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CopperHound posted:A RothIRA can get you most of the way there. And then there's nothing wrong with a taxable account, or even a 529 for future children.
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May 4, 2017 00:06
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So is there anything additional I should be looking for to put money into? So far right now my game plan is - pension - 457(b) - Roth IRA - leasing 1-2 apartments No debts and I plan on working for 20-25 years before retirement so around age 45-50
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May 4, 2017 00:07
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Woof Blitzer posted:So is there anything additional I should be looking for to put money into? So far right now my game plan is Does "leasing 1-2 apartments" mean you're gonna buy 1-2 rental units and generate rental income from them? The Roth IRA income limit is $117,000 (phase begins) to $132,000 (completely ineligible). You're 25 and going to retire in 20-25 years. That's hard to do on an income below $117,000! Don't take this as naysaying though, I just want to get some more detail.
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May 4, 2017 00:14
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Woof Blitzer fucked around with this message at 00:35 on May 7, 2017 |
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May 4, 2017 00:35
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I'm setting up my girlfriend's 401k. US has a Vanguard 500, small, and mid so thats good. No international funds other than terrible American Funds, will pass and make up in IRA Bonds I'm less sure about, no Total Bond fund but has these three options: Metropolitan West Tot. Return Bond Fund (P) ER: 0.38% Vanguard Inflation Protected Secs. Fund (Adm) ER: 0.10% Vanguard ShortTerm Bond Index Fund (Adm) ER: 0.09% I'm not real familiar with the last 2, is either an acceptable replacement for a total bond fund? Don't really have the ability to pass and make it up with the IRA because its so much smaller. Also she has a to wait 12 whole months before be able to contribute which is a bummer, but we can at least roll over her previous extremely bad 401k.
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May 4, 2017 16:14
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The inflation protected bond fund is good. Here's a bit of portfolio theory talk: bond funds exist for two reasons: 1. They're negatively correlated with stocks, so they reduce portfolio volatility. As your stocks decrease, your bonds will increase, and through rebalancing you will weather crashes in much better shape. 2. They're very stable in value, so their future value has high confidence. This is especially important as retirement age approaches and you're more concerned about return of capital than return on capital. Inflation-protected bond funds fulfill these requirements just as well (perhaps better, tbh) as "regular" bonds.
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May 4, 2017 16:31
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i've got lovely options from my company 401k so i think i'm just gonna split between VTSAX/VSIAX/VMVAX. what would be a recommended ratio for them? since i opened the 401k i've just been dumping it all to VTSAX but i feel like i may be better spreading it out a bit.
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May 4, 2017 16:56
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baram. posted:i've got lovely options from my company 401k so i think i'm just gonna split between VTSAX/VSIAX/VMVAX. what would be a recommended ratio for them? since i opened the 401k i've just been dumping it all to VTSAX but i feel like i may be better spreading it out a bit. VTSAX contains every fund in those other two index funds, in an appropriate weight for their market cap. If you also bought VSIAX or VMVAX, you are placing a monetary wager that "small and mid caps will outperform the US Stock Market as a whole". Some people think that, but... Do you? VTSAX is only one fund, but it covers "diversification" all by itself.
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May 4, 2017 18:06
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This might be a dumb question but I have a bunch of VHDYX and i know that Goldman stopped selling them or something this week. The price hasn't changed for a couple of days but my bank (USAA) hasn't send me any information. Is the fund just like, dead and locked at the last closing price now or what? e: welp the price just updated for today so i guess everything is normal. thanks tho baw fucked around with this message at 23:03 on May 4, 2017 |
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May 4, 2017 22:46
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I recently setup my 401k at my new job and I'm looking to rollover soon but I can figure out how the gently caress to read these confusing rear end tables. I'm basically trying to figure out the expense ratio. My understanding is to basically look for appropriate funds with the lowest ER. That number was easy to find through my old provider. Can anyone help me decrypt this? E: Nevermind, I found the information I needed in a different section.  Tots fucked around with this message at 18:04 on May 5, 2017 |
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May 5, 2017 17:59
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Holy crap, sales charges and deferred sales charges! I thought those died off years ago. Depending on your investment horizon, those may be better options, but make sure to crunch the numbers on that.
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May 5, 2017 18:21
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The OP's 401k is probably not offering the A shares.
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May 5, 2017 18:27
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Zero One posted:The OP's 401k is probably not offering the A shares. R-5 (no idea what any of this means) Whatever, plugging it all in the target fund and loving off
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May 5, 2017 20:38
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Yeah so your fund has no load and a 0.47 % annual operating expense. Not great compared to most Vanguard or Schwab funds but good when some people might pay twice that in a crappy 401k.
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May 5, 2017 21:39
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Is this the thread to discuss Stash, Acorns, and other micro-investing/ways to buy fractional share ETFs? I have two well established 401ks but I wanted to dabble with these new fangled millennial focused apps.
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May 9, 2017 05:47
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Syrinxx posted:Is this the thread to discuss Stash, Acorns, and other micro-investing/ways to buy fractional share ETFs? I have two well established 401ks but I wanted to dabble with these new fangled millennial focused apps. SpelledBackwards posted:Either this thread or the Newbie Personal Finance one used to have the subtitle "Acorns are for squirrels" if that gives you an idea of BFC's general feelings on the matter.
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May 9, 2017 20:41
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Syrinxx posted:Is this the thread to discuss Stash, Acorns, and other micro-investing/ways to buy fractional share ETFs? I have two well established 401ks but I wanted to dabble with these new fangled millennial focused apps. Some of these services are better or worse, but when I hear about a new one, I ask myself "how exactly is this better than just a brokerage account?" Most of the time the advantages don't outweigh the cost, even if the only cost is having a separate account at a different institution. That being said, I do keep a Betterment account open for certain savings goals just for ease of use. I don't mind paying a little for convenience.
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May 10, 2017 01:45
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Went to finish consolidating my investments by transferring the remainder of stuff I have at Schwab over to Vanguard. Load up Schwab's page and the first thing I see: Vanguard must seriously be eating the classic firms' lunch.
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May 11, 2017 01:07
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pr0zac posted:Went to finish consolidating my investments by transferring the remainder of stuff I have at Schwab over to Vanguard. Load up Schwab's page and the first thing I see: When you click the link it says "You're right, but at least we made you think"
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May 11, 2017 01:11
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I'm working with my wife to reallocate her 401a/403b funds. I've got an idea of what I want to do for most of it. The international funds have not performed well over the last year. Her current allocation is almost 30% in these international funds that have been stagnant, year over year. Is there any reason why I should keep a percentage in there, or should I put it all in large cap VIIIX (0.16 ER) and small cap FRSGX (0.25 ER)?
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May 11, 2017 02:03
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30 intl is a lot considering you probably have international exposure through other blue chip stocks. I would not take it to zero, though.
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May 11, 2017 02:16
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Cacafuego posted:I'm working with my wife to reallocate her 401a/403b funds. I've got an idea of what I want to do for most of it. The international funds have not performed well over the last year. Her current allocation is almost 30% in these international funds that have been stagnant, year over year. Is there any reason why I should keep a percentage in there, or should I put it all in large cap VIIIX (0.16 ER) and small cap FRSGX (0.25 ER)? What international fund is she invested in currently? Switching to those two funds is simply a bet that US stocks will outperform the international market, of which there is no guarantee.
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May 11, 2017 02:17
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anathema72 posted:What international fund is she invested in currently? Switching to those two funds is simply a bet that US stocks will outperform the international market, of which there is no guarantee. She's currently got 17% allocated into VGTSX (0.30 ER) and 14% into RERGX (0.64 ER). 31% of her total allocation is in these international funds. Would dropping to 15% total int'l be a good plan, putting it all in VGTSX since it has the lower ER?
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May 11, 2017 02:48
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Cacafuego posted:She's currently got 17% allocated into VGTSX (0.30 ER) and 14% into RERGX (0.64 ER). 31% of her total allocation is in these international funds. There's no reason to hold RERGX, VGTSX already has Europe covered. I think 20-30% Intl is fine, Vanguard uses 40% for their Target Date funds.
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May 11, 2017 03:25
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Thanks for the advice!
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May 11, 2017 04:26
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I Like Jell-O posted:Some of these services are better or worse, but when I hear about a new one, I ask myself "how exactly is this better than just a brokerage account?" Most of the time the advantages don't outweigh the cost, even if the only cost is having a separate account at a different institution. That being said, I do keep a Betterment account open for certain savings goals just for ease of use. I don't mind paying a little for convenience.
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May 11, 2017 04:59
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KYOON GRIFFEY JR posted:30 intl is a lot considering you probably have international exposure through other blue chip stocks. I would not take it to zero, though. I have sort of struggled with this - US index funds have huge international exposure in terms of revenue generated outside of the US and vice versa international funds have significant revenue generated in the US. It's hard to rationalize a right answer let alone practically allocate it.
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May 11, 2017 05:10
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Syrinxx posted:I think the ability to buy fractional ETF shares is what got me interested. $5 here, $10 there, etc. Stash does that (and is a good experience overall I think) but Acorns leaves you with basically no choice but to buy their pre-mixed portfolios. I decided to keep Stash around but go ahead and open a Vanguard individual account for the majority of my non-retirement investing. Charging upwards of 0.25% isn't awful, but it seems completely unnecessary. What is the big advantage to buying fractional shares? The S&P500 is only around $220 and the rate of return isn't really high enough to matter if you have under that. Robinhood seems like a better option if you're trading often due to low amounts though I haven't personally used it.
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May 11, 2017 06:03
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Syrinxx posted:I think the ability to buy fractional ETF shares is what got me interested. $5 here, $10 there, etc. Stash does that (and is a good experience overall I think) but Acorns leaves you with basically no choice but to buy their pre-mixed portfolios. I decided to keep Stash around but go ahead and open a Vanguard individual account for the majority of my non-retirement investing. "Fractional ETFs" seem to just be another way to say "mutual fund". The only difference I can think of is that most mutual funds have a minimum purchase, but once you pass that threshold you can buy fractional shares to your heart's content. Maybe I'm missing something. And this leads into a simple truth: if you don't have much capital to invest, it doesn't really matter how you invest it. The difference in a year on $1000 between a good savings account (let's say 1%) and a good, but risky stock fund (let's say ~6% ER) is only $50 per year or so, or right around $4 per month. So buying one extra fancy coffee per month might wipe out the difference between the two. The extra return really adds up when you start building a larger nestegg, and it's great to build good habits when you're first starting out, but if you're only investing a few thousand dollars it may just not be worth trying to optimize too much. And if you have more than a few thousand dollars, you should qualify for a decent mutual fund with no need to get more complicated than that. In the end, if you're saving money at all you're making a good choice. If some of these programs help you do that, no matter how optimized they are, then they're a net positive.
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May 11, 2017 07:49
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BEHOLD: MY CAPE posted:I have sort of struggled with this - US index funds have huge international exposure in terms of revenue generated outside of the US and vice versa international funds have significant revenue generated in the US. It's hard to rationalize a right answer let alone practically allocate it. I've struggled with international and REIT allocation in the last few years too. I think at some point I need to revisit both, just to have the same confidence I used to have in my approach. Even if my allocation doesn't change. The last time I really put thought into those allocations was around 2007/2008 when I read about every book in the OP and spent a whole weekend thinking about how to setup my portfolio. I was very confident in the 40% allocation for international back then, and US centric investing seemed like a fallacy, but the idea that most companies are actually international companies is pretty compelling to me now and worth revisiting. As for REITs, I'm fully divested from them.
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May 11, 2017 13:16
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Bogle doesn't believe in diversifying internationally. It's become somewhat taken for granted that "diversifying internationally typically doesn't increase portfolio returns, but reduces risk". I remember coming across that in the CFA coursework and b-school. But backtesting with actual investable indexes over various timeframes, I haven't actually seen the risk benefit either. So who knows
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May 11, 2017 13:31
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shrike82 posted:Bogle doesn't believe in diversifying internationally. My wildly uneducated guess would be that the usefulness of the backtesting would be limited as the rate of large-firm global market penetration has accelerated over the last several decades. That is to say that today's S&P 500 generates significantly greater international exposure than the S&P 500 of 40 years ago simply due to the increased ex-US activities of the component firms. Whether this effect is more, less, or equally pronounced compared to other things that have changed in the past 40 years though... v  v"So who knows" indeed
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May 11, 2017 14:01
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My backtests went back to the 70s and there wasn't a clear benefit to diversifying internationally (with the caveat that the older data for ex-US markets tends to be synthetic so real returns from investing abroad would have been even worse than what I saw). The other thing to note is that US investors are in a special place when it comes to deciding local only or diversifying internationally. US equities have performed not just better than other markets, but done so over essentially the entire history of modern equities. Advocates for international diversification like to point at the Japanese average investor in the late 80s and his fate if he had been purely in domestic assets. Again, who knows? Just to be fair and balanced, the best argument I've seen made for international diversification is by Cliff Asness et al. in the paper "International Diversification Works (Eventually)" - https://www.aqr.com/library/journal-articles/international-diversification-works-eventually
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May 11, 2017 14:29
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pig slut lisa posted:My wildly uneducated guess would be that the usefulness of the backtesting would be limited as the rate of large-firm global market penetration has accelerated over the last several decades. That is to say that today's S&P 500 generates significantly greater international exposure than the S&P 500 of 40 years ago simply due to the increased ex-US activities of the component firms. Whether this effect is more, less, or equally pronounced compared to other things that have changed in the past 40 years though... v I think one thing to look at is the industry composition of US markets versus foreign ones. US is extremely tech-heavy, 19% versus 10% for foreign (which makes sense, the big tech companies are based in the US.) Then you have a sector like basic materials (think mining, chemicals, stuff like that) which is 3% US but 9% foreign. I wonder how much of the higher returns in the US market have been due to "FANG" (and other tech companies that have been high-flyers), and what will happen if we see another tech recession. You also get different companies investing overseas. You get Toyota instead of Ford, for instance.
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May 11, 2017 18:38
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monster on a stick posted:I wonder how much of the higher returns in the US market have been due to "FANG" (and other tech companies that have been high-flyers), and what will happen if we see another tech recession. A tech recession could definitely hurt, but I doubt those specific companies had much of an effect on total stock market returns. Combined they are still less than 10% of the S&P 500. The S&P 500 increased in value by ~15% last year alone. If all of those companies dropped to 0 tomorrow that would only be 8 months worth of gains.
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May 11, 2017 23:10
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OctaviusBeaver posted:A tech recession could definitely hurt, but I doubt those specific companies had much of an effect on total stock market returns. Combined they are still less than 10% of the S&P 500. The S&P 500 increased in value by ~15% last year alone. If all of those companies dropped to 0 tomorrow that would only be 8 months worth of gains. Tech by sector weight is fully a quarter of the S&P 500. Those 4 stocks might be the poster children, but don't be myopic about the effect that a tech devaluation would have on your index prices.
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May 12, 2017 12:34
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For those of you that like to slice-n-dice check out Paul Merriman's Portfolio ideas http://paulmerriman.com/ultimate-buy-hold-strategy-2017/ He's basically the old man that can't stop tinkering with his pet project for his whole life. tl,dr: if you skew your stock index portfolio towards value, small cap, and international, you can slightly bump returns while maintaining a similar volatility to just holding the S&P 500 index. This must be the real-life equivalent of min-maxing in RPGs.
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May 13, 2017 04:02
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balancedbias posted:For those of you that like to slice-n-dice check out Paul Merriman's Portfolio ideas Right now, I just have all my funds in VFIAX. This intrigued me, but I've always heard that the best (and lazy) thing is just to keep your investment in a low cost index fund or two. I wonder if this would be a better strategy.
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May 13, 2017 16:24
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balancedbias posted:This must be the real-life equivalent of min-maxing in RPGs.
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May 13, 2017 16:47
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balancedbias posted:For those of you that like to slice-n-dice check out Paul Merriman's Portfolio ideas 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
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May 14, 2017 00:30
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