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It was " fun ", as in, human contact. The human element commands a premium. I can envision a U. S. economy where personal service or connections are the only thing that is not a commodity.
In that regard, charging for it is okay. In fact, someone here said they try to limit (commission) charges to not exceed the state sales tax rate, I think that's interesting.
Anyway, thanks for the perspective. I think I'll continue to focus on TIPS for non correlated " fixed " right now.
By the way, I think you will be hard pressed to find an ETF to beat Oppenheimer Rochester National Muni. I guess you would say it will fall soon. What do you think?
[quote=Bobby Hull][quote=AllREIT] [quote=razeurgame]
I'm with you, blarm.
Allreit, you got the fund right. Don't understand why a bigger hunk is better than a smaller hunk of it, alongside a blarm - like strategy. [/quote]
Because if you want diversification you need a big portion of it to offset larger equity postions, since that fund isn't very volatile.
[quote]I think bonds (strategic income) are an example of at least the potential for added value through active management, when you consider that the only really big idea that can be added to asset allocation is the idea of pushing the allocations a little, based on what we expect of the market.[/quote]
Which assumes that people have any hope of doing that. On the whole active management has a bad record picking stocks, which suggests an equally bad record picking and shifting asset classes.
You're basicly assuming that Fidelity can time the market for you.
[quote]Not even saying that management will beat the index, but, its " fun " and provides a broad field for client service and education.[/quote]
You want fun and gambling? go to vegas. They give you free drinks. The most fidelity will give you are glossy anual reports.
[quote]Usually we say active management can add value more in international and small cap ( no question about the potential to add value through security selection), and I would add bonds to that list right now, given where we are in the economic cycle, and specifically, total return type bond funds.[/quote]
The evidence for active management adding value, (at the retail fund level) is very poor. Both international and small cap markets are probably more effecient than in the past owing to greater interest in those sectors.
[quote]Just my opinion, can't prove it, frankly don't want to, as I enjoy talking to my clients about the strategy, which is likely no worse than alternatives, regarding the fixed portion of the portfolio.
A recession combined with tighter credit conditions is going to hammer that fund.
1. Meltdown in the junk loan market.
2. Drop in commodities prices due to lower aggregate demand.
3. Tighter credit conditions reduce the profits /impair assets of the mortgage reits.
If you want the diversification of real returns then buy the Fidelity Inflation protected securities fund.
The other moving parts of the Real Return fund are just flash and noise.
BTW I'm very impressed that you are honest enough to admit that you make investment decisions for subjective reasons include percived fun of ownership. Most people won't admit that.
Spoken like a troll that wants to draw attention to itself, ironically because it has a really tiny penis.
[quote=AllREIT] On the whole active management has a bad record picking stocks, which suggests an equally bad record picking and shifting asset classes.
On the whole (if I had to guess) Americans are female, white, have brown hair, are aged 40ish, stand about 5'6" and weigh 145 lbs. Now look around you, how many people do you see that very from that?
Now you have an understanding of how misleading the word "average" (a proxy for "on the whole") can be.
Good point, Mike. The problem is, at the firm level, (at least one that I know but will not disclose for confidentiality, but I'm sure others can confirm this fact must be true at other firms), if only a minority of advisors are outperforming, which is the case, then this becomes a lightning rod for the regulators, in the case of wrap account performance.
The solution is to make sure that clients are paying for advice and service, not performance. Maybe a separate planning fee, with a lower wrap fee, for example.
In any case, why not move the discussion from performance to the value and cost of personal advice and service?
Having said that, a lot of advisors, maybe not you, would be better off using index vehicles and focusing on (improving) the quality of advice and service.
No need to focus on performance, because your clients want you, not Allreit, and they know what you are worth.
[quote]By the way, I think you will be hard pressed to find an ETF
to beat Oppenheimer Rochester National Muni. I guess you would say it
will fall soon. What do you think?[/quote]
The excess return in Junk Muni's is quickly vanishing because so much capital is being applied to that sector.
There isn't a huge supply of junk muni's to begin with, since most muni's are high investment grade/insured to begin with. ORNAX is full of things like Airport revenue bonds and Tobacco securitisations.