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80k
Jul 3, 2004

careful!

PIPBoy 2000 posted:

I'm 23 and considering starting a Roth IRA for myself through Vangaurd. Considering going with a mix of VGSTX and a bond fund initially around 50-50 with this year's max IRA investment, and then dollar-cost averaging myself into more VGSTX and some VEXMX with next year's and ongoing investments. Does this sound like a sound strategy?

I'm seeing a lot of love here for VBMFX, but what about VUSTX, which is a long term treasury fund? could I really go wrong with either of them?

I wouldn't touch long-term treasuries... one of the last things I would dump my money in right now. VBMFX is ok, but at today's prices, I would go for short-term investment grade bonds or treasury inflation-protected bonds (TIPS). But do your own research and be aware that despite the extraordinarily high risk premiums for short-term corporates, there is still a lot of risk out there and the ride can be bumpy. TIPS are a very volatile asset class as well but trading at historically very attractive real yields.

edit: also, never was a big fan of VGSTX (Star fund). It's like fund diahrrea. If you are already going to mix another bond fund in there, you might as well just start off with an efficient 2-fund portfolio. Short-term investment grade fund plus VTWSX (the total world stock index, which includes domestic and international stocks): Adjust the ratio of the two funds according to your risk preferences.

80k fucked around with this message at 04:07 on Dec 1, 2008

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kys
Dec 8, 2007

Let's run this shit down to sea level!
As soon as Jan. 1st rolls around I plan on maxing out my Roth IRA contribution to the full $5,500. I have been saving up cash in a savings account and I plan to buy in while the market is low. Has anyone had experience doing this kind of thing? Do you prefer to pay in monthly installments spread out throughout the year?

I plan on investing all of it into the USAA S&P Index fund. I can afford the volatility right now.

backstage
Sep 23, 2005

I have experience in that I have been keeping my Roth IRA in USSPX for some years now. But I just drop the same amount in there every month rather than try to look for the low points. Seems like to get any advantage by filling it all up Jan 1, the share price would have to rise significantly during the next 12 months, and not drop. Might happen, might not, right?

80k
Jul 3, 2004

careful!

kys posted:

As soon as Jan. 1st rolls around I plan on maxing out my Roth IRA contribution to the full $5,500. I have been saving up cash in a savings account and I plan to buy in while the market is low. Has anyone had experience doing this kind of thing? Do you prefer to pay in monthly installments spread out throughout the year?

I plan on investing all of it into the USAA S&P Index fund. I can afford the volatility right now.

Sure, I've been doing this every year (lump sum my Roth first week of January). But only a small portion of it goes into equities, the rest into TIPS/bonds (most of my stocks are in my taxable account).

But even if I had my Roth invested in stocks, i would still probably lump sum it every year. Over your lifetime, these $5K-ish contributions will be spread out year after year... it's still "dollar cost averaging" in larger chunks over a very long time frame. You're just as likely to come out behind as you would ahead by sticking it in on January rather than periodically throughout the year. This year was obviously a bad year to lump sum in the beginning of the year... but that's only known in hindsight.

kys
Dec 8, 2007

Let's run this shit down to sea level!

80k posted:

wordz

It will just make things easier having one less savings vehicle I would have to pay into every month. The only doubt that crosses my mind is the fact that the market can take a huge poo poo like it did this year.

kys fucked around with this message at 06:44 on Dec 6, 2008

80k
Jul 3, 2004

careful!

kys posted:

It will just make things easier having one less savings vehicle I would have to pay into every month. The only doubt that crosses my mind is the fact that the market can take a huge poo poo like it did this year.

You know that you don't have to invest in equities in your Roth? You can put it into a money market fund and DCA into your stock fund slowly throughout the year. This way, you don't pay taxes on any interest earned on the money market (since it's in your Roth).

On Unicornback
Oct 17, 2004

I'm 24, finished my first calendar year of my career and have saved up $10k all in an ING Savings account. I didn't sign up for my 401k at work because they don't match until like 3 years of service and I doubt I'll be there then.

I have a few mutual funds and/or IRAs started by my parents years ago, but I'm not really sure what they are. I'll sit down with them and get all that info over Xmas.

However, now that I'm a big boy I'd like to also start to plan for retirement myself as well, so from reading this thread a Roth IRA at Vangaurd sounds like my first step. Any advice on which to pick as a very passive investor? I suppose I'll go ahead and take $5k and max out that account for 2008.

Is this the right path to start with?

Chad Sexington
May 26, 2005

I think he made a beautiful post and did a great job and he is good.
Is there any point to enrolling in my company's 401k plan if they don't do matching? It seems like a terrible idea to me, but my boss keeps harping me on it because I guess he thinks I'm just being stupid or something. I tried to explain that at 22 years old, deferring taxes on my income until I retire is self-defeating, because I'm in such a low tax bracket right now and expect to be better off later in life.

I guess I'll have to see if they offer a Roth 401k, but again, I don't see the point. I haven't even hit my contribution limit for my Roth IRA yet.

80k
Jul 3, 2004

careful!

Chad Sexington posted:

Is there any point to enrolling in my company's 401k plan if they don't do matching? It seems like a terrible idea to me, but my boss keeps harping me on it because I guess he thinks I'm just being stupid or something. I tried to explain that at 22 years old, deferring taxes on my income until I retire is self-defeating, because I'm in such a low tax bracket right now and expect to be better off later in life.

I guess I'll have to see if they offer a Roth 401k, but again, I don't see the point. I haven't even hit my contribution limit for my Roth IRA yet.

It depends on the quality of the 401k plan. Unfortunately, many (if not most) 401k plans are disgustingly bad. Mine should be illegal.

But the idea of deferring taxes is beneficial even if you plan on being in a higher tax bracket in the future. This is because of the tax drag on investments along the way.

So, if you don't get a match, I would first max out your Roth IRA. Any additional money that you can earmark for retirement, you should consider the 401k. If your 401k is as awful as mine is, you should at least see if there is one fund in there that is acceptable. And if all your choices suck, you should consider how long you will be at the company. If you plan to quit in a few years, you might just suck it up and put money in. When you quit, you can roll it over to an IRA, and have a whole universe of investment choices to choose from.

Don Wrigley
Jun 8, 2006

King O Frod

Chad Sexington posted:

Is there any point to enrolling in my company's 401k plan if they don't do matching? It seems like a terrible idea to me, but my boss keeps harping me on it because I guess he thinks I'm just being stupid or something. I tried to explain that at 22 years old, deferring taxes on my income until I retire is self-defeating, because I'm in such a low tax bracket right now and expect to be better off later in life.

I guess I'll have to see if they offer a Roth 401k, but again, I don't see the point. I haven't even hit my contribution limit for my Roth IRA yet.

The fact that you haven't hit the contribution limit on your IRA tells me you need not worry about the 401(k) option, unless of course they offer a Roth 401(k), which is the best thing in existence as it takes the best parts of Roth IRAs and traditional 401(k)s and puts them together.

The advantage of 401(k) options over IRAs is 1) maximum yearly contributions, and 2) the income at which you're allowed to contribute.

For 1), there is quite a difference between $4000 (or is it $5000 now) in an IRA and $15,500 in a 401(k), which are the limits. Of course, if you're making enough to do both, that's the best of both worlds, however this is limited by #2. For your specific case, if you're not even able to meet the IRA limit, then what do you need a 401(k) through a company for? Not only are they not matching, but you'll have a better pick of funds by doing an IRA on your own.

For 2), I forget the exact number (maybe $100,000) that if your income is above that, you can't contribute to a Roth IRA. This is what makes Roth 401(k) so awesome; as with traditional 401(k), you can still contribute. I assume this doesn't affect you, but it's just good knowledge.

Chad Sexington
May 26, 2005

I think he made a beautiful post and did a great job and he is good.

Don Wrigley posted:

The fact that you haven't hit the contribution limit on your IRA tells me you need not worry about the 401(k) option, unless of course they offer a Roth 401(k), which is the best thing in existence as it takes the best parts of Roth IRAs and traditional 401(k)s and puts them together.

The advantage of 401(k) options over IRAs is 1) maximum yearly contributions, and 2) the income at which you're allowed to contribute.

For 1), there is quite a difference between $4000 (or is it $5000 now) in an IRA and $15,500 in a 401(k), which are the limits. Of course, if you're making enough to do both, that's the best of both worlds, however this is limited by #2. For your specific case, if you're not even able to meet the IRA limit, then what do you need a 401(k) through a company for? Not only are they not matching, but you'll have a better pick of funds by doing an IRA on your own.

For 2), I forget the exact number (maybe $100,000) that if your income is above that, you can't contribute to a Roth IRA. This is what makes Roth 401(k) so awesome; as with traditional 401(k), you can still contribute. I assume this doesn't affect you, but it's just good knowledge.

I only make somewhere in the area of $30,000 a year at the moment, so 5k in IRA contributions probably represents something like a 20% savings rate compared to my after-tax income, not including the money I've been stashing away as a hedge against unemployment or my car breaking or something. That's already a pretty aggressive savings strategy for someone my age, I think. (I only have 4k in my Roth at the moment because I've only been working full-time for five months. Most of it comes from savings I had just sitting around in a checking account.)

Now I have to sit through my boss and CFO shaking their head at me and thinking I'm just some dumb kid who wants to spend his paycheck on hookers and blow.

Chad Sexington fucked around with this message at 22:20 on Dec 9, 2008

Don Wrigley
Jun 8, 2006

King O Frod

Chad Sexington posted:

Now I have to sit through my boss and CFO shaking their head at me and thinking I'm just some dumb kid who wants to spend his paycheck on hookers and blow.

Ugh...I hope not. What you do with your money is nobody's business but your own.

Question: You say they only match after x amount of years. Is this retroactive? If so, you should contribute to your 401(k). If not, then you shouldn't.

Chad Sexington
May 26, 2005

I think he made a beautiful post and did a great job and he is good.

Don Wrigley posted:

Ugh...I hope not. What you do with your money is nobody's business but your own.

Question: You say they only match after x amount of years. Is this retroactive? If so, you should contribute to your 401(k). If not, then you shouldn't.

I guess they're just trying to be helpful, but in so doing they sell me short on my ability to manage my own money. So it is when you're young, I guess.

They don't actually match after x amount of years. The company is an internet start-up that is less than a year old, and they're only just now starting the 401k plan, which is why it came up. They say there isn't matching currently, but there may be in the future. I don't see the company living for another year, so I don't anticipate ever seeing the day they do a match.

kys
Dec 8, 2007

Let's run this shit down to sea level!
I am a newbie when it comes to investing, but how can I take advantage of a Roth 401k? It just seems to me like a Roth but with a higher limit. My employer does not offer it, but Im trying to find if that is the only way I can contribute.

Also, I have a lot of money in savings and I like seeing the amount of interest that comes in every month. Is is terrible to leave a lot of money like that sitting around in a taxable account? I don't really need it, I just like to know that it is completely liquid.

Small White Dragon
Nov 23, 2007

No relation.

kys posted:

Also, I have a lot of money in savings and I like seeing the amount of interest that comes in every month. Is is terrible to leave a lot of money like that sitting around in a taxable account? I don't really need it, I just like to know that it is completely liquid.
I personally don't think so, but it depends on the amount of interest you're getting.

Don Wrigley
Jun 8, 2006

King O Frod

kys posted:

I am a newbie when it comes to investing, but how can I take advantage of a Roth 401k? It just seems to me like a Roth but with a higher limit. My employer does not offer it, but Im trying to find if that is the only way I can contribute..

You can only get a Roth 401(k) if your employer carries it, you can only get an IRA on your own. More and more companies have Roth 401(k) as an option, but unfortunately it is still not an option everywhere.

Dijkstra
May 21, 2002

kys posted:

I am a newbie when it comes to investing, but how can I take advantage of a Roth 401k? It just seems to me like a Roth but with a higher limit. My employer does not offer it, but Im trying to find if that is the only way I can contribute.

Also, I have a lot of money in savings and I like seeing the amount of interest that comes in every month. Is is terrible to leave a lot of money like that sitting around in a taxable account? I don't really need it, I just like to know that it is completely liquid.
Re: the Roth 401(k), if your employer doesn't have it then you are out of luck. You can still contribute to an IRA of course, but yeah the limits suck. The $5000 limit is due to be raised in a few years I think, albeit marginally.

Nothing wrong at all with keeping savings around. It is as safe an investment as you can get and if you have it in a decent bank you can get 3-4% currently, which is more than the market is returning. :)

Most people around here will tell you to keep between 4-8 months of living expenses in a liquid savings or money market account. If you're single and don't have many expenses you can get away with 4 months. But if you're married and have kids etc. you probably want to put more away in case you or your spouse is laid off or you need the money in a true emergency.

I keep 6 months. I'm single, but I live in a relatively expensive part of the country as far as housing goes. So my rent is outrageous. I'm also extremely risk-averse for my age and like to know that money is sitting there if I need it. I sleep better at night.

So the amount is up to you but everyone should definitely have some kind of liquid cash fund for emergencies.

Chad Sexington
May 26, 2005

I think he made a beautiful post and did a great job and he is good.

kys posted:

I am a newbie when it comes to investing, but how can I take advantage of a Roth 401k? It just seems to me like a Roth but with a higher limit. My employer does not offer it, but Im trying to find if that is the only way I can contribute.

Also, I have a lot of money in savings and I like seeing the amount of interest that comes in every month. Is is terrible to leave a lot of money like that sitting around in a taxable account? I don't really need it, I just like to know that it is completely liquid.

It's still liquid enough in a Roth IRA. You can withdraw your contributions whenever you want, it's just the the interest you can't take out without penalty.

lowcrabdiet
Jun 28, 2004
I'm not Steve Nash.
College Slice

Chad Sexington posted:

It's still liquid enough in a Roth IRA. You can withdraw your contributions whenever you want, it's just the the interest you can't take out without penalty.

When you withdraw your contributions from a Roth IRA, can you deposit it back? Or does any deposit go against the yearly limit?

For example, the 2008 contribution limit is $5000. If I withdraw $1000 in July 2008, can I put in $6000 the next month?

Or is it "once it's out, it's out"?

Chad Sexington
May 26, 2005

I think he made a beautiful post and did a great job and he is good.

NashAsh posted:

When you withdraw your contributions from a Roth IRA, can you deposit it back? Or does any deposit go against the yearly limit?

For example, the 2008 contribution limit is $5000. If I withdraw $1000 in July 2008, can I put in $6000 the next month?

Or is it "once it's out, it's out"?

You can only contribute $5000 in a year. If you pull money from past years, it's pulled out for good, I think.

backstage
Sep 23, 2005

I just found out I'll have the option of a Roth 403(b) next year. I don't think I understand all the permutations of traditional vs. Roth, so I'm not sure what to do about it. I think that if my contributions to the Roth are taxed at the same percentage as my withdrawals from the traditional, there is no difference. But my contributions to the Roth right now would be taxed at my current marginal rate - so if my IRA is my only source of income at retirement, even if my marginal rate is the same then, the overall tax rate is lower. Therefore if this is the scenario I expect, I should use the traditional IRA. Is this right, or am I talking out my rear end? I am nowhere close to maxing out my 403(b) contributions right now, so that's not a factor.

mcsuede
Dec 30, 2003

Anyone who has a continuous smile on his face conceals a toughness that is almost frightening.
-Greta Garbo
There's a lot of talk in this thread about the Vanguard targeted retirement funds, but what do you guys think of the American Funds targeted retirement funds? This concerns a RothIRA if that matters.

mcpringles
Jan 26, 2004

You can make 2008 ira contributions until April 15th right? If I contribute funds between January and April 15th and I have not already maxed my 2008 contribution, will it automatically go towards 2008 and not 2009? My account is through Vanguard if that matters.

backstage
Sep 23, 2005

You need to specify the contribution year. Usually there is a checkbox or something for the purpose.

Nysven
Apr 15, 2005
You got a good sarsaparilla?

backstage posted:

I just found out I'll have the option of a Roth 403(b) next year. I don't think I understand all the permutations of traditional vs. Roth, so I'm not sure what to do about it. I think that if my contributions to the Roth are taxed at the same percentage as my withdrawals from the traditional, there is no difference. But my contributions to the Roth right now would be taxed at my current marginal rate - so if my IRA is my only source of income at retirement, even if my marginal rate is the same then, the overall tax rate is lower. Therefore if this is the scenario I expect, I should use the traditional IRA. Is this right, or am I talking out my rear end? I am nowhere close to maxing out my 403(b) contributions right now, so that's not a factor.

Your roth contributions are taxed at your effective rate, not the marginal.

Traditional will be taxed at your effective rate when you withdraw it.

If your effective rate is higher then you expect it to be when you retire, contribute to traditional accounts. If your effective rate is lower then you expect it to be at retirement (any young person pretty much), contribute to a roth.

As a note, if your employer matches you on your roth 403b, your contributions go into the roth but the employer contributions go into a traditional account.

detloc
Oct 13, 2003

Poofter? In the footy stands, [b]maybe[/b], but in the office? I think not!

MisterPants posted:

I posted this in a thread of mine but got no responses so I'll try here.

I am now looking to invest in shares soon. I've done my homework and think I have my strategy worked out but would just like to see if there's anything glaringly obvious that someone more experienced will see that I'm doing wrong.
:words:

Your strategy is fairly similar to mine. I recently borrowed against the equity in my home and bought a bunch of shares, roughly half STW (the ASX200 SPDR) and half MLT (an LIC that doesn't actively follow the index and pays fully franked dividends). I did consider the Vanguard but decided against it due to the higher management fee (MLT's management fee is approx .17%). I also feel more comfortable being able to buy through commsec. I'm only planning to buy shares twice a year, right before the dividend gets paid (lower capital gains tax if I ever sell).

I'm in the dividend re-investment plan for STW and will roll my MLT dividend into the cash I save over the 6-month period, using it to buy new units. The plan is when I'm sick of working I'll be able to switch off the dividend reinvestment and instead use the money to pay my bills, allowing me to savour my freedom to do whatever I want.

At your age it sounds like you'll be well set up by the time you're in your 30s - and you're building a solid asset base you can use to help buy a house without having to pay mortgage insurance.

I'm always keen to talk investing with people, MSN in my profile

filo
Jan 27, 2004

run run run run run
So, I think I made a few stupid newbie investment mistakes, but I'm ready to own up to them and try to fix the situation.

Earlier this year, I invested around $9000 in SEP retirement money from 2007 in the Fidelity Independence Fund (FDFFX). At the time, it was 5-star rated and looked decent (despite high expense ratio .9% -- mistake, I know). Anyway, now, I'm down 50% and I want to know, do I ride this out and hope for some sort of recovery or should I bail from this fund and try to diversify the remaining money?

I'm turning 27 in January so I don't need it anytime soon but I would like to try not to lose it all. I know the market is lovely right now so everyone is down but it seems I got whacked worse than most. Fidelity has a $10k minimum for investing in index funds so I couldn't do that at the time and I'm not sure what I'm eligible for right now with only around $5000 to invest. I would prefer to be a more hands off investor so if there is a good route to go with that in mind, it would probably be best.

Thanks in advance for any advice.

The Noble Nobbler
Jul 14, 2003

Unormal posted:

Here's some reading recommendations:

The Intelligent Asset Allocator
http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393325350/ref=pd_sim_b_23

All About Asset Allocation
http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393325350/ref=pd_sim_b_23


Can you fix these links to not be the random walk book

TraderStav
May 19, 2006

It feels like I was standing my entire life and I just sat down

The Noble Nobbler posted:

Can you fix these links to not be the random walk book

Bonus fact: You can find my name in the acknowledgments of the All about asset allocation book :)

Unormal
Nov 16, 2004

Mod sass? This evening?! But the cakes aren't ready! THE CAKES!
Fun Shoe

The Noble Nobbler posted:

Can you fix these links to not be the random walk book

Fixed my original post.

tehkaewt
Jul 23, 2007
How much in fees does Vanguard take in total in a year? Where could I even find that kind of information?

I mean this in total dollar terms, not average expense ration, which google has told me is 0.2%. I'm guessing it's millions upon millions of dollars, but I'd like to see this written somewhere. Maybe I'll call them and ask?

80k
Jul 3, 2004

careful!

tehkaewt posted:

How much in fees does Vanguard take in total in a year? Where could I even find that kind of information?

I mean this in total dollar terms, not average expense ration, which google has told me is 0.2%. I'm guessing it's millions upon millions of dollars, but I'd like to see this written somewhere. Maybe I'll call them and ask?

Vanguard has over 1 trillion dollars under management. If their average fee is is 0.2%, it would be about 2 billion dollars of management fees. However, the 0.2% average fee may only apply to retail/investor shares. Their institutional, admiral, and ETF shares are often closer to 0.1% in fees, and this makes up a huge amount of their 1 trillion dollars under management. I would guess, they take in somewhere between 1 and 2 billion dollars in fees every year.

smackfu
Jun 7, 2004

tehkaewt posted:

How much in fees does Vanguard take in total in a year? Where could I even find that kind of information?
I'm not sure if they do it overall, or just each fund.

Here is the annual report for the S&P 500 fund (the biggie) for 2007:
http://www.vanguard.com/funds/reports/idx500ar.pdf

Assets: $121 billion
Income (dividends, etc): $2.4 billion
Expenses: $142 million ($114 million management, $23 million marketing)

PIPBoy 2000
Oct 29, 2007
I'd be a lot more helpful if my clues button weren't broken.

80k posted:

I wouldn't touch long-term treasuries... one of the last things I would dump my money in right now. VBMFX is ok, but at today's prices, I would go for short-term investment grade bonds or treasury inflation-protected bonds (TIPS). But do your own research and be aware that despite the extraordinarily high risk premiums for short-term corporates, there is still a lot of risk out there and the ride can be bumpy. TIPS are a very volatile asset class as well but trading at historically very attractive real yields.


Is there a reason that short-term corporates are preferred over intermediate-term or even High Yield Corporates? I know short-term should carry lower risk levels, but it seems like now may be a great time to get in on High Yield corporates with prices what they are now. I'd be going though Vangaurd so I'd be looking at VFICX or VWEHX. Would I be crazy to buy either of these with the idea of riding them out long term?

80k
Jul 3, 2004

careful!

PIPBoy 2000 posted:

Is there a reason that short-term corporates are preferred over intermediate-term or even High Yield Corporates? I know short-term should carry lower risk levels, but it seems like now may be a great time to get in on High Yield corporates with prices what they are now. I'd be going though Vangaurd so I'd be looking at VFICX or VWEHX. Would I be crazy to buy either of these with the idea of riding them out long term?

Junk bond prices are low because the market is pricing in record high defaults or record low recovery rates; or both. Things are downright ugly right now, so don't think it's smooth sailing from here on out. Junk is a bit more attractive than usual right now, because we are in an environment of fallen angels, so much less call risk, so there is admittedly some decent upside potential here. So no, you are not crazy to buy it, but I personally would not go there myself.

I like short-term investment-grade corporates, because there is a huge liquidity premium right now, which is just the type of risk that one should gobble up during a financial crisis, if you are lucky enough to be able to bear such a risk. Credit risk, on the other hand, cannot be taken so lightly during a time of extreme systemic risk.

Also, historically, credit risk has been most rewarded on the short-end of the curve, so short-term investment grade bonds usually offer a very attractive risk-adjusted return.

The key to the game is understanding the risks that you want to bear. With high yield, you are bearing equity-like risks. So why not expose yourself to equities with a portion of your money, and the rest in short-term corporates? That is pretty much my strategy now... try to gain access to extraordinarily high liquidity premiums through TIPS, muni's, CD's, and highest-grade corporates, while keeping a very high standard for credit quality (recognizing the huge risks that are out there today). Any additional risk I can bear, I am investing in stocks, including riskier stuff like emerging markets and small cap stocks.

Rekinom
Jan 26, 2006

~ shady midair gas hustler ~

~ good hair ~

~ colt 45 ~
Speaking of investments, what do you guys think about this idea: the feds are offering a first time homebuyer credit of $7500. It's a refundable credit that has to be repaid over a 15 year period, but it's basically an interest free loan, and you dont have to start making the payments until 2 years after you take it.

So I'm thinking of taking the credit and put it into staggered CD's. USAA has some pretty sweet APY's ranging from 3.4 to 5.0. I figure it's a good way to take some of the risk out of my portfolio which is basically like 95% stocks and 5% bonds right now.

What do you guys think?

backstage
Sep 23, 2005

Does it not gain you more in the long run to apply it to your mortgage principal instead?

Dance McPants
Mar 11, 2006


I just started working this summer and am ready to max out my 2008 and 2009 roth IRAs. I don't have a matching 401k, and since I started in July and am quitting in February I have little income tax so I'm pretty sure this is the right move. I'd just like to see if I'm doing anything terribly wrong before I dive in here.

A little background, I'm 23 and will be leaving for the peace corps in March. I should have enough to max out my 2008 and 2009 IRAs.

I was thinking about going with Scottrade, the motley fool link shows they have pretty low fees. Does anybody have any other recommendations for a broker?

Here's what I was thinking for my portfolio. How does it look? And when I go to the branch office, do I just bring this in and tell them that's what I want my money in? Can I combine my 2008 and 2009 IRAs or do they need to be seperate?

VFINX 25% Vanguard 500 Index Fund
VEXMX 20% Vanguard Extended Market Index Fund
VGTSX 25% Vanguard Total International Stock Market Index
VEIEX 20% Vanguard Emerging Markets Stock Index Fund
VBMFX 10% Vanguard Total Bond Market Index Fund

Unormal
Nov 16, 2004

Mod sass? This evening?! But the cakes aren't ready! THE CAKES!
Fun Shoe

Aggro Craig posted:

I just started working this summer and am ready to max out my 2008 and 2009 roth IRAs. I don't have a matching 401k, and since I started in July and am quitting in February I have little income tax so I'm pretty sure this is the right move. I'd just like to see if I'm doing anything terribly wrong before I dive in here.

A little background, I'm 23 and will be leaving for the peace corps in March. I should have enough to max out my 2008 and 2009 IRAs.

I was thinking about going with Scottrade, the motley fool link shows they have pretty low fees. Does anybody have any other recommendations for a broker?

Here's what I was thinking for my portfolio. How does it look? And when I go to the branch office, do I just bring this in and tell them that's what I want my money in? Can I combine my 2008 and 2009 IRAs or do they need to be seperate?

VFINX 25% Vanguard 500 Index Fund
VEXMX 20% Vanguard Extended Market Index Fund
VGTSX 25% Vanguard Total International Stock Market Index
VEIEX 20% Vanguard Emerging Markets Stock Index Fund
VBMFX 10% Vanguard Total Bond Market Index Fund

Looks generally good; Why not just use Total Stock Market (VTSMX) rather than Index+Extended, you'd get the same exposure at a lower overall expense ratio.

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Don Wrigley
Jun 8, 2006

King O Frod

Unormal posted:

Looks generally good; Why not just use Total Stock Market (VTSMX) rather than Index+Extended, you'd get the same exposure at a lower overall expense ratio.

In addition, no reason to have both Total International AND Emerging Market index, as the total international contains the emerging market. If you want heavier exposure to emerging markets, you should get one fund that covers developed markets and another that covers emerging markets, and allocate accordingly. If you don't want heavier exposure to emerging markets, total international is enough for developed and emerging markets.

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