arcticpineapplecorp. wrote: ↑Wed Apr 14, 2021 4:05 pm
sidwin516 wrote: ↑Wed Apr 14, 2021 3:12 pm
thanks for the fund information. i said i would think about it.
up to january i was 90% stocks US based and 10% bonds. i've shifted to 60/40 and sleep better that's for sure but i should be opening up to shifting to some international (europe) and some REIT. He was telling me i should look for reit to get some dividend income as well.
Thanks!
is this a retirement or a taxable account?
you don't want REITs in a taxable acct precisely because they pay dividends.
You might not be aware that the last tax law changed the calculus somewhat.
https://www.accountingtoday.com/opinion ... reform-law
I hold REITs only in retirement accounts but I don't hold them for the dividends. If I was holding them for dividend income, I'd be more likely to hold them in a taxable account now.
(My purpose in holding REITs is that I like the way they diversify my portfolio. I've tried both with and without REITs. I like with REITs better, and have written it into my Investment Policy Statement. I don't use individual REITs, but rather, buy the REIT index.
How does OP pay this financial advisor? Are they a fiduciary? Most fiduciaries don't steer their clients away from index funds nor encourage clients to take on single stock risk. Are they independent, or part of a firm? What firm?
If you're not sure what I'm talking about, some definitions:
- A fiduciary financial advisor is an investment professional who is licensed with the United States Securities and Exchange Commission (SEC) or state regulators. Fiduciary advisors are important for clients because they are legally required to put clients' interests ahead of their own. No, this isn't automatically assumed.
- Single stock risk (also known as idiosyncratic risk) - An investment in a single company's shares are exposed to specific factors and events that could affect the performance of that one company and, in turn, cause its share price to fall. The alternative is to buy an index, such as VTSAX (Vanguard Total Stock Market Index), which holds every publicly traded company in the US. If you buy a single stock and the company's management makes an error, your stock could drop significantly, potentially to zero. VTSAX will only drop to zero if every publicly traded company in the US goes out of business simultaneously. (If this actually happens, we'd have more important things to worry about than stock holdings.)
- The question about payment is because non-fiduciary financial advisors often steer clients to financial instruments that give them a kickback or a commission (and no, they don't tell you about it up front.) Fiduciaries have to disclose compensation like that, and usually don't offer such products to avoid conflicts of interest.
- The question about the firm is because the big investment companies have known policies, and we might already know if they are fiduciaries or not.
P.S. Please don't be insulted that I'm defining these terms. I'm not presuming ignorance on your part. There are a lot of new investors who read this forum and I'm trying to be inclusive and not assume knowledge of terms and buzzwords.