|
Anyone here use https://www.futureadvisor.com/ Thoughts? Opinions? Tempted to just blindly follow the advice. Looking over their rationale etc, it seems pretty good.
|
#
?
Aug 4, 2014 20:49
|
|
|
|
| # ? Jun 13, 2024 05:43 |
|
|
DNK, here's one more thing to consider. Right now, you have (if I understand your post correctly) no retirement savings. You're (wisely) paying off your high-interest debt and are about to start "buying in" as you said, and you're worried about the state of the market currently. But, you're 26. If you are retiring in your sixties like most people, you still have something like 40 years of accumulation of retirement savings to make. It is of course important to put in as much as you can as early as you can, so that that money can have the full period in which to accumulate dividends and track economic growth and turn the power of compound interest etc. to your advantage. So, there's a large benefit to getting money in earlier rather than later. On the other hand, compared to your final retirement account value, the amount of money you're talking about investing in the next three years is tiny. You are probably aiming to retire with several hundred thousand dollars in your retirement account, at least. Maybe more than a million or two. Does it really matter if your $30k or whatever loses 20% of its value in 2017? It'll have 30+ years to regain its value, and even if it never regains that lost $6k... well, $6k is a drop in the bucket compared to your retirement target. The upside (get your money in early) greatly outweighs the potential downside (of losing a bit when there's a downturn). There is only one piece of information that matters here: historically, over the last century, money invested in "the market" has grown more rapidly than inflation. There have been plenty of periods when that wasn't true, shorter and longer ones... there have even been some specific scenarios where a 30-year period saw overall losses compared to inflation. But you have to really hunt to find those. For the vast majority of investors over the last hundred years, putting money into the market (wisely balanced across asset classes) has produced real returns that outpace inflation significantly. Even if you think you can predict what the market will do in the next three years, those are the least important three years of market performance. What will really matter for your retirement is what the market does 25 years from now, and absolutely nobody can predict that. Which is why as you age and get nearer to retirement, you should gradually shift your asset allocation into more and more lower-risk/lower-return choices. For now, at the age of 26, you can take advantage of higher potential returns while accepting higher risk, with your much smaller total amount of money in your retirement and with decades left in which you'll get to ride the very highly probable rises in the market. Of course nothing is guaranteed. Just because the market did well the last hundred years doesn't mean that it will definitely 100% do well the next 100. Maybe our civilization has peaked and we are in for a long slow (or fast) ride into the shitter. It's happened before to lots of other civilizations. But if that happens to us, being well set up with your retirement account is not going to be your biggest concern.
|
|
#
?
Aug 4, 2014 21:03
|
|
|
I am about to become eligible for my companies 401k and I wanted some advice. It seems like a pretty good plan, with several low cost ETF options, and managed funds with pretty low ETFs. It doesn't have a simple ETF that tries to index the whole stock market, despite many of the managed funds being comprised largely by the vanguard total stock market ETF. I have the iShares Russel 1000(.15% expense ratio), 2000(.24% expense ratio), and Mid Cap (.22% expense ratio) ETFs available, but I'm not sure how to distribute funds among these to approximate the whole stock market. The vanguard total international and total bond funds are also available to round it out. The other option is to let the company manage it for me. They have a plan pretty close to how I was planning to invest it with a .28% expense ratio (~50% US stock, ~20% international stock, ~20% bonds) A third way I am considering is to go 80% into the extremely aggressive managed plan with an expense ratio of .248 (70% US stock, 25% international stock) and balance that out with the vanguard total bond fund myself. I am 26, no other retirement savings with no debt, and planning to also open a roth IRA this year with the maximum contribution.
|
|
#
?
Aug 4, 2014 21:59
|
|
|
I would put most of it into the iShares Russell 3000(large cap)if they have it and then the rest into bond fund. The more aggressive plan makes sense since you are just starting your 401k. The 1000/2000 Russell funds are targeted at small cap companies. The Russell index if anything is pretty decent since it includes a wider range of companies compared to the S&P and other better known indices. etalian fucked around with this message at 23:11 on Aug 4, 2014 |
|
#
?
Aug 4, 2014 23:09
|
|
|
Wozbo posted:He hasn't mentioned rhabdo or lifting yet. Time to grow herbs for profit. I've answered my own question from earlier by reading four pillars. For long term net worth paying off a large proportion of my mortgage is going to be more effective. Although over the next 2-3 years I'm going to have most or all of my equity in my house, now looking at the local version of a 401k and some index funds. I think I'll cut out some energy drinks and snacks to put some money aside (instead of living on beans).
|
|
#
?
Aug 5, 2014 00:49
|
|
|
big data bitches posted:We try to live below our means, drive lovely 10+ year old cars we own outright, and have a 240k mortgage and no other debts. We want to have kids, and that's going to be expensive, so I'd like to have our retirements covered by the time the first kid pops out in two years.
|
|
#
?
Aug 5, 2014 00:51
|
|
|
Seems like this should be in the OP - http://www.bogleheads.org/wiki/Lazy_portfolios And since a lot of people are constrained by their employer's plans - http://www.bogleheads.org/wiki/How_to_build_a_lazy_portfolio#Employer_plan_checklist quote:
shrike82 fucked around with this message at 01:05 on Aug 5, 2014 |
|
#
?
Aug 5, 2014 00:51
|
|
|
Keep in mind that if any person or firm could reliably predict the stock market, they would not be telling you about it. They'd be busy owning the entire economy. Your newsletter guru, financial advisor, rich uncle, or crazy neighbor is either intentionally pulling a fast one on you or is experiencing some variety of the Dunning Kruger effect. If you visit a website that touts market corrections on the front page every day, they have been consistently wrong for a long time.
|
|
#
?
Aug 5, 2014 02:13
|
|
|
antiga posted:If you visit a website that touts market corrections on the front page every day, they have been consistently wrong for a long time. There's a subset of people out there that have been screeching about the "overvalued" market and the impending crash for the past 3-4 years. If they've been sitting in cash and bonds this whole time they've been going sideways at best. Meanwhile economic indicators continue to slowly improve across the board, many stocks outside a handful of tech stocks are trending inline with traditional valuation metrics (having since recovered from the big 07-09 downturn), and the S&P500 has grown steadily to the tune of about 80% and paid out quarterly dividends along the way. Even if there's a "correction" in the near future I'll still have come out ahead and will be ready to buy more for the long term. Guinness fucked around with this message at 02:22 on Aug 5, 2014 |
|
#
?
Aug 5, 2014 02:18
|
|
|
etalian posted:The 1000/2000 Russell funds are targeted at small cap companies. Umm I'm pretty sure this is not true; Russell 1000 is the top 1000 (large-cap), and Russell 2000 is the remaining 2000 (mid- and small-cap). Together they make the Russell 3000. According to a quick Google I did the correct weighting would be 92% to the Russell 1000 and 8% in the Russell 2000. Each of the three ideas you proposed seems reasonable. I don't see anything terribly wrong with any of them; you seem to have thought it through pretty well. Personally I prefer to roll my own mix so I'd do the first thing you said (using the weights given above and rounding out as desired with bonds + int'l), but if the asset allocation would be similar, then the other options would have similar results. Echo 3 fucked around with this message at 03:16 on Aug 5, 2014 |
|
#
?
Aug 5, 2014 03:14
|
|
|
Russel Index funds are also pretty handy since they have wider exposure compared to S&P 500 index fund and the simple elegant design makes it easier to index track different cap sizes.
etalian fucked around with this message at 04:31 on Aug 5, 2014 |
|
#
?
Aug 5, 2014 04:29
|
|
|
shrike82 posted:Seems like this should be in the OP - http://www.bogleheads.org/wiki/Lazy_portfolios To expand on this: when forced to slice-and-dice a selection of lovely funds to try to approximate an index, use Morningstar Instant X-Ray to test out different mixes and compare them against VTI (or VXUS or BND as the case may be), trying to get their numbers as similar as possible. Asset Allocation is the most important, since if that doesn't match then you're using the wrong asset classes, then Style Diversification, and then also the World Regions numbers for VXUS to make sure you're not all clumped up in a single part of the world. It's a bit of a pain in the rear end since you have to go by trial and error, but you'll get a sure answer that should only have to be checked for slight tweaking around the time of your annual or biannual rebalance.
|
|
#
?
Aug 5, 2014 07:56
|
|
|
shrike82 posted:Seems like this should be in the OP - http://www.bogleheads.org/wiki/Lazy_portfolios Kilty Monroe posted:To expand on this: when forced to slice-and-dice a selection of lovely funds to try to approximate an index, use Morningstar Instant X-Ray Thanks y'all, I have OPulated these.
|
|
#
?
Aug 5, 2014 14:44
|
|
|
I'm still making my way through Four Pillars, so don't flame me just yet, but I was wondering if anyone has any opinions, commentary, or overview-explanations on the services mentioned in this article: http://www.nytimes.com/2014/02/11/your-money/sites-to-manage-personal-wealth-gaining-ground.html?_r=1 Betterment, Marketriders, PersonalCapital, and Wealthfront They don't seem that far off from traditional money managers. Should we view them as lipstick-on-a-pig? Perhaps they offer nothing that I couldn't learn on my own?
|
|
#
?
Aug 6, 2014 07:43
|
|
|
Throw out PersonalCapital, they're selling "smart beta*" which is essentially active management. You see this by the fact that they charge substantially higher fees of over a percent. Betterment and Wealthfront are more interesting to the lay investor in that they help clients build a portfolio using Modern Portfolio Theory (MPT) which Bernstein, the 4 Pillars dude, subscribes to himself. What does this mean? Posters here are big fans of a diversified portfolio of low cost passive funds. You see people throwing recommendations like 50% Vanguard Total Stock Market/50% Vanguard Total Bond Market or 60% S&P 500/40% LT Bonds etc. But the ratios of these mixes (50/50, 60/40, 80/20 etc.) being thrown out by posters here and elsewhere are just guesses. What Betterment and Wealthfront do with MPT is to quantify a theoretically optimal ratio of passive funds that fit your risk-return profile. In theory, they should be able to maximize your portfolio's expected return given your appetite for risk (or minimize your portfolio's risk given your target return). The tricky part is that MPT portfolio construction requires guessing the future returns/volatility/correlations of the various asset classes. If you go to Wealthfront's blog, you can see a recent post with their views on the future performance of US stocks, US bonds etc. There's no guarantee they'll be right on it. These platforms also claim to improve your after-tax returns by considering the tax impact of rebalancing. I don't know enough about how they do so to comment. In terms of fees, I believe you'd be paying on the order of hundreds of dollars a year with a portfolio of a hundred grand. You'd have to decide for yourself whether the above features are worth that much to you. * smart beta or smart indexing attempts to modify existing indices to juice returns. For example, instead of using a market cap index, they might use an equal weighted equivalent because they believe a market cap index is deficient because they're by definition overweight on potentially overvalued stocks.
|
|
#
?
Aug 6, 2014 11:14
|
|
|
Goon recommendations generally follow the glidepath of the underlying mix in Vanguard's Target Retirement funds, which are also theoretically optimized portfolios of their own passive funds, with the caveat that you can go up to your age in bonds to adjust your risk. Perhaps still not as personalized as the services at Betterment or Wealthfront, but more than pure guesswork, enough so that I'm not convinced their extra overhead in fees is justified in comparison.
|
|
#
?
Aug 6, 2014 12:15
|
|
|
I'm not sure I'd agree with the statement that the Vanguard target dates are theoretically optimal. Their glide path is linear so they're likely going for simplicity, which isn't a bad thing of itself. Also, platforms like the aforementioned include additional asset classes like REITs in their optimized portfolio. I'm not sure how goons here incorporate that into a replication of a target date fund. I would tend to agree with your skepticism about whether the platforms are worth their fees.
|
|
#
?
Aug 6, 2014 13:04
|
|
|
At least for Wealthfront, you can just get the allocations they recommend based on risk level and whether the account is taxable and then reproduce those allocations on your own using Vanguard (which has an REIT index fund, an EM bond index fund, etc.)
|
|
#
?
Aug 6, 2014 13:44
|
|
|
shrike82 posted:Throw out PersonalCapital, they're selling "smart beta*" which is essentially active management. You see this by the fact that they charge substantially higher fees of over a percent. They're selling it, but you don't have to buy it. Their free service essentially serves as a marketing tool for their paid service, but it's still the best site I've tried for tracking investment performance.
|
|
#
?
Aug 6, 2014 14:38
|
|
|
Thanks, another service is SigFig. They seem to just charge a flat $10/mo for some algorithmic portfolio suggestions. Anybody used it?quote:SigFig has partnered with three of the most trusted and popular brokerages in the country: Fidelity, TD Ameritrade, and Schwab. This means if your money is already at one of these brokerages, your SigFig Managed Account will stay there. By keeping your money at Fidelity, TD Ameritrade or Schwab, we can offer you even better protection and security on your money. Hog Obituary fucked around with this message at 16:27 on Aug 6, 2014 |
|
#
?
Aug 6, 2014 16:25
|
|
|
Hog Obituary posted:Thanks, another service is SigFig. They seem to just charge a flat $10/mo for some algorithmic portfolio suggestions. Anybody used it? SigFig is really similar to PersonalCapital, but I find them a little too annoying with their pushy fund suggestions. Basically it will keep trying to convince you to get out of your low-cost Vanguard funds and buy crazy expensive funds who are presumably paying them to do so. It strikes me as shady and makes all their advice suspect.
|
|
#
?
Aug 6, 2014 16:37
|
|
|
Actually, SigFig is closer to WealthFront and Betterment than PersonalCapital in that they also use MPT for portfolio construction. You know what, ignoring their investing methodology, it might be a good idea to avoid using the services of these start ups from a viable business model standpoint. If you look at the fees they levy, they're not making enough money relative to their expenses and they're doing the typical start up action of burning money to try to get clients/mindshare. It's very likely that a lot of these services will implode. Your money wouldn't be affected because they're advisors and not managers but there's no point in coupling yourself to their portfolio construction models if they're not around for the long term.
|
|
#
?
Aug 6, 2014 16:46
|
|
|
Do we do portfolio analysis for tax efficiency etc here? I half thought about throwing it up on Bogle but I don't post there much.
|
|
#
?
Aug 6, 2014 16:59
|
|
|
Rurutia posted:Do we do portfolio analysis for tax efficiency etc here? I half thought about throwing it up on Bogle but I don't post there much. My order of preference for tax efficiency: Taxable Accounts: 1. International stocks and Tax Exempt Bonds 2. Domestic Stocks 3. High Quality Bonds 4. Junk Bonds Traditional IRAs and 401k/403b/whatever: 1. High Quality Bonds 2. Junk Bonds 3. REITs 4. Domestic Stocks 5. International Stocks Roth Accounts: 1. REITs 2. Junk Bonds 3. High Quality Bonds 4. Domestic Stocks 5. International Stocks
|
|
#
?
Aug 6, 2014 17:33
|
|
|
This is pretty much all you need: http://www.bogleheads.org/wiki/Principles_of_tax-efficient_fund_placement
|
|
#
?
Aug 6, 2014 17:38
|
|
|
I've read all of those. The first list is a good rule of thumb for sure. The second brings up a lot of issues and complexities that may arise without really addressing them. I think my post was poorly worded. I wasn't asking for a portfolio analysis on only tax efficiency. I meant an analysis that goes more than, "well you're using index funds, and your allocation follows 80/20", and into the more intricate aspects.
|
|
#
?
Aug 6, 2014 17:45
|
|
|
I'm about to start some part time contract work that is going to be relatively significant. I'm keeping my full time job, this will just be an addition. I'm also not sure how long it will last. I've seen mention of contract workers being able to use a SEP IRA. Does this need to be funneled through a company to be able to contribute? I've been googling around and can't find an answer.
|
|
#
?
Aug 6, 2014 19:36
|
|
|
No, you can just open one and transfer money in yourself. Be a little careful because the contribution limits are kind of stupid - it end up being somewhere around 18% of contract income as a limit even though they make it look like 25%. There are calculators online.
|
|
#
?
Aug 6, 2014 20:02
|
|
|
Are there any investment books with a focus on hedging?
|
|
#
?
Aug 7, 2014 04:01
|
|
|
I have a question specific to investment options for US federal jobs, if anyone has experience with that. (I asked in the Federal Jobs thread, but there are lots of knowledgeable people here!) The government has a Thrift Savings Plan (TSP). I understand that it's the government's version of a 401k. However, I was unaware of the different funds that they use, for example the exclusive G Fund. Do you have any advice or sources of info on this realm of investments (i.e., the relative advantages/disadvantages), since this is a bit different than the usual retirement options? My previous investing was index funds. I understand the the G fund is composed of government securities and guaranteed not to lose value, which is pretty cool. However, it's rate of return looks pretty modest. C Fund is basically an index fund? S and I funds are variants of that?
|
|
#
?
Aug 7, 2014 18:35
|
|
|
Phone posting so I can't get into too much detail but yeah those are all designed to emulate different indexes. I feel like the website does a pretty good job of explaining their past returns and comparing and contrasting the funds. One big benefit of TSP is the very low fees, which are subsidized by all the people who take loans out of their TSP accounts.
|
|
#
?
Aug 7, 2014 18:53
|
|
|
Thesaurus posted:I have a question specific to investment options for US federal jobs, if anyone has experience with that. (I asked in the Federal Jobs thread, but there are lots of knowledgeable people here!) Be lazy like me and put it in the target year fund.
|
|
#
?
Aug 8, 2014 03:33
|
|
|
This is kind of a random thing, but surely someone else here has run into it. I just started using Quicken to track, well, everything. I have it pulling data from my ING/Voya 401(k). It's able to get the transactions just fine, but it seems like I have special snowflake funds to choose from - they aren't recognized by Quicken as something it has data for. It merely uses past transaction prices and interpolates. For example, I have Voya Russell Small Cap Index Port Adv, which I can't find anywhere else and has a completely different NAV from any of the other variants of Voya Russell Small Cap Index (Class A, etc.). I'm hoping that I might just be looking in all of the wrong places. Watching these numbers move up and down is what keeps me interested in saving, and it kind of sucks if I have to wait 14 days... Any ideas how to fix or work around this?
|
|
#
?
Aug 8, 2014 05:34
|
|
|
It's not Advantage class, IRSIX ?
|
|
#
?
Aug 8, 2014 06:42
|
|
|
It is Advantage class, but IRSIX is class A. On 7/30/14, the price of what I have as the Advantage class in my 401K is $19.989/share, while according to Google, IRSIX was $15.31 This is how it's listed: 9242 Voya U.S. Stock Index Port Adv
|
|
#
?
Aug 8, 2014 06:47
|
|
|
Thesaurus posted:I have a question specific to investment options for US federal jobs, if anyone has experience with that. (I asked in the Federal Jobs thread, but there are lots of knowledgeable people here!) All the funds are index funds of one type or another. C fund is an S&P 500 index fund. Domestic large cap blend. S fund is a completion index benchmarked to the Dow Jones completion index (essentially the other 4500 stocks or so in the US market). Domestic mid-small cap blend. I fund is an international index fund benchmarked to the Morgan Stanley EAFE index. It is foreign developed-markets large cap blend. F fund is an aggregate bond index, has a mixture of corporate and government investment-grade bonds, average duration of around 5 years. G fund is unique to the TSP, the interest rate resets monthly and is based on the weighted average yield of all outstanding Treasury notes and bonds with 4 or more years to maturity. It will never decrease in value. Effectively this makes it a money-market fund with a much higher interest rate. Risk wise it is like the equivalent of having a treasury bond with zero duration (no interest rate risk) that carries the interest rate of roughly a 10 year treasury bond. Right now it has a yield somewhere around 2%/year. The other thing to note is that the TSP funds have probably the lowest expense ratios of anything you will be able to access. The average expense ratio of TSP funds last year was 0.029% so only 29 cents per $1,000 invested. Compare this to the Vanguard S&P ADMIRAL shares or ETF shares which have an expense ratio of 0.05% flowinprose fucked around with this message at 07:25 on Aug 8, 2014 |
|
#
?
Aug 8, 2014 07:21
|
|
|
I have about 50k in a JFFIX retirement find (401k). Is this thing costing me a ton of money and I should roll it to vanguard? I'm going to max 401k this year and going forward (high income) and I'm 26 so I just want to make sure I'm starting off right. Also, I have about 60k of company stock 1/3 of which (20k) can be sold at with no penalty (if stock is less than 1yr old I pay income tax, otherwise capital gains). I contribute about 10k every 6mo (I get about 15k in stock for that $10k) so it keeps rolling over like this. I think I need to liquidate that 20k and keep doing that every 6mo to diversify but I'm wondering where to put it.
|
|
#
?
Aug 8, 2014 17:48
|
|
|
ohgodwhat posted:It is Advantage class, but IRSIX is class A. On 7/30/14, the price of what I have as the Advantage class in my 401K is $19.989/share, while according to Google, IRSIX was $15.31 IRSIX is the Adv class of the Russell Small Cap Index, the one you originally mentioned. ISIVX is the Adv class of the US Stock Index Portfolio. That info is from Voya's web site. I don't usually see NAV given to the third decimal place, are you sure you didn't buy 19.989 shares or something? Otherwise maybe these are some kind of annuity or subfund specific to your 401k? Check out the 401k info you got from your employer.
|
|
#
?
Aug 8, 2014 18:28
|
|
|
MasterColin posted:I have about 50k in a JFFIX retirement find (401k). That target fund looks like it has 0.78% expense ratio. A Vanguard target retirement fund, say VFFVX, has expense ratios of 0.18%, so 0.6% lower. It'll be hard to beat that advantage, because at 50k it means you'd need to get an additional $300 of returns in a year out of the JP Morgan fund to make up for the higher expenses. This is very first world problems and all, but as time goes on and the numbers get bigger, this could change your retirement income by hundreds or thousands per year. Additionally, at 50k you can probably break that into a few Admiral Class funds that make up the target retirement fund instead, and then end up with even lower expenses. At age 26 I think it sounds like you're doing great. Nail Rat fucked around with this message at 20:51 on Aug 8, 2014 |
|
#
?
Aug 8, 2014 20:22
|
|
|
|
| # ? Jun 13, 2024 05:43 |
|
|
edit: already answered
J4Gently fucked around with this message at 22:12 on Aug 8, 2014 |
|
#
?
Aug 8, 2014 22:09
|
|
