Long Term Investing & Retirement: The second best time is now

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obi_ant: Apr 8, 2005

Over the years I have a bit of money saved in my savings account not doing anything. I don't have a real goal in mind, aside form making it grow even larger. I feel that my money can be put to better use than sitting getting less than a 1% back.

I'm a bit interested in placing some money into individual stocks. I checked out the individual stock trading thread, but the OP seems a bit outdated. I know this is a long term investing thread, but I figure this is the next best place to see what the next step is. I've done the following so far in terms of long term, so I guess the next thing is to take a look at individual funds, or groups of individual funds.

1. Emergency fund (6 months)
2. Match 401k to employer match 4%.
3. Max out Roth each year.
4. Place another 7% into 401k (I don't place more because roughly 30% of it is company stock).

5. ???

So where is a good place to start looking at and learning more about individual stocks? Good books?

I'm slightly turned off by individual stocks because of the risk involved. Is there another alternative I should look at?

# ? Feb 23, 2015 10:46

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# ? May 26, 2024 16:53

asur: Dec 28, 2012

obi_ant posted:

Over the years I have a bit of money saved in my savings account not doing anything. I don't have a real goal in mind, aside form making it grow even larger. I feel that my money can be put to better use than sitting getting less than a 1% back.

I'm a bit interested in placing some money into individual stocks. I checked out the individual stock trading thread, but the OP seems a bit outdated. I know this is a long term investing thread, but I figure this is the next best place to see what the next step is. I've done the following so far in terms of long term, so I guess the next thing is to take a look at individual funds, or groups of individual funds.

1. Emergency fund (6 months)
2. Match 401k to employer match 4%.
3. Max out Roth each year.
4. Place another 7% into 401k (I don't place more because roughly 30% of it is company stock).

5. ???

So where is a good place to start looking at and learning more about individual stocks? Good books?

I'm slightly turned off by individual stocks because of the risk involved. Is there another alternative I should look at?

Why can't you change the allocation of the 401k and then max it? Regardless, there isn't a reason to look at individual stocks unless you want to invest in them for some reason. You can open a taxable brokerage account and then continue to invest in the same funds as are in your 401k and ROTH IRA. Some types of investments do benefit more from tax shelters than others so you may want to allocate different funds to certain accounts. You can read more about this at Bogleheads.

# ? Feb 23, 2015 12:00

spf3million: Sep 27, 2007; hit 'em with the rhythm

Just because you're filling up your tax-sheltered accounts, doesn't mean you need to start buying individual stocks if you don't want to. There are countless mutual funds or ETFs which are a composite of every imaginable combination of stocks.

Re: tax-sheltered accounts, are you able to contribute to an HSA? You can shelter an additional $3,350 as an individual this year.

# ? Feb 23, 2015 12:27

Bloody Queef: Mar 23, 2012; by zen death robot

obi_ant posted:

Over the years I have a bit of money saved in my savings account not doing anything. I don't have a real goal in mind, aside form making it grow even larger. I feel that my money can be put to better use than sitting getting less than a 1% back.

I'm a bit interested in placing some money into individual stocks. I checked out the individual stock trading thread, but the OP seems a bit outdated. I know this is a long term investing thread, but I figure this is the next best place to see what the next step is. I've done the following so far in terms of long term, so I guess the next thing is to take a look at individual funds, or groups of individual funds.

1. Emergency fund (6 months)
2. Match 401k to employer match 4%.
3. Max out Roth each year.
4. Place another 7% into 401k (I don't place more because roughly 30% of it is company stock).

5. ???

So where is a good place to start looking at and learning more about individual stocks? Good books?

I'm slightly turned off by individual stocks because of the risk involved. Is there another alternative I should look at?

What specifically about the OP feels outdated? The only thing that's actually outdated are the brokerage recommendations. But you can ask in the thread.

# ? Feb 23, 2015 13:03

khysanth: Jun 10, 2009; Still love you, Homar

I recently broke the 10k figure in my Vanguard Roth IRA and have it all invested in the Target Retirement 2050 fund. At some point in the near future I want to get a bit more hands on, and am wondering if now is the time. Do I now have access to the Admiral class shares of all the funds within the 2050 target fund?

Right now, I have an automatic $458.33/month deposit from my bank that automatically purchases the 2050 fund. Would I just sell all the shares I have now, and then do some math every month to figure out how many shares of the 4 funds that make up the 2050 retirement fund I need for the proper allocation?

# ? Feb 23, 2015 23:07

Guinness: Sep 15, 2004

khysanth posted:

I recently broke the 10k figure in my Vanguard Roth IRA and have it all invested in the Target Retirement 2050 fund. At some point in the near future I want to get a bit more hands on, and am wondering if now is the time. Do I now have access to the Admiral class shares of all the funds within the 2050 target fund?

Unfortunately, each fund has a $10,000 minimum investment for admiral shares, not just your portfolio total.

# ? Feb 23, 2015 23:10

slap me silly: Nov 1, 2009; Grimey Drawer

Admiral share class is not worth worrying about. Just having a diverse index-based portfolio at Vanguard rates is 99% of the battle. If you want to move it out of the Target fund and into something else, then do it, make your portfolio what you want it to be. If some part of it is big enough to save a little more on expenses via the Admiral class shares, that's great, go for it. Otherwise forget about it.

# ? Feb 23, 2015 23:52

obi_ant: Apr 8, 2005

Thanks guys. I'll take a look at the Vanguard ETFs. I figured that I'm too risk adverse to take on individual stocks anyway.

On another note, why isn't the Admiral class worth investing in?

# ? Feb 24, 2015 00:40

Brian Fellows: May 29, 2003; I'm Brian Fellows

It is. It's the same as the non-Admiral version of the fund, but it's got a smaller expense ratio that's offered to you because you're investing more money.

For example if you go to Vanguard's VTSAX (Admiral Total Stock Market Index) there's a note up top that says "Also available as Investor Shares mutual fund and an ETF."

What he's saying is that until you have a lot of money, the expense ratio difference between the two isn't very important. You definitely need to look at ER every time, but with Vanguard funds they're very low.

Ten years at the VTSAX expense ratio of 0.05% with $10,000 invested: $118.

Ten years at the VTSMX (same fund, non-Admiral version) expense ratio of 0.17% with $10,000 invested: $399.

So you're talking about saving ~$30 a year if you had an Admiral fund instead of the investor version. Not a lot at the dollar value you have now. So now it's probably for the best to stay at an allocation that makes you comfortable and not worry about minor fees. When you get a lot of money definitely look into splitting it up. But the most important part at this point is your SAVINGS RATE. That's far more important than chasing rates while you're young. Save as much as you can.

# ? Feb 24, 2015 00:54

etalian: Mar 20, 2006

Also Vanguard will automatically upgrade you to the cheaper Admiral class rate once your investment balance in the fund meets the requirement.

# ? Feb 24, 2015 01:03

GoGoGadgetChris: Mar 18, 2010; i powder a
granite monument
in a soundless flash

showering the grass
with molten drops of
its gold inlay

sending smoking
chips of stone
skipping into the fog

Your allocation is MUCH more important than a 0.15% increase in expense ratio. Don't let the expense ratio tail wag the portfolio allocation dog.

If we cared about expense ratio above all else, we'd all be in Total US Stock Market at 0.04% and not hold any Total International Stock Market at 0.22%.

# ? Feb 24, 2015 01:22

DogsCantBudget: Jul 8, 2013

Wife's roth just transferred from Ameriprise to Vanguard...mine is in the works. She has 18k to play with. Where should we invest it? What percentage should she be? We are both 31

# ? Feb 24, 2015 03:24

Blinky2099: May 27, 2007; by Jeffrey of YOSPOS

DogsCantBudget posted:

Wife's roth just transferred from Ameriprise to Vanguard...mine is in the works. She has 18k to play with. Where should we invest it? What percentage should she be? We are both 31

From my understanding the answer will be exactly the same as the past ~7 posts re: someone who has just over 10k invested.

# ? Feb 24, 2015 03:35

DogsCantBudget: Jul 8, 2013

Blinky2099 posted:

From my understanding the answer will be exactly the same as the past ~7 posts re: someone who has just over 10k invested.

Could you perhaps quote one? I just read back 5 pages and didn't have an answer...18k is closer to 20k then it is to 10k. There is also another 2k that has to be liquidated from Ameriprise that will get sent over to Vanguard directly afterwards...

DogsCantBudget fucked around with this message at 03:52 on Feb 24, 2015

# ? Feb 24, 2015 03:47

etalian: Mar 20, 2006

DogsCantBudget posted:

Wife's roth just transferred from Ameriprise to Vanguard...mine is in the works. She has 18k to play with. Where should we invest it? What percentage should she be? We are both 31

I would just go with all in one mutual fund:
Vanguard LifeStrategy Growth Fund (VASGX)

# ? Feb 24, 2015 03:52

MickeyFinn: May 8, 2007; Biggie Smalls and Junior Mafia some mark ass bitches

DogsCantBudget posted:

Could you perhaps quote one? I just read back 5 pages and didn't have an answer...18k is closer to 20k then it is to 10k. There is also another 2k that has to be liquidated from Ameriprise that will get sent over to Vanguard directly afterwards...

The answer from a majority of posters will usually be, if you are asking this question, go with the Target Retirement 20XX fund closest to your planned retirement date and then read the books in the op. Unless you are etalian, who recommends the Life Strategy funds.

# ? Feb 24, 2015 04:27

etalian: Mar 20, 2006

Main difference is Target Retirement funds reduce risk by allocating more "safe" investments such as more bonds the closer you get to retirement, while Lifestrategy funds keep the same basic strategy over time.

Target Retirement funds are the better bet if you worry about stock market crashing, while the Aggressive Life strategy fund will probably get you a bigger nest egg in the long run in exchange for more risk.

Either option is a good choice for new investors since the funds have good diversification e.g includes US stock, international stock, bonds and also are automatically re-balanced over time by Vanguard.

# ? Feb 24, 2015 04:40

Deep 13: Sep 6, 2007; "Let's think the unthinkable, let's do the undoable, let's WORK OUT"

etalian posted:

Main difference is Target Retirement funds reduce risk by allocating more "safe" investments such as more bonds the closer you get to retirement, while Lifestrategy funds keep the same basic strategy over time.

Target Retirement funds are the better bet if you worry about stock market crashing, while the Aggressive Life strategy fund will probably get you a bigger nest egg in the long run in exchange for more risk.

Either option is a good choice for new investors since the funds have good diversification e.g includes US stock, international stock, bonds and also are automatically re-balanced over time by Vanguard.

You're incorrect about the target retirement asset allocation and your claims about risk/reward. For a 30 year old like the poster above, Target Retirement 2045 is still 90/10 stock/bond right now. You only cross over 80/20 (LifeStrategy growth) for the 2035 fund, which is only appropriate for people in their mid-40s. Past that age, increasing bond exposure (far) above 20% over time only makes sense.

LifeStrategy funds are better for medium-term stuff like saving for your kid's college. Why convince people who are new to investing to forego the automatic asset allocation that the target date funds provide?

# ? Feb 24, 2015 08:07

shame on an IGA: Apr 8, 2005

What are yalls thoughts on balancing large/mid/international on the equity side of your portfolio? My 401k through fidelity finally added more of the Spartan funds than just S&P so I rebalanced yesterday into:

50% FXSIX S&P 500 0.05 ER
20% FSEVX Extended Market 0.07 ER
15% FSGDX Global Ex-US 0.28 ER
15% FSITX US Bond 0.17 ER

I'm wondering if it would've been better to go heavier into extended market from large cap and if I'm taking on too much international exposure. I'm 29 with about $8k balance, contributing 12% gross + 6% match from ~45k gross income.

# ? Feb 24, 2015 18:22

GoGoGadgetChris: Mar 18, 2010; i powder a
granite monument
in a soundless flash

showering the grass
with molten drops of
its gold inlay

sending smoking
chips of stone
skipping into the fog

Shim Howard posted:

What are yalls thoughts on balancing large/mid/international on the equity side of your portfolio? My 401k through fidelity finally added more of the Spartan funds than just S&P so I rebalanced yesterday into:

50% FXSIX S&P 500 0.05 ER
20% FSEVX Extended Market 0.07 ER
15% FSGDX Global Ex-US 0.28 ER
15% FSITX US Bond 0.17 ER

I'm wondering if it would've been better to go heavier into extended market from large cap and if I'm taking on too much international exposure. I'm 29 with about $8k balance, contributing 12% gross + 6% match from ~45k gross income.

Extended Market makes up 20% of the US Stock market, and you're giving it 30% right now. You're already giving them 1.5x their cap weight, so you better have a Really Good Feeling about small and midcaps if you want to push it even higher.

You could probably drop your bonds 5% and up your International 5%. Your International allocation is only about 17% of your equity side, and I think 25%-35% are pretty common without being viewed as "internationally aggressive".

Also I just noticed you only asked for info on the equity side. Personally I would 50% SP500, 10% Extended Market, and 25% International, if you want to leave 15% at bonds. This gives you the cap weighted 80/20 for SP500/Extended, and a Domestic/Intl of 70/30.

# ? Feb 24, 2015 18:37

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

I'd also up the international side.

# ? Feb 24, 2015 18:51

MJBuddy: Sep 22, 2008; Now I do not know whether I was then a head coach dreaming I was a Saints fan, or whether I am now a Saints fan, dreaming I am a head coach.

etalian posted:

Target Retirement funds are the better bet if you worry about stock market crashing, while the Aggressive Life strategy fund will probably get you a bigger nest egg in the long run in exchange for more risk.

Ex-ante this isn't true; other than the reasons mentioned above, the idea of hedging your risk more is such that it will produce the highest nest egg by the given date. That is, under their estimates more risk will more likely produce a loss that cannot be recouped by the target date. It may fail at those goals, but the Aggressive Life is more in line with letting your funds grow perpetually so that you may leave them to future generations or treat as an endowment.

# ? Feb 24, 2015 20:57

WarMECH: Dec 23, 2004

My plan is to shift my asset allocation from higher risk equity to lower risk bond/fixed income as I approach retirement age, on a glide path similar to the Target Date funds or "120 minus age in Equities", to make sure I have the money in my account at that time. Then I plan to switch to something like the fixed Life Strategy funds to ensure that I continue to earn a decent return as I draw on the account indefinitely.

# ? Feb 24, 2015 21:09

khysanth: Jun 10, 2009; Still love you, Homar

GoGoGadgetChris posted:

Your allocation is MUCH more important than a 0.15% increase in expense ratio. Don't let the expense ratio tail wag the portfolio allocation dog.

If we cared about expense ratio above all else, we'd all be in Total US Stock Market at 0.04% and not hold any Total International Stock Market at 0.22%.

I was literally planning on using the exact same allocation as the Target 2050 Retirement Fund but just switching to the Admiral class shares and manually verifying allotment once a month. Is this a sane idea?

# ? Feb 24, 2015 21:34

Guinness: Sep 15, 2004

khysanth posted:

I was literally planning on using the exact same allocation as the Target 2050 Retirement Fund but just switching to the Admiral class shares and manually verifying allotment once a month. Is this a sane idea?

No, it's totally fine to do that, though monthly rebalancing might be a little overzealous. Problem is that to do it all with Admiral shares you'll need over $10,000 in each fund which when you start talking about your bond allocation (assuming 10-20%), then dividing between domestic and international bonds all of a sudden we're talking total portfolio worth over $100,000. Since you'll probably have to use Investor-class shares to diversify appropriately, there's a vanishingly small difference between just putting it into a Target Date fund and letting Vanguard automatically do it.

# ? Feb 24, 2015 21:37

80k: Jul 3, 2004; careful!

khysanth posted:

I was literally planning on using the exact same allocation as the Target 2050 Retirement Fund but just switching to the Admiral class shares and manually verifying allotment once a month. Is this a sane idea?

Yea, once you have enough assets, it is worth splitting off into admiral share classes.

# ? Feb 24, 2015 21:38

DNK: Sep 18, 2004

Personally, once a month is overkill unless some really insane market shenanigans are afoot. Quarterly, bi-annually, or annually are all easier and just as effective.

# ? Feb 24, 2015 21:39

Yaoi Gagarin: Feb 20, 2014

The "Stock Series" blog linked in the OP also suggested rebalancing anytime there's a ~20% or more deviation from your target. Is that a good idea?

# ? Feb 24, 2015 22:35

EugeneJ: Feb 5, 2012; by FactsAreUseless

lovely 401k fund options may be coming to an end:

http://www.cnbc.com/id/102451072

quote:

Supreme Court may give retirement savers a boost

Kelley Holland

2 Hours Ago

Does your 401(k) plan really offer the best investment choices for you? And is your employer reviewing those choices often enough?

Those questions are at the heart of a dispute that has made its way to the Supreme Court, which is hearing the arguments Tuesday. If the justices rule in favor of the plaintiffs, the case, Tibble v. Edison International, could have major implications for how companies run 401(k) plans.

The original suit claimed that Edison, the Rosemead, California�based utility, failed to fulfill its fiduciary responsibility to employees participating in its 401(k) plan because it offered several funds among the plan's investment offerings that had higher fees than other nearly identical funds.

Edison claimed, though, that according to terms of the Employee Retirement Income Security Act, or ERISA, which governs how 401(k) plans are run, the plaintiffs could only sue over funds that were among the offerings during the previous six years or less�and that several of the funds in question had been included for longer.

But the plaintiffs argued that fiduciary responsibility for plan choices is ongoing, and it is that question that the court agreed to hear.

"The question is what are the time periods in which these selections are made, and what are the statute of limitations" boundaries, said Howard Shapiro, a partner at Proskauer and an expert on ERISA litigation. He cautioned that the Supreme Court could opt to issue a ruling on broader grounds. But even if the court does not, the result could well be an increase in lawsuits related to retirement plan choices.

"It could extend the time periods of liability for decisions that were made so that the plaintiffs would be able to go further back into the past to attack decisions," he said.

The case is being argued at a time when a number of other employers and plan providers have been sued over their management of defined contribution plans. In December, Nationwide Life Insurance and its affiliate, Nationwide Financial Services, settled for $140 million a lawsuit that claimed that the revenue-sharing payments Nationwide received from several mutual fund companies violated ERISA.

A month earlier, in November, MassMutual agreed to pay $9.475 million to retirement plan participants to settle a suit that claimed it breached its fiduciary responsibility when it got revenue-sharing payments from investment advisors and mutual fund companies.

Also in December, Lockheed Martin settled for $62 million a class action claiming that the company offered investment options in its retirement plan that had excessive fees. Nationwide, MassMutual and Lockheed Martin deny any wrongdoing.

"It is natural that as these plans become more omnipresent in the retirement community, the way that they are operated is going to attract more scrutiny from government regulators and from litigators," Shapiro said. "You are going to see more and different types of challenges to 401(k) plans."

Heightened scrutiny of retirement advice is also coming from another quarter: On Monday the Obama administration endorsed a rule proposed by the Labor Department to hold brokers to the fiduciary standard, instead of just requiring them to find "suitable" investments for retirement accounts.

"All of these lawsuits have awakened the plan sponsors to the fact that they are under a lot of scrutiny," said Jay Sushelsky, senior attorney for AARP Foundation Litigation. (AARP filed a friend of the court brief in support of the class.) "That's a good thing."

# ? Feb 25, 2015 00:58

Easychair Bootson: May 7, 2004; _{Where's the last guy?

Ultimo hombre.

Last man standing.

Must've been one.}

I only contributed about $2000 to my Roth IRA last year, but I'm budgeting $450/mo to max it out this year. Right now that money ($900, soon to be $1350) is in my checking account. Is there any reason I couldn't/shouldn't make that as a 2014 contribution (before 4/15) and leave myself some headroom in 2015? I have already filed my 2014 taxes, but I don't believe that matters since I'll stay under the $5500 limit.

# ? Feb 25, 2015 01:14

Gisnep: Mar 29, 2010

Easychair Bootson posted:

Is there any reason I couldn't/shouldn't make that as a 2014 contribution (before 4/15) and leave myself some headroom in 2015?

No, it's a good idea.

# ? Feb 25, 2015 01:24

etalian: Mar 20, 2006

Easychair Bootson posted:

I only contributed about $2000 to my Roth IRA last year, but I'm budgeting $450/mo to max it out this year. Right now that money ($900, soon to be $1350) is in my checking account. Is there any reason I couldn't/shouldn't make that as a 2014 contribution (before 4/15) and leave myself some headroom in 2015? I have already filed my 2014 taxes, but I don't believe that matters since I'll stay under the $5500 limit.

Yes you allowed to max out the previous year assuming you can make the Roth contribution before the April 14 tax deadline, so you would have until 2016 next year to max out your 2015 contribution.

# ? Feb 25, 2015 01:26

slap me silly: Nov 1, 2009; Grimey Drawer

Yes, always contribute to the previous year first if you still can. Then try hard to max out this year, too.

# ? Feb 25, 2015 02:03

pig slut lisa: Mar 5, 2012; irl is good

EugeneJ posted:

lovely 401k fund options may be coming to an end:

http://www.cnbc.com/id/102451072

Sounds like a ruling for the plaintiffs would have a small effect, but it's a step in a positive direction. Thanks for sharing with the thread.

# ? Feb 25, 2015 02:25

EugeneJ: Feb 5, 2012; by FactsAreUseless

More good news on the 401k front:

http://time.com/money/3718640/obama-advocates-fiduciary-standard/

quote:

Obama to Wall Street: Stop Acting Like Car Salesmen

Ian Salisbury @salisburyian Feb. 23, 2015

It�s an issue that�s pitted Main Street against Wall Street for years. Now President Obama is wading into the murky question of what ethical duties financial advisers owe their clients when they recommend products like mutual funds and annuities.

On Monday, President Obama plans to use an AARP event to tout something known as the �fiduciary standard,� which would require financial advisers to act in the best interests of their clients, much as a lawyer must do.

That may seem like a no-brainer. But in fact, investment pros who call themselves �financial advisers� currently are not required to give clients the best advice or products that they can offer. They never have been. In the eyes of the law, financial advisers�once more commonly known as stockbrokers�are like car salesmen or the guys selling TVs at the local big box store: They can and do tout products that offer the heftiest profits and commissions.

To be sure, investment advisers have never been allowed to recommend just any investment. Current law requires they sell investments that are �suitable� for their clients based on factors like age or risk tolerance. In practice, however, that often means actively managed mutual funds with hefty sales loads or annuities with complex and expensive guarantees. Compared to low-cost index funds and exchange-traded funds, these investments can end up costing savers tens of thousands of dollars over the years it takes to build a retirement nest egg.

Raising the legal standard to a fiduciary one might stop that practice. That�s a big reason that consumer advocates, including the AARP and the Consumer Federation of America, have been calling for years to require all advisers to act as fiduciaries.

Both the Securities and Exchange Commission and the Department of Labor, which has jurisdiction over 401(k) plans, have taken stabs at requiring advisers to become fiduciaries. The issue was a key point of contention in the debate of the 2010 Dodd-Frank financial reform bill. While the bill ultimately included language that appeared to authorize the SEC to implement the financial standard, five years later the proposal is still stalled. One key point of contention: Financial advisers that work on commission tend to take on less wealthy clients. That has allowed Wall Street firms�and especially big insurance companies whose agents sell annuities�to argue that tougher rules would deprive middle class investors of advice.

Of course, it may seem strange that members of Congress would listen to what big business thinks is best for middle class investors while ignoring AARP and the Consumer Federation of America. But that only speaks to the strange ways of Washington�and, of course, to the ingenuity and determination of the financial services lobby.

The White House push appears to focus on advice doled out to investors in retirement plans. While that�s a huge group of investors, it�s not clear what effect, if any, the proposal would have on advice regarding taxable investment accounts. Any new rules could also be crafted to permit brokers to continue to earn commissions, something that many investors advocates are likely to see as a potentially fatal loophole.

# ? Feb 25, 2015 02:34

Blinky2099: May 27, 2007; by Jeffrey of YOSPOS

so if I max out Roth IRA and have more money to invest, but want to have access to it shortish-term, lifestrategy (taxable) funds are a good choice? I don't mind putting the money in something risky if it means better avg returns.

I might want to spend it 3-5 years down the road (vanguard suggests 20/80 stock/bond split), but don't care much about added risk of losing it, if it means higher average returns (from my understanding 80/20 stock/bond split, but other people seem to be disagreeing about this ratio actually giving better returns.)

I guess this isn't really a long-term investment question and maybe I should be taking it elsewhere, I just learned about vanguard funds from setting up my IRA the past week and want to withdraw from investing in individual stocks when I'm not knowledgeable enough to manage them myself.

# ? Feb 25, 2015 02:36

pig slut lisa: Mar 5, 2012; irl is good

EugeneJ posted:

More good news on the 401k front:

http://time.com/money/3718640/obama-advocates-fiduciary-standard/

I saw this as well, though I haven't yet seen anyone handicapping whether this effort is more or less likely to succeed than past efforts.

# ? Feb 25, 2015 02:46

slap me silly: Nov 1, 2009; Grimey Drawer

Blinky2099 posted:

I might want to spend it 3-5 years down the road

For a 3-5 year time frame I personally would pick something anywhere from a savings account, to 60% bonds/40% stocks. If it's more "might" want to spend than "probably" will spend, I'll tend more toward the 60/40. It really is all about your personal risk tolerance. If you don't care that much how much you might be down in 5 years, or you have the flexibility to wait 15 years instead of 5 if returns are bad, then go for the riskier stuff. If you know for sure you're going to buy a house in 4 years, use the FDIC insured savings account.

For a 3-5 year time frame, average returns are almost meaningless, you are going to get whatever the market does whether you like it or not. A higher bond ratio makes the possible pain less extreme.

# ? Feb 25, 2015 02:57

Brian Fellows: May 29, 2003; I'm Brian Fellows

What I tend to do (emergency fund and every tax advantaged account maxed out already) is contribute to a savings account I have earmarked for a 3-5 year time frame (next car, house downpayment, who knows what) AND a taxable investment account. I just funded the taxable investment account with my bonus a couple of years ago (so it was already over the minimum for the fund I wanted).

So I always treat my 3-5 year savings account as something I HAVE to contribute X dollars to every month (because it's money I'm definitely planning on using, just don't know on what yet), whereas my taxable investment account gets whatever play money I have left over to throw at it. I can always use that invested money if I want to, but I don't want to - it's there to make me more money. But with my 3-5 year savings account, well... If you know you want it in 3-5 years and definitely don't want it to LOSE money, it's not too sensible to keep it in stocks.

# ? Feb 25, 2015 03:39

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# ? May 26, 2024 16:53

MJBuddy: Sep 22, 2008; Now I do not know whether I was then a head coach dreaming I was a Saints fan, or whether I am now a Saints fan, dreaming I am a head coach.

I looked at Vanguard's Target Retirement Income Fund.

https://personal.vanguard.com/us/funds/snapshot?FundId=0308&FundIntExt=INT

code:

1	Vanguard Total Bond Market II Index Fund Investor Shares�	39.5%
2	Vanguard Total Stock Market Index Fund Investor Shares	20.6%
3	Vanguard Short-Term Inflation-Protected Securities Index Fund Investor Shares	16.9%
4	Vanguard Total International Bond Index Fund Investor Shares	14.1%
5	Vanguard Total International Stock Index Fund Investor Shares	8.9%
Total	�	100.0%

So it's about 30% Stocks, 53% Bonds, 17% Inflation-Indexed Securities (basically just bonds but less variance assuming there's not some major financial securities problem...which I mean never happens right?).

# ? Feb 25, 2015 04:00

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Long Term Investing & Retirement: The second best time is now

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