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Investing/Strategies / Retirement Investing
|Subject: Re: Secrets of the 0.2%||Date: 1/22/2012 4:39 PM|
|Author: intercst||Number: 69964 of 74759|
This talk of high fees in 401k plan fund selections has me a little confused. In making my selections, I tried to keep in mind the Fool's advice of keeping any fees/transaction costs under 2%. Should I aim lower than that? My 401k, while new, has done relatively well (at least for this first year), considering all of the volatility. Here's a breakdown of expense ratios
Vanguard Total Stock Market Index........... 0.07%
MainStay Large Cap Growth................... 1.04%
Perkins Mid Cap Value....................... 0.83%
Select Mid Cap Growth (TRP/Frontier)........ 0.86%
Selec Sm Cap Growth Eq (W&R/Wellington)..... 0.99%
Euro-Pacific Growth......................... 0.85%
Each of these is the lowest in expenses of those available in my plan for each sector. The only real dog I have right now is the Euro-Pacific Growth fund (my smallest holding, @ 5%). Unsurprising, given the events in Europe.
Would any of you say that these expenses are out of line?
The average person is paying too much in fees.
I'd compare your overall return vs. putting 100% in the Vanguard Total Stock Market Index. If those other funds on your list have high portfolio turnover, the hidden costs could easily double the 0.83% to 1.04% expense ratio. The hidden costs for the Vanguard fund are only 0.022%
Here's an article I wrote a while back that explains the issue.
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