Navigating Investment Losses And Finding The Right Advisor: My Personal Story
Join me on my personal journey through investment challenges, exploring my decisions, advisor interactions, and the shift towards more suited investment strategies for my goals and risk tolerance.
Morgan Barrons
Nov 01, 2023
When I started investing, I had $1.5 million, but to my dismay, it dwindled to $1.3 million, marking a 14% drawdown. This loss made me question my investment strategy, which was heavily equity-focused and ill-timed at the market's peak.
I had an Ameriprise advisor, but at a 200 basis points (bps) fee, I started questioning the value I was getting.Such fees are high even for Separately Managed Accounts (SMAs). I expected personalized services like individual stock selection and tax harvesting, but I wasn't fully utilizing them.
In my conversations with the advisor, I realized the importance of aligning investment strategies with my goals. I wanted to retire in 14 years, so a blend of 40-55% US equities, 20-35% international equities, and 15-30% bonds was recommended. However, I was more inclined towards capital preservation, which required a different approach.
Exploring other options, I considered robo-advisors and target date funds for lower fees and efficiency. I looked into a Fidelity target date fund (Fidelity Fund) as an example, noting its performance over the past three years.
Given the current high interest rate environment, a fixed income-focused portfolio seemed more appealing for my risk-averse nature. I also realized the value of seeking recommendations from friends and family and exploring local RIAs for more personalized services.
“„Through this journey, I learned that understanding your investment needs, risk tolerance, and the value derived from advisory services is crucial. Sometimes, self-directing investmentsor opting for simpler, cost-effective solutions like robo-advisors could be the smarter choice.