I went to an investment advisor firm party for rich people

[Zoot Allures]

This is an excellent book to read. The book basically explains why advisors get rich, and their clients get poor----LOL

View attachment 423520

Where are the advisors yachts?
They claim to beat the market so they should be wealthy but they are not living on yachts
so their claim rings hollow

My thoughts are :

If everyone can beat the market then beating the market would not be possible as the market would achieve
its ideal state of perfect effiency so no stock would be a better investment than any other stock
and there would be no alpha to chase as all stocks would be perfectly priced according to their risk vs potential return

While there are huge returns to be made by finding hidden alpha, the reason is the market has not achieved perfect effiency
because advisors cannot find alpha but they they may stumble on it by chance

An example is mutual funds

They make many claims to find alpha therfore beat the average

One of many that are compelling arguments is using a standard index like the S&P/TSX benchmark equity index
that tracks 250 of Canada's largest public companies.

Funds claim they can beat that index by weeding out the undesirable companies thereby beating the index.
This is a compelling claim as some of those 250 companies must surely be better buys as companies
get into the index only by size

 

[Zoot Allures]

The point of the book is that the advisors have the yachts, and not the customers!!

My point is the advisors should have yachts without the need for customers

 

[speakercontrols]

”I am going to buy an RRSP".

I think what you’re really saying will go over most people’s heads

 

[Ponderling]

Advisors do offer discipline.

DIY... save 1% but 1% is not that much

Yes, some need someone to hold their hand and set up auto contribution transactions, annual rebalancing, etc.

But the part about 1% being not that much is not true.
It is 1% every year.
Over time this 'little' amount adds up.

I bailed on my advisor about 17 years ago.

I built a spreadsheet back then and came to the realisation that if I maxed my RRSP contribitions every year until I retired on an already pretty healthy sized RRSP account, that all my new money was going to pay his management fee.

That realisation made going DIY easy.

Sitting tight when stock markets slide or when bond holdings dump, like in 21 and 22 is not fun.
But it comes with the territory when you put on the big boy pants with no pull ups on underneath.

 

[Mandala]

Yes, some need someone to hold their hand and set up auto contribution transactions, annual rebalancing, etc.

But the part about 1% being not that much is not true.
It is 1% every year.
Over time this 'little' amount adds up.

I bailed on my advisor about 17 years ago.

I built a spreadsheet back then and came to the realisation that if I maxed my RRSP contribitions every year until I retired on an already pretty healthy sized RRSP account, that all my new money was going to pay his management fee.

That realisation made going DIY easy.

Sitting tight when stock markets slide or when bond holdings dump, like in 21 and 22 is not fun.
But it comes with the territory when you put on the big boy pants with no pull ups on underneath.

1% counts , as you point out , that gets compounded and the compounding gets compounded then that gets
coumpounded and so on, but lots of people feel the responsibility to DIY is too great and for 1% they can relax but
we know the truth. They do not and will not believe us as they have been brainwashed and the education system failed them

Also, for that 1% they get the discpline of a professional who encourages monthly savings




and will not panic



So it is more psychological than anything else therefore that 1% is well
spent for some investors but not because advisors are so smart that they can beat the market,
they cannot in spite of their bravado


Happy investing

 

[anonemouse]

1% counts , as you point out , that gets compounded and the compounding gets compounded then that gets
coumpounded and so on, but lots of people feel the responsibility to DIY is too great and for 1% they can relax but
we know the truth. They do not and will not believe us as they have been brainwashed and the education system failed them

Also, for that 1% they get the discpline of a professional who encourages monthly savings

View attachment 424171


and will not panic

View attachment 424173

So it is more psychological than anything else therefore that 1% is well
spent for some investors but not because advisors are so smart that they can beat the market,
they cannot in spite of their bravado


Happy investing

Buffet has a massive cash position at the moment, way ahead of the recent tariff volatility. I expect he's going to get back into the market in a big way with that cash pile, and as soon as he does I'll follow suit.

 

[Mandala]

Buffet has a massive cash position at the moment, way ahead of the recent tariff volatility. I expect he's going to get back into the market in a big way with that cash pile, and as soon as he does I'll follow suit.

Good one
How will you know?
Watch BRK acquisitions?