to buy some US stocks. She's sitting next to me with a paw on my lap and is licking her chops and giving me a nudge. She ran her computer model this AM and sees that US stocks are now under allocated significantly. She want some, so we'll buy a good bit of VTI in the morning. VTI is the US Total Market Index Fund offered by Vanguard. The funds will come from cash which she piled up by selling stocks at much higher prices a few months ago.
One intriguing thing about mechanical asset allocation models: they sure like buying when the fear is palpable and they sell when the greed is infectious. And a model run by a dog is even more impervious to human emotions. Krypto doesn't really know what the model is doing. She just presses the button, generates the trade orders, and gets a dog biscuit as a fee.
No machines running machines here - I use my good doggie, Krypto, as a biological cut-out.
Just imagine what a big "wealth management" firm would charge ? They like to get at least 1%, preferably 1.5% or even 2% of "managed" assets. Per $1 million under management, that's $10-20,000 a year. Krypto is beating the benchmark index [the S&P 500] by more than 5% year-to-date. And for what fee ? Dog biscuits. Hence the true value of all those asset management firms is ... zero. And most of that asset management advice is worth ... zero.
Notice I said "most" advice is worthless. A good broker who listens and helps a person who knows nothing about investing and who guides the person to good, diversified investing (and doesn't try to churn) and helps education a person in meeting financial goals and avoiding emotions or foolish moves, is worth a lot. Those are valuable fees for worthwhile services. I have arranged for Mrs. B to have a good broker for her Sky Fund and she's done very well. The fund pays full commissions for its investments. And it's worth it.
BUT all the "wealth management" hype about finding superior performance is utter garbage. Excellent performance can be obtained for almost free. Just follow Krypto and pay dog biscuits. Those firms who want to charge you to find that "superior performance" guarantee nothing. If they fail, you lose, but still pay. If they succeed, you'll like pay more especially if they put you into hedge funds.
Word of the Day
"Equipoise" - noun and verb [$10]
Equipoise means (noun) 1. equilibrium, a balanced state; 2. a counterbalancing thing; (verb) to counterbalance.
Sentence: [joke] Krypto has superior equipoise for her investing. Is that from her biological advantage - viz. having four legs ? Nope. She equipoises moves up with sales, and moves down with buys using a mechanical model.