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Aggro Craig posted: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? I'm not sure how buying funds through Scottrade works, but buying these funds directly from Vanguard requires a $3000 minimum per fund. So, to have 10% in VBMFX you would need $30,000 in your account. You could buy ETF equivalents to get around this, but trading fees can be expensive. With your $10,000 opening deposit you could split VTSMX/VBMFX/VGTSX equally. You could also consider the Vanguard Target Retirement funds. The 2050 fund is roughly 72% US (VTSMX), 10% Bond (VBMFX), 18% International.
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Jan 12, 2009 20:35
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Thanks for the info. I guess I'll roll both my international and domestic into toal funds. One last question, I'm tempted to allocate more towards bonds to make sure I don't get burned. Is this being overly conservative or a good way to mitigate the risk? Here's what I have now: VTSMX 40% Vanguard Total Stock Market Index Fund VGTSX 40% Vanguard Total International Stock Market Index VBMFX 20% Vanguard Total Bond Market Index Fund
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Jan 12, 2009 20:48
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Aggro Craig posted:Thanks for the info. I guess I'll roll both my international and domestic into toal funds. One last question, I'm tempted to allocate more towards bonds to make sure I don't get burned. Is this being overly conservative or a good way to mitigate the risk? VTSMX has declined 35% in the past year, so you would have been rewarded for holding additional bonds for that time period. However, nobody knows what the ideal asset allocation will be going forward, so your 40/40/20 has just as much of a chance of being it as a 33/33/33 split, or a 45/45/10 split. If you are young it kind of doesn't matter. Future contributions are going to make up the bulk of your portfolio. But in the end you should allocate in a way that allows you to sleep at night without worrying about it and without being tempted to move the money around too frequently.
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Jan 12, 2009 21:01
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I have an IRA account and I am trying to move my money out of a high expense mutual fund. I was looking at vanguard no load index tracking funds but they have minimums that prevent me from using them. So now I'm looking at ETFs. Here is the split I am leaning towards, they are all Vanguard, because they seem to have low expenses. 60% VTI- This one seems to follow the S&P500 could someone point me towards one that follows a larger index like the Wilshire 5000 10% BND Total Bond fund US 20% VT - Vanguard world market 10% VWO - Vanguard Emerging Market Does this look alright, I know i'll have more difficulty dollar cost averaging with ETFs but I only contribute once per year so I think this is my best bet. Also my broker gives me $5 trades.
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Jan 12, 2009 22:28
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Bigntasty posted:
VTI follws the total US stock market, not the S&P 500. It is what you're looking for.
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Jan 13, 2009 19:37
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Just got back from Scottrade, apparently they charge $7 for online trades except for mutual funds and index funds, which they charge $17 for. They say ETFs are only $7. Is there any significant difference between ETFs and index funds? Should I just pony up the additional $10 for the index funds? I also figure since I'll be funding my 2008 and 2009 IRAs at the same time, I'll just put all my bond funding and half my stock into 2008, and the other half of my stock and all my world into 2009 so I only pay 4 trading fees instead of 6. 20% Total Bond Market ETF 40% Total Stock Market ETF 40% Total World Market ETF Dance McPants fucked around with this message at 15:21 on Jan 14, 2009 |
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Jan 14, 2009 15:12
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Aggro Craig posted:Just got back from Scottrade, apparently they charge $7 for online trades except for mutual funds and index funds, which they charge $17 for. They say ETFs are only $7. Is there any significant difference between ETFs and index funds? Should I just pony up the additional $10 for the index funds? Why are you considering buying Vanguard funds through Scottrade?
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Jan 14, 2009 15:42
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Aggro Craig posted:Just got back from Scottrade, apparently they charge $7 for online trades except for mutual funds and index funds, which they charge $17 for. They say ETFs are only $7. Is there any significant difference between ETFs and index funds? Should I just pony up the additional $10 for the index funds? Scottrade? Just sign up an account directly with vanguard, you can buy the funds for free. Why pay a brokerage?
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Jan 14, 2009 15:47
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I assumed I needed to, if I can avoid it all the better.
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Jan 14, 2009 15:54
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Aggro Craig posted:I assumed I needed to, if I can avoid it all the better. Nah, just open up an IRA at Vangaurd. Scottrade will just charge you commission to get you the same thing.
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Jan 14, 2009 16:02
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Aggro Craig posted:Is there any significant difference between ETFs and index funds? There was just an article on money.cnn.com about this - http://money.cnn.com/2009/01/06/pf/funds/etf/ETFs_index_funds.moneymag/index.htm?postversion=2009010705
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Jan 14, 2009 16:19
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Don Wrigley posted:Scottrade?
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Jan 14, 2009 17:33
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abagofcheetos posted:Yeah but Vanguard doesn't let you buy their ETFs for free, right? If he wants to go the ETF route Vanguard would probably charge more than $7. That's right. I use Vanguard's brokerage services myself, but I do qualify for reduced commissions (check Vanguard to see what level of service you qualify for) making the fees competitive. But for normal accounts, the fees are pretty high compared to discount brokerages like Scottrade. I like ETF's for their lower fees, trading flexibility (no restrictions), and it's easier to keep track of lots for tax purposes. Going with a discount brokerage, and buying ETF's is a fine way to go, imo.
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Jan 14, 2009 17:47
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Thanks for the advice everyone. Since I'm making 2 lump-sum investments, one for 2008 and one for 2009, I think ETFs are the right way to go - at least going by the fees. That CNN article says the mutual fund fees are 0.15% while the ETFs are 0.07 (Although the Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) has a fee of 0.07 also.) Since I'm maxing out both IRAs at $5k each, that's $8/year of extra fees. So I'll pay $28 up front to avoid an extra $8 in fees a year. Fake edit - I just checked Vanguard, and the fees for the ETFs I was looking at are 0.11 for the bond (BND), 0.07 for the stock (VTI), and 0.25 for the world (VT). That doesn't sound too good. As far as I can tell, the only qualification for reduced commissions is the amount you are investing, and it doesn't look like I have enough to qualify. From what I see I will have to pay a $20 annual fee for each fund account under $10,000, so that's an extra $60/year if I'm not mistaken (does fund account mean my total IRA or each fund I have in it?) Also, do I pay these fees regardless of whether I go through Vanguard directly, or if I go through Scottrade? (At Scottrade I was told there are no annual fees as long as I do everything electronically.) Since the ETFs I'm looking at have similar expense ratios as the index funds I was considering, I think that's what my decision will come down to.
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Jan 14, 2009 19:16
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Aggro Craig posted:AFrom what I see I will have to pay a $20 annual fee for each fund account under $10,000, so that's an extra $60/year if I'm not mistaken (does fund account mean my total IRA or each fund I have in it?) Also, do I pay these fees regardless of whether I go through Vanguard directly, or if I go through Scottrade? The $20 fee is waived if you do electronic delivery of statements, confirmations, and prospectuses. You should do this anyway, as it saves trees, and really... who wants all that mail? So you can ignore that fee. But to answer your question (in case you like receiving a ton of paper mail), it is for every fund, and only if you go through Vanguard directly. It's a custodian fee, so Scottrade will have their own fee schedule.
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Jan 14, 2009 19:22
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Okay, I think I'm mostly straight. Since the fees are pretty close for the index funds and similar ETFs I'm looking at, I think I'm gonna go with index funds directly through Vanguard. Also, if I change my mind and want to trade my funds around, I don't have to worry about accruing fees. The only issue I have now are the minimum investments. Each fund I want to invest in has a $3k minimum, but if I allocate the way I wanted I would only be putting $2k into bonds. Is the $3k minimum for the total IRA or for each fund? I plan on maxing out my 2008 and 2009 IRAs for a total of $10k. Here's what I'm going with: VTSAX 40% Vanguard Total Stock Market Index Fund Admiral Shares (expense ratio: 0.07%) VGTSX 40% Vanguard Total International Stock Market Index (expense ratio: 0.27%) VBMFX 20% Vanguard Total Bond Market Index Fund (expense ratio: 0.19%)
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Jan 14, 2009 21:25
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Aggro Craig posted:Okay, I think I'm mostly straight. Since the fees are pretty close for the index funds and similar ETFs I'm looking at, I think I'm gonna go with index funds directly through Vanguard. Also, if I change my mind and want to trade my funds around, I don't have to worry about accruing fees. The only issue I have now are the minimum investments. Each fund I want to invest in has a $3k minimum, but if I allocate the way I wanted I would only be putting $2k into bonds. Is the $3k minimum for the total IRA or for each fund? I plan on maxing out my 2008 and 2009 IRAs for a total of $10k. It's for each fund. So you might just do 30% in the bond market fund, and 35% in each of total stock and total international.
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Jan 14, 2009 21:28
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80k posted:It's for each fund. So you might just do 30% in the bond market fund, and 35% in each of total stock and total international. To add to that, you can always from there increase contributions to your total stock and total international without increasing your bond fund contributions until you reach your allocation goals. You're young, so you have plenty of time to accomplish this.
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Jan 14, 2009 21:48
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I've been working for a company for about a year and recently they've suddenly asked if I would want to have part of my pay sent to a different account than the Chinese savings account that it was all previously accumulating in. This has prompted me to suddenly realize that I should probably figure out something with a longer view towards the future. My understanding is that there is no 401k or equivalent available to me, and so is what I should be doing basically going to somewhere like Vanguard and opening up a Roth IRA and filling it up? And am I correct in understanding that the benefit of a Roth IRA for me is that I can invest it and then much later if there are gains I can take those gains without tax? Something like a traditional IRA doesn't however make so much sense for me as using it for deductions is of no benefit to me now. Some other background information that might be relevant: I'm 24, US citizen, working and living in China.
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Jan 16, 2009 08:01
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waloo posted:And am I correct in understanding that the benefit of a Roth IRA for me is that I can invest it and then much later if there are gains I can take those gains without tax? Something like a traditional IRA doesn't however make so much sense for me as using it for deductions is of no benefit to me now. Pretty much. Roth's are generally good for younger people who are in a lower tax bracket than they will be when they retire. Traditional are good for years when you need those deductions now to reduce your taxes (i.e. right now I'm in a dual income no kids situation paying rent, and hence have ridiculous taxes, so I'm contributing to a traditional IRA this year).
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Jan 16, 2009 14:52
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I still young and wanted to know what you guys thought of my allocation. I've decided to invest in ETFs because I am getting cheap trades and the expense ratios are low.code:
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Jan 17, 2009 04:19
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I am opening up a ROTH IRA for the first time and I have had the 5k from last year sitting in an ING savings account. If I open the account now, and put that money in, does that count as my 2008 contribution or my 2009 contribution?
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Jan 17, 2009 04:39
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Jan 17, 2009 04:53
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I just opened my Roth IRA with Vanguard and was able to make contributions to both 2008 and 2009.
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Jan 17, 2009 05:22
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Chachikoala posted:I am opening up a ROTH IRA for the first time and I have had the 5k from last year sitting in an ING savings account. If I open the account now, and put that money in, does that count as my 2008 contribution or my 2009 contribution? You can "backdate" your contributions to the previous year as long as you do it before April.
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Jan 17, 2009 07:08
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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. The total stock market doesn't have much weighting to small or mid cap: http://quicktake.morningstar.com/FundNet/Portfolio.aspx?Country=USA&Symbol=VTSMX http://quicktake.morningstar.com/FundNet/Portfolio.aspx?Country=USA&Symbol=Vexmx So I like having the ability to overemphasis SMid caps above their market cap weightings in the Russell 3000.
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Jan 17, 2009 07:19
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Ravarek posted:You can "backdate" your contributions to the previous year as long as you do it before April. Yep, this is a really important point everyone should keep in mind. You can do the same for a traditional IRA as well if you make a good amount and need the tax breaks.
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Jan 17, 2009 17:06
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Alright, starting my Roth IRA this year. I'm not sure if I'm going to contribute the full 5k, but it'll be at least 3k. I'm thinking of starting off with VTWSX, although it's done pretty poorly recently, but so has everything, right? Once I'm able to get another $3k in the IRA with my 2009 contributions, I'm thinking of investing in some bonds. Maybe VBMFX. After that, I'd probably want to have a 70/30 distribution with the stocks to bonds. Maybe in a few years I can reallocate the VTWSX to individual funds for US/international. Or maybe not. I'm 25 and I'd like to be somewhat hands off. Does this sound like a decent plan to start my retirement fund? Should I think about diversifying further once I get more money in the account? Thanks. Edit: Right now I have an account at eTrade. Does it matter if I stick with them, or should I go directly with Vanguard? While etrade charges a one-time fee of $19.99 to buy into a fund, it seems Vanguard charges $20/year per account, and an additional (?) $25/year per IRA. I could be reading that incorrectly. Does it really matter that much, either way? AtomicGarden fucked around with this message at 03:01 on Jan 19, 2009 |
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Jan 19, 2009 02:43
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AtomicGarden posted:Edit: Right now I have an account at eTrade. Does it matter if I stick with them, or should I go directly with Vanguard? While etrade charges a one-time fee of $19.99 to buy into a fund, it seems Vanguard charges $20/year per account, and an additional (?) $25/year per IRA. I could be reading that incorrectly. Does it really matter that much, either way? VG only charges those fees if you're opting for paper statements. I don't pay any fees for my RIRA and regular taxable accounts with Vanguard. When you make an account, you can choose electronic delivery of statements and there shouldn't be a fee for most funds.
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Jan 19, 2009 04:06
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AtomicGarden posted:I'm thinking of starting off with VTWSX, although it's done pretty poorly recently, but so has everything, right? I suggest you read the four pillars of investing book linked in the OP. mcpringles fucked around with this message at 08:38 on Jan 19, 2009 |
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Jan 19, 2009 08:11
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80k: What do you think of a 2-fund/ETF portfolio? I'm thinking VT (Vanguard World Stock ETF) and a bond ETF. I'm trying to minimize the number of funds/ETFs in my portfolio, so I won't be paying so much in transaction fees. Which bond ETF do you think I should go with?
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Jan 20, 2009 01:12
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Ravarek posted:80k: That sounds ok to me. I like TIPS or short-term corporates, for bonds, at the moment, but either the short-term bond index or intermediate-term bond index Vanguard ETF's would be alright too.
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Jan 20, 2009 03:46
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Ravarek posted:80k: You could also just use a TR fund, and then you just have 1!
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Jan 21, 2009 00:03
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Unormal posted:You could also just use a TR fund, and then you just have 1! True, but I don't really like Target Retirement funds. I have yet to see a TR fund that has more than 20% foreign equity exposure.
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Jan 21, 2009 08:57
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I've finally got enough money coming in to start investing in my retirement. I just moved $5k for 2008 into a Vanguard Roth IRA and was hoping for suggestions on a good starting setup. Right now I've got all $5k sitting in Target Retirement 2040 (VFORX) but it seems like the general consensus around here is those aren't the best investment? What would be the best place to start?
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Jan 22, 2009 18:30
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pr0zac posted:I've finally got enough money coming in to start investing in my retirement. I just moved $5k for 2008 into a Vanguard Roth IRA and was hoping for suggestions on a good starting setup. Right now I've got all $5k sitting in Target Retirement 2040 (VFORX) but it seems like the general consensus around here is those aren't the best investment? What would be the best place to start? The best place to start is building an asset allocation plan by reading some of the books in the OP. With a small initial amount of money your hands are tied. You can get exposure to a diversified portfolio of asset classes through the TR fund with a single $3000 minimum, or you can buy ETF equivalents to build your own portfolio. With the ETF route you will need to pay brokerage fees on any trade. With the fund route you cannot influence your asset allocation to any great degree, but it will auto-rebalance and become more conservative over time. Make sure you turn on electronic delivery of statements to avoid the $20/year fee using Vanguard funds.
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Jan 22, 2009 19:25
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pr0zac posted:I've finally got enough money coming in to start investing in my retirement. I just moved $5k for 2008 into a Vanguard Roth IRA and was hoping for suggestions on a good starting setup. Right now I've got all $5k sitting in Target Retirement 2040 (VFORX) but it seems like the general consensus around here is those aren't the best investment? What would be the best place to start? I think the general consensus is favorable towards target retirement funds, because they're such a simple solution. But who cares about general consensus. Take a look at the holdings of the target retirement fund, and see if you like the allocation. Things to watch out for are stock/bond ratio, and domestic/international ratio. I don't like the target retirement funds because I think they encourage too much risk (for the given date that corresponds to your retirement date, and unfortunately that's what most people go for). I also think they have too little international exposure. So they fail on both accounts for me. Also, the "general consensus" on this forum is that if there is anything wrong with the target retirement funds, it is that they are too conservative, which is the complete opposite of how I feel. Again, another reason to avoid general consensus, and decide for yourself what works best for your situation.
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Jan 22, 2009 19:28
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Does it make more send for me to open a Roth IRA and contribute the max every year towards retirement or now in the short term save that money to buy a house when the market eventually stabalizes? I just can't figure out what's best. Currently I have a 401k that I've been doing for 18 months, company matches 100% up to 6%, so that's going ok. But can't figure out what to do next. My worst fear is putting my savings into a Roth IRA and then getting laid off and not having any emergency income.
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Jan 22, 2009 22:46
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Koirhor posted:Does it make more send for me to open a Roth IRA and contribute the max every year towards retirement or now in the short term save that money to buy a house when the market eventually stabalizes? I just can't figure out what's best. Currently I have a 401k that I've been doing for 18 months, company matches 100% up to 6%, so that's going ok. But can't figure out what to do next. My worst fear is putting my savings into a Roth IRA and then getting laid off and not having any emergency income. If that's your worst fear, just save/invest in taxable accounts. Sure, it's less tax efficent (maybe) in the long term, but you have the liquidity to deal with life's 'little' problems and opportunities. Ain't nothing wrong with that! You could consider splitting the difference, and going 50/50 Roth/taxable until you get to a comfortable level of taxable savings.
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Jan 22, 2009 23:11
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I'm looking for opinions my RothIRA. Right now I'm:code:
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Jan 23, 2009 18:13
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