I am invested in fixed income funds as well as equity funds. My broker rebalances my portfolio once a year.?

Question

This rebalancing occurs in December of each year. I also have an amount in a cash account with this financial advisor. With my equity fund balance being steadily eroded in this current market, should I ask that everything be placed in cash and fixed income until the roller coaster subsides -- or, should I just wait it out? How flexible are financial advisors about doing a mid-year rebalance if you contractually agreed to a once a year rebalance? Since I'm a neophyte, will I lose additional money if the current equities are sold at a deflated price in order to be moved into cash or fixed income? Is this

a reasonable request, or will I incur additional fees -- I currently pay on a quarterly basis the total of 1.5% of my portfolio annually.

Answer 1

In regards to additional fees, you need to ask your advisor about that.

In regards to your portfolio, you really need to read up and learn about investing so you can be informed about the market and take control of your own finances, such as, no-load mutual funds.

Personally, I wouldn't pay anyone to manage my money.

What's your rate of return with your advisor?

Answer 2

1.5% a year + the internal fees of the Mutual Funds. That's costly!

You're paying a ridiculous fee to have your money managed... yet you want to manage it????? What's wrong with this picture?

Two suggestions;

Keep your current asset allocation. It was based on a long term view.

Learn about "asset allocation"  and Mutual Funds.  Over your lifetime it will save you a ton of money.

Read;

Mutual Funds For Dummy's & other good books.

SPECIAL NOTE:  If you take money out of a good asset allocation..... you'll never know when to get back in. These people that say wait for the market to get better are just simply ignorant on how it works.

Answer 3

You are getting screwed .

    Did your broker get rich in the market - no

      Buy no load  funds

       Buy value funds

       Vanguard  for  income funds

         GuruFocus.com for the best  value gurus

Answer 4

First of all why do you have a broker? You don't need a broker or financial advisor in this day in age. It's called www.fidelity.com. Set up a portfolio and switch to etf's and mutual funds like vanguard, proshares, powershares, etc. Do research for yourself, in my opinion using a broker will be extinct within the next 10 years. You should already have been in cash 6 months ago pal, the market is down to 11,600 and is struggling. I think you need to re-evaluate where your money is being focused on in a volatile market like this one. Cash is king.

Answer 5

Your broker is not serving you well - he is feeding at the trough off your money.  1.5% a year (that is on top of the mutual funds' internal fees) is outrageous.  Switch to no-load mutual funds and do your own "rebalancing."

Answer 6

You are paying double for fund management--one for your broker, and another one for the fixed income and equity funds.

If you are going to close your equity fund, you are going to lock in the losses in that portfolio. You can ask your broker what were his/her reasons for opening positions for you in the quity fund. It could be that they chose those positions for a good reason, dividends perhaps? If they opened those equity positions speculating that their stock price will go up... I guess they were wrong about it.

To close your positions in the equity fund means that you are going to lock in those losses. Keeping them open, their value might go down some more. But these stocks are yours. In time, who knows when, their value might go up again.

I myself am a fund manager, but I encourage my clients to have more than one. Find one who accepts pay for performance--that is, if your portfolio does not make money under their management, then they don't get paid.

Again, always consult first with an independent financial advisor before you invest.

Hope this helps!

Jim http://homeruntrades.blogspot.com