Schwab Intelligent Portfolio is crashing...

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ramtastic85
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Joined: Fri Jan 26, 2018 8:44 pm

Schwab Intelligent Portfolio is crashing...

Post by ramtastic85 » Tue Oct 23, 2018 6:52 pm

After much research, a lot on this board, I decided to leave EDJ and roll my money into Scwab, this was in April 2018. After speaking with one of their reps, I decided to go with the Intelligent Advisory, solution. They also setup a brokerage account for me with about 15% of my assets.
I had a total of $341,000 in the 2 IRAs when I set this up. It gradually grew to $350,000, then with the recent market downturn, has dropped to $329,000. I have about 65/35 stock /bond allocation...the Intelligent Portfolio consits of about 20 different ETFs, and 8% in cash. A few of these Schwab ETFs are performing horribly (emerging markets, international large co.). I speak with my advisor there occasionally, he always assures me that these portfolios have a team of people who monitor, rebalance, etc.
I find this large drop unacceptable. I may go with the Intelligent Advisory, see how that goes, the .28 fee isn’t too bad. I’ve pondered switching to other companies, such as Vanguard.
On a side-note, I’ve lost a little in my brokerage account, cannot seem to pick stocks at the right time, they crash when I buy them, jump in price when I sell them. Square was my big gainer, until that crashed recently. I even invested in some cannabis stocks, which I’ve now sold after the past few days of plunging. :(
Any advice, suggestions or opinions would be appreciated!
Last edited by ramtastic85 on Tue Oct 23, 2018 6:59 pm, edited 1 time in total.

badger42
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Re: Schwab Intelligent Portfolio is crashing...

Post by badger42 » Tue Oct 23, 2018 6:57 pm

A 6% loss is normal market volatility.

gclancer
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Re: Schwab Intelligent Portfolio is crashing...

Post by gclancer » Tue Oct 23, 2018 7:08 pm

badger42 wrote:
Tue Oct 23, 2018 6:57 pm
A 6% loss is normal market volatility.
How close are you to retirement, OP? 65% stocks 27% bonds and 8% cash is actually relatively conservative. Agree with badger42 that you may need to adjust your expectations or invest more conservative. Personally, I’d try to learn to stomach the losses since they’ll be erased over the long haul.

drummerboy
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Re: Schwab Intelligent Portfolio is crashing...

Post by drummerboy » Tue Oct 23, 2018 7:08 pm

ramtastic85 wrote:
Tue Oct 23, 2018 6:52 pm
After much research, a lot on this board, I decided to leave EDJ and roll my money into Scwab, this was in April 2018. After speaking with one of their reps, I decided to go with the Intelligent Advisory, solution. They also setup a brokerage account for me with about 15% of my assets.
I had a total of $341,000 in the 2 IRAs when I set this up. It gradually grew to $350,000, then with the recent market downturn, has dropped to $329,000. I have about 65/35 stock /bond allocation...the Intelligent Portfolio consits of about 20 different ETFs, and 8% in cash. A few of these Schwab ETFs are performing horribly (emerging markets, international large co.). I speak with my advisor there occasionally, he always assures me that these portfolios have a team of people who monitor, rebalance, etc.
I find this large drop unacceptable. I may go with the Intelligent Advisory, see how that goes, the .28 fee isn’t too bad. I’ve pondered switching to other companies, such as Vanguard.
On a side-note, I’ve lost a little in my brokerage account, cannot seem to pick stocks at the right time, they crash when I buy them, jump in price when I sell them. Square was my big gainer, until that crashed recently. I even invested in some cannabis stocks, which I’ve now sold after the past few days of plunging. :(
Any advice, suggestions or opinions would be appreciated!
Schwab Intelligent Portfolio (SIP) is fine. It is holding/rebalancing the various asset classes you are invested in. Yes, Emerging Markets is having a rough year. It is for EVERYONE. This is not a Schwab or SIP issue (Vanguard emerging ETFs are down this year too). Emerging Markets are officially in a bear market territory during 2018. You have a diversified portfolio with SIP, some things go up, some go down. Bonds, International, especially Emerging are all having varying degrees of down years. The US stock market was the only thing driving decent returns this year, but in the last few weeks, that has disappeared.

If anything, SIP is doing it's job. It sounds like you are trying to time the market, and you expect your portfolio to work like a bank (always going up, but sometimes very small). That's not how it will work. SIP is saving you from your own bad instincts (which most of us have) which is letting our emotion trigger our buy/sell decisions.

Your recent weak performance isn't a SIP issue, it's the markets. And if you are down by 6% that is hardly a crash! That is minor bump over a 30-40 year investment lifespan.

Check your balances less often, sleep well, and stop trying to pick stocks for short term gain. It's a losing proposition.
Enjoy the fact that SIP will help you maintain your investing discipline.

Morgan Dollar 1921
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Re: Schwab Intelligent Portfolio is crashing...

Post by Morgan Dollar 1921 » Tue Oct 23, 2018 7:11 pm

I am new here to the forum so others will have better advice, but I did work for IDS/Amex about a year,,(so long ago it is like the "I stayed at a Holiday Inn Express" ad advice) so I will offer the following.

A. You are down ONLY about 3.5% of your initial investment, based on my quick math, that is not unusual for a 65/35 mix, IMHO. Some, many downturns are at least 7 to 15 %, I have seen worse in 1987, the dotcom bubble bust, and of course the 2007 - March of 2009 bottom.

B. Like I used to tell clients, sell down to the sleeping point, or now I after several months here, I would say allocate to the sleep good at night level.

C Time horizon and goals?

D. I have $ at Schwab, Fidelity & Vanguard, but if 20 Different ETF's is what the Intelligent Portfolio does, I am glad I am not in it. A previous employer had an advisory firm that charged 75 bp for a look alike that ended up with 19 slices. They promised a cut in the fee after the pool grew but after 4 years the fee stayed, so I left.

E. Look here for the simple and effective, "Three fund Portfolio"

Jump on youtube and search for "After the Crash - Part 1 - Wall Street Week Oct. 23, 1987" Louis Rukeyser take 10 minutes, it is a good start.

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vineviz
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Re: Schwab Intelligent Portfolio is crashing...

Post by vineviz » Tue Oct 23, 2018 7:13 pm

ramtastic85 wrote:
Tue Oct 23, 2018 6:52 pm
I find this large drop unacceptable. I may go with the Intelligent Advisory, see how that goes, the .28 fee isn’t too bad. I’ve pondered switching to other companies, such as Vanguard.
On a side-note, I’ve lost a little in my brokerage account, cannot seem to pick stocks at the right time, they crash when I buy them, jump in price when I sell them. Square was my big gainer, until that crashed recently. I even invested in some cannabis stocks, which I’ve now sold after the past few days of plunging. :(
Any advice, suggestions or opinions would be appreciated!
My advice: either find a way to control your instincts or leave your investing to someone else.

It sounds like Schwab has built a well-diversified portfolio that is performing about as it was designed to perform, but you find that unacceptable? Why?

Abandoning a successful strategy after a mildly disappointing couple of months is going to cost you thousands of dollars because you're going to end up buying high and selling low.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

typical.investor
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Re: Schwab Intelligent Portfolio is crashing...

Post by typical.investor » Tue Oct 23, 2018 7:13 pm

ramtastic85 wrote:
Tue Oct 23, 2018 6:52 pm
After much research, a lot on this board, I decided to leave EDJ and roll my money into Scwab, this was in April 2018. After speaking with one of their reps, I decided to go with the Intelligent Advisory, solution. They also setup a brokerage account for me with about 15% of my assets.
I had a total of $341,000 in the 2 IRAs when I set this up. It gradually grew to $350,000, then with the recent market downturn, has dropped to $329,000. I have about 65/35 stock /bond allocation...the Intelligent Portfolio consits of about 20 different ETFs, and 8% in cash. A few of these Schwab ETFs are performing horribly (emerging markets, international large co.). I speak with my advisor there occasionally, he always assures me that these portfolios have a team of people who monitor, rebalance, etc.
I find this large drop unacceptable. I may go with the Intelligent Advisory, see how that goes, the .28 fee isn’t too bad. I’ve pondered switching to other companies, such as Vanguard.
On a side-note, I’ve lost a little in my brokerage account, cannot seem to pick stocks at the right time, they crash when I buy them, jump in price when I sell them. Square was my big gainer, until that crashed recently. I even invested in some cannabis stocks, which I’ve now sold after the past few days of plunging. :(
Any advice, suggestions or opinions would be appreciated!
The Schwab ETFs are behaving pretty much as expected. I am not overly concerned.

One thing you need to understand is that Schwab's Intelligent Portfolio has a small value tilt. These assets tend to be a little more volatile.

I see no benefit whatsoever in selling out of SIP and moving into something else.

Yes, the market dropped. But you can't try to look at what dropped the least and then sell and move into it.

Probably what will happen in SIP is that the gold allocation has done well. I suspect it will at some point rebalance and you'll use that to buy more of the equities that have fallen the most. Same perhaps with emerging or international if it falls more than US. Then over time when the cheapest assets that you've put money into recover and appreciate, you'll be happy. No guarantees of course.

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Nate79
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Re: Schwab Intelligent Portfolio is crashing...

Post by Nate79 » Tue Oct 23, 2018 7:17 pm

Are you aware many areas of the market has been going down?

retiredjg
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Re: Schwab Intelligent Portfolio is crashing...

Post by retiredjg » Tue Oct 23, 2018 7:20 pm

You have an unrealistic vision of what is supposed to happen. The drop you have experienced is simply a reflection of what is happening in the market.

On a side-note, I’ve lost a little in my brokerage account, cannot seem to pick stocks at the right time, they crash when I buy them, jump in price when I sell them. Square was my big gainer, until that crashed recently. I even invested in some cannabis stocks, which I’ve now sold after the past few days of plunging. :(
This is the stuff of movies, not investing. Picking stocks "at the right time" and the other things you mention are pretty much a loser's game. That is not what investing is about.

Take some time to get familiar with how investing actually works and forget EVERYTHING you think you know because it is all (wrong).

This is a good place to start learning something.

https://www.bogleheads.org/wiki/Getting_started

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BL
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Re: Schwab Intelligent Portfolio is crashing...

Post by BL » Tue Oct 23, 2018 7:21 pm

Read this and Getting Started in Wiki:
https://www.etf.com/docs/IfYouCan.pdf
(How to get rich slowly.)

Topic Author
ramtastic85
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Re: Schwab Intelligent Portfolio is crashing...

Post by ramtastic85 » Tue Oct 23, 2018 7:26 pm

I just have a hard time seeing my account drop $21,000 In a period of 2 months.
I am 51 years old.
But all of this advice has helped; I need to be patient & look the big picture. I previously had all of my money in American Funds through my previous employer (25 years), I really didn’t mess with it much other than rebalancing a bit. I’m actually trying to educate myself more on investing, it’s been a fun journey.
Another question, what are your thoughts on the Rule of 72? Rough guesstimate, accurate? I haven’t taken the time to look back through history & do calculations. But in general I’m hoping this IRA will double in 8-9 years, then double again when I retire (age 67). I realize the future cant be predicted. ;)

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RickBoglehead
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Re: Schwab Intelligent Portfolio is crashing...

Post by RickBoglehead » Tue Oct 23, 2018 7:39 pm

Cash in an IRA?

You did a lot of research here and then decided to do short term stock trades?

For your portfolio to double in 8 years, it needs to return an average of 9% a year. That's not likely.

The rule of 72 is a quick, useful formula that is popularly used to estimate the number of years required to double the invested money at a given annual rate of return.


72/8 =9
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

UpperNwGuy
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Re: Schwab Intelligent Portfolio is crashing...

Post by UpperNwGuy » Tue Oct 23, 2018 7:44 pm

ramtastic85 wrote:
Tue Oct 23, 2018 6:52 pm
I find this large drop unacceptable. I may go with the Intelligent Advisory, see how that goes, the .28 fee isn’t too bad. I’ve pondered switching to other companies, such as Vanguard.
Don't switch to Vanguard if you don't want your portfolio to drop in value when the market drops in value. Vanguard specializes in index funds that follow the market. When the market drops, Vanguard index funds drop, too.

Morgan Dollar 1921
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Re: Schwab Intelligent Portfolio is crashing...

Post by Morgan Dollar 1921 » Tue Oct 23, 2018 8:03 pm

I read other responses and maybe I am a little hasty in my criticism of SIP, but I also took a few minutes to watch the three you tube clips I suggested'

The advice is so STRONG and so good and timely, I decided to share it here in written word.

"After the Crash - Part 1 - Wall Street Week Oct. 23, 1987" Louis Rukeyser.

His guests for the Friday show after the crash are,
A. William Schreyer of Merril Lynch,
B. Steven Einhorn Goldman Sachs, and
C. John M Templeton.

The advice,
A. "Don't panic".

B. There are two elements that combined to bring about the most important lesson of the week, "There is a tolerance that the market has for inadvisable economic policies, but that tolerance is not indefinite. The policy that they found intolerable was the large budget deficit. The second ecomonic policy and critical I thnk, is that the world or industrial countries must cooperate with each other in terms of economic policy, confrontation is simply unacceptable in the conduct of economic policy, cooperation is critical."

C. "If you NEVER buy investments with borrowed money, you can always be comfortable, human nature is such, that we are always going to have periods of enthusiasm and pessimism, every ten years there'll be bull markets and bear markets, but if you don't have borrowed money, you don't have anything to worry about ."

I would add, wow Mr Einhorn hit a nerve and the target 31 years later to the day (10/23/2018) from the DATE, Oct 23rd, 1987 , here are some headlines:

Caterpillar warns of higher costs from tariffs - Jul 30, 2018 - Caterpillar warns of steel tariff impact but reports upbeat earnings ... Caterpillar (CAT) shares were down 0.5 percent at $141.85 in morning ...USA Today

Today $CAT closed at $118.98, down 16% from the above headline on Jul 30,2018, so 3.5 % of OP's initial investment or 6% of the high balance is playing pretty good defense IMHO.

tax law pushes budget deficit to $779 billion, highest since 2012 ...

edit:
$CAT is down another 5.58% today, 10/24/2018,.... maybe a period of pessimism as described by Mr. John M. Templeton.
Last edited by Morgan Dollar 1921 on Wed Oct 24, 2018 8:04 pm, edited 1 time in total.

ThePrince
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Re: Schwab Intelligent Portfolio is crashing...

Post by ThePrince » Tue Oct 23, 2018 8:06 pm

drummerboy wrote:
Tue Oct 23, 2018 7:08 pm
ramtastic85 wrote:
Tue Oct 23, 2018 6:52 pm
After much research, a lot on this board, I decided to leave EDJ and roll my money into Scwab, this was in April 2018. After speaking with one of their reps, I decided to go with the Intelligent Advisory, solution. They also setup a brokerage account for me with about 15% of my assets.
I had a total of $341,000 in the 2 IRAs when I set this up. It gradually grew to $350,000, then with the recent market downturn, has dropped to $329,000. I have about 65/35 stock /bond allocation...the Intelligent Portfolio consits of about 20 different ETFs, and 8% in cash. A few of these Schwab ETFs are performing horribly (emerging markets, international large co.). I speak with my advisor there occasionally, he always assures me that these portfolios have a team of people who monitor, rebalance, etc.
I find this large drop unacceptable. I may go with the Intelligent Advisory, see how that goes, the .28 fee isn’t too bad. I’ve pondered switching to other companies, such as Vanguard.
On a side-note, I’ve lost a little in my brokerage account, cannot seem to pick stocks at the right time, they crash when I buy them, jump in price when I sell them. Square was my big gainer, until that crashed recently. I even invested in some cannabis stocks, which I’ve now sold after the past few days of plunging. :(
Any advice, suggestions or opinions would be appreciated!
Schwab Intelligent Portfolio (SIP) is fine. It is holding/rebalancing the various asset classes you are invested in. Yes, Emerging Markets is having a rough year. It is for EVERYONE. This is not a Schwab or SIP issue (Vanguard emerging ETFs are down this year too). Emerging Markets are officially in a bear market territory during 2018. You have a diversified portfolio with SIP, some things go up, some go down. Bonds, International, especially Emerging are all having varying degrees of down years. The US stock market was the only thing driving decent returns this year, but in the last few weeks, that has disappeared.

If anything, SIP is doing it's job. It sounds like you are trying to time the market, and you expect your portfolio to work like a bank (always going up, but sometimes very small). That's not how it will work. SIP is saving you from your own bad instincts (which most of us have) which is letting our emotion trigger our buy/sell decisions.

Your recent weak performance isn't a SIP issue, it's the markets. And if you are down by 6% that is hardly a crash! That is minor bump over a 30-40 year investment lifespan.

Check your balances less often, sleep well, and stop trying to pick stocks for short term gain. It's a losing proposition.
Enjoy the fact that SIP will help you maintain your investing discipline.
+1

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jakehefty17
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Re: Schwab Intelligent Portfolio is crashing...

Post by jakehefty17 » Tue Oct 23, 2018 9:58 pm

ramtastic85 wrote:
Tue Oct 23, 2018 6:52 pm
I find this large drop unacceptable. I may go with the Intelligent Advisory, see how that goes, the .28 fee isn’t too bad. I’ve pondered switching to other companies, such as Vanguard.
On a side-note, I’ve lost a little in my brokerage account, cannot seem to pick stocks at the right time, they crash when I buy them, jump in price when I sell them. Square was my big gainer, until that crashed recently. I even invested in some cannabis stocks, which I’ve now sold after the past few days of plunging. :(
Any advice, suggestions or opinions would be appreciated!
Schwab's IP is not crashing, it's reflecting the market downturn.

Changing your plan won't help you, for the same reason you're struggling with single stocks. Market fluctuations are normal, if you sell when down and buy when high that's what happens. People overthink and over-react, it's human nature.

If this is truly "unacceptable" to you, you need to invest more conservatively. Downturns happen and will effect any portfolio. In my opinion your asset allocation is fine for someone your age with your goals.
ramtastic85 wrote:
Tue Oct 23, 2018 7:26 pm
Another question, what are your thoughts on the Rule of 72? Rough guesstimate, accurate? I haven’t taken the time to look back through history & do calculations. But in general I’m hoping this IRA will double in 8-9 years, then double again when I retire (age 67).
I've never heard of the Rule of 72 until tonight, so you taught me something new. I can tell you it's not often used on this forum. Based on your asset allocation, you should dial back your guess to assume closer to 7% annual returns IMHO. That puts you at doubling in 72/7 = ~10 years.

Develop a workable plan, and stay the course. Don't try to time the market.
https://www.bogleheads.org/wiki/Boglehe ... philosophy
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." -Charles Bukowski

PFInterest
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Re: Schwab Intelligent Portfolio is crashing...

Post by PFInterest » Tue Oct 23, 2018 10:06 pm

ramtastic85 wrote:
Tue Oct 23, 2018 6:52 pm
After much research, a lot on this board [...]
Any advice, suggestions or opinions would be appreciated!
Clearly you need more (good) research and more time on this board.

4nwestsaylng
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Re: Schwab Intelligent Portfolio is crashing...

Post by 4nwestsaylng » Tue Oct 23, 2018 10:14 pm

As others have stated, everything is down about 6%, nothing is "crashing". And if there were a 20 percent drop, SIP would drop, but so would the equity side of a two fund portfolio that was 65/35, eg.VTI. Look at VTI, it is down from a high around 149 a couple of weeks ago, it's down about 5 percent.

Maybe your asset allocation (AA),while conservative for age 51, doesn't match your risk tolerance. You could still do well with a 50/50 allocation.

I would stick with the SIP, get out of individual stocks for sure. If anything, increase your allocation to SIP, and you could also go into something like VTI on the equity side, a lateral move which should be neutral.You will feel better getting out of individual stocks, let the SIP folks rebalance for you.

If your AA is right, even a big drop in the market should not be a disaster. Do scenarios of a 20 % drop with a 65/35 and a 50/50 allocation, see which you could live with better.Because it will happen.

stocknoob4111
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Re: Schwab Intelligent Portfolio is crashing...

Post by stocknoob4111 » Tue Oct 23, 2018 10:24 pm

International markets are getting hammered, it's affecting all not just yourself. In addition bonds are going down as well but hopefully long term yields are stabilizing now. I'm not going to extrapolate what is happening in the last 8-9 months to be indicative of the next 6-7 years so no need to panic, yet :D

Based on what i've been reading the forecast is for International/EM to go down even more and a distinct possibility for domestic equities to start crashing as well. Not saying that is what is going to happen but better to be mentally prepared for it. A silver lining is that it's a good opportunity to lower cost basis for the long haul.

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Toons
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Re: Schwab Intelligent Portfolio is crashing...

Post by Toons » Tue Oct 23, 2018 10:38 pm

Give it 10 years
:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

Momus
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Re: Schwab Intelligent Portfolio is crashing...

Post by Momus » Tue Oct 23, 2018 10:44 pm

Sounds normal to me. Nothing to see here.

alwayshedge
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Re: Schwab Intelligent Portfolio is crashing...

Post by alwayshedge » Tue Oct 23, 2018 11:01 pm

What exactly did you expect? For your portfolio to just always go up? :confused :confused

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nedsaid
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Re: Schwab Intelligent Portfolio is crashing...

Post by nedsaid » Tue Oct 23, 2018 11:23 pm

ramtastic85 wrote:
Tue Oct 23, 2018 6:52 pm
After much research, a lot on this board, I decided to leave EDJ and roll my money into Scwab, this was in April 2018. After speaking with one of their reps, I decided to go with the Intelligent Advisory, solution. They also setup a brokerage account for me with about 15% of my assets.
I had a total of $341,000 in the 2 IRAs when I set this up. It gradually grew to $350,000, then with the recent market downturn, has dropped to $329,000. I have about 65/35 stock /bond allocation...the Intelligent Portfolio consits of about 20 different ETFs, and 8% in cash. A few of these Schwab ETFs are performing horribly (emerging markets, international large co.). I speak with my advisor there occasionally, he always assures me that these portfolios have a team of people who monitor, rebalance, etc.
I find this large drop unacceptable. I may go with the Intelligent Advisory, see how that goes, the .28 fee isn’t too bad. I’ve pondered switching to other companies, such as Vanguard.
On a side-note, I’ve lost a little in my brokerage account, cannot seem to pick stocks at the right time, they crash when I buy them, jump in price when I sell them. Square was my big gainer, until that crashed recently. I even invested in some cannabis stocks, which I’ve now sold after the past few days of plunging. :(
Any advice, suggestions or opinions would be appreciated!
Your expectations are unrealistic. Your time horizon is too short. You are impatient. Stop trading.
A fool and his money are good for business.

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whodidntante
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Re: Schwab Intelligent Portfolio is crashing...

Post by whodidntante » Wed Oct 24, 2018 12:12 am

ramtastic85 wrote:
Tue Oct 23, 2018 7:26 pm
I just have a hard time seeing my account drop $21,000 In a period of 2 months.
I am 51 years old.
But all of this advice has helped; I need to be patient & look the big picture. I previously had all of my money in American Funds through my previous employer (25 years), I really didn’t mess with it much other than rebalancing a bit. I’m actually trying to educate myself more on investing, it’s been a fun journey.
Another question, what are your thoughts on the Rule of 72? Rough guesstimate, accurate? I haven’t taken the time to look back through history & do calculations. But in general I’m hoping this IRA will double in 8-9 years, then double again when I retire (age 67). I realize the future cant be predicted. ;)
You'd need an extremely conservative allocation to protect against a 6% loss, so you also wouldn't be able to get much growth out of it. It would be so conservative as to be outside of any reasonable portfolio discussed here. I think working on your perspective is helpful, but you might also need a somewhat more conservative asset allocation. I would consider both options.

MotoTrojan
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Re: Schwab Intelligent Portfolio is crashing...

Post by MotoTrojan » Wed Oct 24, 2018 12:24 am

jakehefty17 wrote:
Tue Oct 23, 2018 9:58 pm
ramtastic85 wrote:
Tue Oct 23, 2018 6:52 pm
I find this large drop unacceptable. I may go with the Intelligent Advisory, see how that goes, the .28 fee isn’t too bad. I’ve pondered switching to other companies, such as Vanguard.
On a side-note, I’ve lost a little in my brokerage account, cannot seem to pick stocks at the right time, they crash when I buy them, jump in price when I sell them. Square was my big gainer, until that crashed recently. I even invested in some cannabis stocks, which I’ve now sold after the past few days of plunging. :(
Any advice, suggestions or opinions would be appreciated!
Schwab's IP is not crashing, it's reflecting the market downturn.

Changing your plan won't help you, for the same reason you're struggling with single stocks. Market fluctuations are normal, if you sell when down and buy when high that's what happens. People overthink and over-react, it's human nature.

If this is truly "unacceptable" to you, you need to invest more conservatively. Downturns happen and will effect any portfolio. In my opinion your asset allocation is fine for someone your age with your goals.
ramtastic85 wrote:
Tue Oct 23, 2018 7:26 pm
Another question, what are your thoughts on the Rule of 72? Rough guesstimate, accurate? I haven’t taken the time to look back through history & do calculations. But in general I’m hoping this IRA will double in 8-9 years, then double again when I retire (age 67).
I've never heard of the Rule of 72 until tonight, so you taught me something new. I can tell you it's not often used on this forum. Based on your asset allocation, you should dial back your guess to assume closer to 7% annual returns IMHO. That puts you at doubling in 72/7 = ~10 years.

Develop a workable plan, and stay the course. Don't try to time the market.
https://www.bogleheads.org/wiki/Boglehe ... philosophy
I would not anticipate/suggest the OP achieving a 7% nominal, let alone real (what matters) return over the next decade. Could it happen? Of course. Should they use that for planning? I’d say no.

OP you have some more reading to do.

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wander
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Re: Schwab Intelligent Portfolio is crashing...

Post by wander » Wed Oct 24, 2018 12:28 am

Op, if you cannot take a few percent drop in your portfolio, you should not invest in stock at all.

Zonian59
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Re: Schwab Intelligent Portfolio is crashing...

Post by Zonian59 » Wed Oct 24, 2018 3:57 am

ramtastic85 wrote:
Tue Oct 23, 2018 6:52 pm
After much research, a lot on this board, I decided to leave EDJ and roll my money into Scwab, this was in April 2018. After speaking with one of their reps, I decided to go with the Intelligent Advisory, solution. They also setup a brokerage account for me with about 15% of my assets.
I had a total of $341,000 in the 2 IRAs when I set this up. It gradually grew to $350,000, then with the recent market downturn, has dropped to $329,000. I have about 65/35 stock /bond allocation...the Intelligent Portfolio consits of about 20 different ETFs, and 8% in cash. A few of these Schwab ETFs are performing horribly (emerging markets, international large co.). I speak with my advisor there occasionally, he always assures me that these portfolios have a team of people who monitor, rebalance, etc.
I find this large drop unacceptable. I may go with the Intelligent Advisory, see how that goes, the .28 fee isn’t too bad. I’ve pondered switching to other companies, such as Vanguard.
On a side-note, I’ve lost a little in my brokerage account, cannot seem to pick stocks at the right time, they crash when I buy them, jump in price when I sell them. Square was my big gainer, until that crashed recently. I even invested in some cannabis stocks, which I’ve now sold after the past few days of plunging. :(
Any advice, suggestions or opinions would be appreciated!
The Intelligent Advisory is just a human Financial Advisor assigned to the your Intelligent Portfolio to help you plan, etc. He can't make asset class or sector class changes or sell volatile ETFs and replace it with a less volatile ETFs, within the Intelligent Portfolio during market fluctuations. All the Intelligent Portfolio will do is automatically rebalance to the set allocations percentages when the holdings gets outside the bandwidth parameters as a result of market changes. In other words, you initially started with a 65/35 and when the market declined, your portfolio changes to 55/45, the Intelligent Portfolio will automatically rebalance back to 65/35.

What you are thinking about is tactical management, like Schwab's Managed Portfolio, Thomas Partners or Windhaven Solutions, where they will actively manage your portfolio, buying and selling in anticipation of market swings. But they will cost significantly more than the 0.28% fee.....more like 1% to 2% and I doubt they will set up a portfolio that will perform any better than the 3-fund index portfolios advocated here.

Regardless of the portfolio, actively managed or not, all our portfolios declined in value when the Dow and S&P500 declined. The only fund type that won't lose principle during wild market fluctuations is CDs or Money Market. But at the same time, when the market does go up 3% don't expect the CDs/Money Market to increase 3% or more.

As for picking stocks at the right time, nobody can. Even the professional traders don't always get it right either. Dollar Cost Averaging at regular intervals seems to be more successful....and less stressful. Some months will buy at a higher price whereas other months will buy at lower price.

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BL
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Re: Schwab Intelligent Portfolio is crashing...

Post by BL » Wed Oct 24, 2018 5:03 am

Rule of 72 makes more sense for approximating rate vs. time needed to double your money with constant interest rates, not with the ups and downs of the stock market where nothing is constant.

Nobody paid attention to costs when the the market was doing great, and your FA was happy to take the credit. People notice when the market is down and the FA may be making more on your investment than you are!

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Re: Schwab Intelligent Portfolio is crashing...

Post by oldcomputerguy » Wed Oct 24, 2018 6:56 am

Welcome to the form. There are a lot of smart people here that are glad to help you over the hurdles.
ramtastic85 wrote:
Tue Oct 23, 2018 6:52 pm
I had a total of $341,000 in the 2 IRAs when I set this up. It gradually grew to $350,000, then with the recent market downturn, has dropped to $329,000.
That works out to a gain of about 2.5% from your initial April value, followed by a drop from that peak of about 6%; or in all, a drop of about 3.5% total since April. That's not bad, given the drop in the stock market in the last couple of weeks. If it helps, I'm 50/50 and my portfolio dropped about 4% just in the last couple of weeks. So you're not alone.
A few of these Schwab ETFs are performing horribly (emerging markets, international large co.).
Yep. That's because those market segments themselves are performing horribly. The Schwab funds are index funds tracking indices that mirror those markets, and when the markets gain or lose, the funds gain or lose. That is precisely how index funds work. Nothing there that points a finger at Schwab.
I speak with my advisor there occasionally, he always assures me that these portfolios have a team of people who monitor, rebalance, etc.
Sounds as if the advisor is doing his best to do his job properly, in that he is telling you what's going on and trying to reassure you so that you don't make bad decisions. That's important. Investor panic selling is one of the biggest detractors to long-term portfolio return to the investor.
I find this large drop unacceptable.
I know it feels like it is large, but a 6% drop is not a large drop, it's just market volatility. It doesn't even count as a correction (a drop of 10%).

I've seen different figures for the average length of a bull market, but they seem to be in the seven-to-nine-year range, with bear markets (20% or more drop) between them averaging around a year-and-a-half. So given that, you're very likely going to see much worse than a 6% drop at least once (maybe more) before you retire. I strongly urge you to get your head ready for that. You will see larger drops in your portfolio. It will happen. If you chase performance, and start making changes trying to avoid these downturns, you'll just end up selling low and buying high, incurring trading costs, and lousing up your probabilities of success. The key is having a portfolio allocation that you can be comfortable with no matter what the market is doing. If a 6% drop in your portfolio is making you nervous enough to talk of abandoning your allocation, perhaps you're invested too aggressively for your needs. You may want to speak with your advisor at Schwab about whether it would be appropriate to dial back your risk a bit. Between the two of you, you should come up with an allocation to stocks that you can stick with through thick and thin, and perhaps get a bit less aggressive as you get closer to retirement.

If you've read much here on Bogleheads, I'm guessing you have run across the phrase "stay the course". This is precisely what that means. It means not panicking when the market takes a dive, and sticking with your plan. I'd also point out what Professor Bernstein wrote in his book "If You Can", that investing is "simple but not easy". This is the "not easy" part. Successful investing requires discipline to stay with your plan through the ups and downs and not abandon it in the face of temporary market movements. Investors who do not have that discipline usually suffer more losses than those who do.
On a side-note, I’ve lost a little in my brokerage account, cannot seem to pick stocks at the right time, they crash when I buy them, jump in price when I sell them.
Not surprising. Think about it this way.

Every share of stock that is purchased on the market is bought from its current owner. Since institutional investors (the "big guys") make up the vast majority (about 80%) of "the market", then chances are good that, when you buy a stock, you're buying it from one of these institutional investors. These guys employ graduates of high-powered business schools, they have charts, graphs, data feeds, analytical software, staffs, offices, and do this full-time for a living.

And these are the guys who are on the other side of the trade when you buy a stock.

In that transaction, he is willing to part with the stock at the agreed price because he thinks that it's no longer a good investment and is willing to get out at that price. You, on the other hand, want to buy the stock because you think it is a good investment at that price. Given the above, who do you think is more likely to be right?

If you're thinking that stock picking is a loser's game for the retail investor, you'd be right.

While the chances of success are slim, if you must scratch that itch, go ahead. Just limit it to 5% or less of your total portfolio. Treat it like money you would take to Las Vegas and put on the roulette wheel. (Actually, the odds are better at the roulette wheel.) And (just like with a trip to Las Vegas) be mentally prepared up front to lose it all, and to stop when you do.
"I’ve come around to this: If you’re dumb, surround yourself with smart people; and if you’re smart, surround yourself with smart people who disagree with you." (Aaron Sorkin)

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Re: Schwab Intelligent Portfolio is crashing...

Post by David Jay » Wed Oct 24, 2018 8:44 am

1. High Portfolio Growth
2. No drops in Portfolio value
PICK ONE

This is what asset allocation is all about. If you never want to drop 5%, you need a portfolio that is 0/100 or maybe 10/90 stocks/bonds. With real growth (that is, growth above the inflation rate) of perhaps 1%. Try the rule of 72 on that number.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Re: Schwab Intelligent Portfolio is crashing...

Post by BogleMelon » Wed Oct 24, 2018 9:11 am

ramtastic85 wrote:
Tue Oct 23, 2018 7:26 pm
I just have a hard time seeing my account drop $21,000 In a period of 2 months.
OP, during the same period, how much your home value dropped? Would you care? Did the drop in your house affected the "number of rooms"?!

You own shares in companies (and you own a house), everyday for whatever reason, these companies (and your house) get evaluated in different ways.. A piece of news here or there (a crime that just happened next door) could affect temporary your portfolio (and your house value). But at the end of the day, the number of shares you are holding are the same (and so is the number of rooms in your house). Unless you sold your entire portfolio (or your house) while the value is down, you haven't locked on the loses. Yes you lost, I am not saying it is not a real loss, but your best action is to stay on course (stay in your house), because the cost of jumping in and out from the market will cost you heavily as you would buy high and sell low.

Making money while investing comes with a price, the price here is the risk. The risk to lose your money and never recover is real, but without it, why should you get compensated? Investors are getting compensated for moments like these. Some people stayed the course during 2008 crash, they were buying when everyone else was selling. They were buying even when their portfolio lost half of its value! In your case, imagine seeing your account dropped by a whole $170,000 yet you decide to not act accordingly, but to follow your preset plan.

Finally, if this drop is keeping you from sleeping at night, or affecting your life in anyway negatively, then you might be taking higher risk than you can tolerate and you might consider reducing the percentage of the stocks. But don't expect much growth by then.

Good luck!
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Re: Schwab Intelligent Portfolio is crashing...

Post by vested1 » Wed Oct 24, 2018 9:13 am

You will always be disappointed if you compare your highest balance to anything less. As Morgan Dollar 1921 stated, you are down approximately 3.5% from the balance you had when you moved to SIP.

I would suggest that you make a plan with reasonable expectations based on a long term timeline. If, for instance, you had created a plan 10 years ago that estimated growth, and compared it to what your balance is today you might be pleasantly surprised. Would you discount that long term gain because of a mere 3.5% recent loss?

Create reasonable and conservative benchmarks that you would like to achieve that will enable you to meet your ultimate goals and to secure a comfortable retirement. A longer duration overview will improve your perspective. Tinkering with investments in hopes of realizing short term gain will disappoint 95% of the time.

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Re: Schwab Intelligent Portfolio is crashing...

Post by jakehefty17 » Wed Oct 24, 2018 1:11 pm

MotoTrojan wrote:
Wed Oct 24, 2018 12:24 am

I would not anticipate/suggest the OP achieving a 7% nominal, let alone real (what matters) return over the next decade. Could it happen? Of course. Should they use that for planning? I’d say no.

OP you have some more reading to do.
Fair enough, I was thinking of nominal returns. My intention was not to mislead, just to dial back the expectations of the OP.
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." -Charles Bukowski

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Re: Schwab Intelligent Portfolio is crashing...

Post by 3funder » Wed Oct 24, 2018 1:36 pm

The loss isn't unusual, nor does it concern me. 20 different ETFs, though? So unnecessary!

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Re: Schwab Intelligent Portfolio is crashing...

Post by MotoTrojan » Wed Oct 24, 2018 1:58 pm

jakehefty17 wrote:
Wed Oct 24, 2018 1:11 pm
MotoTrojan wrote:
Wed Oct 24, 2018 12:24 am

I would not anticipate/suggest the OP achieving a 7% nominal, let alone real (what matters) return over the next decade. Could it happen? Of course. Should they use that for planning? I’d say no.

OP you have some more reading to do.
Fair enough, I was thinking of nominal returns. My intention was not to mislead, just to dial back the expectations of the OP.
For sure, just don't want them to incur taxes by swapping to another system if they get 5% annualized over the next decade, or -2%...

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Re: Schwab Intelligent Portfolio is crashing...

Post by LadyGeek » Wed Oct 24, 2018 3:32 pm

ramtastic85 - Please read this wiki article: Risk tolerance and note that it discusses the very thing you are worried about.

You are getting nervous due to a "bear market", meaning the stock market is having a bad day (or a few days). The bottom line is that you should increase the amount of bonds in your portfolio which will "smooth out" those market dips.

You're getting a lot of replies, which may be confusing to you. To get things focused in a productive direction, please post your portfolio in this thread using the Asking Portfolio Questions format. It will make you think about the "big picture" while giving us the information we need to point you in the right direction.

If you have any questions, ask them here.

(To our experienced members, the discussion is losing focus. Let's give the OP a chance to get organized. Posting the portfolio info is a good starting point.)
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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Re: Schwab Intelligent Portfolio is crashing...

Post by Northern Flicker » Thu Oct 25, 2018 4:01 am

On a side-note, I’ve lost a little in my brokerage account, cannot seem to pick stocks at the right time, they crash when I buy them, jump in price when I sell them. Square was my big gainer, until that crashed recently. I even invested in some cannabis stocks, which I’ve now sold after the past few days of plunging. 
Any advice, suggestions or opinions would be appreciated!
You're in good company there as people much more knowledgeable of the markets than most of us have not been able to demonstrate an ability to pick stocks at the right time. Trying to do that is a fool's errand.
Index fund investor since 1987.

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