Consumer debt payment to income ratios & housing inventory to sales ratios

**disneysteve** · 05-16-2009, 06:18 PM

I would get a new financial advisor. What possible reasoning does he give for advising a 42-year-old to put over 80% of his retirement money into bonds? Unless you already have a substantial retirement portfolio that is heavy on stocks, I'd say this is lousy advice.

**swanson719** · 05-17-2009, 12:24 PM

Think of it like this. You have Item A on sale for 30% off for the first time in 30 years. Item B usually pays about 4-5%, but right now is paying 1 or 2%, so it's only paying half of it's norm. Instead of buying Item A at 30% off, you're buying Item B that's paying half of normal. Fire your financial adviser.

What your financial guy is telling you is that you shouldn't buy into the stock market until the economy starts to recover. Completely bogus. If I woke up in your shoes, I would be buying aggressive growth stock mutual funds like it was going out of style and be a silent partner/investor in established house renovation companies. Stocks are down, way down, right now. They might come back, they might go down some more. The housing market isn't going to go down much more. You could buy some investment properties from HUD and fix them up yourself, or be a silent partner, which is easier, and you get paid just as much. But to buy bonds right now when you have 20 years until you retire is just stupid. There's no difference between that and putting your money in a simple savings account at your local bank.

**rerod** · 05-17-2009, 05:14 PM

Thanks Guys.

This is my adviser.. www.stevensoninvestments.com

My 403b is 40% bonds and is worth 1/4 of what I have inherited.

I like to lurk the morningstar forums and have found most of the respected users there feel this recent market rally is just that. A short lived rally. We still haven't seen the bottom yet. And after finding info like this..
Dohmen Capital Research Institute
I tend to agree with them. Looks like Mr Stevenson also agrees.
I had the "buy and hold" mentality before this recession even though I KNEW the USA owed more than it was worth and stocks were overvalued. Now Im kicking myself for not transferring funds in my 403b retirement and losing almost 20% of my kids education funds. Yet I still hold even though the education funds are needed sooner. I feel like a idiot.

I dont want to feel this way about my moms money. She sold her stocks before the recession and urged me to do the same. But it was her decision to sell and not Mr Stevenson. Im tempted to subscribe to Bert Dohmen's PRIVATE PORTFOLIOS.
Dohmen Capital Research Institute
I'm not the sharpest tool in the shed and have very little time. We are a one income family of four living off of 50K which forces me to do everything around the house. I cant afford to pay anyone to do anything because I don't borrow. My wife has no retirement money. One thing going for us is that I don't owe a thin dime. Sorry for the rant. I just want the best for my family and am nervous and don't know where to turn.

**disneysteve** · 05-17-2009, 05:53 PM

I'm very curious how much this guy is charging you for his advice.

**rerod** · 05-17-2009, 06:15 PM

His Mutual fund suggestions are free. He's made his money and said " he want to give it back"

When he feels its time for stocks the fee is .75% of the portfolio.

**disneysteve** · 05-18-2009, 04:45 AM

Originally posted by rerod View Post

His Mutual fund suggestions are free. He's made his money and said " he want to give it back"

When he feels its time for stocks the fee is .75% of the portfolio.

So you meet with this guy, he recommends no-load mutual funds from Vanguard and you pay him absolutely nothing? That doesn't sound right at all. What possible reason would there be for him to waste his valuable time with clients who aren't paying him a cent? If you do buy the funds he recommends, do you do it on your own or through an account with his firm? If it is through him, are you sure there isn't some added expense above what you would pay on your own?

As for the fee for stocks, why not stick with stock mutual funds and not lose 0.75% to the advisor? That's a big hit to take to your portfolio.

**Ima saver** · 05-18-2009, 07:32 AM

I agree with disneysteve. why not just buy Vanguard Index funds on your own and don't pay a financial advisor at all?

**feh** · 05-18-2009, 08:29 AM

Don't try to time the market. Stocks are very cheap right now. Is there a chance they'll drop again? Sure. But there's also a chance they won't.

**disneysteve** · 05-18-2009, 09:44 AM

I'm always baffled by how many people, including financial professionals, want to wait until AFTER the market has recovered before investing.

It is like swanson said. If you went to the store today and an item you wanted was on sale for 40% off, would you buy it or wait until the sale was over so that you could pay full price?

**Shane Watson** · 05-18-2009, 10:49 AM

How about your own competitive analysis on the matter? You already have a pension plan. Would it have a positive timely return comparing to the pension plan. If not, then you will be losing your safety net half.

**tripods68** · 05-18-2009, 11:29 AM

Do not hire this FA.

I agree with Steve:
Open a ROLLOVER IRA ((under your name) account through Vanguard directly. Buy NO LOAD funds through them instead. They also offer free advice.

**rerod** · 05-18-2009, 12:04 PM

Thanks everyone.

My 403b needs to remain at tiaa cref until I retire. The inheritance is in a local savings account for the moment but will go to vanguard soon.

Iv only heard good things about Stevenson from many close locals.
Im going to give Stevenson the reins for one year and see how he handles it.

I will let you know after a year what happened.

**disneysteve** · 05-18-2009, 12:23 PM

Originally posted by rerod View Post

The inheritance is in a local savings account for the moment but will go to vanguard soon.

Im going to give Stevenson the reins for one year and see how he handles it.

If you will be putting the money in Vanguard, what exactly does "give Stevenson the reins" mean? Will he be controlling your investments or just making advice which you then have to act on.

If he is just giving advice and truly not charging for his services, I wouldn't have a problem with seeing what he has to say. I would suggest posting his recommendations here before acting on them just to get a "second opinion" of sorts. I'm troubled by his advice to put 80% of this money into bonds given the current market conditions, but wait and see what happens.

**rerod** · 05-18-2009, 01:31 PM

He will be controlling my inheritance money. I could still make updates on what he did when he does.

Consumer debt payment to income ratios & housing inventory to sales ratios