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Febtober posted:I think this is a thread worthy of bumping... If you're already invested in VTSMX, continue to invest there. First of all, this index is weighted 80% to the S&P 500 as it stands, you wouldn't be getting any more diversification by weighting your assets more into large caps. The total stock market tends to slightly outperform the S&P 500 over long stretches due to the added risk of mid and small cap stocks...however the weighting is slight enough that the total risk of the fund isn't huge. Just keep on contributing to your total stock market fund. For more diversity, contribute to VGTSX in some percentage depending on age, and I would also take some bond holdings...the easiest way being Vanguard's Total Bond Market Fund. Even if you're not risk averse at all, it's good to have at least a 10-15% stake in bonds, it will slightly minimize risk without taking a large hit to your reward with such a low percentage holding.
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Aug 25, 2008 16:24
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The John Bull posted:Regardless, I don't plan on adjusting my stock allocation until the market hits mid 5-6000 range, since I think we're going to get there before it's all over. The whole idea behind allocation is leaving it the same, in good times and bad, depending on your risk, age, etc. It makes sense in theory to have more (percentage) exposure to stocks when you think things will be good and less when things are bad, but this is market timing and usually doesn't work out in the investor's favor over the long haul. You could lose out on big returns if you're wrong over the next 2-3 years. The whole point of allocation is that you ARE increasing your exposure to stocks when they are cheaper (in real terms, not percentage) and the same with other assets. You shouldn't change your asset allocation on a whim for long term investing.
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Oct 31, 2008 18:12
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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. 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.
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Dec 9, 2008 21:20
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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.
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Dec 9, 2008 22:39
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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.
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Dec 10, 2008 12:52
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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. 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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Jan 12, 2009 19:26
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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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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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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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Killmaster posted:
You're 23. Roll over to a traditional ira, and then leave that be and start a roth ira. There's no reason to convert because of the tax implications, but there's definitely reason to start contributing to a roth. Also, you wouldn't be buying high and selling low; you wouldn't be selling at all. Once you roll over into an IRA, just repurchase the shares immediately (they'll handle that for you actually, the process for rolling over 401k to IRA has become almost seamless).
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May 8, 2009 14:55
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extra innings lovin posted:I will be making a sizeable chunk of cash doing an internship this summer. Budgeting out for the next year leaves an extra couple thousand dollars that will just be sitting around. Would there be any reason not to pick out a solid, stable-growth company with a convenient share-purchasing plan (I like MCD, personally) and put the money there (while planning to continue adding to the investment)? Or should I just wait until I start a Roth in a few years and start buying shares then? Why don't you start a Roth now and buy the MCD shares in it?
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May 8, 2009 20:55
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El Kabong posted:Any advice? I kinda got skipped over last page and I hope it wasn't because there is no good answer My advice to you is to head over to the trading thread, this thread is for long term investing.
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May 12, 2009 17:36
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El Kabong posted:I take it your implying that the longterm investor stays in no matter how outrageous his short-term gains seem to be? I'm saying a long term investor picks an allocation and sticks to it. If that huge jump made your allocation out of whack, then you sell enough to rebalance, though I wouldn't recommend rebalancing on a daily/monthly basis, even inside the confines of an IRA.
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May 13, 2009 02:13
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Sancho posted:I would have to disagree. Asset allocation research goes back to the early 20th century and the average annual return for stocks has been higher than bonds even well before the 80's. Likewise, I feel that the idea you shouldn't own more stocks at an early age is a byproduct of the 1998 - 2009 bear market making everyone gush about safety. See how anything can be spinned?
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Jul 8, 2009 14:31
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loud-bob posted:I'm 27. I stopped investing in my 401k (which is matched) in Oct 08. I just started doing 5% again with a salary around 80k + 300/m in savings. In total it comes out to about 11% pre-tax to savings. I'm going to find (I have a feeling), after looking at my budget, that I have extra money to save. What should I do with it? I'm pretty behind on my retirement savings (around 8k all in 401k/Roth IRA). I'm thinking about buying stocks with it. My thinking is I have disposable income and the market is close to bottoming out but I am just learning about trading. I'd like to take a more active role in growing the extra money though. Any suggestions? This is the long-term thread, don't worry about trading. You should've been saving money for retirement, especially with the match, for a long time now--at that young age with that decent a salary, having only 8K for retirement tells me you've been on the wrong path. Look at it this way--you think the market is "bottoming out"...and yet the S&P 500 is about 350 points or over 50% higher than its low for the year; ie the market may have bottomed out long ago and you may have missed it. Timing the market is a fool's game and nobody's going to pat you on the back for stopping your contributions in october 08 (this was a horrible move by the way, you bought stocks expensive and then refused to buy them cheap). Start playing catch up, contribute enough to get the match in your 401k, then max out your IRA, and anything left over start contributing more to your 401k. Whether or not you want stock mutual funds or some other allocation is up to you based on your risk profile, the main thing you have to consider now is to start saving.
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Aug 6, 2009 14:16
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quadreb posted:He said 80k. He's well ahead of the curve for most. loud-bob posted:I'm pretty behind on my retirement savings (around 8k all in 401k/Roth IRA). ?
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Aug 6, 2009 15:18
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quadreb posted:That's why I go for much higher returns on very risky ventures. The bonus of getting to hear a full business proposal and have the business plan laid out for you when you're a member of a group serving as the principal investor in a project beats the hell out of mutual funds if you can pick the right projects. Like recently, I helped fund exploratory oil drilling in Texas on a 2 year contract and make 120% returns on my investment. However, I've also funded similar projects that lost everything. This is the long-term investing thread, not the venture capital thread. And you're quoting someone who said he has $10,000.
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Aug 11, 2009 14:10
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HomerCSM posted:Since my employer matches 50% on 6% max on the 401(k) does that mean I have to put 6% in regular after-tax or will my first 6% in my employee roth be matched? Ask to make sure, but most likely your roth contribution will be matched with a pre-tax match.
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Oct 14, 2009 18:56
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CobiWann posted:I started with my current company in 2005 at the age of 28, and have been investing into my 401(k) at 12%, which they fully match. Man, what company matches up to 20% of your salary in 401k contributions? That is by far the best match I've ever heard of, heck that's better than a traditional pension plan.
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Oct 22, 2009 14:52
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80k posted:It's not an employer option. IRS rules require company matching to be pre-tax. IIRC that is. I've been contributing to a Roth for years now, and I know the matching contributions are pre-tax. I also have been contributing to a Roth IRA, but have no traditional IRA. Does this mean if/when I roll over my 401k, I'll have to roll my contributions into the Roth IRA, and roll the company's contributions into a (new) traditional IRA? I've been putting off this question for a long time...just would be good to know.
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Nov 25, 2009 15:27
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Giraffe posted:Cornholio's thread got me thinking about my own 401(k) investment lineup, which I chose a bit randomly. I'm 36, with a medium risk tolerance -- I'm all in stocks, but would like a fair amount of diversification, as I value consistent long-term return over trying to catch the big jumps. First of all, you say you profile as medium-risk, but 100% stock funds is very high risk. At your age and risk profile, you should probably have at least 30-40% in bond funds. Second, I'd make a few changes to your current allocation. I don't see why you'd hold both the large-cap growth fund and the S&P 500 fund, there's bigtime overlap (S&P 500 = Large cap growth + Large cap value). If I were you, I'd just get rid of the growth and stick with the index; lower fees and higher diversification. Finally, you're very heavy in US as opposed to international exposure--I would shift that a bit.
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Jan 8, 2010 16:16
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Giraffe posted:That moves me from 100% stocks down to 75%, a third of which will be in international instead of a fifth. The US stocks are now more balanced between the S&P 500 and mid- and small-cap. Too much so? I might tip your US holdings more in favor of S&P 500 than mid and small cap, as the S&P 500 makes up something like 75% of the US market; for perfect diversification, your portfolio should mimic this type of discrepancy (try your best to model it after the vanguard total stock market index holdings, it's unfortunate that 401k plans tend to give s&p index rather than total stock market index as a choice in general). This will give you better diversity and lower risk.
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Jan 8, 2010 20:05
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abagofcheetos posted:Besides, even though CGMFX underperformed the last two years it still ended the decade providing over 200% greater returns than VIGRX (and there was a time when it was near 500%). Don't you see the inherent problem with this? When it was providing these great returns, nobody knew about it, only after an actively managed fund provides these big returns do people start jumping on the bandwagon...and that's when they could stop providing the big returns. Do you think a decade ago, Cramer was on TV screaming to get in on CGMFX? Only after the fact.
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Jan 15, 2010 18:03
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abagofcheetos posted:Ok I agree with all of this but how does any of it make CGMFX any less of a fund? Chasing performance is always a losing venture but I'm not advocating that. To me it doesn't make it any more or less of a fund. Think about it this way, though I don't 100% agree with this assessment. If there are 10,000 large-cap blend mutual funds, they will on average match the fund minus expense fees on any given year. Of course there will be deviation from this mean, they won't all perform exactly the same, some better some worse. What if one performs better for 2 years in a row? 5 years? 10 years? Take it another way...what if you're flipping a coin, and one of 10,000 people flipping a coin. What if you flipped 2 heads in a row? 5 heads? 10 heads? The point is, the one that outperforms over a 10-year stretch is going to be the one you hear about, but at the beginning there was no way of knowing about it. This chalks up a lot to luck--and as 80k said before, deploying certain strategies could make a fund outperform for a reason. But whether by luck or skill, past performance is no indicator for future success and since it's already over and done with, is really not even worth taking into account.
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Jan 15, 2010 18:18
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Orgasmo posted:I want to create some kind of savings receptacle for my newborn. All of his birthday money and occasional injections from mom n dad would go in as well. I'm looking for something he can pull money out of when he's an adult or whenever I sign off ownership of the account to him. Or an account I can liquidate when he wants to do something with the money. What you're describing is a trust fund, but I would open a 529 college savings plan. All gains are tax free and it's the best way to start saving for college. Trust funds are for rich people.
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Jan 28, 2010 17:50
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dv6speed posted:
And dividends are paid out quarterly, meaning by letting the dividends reinvest you are averaging out the cost by buying at 4 different times throughout the year. Anything more than this is trying to time the market. No offense dv6, but you are giving some awful advice...this is the LONG-TERM Investing and Retirement thread.
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Mar 3, 2010 15:14
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ShaneB posted:Is there any real reason for me to self-diversify in my Roth, instead of just buying a target retirement fund? Should I fear putting all my retirement money from my work retirement accounts and my roth into the same target retirement fund? I currently have the vast majority of my money in FFFGX, relying on its internal diversification to avoid some kind of catastrophic loss. The real reason is if you don't like the allocation of the target retirement accounts, which many don't. No, why would you "fear" putting your ira and 401k in the same target retirement fund? You'll just have a consistent allocation.
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Mar 11, 2010 04:50
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I'd like to meet person who has the work ethic to save $8 million (in an IRA, lol) but is ready to retire at 50.
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Apr 19, 2010 14:14
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