UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev Thread | Next Thread
Author: MESTIZO Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76079  
Subject: Fidelity Rollover IRA Date: 1/27/2000 2:40 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I rolled a 401k from a former employer into a "Rollover IRA" with Fidelity. They were the original fund managers of the 401k when it existed as a 401k. I have positions in FCNTX, FGRIX, & FGMAX. These are positions that I already had with Fidelity when it was a 401k plan and I just decided to keep those positions for the sake of convenience. The initial Rollover value was approximately 30k in 1997 and it is now close to 70k in 2000. Now to the "novice investor" (which I am), that appears to be a fairly decent rate of return considering I haven't contributed a dime since rolling it into an IRA. My concern however is that I may not be getting the maximum "bang for my buck". Should I be considering other funds available through Fidelity or just hold on to what I have? I am trying to read as much as I can regarding this matter but at times my investment options and considerations seem overwhelming. Any insight would greatly be appreciated. Thanks! - Jeff
Print the post Back To Top
Author: FoolishProf One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18321 of 76079
Subject: Re: Fidelity Rollover IRA Date: 1/27/2000 3:26 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Now to the "novice
investor" (which I am), that appears to be a fairly decent rate of return considering I haven't
contributed a dime since rolling it into an IRA. My concern however is that I may not be getting
the maximum "bang for my buck".


I calculate this to be around 33% annualized return. How much "bang" do you want, anyway? Most non-novices that I know would be delighted.

Persevere!

Print the post Back To Top
Author: blgriffin One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18331 of 76079
Subject: Re: Fidelity Rollover IRA Date: 1/27/2000 5:54 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
"I rolled a 401k from a former employer into a "Rollover IRA" with Fidelity."

I did the same in 1994. Rolled $34K into 3 Fidelity Accounts (the same ones I had in my 401K). But in 1997 I transferred 2 accounts to GROWTH (FDGRX) and kept my CONTA account (FCNTX). At 12/31/99 my balance is $125k thanks to the Growth and Contra. If I would have kept Low Priced Stocks and Growth & Income my balance would be much less.

Print the post Back To Top
Author: OldToad One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18365 of 76079
Subject: Re: Fidelity Rollover IRA Date: 1/28/2000 9:19 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I did just about the same thing, with Fidelity. I kept all my positions in the Fidelity funds initially (FCNTX, FGRIX, and FPURX). The last two didn't have a great year for the last couple of years but I selected them initially for the diversification. When I decided to become a real fool, I converted a piece of my IRA into a trading account (PEG) and since it is in a tax deferred account, I could do the 6 month type of PEG4.
I also re-allocated my funds and put a majority into the Spartan S&P 500 Index equivalent (FSMKX).

The results? FCNTX is still doing fine, FSMKX is doing as well as the Index(almost - not as well as my Vanguard 500 fund though), and the PEG4 is blazing away. I still have long-term hopes for FGRIX and FPURX (looking for a minimum of 10% over the long term).

Well that is my two cents. Hope it gives you some more to think about.

Have a great day!

OldToad

PS. If you didn't notice, Fidelity actually sold your previous positions in your 401k to set up the Rollover IRA. Those sales were followed by equivalent purchases, resulting in your having the same positions in the IRA. It's a minor point but the realities of the tax-deferred world.

Print the post Back To Top
Author: sdanderson Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18370 of 76079
Subject: Re: Fidelity Rollover IRA Date: 1/28/2000 12:16 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
The initial Rollover value was approximately 30k in 1997 and it is now close to 70k in 2000. Now to the "novice investor" (which I am), that appears to be a fairly decent rate of return considering I haven't contributed a dime since rolling it into an IRA. My concern however is that I may not be getting the maximum "bang for my buck". Should I be considering other funds available through Fidelity or just hold on to what I have?

OK, I'm no Peter Lynch, but by my calculations that is a 133% increase in three years. 44% per year.

<soapbox mode on >
Am I the only one that remembers the stock market before the 1980's? 14% interest rates? Are we so spoiled that 44% a year is a bad thing? Does everyone *really* expect this to continue like this forever? 44% per year is a great rate of return, be happy for it.
</soapbox mode off>

<sound of head banging on desk>

I feel better now..thanks. I didn't mean to pick on you...just had to get that off my chest...

Print the post Back To Top
Author: sdanderson Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18373 of 76079
Subject: Re: Fidelity Rollover IRA Date: 1/28/2000 12:32 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I calculate this to be around 33% annualized return.

In my previous rant I over stated the annualized return, How did you arrive at 33%?

Print the post Back To Top
Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18375 of 76079
Subject: Re: Fidelity Rollover IRA Date: 1/28/2000 12:44 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
sdanderson:

<<<<The initial Rollover value was approximately 30k in 1997 and it is now close to 70k in 2000. Now to the "novice investor" (which I am), that appears to be a fairly decent rate of return considering I haven't contributed a dime since rolling it into an IRA. My concern however is that I may not be getting the maximum "bang for my buck". Should I be considering other funds available through Fidelity or just hold on to what I have?>>>>

"OK, I'm no Peter Lynch, but by my calculations that is a 133% increase in three years. 44% per year."

It may be 133% in 3 years, but it is more like 33% (or just under) CAGR, not 44%. For a seat of the pants justification:

Start year 1 - 30,000
End year 1 - 30,000 + 10,000 = 40,000
End year 2 - 40,000 + 13,300 = 53,300
End year 3 - 53,300 + 17,700 = 71,000

IMO, it is important to understand CAGR and how compounding really works. I am also sure that JABoa could recite the formula, or has already discussed it on the Math board.

44% per year would be a substantially larger amount.

Just my $0.02. Regards, JAFO



Print the post Back To Top
Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18379 of 76079
Subject: Re: Fidelity Rollover IRA Date: 1/28/2000 12:52 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
sdanderson:

<<<<I calculate this to be around 33% annualized return.>>>>

"In my previous rant I over stated the annualized return, How did you arrive at 33%?"

See my post 18375 for the rough proof. I usually use either a financial calculator (HP12-c) or some finace programs loaded on my computer at home. My office computer does not the same specific finance programs, so I have previously constructed a simple spreadsheet that lets me play with the variables.

Or you could read the Math board and/or find post by JABoa, who gladly recites and explains the formulas, but exponential formulas give me headaches.

I continue to recommend building amortizaton and compounding spreadsheets in order to really play with the variables and get an understanding of how compounding works.

Just my $0.02. Regards, JAFO


Print the post Back To Top
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev Thread | Next Thread
Advertisement