Morningstar is featuring an interview with Allan Roth,CPA, CFP, and according to Morningstar: "One of the of the pre-eminent hourly financial advisors in the United States." Allan is a fee-only adviser ($450/hr.) and a long-time personal friend. When Allan speaks, I listen:
I Embrace Dumb Beta"I saw a CFP with fiduciary responsibility selling a couple of annuities to a client and he couldn't make up his mind whether to charge commission or a percentage of assets. So, he did both."
"I argue that Jack Bogle, the founder of Vanguard, always said growth was never the goal, trying to put the client first and do something good for the client resulted in growth."
"I've always said investing is simple, but I never said taxes were and withdrawals have tax ramifications."
"I try to help the client imagine the pain they would feel with another 50% decline like we've had twice since 1999, or even a Japan-like scenario."
"The most important decision is committing to stick with an asset allocation."
" I'm a strong believer that take risk with stocks, and the purpose of the bond, the fixed income, is to be the shock absorber of the portfolio."
"I'm a big believer in target-date retirement funds."
"I have my clients invest no more than 20% in muni-bond funds."
"Taxes are very, very important, and all things being equal, you want to be tax-efficient, but you don't want taxes to drive the overall portfolio."
"Not a penny has ever been made in the aggregate in the futures market. It's a zero-sum game before costs."
"The strategy that I use to protect for higher inflation and higher interest rates is the CD strategy with the early withdrawal penalty. But if a client doesn't want to do that, because it does take some time, then a TIPS would be a good strategy."
"Five years ago, I couldn't be at a conference and go more than 60 seconds without hearing smart beta, factor investing--and money pours into part of the market, and that means, all things being equal, it's likely to underperform going forward, it's not a for-sure thing, and small-cap value has underperformed large-cap growth I think the last time I looked at Morningstar over the last five years by almost 10 percentage points a year."
" I embrace dumb beta, just owning the entire market, and there's something really cool about a total stock or total international stock index fund, because if I own that with a 0.04% expense ratio, then I'm guaranteed to beat the average dollar invested in U.S. stocks, because I own the entire market and I owned it at lower costs than most other people do,"
"I give Jack Bogle not only credit for saving people billions and billions of dollars in fees for Vanguard, but in also forcing competitors to lower fees." --"meeting Jack Bogle was like meeting my hero. And the fact that we saw each other once or twice a year, and I could talk to him fairly regularly was just wonderful."
"in the vast majority of the cases, especially for a married couple, it makes sense for one to wait on Social Security, and I call that delaying Social Security the best annuity on the planet."
Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Good advisers give you their personal attention, help you avoid some of the pitfalls of investing, and provide worthwhile asset-allocation services."
