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Investment tracker (WITH FEES)
Jebus314
Registered User regular
Registered User regular
I've inherited a decent chunk of investments and right now they are all in an actively managed brokerage account. My understanding is that in an actively managed brokerage account they are typically more involved with watching my investments and giving advice, which I pay for in terms of commissions whenever I trade. Typically these commissions are rather large compared to ordinary trading fees ($200-$400 depending on how large the transaction is). The flip side is that I can supposedly ignore my investments and they will make sure everything is going well.
What I would like to do is start tracking how my investments are doing with an emphasis on whether or not I am coming out ahead by following their advice. So basically, assuming they recommend I sell some stock and buy a different one, if I look at it a year later, did the new stock out grow the old stuck by more than I paid in comission fees? So i need some way to track the investments I currently have, the investments I used to have, and any fees associated with my account. Does this type of thing exist? I know my brokerage account has all of that information individually but I'd rather not have to dig it all up myself.
Also, I guess if anyone has any background on actively managed accounts and whether or not they are generally a good deal that would also be helpful. As it is, my broker seems to suggest one trade every year or so, which seems like a good balance between he's just trading my shit to get more commissions and he doesn't even remember I'm a customer.
What I would like to do is start tracking how my investments are doing with an emphasis on whether or not I am coming out ahead by following their advice. So basically, assuming they recommend I sell some stock and buy a different one, if I look at it a year later, did the new stock out grow the old stuck by more than I paid in comission fees? So i need some way to track the investments I currently have, the investments I used to have, and any fees associated with my account. Does this type of thing exist? I know my brokerage account has all of that information individually but I'd rather not have to dig it all up myself.
Also, I guess if anyone has any background on actively managed accounts and whether or not they are generally a good deal that would also be helpful. As it is, my broker seems to suggest one trade every year or so, which seems like a good balance between he's just trading my shit to get more commissions and he doesn't even remember I'm a customer.
"The world is a mess, and I just need to rule it" - Dr Horrible
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When I was a kid, there were places that let you set up fake portfolios and track the returns, but I'm not sure how flexible those are. I also think most brokerages have tools to let you "test" transactions over historical data, too. Maybe someone has one out there that account for fees, but I don't know. If you know the fee you paid (and you should), it should be trivial to factor that into the difference you find, though.
I made a brief study of investment strategies back when I first got a job that paid enough for me to get past my student loans. I'm a smart guy, but I don't have the level of expertise, interest, or time required to win the stock-picking game except by chance. That leaves two options--either pay someone else to play that game for me, or don't play it at all and allocate passively among asset classes and sub-classes via index funds. The latter strategy is what I chose and is known as "asset allocation".
I am reasonably convinced that the average brokerage firm is no better at "predicting" the stock market than random chance, which makes the overhead they charge for the service a pure loss from my perspective. This is consistent with the observation that, if a particular investment manager really could predict the market to any meaningful degree (and knew that he could), he'd invest his own money that way and be a billionaire in short order.
Besides, even if those special geniuses do exist, there's no way for someone in my position to identify them before they become the Warren Buffets of the world. Choosing randomly from investment managers of uncertain quality is therefore no less a gamble than choosing stocks. I could, hypothetically, choose a manager who I believe is following a superior investment strategy (such as value investing) but I've yet to be convinced that there's enough of an advantage there to be worth eating the extra costs of an actively-managed fund.
The book I usually pimp in these threads is The Intelligent Asset Allocator, but if you're new there are others you may want to read first (The Intelligent Investor is a good read, as is A Random Walk Down Wall Street, although they have different perspectives).
Equities and options are pretty easy to track returns on. Other stuff isn't so easy.
And if it's an actively managed fund, you're probably paying a set percentage of returns out as fees also. You need to get all of this info from the fund itself. And find out if there are any redemption restrictions.
It sounds more like this is an investment account containing individual stocks and shares.
I made a game, it has penguins in it. It's pay what you like on Gumroad.
Currently Ebaying Nothing at all but I might do in the future.
Yeah it's just a brokerage account with 5 or 6 stocks and a mutual funds. Basically at this point I think I have intel, colgate, ford, at&t, gen mills, honeywell internation, and a mutual fund.
As far as I can tell there's no fees associated with returns or dividends or anything like that. I nominally pay like $60 per year or something for the account, but that gets waived so long as I maintain my balance above a certain threshold. The only other fee I see is that any trades I make on the recommendation of my broker are charged like 0.5% commission or something like that. At anyrate for a 5K trade it works out to around a few hundred dollars.
At this point I know basically nothing about investing other than always max out any tax free contributions or retirement matching plans that you can afford. Obviously keeping in mind the need for liquidity for stuff like future down payments on a house. Although now a days I thought you could withdraw money from an IRA or retirement plan to buy a house without having to pay a fee, but whatever. I will definitely check out some of the aforementioned books.
Again I don't really know anything, but the one thing I've heard is that when you're young (I'm 26), you should be more heavily risk based (so stocks basically) because you have a long time frame to rebuild in case something like the housing bubble happens, or you just pick wrong.
@CycloneRanger, I've heard a little bit about things like index funds and I'm wondering what your experiences have been so far. One thing I like about my current setup is that someone is at least supposedly keeping an eye on things for me, so if some huge news comes down the pipe about ford and it's likely their stock is going to tank, supposedly I will get a heads up even if I am not all over ford news and wouldn't know what I was looking for even if I was. But maybe that's not so important if you just roll index funds.
Also I've been running on the assumption that whilst professional investors don't typically dominate the market, they also tend to not completely fail either, which is a real possibility for random dude picking stocks of companies he likes. So if an investor can reliably maintain pace with the market do you lose more in fund fees or trading commissions? These are things I don't know.
http://www.businessinsider.com/index-funds-beat-actively-managed-funds-2013-6
How does that compare to brokerage accounts though? My understanding is that actively managed funds will typically have higher associated fees then having a regular brokerage account where a broker well help you decide which stocks to invest in. So index funds are better than actively managed funds, but how does owning individual stocks factor in?
Yeah it looks like this may be my best bet, but I was just sort of hoping there was a program that could automatically grab stuff like current market prices, where I could input any associated fees and it would bring it all together to show me my historical acheivements. Just for ease of use. But it sounds like this isn't that common so back to excel it is.
Depending how much of the money is in the 5-or-6 stocks and how much is in the mutual fund you could be playing a dangerous game. I'll try and find the papers so you know I'm not bullshitting on this but with that few stocks you are highly reliant on the individual companies performance, and as such, highly reliant on your broker's picking skills. Even if those shares are in big, solid companies then you are taking on extra risk, if one of them turns out to be an Enron then you could see a significant portion of your wealth vanish in a puff of smoke.
If you had 15ish stocks spread across different sectors (this is where I need to find the papers to back up what I'm saying) then you would get approximately the same exposure to the stock market as buying an all-share index fund, but with higher volatility as you have fewer individual components making up your "fund".
If your major investment in the account is the mutual fund and the 5-to-6 stocks are minor addons then I wouldn't be too worried, especially if the mutual fund is a nice, low commission all share index fund. It could be that the broker is value-investing for you, spotting undervalued, unsexy companies that he thinks will make a good long term return - given that he's performing 1 buy sell a year I wouldn't be surprised at all if that was the case as the hall-mark of value investing is long term buy and hold.
However if the 5-to-6 shares are making up a large portion of the portfolio then that would make me rather nervous and I would want to sell then and instead put my money in a passive all-share tracker. So that would keep you in equities, but doesn't rely on the performance of a specific half dozen companies.
I made a game, it has penguins in it. It's pay what you like on Gumroad.
Currently Ebaying Nothing at all but I might do in the future.
In my opinion the main benefit to having an active portfolio manager is not consistently beating the market, but that you don't have to mind it or make decisions on it. You don't need to have a strategy (other than initially explaining to him what your goals are, appetite for risk, need for liquidity, and if any of those things change), you don't need to try to interpret anything, and you aren't in a position to do anything rash out of fear or people talking up things on the telly.