View Full Version : USAA Managed Portfolio?
frostfire
01-23-2013, 23:57
ladies, gents,
anyone here using USAA managed portfolio care to share their 0.02 ? Pros? Cons?
With the 1.1% service fee and tax, do you still get an annual % increase that beats inflation and any cd/savings/money market interest rates?
Background:
Lately I'm been getting more and more financial education, and have decided to venture beyond TSP, CD, money market etc. I've heard nothing but great things about USAA banking and car insurance. I understand that the performance of their indexes are not as good as fidelity and vanguard, but those companies requires investment over 100000. USAA lets you start at $25000. I also understand that the net after-tax yield won't be as good as an expert DIY mutual funds, stocks, etc. but the appraised value of time not spent tracking stocks, reading boogleheads, and attending workshops is surely high IMHO.
Stiletto11
01-24-2013, 15:47
Make sure when you look at the inflation numbers it includes food and fuel. The Gov numbers don't. The real rate of return is the net amount after taxes, inflation, and any management fees (if any). Fixed products usually don't pay enough to beat inflation in the current environment unless you are buying corporate bonds that have not yet been called. You need to identify what your financial goals and timelines and risk tolerance to best decide what type of investments are best for you. An asset allocation model base on these constraints will afford you the best opportunity to meet your financial goals. To just dump money in an account without identifying the above facts is just like throwing a dart and hoping it hits the bulls eye. I am a former financial advisor and this would be my advice to a client. I use USAA for some stuff but I do all of my own research. PM me if you need general help. Best.
Stiletto11
01-24-2013, 15:51
I forgot to add you can look at a DRIP (Dividend Reinvestment Plan) where you can go directly to the company of choice and for as little as $250 initial investment and as little as $50 a month, you can buy stock without brokerage fees and the dividends are used to buy more stock. Caveat Emptor: you have to pick the best plan. Google best DRIPS.
I've had the USAA managed portfolio for about 4-5 months now. So far, I am not terribly impressed. They have a wide mix of assets, many of which I would never have put into an "aggressive" portfolio. Over the past 3 months, my gain has been 7.2% compared to 5.9% from the S&P 500.
You will not get a better return from CD or money market, and that will not change for the foreseeable future.
I understand that the performance of their indexes are not as good as fidelity and vanguard, but those companies requires investment over 100000.
This is not true (assuming we are talking about funds and not managed accounts). Fidelity and Vanguard funds will have "share classes" called institutional shares with minimum investments like that (and correspondingly lower expenses), but the same funds are typically also available with minimums in the $2000 range.
See for example:
https://personal.vanguard.com/us/funds/snapshot?FundId=0699&FundIntExt=INT
https://personal.vanguard.com/us/funds/snapshot?FundId=0040&FundIntExt=INT
1.1% is pretty steep IMO. Of the handful of people I know paying 1% to a financial advisor to manage their money, none of them are beating the S&P 500 long term after fees.
mark46th
01-25-2013, 14:14
Start listening to Dave Ramsey. He has some good ideas about how to handle money.
Can't help with USAA, I have had them as my insurers for 45yrs, but no investments.
As an alternate base-line benchmark:
I have my $00.0002 in Schwab, IRA, roll-over IRA, Brokerage, Kids, Wives. Did all my own investments up until 4 yrs ago, them turned it all over to them. They bundle the accounts for investment, as one portfolio. The guy I use calls each quarter, we discuss my needs and his suggestions, then they execute the buys/sells. No daily or weekly call on HOT STOCK tips.. We use a moderately aggressive investment profile.
They have been getting between 8% - 15% annual growth.
They charge just under 1% annual fee and the handlers are paid on a salary basis, no commission.
Good Luck.. :lifter
frostfire
01-26-2013, 01:03
I've had the USAA managed portfolio for about 4-5 months now. So far, I am not terribly impressed. They have a wide mix of assets, many of which I would never have put into an "aggressive" portfolio. Over the past 3 months, my gain has been 7.2% compared to 5.9% from the S&P 500.
You will not get a better return from CD or money market, and that will not change for the foreseeable future.
wait....not terribly impressed? but they beat the S&P500 index ? :confused:
I went with the moderately aggressive option. I would take 7.2% any day compared to my current MM 0.00000000001 %:rolleyes:
Thanks for all the input, gents
They have financial planners that you can spend as much time as you want discussing things with them. I used one of their mutual funds and it did well...I don't remember the rate of return though.
I generally picked my own stocks, and did well...once I learned that penny stocks are nothing but gambling. $150 isn't too much to pay for that experience. I did well looking at some cycles...gun stocks spiked when Obama was elected both times :). Toyota fell a month after Fukushima, and then free fell again a couple months later :(
Warren Buffet has good principles, find a good business that is undervalued and ride it out. He's a value investor...I should have held onto Toyota longer, I'd've doubled my money even with the second hit.
The USAA managed portfolios are full of fees and the funds are not very good. My 3 month win over the S&P was short lived. I closed the account after about 9 months with little gain. I recommend picking the lowest fee index fund (like Vanguard total stock market index).
Insured with USAA for 1yr now. Had a Kitchen oven fire, lot of smoke damage, broken screen, and ruined rugs - excited volunteers...
Filed the claim two (2) wks ago, No response, other than a standard "we rec'd your claim auto msg".
Anyone else have a similar experience?
Sorry to hear that Penn..
I've have had USAA for 45 yrs and every claim has been fast and courteous..
Things change and although I have not had a claim in 7-8 yrs, I feel USAA may have let it's luster get dusty with the new "we insure everyone" corporate thrust..