EDJ Field Foundations- My Experience thusfar
272 RepliesJump to last post
It would depend on your allocation but I don’t know how you could have an American Funds only portfolio that would be positive over the last 1-2 year time period if you had at least a 50% equity allocation.[/quote][quote=Moraen] [quote=Hey Kool-Aid] Recovered from losses…now of course, these are the folks that were fortunate enough to have the cash available to add to their investments. Fortunately, I had my older clients and clients near retirement re-allocate quite a bit near the top, but not nearly as much as I would have liked. Anyone who tells you that their clients are making money or losing little during the last 2 years is either lying…or invested with Bernie Madoff! [/quote] HKA - that whole “not losing much” or “making money in the last 2 years is lying” is more propaganda. I know of at least two other advisors in my town that have made their clients money. Not ALL of their clients, b/c some refuse to give up mutual funds. But at least some.
In his defense, he did originally say American Funds and others.
It can happen with American or any other fund family, provided that the Investor has enough in cash to add to their investments. For example, Joe Client has $100k turned into $70K over the last two years and adds $50k in March, 09...well..you do the math!
He had the 50k before, He already had the 50k, doing the math (I assume this is what you mean) would make it 120k (plus whatever it returned). American funds did not add that 50k in market returns. That was money he already had.
Correct Moraen…I’m not saying that the Fund production on its own recovered his money. I am saying that my advice to continue to add to his portfolio when the values were low caused the recovery!
I actually have some clients that have added to their positions in the past year, and are now up on a combined basis. Generally speaking, they were abnout 50% equities, 50% “other stuff”, so they were down about 25% peak to bottom, and their original stuff is now down only about 8-10%. But the new stuff they added is up handsomely, more than offsetting the losses. As of about 6 months ago I overwighted Emerging Equities for many of my clients, which helped. I also overwieghted Small Caps, which helped, but not quite as much as hoped. Unfortunately, I have only had a few clients add meaningful amounts to their portfolios since the beginning of this year. Of course, my new clients in 2009 think I’m a hero. I DCA’d most of them into the market from Short Duration bonds, so they missed the residual drop in early 2009, and captured much of the upside since March. Sometimes things just have a way of working out in the end.
I would say my worst portfolios are still down about 25% peak to today (these are primarily 30-somethings with mostly equities). Even though they have a long way until retirement, I still hate them being down that much. My worst near-retiree or retiree is down about 15%. For some of my all-American Funds clients, they key was that much of my fixed-income exposure was in Govie Fund and not Bond Fund or High Yield. My income-taking clients did, however, have higher allocations to those two funds, which blows.So you are taking credit for money he already had? So, adding it in March (this wouldn’t be an attempt at market timing would it?), he pays 3.5% (or maybe you added it to advisory solutions?) to add HIS $50k.
I’m truly not trying to bust your balls, I think maybe I’m not understanding what you are saying. It sounds like you are saying that he used HIS money (on your advice of course) to recover his $30k loss and add $20k to it. Because in order for 70k (even with the 50k added to it) to turn back into 100k, you would need at least a 25% return. Have any of the American Funds done that?
First off...I wasn't using exact numbers, I was just typing off the cuff. I understand the "math" I spoke of doesn't work in that example, however, I think you got the drift?! What i'm talking about isn't market timing as I always recommend clients continue to add to their portfolios, I do stress it when markets are down, just like I change allocations when the markets are extremely high (particularly with retired or nearly retired clients).
btw- you can correct me if i'm wrong (but i'm not) ...but Fundamental Inv., GFA & ICA are all over 25% up since March (ending 6/30/09, likely higher after July). There may be more but those are the first 3 I checked!Borker, what is wrong with that! The whole point of speeding up a recovery of a portfolio after a Bear Market is buying low…no??? If you aren’t advising your clients to add to their investments when markets are depressed then you are the “complete tool”!
HKA - no.
Adding more money does not “speed up the recovery of a portfolio”. That 70k still hasn’t recovered completely. You just added money to an account. That 50k is up 25%. The 70k is not.
do you people ever work or just talk on this forum?
I prefer to work as little as possible. Talking on the forum is fun for me. Hi pot, I'm kettle.
Borker, HKA, B24, Volt - you guys better watch out. The 123rd General Partner of Edward Jones is patrolling these forums checking to make sure you are working. And he’s MAAAAAD!
Neither, talking implies something spoken.....Our words are actually written....... Are you a GP, LP or just a P?do you people ever work or just talk on this forum?
Of course, I understand that. That's where, imho, we add value... it's not easy to get a client to add to a port thats down 30%...but the ones that did, are with me for life...and refer their friends and family, because I was able to seperate their emotions from their logic!...and the one's that didn't remember me pleading with them not to sell and now are starting to see that I was right! Either way they recognize the value I add!HKA - no.
Adding more money does not “speed up the recovery of a portfolio”. That 70k still hasn’t recovered completely. You just added money to an account. That 50k is up 25%. The 70k is not.
Of course, I understand that. That's where, imho, we add value... it's not easy to get a client to add to a port thats down 30%...but the ones that did, are with me for life...and refer their friends and family, because I was able to seperate their emotions from their logic!...and the one's that didn't remember me pleading with them not to sell and now are starting to see that I was right! Either way they recognize the value I add![/quote][quote=Moraen]HKA - no.
Adding more money does not “speed up the recovery of a portfolio”. That 70k still hasn’t recovered completely. You just added money to an account. That 50k is up 25%. The 70k is not.
[quote=Moraen]HKA - no. Adding more money does not “speed up the recovery of a portfolio”. That 70k still hasn’t recovered completely. You just added money to an account. That 50k is up 25%. The 70k is not.
Of course, I understand that. That’s where, imho, we add value… it’s not easy to get a client to add to a port thats down 30%…but the ones that did, are with me for life…and refer their friends and family, because I was able to seperate their emotions from their logic!..and the one’s that didn’t remember me pleading with them not to sell and now are starting to see that I was right! Either way they recognize the value I add![/quote]
Or your client could have not kept their money invested in mutual funds, but individual equities. Gone 30% cash two years ago. Not lost as much. Put that $50k in various “cheap” securities in March and be up even more. Talk about actually adding value.