Mark Rosinski

Financial Planner at Dunes Financial. Interested in all things personal finance, taxation, and advisor marketing for retirees.
Opinions ≠ Advice.

[Mark Rosinski @markrosins]

@Daxximas1 @kevinxu Just because the NW was $1M doesn't mean they owned it outright. A very common example of a younger, higher earner with a $1M NW could look like $750K home, $400K mortgage, $50K cars, $35K auto loans, $35 bank accounts, $600K investments.

[Mark Rosinski @markrosins]

@mrstormymonday @dailydirtnap Not 10.99% but a small regional bank local to me offered guaranteed lifetime 8% yield accounts decades ago and had to buy most people out of them. I knew someone who refused and kept banking the 8% every year.

[Mark Rosinski @markrosins]

@HammerAndRails All B1G Final Four incoming

[Mark Rosinski @markrosins]

@PurdueBballGuy 0-11 now...

[Mark Rosinski @markrosins]

@VivekChirps @ramit Genuinely, it sounds like you're looking for an investment manager / hedge fund. Not as much a financial advisor.

[Mark Rosinski @markrosins]

@StormTrader2005 @KurtSupeCPA This assumes he was not working from 62 until his FRA. If he was working it's likely he wouldn't have received benefits due to the earnings test. Too many unknowns to make such broad stroke opinions.

[Mark Rosinski @markrosins]

@Nicolascole77 Books

[Mark Rosinski @markrosins]

@anthonytrucano @Jeffdthompson I've seen portfolio loans be as little as FFR +100bps even in this interest rate environment at Schwab. But the portfolio needs to be up there.

[Mark Rosinski @markrosins]

@elonmusk Why not quote the OP @danielcrosby?

[Mark Rosinski @markrosins]

@genticici @maxpashman As an independent/self employed you have access to a solo 401k/SEP where contributions can be much higher.

[Mark Rosinski @markrosins]

@criticalsfl @SMB_Attorney Agreed. Especially as someone who played year round sports in HS and rec leagues in college. My world revolved around sports. Life is much different 20 years later.

[Mark Rosinski @markrosins]

@Bwenz11 @CPAPlanner Required Beginning Date. 4/1 the year after the year the plan owner turns RMD age.

[Mark Rosinski @markrosins]

@CPAPlanner Can't wait!!

[Meb Faber @MebFaber]

Investing quote of the day via @morganhousel:

[Thomas Kopelman 💵 @TKopelman]

2 most important Personal finances numbers you need to know:

- Net worth
- Savings/Investment rate

Focus on growing your net worth

And keeping a high savings rate

[Mark Rosinski @markrosins]

@TKopelman I use one HYSA and @ynab for this. Account total equals total of sub categories in YNAB.

[Mark Rosinski @markrosins]

@TKopelman @AffordAnything Maybe reach out to @kaylindillonfin

[Massimo @Rainmaker1973]

This is called the Coffer illusion.

In this image there are 16 circles. Can you find them?

[Alan Corey | Atlanta Real Estate Expert @RealEstateMaxi]

Sell purple, buy green.

[Meb Faber @MebFaber]

If you’re like most investors, you’re asking the wrong questions.

I was chatting with a group of advisors awhile back down in La Jolla and a question arose. I’ll paraphrase:

"Meb, thanks for the talk.  We get a steady stream of salespeople and consultants in here hawking their various asset allocation models.  Frankly, it can be overwhelming. Some will send us a 50-page report, all to explain a strategic shift from 50% equities to 40%.  I want to do right by my clients, but I have a hard time reading all the various research pieces and models, let alone reconciling their differences.  Any thoughts?”

The advisor followed up by emailing me this summary of all of the institutional asset allocation models by the Goldmans, Morgan Stanleys, and Deutsche Banks of the world.  And as you’ll see, they are HIGHLY different.  Morgan Stanley says only 25% in US stocks, while Silvercrest says 54%!  Brown Advisory says 10% in emerging markets and JPMorgan 0%.

So what is an advisor to do? What’s the most effective asset allocation model?

Turns out, that’s actually, that’s the wrong question.  

The correct starting question is, “Do asset allocation differences even matter?”

In the summary article that the advisor sent me, there’s a link to a data table showing the asset allocations of 40 of the nation’s leading wealth management groups. I teased out all the data from the table to examine three allocations:

The allocation with the most amount in stocks (Deutsche Bank at 74%).

The average of all 40.

The allocation with the least amount in stocks (Atlantic Trust at 44%).

Below is the equity curve for each.  Unless you have hawk-like vision, you’ll likely have a hard time distinguishing between the curves, and this is for the most different.  The other 40+ firms live somewhere in the middle!!

Below are the returns for each allocation over the entire 1973-2015 period.

Most aggressive (DB):  9.72%

Average:  9.60%

Least aggressive (AT):  9.19%

There you have it – the difference between the most and least aggressive portfolios is a whopping 0.53% a year.  Now, how much do you think all of these institutions charge for their services?  How many millions and billions in consulting fees are wasted fretting over asset allocation models?

Let’s try one more experiment…

Overlay a simple 1% management fee on the most aggressive portfolio and look again at the returns.  Simply by paying this mild fee (that is lower than the average mutual fund, by the way) you have turned the highest returning allocation into the lowest returning allocation – rendering the entire asset allocation decision totally irrelevant.

And if you allocate to the average money manager with an average fee (1%) that invests in the average mutual fund, well, you know the conclusion.

So all those questions that stress you out…

“Is it a good time for gold?”

“What about the next Fed move – should I lighten my equity positions beforehand?”

“Is the UK going to leave the EU, and what should that mean for my allocation to foreign investments?”

Let them go.

If you’re a professional money manager, go spend your time on value added activities like estate planning, insurance, tax harvesting, prospecting, general time with your clients or family, or even golf.

If you’re a retail investor, go do anything that makes you happy.

Either way, stop reading this long ass tweet and go live your life.