Heres the problem... I got a portfolio at Smith Barney (college fund) worth over 200k, but I only made like 25k last year (I should've been making that every month) before taxes. I looked at the statements and found that my "Money manager" is only buying like 50 shares here, and 80 shares here of xyz.. I dont recall seeing any trades over 200 shares. My personal trading account is only like 15.7k, and I'm trading the same size, if not larger than the money manager. Do you see a problem here? I'm thinking about just taking it all out and doing this all on my own. Besides the fact that my parents will probably disown me and never speak to me again, do you think I'm ready to manage such a large account? cm69
thats a great return and you should be happy your guy is trading conservatively if your goal is capital preservation ie - if you actually need the money for college... to say you should have been making "25k a month " on this account with you broker suggests to me you don't really understand what a portfolio is or what a realistic return would be.. managed money if you can consistently make 10% - you are a god
It shouldn't be all or nothing. Take it one step at a time. Perhaps double or triple your personal acount and see how you do. This way if there's a problem you still have the original conservative account to fall back.
If you need the money in the next 5 years you should never touch it. You will have 10 million in 15 years instead of 2 million if you keep your hands off. Only trade with $$$$ you can afford to loose.
You want 160% returns a year, are you prepared for 50% drawdowns? Seeing that 200K turn into 100K before it turns into 500K?? You cant get high rewards without high risk, the money manager is making 12% a year, hopefully he will never give you more than a 5% drawdown.
Yes, let the investment account ride. Play with your smaller trading account. Consider yourself very lucky, because as another poster said, if you can let that money compound over the next 20-30 years, you will be extremely rich.
It's called diversification. The ROI wasn't all that bad. And if he had bought larger positions (i.e. 5000 XYZ, etc.), with less diversification, I suspect you'd be all over him for putting too many eggs in one basket if he had some losers that pulled the returns down. At your age you should be looking for returns at/near the market returns. If you pull the money out I'd bet my last $ that you'd not do as well as he has and likely overtrade or hold on to losers way too long.
I'm not sure what my goal is, lol. I wasn't their when it was formed, but I do know it's 100% in stocks that's traded on a daily basis. I'm not sure if he trades ONLY my account or if its a group deal..like a MF. I guess my expectations were too high. And no, I dont really need the money because I go to a CC. 4yr schools are too expensive these days.
I had a 401k all in capital preservation all the years I was studying trading, I never traded it at all and it worked out fine. There is the old adage about not putting all your eggs in one basket..... it's a good thing to know.
Whats the manager charging you? If he's giving you market like performance and charging you 2%, you can move it to an index fund and save yourself about 1.8% or about $3600.