[USER]

I would really appreciate some input and guidance. I’m recently (Aug 2024) widowed and have an appointment with our financial planner of 8 years in a couple weeks.

I was looking at the online resource that shows returns over various periods and wonder about them (they seem low)

We were supposed to be invested ‘moderately aggressive to moderate’ 2016 to 2022 and then went to ‘moderate to moderately conservative’.

My husband retired in 2014 and I retired in 2024 and the portfolio is currently at about $2M in case that is relevant.

Are there some benchmarks for these periods that I could use as a reasonable basis for comparison and to understand if the returns are appropriate based on our risk tolerance over those years?

If these are low then I’d like to be able to point to data for the planner discussion.

TIA

[Bill]

Instead of meeting with him, you should either be handling this yourself or paying someone an hourly fee. Honestly, this isn’t about the returns – even though they are abysmal.

It’s been 8 years and if you are asking these type of questions, he’s kinda failed in that teacher role of helping you understand your investments and how they fit with your goals.

If you are paying someone $20kish per year, they should be adding a lot of value in those type of areas as well as tax and estate planning.

They shouldn’t just be giving you a “moderately aggressive” portfolio- whatever that means.

[Rick]

My guess is high fee balanced funds, strategic income funds, and similar. And 2022 wiped out a lot of gains that existed going into that year.

And the last month has not helped returns. So, a lot of things are working against the ole 1-3-5 year performance charts of these types of funds.

Here are a few example funds but are unlikely exactly what you hold.
Fidelity Strategic Income FADMX

YTD 0%
1 yr 1.84%
3 yr 3.15%
5 yr 4.03%

Vanguard Wellesley VEIAX
YTD 2.05%
1 yr 0.97%
3 yr 3.26%
5 yr 1.70%

[Scott]

You could look at the varying Vanguard LifeStrategy Funds. These funds range from 80/20 stock/bond to 60/40, 40/60 and 20/80.

Be mindful that using 5 year returns is a bit dangerous right now since that is April 2000 so you could see big changes depending on which exact date in March-April 2000 (COVID volatility).

[Luke]

2 things I would need to know first:
What percentage do you have in stocks and bonds?

What percentage do you have in US and International?

You could also use a flat fee financial advisor to get a second opinion:

[Ron]

Here are some comparators for you. I hope they help. By any measure your performance since April 1, 2016 is low as these are showing between 7 and 13% CAGR (compound annualized growth rate) during that period.

These are results of some benchmarks starting with 4/1/2016, using Portfolio Visualizer.

The benchmarks are US Total Market 100% (all US stocks), a classic 60/40 stocks/bonds mix (typical retirement portfolio; the 60 is US Total Market, the 40 is US Total Bond Market) and Golden Butterfly (20% each US Total Market, US Small Cap Value, US ST Treasuries, US LT Treasuries and Gold).

I used Golden Butterfly simply because I’m familiar with it. It’s a portfolio designed to minimize drawdowns.
Is there an AUM (assets under management fee)?

If I were me I’d look at the account and see what you are invested in now and what percentages. It could be the funds have high fees, in addition to an AUM fee.

Based on what you’ve said you’ve communicated to your financial manager I don’t think your performance should be so far below market averages.

A classic 60/40 might be what old school folks might maintain throughout retirement.

Some go more conservative, though typically folks are not super conservative even in retirement and certainly not before it.

Hope this helps.

[Author]

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