Fifth Year - Edward Jones
Hello all,
Five years ago exactly this month, I came on here asking for opinions on leaving my managerial job and going into the securiites business, in particular with Edward Jones. This is the first time I've been back since February, 2004. I was basically told either no-way, or go with EJ just to gain some experience. I'm back to tell you all that I'm now a segment 4 broker with $27m in assets, and have earned six-figure salaries each of the past two years. I've been on all-expense trips to Hawaii, St. Thomas, Turks and Caicos and of course Disney World. This year is difficult for sure, but so far I'm averaging about $8k net per month. My assets were approaching $36m before the downturn, so there you go. I was advised in 2004 to start with AG Edwards! Gosh, what a change that would've been.... I suppose I'd be in Georgia working for Wells Fargo Securities about now. wp_fanDon’t you feel exploited? … Did they make you knock on doors and talk to prospects? … Did you have to go the regional meetings? … Did it bother you when EJ forced you to sell all Putnam funds? … Don’t you hate the color green?
love the post, very motivating
wp_fan:
New/new? GK1 or GK2 or are you that kid that I knew in my region that took over Dad's office?
Seriously though, Congratulations! Making it in this business regardless of what firm you are with is a job well done.
[quote=buyandhold]Don’t you feel exploited? … Did they make you knock on doors and talk to prospects? … Did you have to go the regional meetings? … Did it bother you when EJ forced you to sell all Putnam funds? … Don’t you hate the color green?
[/quote] 1. No - they told me I just needed 25 quality prospects a day. I don't suppose they cared how I got them as long as I didn't break any SEC rules. 2. I actually like to go to the regional meetings, since it's generally an all-expense paid trip to the beach! Even the one-day trips are to pretty nice places. 3. I was never forced to sell anything. The only Putnam's I sold were to people who transferred some in, and I was trying to get them a breakpoint and they were familiar. Just about $250k over 5 years. 4. No. I'm not a terribly independent soul, so I like to associate with something. So, yeah I do wear an occasional EJ tie or shirt. And, I drink my beer from a green EJ koozie - but they also make them in yellow, blue and orange I think. But, yeah it's been a pretty cool career move. I just wish all this volatility would stop. My previous industry is in turmoil as well, so it's all ok.[quote=jkl1v1n6]
wp_fan:
New/new? GK1 or GK2 or are you that kid that I knew in my region that took over Dad's office?
Seriously though, Congratulations! Making it in this business regardless of what firm you are with is a job well done.
[/quote] I took an office that had been opened by a new-new, just for six months or so. He had been an engineer and decided to go back. The assets were about $750,000 when I got there with about 27 clients. Since I had been working in my spare room, I thought that was huge! Now I've got about 375 households.Like I said. Congratulations! I would not have begrudged you if you HAD taken over dad’s office.
Awesome. Sounds like you had a very supportive region.
While I’m not directly accusing you of it, the post smacks a little of someone from the home office writing. From all of the people I know with all of the bad experiences with Jones and the “I just talked to 25 quality prospects a day”, sounds a little like the company line.
But if you earned it, congrats! Hats off! I go to write my daily 25 (minus 2) complaints.
Damn, I was punked!Awesome. Sounds like you had a very supportive region.
While I’m not directly accusing you of it, the post smacks a little of someone from the home office writing. From all of the people I know with all of the bad experiences with Jones and the “I just talked to 25 quality prospects a day”, sounds a little like the company line.
But if you earned it, congrats! Hats off! I go to write my daily 25 (minus 2) complaints.
WP Fan
Congrats, its not easy. However, I question if you will be singing the same tune 2 years from now if we have a flat or down market and you keep pushing the company line of "its a great time to buy". It works for a while, but pretty soon your clients might turn on you. When Jones rides BAC with a BUY down to 4, then decides to downgrade last week to a HOLD, your clients will not be happy. I know, I was sitting in Hawaii for a Div trip last week when the GP told us of the downgrade. You could hear a pin drop in the room from every FA who had sold BAC just the week before. If we were really Financial Advisors and not salesmen, we would have advised people last spring to move to money market for awhile. But that does not pad the GP's pockets, so we will never be told that.[quote=wp_fan][quote=buyandhold]Don’t you feel exploited? … Did they make you knock on doors and talk to prospects? … Did you have to go the regional meetings? … Did it bother you when EJ forced you to sell all Putnam funds? … Don’t you hate the color green?
[/quote] 1. No - they told me I just needed 25 quality prospects a day. I don't suppose they cared how I got them as long as I didn't break any SEC rules. 2. I actually like to go to the regional meetings, since it's generally an all-expense paid trip to the beach! Even the one-day trips are to pretty nice places. 3. I was never forced to sell anything. The only Putnam's I sold were to people who transferred some in, and I was trying to get them a breakpoint and they were familiar. Just about $250k over 5 years. 4. No. I'm not a terribly independent soul, so I like to associate with something. So, yeah I do wear an occasional EJ tie or shirt. And, I drink my beer from a green EJ koozie - but they also make them in yellow, blue and orange I think. But, yeah it's been a pretty cool career move. I just wish all this volatility would stop. My previous industry is in turmoil as well, so it's all ok.[/quote] So you have 27 million assets under management with 375 households. That's a great average of 72K per household. At about the 5th year where you are at you say that you have averaged over 100K per year, backing that out means at 38.5% avg payout means you are producing approximately 260k gross dollars. That's right at 1.00% velocity. That makes you a very dangerous broker as you have to be turning your book over quite often. I would guess a lot of mutual fund switches into A shares and upgrading a lot of older annuities into the Jones A shares. You can't be doing a lot of fixed income as it doesn't pay enough to keep your velocity up.Nice noggin - my first instinct was right - Home office troll.
Who actually says “Gosh” anyway?
1% is not even close to high velocity…let alone counting new assets coming in at higher comm levels.
The velocity is higher than 1% in the early years of your career, as new money will come in at higher commission levels. And don’t forget insurance.
Strange argument to be making that a broker netting 100k on 27 million is churning assets when he could be put everything in a fee based accounts and make more than that next year.
I'm in Georgia, and anyone wanting to call me is welcome. Put me a private message and I'll give you my cell number.
I sell about 40% in mutual funds, 15% in stocks and the remainder in managed accounts or bonds. I've been very focused on long term care and life insurance as well. I started out prospecting mostly small business owners, as there are about 2,000 in my county. A lot of those guys buy big policies. I wouldn't mind going the independent route, but like I said I'm not so much the independent type. I would like the money, but I don't want to be that far out on an island. I thought I said I made more than $100k, but if not that's what I meant. Really, I'm on here just because I was reflecting back to the same comments I heard five years ago...... I was worried then, but not so much now. I'll probably only check back a few more times b/c I certainly don't want to get "hooked" on this chat room.noggin - regardless of fact/fiction of wp fan. $27M today was likely $35M or more 12 months ago giving a “$100k net” producer closer to .75 bps for velocity (excluding insurance).
You're right Hulk. At the peak of last year, I had built up to about $36M and things seemed to be getting easy. Still, I can't comprehend all the negativity now, and in 2004. Maybe I'm in a good spot?noggin - regardless of fact/fiction of wp fan. $27M today was likely $35M or more 12 months ago giving a “$100k net” producer closer to .75 bps for velocity (excluding insurance).
So, 5 years up to $36 MM at the peak, so really that was at about 4.5 years, means he’s averaging about $9 million a year in either new assets or growth of existing assets. Not too shabby.
noggin - just because you couldn't make that kind of money in your Jones office doesn't mean you should assume that nobody can. wp - congrats on doing well at Jones. Keep gathering assets like that and you'll be up there with Rankstocks in AUM before you know it. These guys around here are negative on Jones for the following reasons: A) couldn't cut it at Jones, got let go and now are taking pot shots at their former employer B) had some differences of opinion in the management of the firm and assets of their region (take that as I didn't get anything from the guy down the street who left the firm) C) coming to grips with their own shortcomings and feel the need to place the blame in someone else's lap instead of taking responsibility for their own actions. or D) are generally nice guys, but have some philosophical differences with Jones and the way we manage money. These are the least negative of the group. The most negative are from either group A or C.congrats. bring in $9 million every year and you will be fine, no matter where you are.
I still think he’s a troll sent by the home office.
The rest of you guys still at Jones talk in general terms about your success, every now and then with a specific success story and are generally grateful for the Jones opportunity and happy the way you are. His sounds like the “recipe” repeated over and over in a way to reinforce to guys on the site who are struggling at Jones that it will get better for them.
Moraen-
Your screen name should be "Robopus." I think I speak for many Jones Alumni who think you'd be better off moving on. Your whineing and bitching is an embarassment to the rest of us. Jones is what it is, and the "Big Green Machine" isn't going to change. As I read your posts I get a vison of of a guy sitting in a crappy apartment working on a sixer of PBR, laptop on an old card table, toggling back and forth between this forum and youporn, bitterly reflecting on unmaterialized dreams and of doors, hundreds of them, knocked on with no real tangible outcome. It is time to go out and compete for Jones accounts belonging to your old coworkers. Go ACAT a nice account from some jackoff in your old region and you will sleep well that night. It is better than a sleeping pill. Friend, we've all been there, now it is time to put on your rally cap and move on. Your "top 25 lists" are pathetic. It is time to quit your whining and turn the page. You are uniquely qualified to go get some accounts from them. Do it, and the Jonesies will respect you. More importantly, live well and they will fear you. I'm not trying to be a jerk, I'm only posting as a public service.I put up an offer of anyone wanting to call me can send a PM; and still no one has. I'll also give you my town and you can look me up on the web. Edward Jones gets like 10k apps a month, so I doubt they worry about getting on a forum like this. I have said I'm sure an independent office would probably be better, just not for me. The thing I came back for is all the recommendations five years ago were to go to AG, or a big bank, and how it has luckily turned out that I didn't follow that advice. Edward Jones is still profitable while a lot of those are crumbling, or have crumbled.I still think he’s a troll sent by the home office.
The rest of you guys still at Jones talk in general terms about your success, every now and then with a specific success story and are generally grateful for the Jones opportunity and happy the way you are. His sounds like the “recipe” repeated over and over in a way to reinforce to guys on the site who are struggling at Jones that it will get better for them.
Ever see "Revenge of the Nerds" even Tri-Lambdas fit for some people and if they like it. Good for them.
[quote=Spaceman Spiff]
wp - congrats on doing well at Jones. Keep gathering assets like that and you'll be up there with Rankstocks in AUM before you know it. These guys around here are negative on Jones for the following reasons: A) couldn't cut it at Jones, got let go and now are taking pot shots at their former employer B) had some differences of opinion in the management of the firm and assets of their region (take that as I didn't get anything from the guy down the street who left the firm) C) coming to grips with their own shortcomings and feel the need to place the blame in someone else's lap instead of taking responsibility for their own actions. or D) are generally nice guys, but have some philosophical differences with Jones and the way we manage money. These are the least negative of the group. The most negative are from either group A or C. [/quote][quote=Soothsayer][quote=Spaceman Spiff]
wp - congrats on doing well at Jones. Keep gathering assets like that and you'll be up there with Rankstocks in AUM before you know it. These guys around here are negative on Jones for the following reasons: A) couldn't cut it at Jones, got let go and now are taking pot shots at their former employer B) had some differences of opinion in the management of the firm and assets of their region (take that as I didn't get anything from the guy down the street who left the firm) C) coming to grips with their own shortcomings and feel the need to place the blame in someone else's lap instead of taking responsibility for their own actions. or D) are generally nice guys, but have some philosophical differences with Jones and the way we manage money. These are the least negative of the group. The most negative are from either group A or C. [/quote] or E) After resigning from Jones after a successful run there including winning a trip in every eligible time period and being offered LP in 2003, the RL just couldn't let it go. Went so far as to say derogatory things about me, my wife, and even MY CHILDREN! Even wrote some of these things in the regional newsletter, wires to my former co-workers, and handwritten notes to some other brokers. Finally got the message that was out-of-bounds when it was brought to his attention by the Jones lawyers after being contacted by my lawyer. Up until that time, he had repeatedly denied ever doing such things. He was presented with the evidence, and then refused to apologize. He's still a RL at Edward Jones today. [/quote] sounds like an A$$hole. blame the guy, not the company. From the sound of it...you should sue the guy. I don't know...defamation of character...libel....whatever...if he was stupid enough to document the things you're saying, he deserves to be sued. RL's probably got some money too!I understand why you might think that way...and the truth is you're not wrong. But the reality is that every company has their share of d|ckhe&ds that simply know how to manipulate interoffice politics in their favor. Absolutely doesn't justify it, but that's life. So to answer your question, "What kind of a company would have such a person in a General Partnership role, and not seriously punish, reprimand, or censure them for such behavior?"...every company. I may be new to this field, and new to EJ, but I'm not new to the corporate world, not even the world of LLP's. Unless you're working for yourself, there's always the chance that you might piss off some prick who obsesses about hurting you and gets away with trite, juvenile behavior like this piece of crap your referring to. So far, my experience with Jones has been nothing but positive. I'm optimistic that it will continue to be that way, but in the end....it doesn't matter. I made the choice to work here...if I'm subsequently sh!tted on, I'll address it at that point...and not lightly. I don't like hearing that one of the GP's for my company has treated a former employee in such a manner, but I believe it's just as wrong for one to label an entire organization of 35K employees based on one maladjusted individual.What kind of a company would have such a person in a General Partnership role, and not seriously punish, reprimand, or censure them for such behavior? And, then, never get a formal apology from the company–just a luke-warm, milk-toasty one from their lawyer.
I put up an offer of anyone wanting to call me can send a PM; and still no one has. I'll also give you my town and you can look me up on the web. Edward Jones gets like 10k apps a month, so I doubt they worry about getting on a forum like this. I have said I'm sure an independent office would probably be better, just not for me. The thing I came back for is all the recommendations five years ago were to go to AG, or a big bank, and how it has luckily turned out that I didn't follow that advice. Edward Jones is still profitable while a lot of those are crumbling, or have crumbled.[/quote] I don't care if he's a troll or not. Maybe he's the one in a hundred who has done everything right from day one. There are a few guys around like that though not many. Some are asset inheritors in disguise and others are bringing over books from other firms. The reality is a lot of people have worked their fannies off and their businesses are still at risk in this horrible bear market. Jones gets 10K applications a month?? I have to tip my hat to their marketing efforts. The caveat is that this is a great job if you make it and very few people make it. All firms downplay the risks of the job. They all downplay the cronyism and nepotism too.[quote=Moraen]I still think he’s a troll sent by the home office.
The rest of you guys still at Jones talk in general terms about your success, every now and then with a specific success story and are generally grateful for the Jones opportunity and happy the way you are. His sounds like the “recipe” repeated over and over in a way to reinforce to guys on the site who are struggling at Jones that it will get better for them.
DB - very nice. I appreciate the pep talk. But really I think you’d be surprised by my business and how much I’ve taken from Jones since I left. I designed a business model to specifically target Jones’ weaknesses before I left. I’ve also set myself up to take Jones brokers (and not ones who are failing). I recently hired two Green alumni so we can crowd around my old card table on my laptop and think of ways to kill Jones (the visual was hilarious by the way).
But I will not stand by while you denigrate PBR - PBR got me though grad school!
You may not realize this Moraen but 85% of your posts involve you accusing someone of being a troll. it may be more fun for you on here if you actually read posts and contribute to conversations. troll troll troll loser troll troll troll it gets old after a while, thats all i'm sayingI still think he’s a troll sent by the home office.
The rest of you guys still at Jones talk in general terms about your success, every now and then with a specific success story and are generally grateful for the Jones opportunity and happy the way you are. His sounds like the “recipe” repeated over and over in a way to reinforce to guys on the site who are struggling at Jones that it will get better for them.
You may not realize this Moraen but 85% of your posts involve you accusing someone of being a troll.[quote=Moraen]I still think he’s a troll sent by the home office. The rest of you guys still at Jones talk in general terms about your success, every now and then with a specific success story and are generally grateful for the Jones opportunity and happy the way you are. His sounds like the “recipe” repeated over and over in a way to reinforce to guys on the site who are struggling at Jones that it will get better for them.
it may be more fun for you on here if you actually read posts and contribute to conversations.
troll
troll
troll
loser
troll
troll
troll
it gets old after a while, thats all i’m saying[/quote]
Proof? I have 98 posts, including this one, which means that approximately 83 of my posts would have had to include the word troll.
By my calculations, I only have accused one person of being a troll, and I’ve only done that twice. That would mean that I actually only accuse someone of being a troll approximately 2% of the time.
I could be wrong though.
count the number of posts you used the word troll in.
to my calculation 73 or your 98 posts say "troll" at least 17 times. the other 25 posts only say it 16 or less.are you an advisor? do they not require basic math skills at your firm?
or counting skills? unless you are counting when people reply to me, I have only used the word troll 2 times. how about you use that thing in the upper right called the "search button". type in troll, see what pops up. you're a moron. i haven't used that yet, but I must be accusing someone of being a moron 47% of the time. get a new hobby, this one's not working for you!I side with Moraen on this.
There are a lot of trolls out on these boards. Troll posts are easy to identify when
you see them. They usually spout the company line.
It’s interesting that brokers, for a group of free thinking capitalists, don’t like dissent
very much. It’s like the old Soviet Union where their parliament used to pass resolutions
with a unanimous vote. They called that “the party line”.
All firms have a party line. I know it’s foolish to fight the firm. I try not to. People who
benefit from the party line like asset inheritors are less likely to question the party line.
At Jones the “party line” is particularly strong and thick like a thick blanket of broker political
correctness. Free speech is good for all of us - especially large firms who are cutting jobs
left and right and pretending like they’re above question.
I think Merrill handles adversity better than Jones. Merrill calls a layoff a layoff. At Merrill a pion is
a pion. At Merrill you know where you stand in the pecking order with out the phony self righteousness.
Jones is a great firm but they like to sugar coat the truth a bit.
What’s happening to a lot of Segment 2 and 3 guys right now is like taking a rat turd, spray painting it pink, and saying “it’s tasty”.
Moraen and Sword,
you're not wrong. There are a ton of people on here quoting the Jones rhetoric right out of the book. I really don't think that automatically makes them trolls. I think it just makes them "new". You have to remember, the first year your at Jones, its Koolaid 3 meals a day. They're still caught up in how great everything appears to be. They quote they're recruiting talking points and spout off about 25 a day. It does get old, but only because people with no real experience try to tell you how everything is going to be better, and all you need to do is make 25 a day. Meanwhile, they're at starbucks studying for their 7. Maybe your right morean, some of these people may be trolls. I guess my only point is... who cares. Let em' type away.I agree. The majority of Jones people on here are newbs. The newbs are just (mostly) young and overzealous. Many have not been around the workforce long enough to understand that things are not always “as they seem”, and that most good companies want to enstill some level of pride or whatever in their employees. I can’t fault Jones for that. It’s just good business. But it’s probably best that newbs DO have pride in their firm early on, especially in this industry. This is a tough business, and you need something to latch onto during the tough years to keep you going. If it’s pride in your firm, or even some false sense of security, if it helps you get through it, then great. Prior to this meltdown, I would say most wirehouse advisors had pride in their firms, especially the Morgans and Merrill’s of the world.
I’ve got to agree with you B24, I think new people just want to feel like they’re a part of something. They’ll come around.
[quote=UNDERMINDED]I’ve got to agree with you B24, I think new people just want to feel like they’re a part of something. They’ll come around.[/quote]
You just hit in on the head! Were I at Ed Jones… I’d want to be ‘part of something’ too!
Really the troll stuff was just trying to be funny. I think it’s unlikely that Jones would hire a public relations person to come on here and use GP money to talk up the great things at Edward Jones. Old boy sounds like he’s doing well for himself, and he has managed to either weather the environment without resenting it, or he’s got an entirely different environment than some of us had to deal with at Jones.
yeah, I think its all in what you make of it. Unfortuneatly crappy RL’s can put a clamp on that if you get stuck with a bad one. My opinion, stay as far away from the koolaid as possible and Jones can be a fine place to work.
I gotta go to work for Ed, those guys never fail to amuse me. I thought I could wear a UPS uniform when I did my door-knocking, see how that goes over.
-
Did you just say index funds - are you really a “wealth manager”? I’m no fan of Jones, but don’t pretend you are some great wealth manager by pushing index funds.
As for training - I agree with you. But I don’t think you are thinking “outside of the box” with index funds.
Why not sell actual products that actually produce results? Wait, those are called index funds, and EDJ brokers would never advocate those because they do not pay commissions.
Index funds "actually produce results?" Really?! How about the grandaddy of all index funds.
(per morningstar 1-31-2009)
Vanguard 500 Index Admiral
Total Returns
1 yr: -38.58 3 yr: -11.78 5 yr: -4.26 10 yr: -2.67
Rank: 47 38 44 53
Over the last decade VFIAX has been essentially at the 50 percentile. It's beaten half of the funds in its category and lost to half.
After the extensive "peeling back of the layers" that you apparently do. I am in complete agreement with you and will now completely switch to no load index funds. They are without a doubt the best option available for everyone in every circumstnace. Thank you, my friend, for showing the light.
I love to hear you geniuses out there (with the exception of ice) spout off in a time like this about your index funds. Before you come to a group of advisors and tell them they’re not thinking outside the box by selling mutual funds, you might want to consider the evidence of your claims. I could have beaten the majority of the major indexes out there with one symbol. AIVSX. And I don’t really like that fund.
Anyway, on to other misconceptions you have. First, that Jones folks don't use indexes. I do. With certain clients. My analytical types (like ice) tend to like the concept of pure asset allocation inside a fee based relationship. I know of quite a few others that think the same way I do. Now, I will give you that most of us use traditional inside the box mutual funds more than indexes. Funds like CWGIX, ITHAX, HFMCX, and others lead me to believe that there are some money managers out there than have and will continue to put a process in place to outperform the indexes over the long run. Are there some that haven't and won't. Yep. If one of the funds I am currently using turns into one of those, I'm certainly going to find a different money manager. That's why my clients work with me. And from a long term cost perspective, I'll still be cheaper than your wrapped index portfolio will be. Now, you can argue internal trading costs all day long, but the client never sees them. So, they're kind of a moot point. BTW, if I wanted to do indexes outside of a fee based account, I can buy ETFs all day long. AND I GET PAID ON THEM! Are you suprised? Or just stupid?The other thing that some people miss is that a lot of the “go anywhere” funds, or “Global Allocation” funds (i.e. Capital Income Builder, First Eagle Global, Blackrock Global, Ivy Asset Strategy, etc.) are not built to compete against any index in particular. They beat the indexes that Morningstar compares them to, but to be fair, those are not even relevant. The best you can do is to compare them to their peers, possibly “World Allocation” funds. But even that is not a good comparison, because they all use different strategies.
Basically, these funds will underperform indexes in good equity years, and outperform in bad equity years. But over time, the COMPOUND returns (that is, not the mean of the annual returns) will outperform most of the relative indexes. This is basically because these type of funds protect more of the downside than index funds do (for obvious reasons), so they don't need the outrageous returns in the "rebound" years to outperform. HOWEVER, if you are good at asset allocation, and know which indexes to be in, and when to get in and out, there is nothing wrong with using indexes. But if you just pick a few index funds and leave them there, you are probably in for some hurt in years like we just had. I just prefer to have good managers decide where/when the best opportunities are. This is where I dislike the "minimalist" approach that says "buy Vanguard Total Stock market, Vanguard Total Bond Market, and Vanguard International whatever index and leave them alone forever". You end up getting crushed in bad years, and won't make up for it enough in good years. And an extra 1% in fees or expenses isn't going to make a difference when you are down 45%, and the actively managed portfolio I use is down 25-30%. I use very few "pure" style funds (except small cap and certain bond funds).I think B24 brings up a good point in regards to comparison vs an index… and also does it really matter when you are down 20-50%…not really… I love the new guys hindsight 20/20 pitch… that will work real well until the next market that is different…
I don't think clients really care about beating the index(unless that was your pitch) as long as you are decreasing their risk and allowing them to enjoy the lifestyle that they want.. I used to run an office with a broker who sold on "I can triple your money in 10 years.. but he used every high risk fund there was... wish I cared enough to call him and see how he is doing now... CGM, Fidelity Latin America... You name the high flying fund of late and he had it... I think clients who have a decent portfolio are looking for less volatility less risk and a decent return(not market shattering)... I am not sure what is better active vs index.. index vs quant funds... etc... So i pick the ones I like from each and create a nice little portfolio... A couple active managed funds.. and etf index strategy(run by someone else who has the time to move the assets around) a couple of uits, some alternative stuff.. and that's the ball game...[quote=B24]The other thing that some people miss is that a lot of the “go anywhere” funds, or “Global Allocation” funds (i.e. Capital Income Builder, First Eagle Global, Blackrock Global, Ivy Asset Strategy, etc.) are not built to compete against any index in particular. They beat the indexes that Morningstar compares them to, but to be fair, those are not even relevant. The best you can do is to compare them to their peers, possibly “World Allocation” funds. But even that is not a good comparison, because they all use different strategies.
Basically, these funds will underperform indexes in good equity years, and outperform in bad equity years. But over time, the COMPOUND returns (that is, not the mean of the annual returns) will outperform most of the relative indexes. This is basically because these type of funds protect more of the downside than index funds do (for obvious reasons), so they don't need the outrageous returns in the "rebound" years to outperform. HOWEVER, if you are good at asset allocation, and know which indexes to be in, and when to get in and out, there is nothing wrong with using indexes. But if you just pick a few index funds and leave them there, you are probably in for some hurt in years like we just had. I just prefer to have good managers decide where/when the best opportunities are. This is where I dislike the "minimalist" approach that says "buy Vanguard Total Stock market, Vanguard Total Bond Market, and Vanguard International whatever index and leave them alone forever". You end up getting crushed in bad years, and won't make up for it enough in good years. And an extra 1% in fees or expenses isn't going to make a difference when you are down 45%, and the actively managed portfolio I use is down 25-30%. I use very few "pure" style funds (except small cap and certain bond funds).[/quote] B24, Not sure using Cap Inc Bldr in the current bear market is the best one to make your case. Now if it was 2003 and you were showing the past performance maybe. I'm just saying!Source URL:https://www.wealthmanagement.com/forums/whats-firms/fifth-year-edward-jones