|
waffle posted:I'm going to open a Roth IRA, and I really like the Vanguard funds, but I don't know that I'll easily obtain enough money to have money in more than one fund for a while. I want to go ahead and get started, and Schwab has some good low expense ratio index funds--just not as many as I'd like, into the future. Will it be hard to switch companies, say, 5 years from now? I don't have any experience with switching companies, but if you have $3000 you can open a Target Retirement fund at Vanguard that approximates your investing goals and hold that until you have enough to diversify further; these funds have the further benefit of re-balancing themselves automatically.
|
#
?
Jan 28, 2010 15:38
|
|
|
|
| # ? May 16, 2024 00:00 |
|
|
I want to create some kind of savings receptacle for my newborn. All of his birthday money and occasional injections from mom n dad would go in as well. I'm looking for something he can pull money out of when he's an adult or whenever I sign off ownership of the account to him. Or an account I can liquidate when he wants to do something with the money. What do you recommend? Which companies? I'm thinking a mutual fund is one option but that opens up a whole slew of other questions, such as Which type of funds are appropriate for long-term growth, Do I go with a mixed bag of Large Cap, Small Cap, Bonds, International, Which funds/fund managers are most reputable. I want a company I can start off small with that won't thumb their nose just because I'm starting off with $100. Gotta start somewhere, and those "please contact us if you have investments over $50,000" investment companies alienate the hell out of most of us that do not have $50k lying around in investments. It's a catch-22, kinda like the college graduate who only encounters positions requiring x years of experience. I am also in the position where I can invest some take-home income into mutual funds and the stock market. I did a little of this in college with E-Trade and enjoyed it. What company is best for this these days? Scottrade? TD Ameritrade? Schwab?
|
|
#
?
Jan 28, 2010 17:44
|
|
|
Orgasmo posted:I want to create some kind of savings receptacle for my newborn. All of his birthday money and occasional injections from mom n dad would go in as well. I'm looking for something he can pull money out of when he's an adult or whenever I sign off ownership of the account to him. Or an account I can liquidate when he wants to do something with the money. What you're describing is a trust fund, but I would open a 529 college savings plan. All gains are tax free and it's the best way to start saving for college. Trust funds are for rich people.
|
|
#
?
Jan 28, 2010 17:50
|
|
|
Don Wrigley posted:What you're describing is a trust fund, but I would open a 529 college savings plan. All gains are tax free and it's the best way to start saving for college. Trust funds are for rich people. Are 529's exclusive to college expenses? I'm also enrolling him in state college pre-paid tuition.
|
|
#
?
Jan 28, 2010 17:57
|
|
|
waffle posted:I'm going to open a Roth IRA, and I really like the Vanguard funds, but I don't know that I'll easily obtain enough money to have money in more than one fund for a while. I want to go ahead and get started, and Schwab has some good low expense ratio index funds--just not as many as I'd like, into the future. Will it be hard to switch companies, say, 5 years from now? It is very easy to switch companies. I've done it a few times. You may be out of the market for a few days (unless you transfer assets in kind and sell when you arrive at the new custodian, but that has its costs due to brokerage commissions). My experience is that asset transfers are easy to procrastinate. If you are sure that Vanguard is where you want to be longterm, starting with one fund and branching out as funds are added is a better compromise than starting elsewhere and transferring later, imo.
|
|
#
?
Jan 28, 2010 20:47
|
|
|
I probably should just call up my tax guy given how complicated everything is for me, but for you guys I'm just wondering if sticking more to my low expense ratio Vanguard account is a good idea given my new job and my eventually-expiring stock options. Base Stats: Age - 26 Married (hard, non-negotiable plan for no kids) Risk Tolerance - Medium/High Retirement / Investment Accounts: Fidelity 401k (previous job) - ~$1.5k 80/20 mix of small cap international emerging markets / TIPS (wish I knew the fund names). There was no match, hence gently caress all for contribution. TSP 401k (previous job) - ~$26k 70/30 S&P index fund plus treasuries (F and G funds I think). Holding until I want to move out of index funds. Vanguard Roth IRA - ~$20k, 100% in VFINX Employer Stock Options in Merril Lynch brokerage account ~$45k market value post-tax I've been investing for retirement since 2001 and was disappointed to see much of my investment earnings from college wiped out and due to a personal situation unrelated to market conditions, I was unable to capitalize upon the market return in later 2009. I guess it goes to show that you need to also be ready to contribute extra when the market is in your favor if you're a long-term investor. What can I do to minimize such (historically rare, admittedly) losses while still being in relatively high-growth funds? Money market accounts seem to be a good idea for what I want, but what are their disadvantages compared to something as growth-oriented as an index fund? Any good fund suggestions for Vanguard and Fidelity account holders? I'd like to move out of domestic almost completely. Also, anyone have any opinion on Merril Lynch brokerage accounts? I was considering moving them over to an Etrade account to minimize expenses and give me better control over transactions, but maybe I'm penny-pinching too much or overthinking it.
|
|
#
?
Jan 28, 2010 21:08
|
|
|
quote:I've been investing for retirement since 2001 and was disappointed to see much of my investment earnings from college wiped out and due to a personal situation unrelated to market conditions, I was unable to capitalize upon the market return in later 2009. It sounds like your tolerance for risk was a lot lower than you thought. Remember that if you need to pull money out in the near future, or there is a significant chance that you'll need to, your tolerance for risk/variance is pretty low. If you've been investing since 2001, you should still have some small growth overall, unless you were investing in something that didn't follow the index or you pulled money out in 2008. The "lost decade" is only such without dividends and assuming a lump-sum investment, not regular contributions. Of course, the gains are still pretty crappy, but that'll happen sometimes. quote:Employer Stock Options in Merril Lynch brokerage account ~$45k market value post-tax AAAAAAAAhhhh like half your money is in options for one company, unless you work for "Deity who Prints Money Inc." and maybe even then you need to start selling some/most of these.
|
|
#
?
Jan 28, 2010 21:27
|
|
|
DuckConference posted:It sounds like your tolerance for risk was a lot lower than you thought. Remember that if you need to pull money out in the near future, or there is a significant chance that you'll need to, your tolerance for risk/variance is pretty low. If you've been investing since 2001, you should still have some small growth overall, unless you were investing in something that didn't follow the index or you pulled money out in 2008. DuckConference posted:maybe even then you need to start selling some/most of these.
|
|
#
?
Jan 29, 2010 00:29
|
|
|
Can someone help me figure out the difference between PLDAX, PTRAX, VIBSX and IUTIX? As far as I can tell PLDAX and PTRAX differ largely in duration, where PLDAX is more short term and PTRAX is more long term bonds. Is there any other significant difference between them? VIBSX has much lower expenses, which seem to me might outweigh the potential loss I might suffer due to inflation in the near future. It is also much less invested in the mortgage sector. IUTIX, a treasury fund, seems to be a low risk, low reward fund for those more interested in security of principle. These are the four options available for bonds in my 401K. Ideally I'd love a short term index fund, but I'm more or less stuck in this 401K until I start my career this summer.
|
|
#
?
Jan 30, 2010 05:25
|
|
|
Hi again. Is there any reason not to use the dirt cheap online brokers such as Scottrade if you're only doing occasional investment in mutual funds once in a while? Supposedly their fees are super low but they have lovely customer service, crappy interface and no debit cards. Let's say that doesn't necessarily mean much to me, is there any reason why I should be picking someone else like Fidelity or MSSB instead of them? DreadCthulhu fucked around with this message at 21:35 on Feb 1, 2010 |
|
#
?
Feb 1, 2010 21:31
|
|
|
Why does Vanguard list the total international stock fund as having very high risk, a few steps above an all US stock fund. Is it only the currency exposure if the USD gains strength?
|
|
#
?
Feb 1, 2010 23:52
|
|
|
sanchez posted:Why does Vanguard list the total international stock fund as having very high risk, a few steps above an all US stock fund. Is it only the currency exposure if the USD gains strength? The currency risk might be a valid reason if it was only a RISK spectrum. But it is a RISK/REWARD spectrum (as Vanguard states "More Risk/More Reward"). There is no reward for currency risk, so the relative position of Domestic vs International on that spectrum doesn't make sense on account of currency risk alone. You could argue that inclusion of emerging markets puts Total International further on the scale. However, why is Developed Market Index and Tax Managed International (both of which exclude emerging markets) also further out on the scale than a domestic stock fund? There is no answer that I can think of. IMO, it is bogus, and there is no good basis for Vanguard to make that claim. Chalk that one up to irrational home bias. 80k fucked around with this message at 00:01 on Feb 2, 2010 |
|
#
?
Feb 1, 2010 23:58
|
|
|
80k posted:IMO, it is bogus, and there is no good basis for Vanguard to make that claim. Chalk that one up to irrational home bias. Maybe instead they should break out the risk from the reward?
|
|
#
?
Feb 2, 2010 01:09
|
|
|
Phil Moscowitz posted:Seeing Cornholio's mindblowing expense ratios has made me examine my own. Admittedly I've basically ignored most of my 401k details, but I contribute the maximum each year with $5000 to the IRA as well and so does my wife. Edit - What I'm thinking about is something along these lines (the expense ratios are coming from the latest prospectus, disclaimer that I know sweet gently caress all about investing): 15% - Stable asset return fund (0.859%) 25% - Large cap equity fund (0.870%) 25% - Mid cap equity fund (0.909%) and/or all cap equity fund (0.917%) 35% - International index equity fund (1.052%) I'm thinking about putting some in a bond index fund too, but that seems redundant with the stable asset return fund. Both funds have a similar expense ratio, but the stable asset return fund is slightly lower. The Rokstar fucked around with this message at 01:57 on Feb 2, 2010 |
|
#
?
Feb 2, 2010 01:45
|
|
|
This may be a dumb question, I don't know much about this stuff. I'm in the UK though I'm not sure if this applies elsewhere. Having just got a lump-sum payment for some work I did a while back I'm looking at investing, other than my work pension (where I pay the maximum the my employer will match), for the first time beyond just sticking a money in a savings account. I've just payed off my mortgage  . With the remainder I'm maxing out this years ISA while I still can and will be setting up some regular contribution (essentially what I would have been paying into the mortgate) to continue maxing out my ISA on an ongoing basis.Anyway, the question regards ISA. Whenever I see people talk about them they're referred to as descrete entities, due to the yearly limits placed on them. Does this extend to their ongoing management? I'm thinking primarily about stocks and shares ISAs here. I've set up a self selecting stocks and shares ISA account with a broker. It allows me to buy and sell funds and shares etc. However next year, if I wish to add that year's allowance to an account with the same broker will I be adding it into a seperate account, or just it just all go into the same big pot, up to the limit each year? That's probably way too many words for a simple question. Of course I could just ring and ask, but I can't talk about that stuff on the phone at work and I'm impatient. I have no idea what funds I'm going to invest in yet. I just wanted to make sure the money was in there before April. I'll have to start researching where it goes now. From the reading I've done ISAs invested in stocks and shares seem to be a lot more of a mystery in the UK than in the US where based on what I've read here it seems like the norm. Gravy Jones fucked around with this message at 18:04 on Feb 3, 2010 |
|
#
?
Feb 3, 2010 17:45
|
|
|
Hello Pity posted:Having just got a lump-sum payment for some work I did a while back I'm looking at investing, other than my work pension (where I pay the maximum the my employer will match), for the first time beyond just sticking a money in a savings account. Were taxes withheld when it was paid out to you? If not, you'll probably owe a whole bunch so keep some money around for that. As far as what to invest in, the advice remains the same. Low-cost index funds split between the stock market and more stable fixed income. You'll have to do some legwork to find the best index mutual funds in Britain or best domestic index ETFs, but for your international component you can always buy vanguard ETFs.
|
|
#
?
Feb 3, 2010 21:07
|
|
|
Yeah, taxes are already sorted ( ).I've been doing some research on funds. I like the look of index funds for the bulk of my initial investment. These ones have very, very low charges. But need to check out performance etc. I really don't know much about this stuff so plan on doing a bit of reading. Meanwhile this year's ISA will be sitting there getting no interest and gathering dust. But I figure I'm better off taking my time. I wouldn't mind learning a bit about stocks myself and having a go with a small portion of my money. But I think I'll just stick with fairly low risk funds for the first year or so. Edit: Oh there's a fact sheet for the fund. Would I be correct in the assumption that given their nature index funds of the same type/market will tend to be fairly close to each other in terms of performance? Another question that I'll probably try and look up myself anyway. Is a funds rating (Morningstar or whatever) relative to the performance of the market in general or an absolute thing? I mean this has a three star rating... does this mean it's a so-so FTSE index fund, or does it mean the FTSE has been doing so-so, so of course the fund is an average performer? Gravy Jones fucked around with this message at 22:55 on Feb 3, 2010 |
|
#
?
Feb 3, 2010 22:46
|
|
|
An aside that blew my mind a little. I work for a small privately owned company. My boss doesn't do matching on our Stakeholder Pension scheme (which I think is the equivilent of your 401k thing), instead he puts in a flat 3% of your salary if you join the scheme. Which is fairly generous of him. There's a minimum £20 a month, which you get tax relief on, to join. Of the 5 people who work for us under 25 not a single one of them have taken him up on this FREE MONEY. The fund is kind of lovely and has high charges, but for most of them £20 a month would actually become £50-£60 a month. I've even taken a couple of them aside and tried to explain it to them, but they're just not interested. Then again I didn't start even thinking about this stuff until well into my 30s so it's a bit hypocritical.
|
|
#
?
Feb 4, 2010 16:15
|
|
|
Hello Pity posted:Edit: Oh there's a fact sheet for the fund. An index fund typically hovers around 3 stars on Morningstar, give or take a star during anomalous periods. same type/market should tend to be fairly close but make sure you evaluate the fine details. For instance, inclusion/exclusion of emerging markets between MSCI EAFE and some FTSE international funds will create significant differences. Morningstar may not account for that and so I would generally avoid looking at Morningstar ratings, but instead, evaluate the index methodology. Differences in performance should mostly be attributed to risk and expense ratio. Unless there are flaws in the index methodology or if it is susceptible to index front running (Russell and S&P indexes have had problems with this in the past). Also evaluate number of holdings. Indexes that cover the same markets can vary widely in number of stocks they hold. And even index funds that cover the same index can vary (some index funds employ sampling while others cover the vast majority of the index).
|
|
#
?
Feb 4, 2010 18:07
|
|
|
A couple of days ago that would have meant nothing to me, but I'm getting some of it now. Thanks. I think the problem is, as a newbie, is stuff like "evaluate number holdings" as I have nothing to value against and no idea what the metric is for being good etc. But as I've said before I'm in no rush to dive straight in and I'll do more research. A question regarding bond type funds. I get that they are a lot more stable and are relatively low risk and growth. I assume as with all funds you're essentially paying your fee for people who are (supposedly) good at picking good bonds and keeping on top of that stuff. Is there anything to look for in a "good" bond fund?
|
|
#
?
Feb 4, 2010 21:30
|
|
|
Hello Pity posted:I think the problem is, as a newbie, is stuff like "evaluate number holdings" as I have nothing to value against and no idea what the metric is for being good etc. But as I've said before I'm in no rush to dive straight in and I'll do more research. There is no metric. An index fund that employs sampling may experience tracking error but will also reduce trading costs (which is a hidden cost not included in the ER). An international stock index fund that has 2000 stocks is not automatically better than one that has 500. The latter may be a more efficient way to access the asset class at the lowest cost. On the other hand, some people may be particularly sensitive to tracking error regret, in which case they would still choose the former. It is often a personal decision. Hello Pity posted:A question regarding bond type funds. I get that they are a lot more stable and are relatively low risk and growth. I assume as with all funds you're essentially paying your fee for people who are (supposedly) good at picking good bonds and keeping on top of that stuff. Is there anything to look for in a "good" bond fund? Look for average duration and average credit quality as a starting point. For most purposes, sticking with highest quality corporates, agency, and government bonds of short or intermediate duration satisfies the needs of most people. When examining average duration, be careful if the bond fund holds a large percentage in mortgage backed securities as the average duration is an estimate and can be misleading. So Vanguard Total Bond Market fund (which holds a lot of MBS) duration value and Intermediate Term Bond index fund (which holds zero MBS) duration value is not an apples to apples comparison. Avoiding funds that hold MBS is a good way of removing that level of complexity (effect of prepayment and extension risk). Rather than seeking highest return in bonds, focus more on gaining the diversification benefit of bonds as part of your entire portfolio. Vanguard short-term and intermediate-term bond index funds are good choices, as is the Inflation-protected securities (TIPS) fund. If you are looking at active funds, pay attention to expense ratios. Pimco is a good active bond shop but their retail funds are expensive. But if you have access to institutional share classes (via 401k or if you have large amount to invest), it becomes a more interesting choice.
|
|
#
?
Feb 4, 2010 22:50
|
|
|
Goons: Looking for general advice or opinion on my current financial/savings information. I'm 23, a paramedic, I work for the city of New York. My current pay is 48k-ish a year before shift differential, overtime, etc. I have been working for the city since July, and am enrolled in the pension system. If I keep doing this I can retire at 48 with a 50% pension. The downside is I currently pay 9% pretax into the pension (after 10 years it goes down to 6%). On top of that I've enrolled in the city's deferred comp plan (it's a 457k plan), and have 5% pretax going into that, which is obviously not matched since they're giving me a pension. My average take home pay for an entire month is probably around $2600, depending on the amount of overtime I've done. I only have about 6k in savings, since I bought my apartment in October and had to borrow 15k from my parents and otherwise wipe myself out to pay the down payment. My mortgage + co-op fees are $1777/month, and I am paying an extra $200 a month in principal. I can manage this alright on my own, and am trying to. I have a roommate (really a tenant, I guess) who gives me $975/month for rent/utilities which I have been putting right into savings, to try and build up my emergency funds. Once I have 15-20k in savings I'm also considering taking the money my roommate gives me and putting all of that into extra principal to try and speed up the mortgage as much as possible. The place is really lax, and is cool with apartment owners subletting their apartments indefinitely, so I'd love to hold onto this place forever and just rent it out, since at this point it could probably fetch $1700/month, and over time that's bound to increase some. Am I missing anything? senor punk fucked around with this message at 08:10 on Feb 12, 2010 |
|
#
?
Feb 12, 2010 08:08
|
|
|
Here's an odd question: How much is too much to invest into retirement? The company I will be working for has the extremely generous matching for their 401k of 50% with NO CAP. I plan to be putting in the legal max every year to leverage this (16.5k right now, correct?). So with their match that is 24.75k a year going into my 401k. Now, I know that Roth's are good for tax advantages, but while I'm trying to put some away towards that, can I allow myself to have a bit more of a fun portion of my budget if I want, since I'll already be socking so much away? I'm 24 also, so I still have a long history ahead of me.
|
|
#
?
Feb 12, 2010 17:23
|
|
|
No Roth IRA is going to get you guaranteed 50% a year performance. As long as you have enough money to pay your bills and save cash for rainy days, put as much as you can in that 401k. Also, Arrogant Bastard Ale is delicious, you have taste!
|
|
#
?
Feb 12, 2010 17:27
|
|
|
Well. If I were getting that much out of the 401k I wouldn't be too worried about missing the Roth opportunity.
|
|
#
?
Feb 12, 2010 17:28
|
|
|
Also, employers can have a habit of changing their contributions over time depending on the budget. So, take advantage of it while you can! It really is free money to make you a rich bastard when you retire.
|
|
#
?
Feb 12, 2010 17:30
|
|
|
dv6speed posted:Also, employers can have a habit of changing their contributions over time depending on the budget. So, take advantage of it while you can! It really is free money to make you a rich bastard when you retire. Exactly. It is a huge benefit and I plan to utilize it to the best of my ability. I wasn't even really talking about blowing more I guess, it is just I guess what I was asking (and was answered) was does the Roth become such a big focus at the moment then. Thanks guys.
|
|
#
?
Feb 12, 2010 17:32
|
|
|
I'm contemplating opening a Roth IRA to contribute for 2009, but I already filed my income taxes. Will I need to file an amendment? As I understand it, all contributions are after tax and are non-deductible, so I don't think I will. Any help?
|
|
#
?
Feb 12, 2010 18:43
|
|
|
Chin Strap posted:Exactly. It is a huge benefit and I plan to utilize it to the best of my ability. How long before you're 100% vested?
|
|
#
?
Feb 12, 2010 22:18
|
|
|
three posted:How long before you're 100% vested? Google posted:Google 401(k) Plan So immediately I guess?
|
|
#
?
Feb 12, 2010 23:43
|
|
|
Haha, you have Vanguard too. Sucks to be anybody else Edit: strwrsxprt posted:I'm contemplating opening a Roth IRA to contribute for 2009, but I already filed my income taxes. Will I need to file an amendment? As I understand it, all contributions are after tax and are non-deductible, so I don't think I will. Any help? No need to amend unless your income is low enough to get the credit. Just get the money in there before April 15 and make sure you mark it as a prior year contribution. slap me silly fucked around with this message at 23:55 on Feb 12, 2010 |
|
#
?
Feb 12, 2010 23:50
|
|
|
My employer matches 90% of 10% (I don't know why they didn't just say 9%) on a very conservative IRA, but it's a 3 year vest. If I don't know at this point whether I'll be with them for 3 years (I'm on a 1 year contract) is it a better option to go with a Vanguard fund, since odds are I'll get a better return?
|
|
#
?
Feb 14, 2010 02:09
|
|
|
Pudgygiant posted:My employer matches 90% of 10% (I don't know why they didn't just say 9%) on a very conservative IRA, but it's a 3 year vest. If I don't know at this point whether I'll be with them for 3 years (I'm on a 1 year contract) is it a better option to go with a Vanguard fund, since odds are I'll get a better return? Even if you're only there a year, assuming 33% vesting a year, that's equivalent to a 30% return on your contributions. There's no way you're going to beat that. Go with the 401K.
|
|
#
?
Feb 14, 2010 06:17
|
|
|
My benefits document says:quote:
First, I have no idea what an after-tax 401(k) is that isn't a Roth one. Ideas? Secondly, as someone who just graduated from grad school going into his first job, and planning to max his 401(k) contribution, which should I do? Pretax my yearly income will be 100k+ (single no depedents) so I am already at a high tax bracket. Does that make the benefits of a Roth moot?
|
|
#
?
Feb 16, 2010 22:26
|
|
|
Explain something to my sorry noob rear end plz. Say I dump a bunch of money in my ETrade account on the vanguard total market index (VTSMX). The thing has been hanging around 25-30 bucks up and down for a decade now. How is one supposed to make any gains with such an index if 10 years later it's still in the same place? Is it the re-investment of dividends that adds up over time?
|
|
#
?
Feb 17, 2010 02:26
|
|
|
DreadCthulhu posted:Explain something to my sorry noob rear end plz. Say I dump a bunch of money in my ETrade account on the vanguard total market index (VTSMX). The thing has been hanging around 25-30 bucks up and down for a decade now. How is one supposed to make any gains with such an index if 10 years later it's still in the same place? Everyone is calling this last decade "the lost decade" for a reason.
|
|
#
?
Feb 17, 2010 02:47
|
|
|
Chin Strap posted:My benefits document says: I don't think they're listing 3 different options; I think in the last part of that sentence they're describing the Roth 401k for people who are unfamiliar. As for which choice is better, I think its really a toss up. You'll hear arguments either way, but all things being equal it's probably a wash if both vehicles have the exact same investment choices within them.
|
|
#
?
Feb 17, 2010 04:53
|
|
|
flowinprose posted:I don't think they're listing 3 different options; I think in the last part of that sentence they're describing the Roth 401k for people who are unfamiliar. No, an after-tax 401k contribution is a legitimate 3rd option.
|
|
#
?
Feb 17, 2010 05:09
|
|
|
80k posted:No, an after-tax 401k contribution is a legitimate 3rd option. So this amounts to effectively the same as non-deductible traditional IRA contributions? I guess that would have the benefit of being able to withdraw your contributions without tax consequences if you want (but do you have to still pay the 10% penalty if before 59&1/2 ?)
|
|
#
?
Feb 17, 2010 05:14
|
|
|
|
| # ? May 16, 2024 00:00 |
|
|
I currently freelance (independent contractor) and work has been rather lousy. So I have no fulltime job or anything, money wise, other than what I do myself. What are the routes (if any) I can go for something better than a standard savings account for long term investing?
|
|
#
?
Feb 17, 2010 05:45
|
|