote]

How about the extremely human tendancy to data mine (back test) for interesting patterns in though random data?

[quote]Think of UITs this way:  Screen to identify the very best seeds to plant.  Plant them and let them grow for 15 months (or whatever the term), then harvest the crop and repeat the process.[quote]

While collecting extra rent at each harvest, for a total lifetime cost far in excess of A-shares.

[quote]Do yourself a favor and explore the First Trust and Van Kampen web sites and look at the methodology and performance of their Target and Alpha strategies, respectively.  Amazing stuff![/quote]

If UIT strategies are so good, why arent UIT's more common and popular?
[/quote]

They are. How do you think I've made so much money in my VA's? Mutual funds?

If UIT strategies are so good, why arent UIT's more common and popular?

I use them often.  The answer to your question is that they aren't very tax efficient and they aren't appropriate for monthly investments.   I like using them for lump sums in rollovers.

Why aren't UITs more common and popular?  For all intents and purposes, there are just three providers of UITs (First Trust, Claymore and Van Kampen) versus hundreds of mutual fund families.  Since UITs are broker-sold, you also don't see them advertised or talked about in the media.  (Why should glowing articles be written about them in the do-it-yourself magazines if the DIYers can't buy them and the sponsors won't advertise in the magazine anyway?) 

In my view, UITs are becoming increasing popular among brokers not only because of the well-thought-out strategies that have allowed investors to way outperform the major averages with substantially higher Sharpe ratios, but also because of their transparency (which allows investors to know precisely what they own). 

As for taxes, investors pay tax only on the gains they've actually realized when a trust terminmates.  Except for any short-term gains off of dividend reinvestments, all gains (by design) are long term (if the trust is held to maturity).  If you want to get into the market later in the year and choose to invest in a mutual fund, you could very well "inherit" capital gains that the fund realized long before you owned it.  Most people who are paying taxes anyway would prefer to pay them on larger gains rather than on smaller gains since, in the end, their net will be higher.  "Through the end of 2006, this American Fund has had an average annual return of 8% over the past five years, which includes the post 9-11 recession year of 2002, and 11% over the past 10 years.  This UIT strategy has averaged 16% over the same 5-year period and 21% over the same 10-year period.  They're both wonderful investments.  Which one would you like to take a closer look at, Mr. Jones?"  If it's true that people like to make easy decisions, guess how this scenario turns out every time?

As for not being "appropriate" for monthly investments, maybe the better word is "convenient."  Minimums are as low as $250 for qualified money (Claymore), although small tickets may not get you paid. 

FWIW, I use a combination of funds and UITs with managed ETF programs and/or annuities to build strategy and management diversification into my larger portfolios.

[quote=FL Broker] Since UITs are broker-sold, you also don’t see them
advertised or talked about in the media.  (Why should glowing
articles be written about them in the do-it-yourself magazines if the
DIYers can’t buy them and the sponsors won’t advertise in the magazine
anyway?)  [/quote]

Even if you had just one UIT sponsor, it wouldn't preclude them from advertising.

The funds sponsors also advertise extensively for themselves and mutual funds in various "Money" type magazines.

[quote]In my view, UITs are becoming increasing popular among brokers not only because of the well-thought-out strategies that have allowed investors to way outperform the major averages with substantially higher Sharpe ratios, but also because of their transparency (which allows investors to know precisely what they own).[/quote]

You need to learn about the issues of backtesting and data mining.  Investing based on trackrecords is like driving while only looking at the rear view mirror. It can be very dangerious at times.

As for the main reason UIT's aren't more common, it has to do with the TCO being higher than the cost of equivalent A-shares. Constantly rolling UIT's is going to cost the client alot more than a single hit with A-shares.

If the underlying strategies were so good, why arent they more popular? With a little effort anyone could replicate them.

There is a reason why UIT's are not a popular form of investment. With only a few sponsors and few users.

[quote]This UIT strategy has averaged 16% over the same 5-year period and 21% over the same 10-year period.  They're both wonderful investments.  Which one would you like to take a closer look at, Mr. Jones?"  If it's true that people like to make easy decisions, guess how this scenario turns out every time?[/quote]

And then comes the issue of past performance/future results. As I remind clients, you can't eat past performance if you weren't part of it.

The question is what is going to happen after you buy the UIT, not what happened when you didn't own it.

[quote]FWIW, I use a combination of funds and UITs with managed ETF programs and/or annuities to build strategy and management diversification into my larger portfolios.[/quote]

Even if you had just one UIT sponsor, it wouldn't preclude them from advertising.

The funds sponsors also advertise extensively for themselves and mutual funds in various "Money" type magazines.

If brokers are selling the product, why pay for advertisements?  Not advertising seems to work for American Funds.

As for the main reason UIT's aren't more common, it has to do with the TCO being higher than the cost of equivalent A-shares. Constantly rolling UIT's is going to cost the client alot more than a single hit with A-shares.

The cost is higher, but that's not the reason.  If it was, then nobody would be in a fee-based account since fees are more expensive than an "A" share account.

If UITs are so good, why not use only UITs?

I hope that this isn't a serious question.  Like all investments, sometimes they are appropriate.  Sometimes, they aren't.

[quote=AllREIT][quote=FL Broker] Since UITs are broker-sold, you also don’t see them advertised or talked about in the media.  (Why should glowing articles be written about them in the do-it-yourself magazines if the DIYers can’t buy them and the sponsors won’t advertise in the magazine anyway?)  [/quote]

Even if you had just one UIT sponsor, it wouldn't preclude them from advertising.

The funds sponsors also advertise extensively for themselves and mutual funds in various "Money" type magazines.

[quote]In my view, UITs are becoming increasing popular among brokers not only because of the well-thought-out strategies that have allowed investors to way outperform the major averages with substantially higher Sharpe ratios, but also because of their transparency (which allows investors to know precisely what they own).[/quote]

You need to learn about the issues of backtesting and data mining.  Investing based on trackrecords is like driving while only looking at the rear view mirror. It can be very dangerious at times.

As for the main reason UIT's aren't more common, it has to do with the TCO being higher than the cost of equivalent A-shares. Constantly rolling UIT's is going to cost the client alot more than a single hit with A-shares.

If the underlying strategies were so good, why arent they more popular? With a little effort anyone could replicate them.

There is a reason why UIT's are not a popular form of investment. With only a few sponsors and few users.

[quote]This UIT strategy has averaged 16% over the same 5-year period and 21% over the same 10-year period.  They're both wonderful investments.  Which one would you like to take a closer look at, Mr. Jones?"  If it's true that people like to make easy decisions, guess how this scenario turns out every time?[/quote]

And then comes the issue of past performance/future results. As I remind clients, you can't eat past performance if you weren't part of it.

The question is what is going to happen after you buy the UIT, not what happened when you didn't own it.

[quote]FWIW, I use a combination of funds and UITs with managed ETF programs and/or annuities to build strategy and management diversification into my larger portfolios.[/quote]

If UITs are so good, why not use only UITs?
[/quote]

Hey you f**king retard, use your god damned brain for a minute. Would a client rather see Miami or Baghdad in his rear view mirror? You're such a f**king polack.

Bobby, you're an A-hole.  (not meant as an insult)

Great line.

[quote=anonymous]

Bobby, you're an A-hole.  (not meant as an insult)

Great line.

[/quote]

Do you think I was a little harsh on Corky? I used to have a high level of tolerance for stupid people. It's all gone, now.

I'd love to see AllREIT's sales pitch.  Think he covers the fact that ETF's have 0 opportunity to EVER out-perform "the market"?  Or the fact that his advisory fee will, over time, cost considerably more than an up-front commission?  Wonder what his clients would think if they knew that they would always be losers.

[quote=drewski803]

I’d love to see AllREIT’s sales pitch. 
Think he covers the fact that ETF’s have 0 opportunity to EVER
out-perform “the market”?  Or the fact that his advisory fee will,
over time, cost considerably more than an up-front commission? 
Wonder what his clients would think if they knew that they would always
be losers.

[quote=AllREIT]

As for the main reason UIT’s aren’t more common, it has to do with the TCO being higher than the cost of equivalent A-shares. Constantly rolling UIT’s is going to cost the client alot more than a single hit with A-shares.

[quote=joedabrkr]

AllREIT you’ve made this assertion before and I’ve called you on it
then too.  The TCO expressed in the prospectus for a strategy UIT
such as those you allude to is truly the TOTAL cost. 
[/quote]



I dunno, UIT’s like ETF’s have a fixed cost structure.



I was assuming that a typical stock MF’s 1.32% was inclusive of 
management and trading costs. If it is not, then the UIT could well be
cheaper. There is also the hidden cost of the bid/ask spread. That just
kills MF’s with high turnovers.



One could argue that trading expenses are not really asset based expenses, but are a drag on (and intrinsic to) the performance of the fund.



However UIT’s also have a fairly high turnover so the total expense there can be pretty high as well, (if you spread say 3.75% over 15 months)



The basic rule in investing, is that if the vehicle’s cost is low, then the YTB is likely low as well.

[quote=AllREIT] [quote=drewski803]

I'd love to see AllREIT's sales pitch.  Think he covers the fact that ETF's have 0 opportunity to EVER out-perform "the market"?  Or the fact that his advisory fee will, over time, cost considerably more than an up-front commission?  Wonder what his clients would think if they knew that they would always be losers.

[/quote]

In general, the best you can do is hope to get your fair share of the markets returns less your investment costs. You must ignore the sexy lady who says otherwise.

We can assure clients that their ETF investments won't do worse than (x-bp) than the indexes, we invite them ask their stockbrokers the same question about proposed SMA's/A-shares.

Our sales pitch is pretty simple.

1) Our clients have long time horizons.

2) You can not beat the market with any type of active trading strategies over the time horizons we are planing for.

3) Therefore we aim to buy and hold asset classes cheaply and to only buy stocks with a margin of safety and clear prospects for a cash bailout.

4) Stock market returns are explained by the Fama/French model and the non-distressed bond market is effecient.

5) An continious advisory fee aligns our interests with the clients. It promotes an ongoing relationship. A commision model encourages advisors to ignore or churn the account.

The stockbroker who actually bought and held A-shares for as long as he said he would have gotten fired for non-production long ago.

6) All investment strategies should be based on the goal of the preservation of principal *and* having an absolute return greater than CPI.

[/quote]

You should sue the government. That Agent Orange that your mom was exposed to during your second trimester did some really bad stuff.

In general, the best you can do is hope to get your fair share of the markets returns less your investment costs. You must ignore the sexy lady who says otherwise.

So, your basic promise to your client is "We promise to underperfom by 1% (or whatever you charge) + investment expenses"  Wouldn't your clients be better off simply by dumping you and buying no load?

We can assure clients that their ETF investments won't do worse than (x-bp) than the indexes, we invite them ask their stockbrokers the same question about proposed SMA's/A-shares.

So basically you have assured your client that they can have virtually unlimited losses, but in no case will they outperform the index.  With the SMA's/A-shares, the client can still have unlimited losses, but they have the ability to outperform the index.   They can go into a VA and be guaranteed to not lose money and have the ability to outperform the index.   ETF's don't look too good in this light.  (I actually have no problem with ETF's, but if you send them back to their stockbroker with this question, they won't move the business.)

Our sales pitch is pretty simple.

1) Our clients have long time horizons.

That's interesting.  Do you do retirement planning and nothing else?  I would think that clients would also have goals with short and medium time horizons.

2) You can not beat the market with any type of active trading strategies over the time horizons we are planing for.

The investor needs to be relatively passive.  The investment does not.  Investor behavior is much more important than active vs. passive investments.  ie. An investor who takes a buy and hold approach with actively managed funds will do much better than an investor who actively buys and sells passive investments.

3) Therefore we aim to buy and hold asset classes cheaply and to only buy stocks with a margin of safety and clear prospects for a cash bailout.

4) Stock market returns are explained by the Fama/French model and the non-distressed bond market is effecient.

5) An continious advisory fee aligns our interests with the clients. It promotes an ongoing relationship. A commision model encourages advisors to ignore or churn the account.

It promotes an ongoing relationship simply because an advisory fee compensates the advisor more.  For this very reason, I prefer to do investments for a fee.  However, the truth lies in the fact that an honest advisor will give quality service whether it is in a fee-based or commissioned account.  

The stockbroker who actually bought and held A-shares for as long as he said he would have gotten fired for non-production long ago.

Early in my career, I was an "A" share junky.  My early clients are still in their "A" shares.   Ultimately, "A" shares do hurt production, but for the short term, they increase production.   

6) All investment strategies should be based on the goal of the preservation of principal *and* having an absolute return greater than CPI.

I completely disagree.  All investment strategies should be based on the goal of maximizing the chance for the client to achieve their financial goals.  If you believe what you are saying, there is a better way to invest your clients' money than what you are doing. 

Since your clients need to preserve principal and beat the CPI, they need to be moderately conservative.  The VA's that you hate so much will accomplish this goal and your client will be able to invest aggressively instead.  You'll be able to guarantee the preservation of their principal. 

Do your clients want to die broke or leave money behind?  Assuming that they want to leave money behind,  they should put the "leave behind" money into a whole life insurance policy.  They will preserve principal and beat the CPI even if they live well past life expectancy.  If they are lucky enough to die early...

Doesn't it suck that the products that will best preserve principal and beat CPI are products that you hate?

(I'm only advocating VA's and WL for everyone if they believe All investment strategies should be based on the goal of the preservation of principal *and* having an absolute return greater than CPI.)

[quote=AllREIT]

AllREIT you’ve made this assertion before and I’ve called you on it
then too.  The TCO expressed in the prospectus for a strategy UIT
such as those you allude to is truly the TOTAL cost. 
[/quote]



I dunno, UIT’s like ETF’s have a fixed cost structure.



I was assuming that a typical stock MF’s 1.32% was inclusive of 
management and trading costs. If it is not, then the UIT could well be
cheaper. There is also the hidden cost of the bid/ask spread. That just
kills MF’s with high turnovers.



One could argue that trading expenses are not really asset based expenses, but are a drag on (and intrinsic to) the performance of the fund.



However UIT’s also have a fairly high turnover so the total expense there can be pretty high as well, (if you spread say 3.75% over 15 months)

For the product line I use it is 2.95% the first 15 months and 1.95% for every 15 months thereafter.  If you use a simple mathematical average of 4 trusts (w/rolls) that comes out to an “all in” average annual cost of 2.2%, which I would suggest compares favorably to an A-share with internal expenses of around 1.25%(or more) and annual trading costs of 2%, not to mention the drag of cash in the portfolio and, as you acknowledged, the big-ask spread.

Don’t get me wrong, I use both.  I’ve just found UIT’s to be a very effective tool, and one that most folks don’t understand.  Maybe in some ways that’s better for me because it gives me an advantage over the competition.



The basic rule in investing, is that if the vehicle’s cost is low, then the YTB is likely low as well.

Generally true.  I think with UIT’s the YTB/cost ratio is a little better because there’s less friction in terms of costs paid to brokerage firms and portfolio managers for constant trading.

[quote=Bobby Hull]

You should sue the government. That Agent Orange that your mom was exposed to during your second trimester did some really bad stuff.

[quote=joedabrkr] [quote=Bobby Hull]

You should sue the government. That Agent Orange that your mom was exposed to during your second trimester did some really bad stuff.

[/quote]

BH ultimately you can post whatever you want, but I think this is the kind of over the top counterproductive stuff that is getting you a lot of cr*p from certain parties.  For what it's worth...
[/quote]

It's not worth much. It'll be forgotten in 5 to 10 minutes.

[quote=joedabrkr] [quote=Bobby Hull]

You should sue the government. That Agent Orange that your mom was exposed to during your second trimester did some really bad stuff.

[/quote]

BH ultimately you can post whatever you want, but I think this is the kind of over the top counterproductive stuff that is getting you a lot of cr*p from certain parties.  For what it's worth...
[/quote]

He finally gets it! Bingo! Good job, broker boy. This venom is exactly what others are talking about.  It's not entertaining nor hilarious and isn't forgotten about either.

Retired? with nothing better to do than insult people all day.

Someone calls him an a-hole and then politely kisses his ass!  Why do you people continually brown-nose this f*ng Asshole.

San Fran Broker has his number!

I echo that he is an acidic moron and that's what I'm talking about broker, you must call him on this unacceptable behavor.  Thinking it is hilarious and entertaining puts you in the same category of lower class scumbags.

[quote=echo]

[/quote]

BH ultimately you can post whatever you want, but I think this is the kind of over the top counterproductive stuff that is getting you a lot of cr*p from certain parties.  For what it’s worth…
[/quote]

He finally gets it! Bingo! Good job, broker boy. This venom is exactly what others are talking about.  It's not entertaining nor hilarious and isn't forgotten about either.

Retired? with nothing better to do than insult people all day.

Someone calls him an a-hole and then politely kisses his ass!  Why do you people continually brown-nose this f*ng Asshole.

San Fran Broker has his number!

I echo that he is an acidic moron and that's what I'm talking about broker, you must call him on this unacceptable behavor.  Thinking it is hilarious and entertaining puts you in the same category of lower class scumbags.

Here he is folks brown-nosing BH again.

Yes, he said it here, folks: he thinks BHull's behavior is entertaining and hilarious.

San Fran Broker said it best!

All acidic a**holes stick together.  and it is YOU who is the biggest self-righteous, allmighty broker man who thinks he can smooth talk and do no wrong: you are very wrong to think Bobby Hull is right in talking to others this way.

This isn't just my opinion-others have voiced how bad this BH is and then you keep taking up for him.  I'm sure others put you in the same cateogory and you are losing any and all crediability by the company you keep, as_shole. 

You are a scumbag just like him!  A person who is entertained when others are mistreated: yep, that would make you a scumbag.

You're not fooling anyone.  Others will soon put you in the same cateogory as him: well, if that's what you want.  You've been warned.

Maybe others won't say anything about you backing him so much but they will be thinking that you must be a scum bag, too.

[quote=echo]

Here he is folks brown-nosing BH again.

Yes, he said it here, folks: he thinks BHull's behavior is entertaining and hilarious.

San Fran Broker said it best!

All acidic a**holes stick together.  and it is YOU who is the biggest self-righteous, allmighty broker man who thinks he can smooth talk and do no wrong: you are very wrong to think Bobby Hull is right in talking to others this way.

This isn't just my opinion-others have voiced how bad this BH is and then you keep taking up for him.  I'm sure others put you in the same cateogory and you are losing any and all crediability by the company you keep, as_shole. 

You are a scumbag just like him!  A person who is entertained when others are mistreated: yep, that would make you a scumbag.

You're not fooling anyone.  Others will soon put you in the same cateogory as him: well, if that's what you want.  You've been warned.

Maybe others won't say anything about you backing him so much but they will be thinking that you must be a scum bag, too.

 [/quote]

Let me make myself clear, parachute/fighnancy/madison/goforbroke.  I'll use small words so I can be sure you understand me.

I have no other aliases:  I am only me, echo.  We're starting to get the opinion that you and pratoman might be Bobby Hull, though.

You and others continually brown nose him. You are afraid you will be added to his victim list if you contridict him in any way.   If you want him to tone it down, then encourage this instead of being entertained by Bobby Hull trashing others!

I do not care if you value my presence here or not. I could care less about your opinion of me.  I do not need your approval to post here.  I have no jokes to tell you other than... I had a broker once who apparently did his job: he made me broke! 

You are self-righteous and holier than thou and your venomous talk means absolutely nothing.  When you support Bobby Hull, it makes you look just like him: a scumbag!  I echo that!

[quote=echo]

I have no other aliases:  I am only me, echo.  We’re starting to get the opinion that you and pratoman might be Bobby Hull, though.

You and others continually brown nose him. You are afraid you will be added to his victim list if you contridict him in any way.   If you want him to tone it down, then encourage this instead of being entertained by Bobby Hull trashing others!

I do not care if you value my presence here or not. I could care less about your opinion of me.  I do not need your approval to post here.  I have no jokes to tell you other than... I had a broker once who apparently did his job: he made me broke! 

You are self-righteous and holier than thou and your venomous talk means absolutely nothing.  When you support Bobby Hull, it makes you look just like him: a scumbag!  I echo that!

 [/quote]

I do not fear BH at all.  No need to.

You are obviously parachute/goforbroke/madison/4luvofmoney.  Your writing style, poor spelling, and the positions you take make it so obvious as to be laughable.

You're obsessed with this other poster.  This poster isn't me.

Positions? Even his peers feel the SAME way.

Other names?  When you brown nose so much, it does seem that you might even be him!  If someone talks about others having aliases so much, it normally means that they are trying to hide the fact that they use aliases themselves.

Don't waste any more time on me.  I've wasted all the time I'm going to on you, trying to tell you that when you accept and encourage this behavior and find it hilarious and entertaining, it puts you in the same exact category.

BTW, if you like to critique writing so much, maybe you should have been an English Professor.

Acidic morons!  One acid moron spoils the whole bunch, just look how rotten this Joe the Broker character has gotten.  I echo that! 

I find Bobby Hull’s comments very amusing. Granted, he doesn’t hold back, but the reactions of those who CAN’T TAKE IT adds to the amuzement. If you can’t take a little anonymous ribbing on a chatboard, your chances of handling all of the rejection in this business is quite obvious. Of course, we all know that parachute/madison/echo/et. al. isn’t in this business. An occasional non-PC comment is better than ever-flowing drivel that adds absolutely nothing!



I still might slap you, young lady…

[quote=anonymous]

Even if you had just one UIT sponsor, it wouldn’t preclude them from advertising.

The funds sponsors also advertise extensively for themselves and mutual funds in various "Money" type magazines.

If brokers are selling the product, why pay for advertisements?  Not advertising seems to work for American Funds. [/quote]

Because the total addressable market for UIT is huge. In theory all mutual fund holdings are targets.

[quote] As for the main reason UIT's aren't more common, it has to do with the TCO being higher than the cost of equivalent A-shares. Constantly rolling UIT's is going to cost the client alot more than a single hit with A-shares.

The cost is higher, but that's not the reason.  If it was, then nobody would be in a fee-based account since fees are more expensive than an "A" share account.[/quote]

The question was UIT's vs everything else, not fee-based vs everything else.

I'm glad that somone else here recognises that rolling a 3.75% commision every 15 months is going to be expensive to the client. Worse than A-shares.

[quote] If UITs are so good, why not use only UITs?

I hope that this isn't a serious question.  Like all investments, sometimes they are appropriate.  Sometimes, they aren't.

[quote=Bobby Hull][quote=joedabrkr] [quote=Bobby Hull]

You should sue the government. That Agent Orange that your mom was exposed to during your second trimester did some really bad stuff.

[/quote]

BH ultimately you can post whatever you want, but I think this is the kind of over the top counterproductive stuff that is getting you a lot of cr*p from certain parties.  For what it's worth...
[/quote]

It's not worth much. It'll be forgotten in 5 to 10 minutes.

[/quote]

I guess Bobby is just some kind of internet sociopath who likes to hurt people. As far as trolls - a troll seeks attention, a troll is a troll.

The perspective that may be lost on some veterans here is that, a professional forum may be some people's first experience at putting themselves and their ideas out there - and those new people are already engaged in a stressful test of survival, whether they are actually new in the business or established and looking for growth or support.

Bobby is responsible for itself. It would be nice if newbees were informed of his sociopathic stature at an early stage by helpful members from time to time.

The idea of somehow tacitly condoning the " hazing " of new posters seems a bit outdated. A troll is a troll, Bobby, with its industry experience and knowledge, seems at time to be a troll with a knife.

Joe appeals to Bobby, and Bobby reserves the right to be a Sociopath. If you have ever known one, you know they don't have a conscience, a sense of right and wrong.

The real damage, as pointed out by SF and NY, is that Bobby pulls much seasoned and focused discussion down into the gutter. The arguement that a Happy Camp humor can overcome it does not square, because good debate requires passion.

Here is an action proposal: would the non industry poster who cares deeply about integrity take responsibility for being Bobby's conscience in a concise - concise, humorous, helpful way? It could be like one of those little fish that rides along with a whale. Just a little disclaimer or joke here or their - be brief! I'm sure some folks are at least a little fond of it - it cares deeply for justice. The "acid" test would be, if it does it's volunteer job and doesn't irritate Joe Broker.

I'm glad that somone else here recognises that rolling a 3.75% commision every 15 months is going to be expensive to the client. Worse than A-shares.

ALLREIT, please use correct facts.  You are very far off with your numbers. Typically, you are looking at 2.95%.  This assumes a small investment of under $50,000.  For large investments of over $1,000,000, the charge is 1.4%.   If we use an example of $100,000.  The original investment will be 2.45%.  Every 15 months thereafter, it will be 1.45%.  It's more expensive than an "A" share, but not by some huge amount.  They are less expensive than what someone would normally pay in a fee-based account.

I'm interested in the thought process that prevents people from using UITs over A-shares.

1) They aren't tax efficient since the entire portfolio gets turned over every 15 months (or a different length of time depending on the specific UIT)

2) The UIT that someone buys in June, can't be purchased in July.  If someone is dollar cost averaging into 4 different UITs at the end of the year, they will have 48 different investments.  Is it even possible to automatically DCA into a UIT?  I think that the answer may be "no" since it doesn't accept new money when the month is done.

These two things combined is why I normally use UITs for lump sum investments into IRA's for people who are relatively aggressive. 

[quote=AllREIT]

[quote=drewski803]

I’d love to see AllREIT’s sales pitch. 
Think he covers the fact that ETF’s have 0 opportunity to EVER
out-perform “the market”?  Or the fact that his advisory fee will,
over time, cost considerably more than an up-front commission? 
Wonder what his clients would think if they knew that they would always
be losers.

[quote=anonymous]

I'm glad that somone else here recognises that rolling a 3.75% commision every 15 months is going to be expensive to the client. Worse than A-shares.

ALLREIT, please use correct facts.  You are very far off with your numbers. Typically, you are looking at 2.95%.  This assumes a small investment of under $50,000.  For large investments of over $1,000,000, the charge is 1.4%.   If we use an example of $100,000.  The original investment will be 2.45%.  Every 15 months thereafter, it will be 1.45%.  It's more expensive than an "A" share, but not by some huge amount.  They are less expensive than what someone would normally pay in a fee-based account.

I'm interested in the thought process that prevents people from using UITs over A-shares.

1) They aren't tax efficient since the entire portfolio gets turned over every 15 months (or a different length of time depending on the specific UIT)

2) The UIT that someone buys in June, can't be purchased in July.  If someone is dollar cost averaging into 4 different UITs at the end of the year, they will have 48 different investments.  Is it even possible to automatically DCA into a UIT?  I think that the answer may be "no" since it doesn't accept new money when the month is done.

These two things combined is why I normally use UITs for lump sum investments into IRA's for people who are relatively aggressive. 

[/quote]

Why are you even talking to this f**king idiot? The guy is a total waste of skin!

[quote=anonymous]

If UIT strategies are so good, why arent UIT's more common and popular?

I use them often.  The answer to your question is that they aren't very tax efficient and they aren't appropriate for monthly investments.   I like using them for lump sums in rollovers.

[/quote]

Explain how you don't see them as tax-efficient.  If you put a UIT up against actively managed money, you there's no comparison.  You could have a MF that that is a loser for the year, but still owe imbedded capital gains as a result of turnover within.  

As for performance, since there's no manager to feed Ferraris to, performance is much better.  Take Van Kampen Enhanced Tot Market--this UIT has a 10-yr number of 25.26%, 13-yr 23.16% and has only 2 down years: '94 and '02 (-1.6 & -6.07) compared to S&P in those years of (1.28% and -22.10%).... Not bad at all.