|
oliveoil posted:He links to this article, which he makes sound better, but I didn't understand any of it: http://www.marketwatch.com/story/why-you-should-consider-an-all-value-portfolio-2017-03-29 I know a lot of this can get confusing, and I'm NOT doing his portfolio myself, but I get an itch sometimes to look at what makes up the whole stock market for my own education sake. I AM NOT A FINANCIAL EXPERT, but here's my basic understanding of some of these terms: -Growth Stock = the companies are expected to earn more than average compared to the rest of the market -Value Stock = the company 's stock price is lower than what you'd expect compared to how it's doing with it's overall business (in other words, it's "undervalued") -Large cap = the companies that are worth the largest amount (think Apple, Google, the largest banks, etc) we're talking tens or hundreds of billions here; pretty much the S&P 500 -Small cap = the companies are worth hundreds of millions, but not necessarily multibillion (some of these we've heard of, a lot we haven't). -I think US vs International is self-explanatory -REITS = Real Estate Investment trusts (a diversified way to invest in real estate without the hassle of being a landlord with a mortgage, around way before crowdfunding became popular for a similar reason) You can usually see how funds are invested by putting their ticker into Morningstar.com's tool and it'll show how it's focused. That article is actually a bit different than the portfolio talk I linked to in the first place. This Marketwatch one says that the best possible return you can get amongst stock index funds is if you focus on value index funds only (as opposed to growth only, or a blend of the 2.) His "ultimate buy and hold" is broader than that; it includes value for sure, but also REITS, and breaks down literally every part from large to small, and value to growth ,and US vs international.
|
# ? May 14, 2017 13:39 |
|
|
# ? Jun 10, 2024 11:21 |
|
r/financialindependence has a thread about aggressive asset allocation by young (or youngish) investors who got in the market after the last crash:quote:We are now over 8 years in to a global bull market that has seen very few pullbacks over the entire duration. With a CAGR of close to 15%, and a total return of approximately 300% since the March 2009 market bottom, a huge swath of new investors (including many on this sub) have not experienced what its like to live through a bear market (myself included). There's some good discussion in the comments, but what I found most interesting was a link to an article about the author losing his nerve and eventually selling off during the crash. The notable thing about the piece is that it was published literally the day the market bottomed out. quote:On Monday, the Dow Jones industrial average nose-dived another 300 points. So, what advice did the perky money manager quoted in my local newspaper the next morning have to offer? "I think we're going to look back and see that this was the best buying opportunity we've seen in years," the man said. "When General Electric is selling for less than the cost of a light bulb, that's an opportunity." There but for the grace of God, I guess. I'm not quite 30. I've never not had a bull market. I hope I have the guts to hold on when the next crash comes. (I'm also not 100% equities btw)
|
# ? May 16, 2017 03:49 |
|
I'm 38 and I was 30 in 2008, having been putting money away in a 401k since I began working in 2001. I had low 6 figures in the market by then and I survived it by just not paying attention. I don't know what I lost (not paying attention, you see), but my 401k bottomed out at 60% of its previous peak. Some of that trough was attenuated by continued contributions, I'm sure. I had the luxury of not paying attention because I was working in the defense industry. At that point there was a very small chance of losing my job in the fear-fueled defense spending that was America post-9/11. Later on, around the 2011 BCA and the subsequent sequester, fiscal reality began to set in. By that time, though, light was visible at the end of the tunnel and 2-3 years is still a hell of a generous adjustment period. Even though I survived the meltdown doing exactly the right thing, that gives me very little confidence I'm prepared for the next. Then I was single; now I have a wife and a kid. I'm also a decade further on with less time for recovery. The level of stress I'd experience today is tremendously greater than I did then. I'd like to think I'd follow the same path again, and I guess I'll find out. My point is that having survived a bear market doesn't necessarily immunize one from screwing up the next. Circumstances and stressors change dramatically and you're likely to be playing an entirely new version of the "keep it together" game.
|
# ? May 16, 2017 04:21 |
|
Reading that has tempted me to delete my mint.com account, or at least remove retirement accounts from it It's kind of fun to check on a weekly basis and see them going up a little but when things go downhill the last thing I would want is constant reminders of the situation
|
# ? May 16, 2017 15:03 |
|
Yeah, I asked for the same responses in here and most said if they rode it out, they're about back where they started, or while they lost a lot in the beginning, they gained it all or more back, although I don't know when the average SA poster started investing
|
# ? May 16, 2017 16:18 |
|
I started my 401k in 2006 or 2007 and was 100% in a vanguard stock index fund. I was unable to contribute for a few years while I was un- and then underemployed but I never thought about touching the money.
|
# ? May 16, 2017 16:27 |
|
Looks like Vanguard have finally opened up to individual, private UK investors. Anyone dare to transfer an ISA and tell us how it went?
|
# ? May 16, 2017 17:01 |
|
I'm 48 and started saving during the 1990 recession. Opened my first 401k in 1993. Since then I have been through the dot-com crash - which was hideous, at the time - and the 2007-2008 crash/bear market. Didn't touch a thing beyond some re-balancing here and there. I don't want to get braggy about what I have today but safe to say I am not displeased. Never cashed out my retirement or taken a 401k loan (which are stupid IMHO for any reason). I made more riding out 2007-2008 than I'd ever made in my life. When it goes down again, and it will, I'll deal. My chief concern these days is planning for if a serious downturn hits when I am ready to retire, and how to work with it. The key being planning now, not when it's happening. I think stuff like Mint, etc. that show Net Worth and tempt you to check at least weekly (because their business model depends on it) are really going to panic folks next time the market goes for a spin.
|
# ? May 16, 2017 20:09 |
|
I think it's Four Pillars that tells the story of why low and low-middle class families fared the best during the Great Depression - They couldn't afford the newspapers that gave stock advice and reported on the doom and gloom, so they Let It Ride, and soundly outperformed all the Mr Monopoly-types who were frantically trying to stay afloat.
|
# ? May 16, 2017 20:12 |
|
Mentally it's hard for investors who haven't suffered at least one downturn to really grasp the tried and true saying that stock losses aren't losses until you sell them. A well run mutual fund does it's own balancing so the fact that you "lost" say, 1 million on your statement means nothing until you need to use the money in it. If you are not retiring you don't need it. If you are retiring than maybe don't retire just then. Etc. I am living proof - I "lost" something like 600k USD in 2008. I wasn't really even paying attention then. That exact same account is well over that loss today.
|
# ? May 16, 2017 20:20 |
|
pig slut lisa posted:r/financialindependence has a thread about aggressive asset allocation by young (or youngish) investors who got in the market after the last crash That discussion was what made me realize I'm actually a lot more risk adverse now compared to 5 years ago when I first started portfolio planning. Rebalanced to 30% bonds as a result and feel a lot more comfortable with that.
|
# ? May 16, 2017 21:14 |
|
pr0zac posted:That discussion was what made me realize I'm actually a lot more risk adverse now compared to 5 years ago when I first started portfolio planning. Rebalanced to 30% bonds as a result and feel a lot more comfortable with that. How old are you or rather, how close are you to where you want to stop regularly working/contributing to retirement? Looking back to the 90's it would have been better for me to stick with an all stock index like VTSAX for a couple decades (certainly the results bear that out) instead of going for a less "risky" approach. If you have a 30 year plus window - or even 15-20 - you'll be able to ride out the bumps most likely and benefit more in the end. The closer you get to retiring the more you need to re-balance of course. If you are younger though, go for it. One thing I have rarely done - only a few times - is pick stocks myself. I am not a broker and I know too many amateur day traders who got burned, particularly during the dot-com bust. Index funds have served me well.
|
# ? May 17, 2017 01:27 |
|
What is (generally) the correct place to store money set aside for an emergency? I've got about 20k saved up in my banks low interest (.05% APY) savings account and have been thinking of taking about half or 2/3 of it and setting it aside in something like a Money Market Account that earns a higher APY. It's not really a huge difference (@10k it's about a 1.7% APY) but I'd be nice to keep it somewhere save, and earning a higher APY than just my savings account. I'd then be taking the remainder of the savings and investing it, but I haven't decided where yet.
|
# ? May 17, 2017 05:14 |
|
Wicaeed posted:What is (generally) the correct place to store money set aside for an emergency? For 20k it's really a matter of convenience. Neither MM or traditional savings - btw you can find "high yield" saving accounts at some banks which more or less match MM these days - are going to give you much of a difference in return on that amount so pick whatever is easiest to deal with. Just as long as it isn't in some poo poo account that actually charges you for the privilege of keeping money in it, of course. If we enter a serious downturn in the next few years then adjust. It's not a bad idea to keep a few months expenses in an FDIC insured, easy to access account. Most financial planners will advise as much - some 6 months, others less. 6 is pretty decent if you can build up to that and then start saving for the future on top of it. I have a little over 30k in a low yield account for just that - emergency oh poo poo moments that life throws you from time to time, even though I periodically consider investing it or otherwise risking a little more. That is where living through bear markets and economic downturns comes in handy. Perspective is a useful thing. As for everything after, speaking as an older goon to my younger self, if I could go back I would save even more. 20% including retirement (401k, IRA, whatever) is a base level. At 48 I save close to half of what I make through automatic withdrawals. I often wish I had started doing that when I was say, 25, given that most of what I spent back then was on the stupidest poo poo imaginable. That said I didn't rack up huge debt and at least saved some for the future so I suppose I am ahead of the game. Especially going by some of the horror stories in this forum and the BWM thread.
|
# ? May 17, 2017 06:02 |
|
secret volcano lair posted:Reading that has tempted me to delete my mint.com account, or at least remove retirement accounts from it You know what, I've had some connectivity issues with my new 401k, and I"m inspired to remove all retirement assets from my mint. It doesn't give me the same money boner looking at my networth, but it's wiser. I've been checking it too often for the last few years in all honesty. I like to check mint every week for spending purposes, but that inevitably leads me to checking everything.
|
# ? May 17, 2017 12:52 |
|
Ixian posted:How old are you or rather, how close are you to where you want to stop regularly working/contributing to retirement? I'm 33. The second question is significantly more complicated, but in short I'd like to be able to rely on my investments in the relatively near term.
|
# ? May 17, 2017 18:34 |
|
Wicaeed posted:What is (generally) the correct place to store money set aside for an emergency? Just put your emergency fund in an Ally savings account and get the 1.05% interest.
|
# ? May 17, 2017 23:59 |
|
Is there a goon favorite site to track ETFs and stocks that I may be interested in? I don't really want to input my entire portfolio, just keep my eye on my current and possible future selections.
|
# ? May 18, 2017 03:09 |
|
Syrinxx posted:Is there a goon favorite site to track ETFs and stocks that I may be interested in? I don't really want to input my entire portfolio, just keep my eye on my current and possible future selections. I like Google Finance? Yahoo Finance also has the same tool I think.
|
# ? May 18, 2017 05:57 |
|
I like stockrover
|
# ? May 18, 2017 06:04 |
|
Google finance requires flash so I looked at Stockrover. Pretty amazing site, thanks.
|
# ? May 18, 2017 15:47 |
|
I'm pretty sure Google Finance has no staff left who works on it.
|
# ? May 18, 2017 22:03 |
|
I honestly think I'm pretty lucky with how the timing of the crash worked out. I started my first post-college job and my 401k in 2007. So even as everything was crashing, I didn't really see the effects on my balance. I remember a bunch of quarterly statements though where I saw that the only reason my balance was going up was because of the continued contributions I was making - the funds themselves all lost value. For a while, I was very much into reading about investments, how to plan, and listening to the financial news. But after figuring out an allocation, the plan is pretty much just "invest more". The crash taught me to be pretty cynical of financial news too. All of the financial news for specific companies is pretty much just noise - partially since there's no way to act on it before anyone else, and partly because even with the data you'd need to know what everyone else is expecting. Right now I only ever pay attention to how my own company is doing. But there never seems like there's a correlation between quarterly results and what happens to the stock price. We had an amazing quarter, earnings above our guided range we provided, and our stock drops because analysts expected more. Or we'd get a so-so quarter, and our stock jumps 10% over the next couple weeks. And none of it, despite my managers assurances, has affected our raises/bonuses in a predictable way either. The broader market affecting news tends to have a lot more impact regardless. Stuff like Brexit and Trumps 2016 election tend to shake things up more than they should. In both events people had next to no idea what would happen. Brexit was a non-binding resolution, and Trump had hardly given any details about his economic agenda. So everyone jumps in and speculates, driving up volatility. Eventually though, everything calms down and the market continues gradually moving upward. Hopefully I can remind myself of that during the next crash.
|
# ? May 18, 2017 22:04 |
|
Spoke with my co-worker about saving up for retirement. Dude is like 30 and has literally nothing aside from his checking account. He asked me when he should've started saving, I told him the sooner the better. So I helped him open a 401k with our workplace which offers ~2.5% match. Better than nothing I guess.
|
# ? May 18, 2017 23:38 |
|
obi_ant posted:Spoke with my co-worker about saving up for retirement. Dude is like 30 and has literally nothing aside from his checking account. He asked me when he should've started saving, I told him the sooner the better. So I helped him open a 401k with our workplace which offers ~2.5% match. Better than nothing I guess. I mean, there's a dude here that has like $200,000 in a checking account at Ally (he's going to grad school and living off of the money) so it depends on how much is in the account.
|
# ? May 19, 2017 00:20 |
|
Michael Scott posted:I mean, there's a dude here that has like $200,000 in a checking account at Ally (he's going to grad school and living off of the money) so it depends on how much is in the account. He's still better putting that in bonds, unless he's paying tuition with that money too. I mean, he'll pay capital gains, but money is money.
|
# ? May 19, 2017 02:20 |
|
Hello, I'm a dumb baby about retirement stuff but I just turned 32 so I should probably figure this poo poo out sooner rather than later. SO, I just started a new job. They have an excellent pension type plan if you are there for over 2 years (which most people are, it's pretty low turnover), but I just started so I just get a 403b (it's a non-profit). There's no match though. They have TIAA-CREF or Fidelity. Since there's no match, I'm guessing I should just skip it and start up a Roth IRA? If so, where is the best place to do that? Also, what should I do with my old 401k's? Can I even touch them right now? I know there are a few options like consolidation, rolling them over, putting them in IRAs or something, but I'm not sure which is best. One has like $25K in it last I checked, the other two are probably pretty piddly as I wasn't at those jobs long.
|
# ? May 19, 2017 19:00 |
|
Odds are the best thing to do is to open a traditional IRA somewhere like Vanguard and roll all your old 401ks into that. That is only non-ideal in these situations: -The old 401ks have better expense ratios than you can get in a regular IRA. This is very rare but it can happen. -You anticipate needing to do a backdoor Roth IRA at some point. If you do, it's ideal to not have any existing traditional IRA or you'll need to pay tax on part of that when you do the conversion. Of course, making enough money that you need to worry about a backdoor Roth IRA is a great problem to have.
|
# ? May 19, 2017 19:28 |
|
Don't know what you make but you probably want to just roll your own 401ks in to a Vanguard IRA and also start a Roth IRA at Vanguard. Solid funds, cheap expense ratios. When you make enough money to where a Roth IRA isn't possible then as Nail Rat says you are entering "good problem" territory (by then you probably will be eligible for the pension). If you have a series of steady jobs with rising but consistent income and no long gaps between employment you'll probably never need a backdoor IRA though. Those are tricky.
|
# ? May 19, 2017 20:06 |
|
Thank you, that's super helpful. So I can just waddle onto Vanguard's site and set this stuff up myself? Are there any pitfalls I should avoid, or is it pretty straightforward?
|
# ? May 20, 2017 03:33 |
|
HondaCivet posted:Thank you, that's super helpful. So I can just waddle onto Vanguard's site and set this stuff up myself? Are there any pitfalls I should avoid, or is it pretty straightforward? It's very straightforward to do online. The only possible pitfalls are making sure you're eligible to contribute in the first place: look up the income limits for contributions. I was recently burned by getting married and not realizing that married filing separately kills your roth IRA contribution. And by burned I mean i had to take the money and its earnings back out and pay a slight penalty tax so it really wasn't the end of the world.
|
# ? May 20, 2017 13:59 |
|
alnilam posted:It's very straightforward to do online. The only possible pitfalls are making sure you're eligible to contribute in the first place: look up the income limits for contributions. This just happened to me too. I called Vanguard and they were really helpful in telling me how to re characterize it and then backdoor it into the Roth.
|
# ? May 20, 2017 14:42 |
|
Duey posted:This just happened to me too. I called Vanguard and they were really helpful in telling me how to re characterize it and then backdoor it into the Roth. Yeah Vanguard's customer service is insanely good
|
# ? May 20, 2017 14:46 |
|
Love Vanguard. And "had to switch IRA because my income was too high" is a classic example of where a backdoor IRA is useful, forgot about that. Though since you are doing this for the first time better to just find out now. Roth limits haven't kept up well with inflation meaning if you have a good job and/or spouse with one you are out of luck on that front. Single limits are for practical purposes $118k - it rapidly phases out until 133k at which point you can't contribute anything - and $184/194k if you are married filing jointly. (there are certain situations where backdooring a Roth is still possible/advisable but that is too complicated to get in to here). That is MAGI income so take you deductions in to account. If you make more than that and are young/in decent health you might want to consider an HSA (Health Savings Account). Your company insurance plan may offer one as an option (often with a match) or you can sign up directly. The catch is you need a HDHP (High Deductible Health Plan) which is exactly what it sounds like - a plan with a high (often double) deductible. Your company may offer that, lots do. For example my HDHP has a 4k deductible as opposed to a similar non HDCP (United Healthcare Choice+ in my case) with a $1500. That means outside of routine/preventative care visits and office co-pays I am out of pocket the first $4k of, say, surgery costs vs. $1.5. The trade off is my premiums are lower (my company pays 75% as well) and I can have a HSA. HSAs are persistant accounts - you can put up to $3,400/year in them if you are single and 6,750 if you are married. Your contributions are tax free and so are your withdrawals, making them a terrific long term savings option. The catch, of course, being you can only use the money for approved health care spending (or pay a hefty penalty). What makes this different from, say, an FSA is you can contribute more, the money is yours and will roll over year-year and between employers, and can even be invested in mutual funds and such as long as you keep a minimum $1,000 balance (un-invested). If your employer offers one many will also match it (though not always a lot - mine gives me $400/year...free money anyway). They can be a powerful retirement instrument because one of the things you can pay for with them is Medicare premiums. Also, you should assume you'll pay more for healthcare when you are older. If you start young and invest safely (or don't invest it at all and just contribute) you can rack up a pretty hefty balance by retirement. The math on whether to do one vs. a regular lower premium plan can be tricky. And if you or your family are hitting your deductible year after year it could work out worse. I don't recommend them unless you are at a minimum already maxing out your other retirement savings options, like 401k. However if you make enough money, are in good health, and already tapped out all your tax deferred savings, they are a decent option. No income limits either.
|
# ? May 20, 2017 15:38 |
|
Ixian posted:The catch, of course, being you can only use the money for approved health care spending (or pay a hefty penalty). You can also use them like a traditional IRA account once you get to a certain age, where you don't pay a penalty on withdraw you just pay taxes on it. There is also currently no time limit between when the expense occurs and when you can reimburse yourself from the HSA, so you can incur a cost today, pay out of pocket, and then withdraw tax free 30 years from now. Although this is somewhat risky to rely on, since they could change this loophole at any time, hopefully if they did they'd give a warning though allowing people to decide to either pull out their existing funds pending reimbursement or decide not to. The risk of a rule change is largely tempered by the fact that even if you can't do that, it can be treated like a traditional IRA after age 65.
|
# ? May 20, 2017 16:02 |
|
Ixian posted:That is MAGI income so take you deductions in to account. I thought most deductions were taken after MAGI, and don't affect it? 401k contributions being one of the exceptions. Ixian posted:Your contributions are tax free and so are your withdrawals, making them a terrific long term savings option. The catch, of course, being you can only use the money for approved health care spending (or pay a hefty penalty).
|
# ? May 20, 2017 16:14 |
|
Steve French posted:I thought most deductions were taken after MAGI, and don't affect it? 401k contributions being one of the exceptions. MAGI is AGI with certain deductions like student loan interest, etc. I meant it more in a general sense, such as "my salary is $133k/year therefore I can't use a Roth IRA". With MAGI factored in you might. Steve French posted:One thing it doesn't look like you mentioned here is I believe that once you hit retirement age you can also spend the money on anything you want, you just have to pay tax on it, but no penalty, so in that sense it behaves like a tax deferred account that you can also use for medical expenses tax free before retirement. That is a very good point, and another in it's favor since for retirement purposes it means you get to contribute even more to an IRA, in a sense. However unless you build up a sizable balance - which if you start young you certainly could - likely most of that money will go to health care tax-free anyway. I forget the calculations but basically if all else is equal between a regular and a HDCP plan other than the deductible, then you factor in what you save in premiums over <x> time by times you have to hit deductible and after <y> years you are well ahead. Basically, if you or your family qualify/earn enough to make it worthwhile and you only have a major healthcare expense (outside of routine/preventative visits) every 3-4 years then you come out well ahead. Not that the latter is easy to predict, of course.
|
# ? May 20, 2017 17:08 |
|
Ixian posted:MAGI is AGI with certain deductions like student loan interest, etc. I meant it more in a general sense, such as "my salary is $133k/year therefore I can't use a Roth IRA". With MAGI factored in you might. Gift of the MAGI
|
# ? May 21, 2017 14:09 |
|
Tactics Ogre MAGI
|
# ? May 21, 2017 15:28 |
|
|
# ? Jun 10, 2024 11:21 |
|
I just initiated a rollover of my old employer 401k to a Vanguard IRA. Up until this point I just picked mutual funds from their meager selection that had reasonable ERs and had good history and ratings. Now I'm about to have most of my retirement money available to invest in a huge array of different choices and I feel like I need an idiot's guide to IRAs. I have some watchlists set up based on things like Vanguards own 2045 target retirement fund (VTIVX) but I feel like there is a bit more I could be doing, somewhere between "super nerd research/diversification" and "put it all in VOO lol" Any good reading on this?
|
# ? May 23, 2017 22:59 |