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Which book from the OP would be the best in regards to teaching me about the different vehicles for short, medium, and long term investing? I want to see learn what the different options are and compare based around liquidity, risk, etc. I'm good at saving, but I don't know what to do with it now. I've got my emergency fund, I maxed the 2010 IRA, I will max 2011, etc. Edit: Also, with funds (non retirement account) is there any minimum holding time etc? Lyon fucked around with this message at 20:11 on Feb 18, 2011 |
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Feb 18, 2011 20:05
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Ahh, okay, thanks guys. As for why I was concerned about the economy, that's news bias for you. Most of what I hear about the US is about how each policy is worse than the previous one, which coupled with the  stuff in DnD paints a pretty awful picture. But at the same time they're unquestionably a major player, and I didn't know how that stuff related to things like investments; so I asked you guys since I don't want to shoot myself in the foot by either wrongly investing or wrongly skipping out.Oh yes, for further info we've got about 50k to put in this (excluding around 10k emergency/spending money), and are probably going to put the bond stuff in a tax-free savings account and the rest into a retirement account. Does that sound good, or is there anything else we should be doing? Edit: Oh drat, the TFSA limit right now is 15k and not 20k. I'll get a TFSA once I've got residency though (hopefully within a few months), so I guess we'll just hold onto that extra 5k for now until we can drop it in mine... Unless we should stick it in the RSSP as another bond index there? As far as it's relevant, no plans for kids ever; I might have some future university costs not get covered, but they're pretty mild up here (~5k a year is the worst it gets); and we're still renting but it's pretty cheap. Doubtful about buying any property because we hate debt and might not want to stay in Quebec anyway. Husband brings home ~36k a year after tax and we'll probably get a nice refund once we dump some of that 50k off into the very belated retirement account. 12k of that is easy to save yearly, sometimes we save more. Company matches some dumb amount in the area of a few hundred bucks. Is this all alright so far? Culinary Bears fucked around with this message at 20:32 on Feb 18, 2011 |
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Feb 18, 2011 20:14
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What's the rule of thumb on the size of emergency savings accounts?
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Feb 18, 2011 20:24
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Lyon posted:Which book from the OP would be the best in regards to teaching me about the different vehicles for short, medium, and long term investing? I want to see learn what the different options are and compare based around liquidity, risk, etc. Minimum holding times for funds will depend on the company you're with but it should be clear in the fund summary.
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Feb 18, 2011 20:36
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moana posted:I would say the Four Pillars of Investing. It's a great beginner's book. Just bought it used off of Amazon, my infatuation with "investing" will probably only last a week or two, but hopefully I'll have learned quite a bit before it all ends and will benefit me in the future.
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Feb 18, 2011 21:51
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I am rebalancing my 401k money. I have two 401ks, one from a previous employer. I am using a vanguard index fund for my exposure to domestic stocks. My old 401(k) has VINIX as its only index fund. My new 401k has VIIIX (as well as VIEIX and FSIIX) as its index fund choices. What is the difference between VINIX and VIIIX? Should I favor one over the other? Is there any reason to consider VIEIX if I just want broad exposure to domestic stocks for this asset allocation?
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Feb 18, 2011 22:13
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Leperflesh posted:I am rebalancing my 401k money. I have two 401ks, one from a previous employer. I am using a vanguard index fund for my exposure to domestic stocks. VINIX and VIIIX are just two different varieties of S&P 500 index funds for institutional investments. They track exactly the same thing, but VIIIX has a slightly lower expense ratio (0.03% vs. 0.05%). It requires larger overall investment in order for a company to offer it in their 401k (like $200mil vs. $5mil). So if you're going to prefer one, it should be VIIIX since it has the lower expense ratio. VIEIX tracks a "completion" index. This is useful if you're also investing in funds tracking the S&P500, since it allows you to directly allocate to the group of stocks not included in the 500. The completion index accounts for about 25% of the market cap of US stocks, so if you want to allocate according to market cap, you would have your domestic exposure broken down into 75% VIIIX and 25% VIEIX.
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Feb 18, 2011 23:41
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flowinprose posted:VINIX and VIIIX are just two different varieties of S&P 500 index funds for institutional investments. ... So if you're going to prefer one, it should be VIIIX since it has the lower expense ratio. Makes sense I guess, thanks. quote:VIEIX tracks a "completion" index. Ahhh, awesome. This is perfect. Yeah, I think I'll do that 75/25 split and use the completion index, since I don't like focusing only on the S&P if a broader index is available. Edit: All done. My new asset allocation: 50% domestic stock (75% S&P 500, 25% S&P completion) 15% foreign stock 35% bonds Leperflesh fucked around with this message at 00:21 on Feb 19, 2011 |
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Feb 19, 2011 00:02
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Alright, sorry if I'm overthinking this without knowing much, but 60% does seem like a lot to put in Canada. I already have 40% in that bond index-e; should I really go with 20% Canadian equity on top of that, or should I move it to somewhere else like another US index or... I don't know, Japan or something? This is the e-series of stuff I've got to choose from. TD also has various ETFs but I'm not quite sure what the deal with those is yet and heard that it's best not to bother with them until you've got serious money to put in them due to commissions on trading.
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Feb 19, 2011 01:46
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Leperflesh posted:Makes sense I guess, thanks.
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Feb 19, 2011 18:24
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Goddamn posted:Alright, sorry if I'm overthinking this without knowing much, but 60% does seem like a lot to put in Canada. I already have 40% in that bond index-e; should I really go with 20% Canadian equity on top of that, or should I move it to somewhere else like another US index or... I don't know, Japan or something? your bonds should be Canadian. The issue is not the 60% combined of canadian stocks and bonds. The issue is whether you want 33% of your equities to be Canadian. I think it is fine but you could reduce it a bit. But don't get rid of it entirely.
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Feb 19, 2011 18:30
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edit: read some stuff that answered my question
Realjones fucked around with this message at 23:44 on Feb 22, 2011 |
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Feb 21, 2011 05:26
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What are this threads thoughts on the Wellesley Income Fund? It's 60/40 bonds to stocks. I'm looking for a fund to start stashing money away in for a "next big purchase". Thinking along the timeline of 3-8 years. Of course it seems like the stock market is almost back to all time highs but timing the market and blah blah blah.
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Feb 22, 2011 18:44
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Alright guys and gals I'm thinking this is the right thread to put this in, and I'm hoping that one of you will be able to point me in the right direction. But before I start asking questions I should first state my situation. I'm two years into my first full time job outside of college and I'm 25 years old. At this point in my life I'm putting 8% of my paycheck into the company's 401k plan and they match three quarters of that. The 401k is 20% one bond fund, 5% another bond fund, and 75% the 2040 retirement fund. Outside of that I've got a full year emergency fund that's in cash, $1200 per month. There is no debt in my life other than the monthly stuff that ends up on the credit card(paid off the last bit of college debt at the end of last year!). The credit card is paid off every month in full. The most I do with that is try to get about 10-20% of the limit to show up on the statement so the agencies see revolving credit. Also, I own my own car, however, it needs to get replaced soon. So if you don't see any issues with that let's get to my question. I don't see myself losing my job anytime soon, and while I'm in need of a new car I'm pretty sure that I'll be able to avoid touching my emergency fund. My emergency fund is currently sitting in an ING account with a 1.1% interest rate. Because of the very essence of how an emergency fund works I most likely will not be needing all of that money at once, and I'd like to get it working a little bit better for me. Whether that's through buying a corporate bond, finding some good CDs, or Government bonds I just want to get it a better interest rate and since it's an emergency fund it's got to be a very safe investment. So the question summarized: I've got a ~15k emergency fund that I would like to get a better interest rate on, what are your suggestions?
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Feb 23, 2011 22:14
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Lyon posted:What are this threads thoughts on the Wellesley Income Fund? It's 60/40 bonds to stocks. The guideline I've heard is any money you'll need in the next 5 years should go in nothing more risky than a savings account. Earth posted:Because of the very essence of how an emergency fund works I most likely will not be needing all of that money at once, and I'd like to get it working a little bit better for me. Whether that's through buying a corporate bond, finding some good CDs, or Government bonds I just want to get it a better interest rate and since it's an emergency fund it's got to be a very safe investment. CDs are as protected as savings accounts, no problem there if you don't mind eating X months of interest if you need to sell, or chaining them so that's less of an issue. But bonds have some risk and corporate bonds are even worse, not something I'd want to put emergency cash into! Fuschia tude fucked around with this message at 22:23 on Feb 23, 2011 |
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Feb 23, 2011 22:18
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Fuschia tude posted:CDs are as protected as savings accounts, no problem there if you don't mind eating X months of interest if you need to sell, or chaining them so that's less of an issue.
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Feb 23, 2011 23:24
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Fuschia tude posted:The guideline I've heard is any money you'll need in the next 5 years should go in nothing more risky than a savings account. Rates kind of suck everywhere too - even if there is some risk. GE Interest Plus Notes, for example, are only at 1.25% if you have under $15,000, and match Smarty Pig at 1.35% if you have $15k - $50k. And they're not FDIC backed like a savings account.
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Feb 23, 2011 23:53
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moana posted:Some dude just asked about this and it looks like most CD rates right now are less than SmartyPig's APR (right now at 1.35%). I don't think you'll get better than that with total security. That's part of the problem. When I look at CD rates they are mostly less than the 1.1% I'm getting right now which is why I let all of my CDs close and not renew them. I've got all of it in ING right now and don't think the additional .25% is worth switching over to SmartyPig. Considering that's $37.54 more in a full year it's really not worth the hassle to me right now. I was under the impression that if you can get in on some corporate bonds from stable companies that's some of the safest higher interest investments. I just don't know how to go about getting in on some of that. If I'm wrong please educate me.
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Feb 24, 2011 01:35
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Earth posted:That's part of the problem. When I look at CD rates they are mostly less than the 1.1% I'm getting right now which is why I let all of my CDs close and not renew them. I've got all of it in ING right now and don't think the additional .25% is worth switching over to SmartyPig. Considering that's $37.54 more in a full year it's really not worth the hassle to me right now. "Safe" is a relative term. Are they likely to default if they are from a large, stable company? No. Default is not the only type of risk, though. Here's a few problems with using them the way you're thinking: 1) Liquidity risk: you want your emergency savings to be in a form that you could liquidate at least a significant portion of them very quickly (hence emergency) without facing serious complications from fees/taxes/price fluctuations. 2) Volatility risk: the bonds of most S&P500 sized companies are probably not going to sway in valuation by more than a few percentage points in any given year. However, depending on the situation, you could have massive swings in debt valuation even for a very "reputable" company (BP is a perfect example of this). This isn't really an issue if you're investing in the bond as part of your retirement portfolio, since you'll probably be holding the bond to maturity anyway so the market value means somewhat little to you. If you have it in your emergency fund instead, if something comes up and you need to liquidate a portion of your savings in the middle of the dip in bond value then you'll be completely hosed over.
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Feb 24, 2011 03:24
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Those are good points. Thank you, flowinprose, and thanks to everyone else who has responded. Sounds like the general view is to just keep the emergency fund in cash and when CD rates go above the savings rate start monthly year long CDS. Which is what I was doing until the CD interest rate dipped below the savings rate.
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Feb 24, 2011 03:50
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Earth posted:I was under the impression that if you can get in on some corporate bonds from stable companies that's some of the safest higher interest investments. I just don't know how to go about getting in on some of that. If I'm wrong please educate me. To get a high return, you need to tolerate a high risk. Risk==reward. You will never ever ever ever find a safe investment with a high reward. Remember all the risky mortgages that were packaged up by finance wizards so they'd be safe and have a high return? Lies. If you look historically, safe investments have had higher interest rates than they do now--that's ok, and not at all a contradiction to the above golden rule. It just meant that risky investments had even higher expected returns. We're hitting up against a 0% interest rate and so if you want something guaranteed, 1-1.5% is the best you'll do. I've spent many nights looking for alternatives to an FDIC insured money market account at my credit union for my emergency fund, but there are basically none to be had.
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Feb 24, 2011 03:56
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I'm not looking for high return. I don't believe looking for something along the lines of 2-3% return is out of the question, when I know that the bank is actually getting 5-6% on my money being lent out. I guess this is me being idealistic.
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Feb 24, 2011 04:57
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Me: 24, single, $30k salary + up to $500/mo commission. Income: $1560/mo after tax, benefits and 401K. Expense: $1200/mo I chose a Roth401k and have been contributing since June, 2008. $6,800 balance. Any reasons I should have gone with a traditional 401K? I expect taxes to be higher then, so I would rather pay them now is my logic here. Dating seems bleak anymore, so I plan on remaining single indefinitely right now. I want to retire before the national average., whatever that is. I don't want to buy a house since I like to move to different parts of the country every 2-3 years.
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Feb 24, 2011 08:49
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Earth posted:I'm not looking for high return. I don't believe looking for something along the lines of 2-3% return is out of the question, when I know that the bank is actually getting 5-6% on my money being lent out. I guess this is me being idealistic. If a bank can borrow millions at or very nearly free (prime at or near 0%), they have little incentive to pay you more than that to borrow a few thousand.
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Feb 24, 2011 10:01
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gigButt posted:Any reasons I should have gone with a traditional 401K? I expect taxes to be higher then, so I would rather pay them now is my logic here. Nope, Roth is the way to go in your situation.
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Feb 24, 2011 14:17
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Anyone follow my 55% precious metals, 10% agriculture and 35% oil portfolio? It has been doing very well lately. (USER WAS PUT ON PROBATION FOR THIS POST)
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Feb 24, 2011 16:47
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poofactory posted:Anyone follow my 55% precious metals, 10% agriculture and 35% oil portfolio? It has been doing very well lately. Please be sure to update us when it does badly as well.
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Feb 24, 2011 17:24
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Inept posted:Please be sure to update us when it does badly as well. It's not too late to get in now. I think we have another 10% to the upside by the end of the year.
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Feb 24, 2011 19:49
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poofactory posted:It's not too late to get in now. I think we have another 10% to the upside by the end of the year. Okay, which Middle Eastern country will have a revolution next?
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Feb 24, 2011 20:00
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Hobologist posted:Okay, which Middle Eastern country will have a revolution next? Why is are you limiting your focus to the middle east? There's going to be a lot more of this going on over the next several years.
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Feb 24, 2011 21:39
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poofactory posted:Why is are you limiting your focus to the middle east? There's going to be a lot more of this going on over the next several years. Are you only holding stocks, not actual commodities?
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Feb 24, 2011 22:11
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poofactory, you might find a friend in Robert Kiyosaki, the author of the Rich Dad, Poor Dad series. He likes to tell people to invest in gold. I think maybe you've even already been to one of his seminars by the way you think.
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Feb 24, 2011 22:16
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Fuschia tude posted:Are you only holding stocks, not actual commodities? I'm not holding any futures. Too volatile for me. The oil investment are in the oil majors like XOM and PTR. The ag is MOO and the PMs are in ETF like GTU, CEF and then I have some GDX and GDXJ. flowinprose posted:poofactory, you might find a friend in Robert Kiyosaki, the author of the Rich Dad, Poor Dad series. He likes to tell people to invest in gold. I think maybe you've even already been to one of his seminars by the way you think. Can't you can do better than that?
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Feb 24, 2011 22:34
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poofactory posted:Why is are you limiting your focus to the middle east? There's going to be a lot more of this going on over the next several years. Because if not for an accident in the Middle East, your portfolio would probably be diminished by a full 10% compared to where it is now. Most other places are net consumers of oil.
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Feb 24, 2011 22:38
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Hobologist posted:Because if not for an accident in the Middle East, your portfolio would probably be diminished by a full 10% compared to where it is now. Most other places are net consumers of oil. Check out a chart on XOM or any of the other oil majors. They have been rising steadily well before the middle east issues.
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Feb 24, 2011 22:45
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I own some VGENX and VGPMX, does that make me cool too? (Actually, VGPMX pays out the heaviest dividends of anything I own. I keep selling chunks of it off every year or two and it just regenerates like a hydra.)
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Feb 24, 2011 22:51
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Yes, since last June. But this is the long-term thread. You guessed a trend in commodity prices correctly once, but should we rely on you continuing to guess correctly for the next 30-40 years? Come to the stock picking thread, where we can tell excellent stories about confirmation bias and the benefit of hindsight.
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Feb 24, 2011 22:53
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Hobologist posted:Yes, since last June. But this is the long-term thread. You guessed a trend in commodity prices correctly once, but should we rely on you continuing to guess correctly for the next 30-40 years? Long term investing means holding one or the same group of investments for 30+ years? That's the most ridiculous thing I have ever heard. last time I visited this thread, everyone hating my commodities call. Seems like you guys still do. I'll check back again in a couple months. (USER WAS PUT ON PROBATION FOR THIS POST)
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Feb 24, 2011 23:25
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gigButt posted:Me: 24, single, $30k salary + up to $500/mo commission. You should be maxing your 401k (what ever % match it is) and the maxing out your 5K Roth. then max out your 401k (up to 15.5K was it?) Roth is the best IRA option if you expect your taxes to go up in the future. Don't worry about buying a house, first time home buyers are allowed to withdraw 10K from Roth IRA without penalty. Don't forget at time of home purchase you can use the 401K/IRA as collateral to get a loan (not a big fan of that but, where will you pull 200K out from?).
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Feb 25, 2011 01:42
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Dr. Jackal posted:then max out your 401k (up to 15.5K was it?) 16.5K
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Feb 25, 2011 04:36
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