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Invicta{HOG}, M.D. posted:My portfolio is pretty typical for long-term strategy in early career (mix of growth/value, mix of large/small cap, mix of domestic and international). I don't have any emerging market funds and using the Yahoo! mutual fund tool and searching by morningstar ratings, load, etc. the top funds are either closed or not available through Schwab. I've seen the Vanguard index here, but does anyone have recommendations either for other general emerging markets funds or for one that focuses on India/China/Russia +/- Brazil? It's just a small amount (this year's Roth) but I want to fully diversify! I think Vanguard's Emerging Markets Index fund is a good, cheap fund to use if you want to just add EM. Do you have a reason for not using it? If you're looking for slightly off-the-basic indexes to take a look at you could take a look at GUR, GWX and TRAMX which invest in emerging Europe, intl. small cap and Africa and Middle East respectively. Unormal fucked around with this message at 15:59 on Jul 9, 2008 |
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Jul 9, 2008 15:55
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abagofcheetos posted:For those that advocate index fund portfolios, is there any reason why you wouldn't simply select all 2x or 3x or 100x (I guess they don't exist... yet) bull funds instead of just the regular indexes? For one, the expense ratios and fees of that sort of fund tend to be very high. You're also exposing yourself to alot of downside risk from leverage. Very young index investors might want an equity exposure over 100%, but most people in most situations will want less than 100% equity exposure.
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Jul 10, 2008 03:07
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abagofcheetos posted:The expense ratios may be high but that is just relative, if you are making double return who cares if you are paying a percent or two in expenses. Cause even in a 2x fund, a 50% drop should wipe you totally out if the fund is really leveraged 2x. The market loses 50% pretty frequently, in terms of an investment lifetime. You don't get double the upside without double the downside, regardless of what the prospectus tries to tell you. Either you're leveraged 2:1, or you're not. If you are, a 50% drop is margin calls all the way to 0, baby... or close enough that you're pretty screwed. You can come back from a drop of 50%, but not a drop to 0. I guess what you're missing is that you can't just fluctuate between +2x and -2x. As soon as you can't collateralize your leverage, the bank pulls your other funds in a 'margin call'. So if you go down to -1x or so, you're done, your collateralized safety margin is used up. So if you could just close your eyes and let it ride, it makes sense like you say, but the reality is that noone will continue to lend you the leverage when you're already so underwater that you can't pay it back. Someone else can probably say this in a much simpler way. (also the expense ratios and fees are more like 10-20x what a good broad-index fund would be, not 2x) Unormal fucked around with this message at 04:57 on Jul 10, 2008 |
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Jul 10, 2008 04:45
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alucinor posted:This is a really timely thread, thanks. I'm 35 and just getting started in my first real, good-paying job, so I have no retirement savings apart from a tiny 401K from my previous crappy secretary job. The best thing you can do for yourself is read every link and all the basic books noted here. Investing well is really not hard at all, but it's a different world from most other things you likely do, so you can't really go into it intuitively. You don't need a financial advsior to make smart calls, but you do need to do a bit of basic reading.
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Jul 11, 2008 22:05
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Ravarek posted:I'll be starting a Roth IRA soon for retirement purposes and I want you guys to critique the portfolio I'm thinking of creating: Like you say, high yield bonds tend to correlate with equities; Your original portfolio looks perfectly fine to me. You might consider a slice of REIT exposure as well.
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Jul 14, 2008 02:20
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Ravarek posted:How about.. This looks like a pretty solid allocation to me; simple and diverse. I wouldn't personally worry about a commodity allocation.
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Aug 3, 2008 19:23
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Vehementi posted:Is there a downside to going with a private financial advisor person (not sure what the term is) as opposed to working with someone in your bank? As far as I can see, there isn't, but you guys are more knowledgeable. I'm in Canada if that makes any difference. You should consider reading up on some of the books mentioned in this thread and others. If investing seems complex, it's because someone (an advisor? an unknowledgable family member?) is making it seem more complicated than it really is. You really can do your own investing without paying anyone else a fee. You have more than enough time to just do the research and learn to do it on your own, it will pay dividends (both literally and figuratively). Four Pillars of Investing is a great place to start http://www.amazon.com/Four-Pillars-Investing-Building-Portfolio/dp/0071385290/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1218161023&sr=8-1
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Aug 8, 2008 03:04
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SDMX posted:This thread doesn't seem to have been playing the same kind of name game that the Stock and Analysis thread has. While that's probably because not everyone has access to the same funds, I still thinks it's worthwhile. This thread is about investing, the "Stocks and Analysis" thread is about speculating. If you want to get into serious investing, your allocations should be set for decades, not months. If you're interested, check out some of the book recommendations earlier in the thread to get started. The biggest influence on your eventual net worth will be how much you can save from your profession, period. The split between how much stock and how much fixed income you have will ultimately be the biggest influence on your investment returns on that savings. After that, you can control expenses and your taxes, anything else basically comes down to speculation. Speculation is just fine, but it's a profession, investing is not. If you're interested in investing, figure out your need and ability to shoulder risk. This leads to an allocation to stocks and an allocation to fixed income. Then it's a matter of finding the most diverse and lowest cost ways you have available to you to invest in that percentage of equities and fixed income. Unormal fucked around with this message at 03:23 on Aug 14, 2008 |
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Aug 14, 2008 03:21
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SDMX posted:While I agree with everything above, there's only so far that advice can take a thread. In fact, it's covered in the OP: Speculation is not a purely stock based profession. Speculation includes anything you can buy and sell for profit. The basis of long term investing is basically that you don't know what is going to outperform, and things are more or less efficently priced. Our market has about the same potential up and down, in anything but a very long (15+ years) term. In any case, to answer your question, my two primary holdings are: VTSMX - Vanguard Total Stock Market Index VFWIX - Vanguard FTSE All-World ex-US Index They are very nice, low cost, tax-efficent, diversified equity funds. Tax-efficency wouldn't matter as much to you in a tax deffered account, but they are perfectly good holdings even there.
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Aug 14, 2008 15:40
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enraged_camel posted:What's a good discount broker to start an IRA at? I'd suggest Vanguard.
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Sep 7, 2008 01:26
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var1ety posted:A lot of people like Vanguard because of low fees. When your post-tax, post-inflation real return is 2-3%, the difference between an average ER of 0.2% and 1% or even 0.5% or god forbid 2% is HUGE. Just keep this in mind.
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Sep 8, 2008 02:47
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enraged_camel posted:I have no idea what this means. Expense ratios that look so small you want to ignore them (1.5%) are, in fact, gigantic, because let's say your total real returns after taxes and inflation are something like 5%. 1.5% is a huge chunk of 5%, so even though 1.2 looks a lot like 0.2, There's a whole world of difference between a 0.2 and a 1.2 expense ratio in terms of your final results. To attempt to stop speaking in gobbldeygook: Imagine you could choose between two pretty similar broad-based funds, one with a 0.5% ER and one with a 1.5% ER. If you invested $10k in each and each returned the same 10%, after 30 years of compounding you have: 0.5% ER = $150,132 1.5% ER = $110,884 So by reducing your ER by 1% you saved 40k in final value (about 25% of the .5ER fund's value at the end). Teeny tiny slivers of ER can mount up to huge amounts of money over time (for you or the fund managers, it's totally your choice)
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Sep 14, 2008 08:25
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enraged_camel posted:I see. I personally use Vanguard, for one because it's so inexpensive. ETFs allow you to build a very inexpensive portfolio regardless of brokerage, these days, so it's not the hugest deal. I don't think you can go wrong choosing a low cost brokerage like Vanguard or Fidelity though.
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Sep 15, 2008 00:55
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Idiodyssey posted:I have a question regarding my new retirement account, and since I'm not very competent in financial matters, I couldn't get a clear answer from the OP. If you need the money in a year or less, it dosen't matter if the market is good or bad, it should have 0% exposure to equities. Even in a great long term bull market you can have downturns that last years. You should be in as close to cash as you can be, which means as short-term a set of bonds as you can arrange; or a money market fund if you have it available.
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Sep 15, 2008 20:10
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Idiodyssey posted:I'm not sure I understand the reasoning behind this. As far as I understood it, the percentage of my income directed towards this retirement account is immediately allocated into various funds and exposed to the market. Not all funds are invested in equities. You can read their prospectus's here, or just post your list of available funds, and someone here can sort through and tell you what the best ultra-short vehicle likely is for you.
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Sep 15, 2008 21:21
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Nosre posted:There's a lot of love for VEIEX - Vanguard Emerging Markets Stock Index Fund in this thread, and I'm thinking of getting into it for part of my Roth to get some international exposure. One thing that stands out though is it has a purchase and redemption fee of 0.25%. With all the (justified) talk about minimizing fees and overhead, what's the deal with that? I haven't noticed it on any of the other Vanguard funds. Vanguard's younger funds often have a purchase fee until they bulk out, it's not 'strictly' a load since it's paid to the fund not as a fee. So if you hold long enough you theoretically make it back as people pay into the fund. You'll also sometimes see redemption fees on younger funds, or tax-managed funds. Often these go away as the fund ages and grows.
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Sep 19, 2008 02:37
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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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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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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: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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. Other countries have seen much worse, and nobody knows what the future will hold.
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If anyone's interested (and has the 25k minimum), Vanguard International Explorer just opened again to non-flagship members. It's a nice mid-cap international fund that's been closed for quite awhile.
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Oct 31, 2008 16:26
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The Noble Nobbler posted:Can you fix these links to not be the random walk book Fixed my original post.
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Dec 19, 2008 01:20
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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. 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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Jan 12, 2009 18:45
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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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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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ZeroAX posted:When I started my roth IRA I put all my money into Vanguard's 2050 target retirement fund. My plan was to build my own portfolio with 4 or 5 funds once I got enough money to diversify. Right now I have a little over $7,000 and have not contributed for 2009 yet. Since most of my money was put into the IRA before the market went to crap, my shares aren't worth what they were when I bought them. You can't predict the market. You're buying much more business for your buck today than last year! I'd suggest doing your reading (from OP), and staying the course.
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Feb 5, 2009 21:22
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Fraternite posted:It's been posted a million times already, but this is what I remind myself of every time the market goes up, and why I'm not buying (not to mention the number of people beginning to default on credit cards): This is all very true, but remember that many of these adjust against the prime rate; which is basically at 0%. So it may actually IMPROVE the monthly payments for many people, at least until rates begin to climb. So it's not necessarily as bad as the graph implies.
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Apr 21, 2009 19:40
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filo posted:I have a bunch of money sitting in my fidelity cash reserves right now. When do I throw it into mutual funds? I see the market is down substantially today and although I won't need to retire anytime soon, I'd rather not loose a large chunk of my principle by jumping on the rollercoaster when it seems there might be a lot more ups and downs coming soon. I know this is a ridiculously open-ended question and no one can predict the future but I'd be happy to hear your thoughts. There are ALWAYS more ups and downs coming soon, that's the risk portion of equity investment. If you're not interested in volatile investments, consider bonds.
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Jun 15, 2009 19:54
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The Noble Nobbler posted:Hobologist is right about what he said, but to elaborate a bit more, your longer term bonds will be the most affected by the scenario you're describing, so what you really want is something that is more coincident (in a good way) with inflationary conditions. In my opinion, I'd suggest looking into short-term bonds rather than commodities to hedge against inflation. They at least have some sort of return, and track inflation rather well, historically speaking.
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Jul 11, 2009 20:06
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Happydayz posted:Ok, still working out my long term asset allocation. Right now I'm bullish on stocks over the long term - thinking only 10% total in bonds. Will probably re-balance after the market returns to its previous high. However for now I intend to go big on equities given that they are at historic sale prices. I wouldn't "rebalance" by changing my allocation at any given market point. Instead (and what 'rebalancing' "really" means) go ahead pick a less agressive allocation NOW, and stick with it for the long haul (like, say, 60/40, 50/50 or whatever), and invest that way. If the market goes back to it's previous highs you'll be 70/30 or 80/20, or whatever, but if you keep automatically rebalancing, you've accomplished your goal stated above, but without the emotional component of market timing. Magic of rebalancing. Unormal fucked around with this message at 03:51 on Aug 4, 2009 |
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Aug 4, 2009 03:49
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xgalaxy posted:For someone (age 27) with approx. 10k invested (through Vanguard) should I avoid the emerging markets fund? Right now I just have all of my money in the Target Retirement but was thinking of splitting it up between a few funds. I had heard the emerging markets fund was pretty good, if not a risky, but this was about a year ago. With things the way they are should I avoid this fund? I would suggest remaining in a target retirement fund and doing background reading (I'd start with four pillars from the OP). Ultimately, the most important diversifier is your bond/equity split, not how much of your equities are emerging markets. Don't trouble yourself with other decisions until you understand your bond/equity exposure. It is, by far, the most important risk-level decision you will make.
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Aug 11, 2009 03:17
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quadreb posted:Bonds? Those sound like something for old people. My take is that if you're over 10 years from retirement, there's no call for them. I like venture capital partnerships myself. That's fine, nothing in your terrible post invalidated anything I said. If he has the tolerance for 50, 100, 150, 200% equities, that's fine; but he still needs to come to that conclusion before doing anything, including venture capital partnerships.
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Aug 11, 2009 22:19
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Happydayz posted:how do people feel about REIT's in a long term portfolio? One thing to note about REITs is that they are incredibly tax-inefficent, similar to high-yield bonds. I wouldn't consider investing in them unless I had a sizable amount to allocate to them in a tax-sheltered account (IRA/401k). Another thing to consider is that you'll probably have a *substantial* exposure to real-estate at some point in your life without REITs, when you own a house/condo/etc. Additionally, just owning a broad market portfolio gives you exposure to real-estate, and real-estate owning companies. That said, there are many people that include REITs as a slice of their asset allocation in tax-sheltered accounts.
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Aug 13, 2009 21:56
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Happydayz posted:I could stash my desired 10% REIT allocation into a tax sheltered account and be fine. I'll have a large amount of my allocation in a taxable account that I'll keep in a tax efficient stock index. So the tax issues aren't a worry. If you're really set on REIT exposure, I agree with 80k; take a chunk out of your equity allocation and buy a low-cost REIT fund in a tax-advantaged account.
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Aug 14, 2009 18:53
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Happydayz posted:That's not a bad breakdown. Personally if I was holding equities I would want it to reflect the total global equities market - so it would be around 70% US domestic stocks and 30% international. The total global market capitalization is something like 40 trillion, and the total US market capitalization is something like 20 trillion; so you'd actually want to hold something like 50/50 if you wanted to refelect the total global equities market.
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Oct 12, 2009 14:15
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Ravarek posted:Anyone have any personal recommendations for a broad-based commodity ETF? I've used PCRDX for a few years, though DBC does have a better ER. PCRDX is a TIPS-collateralized fund, and DBC is probably a better pure play. I'm not really much of an expert on commodity funds, though.
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Jan 17, 2010 02:27
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nelson posted:You can lock in low rates in fixed investments or gamble that the stock market and/or other assets aren't in a bubble. That is pretty much always true, whether rates are at 0 or 15%. Those rates are ultimately set by auction based on people's expectation of future returns. So when you're getting 5, 10 or 15% on fixed investments, it's because people expect returns/inflation/whatever to return that much more on risky investments.
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Apr 9, 2012 20:04
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rockcity posted:Last year I started my Roth IRA and put my initial 5k into a T. Rowe Price Target 2050 account. I'm about to make my 5k contribution for the tax year and I'm debating what I want to put it into. 10k doesn't really seem to be enough to really diversify my investments myself because of the minimums required to buy the funds. Should I look into buying another already diversified fund or should I just put another 5k into the T. Rowe Price fund for now? Target retirement accounts are already hugely diversified internally. You should just be able to load all your money into it without issue. The 2050 fund itself holds a broadly diversified set of other funds, in a decent stock/bond ratio for someone targeting 2050 for retirement. http://www3.troweprice.com/fb2/fbkweb/composition.do?ticker=TRRMX http://individual.troweprice.com/staticFiles/gcFiles/pdf/phrplq1.pdf
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Apr 10, 2012 15:10
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| # ¿ Apr 28, 2024 19:47 |
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rockcity posted:Yeah, I guess my question was more of should I move the just over 5k from that in addition to the new 5k and try to diversify myself or continue to add to the T. Rowe 2050 until I have more available to do my own diversifying. There's not really a compelling reason to do your own diversification unless you're talking about hundreds of thousands of dollars, and even then it's of marginal value, and you'd still be fine 100% in a TR fund, and even then it's more for personal control over rebalancing, and other marginal activities like tax-loss harvesting, than additional diversification. You're completely and utterly diversified even though you own only a single fund. Successful investing is incredibly boring, seek thrill elsewhere. Unormal fucked around with this message at 18:06 on Apr 10, 2012 |
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Apr 10, 2012 18:01
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