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80k posted:Funds-of-funds are ineligible for the foreign tax credit, even if they hold international stocks. Normally, in the taxable account, if you own index funds that hold international stocks and distributed foreign income, you will be able to claim a foreign tax credit on your tax return. Thus if you are going to put any asset class in a taxable account, the first priority should be international stock funds. Would this still hold true if you're unable to invest in a 401(k) or IRA because all of your income/salary is covered by the Foreign Earned Income Exclusion?
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Jan 9, 2013 23:29
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Gold and a Pager posted:Would this still hold true if you're unable to invest in a 401(k) or IRA because all of your income/salary is covered by the Foreign Earned Income Exclusion? Well, in your case all of your funds will be in taxable accounts, so just invest in whatever your asset allocation calls for. Just don't use the target retirement funds or other "fund of funds" and you will be fine.
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Jan 9, 2013 23:42
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I don't have a steady job so I'm going to just stuff my mattress with cash and precious metals does that sound right? I think that sounds right.
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Jan 10, 2013 07:53
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I recently signed up for a long-term investment retirement savings plan with AXA through a financial adviser in Hong Kong, where I work as a teacher. The term is 25 years, and I'm kind of freaking out about it because I have never committed myself to anything this long-term before in my life (I just turned 27). I'm required to make fixed monthly payments of about ~$500US a month for the next 18 months, and then it opens up and I can pay less and/or stop paying into it for a while. I don't make a lot of money teaching here and lately I've been worried that I've over-committed myself. I still have enough to live on, just a lot less than I used to and I'm actually having to adjust to a more frugal lifestyle. I know I'm making the right decision for the long-term, but right now it's kind of lovely as I can't go out and party and travel as much as my friends. I dunno, I guess I was just wondering if anyone was in a similar situation and how they dealt with it.
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Jan 10, 2013 09:48
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80k posted:Well, in your case all of your funds will be in taxable accounts, so just invest in whatever your asset allocation calls for. Just don't use the target retirement funds or other "fund of funds" and you will be fine. So if I made a "manual" blend equal to what I currently have in VFIFX (90% in stocks (so, 70% in VFINX, 30% in VGTSX) and 10% in bonds (100% in VBMFX)), the tax advantages would be greater? My only problem is that I just have $10,000 at the moment and it looks like all of the bond funds require a $3,000 minimum, so I would have to commit a significant percentage of my retirement savings to bonds (or could I get by with 100% in stocks for a year or two until I was able to save enough to not have a significant percentage of my retirement savings in bonds?). I'm 28 with no debt. Total Confusion fucked around with this message at 10:03 on Jan 10, 2013 |
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Jan 10, 2013 09:56
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How should I be approaching saving up for a down payment on a house? I believe I read that I should start with a Roth IRA, which I could then withdraw 10,000 from after 5 years without penalty. Unfortunately, I'd like a bigger down payment than 10,000. Where should I be saving the rest of my money for this purchase?
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Jan 10, 2013 15:37
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In my opinion you should max out your Roth IRA, and save for the house additionally - don't waste your early life Roth space on a house down payment. For the house savings, it's probably best to use a savings or money market account, or short-term CDs. Interest rates suck right now, but five years is too short to be using riskier stuff.
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Jan 10, 2013 18:03
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Gold and a Pager posted:So if I made a "manual" blend equal to what I currently have in VFIFX (90% in stocks (so, 70% in VFINX, 30% in VGTSX) and 10% in bonds (100% in VBMFX)), the tax advantages would be greater? The foreign tax credit is the smallest reason why you should go with the manual blend. The other reasons are far greater. In 20 years, the bond portion of that target retirement is going to be closer to 40%. You are going to hate having all of that income from the bonds in a taxable, but you will be unable to do anything about it unless you sell the whole drat thing. At the very minimum, you should be splitting between domestic, international, and bonds in a taxable account. You also have the ability to tax loss harvest with a manual blend… For instance if international stocks have a bad year, you can sell it at a loss and buy a similar index and claim that loss on your tax return. With a target retirement fund, all of your gains and losses are blended. Any kind of balanced fund (mix of stocks and bonds), do not belong in the taxable account… With target retirement funds one of the worst. If you can't meet the minimum, it is not a big deal. Just buy your domestic stocks, international stocks, and leave the rest in a savings account. That $1000 making up 10% of your portfolio is not going to make a lick of difference whether it is in the savings account or a bond fund.
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Jan 10, 2013 18:27
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If you wanted to avoid the issue with minimums, wouldn't an ETF like BND (which is also run by vanguard) be a viable alternative?
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Jan 10, 2013 18:33
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Initio posted:If you wanted to avoid the issue with minimums, wouldn't an ETF like BND (which is also run by vanguard) be a viable alternative? Sure, but then he would have to open a VBS account. It is $1000... just put it in a savings account.
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Jan 10, 2013 18:38
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I have an employer-sponsored 401(k) and am considering either starting a Roth IRA in addition or adding money to my 401(k). I know the deadline for the contributing to a Roth IRA is tax day (April 15th), but I've found conflicting info about 401(k) contributions. Did I miss the boat on doing that for 2012, or can I contribute to that, too, until tax day?
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Jan 10, 2013 20:23
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Employer-sponsored 401ks are done through payroll deductions only. Your company usually has sign up windows, so check that out soon so you don't miss one.
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Jan 10, 2013 20:35
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Harry posted:Employer-sponsored 401ks are done through payroll deductions only. Your company usually has sign up windows, so check that out soon so you don't miss one. Thanks. Just to make sure I understand, because I'm an amateur: I already contribute to my employer 401(k) at the limit for employer match. I know I can't get my employer to contribute additional funds, but the maximum 401(k) employee contribution for 2012 ($17000) is more than I personally contributed via payroll deductions, and what I'm wondering is whether I can still put money in now (enough to max out that $17k), or if I've missed the boat on that.
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Jan 10, 2013 22:28
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You can increase the percent taken from each paycheck going forward, but 2012 has already passed. If you have extra cash you need to put somewhere put it in a Roth.
nelson fucked around with this message at 22:39 on Jan 10, 2013 |
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Jan 10, 2013 22:37
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Actie posted:Thanks. Just to make sure I understand, because I'm an amateur: I already contribute to my employer 401(k) at the limit for employer match. I know I can't get my employer to contribute additional funds, but the maximum 401(k) employee contribution for 2012 ($17000) is more than I personally contributed via payroll deductions, and what I'm wondering is whether I can still put money in now (enough to max out that $17k), or if I've missed the boat on that. You can no longer make contributions that will count for 2012. Any changes in contributions you make from this point will count for 2013. You CAN make contributions to an IRA and specify them to count for the 2012 limit until tax filing deadline.
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Jan 10, 2013 22:40
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Thanks. So I'll park my cash in an IRA, as suggested.
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Jan 10, 2013 22:59
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I've not heard of the foreign tax credit until it was mentioned a few posts back, but now I'm interested and want to make sure I don't miss a credit when I do my taxes going forward. I've got a position in VTIAX in my Roth IRA, do I need to do anything or care about the tax credit if my international allocation is held in the Roth IRA and not a taxable account?
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Jan 11, 2013 22:13
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Ok, we just got our packets at work and I've never done this before. My employer is also not matching at all, but I think I should start it up anyway. I'm 27, just started at the company, making about 60k/yr, of which quite a bit goes towards rent and student loans. My options are a variety of Class R Retirement Funds (the lo-risk option) or to spread my monies around in growth and aggressive growth Funds ... I should go hi-risk since I'm pretty young, right, but where else do I start? I have a tickers for all the hi-risk funds here but I won't make you guys read em all if there's no need. Also, is it worth trying to target less evil funds or should I just assume they're all making money by selling munitions to small children in Syria and come to terms with that now?
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Jan 13, 2013 06:17
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fuzzy_logic posted:Ok, we just got our packets at work and I've never done this before. My employer is also not matching at all, but I think I should start it up anyway. I'm 27, just started at the company, making about 60k/yr, of which quite a bit goes towards rent and student loans. My options are a variety of Class R Retirement Funds (the lo-risk option) or to spread my monies around in growth and aggressive growth Funds ... I should go hi-risk since I'm pretty young, right, but where else do I start? I have a tickers for all the hi-risk funds here but I won't make you guys read em all if there's no need. Lets back up for a minute here. Can you give us a summary (balances and interest rates) of your student loans and other notable interest bearing debts? Since your employer doesn't match (so you lose no income by not investing your retirement plan) it might make more sense for you to put your money in to paying off your debt instead of retirement savings. You can think of the interest you're paying on your loans as negative savings and you could potentially get a better return on "investment" from paying off your loans (thereby reducing the money you'll waste on interest) compared to what you would gain in interest from retirement investments.
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Jan 13, 2013 07:10
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Hopefully this is the right place to ask this. I'm trying to consolidate my retirement and investment funds, and I'm not entirely sure what the ramifications are for moving things around. I realize most of this is probably stuff I should talk to a real adviser about, but I prefer to get the advice of strangers on the internet first. What I have: - A collection of stocks and some cash in a brokerage account with Wells Fargo - A Roth IRA with Fidelity - My 401(k) with J.P. Morgan (can't move this). - A mortgage, but no other debt Though the cost ratios on my Fidelity IRA funds aren't atrocious, both returns and expense ratios there are worse than their equivalents at Vanguard. My Wells Fargo account doesn't charge an annual management fee, but the costs to have them buy/sell a stock or even send me a check for my dividends is ridiculous, so I'd like to move those assets to a more reasonable place as well. I haven't made 2012 contributions to the IRA yet. 1) What is Vanguard like for individual stock management? I'm mainly just holding these stocks and don't have plans to purchase more, but I do get dividends that I'd like to be able to reinvest more wisely. Do IRA and brokerage accounts both count towards their "assets invested" number that determines whether I'm standard or Voyager? 2) Are there tax implications if I'm moving my Roth IRA from Fidelity to Vanguard? Is my only option for moving assets from Fidelity funds to Vanguard funds to sell the former and buy the latter? How do taxes and such work for that? 3) I'm going to try to refinance my mortgage soonish. Will moving assets like this affect anything that could affect my credit? 4) Would it be better to just ditch the movement stuff and start a new IRA account with Vanguard with my 2012 contribution and leave the Fidelity stuff where it is?
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Jan 13, 2013 10:38
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I think this is just a pre-caffeinated question, but indulge me. My holdings are essentially: Other Vanguard Brokerage Account: ~$8ishk in the Total Stock Market Fund, at its year-long high at the moment if that's relevant, plus about $3k in two different bond funds Ally savings: ~$12k at .95% My Roth IRA has about $17k in it from 3 years of contributions  Should I transfer this year's contribution from Ally, or from Vanguard? I guess the difference is that if I take it from Ally, I'm putting more of my assets in a less liquid state, whereas if I transfer from Vanguard, I'm keeping the same amount liquid, but may have to pay gains taxes. I don't mind paying taxes on earnings but I would like a second opinion.
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Jan 13, 2013 18:01
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fuzzy_logic posted:Ok, we just got our packets at work and I've never done this before. My employer is also not matching at all, but I think I should start it up anyway. I'm 27, just started at the company, making about 60k/yr, of which quite a bit goes towards rent and student loans. My options are a variety of Class R Retirement Funds (the lo-risk option) or to spread my monies around in growth and aggressive growth Funds ... I should go hi-risk since I'm pretty young, right, but where else do I start? I have a tickers for all the hi-risk funds here but I won't make you guys read em all if there's no need. BFC typically advocates low cost, highly diversified funds. I would find the expense ratio for all of your funds and see which ones are the lowest. Then invest in the ones which have a large portion of their holdings in equities and not bonds. Also look for funds with a decent portion (~25%) in international equities. Tricky Ed posted:Hopefully this is the right place to ask this... I would not talk to an adviser as the amount of money you have would not make it worth it. Instead read through BFC and google your questions. 1) Sounds like it might be best to just sell those stocks and buy some funds in Vanguard. Yes, all assets in Vanguard count to the $50,000 limit. 2) If you directly roll it over to another account of the same type (e.g. Roth IRA to Roth IRA) there is not tax implication. When you roll it over, Fidelity will sell your assets and transfer the dollar amount of Vanguard. When you initiate the rollover, Vanguard will ask what you want to invest the money in when they receive it. I think you can leave it in a money market if you don't know. 3) Moving money will not impact credit in any way although I have heard if they see large transfers they will want documentation of where it came from so they know someone isn't just parking a bunch of money with you to make it you have money. 4) I think the cleanest setup is one 401k with you currently employer, one IRA which any old 401k gets rolled into, and one taxable account for all regular investing. This keeps it simple, minimizes work tracking and maintain things. Fidelity is pretty good, Vanguard is too so I'd just look between the funds that interest you and the rules/fee/benefits of each program and choose the one best suited for you. Eggplant Wizard posted:I think this is just a pre-caffeinated question, but indulge me. My holdings are essentially: If you'll need the liquid money soon you're right, keep that money liquid. To transfer you'll need to sell your Total Stock Fund which will incur any capital gain hit at tax time. Take the money from the sale and transfer that to the IRA.
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Jan 13, 2013 19:08
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Mr.Radar posted:Lets back up for a minute here. Can you give us a summary (balances and interest rates) of your student loans and other notable interest bearing debts? Since your employer doesn't match (so you lose no income by not investing your retirement plan) it might make more sense for you to put your money in to paying off your debt instead of retirement savings. You can think of the interest you're paying on your loans as negative savings and you could potentially get a better return on "investment" from paying off your loans (thereby reducing the money you'll waste on interest) compared to what you would gain in interest from retirement investments. This is a good point. I hadn't thought of it this way before (bolded part), I was just excited that compound interest might be working in my favor for once. Loans are: code:Leftover undergrad loan: code:That ... looks like a lot of debt. Probably I shouldn't be investing yet, huh?
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Jan 13, 2013 20:51
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The odds of you finding an investment that consistently makes 6.8-7.9% annually are extremely small. I'd advise aggressively paying down the student loans instead of investing into a 401k. The amount you'll save on future student loan interest will likely exceed the gains you would make from the 401k.
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Jan 13, 2013 21:13
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I'm finally trying to get my poo poo together, and I need a little help. I have some of the basics down, but am trying to read this whole thread to learn more - but keep getting lost. Help? I'm ordering a few books to help me get the terminology down and understand what to do with the money IN these accounts (how they should be allocated, etc.) I used to have a job with a 401k (and match) and then had a job with a 403(b). I've put both of those in an IRA rollover account. I don't remember the reason I did this now ... but I did and it's done. It's about 20k-ish. I now have a new, fabulous job but they do not offer a match. In addition to my rollover IRA, I opened up a Roth IRA. I fully funded it last year, and plan on fully funding it this year. I'm also saving up for a down payment for a home (in the longer-term. I live in NYC and housing is insane - and we are likely moving somewhere else in the country in 2-3 years, location undetermined.) In addition to fully funding my Roth -- what else should I do? Should I contribute to a 401k, even without a match? Compounding this: I have a husband who is in grad school and has no retirement to speak of. All of my accounts have him as a beneficiary, but I am wondering if, instead of a 401k with no match, I should just open up a Roth in his name, and contribute there as well. I have about 15k in student loan debt, but it's at such a low interest rate that I'm not sure it's worth worrying about. Thoughts? Should I have gone back and try to slog through 117 pages before asking? Start my own thread? Edit: I'm 30, he's 34. No kids yet, and he should be done with grad school in 2 years, and be employed as a professor soon after. Which would be steady, good income and likely come with a pension of some sort?
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Jan 13, 2013 21:36
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kansas posted:If you'll need the liquid money soon you're right, keep that money liquid. To transfer you'll need to sell your Total Stock Fund which will incur any capital gain hit at tax time. Take the money from the sale and transfer that to the IRA. How hard is it to liquidate Roth IRA thought? I'm with Scottrade, so for me it's simply a 'sell, transfer back' up to the total principle amount, which really doesn't take that long. You take no tax hit at all this way. In the end, I think it is more about how much cash (in terms of risk/variability) you want as apart of your allocation. I have virtually all of my emergency savings in my Roth because of this. Rurutia fucked around with this message at 21:49 on Jan 13, 2013 |
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Jan 13, 2013 21:45
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keiran_helcyan posted:The odds of you finding an investment that consistently makes 6.8-7.9% annually are extremely small. I'd advise aggressively paying down the student loans instead of investing into a 401k. The amount you'll save on future student loan interest will likely exceed the gains you would make from the 401k. This isn't quite true, imho. If there is an employer match and you are 100% vested(or don't plan on leaving until after you're 100% vested) it's always a good idea to contribute up to the maximum match. You're leaving a lot of free money on the table otherwise.
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Jan 13, 2013 22:02
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Obsurveyor posted:This isn't quite true, imho. If there is an employer match and you are 100% vested(or don't plan on leaving until after you're 100% vested) it's always a good idea to contribute up to the maximum match. You're leaving a lot of free money on the table otherwise. Yeah, the company said they may be able to do matching later so I think I'll revisit it if that ends up happening.
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Jan 13, 2013 22:04
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Rurutia posted:How hard is it to liquidate Roth IRA thought? I'm with Scottrade, so for me it's simply a 'sell, transfer back' up to the total principle amount, which really doesn't take that long. You take no tax hit at all this way. In the end, I think it is more about how much cash (in terms of risk/variability) you want as apart of your allocation. I have virtually all of my emergency savings in my Roth because of this. It's still a market account, which means it could disappear easily enough. I also no longer consider it money I'm allowed to touch once I've put it in there. Thanks for the advice folks 
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Jan 14, 2013 03:20
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So I started stockpicking in 2011 and I'm trying to develop a nice spreadsheet so I can track and benchmark my portfolio's performance against the market. I'm having trouble developing good metrics -- most specifically, I'm trying to come up with something that could be legitimately compared to a compounded index performance. What I essentially want is a compounded return per available dollar per year, but I'm struggling because I don't know how to weight different years when I have different principals because of contributions. For example, it's easy for me to calculate the compound return of an index, but how would I calculate a compound return per dollar per year if I had a -5.7% return in 2011 on a principal of 25000 (0 2010 starting balance + 25000 2011 contributions) and a 16.2% return in 2012 on a principal of 58812.89 (23556.11 2011 starting balance + 35256.78 2012 contributions)? Do I just weight the 16.2% return 2.35 (58812/25000) times more than the -5.7% one and then create a fake "portfolio value per available dollar per year" of 1 (2010), .94224 (2011; 1*-5.7%), (2012; 2.35*16.2%*0.94224)? That would give me 1, 0.94224, 1.30 and then the compound return per available dollar per year would be 14.01% -- but that looks just wrong. What sort of metric could you develop to compare a compound return of an index with the compound return of your portfolio when you're making yearly contributions to your portfolio? Fraternite fucked around with this message at 05:26 on Jan 14, 2013 |
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Jan 14, 2013 05:22
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Fraternite posted:So I started stockpicking in 2011 and I'm trying to develop a nice spreadsheet so I can track and benchmark my portfolio's performance against the market. The most common metric for this sort of thing is internal rate of return (IRR), which tells you the dollar-weighted rate of return for an investment with a series of cash flows. Calculating it by hand involves discounting every investment or withdrawal you make and tuning the discount rate until you get an NPV of zero, but the Excel function XIRR is a user-friendly calculator that lets you input a series of cash inflows/outflows and a corresponding series of dates, then gives you the annualized (ie, over a period of 365 days) rate of return. You would use your deposits as cash outflows, and assuming you haven't made any withdrawals, the current value of your investments with today's date as a cash inflow. This is kind of of equivalent to what you are doing, but this method lets you specify the exact dates of each cash flow, rather than only considering cash inflows and outflows at the beginning and end of the year for a more precise answer. That is, I assume that you didn't invest all $25000 on 1/1/2011 and the next $35256.78 on 1/1/2012.  Here is an example of me using XIRR on my one-year-old IRA. There are two transactions on most days because I bought into two different funds. As for comparing it against the market, in my opinion it's not as simple as saying that the S&P appreciated so-and-so percent. Usually when people think about "is this a good investment yes/no" when they use IRR or something they assume a constant rate they could get on an alternative investment (this is what the MIRR function in Excel does), but if you want to compare against "the market" you could use the same outgoing cashflows as the real-life investment, but figure out the NPV of a hypothetical investment in something else, like if you had only bought SPY instead. Edit: Writing and re-editing this post made me realize that I actually did forget a lot of what I learned it my project management class in school. I considered deleting the whole thing but I think there's at least something intelligible in here. Shear Modulus fucked around with this message at 08:31 on Jan 14, 2013 |
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Jan 14, 2013 06:55
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Shear Modulus posted:The most common metric for this sort of thing is internal rate of return (IRR), which tells you the dollar-weighted rate of return for an investment with a series of cash flows. Calculating it by hand is really tedious, but the Excel function XIRR is a user-friendly calculator that lets you input a series of cash inflows/outflows and a corresponding series of dates, then gives you the average annual rate of return. You would use your deposits as cash outflows, and assuming you haven't made any withdrawals, the current value of your investments with today's date as a cash inflow. This is exactly what I needed, thanks! I rearranged my data and built a few indexed alternatives to benchmark against and I'm really pleased with the results! (of both my investing and the new spreadsheet, that is. But to think I burned 5 hours yesterday trying to figure out how to build the metrics by hand;  )
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Jan 14, 2013 08:16
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Hey guys. I got directed from the stock thread to this thread. I'm Canadian. We have something similar to the ROTH IRA and 401K known as the tax free saving and RRSP. I'm going to max both of those out. I'm also looking to get into stocks but I'm going to start off with mutual funds using the index as a benchmark. The MER is only 0.33 and I will try to find out if there are any additional fees before I buy. I'm fine if I do lose the money. I'm only investing a small amount of my income that I've saved up, and I feel like I will never understand the stock market until I'm actually invested in it. The indexes being S&P/TSX and S&P at the moment. I am thinking international mutual fund and emerging markets (BRIC for example). I know I sound like a complete noob and should stay out of stocks. But I'm only investing in a small amount of the money I've saved up, and I feel like it will save me time when I'm actively invested in the stock market so I can learn the essentials quicker. Thanks It sounds like people use Vanguard a lot. Do ETFs require more micro-management? I've been working lots, so I'm not sure if I'm able to periodically follow stocks everyday.
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Jan 14, 2013 17:37
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dogpower posted:It sounds like people use Vanguard a lot. Do ETFs require more micro-management? I've been working lots, so I'm not sure if I'm able to periodically follow stocks everyday.
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Jan 14, 2013 19:32
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cowofwar posted:Mutual funds are generally free to purchase and can be found as "no load" with reasonable MERs. ETFs have transaction fees just like shares in stocks but have lower MERs. If you're working with a small amount of money you'll want to focus on mutual funds as the transaction costs of ETFs will murder your returns unless you're working with > $15,000. Vanguard and Fidelity both have transaction free trading of some of their ETFs.
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Jan 15, 2013 01:41
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keiran_helcyan posted:Vanguard and Fidelity both have transaction free trading of some of their ETFs.
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Jan 15, 2013 01:45
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How do value Index funds/ETFs work? From what I know, they track a value index. That index is made of stocks that meet a certain number of conditions and ratios that indicate that the stocks are under-priced. So I think I understand how a stock gets into a value index. What happens when the conditions and ratios, that made the stock part of the value index, change? For example, what happens if the price of a stock increases so that the P/E ratio no longer meets the index conditions? Does the index drop the stock? Do the funds/ETFs then sell the stock? My understanding of Value investing is that you buy when the conditions and ratios are met and then hold onto the stock for the long run, with the assumption that the price will go up, and eventually it would stop being under-priced. Do the value funds work the same way? I looked through the documents for XCV and could not find an answer. jayd42 fucked around with this message at 05:03 on Jan 15, 2013 |
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Jan 15, 2013 05:00
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So, I read about DCA and Value Averaging in "The Four Pillars" and I really liked how value averaging worked, but since the book was written a little well over a decade ago I'm wondering if something better than value averaging has come out since then? edit: Also dumb question: I'm guessing dividends/interest earned from an index fund in a ROTH IRA are automatically reinvested right? I'm 99% sure of that but I'm having trouble seeing where the interest "went" on Vanguard. Sephiroth_IRA fucked around with this message at 04:37 on Jan 16, 2013 |
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Jan 16, 2013 01:18
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Got no wisdom on your first question, but the second - my Vanguard Roth IRA transaction history has items "Dividend", "Long-term Capital Gain", "Short-term Capital Gain" which is the reinvestment happening. Dividends show up monthly or quarterly, the capital gains I think annually?
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Jan 16, 2013 16:04
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^Thanks. Essentially DCA (Dollar Cost Averaging) is a strategy where you invest a set amount each month. So instead of tossing $5.5k into your desired funds at the beginning of each year you instead invest a set amount (Say $100) into the fund at set intervals (let's say weekly). This increases the chance that you will spend less on average throughout the year. Value Averaging is a strategy like DCA but instead you invest a variable amount based on a fixed amount (let's say $100) into the funds at set intervals. Unlike DCA you adjust your contribution based on whether the value of the fund has risen or fallen. So to make it simple: You invest $100 into Index A at $1.00 per share. By the end of the week the price has dropped and the value of your investment is now worth $95 Instead of investing another $100 into the fund (as in with DCA) you invest 105 to get the fund to $200 So as you can see this strategy guarantees that you will buy more of a fund when prices fall, and less when prices rise. Sephiroth_IRA fucked around with this message at 17:45 on Jan 16, 2013 |
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Jan 16, 2013 17:42
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