Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (42004)	3/28/2011 1:51:41 PM
From: Jurgis Bekepuris	Respond to of 78719

You are thinking about it wrong way. Yes, it is hard to find a great investment manager if you want them to consistently and considerably outperform the market. However, a person (from your family), who is not interested in investing or is bad investor will underperform market and funds much more. You are choosing between a fund manager and your family member, not between a fund manager and a great investor. :) Here are two possible solutions: 1. Graham solution for passive investors. Invest 50% in index fund, 50% in treasuries (or TIPs). Rebalance yearly. 2. Pick somebody you believe is good enough manager. Third Avenue. Dodge & Cox. Tweedy, Browne. Fairholme. No guarantees that they will outperform for decades, but they may do OKish. You don't need super returns of Mike Burry to do OK. You can also mix 1 and 2, e.g. by putting the stock portion of 1 into one of the funds from 2. The really tough part is to make sure your family follows your plan. Cause I'm sure they gonna get spooked and sell when index or fund crashes. :((( -------------------------------------------------- General note: Somehow people think: fund managers are difficult to pick, they underperform market, therefore I (my wife, my kids, my friends) should all learn how to invest and do it themselves. Cause obviously they can do better than fund managers, yes? Well, for some of us this is true, but for 90% of people it is not. Your wife, kids, friends may have no inclination or capability to invest well. So you either have to tell them to hide money under mattress or a simple strategy that will yield average/OK returns. If they are not interested/capable, telling them to spend their free time on investments will not lead to anything good.

To: Madharry who wrote (42004)	3/28/2011 11:35:45 PM
From: Jurgis Bekepuris	Respond to of 78719

Alternatively you can try to get someone in your family interested in investing and train them to be able to take over your portfolio or at least convert it into their own portfolio without huge problems. IMHO, this is difficult, but some people manage to get their kids or spouses into it.

To: Madharry who wrote (42004)	3/29/2011 2:13:22 AM
From: Paul Senior	2 Recommendations Read Replies (1) \| Respond to of 78719

Madharry, couple of points: I distinguish between fund manager and investment manager. If someone hires an investment manager because they don't have the skill set or inclination to manage money themselves, the job of the investment manager as I see it is to manage monies with an appropriate and agreed upon risk level for the client. It's not the job of such an investment manager to continuously (year after year) beat the market. It's to help shepherd the client's money so that the client can achieve financial goals within an appropriate and agreed upon risk. Of course in the good times, when the market is up, young family members want to "invest" - everybody's doing it and it's so easy (e.g Barbra Streisand is quoted in Fortune giving her investment tips)- well then, the investment manager is history if he/she can't at least beat the market, no matter what kind of investing or desired results were agreed on previously. Yes, there were people on this thread who invested with Mike Burry. I know of one person who told me his family made a substantial investment.