The size of an investors portfolio vs budget is the most important discussion with a financial planner IMHO. This will drive asset allocation and risk tolerance. The age of the investor is the most critical component of that discussion as you noted. 100 % S&P 500 is a very aggressive portfolio. I believe in a balanced portfolio with income producing instruments. My personal AA preference is the "pay your bills first" method which requires income producers. All new investors should consult a financial professional.

... I personally have decided to use the S&P 500 and stop further in depth allocations such as much discussed finer granular reits, mlp's, utilities etc. S&P500 contains all of the aforementioned within the index. ... The argument can be made for more granularity outperforming the S&P500, but i will live with the simple solution. I like the fact mutual funds can easily reinvest dividends/cap gains if needed while some ETF's cannot (easily). I also like the fact that by the nature of the SP500 index it gradually picks the winners for me and discards the losers. just my 2c.

Hi shipwreckedandalone,
Thanks for commenting. (Worth a lot more than 2c). All valid points. It’s not clear to me whether this represents a portion of your total invested assets or all of them. I suspect it’s the former. That said, I don’t think the argument for real estate or any other granular asset class rests only on maximizing return. There may be other considerations like diversifying assets (and hopefully mitigating risk), increasing income stream, hedging against the unexpected (rampant inflation, depression, war, tax law changes, etc.)
If I were age 25-40 and gainfully employed I’d be inclined to put 100% into growth (even possibly the S&P 500) and let her ride come Hell or high-water. A single fund (2 or 3 at most) would work fine. Even at age 40-50 that might make sense - but would require a stronger risk appetite. At 70 or older (with perhaps a 20-year life expectancy I believe an all-growth portfolio foolhearty, unless one is trying to build assets for posterity (estate planning). In that case, long as your own funding is assured for your lifetime, a 100% growth portfolio might still make sense.
To glean an appreciation of how much a 100% S&P 500 investment can fall in a relatively short time we need go back hardly more than a single decade (from Wikepedia): “The US bear market of 2007–2009 was a 17-month bear market that lasted from October 9th 2007 to March 9th 2009, during the financial crisis of 2007-2009. The S&P 500 lost approximately 50% of its value.”
Now - to sit still and endure the pain for 17 consecutive months while watching your total investment egg fall by 50% takes a great deal of intestinal fortitude. And, remember that on March 8, 2009 after 17 months of free-fall, there was no guarantee the market would reverse direction. History has taught that these downturns can persist for much longer. If an index can tumble 50% in 17 months ... it can just as easily fall 60 or 70% over a longer time. No law says it has to stop at 50%. (It’s likely real estate fared even worse during that period.)
In a nutshell, it depends a great deal on your life situation and ability to endure punishment. I think all of us could do a better job relating our age and years to / into retirement when discussing our allocations. One size does not fit all. Such understanding might benefit the younger newbies - if any.
PS: Just my humble mumble. I am not a qualified advisor. Other points of view welcomed.

This New York Times article might be worth considering....
Turkey’s Financial Crisis Surprised Many. Except This Analyst.

Yet he is doubling down on his doomsday message: The river of global cash will dry up, the dollar will spike and there will be a series of financial seizures. Investors, he thinks, will flee developing economies, then Europe and eventually the American stock and bond markets.
“It won’t be a banking crisis this time around — it will be a financial market crisis,” Mr. Lee said. “And I am very confident that it will happen.”

See: https://www.nytimes.com/2018/08/11/business/turkey-lira-crisis.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news

https://www.pimco.com/en-us/resources/education/the-case-for-staying-invested-in-bonds
https://www.pimco.com/en-us/resources/education/the-case-for-staying-invested-in-bonds/
As the global expansion begins its 10th year, stocks are approaching full valuation, market volatility has increased and interest rates are rising. In light of these conditions, while some investors may consider exiting the bond market, their long-term financial goals may be better served if they remained invested.

Good! How can you have justice when there’s a financial incentive to put people in jail? The private sector should have no place whatsoever in the criminal justice or court system. Otherwise, you end up with the prison industrial complex we now have.

FYI: Ed's a big Roth IRA proponent, so it’s actually tough to write about the reasons not to go Roth. But, as with any other financial decision, there are drawbacks that must be addressed. When he says “Roths,” he's talking about Roth conversions as opposed to Roth contributions. Roth conversions have no income limits, and there are no limits on how much can be converted. Clients can convert all they wish as long as they can pay the income tax.
Regards,
Ted
https://www.fa-mag.com/news/when-roths-may-not-be-right-39880.html?print

Hi @newgirl,
I probably not the best on the board to walk you through how to start a due diligence process. I think most retail investors need the guidance of a financial advisor and you might do well to seek one out.
There are a lot of things that are unknown about you and with that suggestions are hard to make concerning your investments. That is why I responded in a way as to what I favored about the Sun America Dividend Strategy Fund ... not is so much that it might be right for you.
Some things you might wish to do if not already done is to perform an investment risk tolerance analysis to help determine what type of investments and asset allocation might be of a fit for you. Another thing that I have found beneficial is to do a Morningstar Instant Xray on each of my funds. This is a quick and easy way to see how they are positioned and allocated. Then do an Xray on your portfolio as a whole. In this way you can see how it is positioned and allocated and how the investments owned combine into a portfolio. Then you can change holdings and amounts to see how this bubbles before making rebalance changes. Knowing your risk tolerance level is important because it will help you with finding the right asset allocation and investments. Before tweaking know what you have first and how it fits together into a portfolio and Instant Xray can help determine this.
Once you have done this then you can get down to a review of your funds and comparing them to others that you might find of investment interest. Before, I kick a fund to the curb I've got to have found a better one with strategies that I am comfortable with. Strategies that I favor might not be right for you as I am in the distribution phase in investing while you might be in the accumulation phase.
As you know many made some good and sage comments. Remember, just because a fund has performed well does not mean it will continue to do so and that is why I consider looking at its strategy to see if it is a right fit for me in the first place and that I understand it. A dividend strategy fund simply might not be right for you while it is for me. And, only you can determine that.
Even today after more than fifty years of investment experience and being considered a seasoned retail investor my advisor will ask me to justify why I am making changes within my portfolio. Sometimes they will ask me to revisit and to rethink this including tax considerations as well. Most times, they follow my first thinking.
Wishing you the very best as you continue your due diligence process.
Old_Skeet
Additional comment. Linked below is a post I made back in 2016 about my portfolio and how I have things organized. Although, somethings have changed within the portfolio itself the process has not.
https://www.mutualfundobserver.com/discuss/discussion/24926/old-skeet-s-new-portfolio-asset-allocations-2016#latest

Ah, poor WFC, then, unfairly singled out in headlines.
BoA the most fines too, as of Feb:
https://www.marketwatch.com/story/banks-have-been-fined-a-staggering-243-billion-since-the-financial-crisis-2018-02-20
MF liked its chances last Dec:
https://www.fool.com/investing/2017/11/30/better-buy-wells-fargo-company-vs-bank-of-america.aspx
BoA up ~~10% since then, WFC up ~5%, if my calcs are good.
Should check whether Parnassus still holds BAC.

Phony accounts:

Wells Fargo isn't the only bank where heavy sales pressure led employees to open fake accounts.
A federal review triggered by the Wells Fargo scandal found that "weaknesses" at other banks led employees to open accounts without proof of customer consent — just like Wells Fargo did — according to the Office of the Comptroller of the Currency.
... Citigroup (C), US Bank and Bank of America declined to comment.

https://money.cnn.com/2018/06/06/news/companies/wells-fargo-fake-accounts-banks-occ/index.html
Emission tests fraud:

Collusion Between Germany's Biggest Carmakers
The diesel scandal is not a failure on the part of individual companies, but rather the result of collusion among German automakers that lasted for years. Audi, BMW, Daimler, Volkswagen and Porsche coordinated their activities in more than a thousand meetings.

http://www.spiegel.de/international/germany/the-cartel-collusion-between-germany-s-biggest-carmakers-a-1159471.html

The motor industry was embroiled in a new diesel emissions scandal last night [June 11, 2018] after 774,000 Mercedes-Benz vehicles were found to contain cheating software.

https://www.thetimes.co.uk/article/mercedes-faces-mass-recall-for-cheating-diesel-software-l0378ctf3

The raids on Tuesday, in which about 100 investigators targeted BMW offices in Munich and an engine factory in Austria, suggested that all of Germany’s top domestic automakers may have evaded emissions rules, although perhaps not to the same degree as Volkswagen.

https://www.nytimes.com/2018/03/20/business/energy-environment/bmw-diesel-emissions.html

Ford became the latest company to become embroiled in the issue, with drivers in a U.S. lawsuit claiming some 500,000 Super Duty pickup trucks were rigged to beat emissions tests.

https://www.washingtonpost.com/business/why-carmaker-cheating-probes-stay-in-high-gear-quicktake-qanda/2018/01/10/318b6d5a-f632-11e7-9af7-a50bc3300042_story.html?utm_term=.da98430847ad
It's not so easy to pick and choose less bad from bad.
With respect to the 400 or so WF foreclosures - these were the result of an "automated miscalculation of attorneys’ fees that were included for purposes of determining whether a customer qualified for a mortgage loan modification." (From WF filing.) That's ineptitude, not malice. Not that the government didn't facilitate this:

No Republican sign-off was necessary for Obama’s Home Affordable Modification Program (HAMP). The Treasury Department alone decided to run it through mortgage companies that had financial incentives to foreclose rather than modify loans. Treasury never saw the program as a relief vehicle, but a way to “foam the runway” for the banks, allowing them to absorb inevitable foreclosures more slowly.

Obama Failed to Mitigate America's Foreclosure Crisis
https://www.theatlantic.com/politics/archive/2016/12/obamas-failure-to-mitigate-americas-foreclosure-crisis/510485/
As to how long to hold the companies responsible (I agree with sending the execs to prison), how about at least as long as the effects of their acts endure? Which can be a mighty long time. We still don't know the extent of long term effects of all the fraudulent foreclosures.
Food for thought when considering duration: How Redlining’s Racist Effects Lasted for Decades
https://www.nytimes.com/2017/08/24/upshot/how-redlinings-racist-effects-lasted-for-decades.html

True, but you don't have to look too far to find they've all had dirt on their hands at one point:
https://rollingstone.com/politics/politics-news/bank-of-america-too-crooked-to-fail-232177/
https://nytimes.com/2017/03/30/business/dealbook/new-firms-catching-up-to-banks-in-foreclosure-rankings.html
The question is which is the cleanest now and which is the dirtiest and which will be the cleanest tomorrow and five years from now and which will be the dirtiest? This will weigh on these banks not just from an ethical perspective, but on their future returns. The other question to ask is which ESG mutual fund will be the first to pick up on potential malfeasance? Since this is a MF site and you are obviously unhappy with PRBLX, which ESG fund do you think will do a better job at catching and reacting to this sort of thing? I guess what I'm thinking is that PRBLX is at least trying to do the right thing. The fact that it failed to do so in a timely fashion is a black eye, but I wonder which ESG funds get it right on financial stocks?

“Individuals make decisions every day with their emotions assisting their judgment. It is part of who we are as human beings. Unfortunately making emotional decisions can be a detriment in the investing world. Individual investors who let their emotions guide them have a much harder time investing than people who have found ways to master their emotional decision making. Some investors try to master their emotional involvement by using a rules-based system, others use computers to make the decisions for them, and still others invest in indexes through ETFs or mutual funds. There are many ways to remove the emotional component from investing, but most investors don’t realize that their emotions are the problem. You can read my post about fear and greed investing or investing is not gambling to learn more.”
The link MJG posted is an advertisement for Investment Advisory Group. The writer’s name is Kirk Chisholm. He’s employed by Investment Advisory Group. I’ve noted the qualifications he provided at bottom. No accredited instructions or degrees are listed. No reference to specialized training in either finance or psychology is indicated.
(1) Correlative statistics: The writer cites statistics showing a correlation between poor investment outcomes and frequency of trading (higher trading being associated with poorer performance). I dont think many would doubt that correlation. It’s pretty widely accepted.
(2) Assumptions The writer makes numerous assumptions about the psychology of different investors which (presumably) led to some engaging in higher than average trading. What are the writer’s qualifications re human psychology? It’s a big leap to go from the correlation between trading frequency and performance to the particular psychology which led to that. At that point you’re likely delving into problems like compulsive personalities, low educational attainment, delusional thinking - and quite possibly substance abuse, gambling addiction and dysfunctional families. I don’t know what leads some investors to trade so frequently. I don’t think the author knows either. I’d suggest the he and his firm stick to dispensing investment advice.
(3) Causal relationship - I don’t think he’s demonstrated that convincingly. It is equally possible that those who trade frequently are poor money managers to begin with and would still have found a way to lose money in the markets. Their heightened trading activity might be more a consequence of more serious underlying issues (including financial) rather than the cause of their predicament. So, was the frequent trading the cause of their problem or was it the result of other problems?
Author: Kirk Chisholm is a Wealth Manager and Principal at Innovative Advisory Group (IAG). His roles at IAG are co-chair of the Investment Committee and Head of the Traditional Investment Risk Management Group. His background and areas of focus are portfolio management and investment analysis in both the traditional and non-traditional investment markets.
-
I liked this thread in general. To me it does not appear to be about frequent trading. I suspect Old Skeet was more interested in that 2, 3 or 5% of an investor’s decisions based on strong conviction for / against a particular opportunity. “Doubling down” is a treacherous path to making money which nearly everyone has previously noted. “Cut and run” references selling a bad investment or fund. If you’ve invested for more than 50 years without ever making a bad investment (one you needed to sell) you are indeed fortunate.

I doubled and tripled down on a bunch of financial stocks during the GFC (RDN and AXP mostly), made a lot of money and thought I was smart. Then I tried the same with a couple of energy and mining stocks a few years back. With one (BBL) I lost my guts and sold at pretty much the exact bottom (it's since recovered nicely) the other (TDW) I bravely held on all the way to bankruptcy.
Adding the two experiences together I broke even, more or less. I consider myself lucky to have done no worse and will never try it again.

FYI: Betterment unveiled its automated investing service in 2010. Within a few years, “robo-advisors” were threatening to upend financial services the way that Amazon.com undid retail. Sophisticated algorithms, the promise went, could provide customized portfolios to the masses, at a quarter of the price charged by human advisors.
Regards,
Ted
https://www.barrons.com/articles/the-top-robo-advisors-an-exclusive-ranking-1532740937?mod=hp_highlight_2

@ Crash: Any thought of a part time job ?
Derf

I

might be open to the idea. My background, though, is not suited for ANYTHING. EVERYWHERE I apply--- literally--- the employer will wonder what the hell I'm doing there, and choose someone else. That's happened time and time and time again, already. And the way things work these days... Well, I'd not put up with it: squeezing the employee for EVERY MOMENT of time. Surveillance of the employee with technology. I'd much rather go with the alternative, which is to come up with the money we'll need through HER job, plus investment income and SS and pension. And the fact that I'm 64 only adds to my predilection for NOT putting up with bullshit, nonsense and lousy bosses. So, how long would I last at the job, eh?

If this is truly true (forget surveillance stuff) and good-faith efforts and not always self-sabotaging vibes ('thanks, we totally get your opposite-of-eager message'), then yeah, absolutely, not worth your time or effort to continue, not one iota. Only real-world super-intense financial pressures would effect a change, and for many people even that is not enough, nothing is, unlike past centuries.

@davidrmoran Goldman Sachs link about the crash right above those Nazi examples and I am not comparing anyone to Hitler. So not quite Godwin. :-) I am merely trying to show what the worst example of corporate behavior can be and asking how long before consumers/investors can forgive and move on if the company changes. I largely forgive these companies for their involvement, although I do think they should make restituion to families if they haven't. Still, neither Allianz nor Deutsche Bank nor IBM in any way really resemble those companies back then in their corporate behavior today. So, in some sense it's the opposite of Godwin. I'm saying they are now OK.
Regarding how to punish, for one, stop treating corporations as "people" and hold executives and boards actually accountible by throwing them in jail and fining them immense sums. Also, no more white collar country club jails for these people either. Hardcore old fashioned jail. Also, fine the companies immense sums and insist they clean house of those commiting the bad behavior with no cushy bonuses for departing execs. Finally, regulators should insist upon proof of structural changes to end the bad behavior. WFC's behavior was in some part due to a bad incentive system. Getting rid of those incentives is legitimately a step in the right direction.
To me what the Federal Reserve did to WFC is a good sign that the company will behave better in the future. I am actually more skeptical than you in assuming that other financial institutions aren't really better behaved than WFC. WFC just got caught and having been caught, they will now behave better than their peers until they prove themselves again, regulators relax and then they will start behaving badly again--a cycle of misconduct.

@davidrmoran
Two strolls down memory lane:
https://rollingstone.com/politics/politics-news/the-great-american-bubble-machine-195229/
https://som.yale.edu/blog/the-nazi-corporate-connection-facing-the-ethical-challenges-of-business-head-on
Since unlike our Supreme Court I don't believe corporations are people, there is an interesting question as to how long a company's image should be tarnished for its misdeeds, especially when different people are in charge or different policies are in place than when the company behaved badly. An excerpt from the article on the really bad historical actors a long time ago:

Business played an essential role in Nazi Germany and the Holocaust. IG Farben (Bayer's predecessor) supplied the patent for deadly chemicals used to exterminate millions of Jews. Financial institutions like Allianz and Deutsche Bank meticulously transferred Jewish assets to German hands. Technology developed by IBM tracked and managed the "evacuation" of Jews across Europe. The hair of Jews who were gassed and burned to ash was sold in bulk to textile manufacturers.

This paragraph actually understates what Allianz did by the way. It was actually far worse:
https://nytimes.com/1998/05/18/world/insurers-swindled-jews-nazi-files-show.html
Yet I wouldn't necessarily hold that against Allianz funds or Pimco today. The question I think with analyzing companies for socially responsible criteria is what are they doing now and going forward? But maybe you are right in that it's too soon to forgive WFC and they need to prove themselves truly reformed.

As I said, I don't trust the financial sector very much and have *very* little exposure to them for that very reason.

Sorry in advance for playing devil's advocate, but does anyone here who remembers 2008 really think that WFC's behavior is so much worse than any other major bank? Or if you go back further in history, what bank or insurer really has completely clean hands ethically? Back in 2008 WFC was presented as heroic for not getting overinvolved with subprime. Today they're the bad guy. Excuse my cynicism, but I actually think now is the time to own Wells Fargo, even from an ethical perspective. The reason is since they got caught more than once for behaving egregiously they are actively trying to improve their reputation. This sort of pattern of bad behavior by the leading financial institutions in capitalism is cyclical and actually I think an indicator of where we are in the broader economic cycle. Inevitably banks start behaving crappily the futher we get into a bull market as regulators and investors turn a blind eye and the competition for ever expanding profits, revenues and share prices increases. But once the banks get caught--with their proverbial hands in the cookie jars--they are chastened for a while and start behaving better, especially after regulators step in. Then the cycle starts all over again. So Wells Fargo is the latest bad actor to be caught and is now finally chastened and trying to improve. Meanwhile, another shoe will drop at some other financial institution soon and people will hate on that bank instead. Some socially conscious funds of particularly an Islamic bent don't own any banks or money lenders at all. If one is concerned about them behaving badly, that might be the best option. Because inevitably they all usually end up ripping people off in some fashion or another.

Sound exciting and lots of planning (number crunching as well). Do you have a financial planner you trust and work with in AZ? Someone who are fee-based advisor, not asset-based. Perhaps other on the board can chime in. Remember BobC who wrote extensively on this topic. Few discussion on financial planners from the past.
https://mutualfundobserver.com/discuss/discussion/comment/92389/#Comment_92389

Umm ... What aspect of a portfolio?
I’m reminded of Patrick Henry’s “I have but one lamp by which my feet are guided”. That is that I want to be as disconnected from the major indexes as possible. I take roughly 30 seconds most weekdays to pull-up my financial app and compare my portfolio’s daily change with some other barometers. Up / down matters little. What I want (at 20+ years into retirement) is low volatility. Friday was a pretty typical day. My portfolio lost 0.03%. (That’s a bit overstated because it doesn’t include interest/dividends which accrue daily on many holdings.).
Some other baramoters Friday:
TRBCX -1.13%
KCMTX -0.96%
DSENX -0.68%
VFINX -0.66%
TRRIX -0.06%
Split Benchmark* +0.01%
* My combined split benchmark = 50% TRRIX and 50% RPSIX
Readers will note from the benchmark that aspirations for growth are very subdued. Hey - I’m 72 and have already lived longer than I deserved based on earlier lifestyle. Why push the envelope and reach for return?
I use a great (subscription based) app from Apple. Takes one-click and 30 seconds (or less) to view the relative daily volatility. Aside from that one measure, I could care less. Might spot-check YTD (at Lipper) on 5 or 6 funds once every month or so - purely out of curiosity.
Disclaimer: I am not qualified to give investment advice. I make no recommendations to others. One size does not fit all.