Any experience with Good Harbor Financial?

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shaboob
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Any experience with Good Harbor Financial?

Post by shaboob »

edited
Last edited by shaboob on Tue Jun 17, 2014 11:04 am, edited 2 times in total.
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Dale_G
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Re: Any experience with Good Harbor Financial?

Post by Dale_G »

I took a brief look at their website:

1. The reported returns of their investment scheme (since 2003) look great superb terrific!
2. The apparent 2% wrap fee looks terrific for them, not for the investor
3. Their "disciplined, model driven investment approach" utilizes market timing and leveraged ETFs

Not my cup of tea.

Dale
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BL
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Re: Any experience with Good Harbor Financial?

Post by BL »

Give him The Bogleheads Guide to Retirement Planning book (see Amazon link on topics page.)
ieee488
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Re: Any experience with Good Harbor Financial?

Post by ieee488 »

Never heard of them.
Looks like they "manage" your money a service which I don't need.
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hlfo718
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Re: Any experience with Good Harbor Financial?

Post by hlfo718 »

Looks like they just started a mutual fund with ER of 1.55, this is on top of the ETFs fees. Their historical returns look great but they weren't audited and don't really know what they were doing to have those returns. If your father insists on using them, have him allocation a portion to the mutual fund.
gwrvmd
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Re: Any experience with Good Harbor Financial?

Post by gwrvmd »

hlfo 718: You said " If your father insists on following them, have him allocate a portion to the mutual fund"
The mutual fund has an ER of 1.55 and the whole account has a wrap fee of 2% , that is an annual load of 3.55% which is almost impossible to overcome...Gordon
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Austintatious
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Re: Any experience with Good Harbor Financial?

Post by Austintatious »

There's a program to be aired on public television's Frontline tomorrow (4/23) evening that might be worth your dad's attention, and yours. It's my understanding that it will discuss the shortcomings of our retirement savings programs and how the average investor's interests have been sacrificed to the interests of the individuals and entities they rely on to invest their life savings. It might help your dad in making his decisions about where to place his savings. I've read on the forum that Jack Bogle is to appear on the program.
hlfo718
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Re: Any experience with Good Harbor Financial?

Post by hlfo718 »

gwrvmd wrote:hlfo 718: You said " If your father insists on following them, have him allocate a portion to the mutual fund"
The mutual fund has an ER of 1.55 and the whole account has a wrap fee of 2% , that is an annual load of 3.55% which is almost impossible to overcome...Gordon
Actually, what I mean is if his father really wants to invest with this firm, instead of having the wrap account just put a small portion in the mutual fund, where the min is 2,500.
lawman3966
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Re: Any experience with Good Harbor Financial?

Post by lawman3966 »

It's good that some of the posters took a look at the web site, but it shouldn't be necessary to answer the question.

Low-fee investing should be simple, transparent, and include mininal intermediation in between the investor and his/her stocks, bonds, and possibly SPIAs.

When you ask about an advising service, any advising service, a few basic observations should come to mind for a Boglehead. An intermediary has only the returns from the underlying investments to feed on, and will thus ultimately only make money by reducing what would otherwise have gone to the investor.

The above simplication could be overcome only if the tired old line of Wall St is believed, namely that the "service" knowns how to pick the good stocks and bonds, and avoid the bad ones. The essence of Bogleheadism is to conclude based on extensive evidence that no advisor can accomplish that consistently, even before deducting the advising fees.

If we re-frame the question using the above observations, and the data some have gleaned from the advisor's site, we come up with: is it a good idea to pay an intermediary 3.55% of assets per year for underlying investment results that will, at best, match some mix of the main indexes, thereby causing the investor to underperform the indexes by 3.55% per year? The question is simple and fairly framed, and the answer is obviously "no." Moreover, the answer remains the same whether the fee level is 1%, 2% or the rather incredible figure of 3.55%.

If there's anything notable about the advisor concerned here, it's that their fee levels accomplish the difficult task of making the big name Wall street advisory firms look good.
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BruceM
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Re: Any experience with Good Harbor Financial?

Post by BruceM »

Your father is a prime candidate for the likes of "Good Harbor Financial", of which I'm sure there are hundreds if not thousands of such 'advisors' popping up to "serve the needs" of the growing number of baby boomers headed into retirement with 401(k) + IRA balances they are now responsible for.

I agree with the foregoing that your dad and his BIL watch the FRONTLINE special tomorrow evening. I've only seen an excerpt but if John Bogel's comments on the typical fee structure of the typical mutual funds recommended for retirees 401(k)s is indicative of the rest of the show, it should prove interesting.

http://www.youtube.com/watch?v=UsvcYJxudUA

BruceM
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camontgo
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Re: Any experience with Good Harbor Financial?

Post by camontgo »

I've looked at this firm before. My understanding is that their strategy is a tactical asset allocation strategy (market timing). So, they invest very aggressively during months when their model is bullish, and they invest conservatively during months when their model is bearish.

I plotted the monthly excess returns of the strategy vs. the monthly excess returns of the overall U.S. stock market using the data from the Good Harbor website and the Ken French website.

Image

The red line shows the least squares regression line (CAPM regression line). The dotted gray line is the line where y=x...so, data points above the gray line show months where the Good Harbor strategy beat TSM, and points below this line show where the strategy underperformed TSM.

There are three months (the points are labeled with dates in the plot) which seem to be driving most of the excellent historical performance (10/2008,11/2008, and 4/2009). If you remove those three months, then there are about as many points below the market return line as above the market return line.

IMO, they did a good job jumping out and then back in to the market in 2008/2009, but they don't seem to have been consistently successful with "tactical asset allocation" when a few extraordinary months are excluded. I'm very skeptical that the data is showing evidence of skill rather than luck.
"Essentially, all models are wrong, but some are useful." - George E. P Box
Topic Author
shaboob
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Re: Any experience with Good Harbor Financial?

Post by shaboob »

Thx camontgo. That's what I was looking for.
Hope is not a strategy. That's why we have contingency plans.
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