Money Matters with Ken Moraif

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Watertree
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Money Matters with Ken Moraif

Postby Watertree » Fri Jul 13, 2012 5:10 pm

My brother in law lives in the Dallas metro area. He recently attended a "money matters with Ken Moraif" seminar. Moraif has a radio show in the Dallas and Houston metro areas. He also has a website moneymatters.net. I looked up his website, specializes in retirement planning with a "buy, hold, and sell philosophy. A market timer investor with lots of disclaimers.

Brother in law is 65 years old and frustrated that his mega corp 401K has not grown substantially. He is looking for investment opportunities outside of his 401k. I recommended to him to contact Scott Burns and his Asset Builder advisory firm in the Dallas area.

Does anybody know anything good or bad about Money Matters with Ken Moraif advisory firm?

Thanks
Watertree

Stryker
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Re: Money Matters with Ken Moraif

Postby Stryker » Fri Jul 13, 2012 5:28 pm

Watertree wrote:My brother in law lives in the Dallas metro area. He recently attended a "money matters with Ken Moraif" seminar. Moraif has a radio show in the Dallas and Houston metro areas. He also has a website moneymatters.net. I looked up his website, specializes in retirement planning with a "buy, hold, and sell philosophy. A market timer investor with lots of disclaimers.

Brother in law is 65 years old and frustrated that his mega corp 401K has not grown substantially. He is looking for investment opportunities outside of his 401k. I recommended to him to contact Scott Burns and his Asset Builder advisory firm in the Dallas area.

Does anybody know anything good or bad about Money Matters with Ken Moraif advisory firm?

Thanks
Watertree


I guess if you believe in market timing. I don't.

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SurfCityBill
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Re: Money Matters with Ken Moraif

Postby SurfCityBill » Fri Jul 13, 2012 9:43 pm

Watertree wrote:
Brother in law is 65 years old and frustrated that his mega corp 401K has not grown substantially. He is looking for investment opportunities outside of his 401k. I recommended to him to contact Scott Burns and his Asset Builder advisory firm in the Dallas area.


I truly hope your brother in law is thinking with a clear head. At 65 years old an investment decision based on frustration may be a recipe for disaster. In other words if it turns out to be unsuccessful, he doesn't have much time to re-coup his loses. Just make sure he's aware that there is a difference between investing and speculating.

-B

Ne'er-do-well
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Re: Money Matters with Ken Moraif

Postby Ne'er-do-well » Sat Jul 14, 2012 5:55 am

I don’t know anything about Moraif but I bet a component of Moraif’s investment opportunity for your brother will be some type of high sales commission annuity that at best might yield mediocre returns. Since you mentioned Scott Burns direct your brother to Mr. Burns’ website where your brother can read about the perils of equity index annuities or fixed index annuities or whatever the marketing people have re-named them as. Due to your brother's frustration he is ripe to hear the siren call of the seduction of annuities.

http://assetbuilder.com/blogs/tags/Annu ... ?GroupID=6

DFAMAN
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Re: Money Matters with Ken Moraif

Postby DFAMAN » Fri Jul 20, 2012 3:42 pm

I live in Dallas. This guy bombards the airwaves every week with his program on numerous am radio stations. His show features goofy sound effects, and he pushes seminars offering free "oatmeal chocolate chunk" cookies. I occasionally enjoy listening to him, just so I can shake my head that people would believe that he has some sort of system that can successfully determine when to "get in" and "get out" of the market. On each program that I have heard, he has touted that his clients were out of the equity markets from late 2007 to June of 2009 - but I haven't usually heard him tout that he also pulled his clients out of the market in 2010 and 2011 during periods that meant his clients missed significant runups in stock markets (and then he had them buy back in at higher prices when markets were up). From information on his website, it appears he advised clients to sell on June 8, 2010 (S&P was at 1,062) and then advised them to buy back in on October 6, 2010 (S&P was at 1159). In 2011, he advised clients to sell on August 5 (S&P at 1199) and then advised clients to buy back in on January 19, 2012 (S&P was at 1314).

In my opinion, if he could predict the future with any degree of accuracy on a consistent basis, he'd be a billionaire investing his own money, rather than bothering to make a living getting fees from middle class retirees. According to the brochure for his firm filed with the SEC, they generally charge a fee of 1% of assets under management - I personally wouldn't have enjoyed the "privilege" in 2010 and 2011 of paying 1% for having him sit me in cash or fixed and miss the vast majority of the 28% run up in S&P from his 1062 sell point to today's 1362 close.

If you can redirect your brother in law to Assetbuilder (or to numerous other people in the Dallas area who offer low-cost, sound advice that doesn't rely on active management or market timing), I believe you will be doing him a service.

kenwollitz
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Re: Money Matters with Ken Moraif

Postby kenwollitz » Fri Jul 20, 2012 4:36 pm

I also live in the Dallas area, and have listened to Ken Moraif for several years. His show is entertaining and can be informative (trusts and such). I have to ignore the part where he says he can't understand why people stay in the market when it "is going down".

DFAMAN summarized Moraif's position well. The only thing I would add is that he has lately stated that what he does is not market timing. I'm sure this is in response to the many complaints on the web about his market timing. I believe his definition of market timing is trying to predict the future based on emotion. He, of course, uses statistics, and thus is not "market timing".

Watertree, you may want to inform your brother-in-law that Moraif will claim that he does not market time, but the standard definition of marketing timing does include Moraif's system.

Moraif has been very successful and is probably very persuasive. Apparently there is a big audience for his product.

Let me add in this, my first post, that Bogleheads is the greatest, and I can't thank all the participants enough.

chaz
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Re: Money Matters with Ken Moraif

Postby chaz » Fri Jul 20, 2012 5:12 pm

Tell your brother in law to read this forum's wiki.
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page

Bogle_Feet
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Re: Money Matters with Ken Moraif

Postby Bogle_Feet » Sun Sep 07, 2014 4:03 pm

I'm listening to this salesman / "radio host" on AM radio in Los Angeles right now. Whenever I hear the words "free seminar" I run for the hills. I thought for sure this guy was selling annuities but upon further review I guess he's selling market timing. To quote Burton G. Malkiel... No one can consistently time the market, and you are more likely to get it wrong than right." I still suspect that he might be looking to push annuities simply because he's targeting people nearing retirement and he's doing free seminars.

The other thing I noticed about this guy is that he's IGNORING diversification into bonds. He's preaching to ignorant people who put 100% of their money in stocks. If you want low risk then understand that the lowest risk portfolio from 1970 - 2010 was 28% stocks and 72% bonds. Going forward over the next 10 - 20 years I would have a little more exposure to stocks because interest rates are so low, but certainly you don't want to abandon bonds.

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Tycoon
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Re: Money Matters with Ken Moraif

Postby Tycoon » Sun Sep 07, 2014 4:15 pm

I haven't caught his broadcast the last few weekends, but he was predicting a downturn in 2015. Oh, and there's the constant refrain that buy-and-hold is dead. If I hear about his world famous cookies one more time....
A person would be better served reading a few good investment books than giving Mr. Moraif 1% of their money.

Do any of the Metroplex Bogleheads remember Kim Snider and her promise of guaranteed returns? 13% guaranteed if I remember correctly.
C'est la vie

tibbitts
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Re: Money Matters with Ken Moraif

Postby tibbitts » Sun Sep 07, 2014 5:01 pm

I've heard his radio program, and understand the appeal of his approach to the general public, particularly after two severe equity market downturns in the past 15 years. His market seems to be people who already have enough to retire even without any additional gains, but not enough to tolerate significant losses from what they've already accumulated, and who are looking for an alternative to annuities.

Bogle_Feet
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Re: Money Matters with Ken Moraif

Postby Bogle_Feet » Sun Sep 07, 2014 5:04 pm

tibbitts wrote:I've heard his radio program, and understand the appeal of his approach to the general public, particularly after two severe equity market downturns in the past 15 years. His market seems to be people who already have enough to retire even without any additional gains, but not enough to tolerate significant losses from what they've already accumulated, and who are looking for an alternative to annuities.

Yeah. It's called diversification into bonds. When stocks fall money runs to the safety of bonds.
ETF's = 100% liquid.
Annuities = Your money locked in prison for life if not for good, taxed at a higher rate.

bowtie
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Re: Money Matters with Ken Moraif

Postby bowtie » Sat Feb 21, 2015 8:54 pm

He says you should not buy and hold.
Then he says that same thing about ten more times.
Yes there is an invitation to a seminar.
Yes there is mention of cookies.
I cannot understand why he says the same things over
And over
And over and over.
I looked him up on this search because he is on radio today .......
Saying those same things and repeating his name about 1,000 times.
He says in a bear market you have to have an exit strategy (sell).
B.

Bogle_Feet
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Re: Money Matters with Ken Moraif

Postby Bogle_Feet » Sat Feb 21, 2015 9:15 pm

bowtie wrote:He says you should not buy and hold.
He says in a bear market you have to have an exit strategy (sell).
B.

Sounds like he's a Texas Sharpshooter and a Monday Morning Quarterback. I'll bet he was telling people back in December and January to sell everything when we had all that volatility. Market crashes always come unexpectedly. And then how do you know if it's going to be a 5% crash? 10%? 15? 20? 25? 30? 35? 40? 45? 50? Some of the BIGGEST up days are when the market rebounds from these crashes. So I think this guy is selling snake oil. I'm sure John Bogle agrees.
"I don’t believe in market timing. I’ve been around this business darn near a half-century, and I know I can’t do it successfully. In fact, I don’t even know anyone who knows anyone who has ever successfully timed the market over the long term." - John Bogle, Founder of The Vanguard Group

zbxb006
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Re: Money Matters with Ken Moraif

Postby zbxb006 » Sat Feb 21, 2015 10:34 pm

I met with them when I was investigating retirement options.

They have two of their own special mutual funds, a conservative porfolio and a growth portfolio, administered by SEI if I recall. They place your money in the two funds according to your desired AA. They charge 1+ percent annually, and take a portion directly out of the funds each quarter. Can't remember what the fees were on the funds, but they were not low. And the funds returns were disapointly low. If they sense a downturn, they move you into cash.

They claim unigue logic as to when to move into and out of the funds, but it's really nothing special. Their determination is based on the S&P 200 day moving average. If the current value drops more than 5% below the moving average, they sell everything. Once they have you in cash, when the current value goes 3% above the moving average, they get back into the mutual funds. You have no control over the buying/selling decision.

Like everyone with a 'special' plan, they claim to have back-tested to the begining of the S&P and can show how they would have protected you during the downturns and taken full advantage of the upturns (but not by using their own funds near as I can tell). During the Oct flucuation they came very close to selling everything, but didn't, due to their 'special' formula.

After reviewing their approach and fees, along with 5 other FAs, I decided that if I was intersted in their approach I could do what they do myself for no cost. The interesting thing is that they went over their approach in detail, spilling their 'secrets', and admitted there was nothing else to it. I have to give them credit there.

Bogle_Feet
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Re: Money Matters with Ken Moraif

Postby Bogle_Feet » Sat Feb 21, 2015 11:59 pm

zbxb006 wrote:They charge 1+ percent annually, and take a portion directly out of the funds each quarter. Can't remember what the fees were on the funds, but they were not low.

Their determination is based on the S&P 200 day moving average. If the current value drops more than 5% below the moving average, they sell everything. Once they have you in cash, when the current value goes 3% above the moving average, they get back into the mutual funds.

According to http://investmentmythbusters.blogspot.ca/ in 2011 this guy locked in losses of about 4.6%. Who knows how far the market went up before he got back in. An investor who simply held an S&P 500 index fund has had a return of about 5.3%. In 2010 he got it wrong too.

This article is dated January 20, 2012. It wouldn't surprise me if this guy has timed the market wrong even more. Each time you lock in losses and missed gains of perhaps 10% then that's money that you have to make up for later! And you have to make up for his 1% fee (and apparently fund expenses) that compound year after year. After 10 years you're behind the 8 ball yet another 10%.

Sounds like this guy guessed right in 2008 (I'd like to know when he actually got out and then got back in) and now he's claiming he's a sharpshooter.

I'll stick with the time tested method of staying constantly diversified.

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Leeraar
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Re: Money Matters with Ken Moraif

Postby Leeraar » Sun Feb 22, 2015 2:48 am

What does Ken Moralf have to do with your BIL's frustration? How about examining his 401k?

Seems like BIL should look to his current situation, and the history.

L.
"You're strange, but don't change" - Neil Young

JillinCa
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Re: Money Matters with Ken Moraif

Postby JillinCa » Sat Feb 28, 2015 5:15 pm

On his radio show Ken Moreif likes to brag that he is a certified financial planner but he doesn't mention that you don't have to take even one business or accounting class in order to be a certified financial planner .
moreif also likes to mention that his firm is one of the fastest growing firms as if that means that your returns will be higher with his firm whereas it probably reflects that he does a lot of advertising. How does the percentage that the S&P went up from 2009-2015 compare to the percentage his stock picks went up ?
He likes to say that he told people to sell their stocks in 2008 before the market crash but where is the proof . Also the market turned around quickly so you would have regained your money if you didn't sell and you wouldn't be out large transaction fees , commissions bid spread etc. Also even if he is telling the truth that he told people to sell in 2008 he had a 50% chance of being right so I am not impressed by one right call.
On his radio show he likes to encourage people to sell . Could that be because he gets commissions?
Does he have an MBA from Ross , Wharton , Anderson ? I don't think so.

JillinCa
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Re: Money Matters with Ken Moraif

Postby JillinCa » Sat Feb 28, 2015 5:21 pm

Moreif keeps repeating that you should not buy and hold and the reason is that he wants to get fees from you by churning your account

JillinCa
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Re: Money Matters with Ken Moraif

Postby JillinCa » Sat Feb 28, 2015 5:24 pm

Their plan seems to involve selling after a price drop.

Bogle_Feet
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Re: Money Matters with Ken Moraif

Postby Bogle_Feet » Sat Feb 28, 2015 8:05 pm

JillinCa wrote:Their plan seems to involve selling after a price drop.

Yeah. It's a simple "stop-loss" strategy. Nothing new about stop-loss.

On his radio show Ken Moreif likes to brag that he is a certified financial planner

Just because someone is a CFP says nothing about whether they are a fiduciary or not. There's LOTS of CFP's who are essentially salesmen (non-fiduciaries who don't legally work for you). If I'm not mistaken Ken Moreif is in fact a fiduciary, it's just that 1) he's an asset manager, which is bad because asset managers CONSTANTLY bill you perhaps 1% per year. There's no need to pay someone to constantly rebalance your account. 2) his strategy of market timing goes against what all of the respected experts say to do (Warren Buffett, John Bogle, Peter Lynch, Jason Zweig, Burton G. Malkiel, etc).

Ken Moreif's stop-loss strategies (to get out) were WRONG in 2010 and 2011. When you factor in missed dividends (from being out of the market) and the fact that the money he LOST while being out of the market could have been GROWING and COMPOUNDING, he's lost somewhere in the neighborhood of 30% for his clients since 2010. As long as the market keeps going up then this is even MORE missed gains. So for anyone who signed on with Moreif after 2009 they have been hurting.

He was right in 2007 - 2009 but in reality only averted losses of somewhere between 29 - 37% -- Not the whole 57% that the S&P lost from peak to bottom. Good luck guessing it right next time. The key is whether someone can do it with any CONSISTENCY. The experts say that NOBODY has ever done it consistently. And when someone gets just 1 crash right is it because of their system or are they just a "Texas sharpshooter" (the one guy who got lucky from a pool of guessers who are constantly guessing)?

Bogle_Feet
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Re: Money Matters with Ken Moraif

Postby Bogle_Feet » Mon Aug 24, 2015 5:47 pm

I wonder if Ken instructed his customers to get out of the market today.

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celia
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Re: Money Matters with Ken Moraif

Postby celia » Mon Aug 24, 2015 6:23 pm

I, too, hear him all the time on the radio in the LA area, but his sound effects are so obnoxious, I usually change the station within 5 minutes.

Why don't you talk to your brother about his existing 401k? Who is the custodian? What are the fees? What is his asset allocation? He can probably may noticeable improvements within his 401k if you show him what to look at and why.

No use jumping from one bad situation to another.

If your advice ends up being helpful, then he will be more likely to listen to you in the future.

Or you can send him here, but he will have to read and put effort into making better decisions.

bowtie
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Re: Money Matters with Ken Moraif

Postby bowtie » Fri Aug 28, 2015 11:55 pm

In response to bogle feet's question, yes, Ken does advocate selling all equities according to a post. I don't even remember how or why I added my name to his email list (I'll have to get off of it ...) I guess I didn't know who he was or what he said at the time I signed up. Anyhow, his latest email post/newsletter page says he asks people to immediately sell all equities. However, I did not read the post except to note that. Just FYI. He has probably the worst sounding radio program - even down to recommending the 'famous cookies' at his seminars and what the ingredients are. :shock:

LittleD
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Re: Money Matters with Ken Moraif

Postby LittleD » Sat Aug 29, 2015 5:16 am

I love the comments so far and I fully understand that most Bogleheads completely hate anything but buy & hold with risk controlled
by rebalancing and holding bonds. This is just a form of trend following (Just like Mebane Faber uses, Merriman uses, Dual Momentum uses). This type of risk reduction strategy can be purely mechanical to take emotions out of the decision and will not outperform buy & hold in a Bull Market.
This trend following strategy can (CAN) reduce downward volatility and drawdowns in a bear market. Studies have shown that you can come out ahead or behind buy & hold over long periods of time so if you love buy & hold then you will do just fine. If you want to use trend following, it might...might make you feel a bit better in a crash or extended bear market but those don't happen very often cause the markets go up more than they go down.

Good fortune with your investments!

DFAMAN
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Re: Money Matters with Ken Moraif

Postby DFAMAN » Sat Aug 29, 2015 9:11 am

In Chapter 20 of the latest version of Jeremy Siegel's book, Siegel shows results from back-testing a 200-day moving average timing approach as compared to a buy and hold approach (using DJIA back to 1886). The advantage of the timing approach would have been that it avoided the worst part of all the major bear markets since 1886. One disadvantage, however, would have been that the approach would have lost a lot of money in certain other periods by being "whipsawed" in and out of the market. In 2000, the approach would have required 16 "switches" and suffered a negative return of over 33% (as compared to negative 5% for the hold strategy). In 2010,2011 and 2012, more "whipsaws" would have occurred, with 20 switches, costing about 20 percentage points of return to be lost even before transaction costs. The timing approach would have underperformed the hold strategy from 2001 to 2012 (4.07% for the hold strategy and 1.33% for timing strategy - and an even worse negative 1.09% for the timing strategy after accounting for estimated transaction costs). In Moraif's case, I see that his brochure filed with the SEC shows that he generally charges a fee of 1.25% of assets under management. It would be interesting to see a back-test taking into account those fees. He's obviously created a profitable business, however, as he manages over $2.6 billion (mainly for "mom and pop" folks who are not high net worth individuals, according to his ADV). If he's just doing this based on a formulaic trend-following approach, that $30 million plus in fees from the mom and pops seems like a nice income (for him and his partners) for just running a mechanical system. Though, he clearly spends a lot on advertising.

LittleD
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Re: Money Matters with Ken Moraif

Postby LittleD » Sat Aug 29, 2015 3:44 pm

I will agree with you that if you trade with trend following you will certainly experience whipsaws and some will lose potential gains that
could have been made in the markets with buy and hold. I will say that all the papers Mebane Faber has published has shown that downside risk,
drawdowns, and major crashes would have been avoided. So maybe you might be willing to give up some potential gain for downside risk protection (portfolio insurance if you will). This chart shows some of the whipsaws you speak of and there are certainly some costs involved but, with todays free trading ETF's with very low expenses, I should think the costs would be much less than Siegals book. The link is to a site that
follows Faber's 10-month trading rules. Still looks like some nice long term gains with major downside protection to me. :happy

http://www.advisorperspectives.com/dsho ... e-1995.gif

DFAMAN
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Re: Money Matters with Ken Moraif

Postby DFAMAN » Sat Aug 29, 2015 4:13 pm

Interesting read, Little D, thanks for posting. Merriman, who I know you have cited on various topics, is a guy I respect very much, and I think he has some good and user friendly podcasts about the pros and cons of a timing approach. I'm certainly not saying he's a dummy for choosing to employ such a strategy for half his portfolio, but I don't think it is something I would be comfortable doing. In any event, nearly 90% of our portfolio is taxable, and Iwouldn't want to trigger gains on an unpredictable basis by using this approach.

LittleD
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Re: Money Matters with Ken Moraif

Postby LittleD » Sat Aug 29, 2015 7:44 pm

Thanks for the kind words... I just like Merriman very much and have been listening to his podcasts for many, many years. He has retired and doesn't work for money any longer and now just wants to help investors reach their dreams. He boldly says that if you are in a bond/stock portfolio and rebalance once a year, you will do just fine and thinks that 9 out of 10 investors should follow this approach. Most of my investment money is in tax deferred accounts at Schwab so I have access to very cheap index funds and etf's. I do follow trends but also rebalance from time to time. There are many trend following strategies that might work if followed but, I do agree that it's much cheaper to do in tax deferred accounts. Buy & hold will work just fine and stay the course and stay invested.

Good Luck with your investments!


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