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Thread cross-talk: why to not put your long term savings into one single stock. http://forums.somethingawful.com/showthread.php?threadid=3259986&userid=0&perpage=40&pagenumber=471#post441777447
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Feb 20, 2015 03:44
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slap me silly posted:Thread cross-talk: why to not put your long term savings into one single stock. http://forums.somethingawful.com/showthread.php?threadid=3259986&userid=0&perpage=40&pagenumber=471#post441777447 of course it's GTAT  e: Oh I didn't see it was Richard Gamingo  double edit: oh my loving god RichardGamingo posted:So I don't have any legal training. I'm in Court firing all of my missiles. The Judge stops and reprimands me, the oppositions counselors stand up and object -- I get an explanation from the judge as to how come a given objection is valid, and he says "Objection Sustained" just like the TV shows. (thank God the Judge has to give an explanation as to what was wrong with what I asked the witness(es), it really helped me learn how to get to the information that I want to illicit and actually have the witness answer the question). pig slut lisa fucked around with this message at 04:14 on Feb 20, 2015 |
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Feb 20, 2015 04:09
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slap me silly posted:Regarding the 40 grand. 5 years is the short term and AGTHX is therefore not a good place for it because it is mostly stocks. AGTHX is also fairly lousy in general because of the relatively high expense ratio and turnover - and are you paying a load? If your time horizon is really 5 years you should get way more conservative, and even all cash wouldn't be completely unreasonable. I swear we talked about the best portfolio balance for this not too long ago but I couldn't find- oh here it is: http://forums.somethingawful.com/showthread.php?threadid=3636416 not quite your situation I guess.
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Feb 20, 2015 05:19
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Star War Sex Parrot posted:I realize this is an ancient quote, but now that taxes from last year are all filed away (and I did end up maxing Roth IRA contribution), I'm trying to make some more progress on my goals for this year. I haven't done anything with the money in AGTHX yet, and I'm investing illiterate. Do I just sell it all, close the American Funds accounts, pay the capital gains on next year's taxes, and park/contribute to it in a savings account? I'm not really sure how the process works. Yeah if it's a taxable account you don't have much option besides selling and then rolling the money over to a lower cost investment.
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Feb 20, 2015 05:35
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Star War Sex Parrot posted:Do I just sell it all, close the American Funds accounts, pay the capital gains on next year's taxes, and park/contribute to it in a savings account? You can do exactly that. American Funds will send you a check or deposit it to your bank for you upon request. They may also try to sell you something. There may be some ways to pay less taxes by being tricksy though. I am not really clever enough with taxes to make suggestions, but off the top of my head - have all the shares been in there long enough for the gains to be long term instead of short term? Does your income change a lot from year to year? Do you or will you have any capital losses? Once you get the money out, you can leave it in a savings account - that's reasonable if your time horizon for using it is really 5 years. Or you could keep it secure in CDs or I-bonds while maybe making a little more interest. Or you can get more risky with it and put some or all of it in something like VASIX or VSCGX.
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Feb 20, 2015 05:41
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slap me silly posted:have all the shares been in there long enough for the gains to be long term instead of short term? Does your income change a lot from year to year? Do you or will you have any capital losses? Income is fairly steady, and I'm not really anticipating capital losses. slap me silly posted:VASIX I'm afraid that if I turn around and reinvest it that I won't hold enough back for tax season next year. I'll have to figure out how to calculate that and read more about it. Current value is ~$40,000 and the most recent quarterly statement says that the total cost basis is ~$12,000. If I sell everything, I won't be taxed on a $28,000 capital gain, though, because I've been paying taxes every year on the reinvested dividends? Maybe I should switch to a tax questions thread or just go to a CPA. Thanks guys.
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Feb 20, 2015 05:58
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Yeah, the main thing is that AGTHX is all stocks, therefore high risk of losing a lot of value in the short term. Most people who aren't insane would consider it too risky for a house savings fund with a 5-year horizon. VASIX is kind of like a compromise between that and the savings account. There's nothing wrong with just letting it languish in savings for a while and revisit this after the next tax season or any other convenient time. Agreed, you might want to ask in the tax thread about figuring your basis if nobody chimes in here. I haven't done this before but the reinvested dividends should be included in the basis, right? Dunno if that would be reflected on your statement or not. Also be aware of the different ways you can do a partial sale if you're not going to sell it all at once.
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Feb 20, 2015 06:10
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How does everyone feel about Betterment's advice not to keep an emergency fund in cash? They recommend a 40/60 stock/bond split - it seems very similar to the Vanguard LifeStrategy Conservative Growth fund. How safe is this, really? And is there some sort of risk with keeping bonds in a taxable account?
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Feb 20, 2015 17:28
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Radbot posted:How does everyone feel about Betterment's advice not to keep an emergency fund in cash? They recommend a 40/60 stock/bond split - it seems very similar to the Vanguard LifeStrategy Conservative Growth fund. How safe is this, really? And is there some sort of risk with keeping bonds in a taxable account? Given that they also say to increase the fund size by 30% to account for risk, I don't see how it's hugely different from just having a smaller emergency fund in cash and investing the rest (except for Betterment getting more fees).
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Feb 20, 2015 18:34
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We talked about it a few pages ago. This is my opinion too:Series DD Funding posted:Given that they also say to increase the fund size by 30% to account for risk, I don't see how it's hugely different from just having a smaller emergency fund in cash and investing the rest (except for Betterment getting more fees). Except there is one more thing - 100% of your Betterment emergency fund is uninsured and completely not guaranteed in any way, which is an important difference from a savings account.
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Feb 20, 2015 19:21
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Some guy on the MMM forums tried to convince me to hold my savings for a down payment on a house 2-3 years down the road in an index fund. I ignored him for exactly that reason; if there comes a time where you need that money within a super short time frame, the gradual growth of the market isn't doing poo poo for you in terms of security.
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Feb 20, 2015 21:07
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Working on depositing my first ever Roth IRA fund this week. Via Vanguard, it looks like the various assets have anywhere from a $3,000 to a $10,000 minimum. I'm depositing $5,500 for 2014 (the maximum) but this allows for investment in only one asset. I assume it's fine to just dump all $5,500 for 2014 into one asset, then plan on doing the same for a separate asset in 2015, and then balancing it out each year. That's reasonable, yes?
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Feb 20, 2015 21:20
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Blinky2099 posted:Working on depositing my first ever Roth IRA fund this week. Via Vanguard, it looks like the various assets have anywhere from a $3,000 to a $10,000 minimum. I'm depositing $5,500 for 2014 (the maximum) but this allows for investment in only one asset. Look into either the Target Retirement Date funds or the Lifestrategy funds. Both are just funds of funds so they are already allocated with US/international stock and US/international bonds. The most common thing to do with a Vanguard IRA is to put 100% of your contribution into one of those until you have enough to create the allocation you want with individual funds.
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Feb 20, 2015 21:25
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Target date retirement funds only have $1000 minimum and diversify you between total domestic equities, total international equities, total domestic bonds, and total international bonds according to portfolio diversification targets for your estimated retirement age. The expense ratios are still low (less than 0.2%) and the funds automatically rebalance over time. They're the defacto recommendation for someone starting out who doesn't want to think about it too much. Once you get more assets you can rebalance yourself into the Admiral shares ($10k minimum) of those 4 funds and bring your ER down marginally. Or you can buy ETFs which have very similar ERs to the Admiral share funds.
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Feb 20, 2015 21:26
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Blinky2099 posted:Working on depositing my first ever Roth IRA fund this week. Via Vanguard, it looks like the various assets have anywhere from a $3,000 to a $10,000 minimum. I'm depositing $5,500 for 2014 (the maximum) but this allows for investment in only one asset. The target retirement funds have a $1000 limit, and they're a perfectly sensible choice.
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Feb 20, 2015 21:26
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To be fair their expense ratios are really low because they don't account for the expense ratios of their holdings. If I created MJFund and it had an expense ratio of 50%, and then I created MJLifestrategy Fund and it held 100% MJFund shares, it could have a reported expense ratio of 0%, but it would have a lower rate of return. Once you get more money on the site, the expense ratio is literally the cost you're paying them to buy assets in the ratios they list for you. Could very well be worth it, but keep it in mind with some funds that charge like .30 to just buy their funds for you. Full disclosure: totally have my money in a vanguard retirement fund anyway, so don't take this as a real negative.
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Feb 20, 2015 22:15
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MJBuddy posted:To be fair their expense ratios are really low because they don't account for the expense ratios of their holdings. I'm almost certain this is completely wrong. The Vanguard Target Retirement Funds report acquired fund fees, which is the weighted sum of the fees of its holdings.
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Feb 20, 2015 22:22
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If I'm depositing for long-term retirement anyway, why not just dump money into the lowest expense ratios (3k or 10k minimum) into single assets and then add a new asset every 1-2 years? Wouldn't that just straight-up save me money, and the short-term risk of having a year or two in 1 asset won't matter since I'm not withdrawing the funds for 26 years? for example, I could just deposit the 11k for last year and this year together and cover the 10k minimum for Admiral shares, then do the same 2 years down the road (11k into a new asset.)
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Feb 20, 2015 22:27
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MJBuddy posted:To be fair their expense ratios are really low because they don't account for the expense ratios of their holdings. Blinky2099 posted:If I'm depositing for long-term retirement anyway, why not just dump money into the lowest expense ratios (3k or 10k minimum) into single assets and then add a new asset every 1-2 years? Wouldn't that just straight-up save me money, and the short-term risk of having a year or two in 1 asset won't matter since I'm not withdrawing the funds for 26 years? slap me silly fucked around with this message at 23:09 on Feb 20, 2015 |
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Feb 20, 2015 23:06
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Blinky2099 posted:If I'm depositing for long-term retirement anyway, why not just dump money into the lowest expense ratios (3k or 10k minimum) into single assets and then add a new asset every 1-2 years? Wouldn't that just straight-up save me money, and the short-term risk of having a year or two in 1 asset won't matter since I'm not withdrawing the funds for 26 years? Yea, as "slap me silly" says, it is not worth worrying about. On 10k, the difference in expense ratio is about $10 annually. Pick the right asset classes and balance your portfolio appropriately. It is much more meaningful than the $10.
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Feb 20, 2015 23:17
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Gotcha, thanks.
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Feb 20, 2015 23:20
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Not a Children posted:Some guy on the MMM forums tried to convince me to hold my savings for a down payment on a house 2-3 years down the road in an index fund. I ignored him for exactly that reason; if there comes a time where you need that money within a super short time frame, the gradual growth of the market isn't doing poo poo for you in terms of security. I did this and I think there's nothing wrong with it in certain limited circumstances. 1. If the market tanked and I had to keep renting or take a loss, I was just fine keeping renting. 2. My down payment was less than a year's worth of savings for me, so I could very quickly get it in cash if I so chose.
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Feb 20, 2015 23:56
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THF13 posted:Look into either the Target Retirement Date funds or the Lifestrategy funds. Both are just funds of funds so they are already allocated with US/international stock and US/international bonds. The most common thing to do with a Vanguard IRA is to put 100% of your contribution into one of those until you have enough to create the allocation you want with individual funds. The other good one fund Vanguard option is the LifeStrategy Aggressive fund(80-20 stock bond split). Only difference is the LifeStrategy Funds don't change the asset allocation over time like the Target Retirement funds.
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Feb 21, 2015 00:39
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slap me silly posted:No, their expense ratios are really low because they are the weighted average expense ratios of the underlying funds which themselves have really low expense ratios. Ah then I've misread that or misremembered. Apologies.
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Feb 21, 2015 01:55
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You'll see that for funds of funds, Vanguard reports "Acquired fund fees and expenses", which covers all the stuff you were talking about. Is it even legal to report only partial expenses without clarifying text? Not sure.
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Feb 21, 2015 02:05
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slap me silly posted:You'll see that for funds of funds, Vanguard reports "Acquired fund fees and expenses", which covers all the stuff you were talking about. Is it even legal to report only partial expenses without clarifying text? Not sure. I could see it being a regulation, but it'd still be honest if it's adjusted the rates of return.
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Feb 21, 2015 02:20
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Vanguard has a nice quick guide for new investors: https://personal.vanguard.com/us/insights/investingtruths basically goes over many things discussed in this thread such as the importance of picking low cost index funds and avoiding traps like attempting to time the market.
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Feb 21, 2015 02:34
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etalian posted:Vanguard has a nice quick guide for new investors:  
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Feb 21, 2015 02:46
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All I see is standard variance -- getting unlucky in '99, and lucky in the '08 crash which happened to be more significant. Is this supposed to show something more than that?
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Feb 21, 2015 03:02
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Blinky2099 posted:All I see is standard variance -- getting unlucky in '99, and lucky in the '08 crash which happened to be more significant. Is this supposed to show something more than that? It's more about making the mistake of getting excited on the market rise, then doing panic sells when it looks like the market is crashing. Also rebalancing is another thing that takes emotional control since it forces you sell "safe" winning socks just to buy more underperforming stocks to hit your original strategy.
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Feb 21, 2015 03:14
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Blinky2099 posted:All I see is standard variance -- getting unlucky in '99, and lucky in the '08 crash which happened to be more significant. Is this supposed to show something more than that? It shows a straightforward formula that would have beaten the market significantly over the time period. Hindsight is 20/20.
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Feb 21, 2015 03:14
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Why did you choose that time frame?
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Feb 21, 2015 03:32
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Heh heh. I gotta see what that algorithm returns over all other 10-year periods, too, though 
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Feb 21, 2015 03:38
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Blinky2099 posted:All I see is standard variance -- getting unlucky in '99, and lucky in the '08 crash which happened to be more significant. Is this supposed to show something more than that?  I was making a joke
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Feb 21, 2015 03:43
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About to hit my maximum no fee limit on Wealthfront. Would it be kosher to post referral links here if people want to sign up through them? Then both the new user and myself gets their amount managed for no fee increased.
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Feb 22, 2015 23:57
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semicolonsrock posted:About to hit my maximum no fee limit on Wealthfront. Would it be kosher to post referral links here if people want to sign up through them? Then both the new user and myself gets their amount managed for no fee increased. You need to take it to here http://forums.somethingawful.com/forumdisplay.php?forumid=85 and read the stickies.
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Feb 22, 2015 23:59
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baquerd posted:You need to take it to here http://forums.somethingawful.com/forumdisplay.php?forumid=85 and read the stickies. Yup. No referral chains in BFC, please. Somebody tell me if I need to advise the same for the Robinhood stuff in the stocks thread...
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Feb 23, 2015 00:02
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Got it, thanks. I think there is a coupon and deals thread for robinhood -- probably wouldn't hurt if they just linked to that instead.
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Feb 23, 2015 02:05
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slap me silly posted:Yup. No referral chains in BFC, please. The robinhood invites aren't referrals, they don't give either account any kind of benefit as far as I've seen, they just let you make an account faster.
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Feb 23, 2015 05:13
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Good to know, thanks.
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Feb 23, 2015 05:18
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