Institutional money managers

[MikeWaters]

Financial advisor says that when my accounts are a little bigger, that I ought to convert part of my portfolio to institutional money managers. He says the rate of return is much higher than your standard mutual funds, (thereby offsetting the 2% they shave off).

He couches it like "you and Mark Cuban dont' have the same investment opportunities, this is a way to get into the same trading arena as the big money."

What do you guys think?

[jay santos]

Originally Posted by MikeWaters

Financial advisor says that when my accounts are a little bigger, that I ought to convert part of my portfolio to institutional money managers. He says the rate of return is much higher than your standard mutual funds, (thereby offsetting the 2% they shave off).

He couches it like "you and Mark Cuban dont' have the same investment opportunities, this is a way to get into the same trading arena as the big money."

What do you guys think?

I think it's crap, unless the institutional money manager is Dimensional Fund Advisors and you have more than $1M to invest with them with a long horizon.

[Colly Wolly]

Hard to go wrong with indexing.

[El Guapo]

Originally Posted by MikeWaters

Financial advisor says that when my accounts are a little bigger, that I ought to convert part of my portfolio to institutional money managers. He says the rate of return is much higher than your standard mutual funds, (thereby offsetting the 2% they shave off).

He couches it like "you and Mark Cuban dont' have the same investment opportunities, this is a way to get into the same trading arena as the big money."

What do you guys think?

I think fund advisors are dramatically overrated. I think when they make money, it is largely by luck, and when they lose money, it is largely by bad luck. I wouldn't ever pay 2% fees to them when I could just have a fund that tracked the markets with no advisor fee (and earned about 10% or more in a rate of return).