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Nice. I just found out that because I'm not a citizen I cannot create a Vanguard account online. I need to mail out a form, and in that form include another form that I get from the IRS. SIGH
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Sep 21, 2008 08:50
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enraged_camel posted:Nice. That't not Vanguard's fault. You can thank the wonderful world of investment regulation and compliance for that. Also, can anyone explain to me why the Dow Jones consistently outperforms the S&P?
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Sep 21, 2008 13:42
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LactoseO.D.'d posted:You can thank the wonderful world of investment regulation and compliance for that. 
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Sep 21, 2008 14:36
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I've looked up Vanguards S&P 500 compared to the USAA S&P. Vanguard really is the best with a lower annual cost at .18% instead of USAA .33%
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Sep 21, 2008 15:33
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I do not feel like I am maximizing my value on my 401K from work. I am currently debating upping my contribution per check to 10% pre-tax. About Me: Age: 24 Years Old Current Income: 39000/yr Personal Per Check - 6% Pre-Tax Company Matched - 4% Pre-Tax 401K's Current Worth - Total: $3,117.10 Vested: $2,330.06 (Will be fully vested in a little under 4 years). Current Investments in 401K: code:Edit: Should I elect to have a professional manage my 401K? "The Personal Asset Manager fee is just 0.6% of your account balance per year." Regnevelc fucked around with this message at 21:05 on Sep 21, 2008 |
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Sep 21, 2008 21:00
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kys posted:I've looked up Vanguards S&P 500 compared to the USAA S&P. FSMKX is only .10%, but the minimum is $10,000.
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Sep 21, 2008 21:01
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Regnevelc posted:I do not feel like I am maximizing my value on my 401K from work. I am currently debating upping my contribution per check to 10% pre-tax. If you read a few posts above you'll see why 0.6% is actually a MASSIVE fee. Frankly, just going 100% into the 2050 TR fund and ignoring it till you die will probably beat most (80%+) investors over the long run.
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Sep 21, 2008 21:41
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So I'm a 25 year old college student, and I've decided I need to learn be wiser about my investments. Not that I'm bad, I just don't know anything about them really. I've set up my 401K with my employer, and I take 15% out of my paycheck. I believe my employer will match 5%, so I'm clearly overing their maximum. Now, I currently only make $15 an hour, so I don't think I'd be able to come close to maxing out a Roth IRA in a year. Should I stick with the 15% or save up to start a Roth IRA, and instead dump my excess earnings there? My 401K is managed by Masterplan, and I'm looking at my most recent statement, and I don't really understand much of it, and I'm looking for someone to help interpret (and make suggestions.) Under asset summary, it says I am 100% invested in 'Growth Portfolio', which has a bunch of investment components like PTRAX, DODGX, VIFSX, RGAFX, RERFX, and 5-6 more that I'm only lightly invested in. Are each of these amalgamations of other investments? And what qualities should I be most concerned with?
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Sep 22, 2008 00:13
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Question: I'm a grad student, making little money. Before that I had a decent job, and put away some money in an IRA with WaMu. It's in two funds: SACAX $1800 SABPX $2600 (both rounded) I put the money in here 3 years ago, and haven't added any money since. Now I'm thinking that Vanguard's Target Retirement Funds might be a better fit for future investing once I graduate in a year and start making the  Would it be better to transfer these to Vanguard right now, or just leave them alone and save up the $3000 needed to start a new account there. I haven't found out what fees I might have to pay yet since WaMu apparently requires me to cash out the IRA before transferring it to Vanguard. Vice President fucked around with this message at 06:33 on Jun 25, 2020 |
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Sep 22, 2008 06:02
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Question: I'm (almost) 21 right now, and I've been socking away money from a great college internship. All the money I've saved is for nearer term goals (house, engagement ring, etc.) in an ING Direct account, but I'm wanting to start a Roth IRA and contribute a bit of my income towards that. Right now I'm looking at about a $150 initial investment and about $90-$100 monthly contributions, so I don't qualify for Vanguard at the moment. I've been looking around at different brokerages that would let me contribute that, but there aren't many. Does anyone have any suggestions for my situation? I'm not wanting to park the $100/month in my ING direct account, because it'll be forever until I have the $3k to open a Vanguard account. I'm also figuring that taking advantage of the bear market to start investing isn't a bad idea since I'll ride this out for about 35 years to retire at 55. I'm sure I'll get a nice return in the long run. Of course right now, since my portfolio will be very small, I'm going all in an S&P 500 index fund. Also, if I open my account at another brokerage (say Schwab or something), can I move it over to Vanguard later on, or would I just be better off staying there since Schwab will allow me to invest in Vanguard's funds anyways? Thanks!
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Sep 23, 2008 01:31
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Little Tortilla Boy posted:Question: I'm (almost) 21 right now, and I've been socking away money from a great college internship. All the money I've saved is for nearer term goals (house, engagement ring, etc.) in an ING Direct account, but I'm wanting to start a Roth IRA and contribute a bit of my income towards that. Right now I'm looking at about a $150 initial investment and about $90-$100 monthly contributions, so I don't qualify for Vanguard at the moment. I've been looking around at different brokerages that would let me contribute that, but there aren't many. Does anyone have any suggestions for my situation?
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Sep 23, 2008 23:27
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Little Tortilla Boy posted:Bump...anyone? I think Schwab and T Rowe Price might both have low minimums. You cannot really diversify with a small initial investment, so you will not see a lot of specific advice. I would personally save up $1,000 and buy Vanguard's STAR Fund (VGSTX), which is a mix of other Vanguard Bond/Equity funds with a $1,000 minimum. Then, when you've accumulated $3,000, transfer it to another investment vehicle such as Target Retirement.
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Sep 24, 2008 17:09
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I am currently planning on what I will be doing for my 2009 Roth IRA contributions and wondering if I should put anything towards items of intrinsic value? I was thinking about putting something small (< 10%) of my retirement into either gold, or land to help further diversify my portfolio. Currently I have my retirement funds spread out over several mutual funds focusing in domestic growth and foreign markets. Is this something I should be focusing on or would putting on a tinfoil hat suffice instead? My other question is the only way to invest in land for a retirement fund through real estate stock? If I wanted to buy vacant land out in New Mexico for when I go crazy/senile/old would that just be something I have to do with my own dime and not my retirement funds?
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Sep 24, 2008 17:16
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I thought the prevailing wisdom was that the target retirement funds weren't so hot. Looking at Vanguard's, the 2045 retirement fund has 10+% of its assets in bonds. Isn't that a bit conservative? At least the expense ratio is low, and it is essentially just like putting 70+% of your money into an index fund, but I can't help thinking there are better options.
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Sep 24, 2008 17:45
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Lord Kimbo posted:I am currently planning on what I will be doing for my 2009 Roth IRA contributions and wondering if I should put anything towards items of intrinsic value? I was thinking about putting something small (< 10%) of my retirement into either gold, or land to help further diversify my portfolio. Currently I have my retirement funds spread out over several mutual funds focusing in domestic growth and foreign markets. Is this something I should be focusing on or would putting on a tinfoil hat suffice instead? It's up to you. A lot of people like holding some "real" assets in their portfolio, whether it is commodities or real estate. I have 10% invested in Vanguard's REIT Index (VGSIX). REITs hold a portfolio of income producing real-estate, and are required to pay out 90% of their income (rent) as dividends to shareholders. You should be aware that a lot of funds have exposure to REITs and commodities, so by owning them your portfolio already has some of one or both. IIRC Vanguard Total Stock Market Index (VTSMX) has around 0.88% REIT holdings. Edit: VTSMX actually holds 2.003% REIT. See http://www.bogleheads.org/wiki/index.php/Percentages_of_REITs_Present_in_Vanguard_Index_Funds for data on other Vanguard fund holdings as of 30 June 2008. var1ety fucked around with this message at 18:58 on Sep 24, 2008 |
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Sep 24, 2008 18:04
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KS posted:I thought the prevailing wisdom was that the target retirement funds weren't so hot. Looking at Vanguard's, the 2045 retirement fund has 10+% of its assets in bonds. Isn't that a bit conservative? At least the expense ratio is low, and it is essentially just like putting 70+% of your money into an index fund, but I can't help thinking there are better options. The prevailing wisdom amongst many well-respected financial advisors and writers is that having only 10% bonds (or less) should be the exception and not the norm. I don't like target retirement funds, but for the opposite reason.
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Sep 24, 2008 18:30
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KS posted:I thought the prevailing wisdom was that the target retirement funds weren't so hot. Looking at Vanguard's, the 2045 retirement fund has 10+% of its assets in bonds. Isn't that a bit conservative? At least the expense ratio is low, and it is essentially just like putting 70+% of your money into an index fund, but I can't help thinking there are better options. Long term investing is easy to get wrong, because 'working harder' at it usually ends up making things worse, not better, unlike the rest of your economic life. Investing is funny like that. Like 80k said, bonds are good, especially if you rebalance your ratios faithfully, which a TR fund would do for you automatically. It's not 100% optimal, but it's probably 95% optimal and it takes 0% effort, so you can spend all your time focusing on whatever it is you do well, instead of wasting your time tinkering with your investments.
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Sep 24, 2008 18:45
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KS posted:I thought the prevailing wisdom was that the target retirement funds weren't so hot. Looking at Vanguard's, the 2045 retirement fund has 10+% of its assets in bonds. Isn't that a bit conservative? At least the expense ratio is low, and it is essentially just like putting 70+% of your money into an index fund, but I can't help thinking there are better options. TR gives you a diversified portfolio with a $3,000 initial investment that rebalances over time to reduce its risk without you having to do anything. You really need at least $9,000 to build a balanced portfolio on your own (33% domestic, 33% international, 33% bonds), and if you want to refine by regions (Pacific/European/Emerging) you need more like $30,000. Bonds provide stability and reduced risk to a portfolio without greatly impacting returns. I am in agreement with 80k that, even as a young person, you should have at minimum 10% exposure to low risk bonds in your portfolio. I personally hold 20% bonds. If your personal investment strategy calls for no bonds then you should look at Vanguard's Total World Stock Index (VTWSX). Edit: Meant VTWSX, not Total International. See posts below discussing it. var1ety fucked around with this message at 19:11 on Sep 24, 2008 |
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Sep 24, 2008 18:50
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OK, when did Vanguard release this gem? VTWSX (Total World Stock Index)? Looks like a cap-weighted global index fund containing both US and international stocks. $3,000 minimum. This would probably be a good default equity fund choice for those that only have enough money to open one fund. I just discovered it about 10 seconds ago. Wonder how i missed it.
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Sep 24, 2008 19:02
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80k posted:OK, when did Vanguard release this gem? VTWSX (Total World Stock Index)? Looks like a cap-weighted global index fund containing both US and international stocks. $3,000 minimum. It just launched a couple months ago, and just recently (last month or so) actually purchased it's fund holdings; I think it's still in the process of aquiring it's initial assets. Nice fund though, yes! In a tax deferred account you could just use this and a total bond market index and be set.
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Sep 24, 2008 19:04
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80k posted:The prevailing wisdom amongst many well-respected financial advisors and writers is that having only 10% bonds (or less) should be the exception and not the norm. I don't like target retirement funds, but for the opposite reason. Agreeed. People continually overweight themselves in equities stating that you are supposed to have more equity exposure when you are young. Well, technically yes, you should have more exposure, because as you reach retirement age, your equity exposure should be lessened as much as possible. But then you get these 90% equity portfolios because people think that their age is some sort license to throw all the benefits of diversification out the window. Hopefully this market cycle teaches some people how bad this practice is.
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Sep 24, 2008 22:53
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LactoseO.D.'d posted:Agreeed. People continually overweight themselves in equities stating that you are supposed to have more equity exposure when you are young. Well, technically yes, you should have more exposure, because as you reach retirement age, your equity exposure should be lessened as much as possible. But then you get these 90% equity portfolios because people think that their age is some sort license to throw all the benefits of diversification out the window. Hopefully this market cycle teaches some people how bad this practice is.
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Sep 25, 2008 02:08
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swenblack posted:Keep in mind though, that most people's portfolio contains cash or cash equivalents. My emergency fund and housing fund are both in a money market account that is essentially cash and short term government bonds. ~90% of my retirement accounts are in equities, but that's only 50% of my total portfolio. Not a terrible allocation right now. And yes, I know all about the presence of cash equivalents in most people's portfolios. My experience tells me that yours is definitely to the high side. Most people just keep just enough in there to keep operations smooth (periodic withdrawals or maintenance fees).
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Sep 25, 2008 02:16
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I currently have a Vanguard Roth IRA, and for the past 2 years have contributed the max to the Vanguard Target Year 2045 fund. I've noticed people here suggesting other funds to invest in at Vanguard. How does one go about investing into these other funds? When I first created the IRA account, I could select different funds and I chose the Target Year one, is it too late to add in, say, the VTWSX one, in addition to the Target Year one, or is that a different type of investment account? Thanks!
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Sep 25, 2008 04:19
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KS posted:I thought the prevailing wisdom was that the target retirement funds weren't so hot. Looking at Vanguard's, the 2045 retirement fund has 10+% of its assets in bonds. Isn't that a bit conservative? At least the expense ratio is low, and it is essentially just like putting 70+% of your money into an index fund, but I can't help thinking there are better options. The only real problem with Vanguard's target retirement funds is that they all have fairly low international exposure; the TR 2050 fund only has about 18% international exposure. The Vanguard TR funds are still pretty decent though, for what they are.
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Sep 25, 2008 05:46
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Jasen posted:I currently have a Vanguard Roth IRA, and for the past 2 years have contributed the max to the Vanguard Target Year 2045 fund. I've noticed people here suggesting other funds to invest in at Vanguard. How does one go about investing into these other funds? When I first created the IRA account, I could select different funds and I chose the Target Year one, is it too late to add in, say, the VTWSX one, in addition to the Target Year one, or is that a different type of investment account? They are all just different mutual funds. You can exchange out of your Target fund and into any other mutual fund (that you meet the minimums for), all within your IRA. You are free to do this at any time, though some funds will charge a fee if you haven't held your shares long enough (say 2 months or 1 year or something). The Target funds do not charge such a fee, IIRC. If you are splitting up into different funds, why keep the Target fund at all? You could, for instance, exchange into the world index fund and a bond fund and have a very diverse portfolio. Or (if your balance is enough for 3 funds), you could buy a domestic fund, an international fund, and a bond fund. The more you split up, the more control you have over your allocation, but you also need more money in order to meet minimums.
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Sep 25, 2008 19:57
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I have a hypothetical question for you guys: What if the cumulative return on stocks over the next ten years (complete with peaks and dips) is 0%? This would make for a total annual return from 2000 to 2018 of ~0.2%. Was 'stocks for the long run' worth it?
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Sep 26, 2008 03:42
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Modern Life Is War posted:I have a hypothetical question for you guys: This wouldn't be the first time this has happened. Imagine having worked hard and built up a sizeable portfolio in the mid-to-late 1960's, put it in stocks, and watch the next 15 years as your portfolio (and subsequent contributions) achieves zero nominal returns, and negative real returns? That's why Siegel's 100 year chart of stock market returns doesn't get me excited at all. Nobody has the stomach or mental fortitude to stay the course through that kind of environment for 15-20 years, with an equity-heavy portfolio. And you can never get that time back, nor choose which decades you want your wealth accumulating years to coincide with. It's perfectly possible that investors today will not see good results from their stocks before they retire. That's why I don't like target retirement funds, and cringe when people complain that they are too conservative (what with their measly 10% in bonds). I truly believe that one should be prepared for the scenario you propose. Stocks are risky, even in the "long run". And if anyone thinks that the time period I selected is too pessimistic, keep in mind the time period was nonetheless taken from the most successful and prosperous stock market in history  . Other countries have seen much worse, and nobody knows what the future will hold.
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Sep 26, 2008 04:45
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80k posted:stuff 80k, you always have some interesting viewpoints. What is your recommended asset allocation for a young person's retirement account? I know you are a bit more "into" bonds than what is the norm.
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Sep 26, 2008 06:14
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80k posted:This wouldn't be the first time this has happened. Imagine having worked hard and built up a sizeable portfolio in the mid-to-late 1960's, put it in stocks, and watch the next 15 years as your portfolio (and subsequent contributions) achieves zero nominal returns, and negative real returns? I agree with this, though also remember that your equity holdings will be paying out dividends that entire time, so your returns aren't actually 0 over that time. (though certainly nothing to write home about)
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Sep 26, 2008 15:41
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Unormal posted:I agree with this, though also remember that your equity holdings will be paying out dividends that entire time, so your returns aren't actually 0 over that time. (though certainly nothing to write home about) It's true that it's very unlikely to have zero or negative nominal returns over long periods of time (though of course it can happen). But the real returns is what matters. Between the late 1960's an early 1980's, even if the nominal annual returns were around 2-3%, that is a horrible result considering that it included a hyperinflationary period. Ravarek posted:80k, you always have some interesting viewpoints. What is your recommended asset allocation for a young person's retirement account? I know you are a bit more "into" bonds than what is the norm. I don't have a general recommended allocation, but I do think most people are overweight equities. If I had to give a general recommendation, I'd say the know-nothing investor should start with 50/50 stocks/bonds, with the bond portion heavily invested in TIPS. I know it seems radically conservative, and I know that it makes me seem pessimistic about the future. But I think it's just plain common sense for a variety of reasons: - At least twice in the past hundred years, an entire generation experienced nearly two decades of miserable stock market results during their most important wealth-accumulating years. We might be in the midst of a third one... who knows. This is why the equity risk premium exists, and why it has been so high. It is not because of short-term volatility, but rather the real possibility of devastating results. - You either believe that it's possible to experience terrible results over a long period, or you believe that today is a safer world and the equity risk premium has been reduced to reflect that. Pick one. Neither scenarios suggest an equity-heavy portfolio as a default choice for the average investor. - Many people have equity-like human capital. Your stocks may be down in the dumps at the same time that your career is suffering or that you are unemployed. So your plans of wishing for a bear market, so you can buy cheap shares could be a pipe dream. If you have that will power (doubtful), you still need the money to make it happen. Likely, you'll be selling shares to make ends meet. - None of this even touches upon the behavioral reasons why people would be better off with conservative portfolios. Sure, over the past century, equity returns have been spectacular... but the returns have been erratic, and whether an investor can achieve those returns is a different matter. The order of those returns, contributions, and withdrawals matter a lot, as well. I also think a lot of the financial advice that is out there is bad because of shortsightedness. It's easy to think equities are awesome after the longest and most spectacular bull market in history. The general "wisdom" always reflects recent history. But good retirement planning should look at market history and use monte carlo simulations and analyze human capital and lifetime consumption. At the very least, take less risk, put a sizeable portion in TIPS, and save more.
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Sep 26, 2008 17:36
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I'm 29 and have been doing my 6% company match now for 18 months which has me fully vested in the Verizon 401k plan, but I really have no idea what I'm doing and I'm -15% YTD, I found this link http://www.fundadvice.com/401k-help/401k-plans/401k-verizon.html and was curious if this makes any sense and what some of you would do with these fund options, on top of what you see above there is also the usual 2045 Fund and another Retirement and Investment fund that aren't mentioned on that page. Thanks for any advice.
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Sep 26, 2008 20:08
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What sort of protection do retirement accounts require? Nevermind, Roth-IRA's generally are covered up to $250,000. Though if there is any information that should be considered regarding Roth-IRA funds' security, I would appreciate the discussion. daspope fucked around with this message at 00:36 on Sep 27, 2008 |
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Sep 26, 2008 23:52
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daspope posted:What sort of protection do retirement accounts require? What kind of protection are you talking about? The $250,000 is in regards to deposits in an FDIC-insured bank. But most people put their Roth IRA money into mutual funds, stocks, or money market accounts, which are NOT FDIC-insured.
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Sep 27, 2008 00:58
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For anyone who'd like to know more about the ideas 80k is espousing, you may want to read The Intelligent Investor by Benjamin Graham (there are updated version with commentary and footnotes). I've got to say that the long term, rational approach makes a lot of sense.
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Sep 27, 2008 03:36
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daspope posted:What sort of protection do retirement accounts require? If you are actually looking for protection, Prudential has a line of particularly attractive variable annuities. You can throw a rider on (highest daily living benefit), that will value the portfolio off its highest historical value. So say you were holding the Nasdaq pre-2000, it'd be valued at the top of the bubble. There is an additional rider that will also guarantee a yearly return of 5%, I think it was 5%. Completely destroys the downside risk for the layman. Prudential is able to pay everything out because its payouts are annuitized, and they know that if you hold your money long enough, the 5% return guarantee is essentially meaningless in the face of market performance. There are some costs, namely liquidity. The money is locked up, and the minimum buy in is 25k. 80k and Ravarek, I highly recommend you check this line out (I believe its Apex and something else). We love these things so much we are using them in some qualified accounts.
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Sep 27, 2008 04:36
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80k posted:They are all just different mutual funds. You can exchange out of your Target fund and into any other mutual fund (that you meet the minimums for), all within your IRA. You are free to do this at any time, though some funds will charge a fee if you haven't held your shares long enough (say 2 months or 1 year or something). The Target funds do not charge such a fee, IIRC. Ah, thanks, I think I get it. There would be no point in a Target fund and different funds because the Target fund is a mixture already. For someone who's clueless about bonds/funds/etc. is it better to just leave it in the Target fund or is it better to separate it into different funds? Also, I can take out the principle I invested into a Roth IRA, correct? If the value of the Target fund is currently less than what I invested, does that mean I can just take the whole amount out? Do I lose out on the rest of my money? I don't plan to do this, I was just curious on how that worked. Thanks again!
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Sep 27, 2008 05:34
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80k posted:more stuff I agree with 90% of what you just said, especially the part about most people not having the guts to hold steady during troubled times with a faltering equity-heavy portfolio. I have a question about TIPS. I want your thoughts, 80k. Everybody knows that TIPS are adjusted based on inflation, or more specifically the CPI. I am rather concerned with the eternal debates/arguments over whether or not the CPI levels are accurate; tons of people yap on and on that the CPI levels are often understated. Is this conspiracy theory or is somewhat true? If the CPI levels are understated, doesn't that mean TIPS are largely useless since the return will be lower than the "real" inflation rate?
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Sep 27, 2008 17:38
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80k posted:OK, when did Vanguard release this gem? VTWSX (Total World Stock Index)? Looks like a cap-weighted global index fund containing both US and international stocks. $3,000 minimum. Speaking of VTWSX: What is your opinion of using VTWSX to replace both VTSMX (Total Stock Market) and VGTSX (Total International Stock Market) in a portfolio? I think consolidating those two funds in VTWSX is much easier in that you'd only need $3,000 to get going instead of $6,000. It is pretty much like going 50/50 domestic/foreign.
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Sep 27, 2008 17:44
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Ravarek posted:I have a question about TIPS. I want your thoughts, 80k. Everybody knows that TIPS are adjusted based on inflation, or more specifically the CPI. I am rather concerned with the eternal debates/arguments over whether or not the CPI levels are accurate; tons of people yap on and on that the CPI levels are often understated. Is this conspiracy theory or is somewhat true? If the CPI levels are understated, doesn't that mean TIPS are largely useless since the return will be lower than the "real" inflation rate? TIPS are traded on the open market, and have always been attractively priced relative to nominals, so it's possible that the market has already discounted them to account for CPI inaccuracy. If CPI levels are understated, it does not make TIPS useless, it just demands a higher real rate. If CPI levels are erratically wrong, then yes, perhaps they are useless, but I do not believe that to be the case. I've followed the arguments, and am personally not too concerned about it. There are organizations/groups more powerful, vocal, and have a far more vested interest in an accurate CPI than I am. An accurate CPI is impossible, so there will always be complaints. Also, half of the conspiracy theorists that I have seen yapping on the internetz don't know the difference between CPI Core and CPI-U and their arguments boil down to "hey, the CPI doesn't include gas, but a dude's gotta drive." Ravarek posted:Speaking of VTWSX: What is your opinion of using VTWSX to replace both VTSMX (Total Stock Market) and VGTSX (Total International Stock Market) in a portfolio? I think consolidating those two funds in VTWSX is much easier in that you'd only need $3,000 to get going instead of $6,000. It is pretty much like going 50/50 domestic/foreign. I still like splitting it up between domestic and international, but you are right, for those that don't meet the minimums, the world index fund is a fine way to go, imo. edit: keep in mind that your domestic/international allocation will change with ongoing changes in world market cap weighting if you go with the single index. Ten years ago, the US portion would have been more than half of your stock holdings. Now it is less than half. Think about how much Japan's weightings have changed over the past few decades. You should decide how much control you want over your allocation or let the world market decide for you. There is no one right way. 80k fucked around with this message at 20:54 on Sep 27, 2008 |
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Sep 27, 2008 19:09
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