What to do with all this rollover money

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Topic Author
itsmedeedee
Posts: 4
Joined: Fri Feb 10, 2017 12:07 pm

What to do with all this rollover money

Post by itsmedeedee »

I have half of his pensions from divorce and one has been rolled over into a self-directed IRA but the six figure is sitting in a IRA savings account at my bank. Now with the election over there is better insight where things are going which is an advantage for me to begin directing which investments to consider.
I am going to be 61 soon, never worked, have no income whatsoever, was awarded half his pensions ($620,000) and a home with a $300,000 mortgage and nothing else. I am entitled to collect Social Security Benefits off his record when the time comes. I am also entitled to Canada Pension and Old Age Security in the coming years but at @ 60% of full amount allowed.
I will be selling the home that will see me with profit of $150,000-200,000. Yet to be rolled over are 3 of his pensions in Canada but can be rolled into a RRSP (Canadian plan) which could be an advantage for me. I am not considering any distributions until the dollar exchange improves.

My bills, mortgage, debts..... everything, are paid from periodic withdrawals from the pension funds. My stradegy is to invest into agressive high yields including IPO's. I obviously don't have time for anything long term.

First, (with only the U.S. funds in mind) I am thinking of going with Merrill Edge and need advice on some issues. For starters, should I transfer all funds being held in my bank IRA account to a Merrill Edge account for easier access for investments or keep my custodian as is? (fees are next to nothing)

I have interest in palladium and feel with the current politics we could see high demand from our very own mine in Montana instead of exports out of Russia and Africa. I am thinking of not only buying into the metal itself but of shares with the Stillwater Mine. I also see great potential in the recent announcement of the gold mine in Alaska. Other natural resources are of interest also with the pipelines going through. With these investments in mind for U.S. investing, I am wondering what advantage such investments would give me on the Canadian side also as Canada too has but one palladium mine, a very promising gold mine in Saskatchewan, and of course its natural oil fields aplenty. How would you invest in the aforementioned? What other investment stradegies would you do if you had such funds available? Mutual funds? Private companies? Stocks, shares, bonds, electronics, manufacturing, imports, exports, currencies, national, international...and IPO'S.. wind energy/solar? etc? Bringing jobs back to Americans. What could be a good investment? Auto, textiles, etc.? Components needed for manufacturing ..... what about the little guy? upcoming and promising with potential to balloon?

I need all the input I can get please. Keep in mind that I need quick returns and that I do understand everything is a gamble but I am willing to take risks for I know if all else fails, I will have Government pensions and equity from my house to fall back on. I won't starve.

In appreciation, I look forward to your responses.
shariron
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Joined: Wed Mar 04, 2009 8:20 pm

Re: What to do with all this rollover money

Post by shariron »

Step 1: Rollover the IRA to Vanguard, and choose the Target Retirement Fund with an asset allocation that best meets your risk tolerance and income needs.
Step 2: There is no step 2 , you are done!
livesoft
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Re: What to do with all this rollover money

Post by livesoft »

Wow. Just wow.

Please tell us that you have a long history of investing and know of all the risks. Also that you have been investing in IPOs over the last 30 years, too. That will help us in understanding your affection for palladium and IPOs because otherwise your first post is so far out of the normal that I have seen for recent divorcées as to border on totally unbelievable. Also where did you even come up with these ideas that are way out of the norm?

Welcome to Bogleheads!
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flyingbison
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Re: What to do with all this rollover money

Post by flyingbison »

itsmedeedee wrote: My bills, mortgage, debts..... everything, are paid from periodic withdrawals from the pension funds. My stradegy is to invest into agressive high yields including IPO's. I obviously don't have time for anything long term.
Do you have time to recover from losing half or more of your investment?

After selling the house you are going to have about $800,000 USD, plus future SS, etc. Why on earth would you need high risk investments?
Scott311
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Re: What to do with all this rollover money

Post by Scott311 »

I need all the input I can get please. Keep in mind that I need quick returns and that I do understand everything is a gamble but I am willing to take risks for I know if all else fails, I will have Government pensions and equity from my house to fall back on. I won't starve.
What, exactly, are you trying to achieve?? Your stated investing preferences are what people come here to avoid... Anyway you need to at least clearly state what your investment goals are... I.E. "X" amount of income to comfortably live off for your remaining years... Building income to pass on to children, etc.
aristotelian
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Re: What to do with all this rollover money

Post by aristotelian »

I learned my lesson with IPOs. Early in my investing career, I had not known about the boglehead philosophy, but was pretty much committed to diversification and mutual fund investing, so I still should have known better. Once I had a significant portfolio I decided to play with a chunk of "house money" and invest in a few stocks.

First I read that American Apparel was having an IPO. I had heard of the company because my wife had a lot of their clothes and she has good taste. Turns out their CEO was known for erratic behavior, kept getting hit with sexual harassment lawsuits and accusations of mismanagement, ended up declaring Chapter 11. Later I heard Noodles & Co was having an IPO, loved their food, figured it was a can't miss. After shooting up to $100 on the first day, it has been downhill ever since to $3.95 today.

By the way, you specifically mention Solar...One of my speculative bets was Guggenheim Solar ETF thinking that solar was the wave of the future. Turns out energy prices collapsed and all of a sudden oil is cheaper again. That one is down 50%.

I did make a good bet on Google that has probably covered most of my losses, and fortunately I have never had more than about 10% of my portfolio in stocks. But I will never make that mistake again. Lesson learned, if you think an investment is hot, you are probably not the only one pricing up the stock. You never have all the information. Please do not try to do this with any significant amount of money. Index funds from here on out. Don't try to beat the market, just try to own the market.
Topic Author
itsmedeedee
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Re: What to do with all this rollover money

Post by itsmedeedee »

I apologize if my post was confusing.

To respond:
The share of the awarded pensions from the divorce is my only source of income. I take out periodically what is needed for my livelihood which includes expenses such as mortgage and other bills. Add all other daily needs along with health, I need $50,000 a year. I also need to consider the 25% tax bracket and need to take distribution for that. My loss for any Canadian distributions is greater seeing a 25% withholding tax and a poor dollar exchange though it has improved lately with today's rate of 0.7641 u.s.
I was the director of our pension portfolio's and the investments grew quick and steady. While so many pensions saw a deep fall (2002?), our portfolio saw a 6% increase. I have done some penny stock in an underdog that pulled through nicely and have doubled my investments in bank IPO's overnight, selling the next day. Mutual funds in precious metals saw the greatest increase, thus the interest of palladium. After spending a year reading and keeping up on palladium, I feel it is worthy of investment. The uses for this metal is more than one expects and with our future not only of electronics but also hearing of the auto industry coming back into our own back yard, and the uncertainty of international resources for the metal, there could be high yielding potential. My take on what Trump is saying is that we will resource from our own country first. So why not invest in it?

My take: I am not interested investing in the wheel nor the spokes that hold it together, but I am interested in the nuts and bolts that keep the spokes on. The guy who supplies them and the guy who made them.

It is easy to critisize but I came to you for your opinions and input. I do not get any check in the mail. I have to pay income tax on whatever I take out and I don't get to use that income to put a contribution back in. The amount of $800k is not my reality of funds to play with as any of you with a monthly income knows how much you have left over from each paycheck to invest. Lucky for you though, you know where the next check is coming from. A different story for sure had I too had income coming in and can imagine how much growth those pensions would have seen in the next five years till I am at full retirement age. Unfortunately, that is not the case and they have not seen any growth whatsoever since rolled over.
It is a shame to see it sitting dormant and I come to you for your input as to where else besides my interest, should I invest. Thank you
livesoft
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Re: What to do with all this rollover money

Post by livesoft »

I am retired and do not have a paycheck. I have no pensions. I do not get any social security yet either. There are many people who participate on the forum that are retired and have no paycheck. My advice is to invest like many retirees on this forum invest. They do it successfully and pay all their bills.

A good first portfolio is described in this link: https://www.bogleheads.org/wiki/Three-fund_portfolio

A portfolio of palladium, mining stocks, and IPOs is not a good first portfolio. Such a portfolio is risky and the returns do not compensate for the risk that one would take. Such a portfolio is akin to gambling. But I have no problem with someone investing in such a portfolio, but I don't think anyone on this forum is going to advise one to do such a thing. All the opinions and input will be pretty much: Don't do that.
Last edited by livesoft on Fri Feb 10, 2017 4:07 pm, edited 1 time in total.
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jf89
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Re: What to do with all this rollover money

Post by jf89 »

You've got a lot of ideas and a lot of energy. What is most likely best for you is to take a deep breath and realize that there's likely nothing that you HAVE to do with this money at this exact moment (although I'd double check that everything is rolled over correctly in your name and isn't waiting on a form or hasn't reached an account yet).

Next I'd read through the wiki on this site about what to do with a windfall, because that's essentially what you have. Read it, memorize it. Read the articles that it links to. Ask questions in future posts about the terms you don't understand. Use the search box at the upper-right corner of this and every Bogleheads page to search other posts to see what has already been asked. Maybe buy a book or five from the recommended reading list on this site (Both Bogleheads books are excellent and I highly recommend anything by Bill Bernstein).

Bottom line: Take your time, learn about the risks involved in everything you're talking about, and make yourself a longterm plan that doesn't involve speculative bets that will likely have you scraping for money in the near future.

Edit: I just read your latest post, and I'm confused. You directed a company pension portfolio? I thought you never had a job.

Also, this kind of sass is really inappropriate:
itsmedeedee wrote:It is easy to critisize but I came to you for your opinions and input. I do not get any check in the mail. I have to pay income tax on whatever I take out and I don't get to use that income to put a contribution back in. The amount of $800k is not my reality of funds to play with as any of you with a monthly income knows how much you have left over from each paycheck to invest. Lucky for you though, you know where the next check is coming from. A different story for sure had I too had income coming in and can imagine how much growth those pensions would have seen in the next five years till I am at full retirement age. Unfortunately, that is not the case and they have not seen any growth whatsoever since rolled over.
That check a lot of us are getting in the mail (or used to get in the mail, for the retired members of the forum) was earned by working, it was taxed before it got to us, and we don't "get" to contribute it to retirement funds... we have to. If you're complaining so much about not having an income, I know of no law prohibiting you from finding gainful employment.
Last edited by jf89 on Fri Feb 10, 2017 4:24 pm, edited 2 times in total.
"Save as much as you can, diversify diversify diversify, and you can't go wrong with tech stocks" | -First investing advice I recall from my parents in the 90's (two outta three ain't bad)
aristotelian
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Re: What to do with all this rollover money

Post by aristotelian »

I love it when people post on a forum asking for feedback, the feedback is not what they wanted to hear, and then they get mad and defensive.

Nobody is recommending against you investing your money. We are recommending against investing in extremely high-risk speculation that could cost you your sole source of income.
flyingbison
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Re: What to do with all this rollover money

Post by flyingbison »

itsmedeedee wrote:
It is easy to critisize but I came to you for your opinions and input. I do not get any check in the mail. I have to pay income tax on whatever I take out and I don't get to use that income to put a contribution back in. The amount of $800k is not my reality of funds to play with as any of you with a monthly income knows how much you have left over from each paycheck to invest.
You seem to think that $800k isn't enough to support you, yet you are willing to lose a large chunk of it with risky investments. If you can't afford to live on that $800k, you certainly can't afford to invest it in IPOs and other high risk ventures.
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slayed
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Re: What to do with all this rollover money

Post by slayed »

itsmedeedee wrote: My stradegy is to invest into agressive high yields including IPO's. I obviously don't have time for anything long term.
It's not clear to me what you mean by "I obviously don't have time for anything long term" as 61 is not particularly old (you should have at least 20 years or so that your investments need to last)
Dottie57
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Re: What to do with all this rollover money

Post by Dottie57 »

Stop.

Do not gamble/speculate with newly found money. The Palladium and IPO's are fools gold. Put your Money into plain jane boring mutual funds and you will do well.

Don't ever follow your "feelings" about investing. Feelings lie. Do the rational and smart. Own the market.
Longdog
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Re: What to do with all this rollover money

Post by Longdog »

Sounds to me like you've already decided how you want to invest your money. I will point out that it's not anywhere close to how people on this forum would advise to invest. So, while you are certainly welcome to participate, unless you change your approach, you likely won't want to invest in the way advocated on this forum. Best of luck to you!
Steve
Topic Author
itsmedeedee
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Re: What to do with all this rollover money

Post by itsmedeedee »

I was the one that picked out where His investments inside His pensions would go. He always trusted my instincts and I must admit that they always did good.

I have always chosen agressively and admit a gambler at heart. These funds have been sitting dormant for awhile now and had decided to wait until the election knowing it would give better insight of things to come.

I understand the risks and am grateful that I will have equity from the house sale along with future Government pensions to fall back on. Once the house is gone, my expenses will be a lot less.

I feel I have been taking my time since knowing for over 2 years that I would be awarded these pensions and have done a lot of reading on different sites and feel that I am ready to dive in. I suppose in a sense this is a Windfall but it also comes 5 years too soon. The first pension that came through I lost over $60,000 to income tax. The divorce went over 3 years and bills piled up such as back mortgage, 3 credit cards, and $45,000 in attorney fees. I choked, gagged and puked over this. I was told from one of the top investment firms that was doing this rollover that I needed to figure out how much I needed to pay off my debts and then to also add how much money for taxes I would need for this distribution. Poor advice! All it did was make my income much higher Live and Learn. This is why I chose to put this pension into a self-directed IRA.
I will read everything i can from this site and from all of you who have been there, done that. Your experiences I trust and will guide me.
minesweep
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Re: What to do with all this rollover money

Post by minesweep »

This is your lucky day (you just don’t realize it yet). Follow the suggestions that you receive at this forum and you will likely be better off because of it (there have been testimonials to that effect over the years). Check out the Bogleheads Wiki at your leisure. But first start here.
Time is your friend; impulse is your enemy - John Bogle | Learn every day, but especially from the experiences of others, it's cheaper! - John Bogle
Topic Author
itsmedeedee
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Re: What to do with all this rollover money

Post by itsmedeedee »

I apologize of any misunderstandings and I fully respect everyone on this forum. I posted looking for insight and I listened to each of you and will reconsider some of my choices. I appreciate all your feedback and will take your experiences and wisdom to guide me into comfortable stability of future finances and will gracefully lick any wounds inflicted because of my posts.

Nonetheless, with the country having a new President that vows many changes, I can only assume that this is a very good time to get in on some investments from the bottom ground up. I am still open for any suggestions as to what percentage and where to allocate some of these funds or of any speculations for financial gain from the changes about to happen within our own borders. Bringing jobs back to Americans must mean money to be had.

I kindly thank you all.
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snowshoes
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Re: What to do with all this rollover money

Post by snowshoes »

itsmedeedee wrote:I apologize of any misunderstandings and I fully respect everyone on this forum. I posted looking for insight and I listened to each of you and will reconsider some of my choices. I appreciate all your feedback and will take your experiences and wisdom to guide me into comfortable stability of future finances and will gracefully lick any wounds inflicted because of my posts.

Nonetheless, with the country having a new President that vows many changes, I can only assume that this is a very good time to get in on some investments from the bottom ground up. I am still open for any suggestions as to what percentage and where to allocate some of these funds or of any speculations for financial gain from the changes about to happen within our own borders. Bringing jobs back to Americans must mean money to be had.

I kindly thank you all.
I certainly recognize your enthuasim, knowledge, speculation, & wanting to get in on the ground floors mindset. US Steel's ticker (X) recently went from low single digits ($6.37) to 39ish in the last 1yr's timeline. Many other mining investing options akin to VGPMX going from $5.55 on 1/20ish/16 to over 13.00 recently have also doubled, in about the same timeline. JPM up 62% since its CEO J.Diamond bought his shares back this time last year also.
It sounds like you have a base income ahead and want better than market returns on your investments, as you know that requires speculation. No ones going to tell you how to prosper in markets, no one concretely knows the future, but they can speculate on it.
Good Luck !
Longdog
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Re: What to do with all this rollover money

Post by Longdog »

itsmedeedee wrote:I apologize of any misunderstandings and I fully respect everyone on this forum. I posted looking for insight and I listened to each of you and will reconsider some of my choices. I appreciate all your feedback and will take your experiences and wisdom to guide me into comfortable stability of future finances and will gracefully lick any wounds inflicted because of my posts.

Nonetheless, with the country having a new President that vows many changes, I can only assume that this is a very good time to get in on some investments from the bottom ground up. I am still open for any suggestions as to what percentage and where to allocate some of these funds or of any speculations for financial gain from the changes about to happen within our own borders. Bringing jobs back to Americans must mean money to be had.

I kindly thank you all.
One of the first rules of Boglehead investing is to view your entire portfolio as a whole, and to allocate it among different asset classes. Another rule is that nobody can consistently do better than market returns, after taking into account fees, expenses, and tax implications. Another rule is to stay the course, regardless of what's going on in the world. So, to ask what you should do with a portion of your portfolio (as opposed to the whole portfolio), based on recent world events, in order to do better than the market goes against some of the fundamental premises of Boglehead style investing. Sorry to disappoint.
Steve
Dottie57
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Re: What to do with all this rollover money

Post by Dottie57 »

Longdog is right. Boglehead philosophy is for long haul investing - not speculation and market timing. No one has a crystal ball.
retiredjg
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Re: What to do with all this rollover money

Post by retiredjg »

itsmedeedee wrote:My stradegy is to invest into agressive high yields including IPO's.
This is a very bad idea.

I obviously don't have time for anything long term.
Actually, what you don't have is the ability to gamble on short term high risk ventures. There is a very high probability you will lose money forever and you can't afford to lose what you have.

I have interest in palladium and feel with the current politics we could see high demand from our very own mine in Montana instead of exports out of Russia and Africa. I am thinking of not only buying into the metal itself but of shares with the Stillwater Mine. I also see great potential in the recent announcement of the gold mine in Alaska. Other natural resources are of interest also with the pipelines going through. With these investments in mind for U.S. investing, I am wondering what advantage such investments would give me on the Canadian side also as Canada too has but one palladium mine, a very promising gold mine in Saskatchewan, and of course its natural oil fields aplenty. How would you invest in the aforementioned? What other investment stradegies would you do if you had such funds available

Again, a very bad idea. Putting your money into a narrow sector of the market is risky. You cannot afford to be risky. You need borad based investments that cover many sectors of the market.

I need all the input I can get please. Keep in mind that I need quick returns and that I do understand everything is a gamble but I am willing to take risks for I know if all else fails, I will have Government pensions and equity from my house to fall back on. I won't starve.
One could argue that all investing is something of a gamble. But looking for quick returns is not a smart gamble. It is a dumb gamble. You are more likely to come out a loser than a winner. There is no reason to do that. Just invest in the whole market and take what the market gives you.
VaR
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Re: What to do with all this rollover money

Post by VaR »

Dottie57 wrote:Longdog is right. Boglehead philosophy is for long haul investing - not speculation and market timing. No one has a crystal ball.
I'd like to expand this and say that Boglehead philosophy is great for investing at all time horizons - long-term, medium-term and short-term.

OP, I recommend taking a breath and figure out how much income you need to tide you over until the pensions start covering all your expenses. You said your current expenses are $50k. This is a good start. When does your Canada Pension and Old Age Security start and how much will it be?

For Social Security, if you can defer taking it until 70 1/2, you can get 8% more in benefits for each year you defer. This is a great option that everyone here recommends. Do you know how much of your expenses this will cover?

My recommendation is to get your base of $50k a year, inflation adjusted, set for life and then to figure out what your goals are for the rest.
inbox788
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Re: What to do with all this rollover money

Post by inbox788 »

livesoft wrote:Wow. Just wow.

Please tell us that you have a long history of investing and know of all the risks. Also that you have been investing in IPOs over the last 30 years, too. That will help us in understanding your affection for palladium and IPOs because otherwise your first post is so far out of the normal that I have seen for recent divorcées as to border on totally unbelievable. Also where did you even come up with these ideas that are way out of the norm?

Welcome to Bogleheads!
I was thinking the same thing, but I think we're out of the norm. Many/most people only know what little they're exposed to, and sometimes that's very little.
itsmedeedee wrote:I have interest in palladium and feel with the current politics we could see high demand from our very own mine in Montana instead of exports out of Russia and Africa. I am thinking of not only buying into the metal itself but of shares with the Stillwater Mine. I also see great potential in the recent announcement of the gold mine in Alaska. Other natural resources are of interest also with the pipelines going through. With these investments in mind for U.S. investing, I am wondering what advantage such investments would give me on the Canadian side also as Canada too has but one palladium mine, a very promising gold mine in Saskatchewan, and of course its natural oil fields aplenty. How would you invest in the aforementioned? What other investment stradegies would you do if you had such funds available? Mutual funds? Private companies? Stocks, shares, bonds, electronics, manufacturing, imports, exports, currencies, national, international...and IPO'S.. wind energy/solar? etc? Bringing jobs back to Americans. What could be a good investment? Auto, textiles, etc.? Components needed for manufacturing ..... what about the little guy? upcoming and promising with potential to balloon?

I need all the input I can get please. Keep in mind that I need quick returns and that I do understand everything is a gamble but I am willing to take risks for I know if all else fails, I will have Government pensions and equity from my house to fall back on. I won't starve.
If you grow up in Montana or Canada, mining is a great investment and many folks live off that. Similarly, Silicon Valley is a great investment with companies like Facebook, Google and many others. Palladium, like gold and silver are commodities, and many people make money on that, but fewer have heard of palladium. Fishing and fisheries? Canned tuna? If you work in these fields, you see people getting rich off these industries all the time. Oil? absolutely. There's lot of money being made in every one of the listed investments. In any industry, there are folks making money, but most often forgotten are the risks and losses in failure. The best way to participate in them is to be a founder or management in these companies. The little guy gets scraps.

The quickest way to bet the money is to play roulette and bet it all on black. You will double your money nearly instantly if you don't lost it all. And if you need more risk, bet it on your favorite number. Don't play more than once. The odds get worse the more you play and the returns (losses) get worse too.

OP, why do you "need quick returns", and what are you going to spend it on?
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Re: What to do with all this rollover money

Post by grabiner »

itsmedeedee wrote:I was the one that picked out where His investments inside His pensions would go. He always trusted my instincts and I must admit that they always did good.
Many investors believe they have done better than they actually have, because they remember their winners and forget or excuse their losers, or because they don't account for things properly. Have you ever computed the Internal Rate of Return on the investments you managed, and compared it to a benchmark? If not, then you have no idea whether you have been successful or unsuccessful at managing your investments.
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