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Author: LuceLu Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75777  
Subject: Davis NY Venture? Date: 9/18/2003 8:54 AM
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Okay, I'm at my bank opening an account for my son and they are asking me about 529s and we are talking about those and the conversation comes around to retirement and they are suggesting Davis NY Venture (NYVTX and/or NYVBX).

I try and look it up on Morningstar but am confused about the way the information is presented there. To me the first fund (NYVTX) is a load-bearing equity fund (4.75%) he little I know of funds, front-load funds are more expensive to invest in--is that true? It's expense ratio is 0.92. The other fund in that family (NYVBX) does not have a front load but does have a 4% deferred load and it's expense ratio is 1.72. They both seem to do better over the S&P in the long-term.

Since I am new and learning about funds, I am wondering if this is a good fund to roll my orphan 401K into (only about $1500).

My current 401K is in a Vanguard Index Fund. Dh's annuity fund is in a "conservative journey" through Mass Mutual (about $35,000). Asset mix targets are 15-45% equity funds, 55-85% fixed income/short-term bonds. I am 38, dh is 35. Dh also has a pension that he collects pension credits for. I am not sure how many he has collected so far but he has been working for the union for about 10 years.

We own our home. We are also in the process of paying off debt.

My dad (who is a financial planner) suggest a different fund, one that rebalances in reaction to market changes. However, I am inclined to believe that if you are constantly reacting to market changes, your gonna lose alot of money. He is an intelligent man but not exactly FI (not even in the zipcode) and tends to be a bit controlling so I take his advice with a grain of salt.

What do you think?

LuceLu
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Author: gogreengo Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37222 of 75777
Subject: Re: Davis NY Venture? Date: 9/18/2003 12:57 PM
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A couple of comments.

Looks like your target asset mix is very conservative given your age. What are your reasons for being so conservative?

Your dad may be suggesting that you get a fund that is a mix of equity and bonds, and that the fund rebalances that mix when needed? Not sure without knowing what fund it is. In a mutual fund, it's my understanding that you as an investor won't lose money if the fund rebalances. But you would if you, as an individual investor, were trying to time the market and doing a lot of trading of individual stocks (or funds) yourself. It is generally a good idea to rebalance your portfolio once a year or so to make sure you have the mix of equities and bonds that fits your goals (ie 80% equities, 20% bonds).

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Author: jesserivera67 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37223 of 75777
Subject: Re: Davis NY Venture? Date: 9/18/2003 1:20 PM
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"about 529s and we are talking about those and the conversation comes around to retirement and they are suggesting Davis NY Venture (NYVTX and/or NYVBX)"

Not sure if you've opened a 529 or not but one suggestion is to look at
http://www.planforcollegenow.com/. It's the Nebraska plan and one of the most versatile of all 529's have 22 separate funds you can invest in as opposed to the fixed plans which are typically overweighted with large cap funds. More advice on this can be found at:

http://www.fundadvice.com/FEhtml/InvestingBasics/0211b.html

"My current 401K is in a Vanguard Index Fund. Dh's annuity fund is in a "conservative journey" through Mass Mutual (about $35,000). Asset mix targets are 15-45% equity funds, 55-85% fixed income/short-term bonds. I am 38, dh is 35. Dh also has a pension that he collects pension credits for. I am not sure how many he has collected so far but he has been working for the union for about 10 years."

I'm with gogreengo, this is way conservative. I'd recommend at least 70/30 mix or if you really risk averse then 60/40 (equities/bonds). I really don't like annuities but if it's working for you great. I would ask if you are working right now are you maxing out your 401k and perhaps your IRA prior to using the annuity.

If you own your home (IOW, fully paid off) congrats! That's a major milestone and will allow for additional savings for your retirement.

The Davis NY fund is a good fund but why pay the fees? There are plenty of alternatives out there (Vanguard, TIAA-CREF, T.Rowe Price, Fidelity, Schwab, etc.) So I'm in agreement with you there.

IMHO you are doing fairly well but probably want to get a bit more agressive with your investing, BWDIK. ;-)



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Author: LuceLu Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37225 of 75777
Subject: Re: Davis NY Venture? Date: 9/18/2003 4:46 PM
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Thank you for your responses. Dh is in the IBEW and has an annuity fund through them. The reason why he is in such a conservative fund? He has no idea what to put it in and thus has done nothing. I cannot access it to change the allocations until he calls and gets pin. We did plan to attend a informational meeting a Mass Mutual rep. was going to give but it ended up getting cancelled for one reason or another. I know it is something I will have to light a fire under him to get to.

I just started the 401K and will come close to maxing it out this year. Next year I think the limit increases. Since I have consumer debt to pay off, I will most likely keep my contributions at the 10% pretax until the debts are paid. However, I will probably contribute to a 529 or Coverdell minimally as well. I am interested in the Private College 529s.

The fund my dad was suggesting sounds like a decent one though. It is one that automatically rebalances every 3 months in accordance to your risk level. He said he will send me the information.

The front load fund--davis- does sound a bit pricey when there are so many other funds out there without that.

LuceLu

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Author: jesserivera67 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37228 of 75777
Subject: Re: Davis NY Venture? Date: 9/18/2003 6:00 PM
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Good luck lighting that fire ...;-)

Careful with the private 529's. I think you'll be committing to a specific college and the youngster's have a tendency to change their minds...

I also forgot to mention that you might want to think about focusing on your retirement first and then the 529. I know this may sound selfish but I think that you should make sure that you both are secure with your retirement and then focus on the 529. The goal is to avoid the stress of not having saved enough for retirement and not having enough for your child's education. Just a thought.

rebalancing every 3 months seems to aggressive to me but best of luck to you.



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