Achievement Unlocked: CFA Charterholder Edition

Tyler Linsten Announcements, Not Sarcasm

Let’s take a break from sarcastic financial commentary on the internet for a personal announcement. 


This week, after almost nine years since the journey began, including over a thousand hours of study time for three exams, plus subsequent years of gaining required work experience, I now hold the right to use the Chartered Financial Analyst® designation.

It feels good to type it out: I am a CFA® charterholder.

I have so many people to thank for their support and I would never have made it without them. A special shout-out to my wife, who over the final two exams (and for months at a time) dealt with not only long periods of daily isolated study time, but put up no objections to surrendering an entire wall that contained hundreds of yellow post-it notes. I wish I had pictures — only a huge grid of tiny holes remain from the thumb tacks I used to hold them on the wall. No joke, I’d stand there with a guitar on my shoulder, spacing out, while trying to absorb the contents of each yellow square, one-by-one. I guess it worked.

Now, it’s time to update the business cards.

A New Leader in the Clubhouse

Tyler Linsten Investing, Personal Finance, Sarcasm

When winning is losing.


An exciting part of helping people with their portfolios is seeing what kind of BS they’ve been stuck with, and then reversing it immediately. Usually, the most common culprits are high-fee funds with fancy names. This week produced an all-time worst.

Behold, Legg Mason’s QS Global Market Neutral Fund. Ticker: LNFIX.

This particular younger client was stuck with this fund comprising 100% of two different IRAs they own, likely because it was very profitable for someone to do so, and the expense ratio is, get ready for it…

No, I don’t think you’re ready yet…

Have you grabbed a paper bag in anticipation of hyperventilating?…

Get one.

Take a deep breath…

Grip the bag and put it up to your mouth.

The expense ratio is…

THREE.

POINT.

SIX.

FIVE.

PERCENT.

3.65%!

Three hundred and sixty-five basis points!

Treat it like a solar eclipse – use eye protection if you must look.

 

LNFIX is over 91 times more expensive than Vanguard’s Total Stock Market Index ETF, which costs only .04% per year. This is by far the worst fund I’ve ever seen in someone’s portfolio. Usually you only hear about these kinds of wealth evaporators second hand through some guy you knew back in the day, or on archived internet forums from the 90s.

I can only imagine that those who willingly buy products like this have a strategy of investing only in funds whose ticker symbols were written on bathroom stalls in gas stations in the middle of nowhere. A market neutral strategy — making some bets for securities to go up, with other bets for things to go down, resulting in only exposure to the manager’s potential skill, or lack thereof — is a painfully inappropriate strategy for a young person, with decades to invest, to put all of their account into. The worst part of it all was this client had to pay a 5.75% sales charge before even getting their money invested. This also means the fund has to not only earn more than the inflation rate, but the inflation rate PLUS 3.65% every year in order to show a real appreciation. Also laughable: They compare the fund to US T-Bills on the website, as if to boldly imply it can be considered to be in the same ballpark as a risk-free asset like Treasuries.

I joke and endlessly lay on the sarcasm, but this is a damn shame. We need a true fiduciary rule applying to the entire investing industry.

Fintech Saved Me from a Huge Headache Today

Tyler Linsten Personal Finance

Financial technology isn’t so bad, after all. 


Earlier this morning my phone buzzed, as it tends to do excessively. This notification, however, wasn’t just another headline about another Mariners player hitting the DL. This time it was a heads up from the app of my credit card company that a $0.99 transaction had been made on my card. The source of that charge was a big red flag: It was from iTunes.

If you know me at all then you’ll know I’m a huge Google Kool-Aid drinker so something from iTunes rings all kind of alarm bells. I quickly logged into my account and disputed the charge and put a freeze on the account. I then notified Citi who recommended I close the account and get a new card, which I promptly did. After I looked again at the transactions I saw that the fraudsters had already snuck in two more $0.99 transactions before I managed to hit “freeze.”

Now, for all the unnecessary stuff we can be driven to do thanks to financial technology (see: cryptocurrency, Robin Hood, Acorns, etc), I want to recognize some of the good. If I hadn’t turned on push notifications for all transactions on my card, which is something I definitely recommend everyone do, I would have never shut this down in time. If this were, say, ten years ago, I would have been lucky to notice the charge within a few days since the only way to patrol a credit card account was manually logging in. The bad guys would have seen that the card worked, and cranked up either their volume of purchases or the price of what they bought.

Score one for fintech.

Let’s Play an Annuity Game, Payout Start Date Edition

Tyler Linsten Investing, Personal Finance

Not to be confused with Let’s Needlessly Tinker with and Damage the Global Economy with Random Tariffs game. 


QUICK: You have 20 seconds to read the Payout Start Date description below while assuming you yourself have owned the annuity since the 1990s.

QUESTION: Can you begin payout now?

Good luck, sucker.

3…

2…

1…

Pencils Down.

Stumped, like I was? Now, maybe I’m just a little dense, but this passage seems extremely confusing and hard to understand. I had to read it multiple times to get a handle on what was possible. To be honest, I’m still only about 95% sure what it’s saying. I can’t get over how hilariously sad (sadly hilarious?) the phrase “on or before the later of” is. How are regular people, the owners stuck with this stuff, supposed to know what to do?

This example shows one reason why you won’t hear me speaking very kindly about annuities in these parts. There are certain times and places for these products, but they’re few and far between because of the layers of complexity they tend to add. Not to mention the all-too-common, insane upfront commissions attached to annuities.

I tend to think of annuities and the Seattle Mariners in the same vein: They always tend to disappoint, you wonder how you got tied up with them, and they never get any better.