Ric Edelman's view on the stock market

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Ric Edelman's view on the stock market

Post by pkcrafter » Wed Jun 26, 2019 9:03 am

Here is a link to Ric Edelman's show (6/23) where he provides some interesting information on stock market behavior. This might give newer investors a better perspective on investing for the long run.

Start at ~1:22:40 listen until 1:13, a total of about 10 minutes.

http://www.wlsam.com/ric-edelman/podcast/

Paul
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Re: Ric Edelman's view on the stock market

Post by Housedoc » Wed Jun 26, 2019 9:19 am

Not a fan of Ric after listening to a few of his weekend radio infomercial shows.

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Re: Ric Edelman's view on the stock market

Post by pkcrafter » Wed Jun 26, 2019 9:35 am

Housedoc wrote:
Wed Jun 26, 2019 9:19 am
Not a fan of Ric after listening to a few of his weekend radio infomercial shows.
I'm not a fan either, but Edelman's comments on market behavior may help newer investors gain a better long term perspective.


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Re: Ric Edelman's view on the stock market

Post by willthrill81 » Wed Jun 26, 2019 9:39 am

pkcrafter wrote:
Wed Jun 26, 2019 9:03 am
Here is a link to Ric Edelman's show (6/23) where he provides some interesting information on stock market behavior. This might give newer investors a better perspective on investing for the long run.

Start at ~1:22:40 listen until 1:13, a total of about 10 minutes.

http://www.wlsam.com/ric-edelman/podcast/

Paul
Would you mind giving us a brief overview? 10 minutes of Ric is a lot for some of us. :wink:
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Re: Ric Edelman's view on the stock market

Post by NotWhoYouThink » Wed Jun 26, 2019 11:09 am

willthrill81 wrote:
Wed Jun 26, 2019 9:39 am
pkcrafter wrote:
Wed Jun 26, 2019 9:03 am
Here is a link to Ric Edelman's show (6/23) where he provides some interesting information on stock market behavior. This might give newer investors a better perspective on investing for the long run.

Start at ~1:22:40 listen until 1:13, a total of about 10 minutes.

http://www.wlsam.com/ric-edelman/podcast/

Paul
Would you mind giving us a brief overview? 10 minutes of Ric is a lot for some of us. :wink:
I usually make it about 15 seconds in the car if I'm switching stations and he is on. Whiny.

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Re: Ric Edelman's view on the stock market

Post by peseta » Wed Jun 26, 2019 11:18 am

NotWhoYouThink wrote:
Wed Jun 26, 2019 11:09 am
willthrill81 wrote:
Wed Jun 26, 2019 9:39 am
pkcrafter wrote:
Wed Jun 26, 2019 9:03 am
Here is a link to Ric Edelman's show (6/23) where he provides some interesting information on stock market behavior. This might give newer investors a better perspective on investing for the long run.

Start at ~1:22:40 listen until 1:13, a total of about 10 minutes.

http://www.wlsam.com/ric-edelman/podcast/

Paul
Would you mind giving us a brief overview? 10 minutes of Ric is a lot for some of us. :wink:
I usually make it about 15 seconds in the car if I'm switching stations and he is on. Whiny.
When his show was a local DC show with live callers, it was quite good. Now, it's mostly just an infomercial for his firm.

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Re: Ric Edelman's view on the stock market

Post by livesoft » Wed Jun 26, 2019 11:27 am

Maybe because pkcrafter was listening backwards from 1:22 to 1:13 made it interesting?
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Re: Ric Edelman's view on the stock market

Post by Sandtrap » Wed Jun 26, 2019 11:34 am

pkcrafter wrote:
Wed Jun 26, 2019 9:03 am
Here is a link to Ric Edelman's show (6/23) where he provides some interesting information on stock market behavior. This might give newer investors a better perspective on investing for the long run.

Start at ~1:22:40 listen until 1:13, a total of about 10 minutes.

http://www.wlsam.com/ric-edelman/podcast/

Paul
Interesting content.
thanks for posting

. . . . though his voice is a bit like listening to someone sing badly out of tune. . . . :shock:
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Re: Ric Edelman's view on the stock market

Post by Dialectical Investor » Wed Jun 26, 2019 11:35 am

willthrill81 wrote:
Wed Jun 26, 2019 9:39 am
pkcrafter wrote:
Wed Jun 26, 2019 9:03 am
Here is a link to Ric Edelman's show (6/23) where he provides some interesting information on stock market behavior. This might give newer investors a better perspective on investing for the long run.

Start at ~1:22:40 listen until 1:13, a total of about 10 minutes.

http://www.wlsam.com/ric-edelman/podcast/

Paul
Would you mind giving us a brief overview? 10 minutes of Ric is a lot for some of us. :wink:
He opens with some statistics about how people feel they have done financially over the past 10 years (for many, not so well), makes some clueless references to the stock market and unemployment, and suggests you call his firm if he is describing you, because you must be doing something wrong, and he can help you.

Then he presents some stats on bear markets and recessions, ending with the usual, don't worry, the market always recovers.

The opening could have been interesting if he didn't just use it to plug his firm. Alas, there's nothing here.

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Re: Ric Edelman's view on the stock market

Post by pkcrafter » Wed Jun 26, 2019 12:42 pm

livesoft wrote:
Wed Jun 26, 2019 11:27 am
Maybe because pkcrafter was listening backwards from 1:22 to 1:13 made it interesting?
Yes, that's right.

Edelman is not popular with Bogleheads, but there is some content there that may be useful for newer investors. He talks about the 10 year bull run and the returns of investors during those 10 years. A good percentage have done poorly. Yes, he promotes his services, but the message is clear that many investors are not managing their assets properly.

10 years without a bear market (20% drop).
Stocks fall about 36% on average in bear markets
Stocks tend to rise 100% in good times
Bear market once every 3 years on average
Half of the best days occur during bear markets.
Uhh, buy/hold, grin and bear it.
If you invest for 30 years, you may incur 10 bear markets. Don't worry about it.
Stocks have risen 77% of the time.

Paul
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Re: Ric Edelman's view on the stock market

Post by columbia » Wed Jun 26, 2019 1:12 pm

What does he know about the market that you don’t know?

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Re: Ric Edelman's view on the stock market

Post by Carol88888 » Wed Jun 26, 2019 2:08 pm

Well, I for one, did not know that you could have a bear market without having a recession. I thought they went hand in hand.

He also said some of the best months occur in the first months after a bear market ends (although of course no one knows at the time that the bear has ended). My takeaway: if you go all to cash to avoid the bear, you're likely to miss those 2 great months off the bottom.

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Re: Ric Edelman's view on the stock market

Post by pkcrafter » Wed Jun 26, 2019 2:55 pm

Carol88888 wrote:
Wed Jun 26, 2019 2:08 pm
Well, I for one, did not know that you could have a bear market without having a recession. I thought they went hand in hand.

He also said some of the best months occur in the first months after a bear market ends (although of course no one knows at the time that the bear has ended). My takeaway: if you go all to cash to avoid the bear, you're likely to miss those 2 great months off the bottom.
Yeah! :sharebeer
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Re: Ric Edelman's view on the stock market

Post by greg24 » Wed Jun 26, 2019 2:57 pm

Who is this podcaster? Why should I listen to anything he says?

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Re: Ric Edelman's view on the stock market

Post by Jags4186 » Wed Jun 26, 2019 3:06 pm

pkcrafter wrote:
Wed Jun 26, 2019 12:42 pm
livesoft wrote:
Wed Jun 26, 2019 11:27 am
Maybe because pkcrafter was listening backwards from 1:22 to 1:13 made it interesting?
Yes, that's right.

Edelman is not popular with Bogleheads, but there is some content there that may be useful for newer investors. He talks about the 10 year bull run and the returns of investors during those 10 years. A good percentage have done poorly. Yes, he promotes his services, but the message is clear that many investors are not managing their assets properly.

10 years without a bear market (20% drop).
Stocks fall about 36% on average in bear markets
Stocks tend to rise 100% in good times
Bear market once every 3 years on average
Half of the best days occur during bear markets.
Uhh, buy/hold, grin and bear it.
If you invest for 30 years, you may incur 10 bear markets. Don't worry about it.
Stocks have risen 77% of the time.

Paul
I guess Ric missed the bear market of December 2018.

Also, I find it hilarious that he rails against loaded funds but the reality is his management fees are so high most people would be better off paying 5.75% loads than investing in low cost ETFs with him.

For example:

If $1,000,000 is invested in a 5.75% load fund returned 8% over 15 years you’d have $2.99 million

If $1,000,000 with Ric Edelman in a low cost ETF portfolio returned 8% and you were paying Ric’s 1.3875% management fee along the way, after 15 years you’d have $2.57 million

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Re: Ric Edelman's view on the stock market

Post by willthrill81 » Wed Jun 26, 2019 9:53 pm

Dialectical Investor wrote:
Wed Jun 26, 2019 11:35 am
willthrill81 wrote:
Wed Jun 26, 2019 9:39 am
pkcrafter wrote:
Wed Jun 26, 2019 9:03 am
Here is a link to Ric Edelman's show (6/23) where he provides some interesting information on stock market behavior. This might give newer investors a better perspective on investing for the long run.

Start at ~1:22:40 listen until 1:13, a total of about 10 minutes.

http://www.wlsam.com/ric-edelman/podcast/

Paul
Would you mind giving us a brief overview? 10 minutes of Ric is a lot for some of us. :wink:
He opens with some statistics about how people feel they have done financially over the past 10 years (for many, not so well), makes some clueless references to the stock market and unemployment, and suggests you call his firm if he is describing you, because you must be doing something wrong, and he can help you.

Then he presents some stats on bear markets and recessions, ending with the usual, don't worry, the market always recovers.

The opening could have been interesting if he didn't just use it to plug his firm. Alas, there's nothing here.
Thanks. I didn't expect much more from him.
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Re: Ric Edelman's view on the stock market

Post by privatefarmer » Wed Jun 26, 2019 10:54 pm

Jags4186 wrote:
Wed Jun 26, 2019 3:06 pm
pkcrafter wrote:
Wed Jun 26, 2019 12:42 pm
livesoft wrote:
Wed Jun 26, 2019 11:27 am
Maybe because pkcrafter was listening backwards from 1:22 to 1:13 made it interesting?
Yes, that's right.

Edelman is not popular with Bogleheads, but there is some content there that may be useful for newer investors. He talks about the 10 year bull run and the returns of investors during those 10 years. A good percentage have done poorly. Yes, he promotes his services, but the message is clear that many investors are not managing their assets properly.

10 years without a bear market (20% drop).
Stocks fall about 36% on average in bear markets
Stocks tend to rise 100% in good times
Bear market once every 3 years on average
Half of the best days occur during bear markets.
Uhh, buy/hold, grin and bear it.
If you invest for 30 years, you may incur 10 bear markets. Don't worry about it.
Stocks have risen 77% of the time.

Paul
I guess Ric missed the bear market of December 2018.

Also, I find it hilarious that he rails against loaded funds but the reality is his management fees are so high most people would be better off paying 5.75% loads than investing in low cost ETFs with him.

For example:

If $1,000,000 is invested in a 5.75% load fund returned 8% over 15 years you’d have $2.99 million

If $1,000,000 with Ric Edelman in a low cost ETF portfolio returned 8% and you were paying Ric’s 1.3875% management fee along the way, after 15 years you’d have $2.57 million
Obviously no bogleheads would invest with Ric because of his high fees. HOWEVER, why attack him?

1) his fees are transparent. He’s a fiduciary/RIA and doesn’t push commissioned products. IF you hire him you do so knowing all his fees upfront.

2) some people are willing to pay the higher fees for perceived value. They apparently think his firm offers enough service to justify the fees. To each their own, don’t attack Mercedes for making expensive cars attack the people who choose to blow their money on Mercedes.

3) Edelman will serve anyone with at least $5000 which is a big deal. His firm gives full financial advise including estate planning etc and most firms won’t touch someone will only a few thousand.

4) he offers free financial service to nurses and families of nurses

Is there any other big name financial guru out there that’s better? No I don’t think there is. Obviously WE would go to vanguard or someone cheaper but most Americans aren’t bogleheads and Edelman is at least transparent and upfront with his fees.

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Re: Ric Edelman's view on the stock market

Post by Bluce » Wed Jun 26, 2019 11:24 pm

privatefarmer wrote:
Wed Jun 26, 2019 10:54 pm
Obviously no bogleheads would invest with Ric because of his high fees. HOWEVER, why attack him?

1) his fees are transparent. He’s a fiduciary/RIA and doesn’t push commissioned products. IF you hire him you do so knowing all his fees upfront.

2) some people are willing to pay the higher fees for perceived value. They apparently think his firm offers enough service to justify the fees. To each their own, don’t attack Mercedes for making expensive cars attack the people who choose to blow their money on Mercedes.

3) Edelman will serve anyone with at least $5000 which is a big deal. His firm gives full financial advise including estate planning etc and most firms won’t touch someone will only a few thousand.

4) he offers free financial service to nurses and families of nurses

Is there any other big name financial guru out there that’s better? No I don’t think there is. Obviously WE would go to vanguard or someone cheaper but most Americans aren’t bogleheads and Edelman is at least transparent and upfront with his fees.
I agree with your points.

I do find him annoying, especially when he goes on a shouting rampage, and then the whole info-mercial thing too. Aside from that, his market/portfolio advice is good.

I listen to him on Sundays 10-12 noon, because I'm not doing anything better at that time. But sometimes I have to shut him off when he's shouting.

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Re: Ric Edelman's view on the stock market

Post by Jags4186 » Thu Jun 27, 2019 7:03 am

privatefarmer wrote:
Wed Jun 26, 2019 10:54 pm
Obviously no bogleheads would invest with Ric because of his high fees. HOWEVER, why attack him?

1) his fees are transparent. He’s a fiduciary/RIA and doesn’t push commissioned products. IF you hire him you do so knowing all his fees upfront.

2) some people are willing to pay the higher fees for perceived value. They apparently think his firm offers enough service to justify the fees. To each their own, don’t attack Mercedes for making expensive cars attack the people who choose to blow their money on Mercedes.

3) Edelman will serve anyone with at least $5000 which is a big deal. His firm gives full financial advise including estate planning etc and most firms won’t touch someone will only a few thousand.

4) he offers free financial service to nurses and families of nurses

Is there any other big name financial guru out there that’s better? No I don’t think there is. Obviously WE would go to vanguard or someone cheaper but most Americans aren’t bogleheads and Edelman is at least transparent and upfront with his fees.
1) You may know his fees upfront but do his clients understand the impact of those fees over a lifetime? Does he break out a chart showing them how much money they’re going to pay him over the next 10, 15, 20+ years? Doubtful. Not that I blame him, but you show me how many normal families can afford to pay someone $100,000s of fees over a lifetime.

2) Just because some people derive value from it doesn’t make it a good value. Some people derive value from a $100 steak.

3) That’s true but I’d argue someone with $5000 doesn’t need a financial planner. Not only that, I’d be very curious how much time the $5000 account spends with the advisor.

4) As far as I’m aware he offers free financial planning session to nurses. I’m sure a good portion become paying clients. Pretty smart way to tap into an upper middle class income.

There are plenty of big name financial gurus out there who are better. Most of them are only trying to sell you books or silly gimmicky products. You can spend $1000 consuming all of Suze Orman’s products and come out way ahead of Ric Edelman’s firm.

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Re: Ric Edelman's view on the stock market

Post by Bluce » Thu Jun 27, 2019 10:06 am

Jags4186 wrote:
Thu Jun 27, 2019 7:03 am
1) You may know his fees upfront but do his clients understand the impact of those fees over a lifetime? Does he break out a chart showing them how much money they’re going to pay him over the next 10, 15, 20+ years? Doubtful. Not that I blame him, but you show me how many normal families can afford to pay someone $100,000s of fees over a lifetime.

2) Just because some people derive value from it doesn’t make it a good value. Some people derive value from a $100 steak.

3) That’s true but I’d argue someone with $5000 doesn’t need a financial planner. Not only that, I’d be very curious how much time the $5000 account spends with the advisor.

4) As far as I’m aware he offers free financial planning session to nurses. I’m sure a good portion become paying clients. Pretty smart way to tap into an upper middle class income.

There are plenty of big name financial gurus out there who are better. Most of them are only trying to sell you books or silly gimmicky products. You can spend $1000 consuming all of Suze Orman’s products and come out way ahead of Ric Edelman’s firm.
I agree with your criticisms of "privatefarmer's" points, which I previously agreed with. :shock:

You are right -- most people will have no idea how much they will end up paying Rice Boy and he will never explain it up front.

My best friend (69 yrs. old) and his wife have recently "invested" somewhere. They are wealthy and don't really need it, but I think he's doing it because of stories I've told him about myself investing over the past 29 years, and where I've ended up.

I have no idea who they are with and I will probably never ask, but I do know when I've talked about comparing returns to a "benchmark" like the total stock market, he has no idea what I'm talking about. And with the very high chance that they will not beat a simple cheap S&P index, then they would be money ahead to open an account with a discount broker and just buy an index.

Plus, I am 99% sure they don't know what a "fiduciary" is, and have no idea the sum of fees/expenses they will pay and how it will impact their return. I think most people, if they know they are paying 1+% annually, won't think it matters.

I wish they had asked me my opinions about these basics, but they never did. But no matter what happens it won't change their life. Oh well.

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Re: Ric Edelman's view on the stock market

Post by SlowMovingInvestor » Thu Jun 27, 2019 10:37 am

I remember several years ago (10, 20 ? ) Ric Edelman used to rant against index funds. His reasoning always struck me as illogical.

I gather he's come around to the point that he supports index ETFs, but not index MFs. But I could never take him seriously after hearing some of his comments on index funds in the past.

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Re: Ric Edelman's view on the stock market

Post by usagi » Thu Jun 27, 2019 11:22 pm

Carol88888 wrote:
Wed Jun 26, 2019 2:08 pm
...He also said some of the best months occur in the first months after a bear market ends (although of course no one knows at the time that the bear has ended). My takeaway: if you go all to cash to avoid the bear, you're likely to miss those 2 great months off the bottom.
That is exactly what happened to Bob Brinker the only time he went to all cash, back in 1987. A classic cash of using market timing to sell at a low and buy at ever higher elevations.

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Re: Ric Edelman's view on the stock market

Post by abuss368 » Sun Jun 30, 2019 6:36 pm

How does anyone know how the stock and bond markets will perform?
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Re: Ric Edelman's view on the stock market

Post by Mr.BB » Sun Jun 30, 2019 6:57 pm

peseta wrote:
Wed Jun 26, 2019 11:18 am
NotWhoYouThink wrote:
Wed Jun 26, 2019 11:09 am
willthrill81 wrote:
Wed Jun 26, 2019 9:39 am
pkcrafter wrote:
Wed Jun 26, 2019 9:03 am
Here is a link to Ric Edelman's show (6/23) where he provides some interesting information on stock market behavior. This might give newer investors a better perspective on investing for the long run.

Start at ~1:22:40 listen until 1:13, a total of about 10 minutes.

http://www.wlsam.com/ric-edelman/podcast/

Paul
Would you mind giving us a brief overview? 10 minutes of Ric is a lot for some of us. :wink:
I usually make it about 15 seconds in the car if I'm switching stations and he is on. Whiny.
When his show was a local DC show with live callers, it was quite good. Now, it's mostly just an infomercial for his firm.

peseta
+1. I used to enjoy listening to his show when he took mostly other callers questions. Now he just does 2 hours of 90% commentary.
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Re: Ric Edelman's view on the stock market

Post by AtlasShrugged? » Mon Jul 01, 2019 6:06 am

2) some people are willing to pay the higher fees for perceived value. They apparently think his firm offers enough service to justify the fees. To each their own, don’t attack Mercedes for making expensive cars attack the people who choose to blow their money on Mercedes.

3) Edelman will serve anyone with at least $5000 which is a big deal. His firm gives full financial advise including estate planning etc and most firms won’t touch someone will only a few thousand.
This.

The sad reality is that most people with less than 250K net worth are simply not served. They are more or less on their own. I am now leaving that boat (having passed 250K net worth), but I cannot begin to tell you how many financial planners said, "Nope, not interested, you need to have [fill in the blank] in investable assets. The problem is very real. When I look at EFE (Edelman Financial Engines), I see a full service shop: Financial planning, estate planning, POA for finance and health, etc. I would venture to say that the majority of people with <=250K in net worth probably have shaky financial knowledge. Full Disclosure: Just to get access to the full set of services, I plan to move over my Roth. I don't get that from Fidelity. The remainder of our assets (401Ks, DW Roth, Taxable) will remain with Fidelity (and Wells Fargo) in low cost index funds.
1) You may know his fees upfront but do his clients understand the impact of those fees over a lifetime? Does he break out a chart showing them how much money they’re going to pay him over the next 10, 15, 20+ years? Doubtful. Not that I blame him, but you show me how many normal families can afford to pay someone $100,000s of fees over a lifetime.
Answer: It comes to roughly 30% of the total return after 25 years. The average family is very unlikely to pay hundreds of thousands of fees over their lifetime. EFE fee structure for entry clients is 1.75% AUM + fund fees that net out to ~0.25% annually...so 2%.

Truthfully, I do not really understand the depth of animus to EFE. I really don't. They are upfront with their fees. They serve a clientele who are traditionally turned away because of minimums, they provide the 'basics' in financial knowledge, help manage poor behavioral choices, and do in-person semi-annual or annual reviews with their clients. In my case, I figure my Roth buys us access to a wider array of services I do not currently have. In about 10-15 years, I retire. The math says I will have paid ~25K over that time in fees (assuming 3% real return annually). Do I like paying out 25K? Not particularly. Do I think I could do better? Probably not. Do I have time to really manage my investments? NO! I work 7 days a week at two jobs, and this comes to roughly ~80 hours/week. I am too mentally and physically exhausted to really devote time to it. For me, it made sense, and besides, my DW listens to Edelman on the radio.

It is very much an individual choice. But the Boglehead Ric-bashing can get to be a little much.
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Re: Ric Edelman's view on the stock market

Post by JoeRetire » Mon Jul 01, 2019 6:15 am

AtlasShrugged? wrote:
Mon Jul 01, 2019 6:06 am
Truthfully, I do not really understand the depth of animus to EFE. I really don't.
I think it's fair to say that this forum has a fair amount animus to anything that isn't DIY, and a bias against anything not Vanguard.
It is very much an individual choice. But the Boglehead Ric-bashing can get to be a little much.
Agreed.
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Re: Ric Edelman's view on the stock market

Post by Toons » Mon Jul 01, 2019 6:23 am

Everybody Has An Opinion
:mrgreen:
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Re: Ric Edelman's view on the stock market

Post by Dialectical Investor » Mon Jul 01, 2019 6:29 am

AtlasShrugged? wrote:
Mon Jul 01, 2019 6:06 am

In about 10-15 years, I retire. The math says I will have paid ~25K over that time in fees (assuming 3% real return annually). Do I like paying out 25K? Not particularly. Do I think I could do better? Probably not. Do I have time to really manage my investments? NO! I work 7 days a week at two jobs, and this comes to roughly ~80 hours/week. I am too mentally and physically exhausted to really devote time to it.
I think a lot of people feel this way, but managing investments should not take much time. I can't imagine having time and interest to compose over 600 posts on Bogleheads but not having time to manage investments. Perhaps there is something unusual about your situation, but for many people, I think they just don't want to do it, or they find false comfort in having an adviser. That's fine, of course, though I think it's good for them to admit what they are doing. A little encouragement to just get on with it themselves is fine too. I tell myself I didn't have time for this or that all the time. I had time. I know I have time to do at least one thing today that I will not do. I know that because I'm spending time typing this post right now.

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