Why “ONE SIZE FITS ALL” SOLUTIONS DON’T WORK!
There is an old article from Marketwatch that captures this concept so perfectly that I’m going to rehash it here with some NEW PROOF
of WHY IT WORKS FOR WALL STRET AND WILL NEVER WORK FOR YOU!!
Why one-size-fits-all investing never works
By: Dana Anspach Published: April 17, 2015 at 5:00 a.m. ET
“You've seen a "one-size-fits-all" garment before, haven't you? A T-shirt perhaps, or even worse, a pair of underwear?
We all know it's a lie when we see it. There's not a chance that piece of clothing will fit all.
I suppose they can get away with that marketing phrase because common sense tells us it isn't true. We don't sue them for false advertising. We simply think "Ha. I won't fit in that," and we walk away.
If only such common sense prevailed when it came to investing. Alas, it doesn't.
Why is it people read this stuff and believe that the advice applies to them?
Do you think the person who wrote it knows anything about your financial goals
and the time frame over which you need to accomplish them?
So, do you suppose an article written by a day trader might have a completely different point of view than one written by a pension fund manager?
Just the other day someone brought me a proposal put together by an investment firm who was comparing their proposed allocation model and use of alternative investments to the way a major Ivy League endowment fund invests.
What was implied was "Look, we invest the way endowment funds invest. So it must be great."
The person who brought me the proposal wanted my thoughts. When you read market commentary, a proposal, or online advice
you have to take a step back and ask, "Does this have anything to with my personal financial goals?"
Think about your goals. Do you suppose the portfolio designed to achieve the 40 year old's goals might look quite different than the one designed to achieve the 60 year old's goals?
Yet both seem to be reading the same online investment advice and [they both] think it applies to them.
And what on earth does the price of oil tomorrow,
or the price of gold in a week have to do with achieving those goals?
Absolutely nothing.
One size CERTAINLY doesn't fit all.
Remember that.”
Now if IF THATS NOT THE GREATEST ANALYSIS OF WHAT
WALL STREET PEDDLES EVERY DAY -
I DO NOT KNOW WHAT IS!!
Now, I’ll add TODAY’S info to this:
Vanguard to Pay $106.4 Million to Resolve Alleged Violations
By Sabela Ojea WSJ Jan. 17, 2025 1:18 pm ET
Vanguard will pay $106.4 million in restitution to investors to resolve charges brought by the Securities and Exchange Commission after the asset manager allegedly FAILED TO NOTIFY INVESTORS of changes to its retirement funds.
According to the SEC’s findings,
the lack of notifications drove higher capital gains tax bills for many retail investors,
the agency said on Friday.
In December 2020, Vanguard lowered the minimum amount required to invest in its Institutional Target Retirement
to $5 million from $100 million. As a result, many investors sold their Investor TRF shares to purchase Institutional TRF shares,
which resulted in significant capital gains taxes for
hundreds of retail investors who relied on the Investor TRFs.
SO, WHEN YOU BUY AN “OFF THE SHELF PRODUCT” OR
“ONE SIZE FITS ALL SOLUTION” SUCH AS THIS,
IT BENEFITS THE VENDOR.
IF YOU DIDN’T HAVE THIS IN A RETIRMENT PLAN, YOU GOT SCREWED - JUST BECAUSE YOU HELD IT.
THE SHAREHOLDERS WHO SOLD,
SCREWED THOSE THAT DIDN’T!!
OH WELL, VANGUARD TOLD YOU HOW
THESE THINGS ACTUALLY WORK
… ITS IN THE PROSPECTUS!!!
…. IT MATCHES YOUR RISK QUESTIONNAIRE!!!
SO THAT MEANS YOU’RE ON YOUR OWN!.
Oh, yeah, you probably didn’t read that … caveat emptor as they say!!
(DON’T HATE THE PLAYERS, HATE THE GAME!!)