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Author: SaraW946 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76395  
Subject: Retirement planning Date: 4/8/2013 11:47 AM
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I'm afraid this is going to be a long post, but I have several questions on retirement planning for which I would very much appreciate your input. In the end, of course, I am responsible for making a decision and buying whatever funds I choose, so I will under no circumstances consider any advice giver as responsible for any mishaps. :) Also: please note that I am a foreigner who now lives in the US permanently, and I have been seriously delving into the American retirement systems and strategies for the last year or so. For this reason, things that might seem evident to you, are not necessarily so to me.


At the moment, I have a regular portable state retirement plan in Illinois, one Traditional IRA, and one 403b plan, besides by brokerage account that includes stocks and mutual funds. I self-manage all but the Illinois state plan. Unfortunately I cannot transfer nor roll-over a European state retirement fund I have which will sadly give me very little in terms of pension when the time comes. As things look right now, I am looking at a 30-year career and active investing for retirement, provided all will go well with me in terms of health. :)


My Traditional IRA, 403b, and brokerage accounts are all with Fidelity. I contribute the maximum allowed to my IRA and about half of what I am allowed to my 403b. The questions I have:

1) My 403b, which I started about a year ago, is invested in two Fidelity mutual funds: Fidelity® Equity-Income Fund - Class K (FEIKX) and Fidelity® Low-Priced Stock Fund - Class K (FLPKX). So far I've been very happy with its returns. Do you guys believe it would be a good idea to continue contributing to those two sole funds without adding a third or changing? And under what circumstances does one change funds?

2) My Traditional IRA, which includes contributions from three years, was initially managed by a very bad financial advisor, has grown slightly. It is invested in three funds, the first two were chosen by the financial advisor, the third one by me. These are: Franklin Growth Fund Class A (FKGRX) which is horrible; FRANKLIN RISING DIVIDENDS CLASS A (FRDPX) which is OKish but I don't like it either; and Fidelity Spartan Total Market Index Fund (FSTMX) which I chose and like so far.

I am thinking of replacing FRANKLIN RISING DIVIDENDS CLASS A (FRDPX) with Vanguard Dividend Growth Fund (VDIGX), and am considering the LifeStrategy Growth Fund (VASGX) to replace FRANKLIN RISING DIVIDENDS CLASS A (FRDPX).

3) Last, but not least, through my brokerage account, I have also bought Fidelity Contrafund (FCNTX) and Vanguard Vanguard Total Stock Market Index Fund Investor Shares (VTSMX). While I've been regularly adding money to Contrafund every month with no issues, I discovered today that VTSMX has a $75 fee every time I buy shares! Naive, you'll argue, but as I said, this is all new to me as a foreigner.


Do you have any advice on strategy? I like VTSMX, but I don't want to be paying such a steep fee every month, so would it be a better solution if I open an account with Vanguard and buy the fund through them with no fee? I still need to find out if there is a minimum I need to invest so that I can forfeit the fee which is possible.

Thanks for taking the time to read all that and I apologize if it's a little confusing. I would be very grateful for any input or advice on my options.
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Author: gdett2 Big gold star, 5000 posts Old School Fool Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71799 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 12:02 PM
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SaraW946,

If you have access to RYR (from your SA subscription) you might look through the various fund resources there.

If you are not completely sold on managed funds, you might look at some ETFs instead. I own some (listed on my profile page). ETFs have lower fees and trade like stock without any minimum purchase amounts. Some brokerage houses offer lower trade fees for their own ETFs. Fidelity might so it is worth a check.

Gene

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Author: ShiningDawn Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71801 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 12:32 PM
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Last, but not least, through my brokerage account, I have also bought Fidelity Contrafund (FCNTX) and Vanguard Vanguard Total Stock Market Index Fund Investor Shares (VTSMX). While I've been regularly adding money to Contrafund every month with no issues, I discovered today that VTSMX has a $75 fee every time I buy shares! Naive, you'll argue, but as I said, this is all new to me as a foreigner.

Who is your broker? VTSMX does not have a purchase fee when purchased directly from Vanguard (https://personal.vanguard.com/us/funds/snapshot?FundId=0085&...) . My best guess is your broker charges a fee when not buying their preferred funds. If you plan on staying with this broker you should probably look at similar total stock market index funds with no purchase fee (and low expenses).

I follow a pretty simple asset allocation of index funds - similar to one of the allocations listed here: http://www.bogleheads.org/wiki/Asset_Allocation

My IRAs (Roth & Rollover) are with Vanguard so I purchase Vanguard index funds (Total Stock market, Total Bond market, Total International Stock market, etc.) for those accounts. My 401k is with Fidelity and I have limited options there so most of my contributions go to Fidelity Spartan 500.

I am somewhat limited in what I am allowed to invest in (due to my job) so I stick to low fee, broad index funds. Nothing "sexy" in terms of investing, but I won't be making anyone rich off of fees & expenses either.

I suggest you take a close look at all of the information available to you (prospectuses, etc.) and make sure you understand all fees and loads before deciding what to do. Some funds have redemption fees if you sell too soon after you purchase. You can look up funds online to get their prospectus if your broker does not provide access to them directly.

I'm sure others will weigh in soon.

Dawn

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Author: synchronicityII Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71803 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 12:41 PM
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VTSMX does not have a purchase fee when purchased directly from Vanguard ...My IRAs (Roth & Rollover) are with Vanguard so I purchase Vanguard index funds (Total Stock market, Total Bond market, Total International Stock market, etc.) for those accounts.

^^ What she said. My Rollover IRA and our Roths (wife and I both have Roths) are invested with Vanguard in a manner that appears similar to what Dawn described. We're in the "Admiral" funds so our fees are even lower than in the "regular" index funds, which is to say they're really darn low.

If you're going to buy Vanguard funds, you might as well buy them directly through Vanguard. There are other companies that also offer very low fee index funds (the Fidelity Spartan funds have been mentioned a few times), so they're an option if for whatever you're constrained from buying from Vanguard directly.

Obviously there's the normal discussions about volatility and asset allocation and such and how to mix equity holdings with bond holdings or whatnot. Dawn touched on that in referencing Vanguard's Total Bond market index fund. I'm sure there are other companies with similar types of funds to that if desired.

-synchronicity

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Author: sykesix Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71806 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 1:07 PM
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3) Last, but not least, through my brokerage account, I have also bought Fidelity Contrafund (FCNTX) and Vanguard Vanguard Total Stock Market Index Fund Investor Shares (VTSMX). While I've been regularly adding money to Contrafund every month with no issues, I discovered today that VTSMX has a $75 fee every time I buy shares! Naive, you'll argue, but as I said, this is all new to me as a foreigner.

If you buy non-Fidelity funds from Fidelity they will charge you a fee. That's where the $75 came from. However, FSTMX which you mentioned before is basically the same thing as VTSMX. So just stick with the FSTMX and you'll be fine.

My experience with Franklin Funds in general is that they have fairly high fees associated with them. Since the fees benefit them, not you, definitely replace those funds with something cheaper. But note that since your account is with Fidelity, you should probably try to stick with an equivalent Fidelity fund or one of their no commission ETFs (of which they have quite a few).

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Author: SaraW946 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71807 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 1:10 PM
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Many thanks to all of you who offered advice. :) I don't have a broker but manage all my funds through Fidelity, so I suppose the $75 fee is charged by Fidelity?

If I open a Vanguard account, could I transfer my Vanguard investments without penalty? I would prefer to keep the Vanguard mutual fund (Total Market Index), so I presume that if I transfer it to Vanguard as in opening a brokerage account there, they will allow it without any penalties? I am also thinking of turning it into its Admiral Shares version and just keep it there.

A couple of questions: how do I educate myself best on ETFs? Do I need to trade them actively or just let them alone most of the time? Last, but not least, since interests are low, are Total Bond Market index funds a good idea? In truth, both Vanguard and Fidelity's pension calculators advise me to take those.

A last question: is it worth investing in mutual funds outside a pension plan? If not, I will then begin to transfer those mutual funds to my IRA as of 2014, I suppose. If I do, would I still be paying a fee if I invest in Vanguard's funds, say, in the context of an IRA or 403b?

Again, I feel very obliged for your help. :)

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Author: sykesix Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71808 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 1:14 PM
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^^ What she said. My Rollover IRA and our Roths (wife and I both have Roths) are invested with Vanguard in a manner that appears similar to what Dawn described. We're in the "Admiral" funds so our fees are even lower than in the "regular" index funds, which is to say they're really darn low.

As an aside, I had a regular index fund with Vanguard, which they automatically converted to Admiral shares when the account got big enough. Which I thought was awful nice of them.

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Author: sykesix Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71811 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 1:57 PM
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A couple of questions: how do I educate myself best on ETFs? Do I need to trade them actively or just let them alone most of the time? Last, but not least, since interests are low, are Total Bond Market index funds a good idea? In truth, both Vanguard and Fidelity's pension calculators advise me to take those.

A last question: is it worth investing in mutual funds outside a pension plan? If not, I will then begin to transfer those mutual funds to my IRA as of 2014, I suppose. If I do, would I still be paying a fee if I invest in Vanguard's funds, say, in the context of an IRA or 403b?


Those are difficult questions to answer. I have accounts at both Fidelity and Vanguard (I'm not sure why, it just happened that way), and they are pretty equivalent. You can go to either website and find out all you need to know about ETFs and such. One thing I like about Fidelity is that they offer a Fidelity Visa card that rebates 2% of all purchases back into a linked Fidelity account. We run as many household purchases as possible on the card, then I use the proceeds to buy no commission ETFs. It is not a ton of money, but it is better than a stick in the eye. It comes out to a few hundred bucks a year that we wouldn't have otherwise.

The issue of where to put your money (inside the IRA or 403b vs. brokerage account) is hotly debated and I see a clear answer. But the main issues go like this: Your 403b and traditional IRA contributions give you a tax break right now. Then the proceeds are taxed as ordinary income. The traditional brokerage account gives you no tax break right now, but the proceeds are taxed as capital gains, and capital gains tax rates are typically lower than ordinary income tax rates. There are also rules about IRA distributions, which make them less flexible.

With me so far? :) My personal view is to go ahead and max the IRA and 403b and get the tax break right now, for the simple reason there is now way to know what your tax rate will be the future. Bird in the hand and all that. Not everyone agrees with that viewpoint.

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Author: sykesix Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71812 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 1:58 PM
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OCD: hotly debated and I see a clear answer.

Should read hotly debated and I don't see a clear answer.

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Author: SaraW946 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71816 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 2:42 PM
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Thanks again. :) I actually max the Traditional IRA but unfortunately cannot do the same with the 403b. I created the brokerage account in order to invest a chunk of my savings in various stages of my life, i.e. when I moved here and brought my assets and then whatever I save every month. As I put away more money and also get raises, I will be looking into putting away more in the 403b, always depending on the circumstances.

Great idea about the Fidelity Visa! My regular bank card also gives me money back, but it's a great thing to have a second one as well.

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Author: ShiningDawn Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71817 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 2:58 PM
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Last, but not least, since interests are low, are Total Bond Market index funds a good idea? In truth, both Vanguard and Fidelity's pension calculators advise me to take those.

I personally don't look to actively manage my investments. Others choose to do different things. There are lots of boards that have great information on a variety of investing methods.

Actively managing your own funds can take a lot of time and effort. I'm sure there are people who do it well, but there are also people who are a lot worse off actively managing versus passivly managing.

It sounds like you are relatively new to investing. You may want to set up a passive approach to start with your retirement money and have a fake account set up where you can play around with different ideas to see how you do with active management before jumping into it with real money.

Basically I came up with my personal target asset allocation and preferred funds. I then invest in those funds in the appropriate allocation percentage and rebalance 3-4 times a year to get back to my target allocation. My allocation includes a mix of stocks & bonds. When I rebalance my portfolio I am forced to sell things that have gained in value and buy things that have declined in value.

As I mentioned before, I have severe restrictions on what I can invest in, so I don't look to invest in much other than index funds. If I invest in an individual stock there is the chance that I would be forced to sell it before I wanted to (or at an inopportune time) for reasons beyond my control. Since this is a risk I can't control for I choose not to invest in individual stocks.

There are going to be times when stocks outperform bonds. There are times that bonds will outperform stocks. I don't have a crystal ball - otherwise I would have bought a bunch of 5 year CD's back when interest rates were around 5% instead of keeping my cash liquid in money markets paying just under 5% :) At the time, it didn't seem to make sense to tie up my money in a CD when money markets were paying very similar interest rates.

Good luck!
Dawn

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Author: SaraW946 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71818 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 3:04 PM
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Yes, I agree with the initial passive approach. My problem was that I allowed a financial advisor, recommended by good friends, to manage my IRA, but I learned my lesson. I do have stocks and they are doing well, but I am more of a conservative investor, so I won't speculate.

Where can I get a fake account to simulate investments in order to learn how to do this?

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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71819 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 3:04 PM
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I have a regular portable state retirement plan in Illinois...

What do you mean by portable? And what are your options with this account? Not investment wise, but what can you do with it after you are no longer employed by the state?

My main reason for asking, Illinois and California are among the worst states financially. Not to scare you, but I can easily see a scenario where they default or go bankrupt and who knows what will happen with those retirement plans.

Years ago I was considered a state employe during residency training. Was able to set aside some money through their system. But as soon as I was done, I was able to transfer the money into a private account and out of the states hands. I would look to see if that is an option for you as well.

JLC

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Author: sykesix Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71820 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 3:04 PM
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I personally don't look to actively manage my investments. Others choose to do different things. There are lots of boards that have great information on a variety of investing methods...

...Basically I came up with my personal target asset allocation and preferred funds. I then invest in those funds in the appropriate allocation percentage and rebalance 3-4 times a year to get back to my target allocation. My allocation includes a mix of stocks & bonds. When I rebalance my portfolio I am forced to sell things that have gained in value and buy things that have declined in value.


If you don't like to actively manage your investments, Fidelity and others have blended funds like the FFNOX, which is three stock funds and one bond fund. You just fire and forget and they do the re-balancing for you.

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Author: ShiningDawn Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71821 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 3:12 PM
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You can set up various portfolios at Yahoo! Finance or Google Finance.

You may be able to do something similar with the Fool's CAPs, but I am uncertain as I don't use that product.

Dawn

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Author: ShiningDawn Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71822 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 3:22 PM
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Fidelity and others have blended funds like the FFNOX, which is three stock funds and one bond fund. You just fire and forget and they do the re-balancing for you.

I don't mind rebalancing a few times a year to save approximately 50% on expenses. The comparable Vanguard TR fund has an expense ratio of 0.18% while the admiral shares of the other funds I hold are all less than that (0.06%, 0.10% and 0.16%). While my portfolio is not huge and the differences in expenses are not super significant, one day I hope it will be :)

Of course, I have instructions for my husband, in the event of my death, to have all the investments switched to the target retirement funds because he won't rebalance anything. Investing is definitely about knowing yourself and your own risk tolerances/willingness to monitor/etc.

Dawn

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Author: TwoCybers Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71823 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 3:30 PM
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The $75 fee is a fee to purchase the mutual fund. Vanguard refuses to participate in mutual purchase fee agreement with other mutual funds. No mutual fund company charges such a fee for their own funds.

If you choose to stay at Fidelity, my suggestion would be limit your VTSMX purchases to one or at most two a year. If you are insistent on not having funds in cash, make a purchase of something similar in the Fidelity group of funds, sell that periodically and make your single VTSMX purchase.

Perhaps you are confusing fund quality with return. Your statement that FKGRX is horrible is contrary to the Morningstar rating. Morningstar's rating of FKGRX is 3 stars. Certainly a large cap US stock fund (think S&P 500) is reasonable, if not important for most portfolios. This fund returned over 9% for the last three years.

Gordon
Atlanta

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Author: SaraW946 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71825 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 4:02 PM
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I'm really grateful to you guys for your help! :) I am responding to a few comments:

1) State of Illinois retirement plan: yes, I know Illinois and California are the worst in the country. When I moved to Illinois about 5 years ago, there were three available options:

a) Traditional Retirement Plan: this is obviously for masochists. Once you have chosen that, you are screwed. You cannot take anything out of it at any point before retirement and depend on the state's economy and whims. I obviously stayed away from it.

b) Portable Retirement Plan: this one is closer to what I knew from Europe, i.e. guaranteed retirement, but you definitely need the supplemental plans. If an Illinois employee leaves before 5 years, one can take along and transfer only one's contributions, but not the state's. After 5 years of employment, and assuming you get a position outside Illinois, which I would very much like to do at this point, you can take along both yours and the state's contributions and transfer them elsewhere.

Unfortunately, what they didn't tell me when they told me about the options I had, was that I wouldn't see the state contributions before retirement, so while I see my money with a 7-7.5% interest increase per year after 2009 (in 2009 they gave us 0% due to the economic downturn), I don't see what the state has contributed, although I know it's around 7% of my salary. Also unfortunately, I may not switch accounts and manage my money myself any more because this is a once in a lifetime decision, assuming one stays in Illinois of course.

c) Self-managed portfolio: that's where you get both the state's contributions and yours and go to either Fidelity or TIAA-CREF and buy mutual funds. As I said, at the time I had no clue about investing in the US, and, from what I am told, I was wise not to self-manage, because all my colleagues and friends lost more than 30% of everything they had due to the financial crisis! On the other hand, I maintained my balance. Of course, there is the state of Illinois mess now.

The state of Illinois is currently trying to change its pension system, and I hear that people would very much welcome offering us the opportunity to take our money and self-manage it. It would be a blessing if this happened because I will obviously opt to manage my money myself. However, until they actually do this, I cannot do anything, unless of course I try to talk to one of the Federal Senators about being deceived regarding the state contributions I was told would be there in my account but are not. If all else fails, I can complain officially to the US Department of State, under whose protection I still am, but I doubt I'll be able to accomplish anything in any case.



2) FKRGX: yes, you are right, it had a gain, but my other funds did a lot better. Additionally, most of my earnings were pocketed by the "evil" financial advisor my friends suggested. I also don't particularly like a heavy-load fund such as FKRGX. Because the financial advisor never consulted me before buying anything at all, I am currently looking into filing a complaint and demanding the return of all hidden fees and my earnings. Whether I will be successful there remains to be seen, but I will be happy if I even accomplish a partial recovery.


3) Regarding the Vanguard Funds, I am thinking of opening an account with Vanguard and buying them from there, so that I can avoid the fee. I'll either buy them as an investment, or transfer my Traditional IRA entirely to Vanguard. A question I have is this: is it legal to have two Traditional IRAs, i.e. one with Vanguard and one with Fidelity, as long as I don't exceed the maximum annual tax-deferred contribution?


Again, I'm most obliged for your help. :)

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Author: gdett2 Big gold star, 5000 posts Old School Fool Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71830 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 4:44 PM
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SaraW946,

how do I educate myself best on ETFs? Do I need to trade them actively or just let them alone most of the time

Active trading of stocks is risky if you mean short-term, hours, days or weeks.

ETFs are mostly setup to mimic an index of some sort so the will track similar to index mutual funds. Where a mutual fund may have a $3,000 initial purchase and either buy or sell fees, ETFs have no limits or minimums and only your standard brokerage buy/sell fee.

As far as management, an annual rebalance, if needed, is sufficient. If you are adding new money during the year, you can target areas that have under performed. I use a spreadsheet to manager our ETFs:

https://docs.google.com/spreadsheet/ccc?key=0AhQ1WVm2vQ8XdFZ...

There are instructions on the sheet. Feel free to copy it if it is of use to you. Actually, any stocks, mutual funds, ETFs or a mix can be used.

Gene

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Author: TwoCybers Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71832 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 4:54 PM
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You can have a dozen or two dozen IRAs if you want. The limits apply to the aggregate.

Vanguard is not my favorite broker - they have good (and some not so good) funds.

There is another factor in the area of fees - that is the total size of all accounts at a broker. Splitting accounts between brokers can lower your total at a brokerage that will cut you out of stuff.

While money is not to be thrown away, opening an account at Vanguard for the sole purpose of saving $75 a year may be not your best way of increasing the bottom line. A membership at Morningstar can be valuable well beyond its cost. Also check out other brokerages. My Vanguard mutual fund purchases, while not zero, are less than $10. I do limit my Vanguard purchases to one per year in each fund.

As I recall, Vanguard charges a significant fee an purchases (and sales) or any non-Vangaurd fund.

Lastly in this area if you open new accounts, check on fees for closing accounts. All the accounts you open will be closed eventually.

Gordon
Atlanta

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Author: SaraW946 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71850 of 76395
Subject: Re: Retirement planning Date: 4/8/2013 8:07 PM
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My best bet then would be to keep the IRA with Fidelity out of convenience and flexibility. I would definitely like to replace the Franklin Rising Dividend fund with Vanguard's Dividend one. The equivalent Fidelity is not that great. I still need to make a decision about the other Franklin fund. Rather than mess with ETFs, at least for the moment, I'll stay with index funds. As for the Vanguard Total Market Index, I guess the best thing to do is to trade once a year or so and the $75 fee won't be that bad.

One last question: how do you guys feel about international index funds? A couple of people mentioned them. Since I'm European, I feel kinda scared about trusting much of my money to international funds given the misguided economic policies in Europe, and I'm not sure how the rest of the world is doing. I generally try to read as many of Warren Buffett's words of wisdom as possible, and he tends to like the American market (mainly), at least as far as non-professional investors like me are concerned.

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Author: TwoCybers Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 71862 of 76395
Subject: Re: Retirement planning Date: 4/9/2013 12:15 AM
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I recommend against international index funds in any broad sense. There is always some place doing bad. If you want to play in the international area I like regional specialists. Matthews has several of the type I favor. Geopolitics are really key. Things like Japan having a new government that is trying to break the deflation or the weakness of the EU central bank are powerful forces. The trouble is knowing if they will last. It takes a lot of time and reading. So unless you expect to be spending a lot of you retirement funds in a foreign country (like living abroad) I say get international exposure from the fact 25% of the sales from US large cap stocks is international.

People can make errors by trying to check investment boxes. I just smiled when Apple was going up last year and people had to buy it. When I asked if they thought having 5% of their funds in a single stock was a good idea they said NO! At that time Apple was 5% of the vale of the S&P.

Gordon
Atlanta

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