That's cool, Mahesh. Whatever works for you... -----Original Message----- From: silklist [mailto:silklist-bounces+shyam.sunder=peakalpha....@lists.hserus.net] On Behalf Of Mahesh Murthy Sent: 30 September 2014 15:19 To: silklist@lists.hserus.net Subject: Re: [silk] Financial planning
On Tue, Sep 30, 2014 at 1:50 PM, Shyam Sunder <shyam.sun...@peakalpha.com> wrote: > >> Regarding DIRECT mode, as lawyers say, anyone who argues his own > >> case > has a fool for a lawyer. > > >Wow. Such hubris. As though managing investments in stocks "should be > something left to the professionals" :-) You must say this to Buffet, > Pabrai, Jhunjhunwala and others, just to get a reaction :-) > > True. Managing investment in stocks should be left to the professionals. > And I would consider those names to be professionals. > They work for themselves. They can't manage your money, or mine. They're not professionals for the purposes of this discussion. > >> There is a substantial difference in performance between the best > >> and > the worst funds. > > >This seems to fly in the face of your own logic that one should > >always > buy a professionally managed fund :-) > Just like there will be a difference between how Joe Blow and Jane Blow manage their money if they do it themselves. But no evidence yet supports the stock picking industry's claim that a professional equity buyer can, after fees, trading costs and taxes and over a long period of time, beat a low cost index fund after the same fees and costs and period of time, anywhere on earth. If in doubt, read John Bogle. I heartily recommend him to anyone interested in this business. > No it doesn't. Point is, it is not enough just to buy any > professionally managed fund. It is important to buy a fund managed by > the best fund manager you can pick. The difference between the best > and worst, is quite substantial. > The fallacy here is that there is no "best" fund manager, over any sustained period of time. And that's the point. As has been amply demonstrated, a majority of equity fund managers can't beat a monkey throwing darts to pick stocks over any sustained period of time ( http://www.economist.com/blogs/freeexchange/2014/06/financial-knowledge-and-investment-performance ) > > >> By the same principle, "never touch it until retirement" is okay if > >> you > don't have the time, will and skill or don't have access to a good advisor. > Monitoring and maintaining the quality of your portfolio is essential. > > >Again, seems to fly in the face of the "pay some active professional > investor to manage your money" logic :-) > > Not really. Some funds stand the test of time well. Others drift in > performance, for a number of reasons, including change in fund > manager. A good financial advisor will, among other things, pick good > funds for you, and maintain the quality of the portfolio, by weeding > out funds when they underperform. > Again, there is nothing called a "good financial advisor". Especially if said advisor is compensated on anything other than a flat fee. > > >> Sorry folks, for suddenly waking up and bellowing, but this topic I > seem to have acquired a little knowledge about. > > >As they say about "a little knowledge" :-) > > :-) Good one, Mahesh. At the risk of appearing immodest, what I meant > by a little knowledge was that we have been financial planners for the > last ten years, work with about 3000 customers of whom about a 1000 > pay us an annual fee for advice. > That in itself establishes nothing. I would imagine, with no rancor intended, that any other group of 3,000 people who went direct would have done as well or badly, and any 3,000 people who just bought the indices at a low or near-zero cost would have done better, after costs, over a long period of time.
