debt debs

Personal Debt Wrangler – Had my money head in the sand – but no more!

http://commons.wikimedia.org/wiki/File%3ADavid_Letterman_2.jpg

Top Ten List – What I Don’t Like About My Investments

31 Comments

top-ten-things-I-don't-like-about-my-investments

By Chairman of the Joint Chiefs of Staff from Washington D.C, United States (110613-N-TT977-230) [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

From the personal finance information I’ve been reading (including many great blogs out there!), the importance of balance in your financial strategies cannot be stressed enough.

What do I mean by this?  Balance in debt repayment and investment savings for long term needs (retirement) to obtain the advantage of compounded growth.

In my travels (around the internet), I realize that I need to do more about ensuring our investment portfolio gets attention and not just our debt.  My head is not quite there (yet) because when I look at the stock market I get confused about yields and price-earnings ratios, and ex-dividend dates and common-law dividend dates… ah er… well you now understand my point.

So my former self would run and bury her head in the sand so she could ignore it.  I’ve perfected burying.  I have red scratchy eyes because of all the sand in them, but I claim the prize for ignoring bells and whistles (Note to self:  Blog about all the red flags I ignored over the years).

icon

But with the motivation of some recent reads, I decide to start to really analyze my net worth, not just update it on my spreadsheet.  I’m gearing myself up to doing a Net Worth disclosure,  even, on Rockstar Finance.

These blogs gave me something to think about, as I work up my courage for Net Worth divulsion (egad that word sounds scary right there):

Debt Discipline – Net Worth Update: February – Brian shamelessly blogs his family’s NW, so what can’t I?

Cashville Skyline – Quarter 1 Update: My First Net Worth Overshare – Addison acknowledges that sharing NW is personal and can be difficult but has decided to for the greater good.

Ree @ Escaping Dodge – My Crazy Method of Determining Property Values for Net Worth Calculations has me thinking about whether I should include my home in my net worth calculation or not.  Note to Canadian readers:  Zillow does not seem to be available for Canadian properties, so I found  www.realtor.ca would be the closest Canadian equivalent (or local city sites can usually be found).  These sites give current listings and may not be reflective of actual values.   Due to privacy laws, real estate agents are not supposed to disclose sale amounts of properties, so use listed amounts with caution.

Financial Samurai – How Much Should My Net Worth or Savings Be Based On Income? – I’m way far behind if I base my evaluation on my current income, however if I lower my living standards (which we have done in the last two years), then I’m not doing too badly.

So in homage to David Letterman who announced his retirement this week, some say because his net worth is declining (he’s worth $400 million and makes $20 million / year, but I think he suffers from what Financial Samurai calls ONE MORE YEAR SYNDROME since he’s not retiring, like, tomorrow),  here is the TOP TEN LIST of WHAT I DON’T LIKE ABOUT MY CURRENT INVESTMENT PORTFOLIO:

  1. I’ve got two losers in my portfolio, CAG and CPG.  (The fact that they both start with C and I am Canadian is purely coincidental)
  2. I don’t have the requisite 30% in low risk investments per Financial Samurai – Recommended Net Worth Allocation By Age And Work Experience (I need to calculate but I would estimate it’s around 10%)
  3. My portfolio is spread out between 4 different institutions (Hence the difficulty to calculate how much I have in low risk funds above.  It was worse, at 5, so I guess I’m making progress)
  4. My growth is not locked in.  (On my largest account, there is 48K of growth in market value which could disappear overnight in a free-fall market)
  5. I pay too much in investment fees. I paid $2574.97 last year on one account alone, and $849.23 on that same account first quarter this year.  That doesn’t include The Irishman’s account fees and other accounts.  I estimate that we pay between 6-7 grand per year on investment fees.  (Feels like paying a drug dealer for the small amount of work that he does for me).
  6. I have no clue how to interpret the P/E ratio when I look at a stock value. (It stands for Price / Earnings ratio but may as well mean Pimp / Escorts for all I can figure out).
  7. My investment advisor does not have a picture of my family on his desk (I have no idea why spell-check does not like advisor.  Does it want me to spell it the Canadian way? ADVISOUR)
  8. I have too many watch lists on my portfolio.  I’ve got Consolidated, Potentials, Hypothetical, Bad News, The Irishman’s Picks, IA Picks.  (OK, I realize you’ve got me on a technicality, because this isn’t my portfolio per se, but how I (try to) manage it.  Ya, it’s all that and a slice of loafed bread.  That’s how confused I make myself am)
  9. I have no stock in Coach, Mazda or Costco. (Products/Services I own or use, except in my case the first one would be COUCH)
  10. I don’t trade my own stocks. (Because I’m too chicken, due to #6 which results in #5)

 

So, there you have it.  This has helped me figure out what I want to focus on.  In preparing this list, it has also made me realize some good things about my investments but I’ll save that for another blog post.

Oh and for my Net Worth extravaganza … that’s coming too.  I think I’m becoming more confident about sharing.  I just need to wait for my stocks to go up some more get it together .  :D

Thanks for reading and sharing your thoughts too!
Oh, and again I’ve linked this post to @femmefrugality’s Financially Savvy Saturdays. Go check out some others participating in this blog hop for personal finance writers by clicking on the pic below. Enjoy!

Stapler Confessions

 

   

Author: debster

I am a fifty-something wife, mother and new grandmother, who admits to having their “head in the sand” about their financial situation until amassing $247,500 worth of consumer debt for a total debt of $393,500. We've paid $121K in 2 years with four more years to go. Join my journey at debtdebs.com sharing ideas and motivation to all those coping with poor money management and bad debt decisions.

31 thoughts on “Top Ten List – What I Don’t Like About My Investments

  1. No doubt that those fees can be a killer!

    • Yes they are! This is why I need to work my way up to financial savvy-ness like you James, so I can be my own broker and manage our portfolios ourselves.

  2. You cracked me up! But while I chuckled (mostly because I saw so much of myself in how you describe yourself) I was cheering you for posting this. It will help give other net-worth newbies the courage to take control of their wealth building by brushing the sand off and committing to learning how.

    The good news is that wealth is built over time and so baby steps are all that are needed to move the needle in the right direction. Try on a few new techniques, set a couple of goals, sell some stuff you don’t use, etc. Over time you figure out a method that works for you. Ta da!

    Thank you for sharing my post about how I carry my property value in my net worth. Good luck and I can’t wait to read your next post!

    Cheers,
    Ree

    • You’re welcome, Ree, I watched your video with great interest!

      I gotta have fun with this stuff. I’m glad you enjoyed it too.

  3. You know I have been focused on my debt purely, and I think it’s because I realized that I could be out of debt in a short period of time. The thought of creating an portfolio has not really crossed my mind, but after reading this maybe it’s time to give it some thought. Hey….ignorance is not bliss.

    • Hey Petrish

      Yes, probably good to get going sooner than later. It’s that magical compounding, you know. Like a slow simmered pot of spaghetti sauce … gets better with age. (We had spaghetti for dinner… prolly why I thought of this)

      I was so down on my debt because it is so large, that for me, looking at my net worth, actually picked me up a bit. But I still have a lot to learn since I don’t know much about investments and wonder if my portfolio is being managed as well as it could be.

  4. I look forward to seeing any information you’re willing to share about your networth. Although I enjoy seeing people giving out numbers, I’m not quite comfortable with that myself, so I’ve been sticking with percentages.

    Thank you for linking to other bloggers, I’ll be checking them out.

  5. Investments are totally overwhelming to me too! And when I was paying off debt, I barely thought about it at all – if you can’t bring in a higher interest rate in your investments than your debt is costing you, there’s no reason to even worry about it. That’s my 2 cents anyway.

    I actually found that playing around on wallstreetsurvivor.com was helpful at first. It lets you track things with fake money and it has some investing classes too.

    • Oh I’ll have to check that site out! I actually pretended to buy some stocks and track them on a watch list I call hypothetical. I wanted to see if I had the stomach to do some personal investing on my own. I quickly lost interest. I guess because I didn’t have real money in it. I may try with real money, but to get less than $30/trade fees, I need to have $50K to open a trading account with my bank. I looked into Questrade a bit but I think you needed to have similarly larger amounts invested to get reasonable per trade fees.

      • Wow, that’s a lot. You can access companies like Sharebuilder from where you are? I guess they don’t accept foreign bank accounts – you’re Canadian or English or something, aren’t you?

        • Canadian. Not sure what Sharebuilder is but there are many ways you can get a personal brokerage account and trade your own US or CDN stocks here. Either through a bank (CIBC Investor’s Edge, RBC Direct Investing, Scotia iTrade) or another online trading (Questrade, Virtual Brokers). When I do have some extra cash, I’m going to look into further to see what makes sense for me. I think I may be wrong about needing to have that much money for low fees on Questrade so maybe that is the way to go.

  6. I’ve never totaled my investment fees before. I imagine I will be appalled by the number, but it could lead to some interesting conversations the next time I visit my financial planner. I do commend you for really trying to analyze and understand what you own, so many people do not. I also don’t really understand P/E. I even was part of an investment club back when they were trendy and took a class on P/E. I got hung up on plotting the future growth of the stock – which I now know nobody knew how to do this accurately.

    As to disclosing your net worth, I once listened to an interview with career blogger Penelope Trunk who chastised a blogger when he wouldn’t disclose his salary. Something about how he would never be a successful blogger if he couldn’t write the truth about himself. Personally, I don’t think it matters that much. You could just write how far you are from your goal. BTW – I asked my financial planner if I could include the equity in my home in my total net worth. He said not too. That my home is where I live not an investment – of course not – I didn’t buy it from him.

    • Thanks SWG, I don’t feel so bad now. I’m not stupid but possibly it’s that it’s not that interesting, but since it’s my money I am interested… so you see the quandary.

  7. I use a set it and forget it strategy for my investments. Simple (and cheap) index funds have served me well.

    • I’m hearing a lot of good things about the index funds. Now is there such a thing as an index mutual fund or is it an indexed EFT or what? See this is where I get all confused. More homework required ;-)

      • I’m with Stefanie…I like index funds (I prefer Vanguard) because of their low cost and if you figure out the asset allocation that you’re comfortable with, you really can set it and forget it. I don’t know about Canada but there are Target Retirement Funds which might be something you can look into. Definitely no need to pay high fees! I’m no professional but I think the difference between index funds and etfs is that the index fund you purchase shares through your mutual fund company whereas etfs, you purchase through a brokerage like stocks. There are other differences too…

        • Thanks Andrew and thanks for stopping by!

          Good to know…

          So I think what you’re saying is Index Funds = bunch of Mutual Funds put together into one Index fund.

          ETFs = bunch of stocks.

          I may be oversimplifying. I do that.

  8. I have retirement funds, through my current employer and I rolled funds from my former employer into an IRA. But, I know pretty much nothing about investing. I looked over the funds and their past performances and tried to make some balance between high risk and conservative, but other than that I am pretty much clueless about investing. I really need to learn more about investing, it will probably help me reach my goals faster and more efficiently.

    • Yes, I used to not pay much attention to it because I was busy raising a family and working. I kind of wish I learned more about investing when I was younger, then now it would be more second nature maybe. Good luck to you learning this stuff earlier than I did! ;-)

  9. I have yet to post my NW, although I have a few spatterings about it on my blog. I may do it at some point, but I think I have most of the bloggers beat…. By quite a bit.

    I used to do individual stocks. now it’s just index stuff. most fund manages can’t beat the S&P, how am I supposed to?

    Keep up the great work! Being debt free is worth something too.

    • Thanks NNL A bit of both, debt payoff and investments is what I’ve heard is the right balance, which makes sense. I’ve been at the debt for 2 years. I hope I can make it another 4, which is my current projection.

  10. I have not focused on investments and it seems overwhelming! I want to start the process before I get out of debt, and need to start educating myself. PF blogs are great for that.

    • I know, it does seem overwhelming as if managing debt wasn’t enough, right?

      My previous investing strategy was mutual funds and ignore. Now I am more invested in stocks directly, recommended by my broker, and also some index funds – still have some mutual funds too. These are all within my Retirement portfolio. I will see if I can get more interested to study and watch individual stocks to know when is a good time to buy them. Definitely only interested in dividend stocks which DRIP the dividends back into more stock.

      I agree, PF blogs are great for that because of the two way dialog and willingness to help other frugals out. Good luck to you! Baby steps.

  11. Ouch on those investment fees!! You can overcome all of these – you’re smart and committed to the task. :-)

    • Thanks Laurie… getting smarter from all the reading I’m doing. I kind of liken this investment crap to this:

      Q: How do you eat an elephant?
      A: One bite at a time

      But the real question is, do I want to eat an elephant?

      Thanks for visiting. Enjoy rest of your week!

  12. Ha! You are funny! First of all, I think you are overthinking your investment portfolio, and yes, I do believe that you can overthink it. I am a financial advisor and one of the first lessons I learned was that 90% of your investment returns are based on your asset allocation. So it doesn’t matter what stocks or bonds or funds you own (or at least 10% of it does), it matters that you own a good mix of all of them. And once you decide on the mix, you rebalance it. I am starting a you tube channel soon about investing. I will let you know when it’s up. :-)

    • Oh that will be great, Shannon. I will be very interested to check out your You Tube videos. If they’re anything like the ones your hubby uses to do all his DIY work then I will be like “Yo, look at me. I’m a DIY investor, and I learned it all right here” (pointing at your youtube channel)

  13. It looks like my first comment didn’t go through, so trying again. Anyway I was just thinking about posting my own net worth. I haven’t done it so far since it’s a little scary to make public right? But now you’ve got me thinking about it again. Maybe with my next side income update. Looking forward to following your progress!

    • Thanks for commenting, Kay … and especially for the second time!! (I’ll go look for a stray comment and let you know if I find something).

      I know, it is a bit intimidating, but then so is this whole blogging thing!! LOL

  14. Pingback: Top Ten Reasons You Need to Manage Your Finances | debt debs