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MJP posted:Also, earlier this year I was gifted around 120 shares of PRU. Should I basically be holding onto this until retirement, because it's freaking PRU, or should I be keeping an eye on the price and unload if it goes below $85 for a long period of time? That sounds like it makes up a pretty large chunk of your portfolio. I'd probably sell it and stick the proceeds wherever it makes sense based on your asset allocation.
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Aug 21, 2015 21:31
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If I were to buy some VTSAX today after the close of trading, would I be purchasing at the Thursday update price, the Friday update price, or the price on Tuesday or whenever the transaction actually is finalized?
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Aug 21, 2015 21:54
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For a long term purchase the day-to-day vagaries of the price should make no difference. If your intent is to hold the shares until you retire, then what difference does it make? I think the specific answer to your question though is that it will depend probably depend on your broker? Since today is Friday you are certainly not getting Thursdays price, otherwise you could make a massive fortune, what with being able to see the future and all. I doubt if you will get today's (Friday) price because your broker is probably not doing anymore active trades today. My instinct is that you would get the price at the end of the next trading day, so Monday.
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Aug 21, 2015 22:14
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Murgos posted:For a long term purchase the day-to-day vagaries of the price should make no difference. If your intent is to hold the shares until you retire, then what difference does it make? I was just curious  Murgos posted:I think the specific answer to your question though is that it will depend probably depend on your broker? Since today is Friday you are certainly not getting Thursdays price, otherwise you could make a massive fortune, what with being able to see the future and all. I doubt if you will get today's (Friday) price because your broker is probably not doing anymore active trades today. My instinct is that you would get the price at the end of the next trading day, so Monday. The reason Thursday seemed like a possibility is because there's a window during each trading day where trading is closed but the price has not been updated, so if the broker's system is "you buy at the price displayed the moment you click the button" then purchasing during that window would give you the previous day's price.
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Aug 21, 2015 22:23
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Murgos posted:For a long term purchase the day-to-day vagaries of the price should make no difference. If your intent is to hold the shares until you retire, then what difference does it make? Are you saying that if he bought VTSAX at 51.22 (Thursday's close) vs. 49.72 (Friday's close) this would have no impact to the long-term value of his purchase?
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Aug 21, 2015 23:11
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mtr posted:Are you saying that if he bought VTSAX at 51.22 (Thursday's close) vs. 49.72 (Friday's close) this would have no impact to the long-term value of his purchase? I think it wouldn't have that much of an impact on the long-term value. Let's say someone was making their entire $5500 IRA contribution. The 3% difference between Thursday's close ad Friday's close is $165. If you assume an 8% return on the extra value for 30 years, the final difference is $1660. Presumably, some contributions have been made in the past, and hopefully many more contributions will be made every year between now and the time the stock is being sold off in retirement. I'm not saying that $1660 is nothing, but in 30 years, it will probably represent such a small portion of total assets that it isn't worth worrying about. I don't think there's anything wrong with being curious, but the one-day change shouldn't impact most people's long-term strategy.
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Aug 22, 2015 00:11
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mtr posted:Are you saying that if he bought VTSAX at 51.22 (Thursday's close) vs. 49.72 (Friday's close) this would have no impact to the long-term value of his purchase? Yes, that particular day to day change would result in a ~3% difference in results but if you can time the market like that then go for it. Me, I can't see the future so I am going to get my money in when I can. Anyway, if he were making regular contributions to his retirement account it would absolutely wash out over time due to variance and be (almost) no difference at all. e: Monte Carlo sims say that the median return for $5500 a year invested in US total stock market for 30 years using historical returns (from 1972-now its 11.99% mean with 18.05% std dev) is ~1.7 million dollars. Is ~$1600 interesting? No, not really it's less than the variance of the median value in multiple runs by a factor of 10 or more. e2: More to the point the 25 percentile return was $1.1 million and the 75 percentile return was $2.6 million. The one day price is absolutely inconsequential. Murgos fucked around with this message at 00:45 on Aug 22, 2015 |
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Aug 22, 2015 00:20
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Yeah in the scheme of things saving money for investing and also having a consistent strategy is more important than worrying if the market will be down a few days from now.
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Aug 22, 2015 15:23
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I want to start putting some money in investments, to possibly buy a condo/house in the next 5-10 years. I am making 401(k) contributions,, and have a Roth IRA. If I'm not maxing out the Roth, should I max that out first before thinking of putting house savings into a taxable account?
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Aug 22, 2015 16:31
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I think that's plenty of time to save for a house without having to sacrifice retirement savings.
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Aug 22, 2015 17:07
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I currently have a Roth IRA at Vanguard, just the Target Retirement 2050 fund. I have about ~15k I want to put into another fund (which I do not plan to take out any time soon), any suggestions as to what I should place it into? I used the guide on the Vanguard site and it tells me to put it into a Target Retirement 2050 fund. I've been looking at a bunch of funds that were suggested, but it seems that they were suggested only because the expense ratio was low?
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Aug 22, 2015 19:38
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obi_ant posted:I currently have a Roth IRA at Vanguard, just the Target Retirement 2050 fund. I have about ~15k I want to put into another fund (which I do not plan to take out any time soon), any suggestions as to what I should place it into? I used the guide on the Vanguard site and it tells me to put it into a Target Retirement 2050 fund. I've been looking at a bunch of funds that were suggested, but it seems that they were suggested only because the expense ratio was low? The Target Retirement funds gets good praise itt mainly because it's a solid low cost all in one fund.
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Aug 23, 2015 03:34
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So to roll over my 401k into a Vanguard IRA I apparently need to get the HR person at my previous company to approve it, if I'm understanding these forms correctly. She's incredibly vindictive and took my quitting very personally, this will be fun.
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Aug 23, 2015 03:41
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totalnewbie posted:I think that's plenty of time to save for a house without having to sacrifice retirement savings. So I shouldn't think about putting aside other savings until a Roth is maxed always? I guess I can always take out the allowed 10k for a house purchase otherwise, if I don't get to a point otherwise.
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Aug 23, 2015 04:01
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Jahoodie posted:So I shouldn't think about putting aside other savings until a Roth is maxed always? Jahoodie posted:I guess I can always take out the allowed 10k for a house purchase otherwise, if I don't get to a point otherwise.  There isn't a definitive answer here, but . . . if you can't max out your IRA and save up for a house, maybe you can't really afford a house yet.
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Aug 23, 2015 04:46
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Parallel Paraplegic posted:So to roll over my 401k into a Vanguard IRA I apparently need to get the HR person at my previous company to approve it, if I'm understanding these forms correctly. well usually you just need to directly contact the provider with your 401k account and personal info.
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Aug 23, 2015 04:53
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Parallel Paraplegic posted:So to roll over my 401k into a Vanguard IRA I apparently need to get the HR person at my previous company to approve it, if I'm understanding these forms correctly. It might also require your previous company to flag your 401k as inactive/left the company, but that doesn't have anything to do with the form. Bhodi fucked around with this message at 04:59 on Aug 23, 2015 |
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Aug 23, 2015 04:56
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slap me silly posted:This is a reasonable approach. Thanks. To rephrase my question, I was getting at would it be silly to use a non-tax advantaged account for medium to long term savings with a goal, when my ROTH hasn't been maxed out. I didn't think so. I should max out my tax advantaged account, because in the off chance I absolutely need to access it (qualified distribution) it's a possibility- though not maybe the smartest as you point out. I haven't maxed out my Roth in past years, but have contributed and also am putting 14% of salary (with match included in that) into a 401k. (I know the local wisdom is to contribute to 401k up to match, max IRA, then go back to top off the 401k instead.) I am also in a very high cost of living area, and it may make more sense in the long term to rent instead of buy anyway. I know that can be  , but just looking into how it might be a long term consideration.
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Aug 23, 2015 06:27
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Murgos posted:Yes, that particular day to day change would result in a ~3% difference in results but if you can time the market like that then go for it. Thanks for the calculation. I wasn't going on about timing the market, I was mostly interested in how that 3% difference in daily price would compound over a lifetime. Which after seeing the difference, I agree it is negligible.
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Aug 23, 2015 17:53
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I am deeply concerned about the volatility of the market right now. This is my current setup, not including 401ks: I am considering moving everything into bonds, or hell, cash. What do I do?
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Aug 23, 2015 19:54
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My Rhythmic Crotch posted:I am deeply concerned about the volatility of the market right now. This is my current setup, not including 401ks: Do nothing. Stay the course. The market will recover and you'll keep making regular deposits and continue buying things on sale!
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Aug 23, 2015 19:57
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My Rhythmic Crotch posted:I am deeply concerned about the volatility of the market right now. This is my current setup, not including 401ks: Listen to the guy above me. Don't be the guy who pulled everything out in March 2009 and missed the 200% rise in the past 6 years. Unless you think the entire thing is going to permanently come crashing down. Then cash it all out and buy canned goods and ammunition. (Don't do this)
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Aug 23, 2015 20:04
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Sigh. I hate money. I'm going for a walk.
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Aug 23, 2015 20:10
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My Rhythmic Crotch posted:Sigh. I hate money. I'm going for a walk. If anything, go to the 90/10 split the website is recommending. Keep contributing, keep diverse and maintain your target asset allocation. Huge drops only matter if you're retiring in <10% years and you'll hopefully have slowly migrated to bonds by that point. Ignore volatility when you're young. I used to work with a guy in his 60s who spent at least 10% of his day looking at the market and seeing his 401(k) balance swing by tens of thousands of dollars each day. It's enough to drive you mad and I think he eventually was.
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Aug 23, 2015 20:15
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Peanut3141 posted:Listen to the guy above me. Don't be the guy who pulled everything out in March 2009 and missed the 200% rise in the past 6 years. Oh, man, I worked with a guy like that. Mid-2011 he decided the stock market wasn't going anywhere good, pulled everything out, and moved to 100% gold (around $1600/oz). He was feeling pretty smug about it through September of that year, but the market has not been kind to him since. We did have a precious metals fund in our 401(k), so at least he didn't lose the 6% match there.
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Aug 23, 2015 20:39
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My Rhythmic Crotch posted:I am deeply concerned about the volatility of the market right now. This is my current setup, not including 401ks: How old are you and when do you expect to need the funds. Consider this quote from Buffet: But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the "hamburgers" they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.
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Aug 23, 2015 20:53
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My Rhythmic Crotch posted:I am deeply concerned about the volatility of the market right now. This is my current setup, not including 401ks: Enjoy the opportunity to buy stocks on sale 
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Aug 23, 2015 21:43
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Peanut3141 posted:Listen to the guy above me. Don't be the guy who pulled everything out in March 2009 and missed the 200% rise in the past 6 years.
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Aug 23, 2015 22:20
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Bhodi posted:I did this in 2011 at the dip. It was a bad move. I lost a lot of potential earnings. I did this unintentionally because it was my college fund and I had to take it out to go to college in 2009. When we asked why the financial advisor hadn't done anything when the market started to dip and it lost half its value we got "oh well it wasn't losing money fast enough. When are you going to college, like 5 years from now right?" 
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Aug 23, 2015 22:24
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My Rhythmic Crotch posted:I am considering moving everything into bonds, or hell, cash. What do I do? So you want to sell when your assets have already lost value and then... what? When do you buy them back? After they've grown in value past what they're worth now? Knee-jerk panic reactions to stock market changes like this just end up forcing you to sell low and buy high. If you've got more money to invest and you want a 90/10 split, you'd actually want to buy more stocks to push yourself back towards that split. Likewise if you needed to sell some investments to cover expenses you'd actually want to be selling your bonds. If you cannot stand market volatility and you're pulling your hair out in a panic you might want to move towards a more conservative allocation with more bonds, but just do that by investing new money into bonds instead.
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Aug 23, 2015 22:29
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app posted:How old are you and when do you expect to need the funds. I have been saving (separately from the Vanguard stuff) to get into a house or some other kind of property in the next couple of years. Basically the dollar's international value is higher than it's been in ages, yet domestically we have huge inflation, rent and property prices are soaring, wages are flat, the fed has to raise the interest rate at some point, etc. It's just so much I can't wrap my head around it. Feels like the entire global economy is a huge zit.
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Aug 23, 2015 22:33
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Inflation isn't huge at all tho
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Aug 23, 2015 23:00
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Series DD Funding posted:Inflation isn't huge at all tho Agreed, try running some actual what-if calculations on your savings. You'll find the impact on such a short time horizon is seriously negligible. This is how I realized, for example, that it doesn't really matter if I put my emergency fund in one of those 1% online savings accounts or if just keep it at my credit union earning nothing.
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Aug 23, 2015 23:29
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It's weird to open the stock trading thread and realize there's a whole other set of BFC posters who do very different things than the people in this thread
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Aug 24, 2015 00:06
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My Rhythmic Crotch posted:I am deeply concerned about the volatility of the market right now. This is my current setup, not including 401ks: I totally get the feeling. I just initiated a big buy into admiral shares as downswing started. It's hard to look at how much money you "lost". Just keep in mind you don't actually lose that money till you sell. We are young guys. This is what I want. I want the market to be down for me to buy in at low prices. It's a great time to be buying. Remember, you setup a plan. You made your ratio you want to have. Stay the course. I'd advise going with the target 90/10 they have. Yeah, you might log in and see a big red number NOW, but future you will breath a sigh of relief when you didn't pull out to be conservative. Gotta have that strong stomach. If it's too hard to see losses, maybe put them into a target retirement account, set and forget your contributions and just let it ride without seeing how good or bad you are doing in the moment.
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Aug 24, 2015 00:19
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pig slut lisa posted:It's weird to open the stock trading thread and realize there's a whole other set of BFC posters who do very different things than the people in this thread I just read a few recent pages and daaaaamn does it clash with this thread. So much "I went 30% cash today because I've Got A Feeling"
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Aug 24, 2015 00:24
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Most people in that thread are not talking about their entire portfolio, only their 'play money'. The general consensus there is, for most people who want to play with stocks you should have the stuff in this thread down pat first.
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Aug 24, 2015 00:49
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Yet there are still people talking about pulling their 401ks completely out of the market. 
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Aug 24, 2015 01:18
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Woo, everything is on sale! I knew I was procrastinating maxing out my 401k for a reason  Just bought $18k of cheap stocks, now if only the real estate market would crash and let me get a decent house.Rhythmic, put your house money in cash if it's not already. You don't need to play with stocks on a few year timeline.
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Aug 24, 2015 01:20
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pig slut lisa posted:It's weird to open the stock trading thread and realize there's a whole other set of BFC posters who do very different things than the people in this thread There's investing and then there's speculating. One of those things gives you the best chance at retiring and the other is more for fun, like gambling. You might speculate right and get returns that massively out-perform the market but then you're better off taking those unexpected gains and throwing them into an index fund, unless you're Warren Buffet. Like going to the casino with a few hundred dollars for a night of fun and hitting the jackpot; you're best off walking away with the winnings. I've you're just playing around with a small portion of your net worth on the chance that you speculate right, it really doesn't matter what you do with it. I'm undecided if I'll ever play games with money like that.
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Aug 24, 2015 01:52
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