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pmchem posted:pizza, most of the people reading this thread won't get your vix example. first of all, I like leper's reply. if you can somehow do an in-kind transfer, all these issues you're worried about go away. you should do an in-kind transfer if at all possible -- ask fidelity and/or vanguard and/or your 401(k) reps on the phone about it. but I understand that may not be possible for some 401(k)'s. so let's address your vix question with an example reduced to total absurdity. thank you for this response. you nailed everything square on the head. right now the administration fee on the fidelity account is just barely over the vanguard one so i'm in no hurry at all. i could theoretically just leave it there until i retire. with how chaotic the markets have been over the past few years i told myself i'd get around to transferring it to my personal vanguard account whenever, 'things settled down' and then that turned into a question of what that actually meant- hence the vix signal became the best i could come up with. i understand that doing the transfer basically any time the market doesn't appear to be on fire is probably fine but now that the idea is in my head i just want to do it correctly, but i didn't even know if this way of thinking could even be considered correct so i posed the question here. right now in the fidelity account i have everything in a fidelity target date fund and when it's moved over to the vanguard account it'll be in the corresponding vanguard target date fund. i love the in-kind transfer idea. that is exactly the thing i was looking for! i'm going to give fidelity a call tomorrow to see if that's something we can make work. if not- i'll just wait until the vix is under 20 again and pray that isn't the day zuckerberg decides to unleash the hypnodrones or whatever GoGoGadgetChris posted:I've never seen anyone hem and haw over a 401k rollover before. Push the button, check on it in 2045 to see if you timed it right i mean yeah this is definitely hemming and hawing territory but i'm in a sweet spot where i'm still fairly young but the balance on this account is large enough such that taking a couple percentage bite out of it can add up to quite a large difference by the time i'm retiring. time is on my side so if there's no harm in waiting, why hurry?
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Sep 14, 2022 00:36
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PIZZA.BAT posted:i mean yeah this is definitely hemming and hawing territory but i'm in a sweet spot where i'm still fairly young but the balance on this account is large enough such that taking a couple percentage bite out of it can add up to quite a large difference by the time i'm retiring. time is on my side so if there's no harm in waiting, why hurry? I don't think anyone here is going to be able to teach you against timing the market at this point so just do whatever you want.
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Sep 14, 2022 00:43
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PIZZA.BAT posted:thank you for this response. you nailed everything square on the head. right now the administration fee on the fidelity account is just barely over the vanguard one so i'm in no hurry at all. i could theoretically just leave it there until i retire. with how chaotic the markets have been over the past few years i told myself i'd get around to transferring it to my personal vanguard account whenever, 'things settled down' and then that turned into a question of what that actually meant- hence the vix signal became the best i could come up with. i understand that doing the transfer basically any time the market doesn't appear to be on fire is probably fine but now that the idea is in my head i just want to do it correctly, but i didn't even know if this way of thinking could even be considered correct so i posed the question here. There's no harm in leaving it where it is, and no harm in an in-kind transfer. I think you're using the term "waiting" as a bit of a euphemism though? You're not really "waiting" for an actionable or definable event; you're waiting on permission from your anxiety, the TV News people, or a trusted index number that you might decide isn't actually trustworthy once it's time to make the rollover. And that's where the Harm comes in... Once you've started letting your fears, your gut, or your short-term expectations influence your investing habits, you'll find it quite hard to stop. pmchem took a more roundabout way of reaching the same conclusion as the thread's regulars, but he still put it best: pmchem posted:it's impossible for anyone here to really answer your question for you.
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Sep 14, 2022 00:59
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PIZZA.BAT posted:thank you for this response. you nailed everything square on the head. I think the communication issue being run into here is that a quick skim of your original post could've had someone thinking that you were trying to gain an advantage over the market by timing your days in cash for the transfer (which most posters in this thread would object to). but a detailed read and follow-up posts of yours made it clear that's not the case at all. in fact, you're happy with whatever the target date fund's returns are, and your goal is to ensure whatever transactions you have to make result in a situation such that you get returns as close as possible to as if you held the TDF without ever making the transactions. you WANT market returns. this can be simply demo'd in another way. day A = start day B = 10 days after start "X" = day invested in TDF "c" = day invested in cash (due to your forced transaction) sequence of events 1: XXXXXXXXXX result 1: target date fund returns sequence of events 2: XXXXXXcXXX result 2: target date fund returns, without whatever the daily returns were on day 7 (cash). your question is basically: would the result of sequence #2 be closer to sequence #1 if the "c" day was on a day when VIX was very low on the prior day, or very high on the prior day? the answer, inevitably, is that it is more likely to be closer if VIX was very low the prior day. whether or not it actually would end up being closer for your particular transaction can only be answered by experiment (sometimes a natural 1 does show up on a 20-sided die, right?). whether it's even worth worrying about is a matter of personal taste. and the question is entirely avoided by an in-kind transfer. quote:i'll just wait until the vix is under 20 again and pray that isn't the day zuckerberg decides to unleash the hypnodrones or whatever to further illustrate how counter-intuitive your questions are... you'd actually WANT zuck to unleash the hypnodrones after day#6 and before day #7 in the example above, because you'd be in cash before the vix spike and market crash occurred. I'm assuming your transaction is submitted for execution just before end of market day (some retirement accounts require mutual fund orders to be submitted before noon... so if the hypnodrones were unleashed after that noon deadline but before market close, you'd be outta luck). But really, that's not a factor worth considering here.
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Sep 14, 2022 01:55
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withak posted:Do you have access to reliable knowledge of the future? If so them PM me. If not then just roll it over and don’t try to time the market because you have no way of knowing whether this is the “right” time. If have information that will lead to the arrest of Hillary Clinton, will that allow me to time the market ?
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Sep 14, 2022 20:19
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Duckman2008 posted:If have information that will lead to the arrest of Hillary Clinton, will that allow me to time the market ? It will make you a better investor https://www.google.com/amp/s/www.businessinsider.com/forgetful-investors-performed-best-2014-9%3famp
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Sep 14, 2022 20:53
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On the topic of predicting future performance, I'm curious if people here have changed their estimated returns for retirement savings given the recession and pessimistic outlook from a bunch of investment places for the next decade's returns, or kept it where it was before? (Or do most people just look at a range?)
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Sep 15, 2022 01:06
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surc posted:On the topic of predicting future performance, I'm curious if people here have changed their estimated returns for retirement savings given the recession and pessimistic outlook from a bunch of investment places for the next decade's returns, or kept it where it was before? (Or do most people just look at a range?) What information would lead you or one of us to reconsider the last 50+ years of stock market performance over a retirement investment timeline? Because I've not found it.
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Sep 15, 2022 01:14
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surc posted:On the topic of predicting future performance, I'm curious if people here have changed their estimated returns for retirement savings given the recession and pessimistic outlook from a bunch of investment places for the next decade's returns, or kept it where it was before? (Or do most people just look at a range?) Been buying and holding for since 1993, why would I stop now? The dot.com bubble bursting was scary and the subprime mortgage crisis was scarier. This is nothing in comparison.
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Sep 15, 2022 01:20
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Motronic posted:What information would lead you or one of us to reconsider the last 50+ years of stock market performance over a retirement investment timeline? Because I've not found it. Nothing I can think of, which is why I was curious. Outside SA I see a lot of discussion around people going from estimating 7% pre-2020 to 3-5% real returns, and the investment firms next-decade predictions get pointed at for it sometimes but that's the most justification I'd heard for it. If some goon had made a similar adjustment and had a reason I'd be interested to hear why. e: oh yeah not gonna stop investing in my retirement fund or anything regardless either, definitely not where I was going with it I just find it interesting what numbers people use for estimating their investment returns and if that's changed, basically what the poster below me was saying. Sorry that was unclear. surc fucked around with this message at 01:50 on Sep 15, 2022 |
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Sep 15, 2022 01:36
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I don't think OP is asking if people are deviating from "buy and hold" or even if they're changing strategies in general. I could be wrong but I believe they're asking if our financial planning now uses a lower "Returns" estimate and thus we're making changes to how much we save per year or extending how long we plan to work? Personally, my philosophy and strategy have not changed amid the most recent cycle of doom and gloom, nor should they have changed, just because Things Are Surely Different This Time. But to your question, yes, I do expect to have lower returns across my entire investing career than I originally expected when I began investing in 2011. Even though my investment strategy and mindset are the same, I am often revising various numbers of my strategy, such as % of income saved per year actual $ saved per year, how many years until retirement, how many years OF retirement, estimated drawdown per year in retirement, etc.
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Sep 15, 2022 01:38
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surc posted:Nothing I can think of, which is why I was curious. Outside SA I see a lot of discussion around people going from estimating 7% pre-2020 to 3-5% real returns, and the investment firms next-decade predictions get pointed at for it sometimes but that's the most justification I'd heard for it. If some goon had made a similar adjustment and had a reason I'd be interested to hear why. if you want estimates from the world's most boring investment house regarding what you're talking about, see: https://advisors.vanguard.com/insights/article/marketperspectivesseptember2022 quote:Asset-class return outlooks
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Sep 15, 2022 01:56
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surc posted:On the topic of predicting future performance, I'm curious if people here have changed their estimated returns for retirement savings given the recession and pessimistic outlook from a bunch of investment places for the next decade's returns, or kept it where it was before? (Or do most people just look at a range?) I know you mean more current, but as a result of Covid I’ve done two things: I now hold 0 bonds I doubled my emergency savings Otherwise I keep it all the same , but yeah , gave my wife and I a larger emergency fund as peace of mind (it does help we had some income raises since then too).
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Sep 15, 2022 02:09
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surc posted:On the topic of predicting future performance, I'm curious if people here have changed their estimated returns for retirement savings given the recession and pessimistic outlook from a bunch of investment places for the next decade's returns, or kept it where it was before? (Or do most people just look at a range?)
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Sep 15, 2022 02:32
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Jamfrost posted:Realistically, 4 - 7 years before I reevaluate needs/goals. My risk tolerance will be low. A duration matched bond fund could be an option. It will be volatile between now and then but if you hold a bond fund for longer than its duration, interest rates going up (the main things that hurts bond prices) balances out with increased coupon payments. STIP and VTIP are 2.5 year(ish) and hedge against higher than expected inflation but will be volatile in the near term and will see federally taxable income from the principle adjustments which are distributed. iShares has a line of iBonds (not to be confused with treasury series I Bonds) which have defined maturity dates. Keeping the money market is reasonable. Everything has been hammered by inflation. But historically, money market type accounts manage to stay more or less in line with inflation over time and your (nominal) principle is never at risk.
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Sep 15, 2022 11:23
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surc posted:On the topic of predicting future performance, I'm curious if people here have changed their estimated returns for retirement savings given the recession and pessimistic outlook from a bunch of investment places for the next decade's returns, or kept it where it was before? (Or do most people just look at a range?) Motronic posted:What information would lead you or one of us to reconsider the last 50+ years of stock market performance over a retirement investment timeline? Because I've not found it. Here’s what’s impacted my thinking: The last 50+ years of US stock market returns have been exceptionally good compared to the rest of the world. Most historic information you find uses the S&P 500 as a benchmark. The question I have been asking is: do I want to bet on the US continuing to outperform the world at the same level over my savings and retirement? It has been remarkably consistently successful so that’s not an unreasonable position. But it’s weird to select the option that sees me only owning about 50-60% of the total market. Do I think the US will continue to be this kind of special? If the answer is  then it makes sense to invest solely in US stocks and plan for ~6-7% real. If the answer is no, then it makes sense to invest in a global index and plan for closer to 4-5% real.My thinking about this has changed over the last years but not because of pandemic/global pessimism timing but because I’ve had more time to learn more about global market historic returns. Most of the easy to find beginner sources quote relatively short periods of US-only returns in nominal amounts and that gives a very rosy picture of long term investing. I think it makes sense to be more conservative in projections. The main effect has been to intensify savings rates, which is the one part of this I can meaningfully control.
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Sep 15, 2022 11:59
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Don't know if we have a short term investing thread, but I need a better spot to park my emergency fund than Fidelity's Core FDIC sweep account.
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Sep 15, 2022 13:13
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Yeah, I think for me it makes little difference what I project in terms of future returns. Maybe it impacts when I have gently caress Off money in terms of retiring, but it doesn't change the strategy of max 401(k), max IRAs, buy max i-bonds, and push the leftover money in to taxable accounts.
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Sep 15, 2022 13:19
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So I have been happy with Ally, but I found it amusing that they sent out a big email announcement last week ish of “great new feature , early direct deposit, you will now start getting paid up to 2 days early.” Beyond it not really mattering cash flow wise (I am fortunate there), it’s def a “lol other banks have had this for years what took you so long?” Analysis here. Just random that they never did it before now.
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Sep 15, 2022 13:39
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GoGoGadgetChris posted:I don't think OP is asking if people are deviating from "buy and hold" or even if they're changing strategies in general. I could be wrong but I believe they're asking if our financial planning now uses a lower "Returns" estimate and thus we're making changes to how much we save per year or extending how long we plan to work? Thanks, I've seen these but not the most recent ones. I'm more curious about if that type of stuff's making people change their personal math around it but still good to see the current stuff. doingitwrong posted:The question I have been asking is: do I want to bet on the US continuing to outperform the world at the same level over my savings and retirement? It has been remarkably consistently successful so that’s not an unreasonable position. But it’s weird to select the option that sees me only owning about 50-60% of the total market. Do I think the US will continue to be this kind of special? Duckman2008 posted:I know you mean more current, but as a result of Covid I’ve done two things:  . Are you trying to buy more stock while things are down, or just not have anything in bonds and it shifted to e-fund?Also ^^^ I got the same type of email re: direct deposit a month or so back from my credit union, I thought it was neat and wasn't aware if it's a thing other places were already doing. I like getting money faster though, seems to only actually be 1 day early for me but still nice. e: daslog posted:Don't know if we have a short term investing thread, but I need a better spot to park my emergency fund than Fidelity's Core FDIC sweep account. Doing a quick google on the fidelity sweep account it looks like it's at 1.2% APY so basically every HYSA is beating it now. I have an amex account and it's at surc fucked around with this message at 16:22 on Sep 15, 2022 |
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Sep 15, 2022 14:03
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I am also zero bonds. Buying as much VTI and SCHD as I can while things are down. Riding that 100% equity roller coaster. Woooo! But realistically I'm at the point where in 20-25 years when I plan to retire a 50% market drop with a 15 year recovery wouldn't really matter. And I just don't think that's going to happen anyway. Antillie fucked around with this message at 14:40 on Sep 15, 2022 |
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Sep 15, 2022 14:28
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surc posted:Nah I consider the 2020 covid drop of a piece with the current situation. 0 bonds though Sorry, I wasn’t super clear. For my investment accounts: I have 0 bonds in my Roth, and I forgot I have 3% in bonds in my main 401k retirement. Which is basically pretty close to 0. For investments , I don’t plan on retiring for 25-30ish years (unfortunately). So I’m fine with the volatility of a mix of small cap, large, cap, international, etc of index funds. So I plan on having 0 bonds for a while because IMO, they tend to just sit there and not move up or down, I’d rather have the better long term growth (which does come with some risk yes). I am fortunate where we are at the point where I can max our Roth every year, but I am not at the point where I have a taxable investment account, so the answer to “do you put extra in while the market is down” is basically “as much as I can, but kind of at the limit.” For my emergency fund: I have $5k in I Bonds, and I’ll probably put a bit more in both this year and over the next few. Basically as an extra emergency fund is how I view it. One good thing: my wife gets a 401k match at her new job, first one in a few years for her, so that’ll help.
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Sep 15, 2022 14:33
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surc posted:I'm not sure if your second situation is saying you would invest more in a global index and continue to also invest in the US or if you'd invest exclusively in a global index plan if the US wasn't gonna be so dominant, but isn't this issue specifically a big part of the reasoning behind the three fund portfolio? Yes, you are right that the three fund portfolio does that, though many people elect to balance their equities with a US bias (and some bias to the exclusion of Ex-US My current thinking is: Own the global market and plan for 4-5% real returns. So that's something like VT or a mix of the US and Ex-US ETFs in the right proportion. On the bonds side, my thinking is: own longer term bonds than the market (since I know my duration is 30+ years) and a significant portion of them in inflation-protected bonds since there's an asymmetrical risk there. I am deciding if I am persuaded enough by the research on independent risk factor investing to add some of the funds that target those factors.
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Sep 15, 2022 16:12
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I also decided to go 0 bonds recently across 401k/roth IRA, now all my long term investments are out there flapping in the breeze of the markets untethered. Currently 35 and not really planning for early retirement after a couple kids and now looking at house buying all being expensive as gently caress, so it's a long horizon. Using VTWAX in the rIRA and approximating the same in the 401ks with US large cap/US extended market/international funds (at an overall ER of 0.029% in the old one and 0.054% in the current one, bless u Vanguard).
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Sep 15, 2022 16:45
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Vanguard target date and chill here
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Sep 15, 2022 16:53
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SamDabbers posted:Vanguard target date and chill here That's a super chill and good way to do it. My current target date option was some actively managed T Rowe Price fund with a high ER that I can DIY cheaper with the available Vanguard funds (even the TRP one had something like 2% bonds only so not much of a change there).
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Sep 15, 2022 17:11
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SamDabbers posted:Vanguard target date and chill here Absolutely nothing wrong with this either.
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Sep 15, 2022 17:47
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D-Tron posted:That's a super chill and good way to do it. My current target date option was some actively managed T Rowe Price fund with a high ER that I can DIY cheaper with the available Vanguard funds (even the TRP one had something like 2% bonds only so not much of a change there). I also mimic the TDF allocation in my 401k with passive indexes to save on ER, and rebalance once a year. My IRA is at Vanguard so I just buy the fund directly in that account. Mostly automated and hands off is how I like it. I have neither the interest nor background to do the analysis that the professional fund managers do (or even some of the posters in this thread) so I decided to just go with the Vanguard TDF glide path for my portfolio to avoid second guessing and subconsciously gambling or trying to time the market. SamDabbers fucked around with this message at 18:27 on Sep 15, 2022 |
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Sep 15, 2022 18:24
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Oops quote not edit
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Sep 15, 2022 18:25
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Buy whatever (low cost, broad) thing sounds good today. Ride the whims of fancy. Only buy, no sell
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Sep 15, 2022 18:51
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Always fun to compare retirement/account setups! Roth IRA with US and ex-US indexes. I have swapped between FSKAX/FTIHX and FZROX/FZILX a couple of times in the past two years for stupid market timing reasons. What's worse is, both swaps were successful and I avoided over 20% in drawdowns. I know these barely-informed guesses will burn me eventually, but swerving around two potholes isn't bad for now. 457b in S&P500 and extended market index funds - the admin fees on just about anything else would be too costly. May add a Roth 457b in the future, but for now the basic 457b needs to catch up to my Roth IRA. Enjoying the tax savings and not paying any attention to the rollercoaster, though. When the savings get large enough, I will eat a flat annual fee in order to transfer to a self-directed account and make further contributions without the management fees. I Bonds - Bond index funds should be my jam for the stable portion of my allocations, but I can't argue with previous six-month returns of over 3.5%, 4.5%, and the current rate of over 4%.
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Sep 15, 2022 18:58
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Epitope posted:Only buy, no sell 
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Sep 15, 2022 19:04
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Hell yeah, plus now I get to buy even more due to being so bad at saving in my 20s!!
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Sep 15, 2022 19:15
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I didn't have any clue about investing and had some low earning years in my 20s so was a bit behind where I wanted to be with retirement savings in my early 30s. Now I'm on track to retire a handful of years early(!) if I maintain this trajectory. This thread helped me bigly to learn how to use the tools available and come up with a reasonable plan. Thanks goons.
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Sep 15, 2022 19:26
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SamDabbers posted:I didn't have any clue about investing and had some low earning years in my 20s so was a bit behind where I wanted to be with retirement savings in my early 30s. Now I'm on track to retire a handful of years early(!) if I maintain this trajectory. This thread helped me bigly to learn how to use the tools available and come up with a reasonable plan. Thanks goons. Hell yeah ! This thread def saved me from living paycheck to paycheck years ago in general, and saved me from being robbed blind by Edward Jones as well. Although I think it took 8 months from realizing it to actually cancelling Edward Jones due to sunk cost fallacy / embarrassment.
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Sep 15, 2022 20:22
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Duckman2008 posted:Hell yeah ! At least you ripped the band-aid off in the end. It took me several months to convince my mom that she was being robbed paying 1% AUM to an advisor on top of the active fund ERs he had her money in. This is a woman who has been good at saving but with a huge mental block and anxiety about investing, so she had her life savings in a money market before this advisor literally knocked on her door and sold her retirement planning services. Vampires.
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Sep 15, 2022 20:35
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Duckman2008 posted:Although I think it took 8 months from realizing it to actually cancelling Edward Jones due to sunk cost fallacy / embarrassment. Willingness to look stupid is underrated. Also good with money.
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Sep 16, 2022 04:27
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Employer match does not count towards my max allowable 401k contribution, correct? I had a change in income and I’m ready to start looking at maxing out.
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Sep 16, 2022 19:15
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Rolo posted:Employer match does not count towards my max allowable 401k contribution, correct? Correct, employer match is separate.
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Sep 16, 2022 19:35
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is it worth having both a Roth IRA and a regular IRA that drops things into Vanguard index funds and if so, does the 10% of salary for Roth and the regular advice in the OP still hold? I have something with CalPERS instead of an employer-sponsored 401k.
Jerry Manderbilt fucked around with this message at 19:44 on Sep 16, 2022 |
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Sep 16, 2022 19:39
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