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KarmaCandy posted:Any thoughts on this method? I'm still not comfortable with it and am going to go with something more long term, but do other people do something similar to this? He's acting like taxation is the only reason to buy-and-hold, when there are lots of other good reasons. You're paying a decent amount of fees for an investment method which may be increasing your risk significantly and is unlikely to beat the market average in the long term.
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Dec 3, 2009 05:38
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Just started at a new job post college. Throwing max matching in to a 401k/457 or something plan. I picked half bonds and half long term aggressive stuff. Anything else I can be doing right off the bat? The stuff I picked seemed to be not so bad for long term goals, while keeping some of it locked away for the time being in inflation protected bonds (apparently). Whats this whole IRA nonsense thing.
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Dec 3, 2009 05:40
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An IRA is another tax-advantaged account that is independent of your employer and can contain most any type of investment. It's good thing to look into if you have more money for long-term investments. It's intended to be accessed once you turn old, but there are some cases when you can get into it earlier without paying a ton of taxes.
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Dec 3, 2009 06:10
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SecretFire posted:He's acting like taxation is the only reason to buy-and-hold, when there are lots of other good reasons. You're paying a decent amount of fees for an investment method which may be increasing your risk significantly and is unlikely to beat the market average in the long term. Yes, I just realized he is at Schwab, which means he is paying between $9 to $12 per trade. Plus there are bid/ask spreads (if he is using highly liquid ETF's, this is not a huge deal). I believe Schwab has a new series of low-cost broad market ETF's, allowing commission free trading. So that can reduce costs a bit. But being new ETF's, they could be thinly traded with wide spreads. Another option to reduce costs is to move to Wells Fargo, which has free trades if you qualify. But I agree that KarmaCandy is doing the right thing in taking control of his portfolio. Fixed asset allocation and rebalancing as needed is the right way to go for the vast majority of investors, imo.
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Dec 3, 2009 06:57
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SecretFire posted:EDIT: A blog I read today has a decent article on some of the parts of asset allocation people miss: How your life affects asset allocation and risk tolerance Too bad that doesn't cover my situation. Apparently everyone has either a pension, is self-employed, or works for a publicly traded company. Well at any rate, for better or worse I got a new job and immediately started contributing to my 403(b). I'm putting in 5% right now. After three years, I get a guaranteed company contribution of 10% as long as I put in at least 2%. It's all in TIAA-CREF right now, with a very heavy emphasis on riskier investments, since I'm fairly young (27.) I also have a part-time job waiting tables. Since my first job covers all my expenses, and then some, I will put as much as I can from waiting tables into a Roth IRA (I suspect I'll easily max out the $5k a year.)
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Dec 5, 2009 06:32
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So my girlfriend and I have an emergency fund/savings account of roughly $5000 sitting in a very low interest rate savings account. This is independent of our long term savings, which is in growth directed mutual funds and an IRA. Do you guys think there's a better option for the money in our savings account? I hate to see it gain barely any interest, so I've been thinking about putting the money in a capital preservation fund or something. The only thing is that we would need to be able to get the money out on fairly short notice (say, if we had a car accident or something), so it definitely wouldn't be anything with much risk. We've never withdrawn money from it, but it's there to be used if we need the money in a pinch.
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Dec 5, 2009 08:22
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waffle posted:Do you guys think there's a better option for the money in our savings account? I hate to see it gain barely any interest, so I've been thinking about putting the money in a capital preservation fund or something. The only thing is that we would need to be able to get the money out on fairly short notice (say, if we had a car accident or something), so it definitely wouldn't be anything with much risk. We've never withdrawn money from it, but it's there to be used if we need the money in a pinch. Really th only other option with capital preservation is a money market fund, but you're giving up FDIC protection and possibly some liquidity for returns that may not be any larger. A savings account is really the best place for an emergency fund.
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Dec 5, 2009 09:58
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waffle posted:So my girlfriend and I have an emergency fund/savings account of roughly $5000 sitting in a very low interest rate savings account. This is independent of our long term savings, which is in growth directed mutual funds and an IRA. You could always try and stack IRAs but for $5,000 the difference is going to be negligible and really not worth the effort, not to mention that you would be giving up some liquidity. Also to everyone, sorry for completely forgetting about this thread. Is there any information that any recommends I add to the OP now that a lot of time has passed?
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Dec 5, 2009 12:31
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KarmaCandy posted:And if anyone's curious, here was his explanation: It's probably ok, however, if he wants to continue doing it on any sort of volume he should move to a broker that will not charge commissions on his trades for larger accounts. Zecco comes to mind. SecretFire posted:In related news, I've had a lump sum sitting in my brokerage account for over a month now, but I haven't yet put it into the portfolio I designed. It seems like every day I have the free time to do it, the market is up a couple of percent, and I'd prefer to wait until it's down a few percent to put the money in. I really need to stop trying to time the market but...aggh. I am in the same boat. I may just dump it all into a bond ETF until small market correction comes. Heh all I want to do is buy on a down tick but it does not appear that will ever come.
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Dec 5, 2009 17:21
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SecretFire posted:Really th only other option with capital preservation is a money market fund, but you're giving up FDIC protection and possibly some liquidity for returns that may not be any larger. A savings account is really the best place for an emergency fund.
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Dec 6, 2009 01:42
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Small White Dragon posted:Wait, I thought Money Market accounts were FDIC insured? Or is that not what you're talking about? Some FDIC banks (or NCUA insured credit unions) offer what they call a money market ACCOUNT, which is insured like any other deposit, and are just another savings vehicle (typically with higher minimums and higher yield). Mutual Fund companies offer money market FUNDS, which are NOT FDIC insured, but have a goal of holding the share value at $1.00/share. The government did step in to offer insurance on money market funds shortly after the Lehman collapse last year, but in general, they are not insured. At the moment, FDIC insured savings accounts and CD's are preferable to money market and bond funds, due to both better yield AND better safety (sounds like a free lunch, because it kinda is right now). The reality is that high quality commercial paper and treasury bills are yielding next to nothing, and this is what money markets invest in. Unlike banks, money market funds cannot give teaser rates nor provide loss-leaders (other than in the form of management fee reduction which is still subtracted from the yield from the underlying investments). At a time like this, there is no reason to choose a money market fund.
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Dec 6, 2009 02:05
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So I was looking up some mutual fund or index or I forget what exactly and Google gave me a link to this site: http://www.altruistfa.com/ Now I'm not trying to plug using their services, but what I will plug is their investment suggestions: http://www.altruistfa.com/dfavanguard.htm This is a really impressive list of super low cost funds for pretty much all segments you would want. edit: holy balls http://www.altruistfa.com/readingroomarticles.htm abagofcheetos fucked around with this message at 21:28 on Dec 7, 2009 |
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Dec 7, 2009 21:15
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I have $4,900 in a municipal retirement fund from a job that I quit after a year and a half. If I cash it out I will take a fairly steep tax on it. I'm looking to roll it over into a Roth IRA. My parents want me to go to the local bank or Edward Jones guy for this, but after reading things on here it seems I could just do it myself and save money, correct?. Does anyone else use Vanguard or should I look to Schwab or another company. I'm 26 and have a new job with a state retirement fund and no other investments (obviously).
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Dec 8, 2009 20:29
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Dave The Ripper posted:I have $4,900 in a municipal retirement fund from a job that I quit after a year and a half. If I cash it out I will take a fairly steep tax on it. I'm guessing it is a qualified tax-deferred account, so the default choice should be to rollover to a Rollover IRA (which is a traditional IRA) and only convert to Roth if it makes sense (i.e. you are in a low tax bracket and you are able to pay the tax bill with money outside the account). No, don't go to your local bank. Bigger no to Edward Jones salesmen. Don't even meet with him once. DIY at Vanguard is a good idea, but read up on investments first so you know how you want to invest your money.
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Dec 8, 2009 20:48
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I just bought some ETFs for the first time. It's sort of exciting considering it was just putting in numbers into boxes. The liquidity is kind of impressive, even the odd lots I was buying were filled within a second or two within a cent or two of the market price. One quick tip for Canadians buying ETFs: I was going to go with the iShares XSB for my bond portion, which is short-duration bonds including both government and corporate bonds. Instead I went with CLF, which is solely 1-5 year government bonds and has a slightly lower MER (.15% vs. .25%). It's not that I have a problem with corporate bonds, it's just that Canada's market isn't very diverse and most of XSB's corporate bonds are in the financial sector.
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Dec 8, 2009 23:29
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Thanks 80k. I used to have an account with Edward Jones, but that thing dried up so fast with fees. Do you know much about 457's? My department offers one, either through Nationwide or IMCA-RC. Do you know anything about either?
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Dec 9, 2009 00:14
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Dave The Ripper posted:Thanks 80k. I used to have an account with Edward Jones, but that thing dried up so fast with fees. My hunch is you will do better with ICMA than with Nationwide, as ICMA tend to have lower and more transparent administrative costs. Nationwide is typical of insurance companies running retirement accounts (complex fee schedule with hidden costs. Don't even bother asking what total fees are, as even their reps don't know how to add them all up). Check the funds offered in the 457 plans and get an idea of the average expense ratio, plus any additional administrative fees charged by ICMA. If it is low (not much higher than 0.5% total expense), it may be worth choosing a 457 over your own IRA. 457's have the added benefit of being able to withdraw at anytime without the 10% IRS penalty. If fees are too high, consider avoiding the 457 and focus your retirement savings on Roth or Traditional IRA's at Vanguard (where total expense is closer to 0.2%).
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Dec 9, 2009 00:36
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80k posted:I'm guessing it is a qualified tax-deferred account, so the default choice should be to rollover to a Rollover IRA (which is a traditional IRA) and only convert to Roth if it makes sense (i.e. you are in a low tax bracket and you are able to pay the tax bill with money outside the account). If you're too clueless for Vanguard and don't want to gently caress something up horribly, are there other options with more guidance? If not, I guess I get to learn to not be as clueless. Probably a good idea in the long run, but my time is precious.
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Dec 14, 2009 15:56
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Vanguard and others have these "Target Retirement 20XX" funds that automatically re-allocate for you over time... it might be reasonable to dump your entire IRA into one of those. That's what I'm doing with my 401k.
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Dec 14, 2009 16:31
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I'm starting an RRSP (Canadian retirement savings plan), just waiting for the paperwork to be finished and transfer the starter money in. I'm going to do a basic allocation using ETFs (equities by geography, Can bonds, etc) but I'm confused about the choice of ETFs. Am I locked into buying ETFs that are Canadian or are any ETFs available to me? I understand Canadian companies offering ETFs for the TSX, Canadian bonds, etc, but why would I buy a Canadian ETF for US equities if there's lots of US options? Am I only able to buy what's listed on a Canadian exchange or does the exchange rate make buying US ETFs off an American exchange not make sense? Whenever I do any reading about Canadian retirement stuff, all the comparisons, reviews, etc are for Canadian ETFs only and I feel like I'm missing out on some better options.
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Dec 14, 2009 17:34
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Solaron posted:If you're too clueless for Vanguard and don't want to gently caress something up horribly, are there other options with more guidance? Target Retirement xxx (as slap me silly recommended) is certainly better than being clueless and picking funds randomly. But reading one book (like William Bernstein's Four Pillars of Investing or his new Investor's Manifesto could benefit you for a lifetime.
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Dec 14, 2009 17:34
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80k posted:Target Retirement xxx (as slap me silly recommended) is certainly better than being clueless and picking funds randomly. But reading one book (like William Bernstein's Four Pillars of Investing or his new Investor's Manifesto could benefit you for a lifetime. I agree wholeheartedly with this. I'd recommend the Investor's Manifesto one for more casual investors, as it is more up-to-date with information from the real-estate bubble, and it is aimed more at those without much financial education background. Either one will take you probably no longer than about 6 hours in total to read - time well spent to give you a solid foundation of understanding invesment for longterm goals.
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Dec 14, 2009 19:25
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EchoBase posted:I'm starting an RRSP (Canadian retirement savings plan), just waiting for the paperwork to be finished and transfer the starter money in. I'm going to do a basic allocation using ETFs (equities by geography, Can bonds, etc) but I'm confused about the choice of ETFs. Am I locked into buying ETFs that are Canadian or are any ETFs available to me? I understand Canadian companies offering ETFs for the TSX, Canadian bonds, etc, but why would I buy a Canadian ETF for US equities if there's lots of US options? Am I only able to buy what's listed on a Canadian exchange or does the exchange rate make buying US ETFs off an American exchange not make sense? Whenever I do any reading about Canadian retirement stuff, all the comparisons, reviews, etc are for Canadian ETFs only and I feel like I'm missing out on some better options. There are some sources that will talk about buying US ETFs, such as https://www.canadiancapitalist.com . Pretty much every canadian broker will give you access to all of the standard american exchanges, where you'll be able to buy the funds, and many of the vanguard funds are excellent options (I now hold VTI and VEA). However, keep in mind that you're buying these funds using US dollars, so you're exposed both to the fluctuation in the fund and the fluctuation in the currency exchange rate. There's been a fair amount of discussion recently about hedging the currency risk by instead buying a fund that employs currency hedging, and the general thought is that over the long term, hedging might not be worthwhile. That said, a fund that attempts to hedge away the currency exposure, like XSP, may still be worthwhile. Personally I like the idea of a bit of diversification when it comes to currency holdings. You'll generally want to put US/foreign holdings in an RRSP, because in a taxable account you'll pay your full marginal rate on dividend distributions, and 15% or 30% (depending on if you filled out a W8-BEN) withholding tax will be taken by the US government, although you'll receive a tax credit for it.
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Dec 15, 2009 01:18
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So the time has come to make my 2nd ever Roth IRA contribution. I started it in 2008, putting the entire initial $5k into Vanguard's VTI ETF. Then the bottom fell out, and it's spent the whole of 2009 climbing back up, and is still -8% from when I first purchased it. Now I'm wondering what I should do with 2009's contribution. Should I start to diversify on such a small scale, given I've just started? I was thinking of picking a Vanguard international ETF and a bond fund (like BND) and dividing it between the two, giving me 50% stock market, 25% international, 25% bond. Does that sound ok? Should I look in a different direction?
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Dec 15, 2009 23:22
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Diseased Yak posted:So the time has come to make my 2nd ever Roth IRA contribution. I started it in 2008, putting the entire initial $5k into Vanguard's VTI ETF. Then the bottom fell out, and it's spent the whole of 2009 climbing back up, and is still -8% from when I first purchased it. Sounds fine. For the international component I'd suggest going with VEA rather than VWO, unless vanguard as a fund that combines those as well.
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Dec 16, 2009 04:02
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SecretFire posted:Sounds fine. For the international component I'd suggest going with VEA rather than VWO, unless vanguard has a fund that combines those as well. That would be VEU.
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Dec 16, 2009 04:04
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Yup that's exactly what I was looking for. Thanks guys. It feels like it will be easier to diversify a portfolio once I get more built up, but I guess percentages can be applied to any balance, eh? Thanks again.
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Dec 16, 2009 04:22
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Diseased Yak posted:Yup that's exactly what I was looking for. Thanks guys. yea, as long as you are getting dirt cheap commissions on trades. You don't want trading costs to become a significant percentage of your transactions.
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Dec 16, 2009 04:23
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Disregard, I have poor reading comprehension.
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Dec 16, 2009 04:23
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80k posted:yea, as long as you are getting dirt cheap commissions on trades. You don't want trading costs to become a significant percentage of your transactions. I have my Roth IRA account at TD Ameritrade. They may not be the cheapest, but I'm only looking at 1 or 2 trades per year. So far I've been letting my IRA contribution build up in a savings account all year long and then investing in one lump sum. Don't know if that's the best way or not, though.
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Dec 16, 2009 17:18
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Diseased Yak posted:I have my Roth IRA account at TD Ameritrade. They may not be the cheapest, but I'm only looking at 1 or 2 trades per year. So far I've been letting my IRA contribution build up in a savings account all year long and then investing in one lump sum. By adding two more ETF's to your portfolio, you will increase the "1 to 2" trades per year to possibly "3 to 6". This is the main reason to minimize the number of ETF's if you have a low balance. Keep that in mind when deciding the optimal portfolio, which can depend on your total balance. For instance, you could reduce down to a 2-ETF portfolio and be globally diversified. Simply use VT (Vanguard All World ETF which includes US and international stocks) and BND for bonds. As your assets grow, go to: - VTI/VEU/BND. - VTI/VEU/BND/TIP - VTI/VBR/VEU/BND/TIP - VTI/VBR/VEU/VSS/BND/TIP - VTI/VBR/VEU/VSS/BND/TIP/VNQ As your assets grow, it is no big deal to be doing 10-20 trades per year, allowing you to diversify more. Also, by the time you have $25K, you can open a Wellstrade account, get 100 free trades a year, and go hog wild.
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Dec 16, 2009 17:40
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As we start 2010 I have some cash I want to use to quickly max out my annual IRA contribution but am unsure of which fund add to (I use Vanguard). Retirement portfolio looks like this so you can get an idea of how I am diversified. I am a 24 year old who won't be touching this stuff for a long time so think 25-30 year time horizon. Right now I am thinking about adding more to the international stock fund in my IRA. But was wondering if you goons had any other ideas or funds I should look into. alreadybeen fucked around with this message at 18:52 on Dec 24, 2009 |
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Dec 24, 2009 18:38
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alreadybeen posted:Right now I am thinking about adding more to the international stock fund in my IRA. But was wondering if you goons had any other ideas or funds I should look into. Your aggregate international exposure is 30% or so. IMO, you would probably benefit from some more international equity exposure (my own portfolio is about 50% international). You may want to consider VFSVX if you want small cap international equity exposure. The reason I mention this is because your current international funds (VGTSX and VEMIX) are pretty much large-cap only. Also, I would probably add some more bond exposure. Sure, common wisdom is that you should overweight equities like a motherfucker if you are young, but adding some more bond exposure can decrease your portfolio volatility without really goosing your expected returns. Not only that, but most people really underestimate the risks associated with an (almost) all-equity portfolio.
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Dec 25, 2009 06:09
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I'm planning on opening up a Roth IRA account but am trying to decide who to use. I am currently moving my checking/savings over to Schwab from Chase because they offer good interest rates and don't have minimum fees/balances/etc. The Schwab Checking/Savings accounts also require I open up a Schwab brokerage account but I don't have to use that account or pay any fees for it. I am trying to decide where to open my Roth IRA account and I'm deciding between Schwab and Vanguard. Vanguard looks more appealing to me because they have funds with very low expense ratios - like the Target Retirement 2045 VTIVX has a 0.18%. The similar targeted Schwab funds have expense ratios from 0.63-0.77%. This leads me to think that opening my Roth IRA with Vanguard would be a better choice. Am I missing something?
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Dec 26, 2009 17:47
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that one guy posted:I'm planning on opening up a Roth IRA account but am trying to decide who to use. I am currently moving my checking/savings over to Schwab from Chase because they offer good interest rates and don't have minimum fees/balances/etc. The Schwab Checking/Savings accounts also require I open up a Schwab brokerage account but I don't have to use that account or pay any fees for it. No you aren't. Vanguard has lower expense ratios, which means more money for you in the long run.
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Dec 26, 2009 18:05
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Is there any reason I would open my Roth IRA with Schwab rather than Vanguard?
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Dec 26, 2009 18:29
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that one guy posted:Is there any reason I would open my Roth IRA with Schwab rather than Vanguard? Does Schwab let you buy Vanguard funds directly?
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Dec 26, 2009 18:57
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that one guy posted:Is there any reason I would open my Roth IRA with Schwab rather than Vanguard? No, I can't think of any. Vanguard has the best selection of low-cost mutual funds. If you open your account at Vanguard, you will have free access to all their funds, plus no other annual maintenance fees as long as you opt into electronic delivery of statements/confirmations/prospectuses. However, in my opinion, the best option for investors getting started is to open an account at a discount brokerage that has low trading commissions and then use ETF's for your portfolio instead of open-ended mutual funds. In general, you will have the lowest expense ratios from using ETF's, as well as have more trading flexibility (no account restrictions or minimums). You have access to ETF's from major companies like Vanguard, SSGA, Ishares, and more from which to build a very diversified portfolio covering any asset class you can think of. If you qualify for Wellstrade's free PMA account with 100 free trades (you need $25K in total assets at Wellstrade), that is the best option. If not, it would also be cost effective to go to a place like OptionsHouse, which has dirt-cheap $2.95/trade, and no other maintenance fees. Zecco also has some free trading but charges an annual IRA fee, so i would avoid them. I am sure there are other good choices. 80k fucked around with this message at 19:32 on Dec 26, 2009 |
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Dec 26, 2009 19:22
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I will look into that OptionsHouse account stuff in the future, 80k. For now I am transferring my wife's retirement savings away from State Farm and into a Vanguard account. Unfortunately it's a Traditional IRA and I have to transfer it into a Traditional IRA account with Vanguard. The account is around 4k. I should be able to convert it to a Roth IRA once it's transferred over and not pay too much in the way of taxes on it, right?
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Dec 26, 2009 22:26
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Thanks Ravarek, I was already planning on doing some bonds, but I hadn't thought about small cap intl. I'll definitely check that out.
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Dec 27, 2009 16:33
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