Should I take my money somewhere else??

[unclemick]

Here is another tip. Cancel your Money magazine subscription. Those idiots cost me a ton of money in my younger years chasing their 10 hottest stocks / funds of the month baloney. Their job is to sell you high expense funds and to encourage churning to the benefit of your broker. Seriously, pick a Vanguard Target Retirement Fund of the appropriate year, invest in it religiously and use your time for better things. It really can be that simple.

Can I get a witness! (call and response)

Amen.



heh heh heh - every once in a while I crack - old Money mags in the waiting room - eye doc, dentist, etc. But action is not mandatory. .

 

[Gardnr]

Here is another tip. Cancel your Money magazine subscription. Those idiots cost me a ton of money in my younger years chasing their 10 hottest stocks / funds of the month baloney.

Hear, hear!! and Amen to that! And it's like drugs because no matter what you want to start trying to hit home runs when you read some of that stuff. (Sorry for the mixed metaphor!)

Much better reading sources out there that will reinforce a disciplined, steady approach rather than chasing the latest sexy stock/fund/idea.

 

[dorikin_86]

hehe luckily I don't subscribe to Money - I just had a long flight today so I thought I'd entertain myself.

Looks like Vanguard has a good reputation everywhere in the world so I got a starting point.

I personally don't know if I can put all my dough in those target date retirement funds - My entire IRA is in that already so I'm looking to diversify even more with my extra funds.

I feel like I only have an IQ of 5 when I talk to you veterans....the learning curve SO steep...kinda wish I started earlier =)

 

[harley]

I read Money. For the same reason I keep ice cream in the freezer even though I'm diabetic and trying to lose weight. I like to prove to myself I have willpower. Plus I can give the mag to people with no financial knowledge. There's some basic good advice in there, amongst the shilling. While they are reading, I give them a bowl of ice cream. Then I warn them about the calories and the investment advice.

 

[W2R]

hehe luckily I don't subscribe to Money - I just had a long flight today so I thought I'd entertain myself.

Looks like Vanguard has a good reputation everywhere in the world so I got a starting point.

I personally don't know if I can put all my dough in those target date retirement funds - My entire IRA is in that already so I'm looking to diversify even more with my extra funds.

I feel like I only have an IQ of 5 when I talk to you veterans....the learning curve SO steep...kinda wish I started earlier =)

You can do it. Here's the booklist from the Bogleheads forum, to get you started:

Investment Books

The books are all available at Barnes and Noble, Amazon, and sometimes even at your local library.

 

[FIREd]

hehe luckily I don't subscribe to Money - I just had a long flight today so I thought I'd entertain myself.

Looks like Vanguard has a good reputation everywhere in the world so I got a starting point.

I personally don't know if I can put all my dough in those target date retirement funds - My entire IRA is in that already so I'm looking to diversify even more with my extra funds.

I feel like I only have an IQ of 5 when I talk to you veterans....the learning curve SO steep...kinda wish I started earlier =)

That's the beauty of Vanguard's target retirement funds. In one fund you own almost the entire stock universe, domestic and international, developed and emerging markets, large and small caps, value and growth. Plus you own a piece of the entire US bond market. So target retirement fund are ideal for a core portfolio. And for all intended purposes, a core portfolio is all what people really need.

There are a few asset classes that are not represented in target retirement funds, such as REITs, commodities, international small caps and global bonds and while some of them are desirable diversifiers IMO, others are more debatable.

Once you learn about more about investing, you can also give a tilt to your portfolio, meaning you can overweight one or more asset classes. A popular tilt is small value for example, which means you would add a small value fund to your core portfolio to give more emphasis to that asset class.

 

[joesxm3]

My two cents:

Read Bernsteins "Four Pillars of Investing"

Remember that you do not need to rush. You can spend a few months learning about things and making up an asset allocation strategy and then make a move. The 2% fees will kill you over the long haul, but not over the next few months.

Several months ago some wise person on this forum told me "figure out your plan before you rush into things". I am working on the plan and making adjustments little by little.

 

[Gardnr]

So target retirement fund are ideal for a core portfolio. And for all intended purposes, a core portfolio is all what people really need.

Very true. A very large majority of people would be best served by being invested in these target funds in their 401K/IRA, etc. and then just forgetting about it. It would save them from the poor decisions that are made that result in the average investor so woefully underperforming the markets. God knows I would have been better off way back in my younger years if I'd been in one.

It's really kind of amazing in retrospect that they weren't developed much earlier.

 

[samclem]

..kinda wish I started earlier =)

Almost ALL of us felt like that once.
I second joesxm's recommendations--the Bernstein book would be a great place to start, and having patience is important--you don't have to fix this in a week, or a month. Now--if your FA still has you in his clutches a YEAR from now, we'll have a little talk . . .

 

[cj]

dorikin - of the books on the Bogleheads forum, I really like the Bogleheads Guide to Investing. It's an easy read, very straightforward.

CJ

 

[Spanky]

I know exactly how much fees I'm paying - about 2% of my portfolio.

I agree with other posters -- the fee is high. If you still interested in active management, find a lower cost company. If you do not mind handling your own portfolio, start looking into ETFs and index mutual funds. Good luck.

 

[dorikin_86]

hmmmm never thought about using those target date things as the core of my portfolio...interesting concept though.

I need to wait for my current funds to recover from this dump then I'll take the money out and do it myself.

 

[LOL!]

hmmmm never thought about using those target date things as the core of my portfolio...interesting concept though.

I need to wait for my current funds to recover from this dump then I'll take the money out and do it myself.

Waiting "to recover" is a BIG mistake. Whatever amount your current funds go up, the ones you intend to buy when you switch will be up even higher because there should be less expenses associated with them. Get out of the behavioral finance trap of "loss aversion" that you are in.

Also if your funds are held in a taxable account, then selling now would be beneficial because you can make the IRS pay for a portion of your losses.

Bottom line: Get out as soon as possible!

 

[travelover]

hmmmm never thought about using those target date things as the core of my portfolio...interesting concept though.

I need to wait for my current funds to recover from this dump then I'll take the money out and do it myself.

Target funds are not just the core of the portfolio - they ARE the portfolio. Look at the Vanguard site and see what is included in a Target Fund - it is virtually every investment type. You can duplicate this asset allocation in other investment vehicles (IRA, 401(k)) by choosing the same components in the same proportions.

Also, a lesson most of us have learned here is not to market time ("wait for my current funds to recover from this dump"). It is a little like saying I'll wait until the TV goes off sale before I buy it.

As others have said, read up, then act when you are ready, but not when "the markets have recovered".

 

[explanade]

What company is charging 2%? Is it a big national company or some local, independent firm?

Did he only plan for you or did he manage your account, make the necessary trades, etc.?

Did you pay commissions on top of that 2%?

 

[Gardnr]

You can duplicate this asset allocation in other investment vehicles (IRA, 401(k)) by choosing the same components in the same proportions.

I don't understand what you're saying here. You can invest in target funds in any IRA (assuming you're with the right company, and even that could be "fixed") and in many 401Ks (not all though, unfortunately).

Maybe I misunderstood your point but I wanted to point that out to the OP at least.

 

[travelover]

I don't understand what you're saying here. You can invest in target funds in any IRA (assuming you're with the right company, and even that could be "fixed") and in many 401Ks (not all though, unfortunately).

Maybe I misunderstood your point but I wanted to point that out to the OP at least.

Sorry this was unclear. What I meant is that if one has an account that does not offer a target retirement fund, such as a 401(k), one can still assemble the elements of that target fund by choosing the pieces as they are available in other investment vehicles.

For instance one could pick up the large cap portion in a company 401(k) that offers a S&P 500 index fund, then round out the target fund basket with an IRA or taxable account that offers small- mid cap / foreign / bonds, REITs, etc.

So in the end you could own a target fund where it is offered and still have the rest of your investments mirror that target fund allocation. Granted, one would have to make periodic adjustments to investments outside the target fund to keep the asset allocation proportioned, but all the heavy lifting is done by the target fund managers - all the OP needs to do is copy it yearly.

 

[Gardnr]

Sorry this was unclear. What I meant is that if one has an account that does not offer a target retirement fund, such as a 401(k), one can still assemble the elements of that target fund by choosing the pieces as they are available in other investment vehicles.

For instance one could pick up the large cap portion in a company 401(k) that offers a S&P 500 index fund, then round out the target fund basket with an IRA or taxable account that offers small- mid cap / foreign / bonds, REITs, etc.

So in the end you could own a target fund where it is offered and still have the rest of your investments mirror that target fund allocation. Granted, one would have to make periodic adjustments to investments outside the target fund to keep the asset allocation proportioned, but all the heavy lifting is done by the target fund managers - all the OP needs to do is copy it yearly.

Yeah, I get that. Good point.

I just didn't want the impression left that you couldn't get into these inside a 401K/IRA.

 

[travelover]

Yeah, I get that. Good point.

I just didn't want the impression left that you couldn't get into these inside a 401K/IRA.

Point well taken. On the Bogleheads Forum there is a steady stream of folks with 401(k) plans whose contributions are matched by their employers, but the investment choices are poor and/or high expense. I was thinking of the obvious answer - to cherry pick the best of the mandated choices and build the rest of the portfolio around that.

If the OP can directly invest in a target retirement fund, he is all set.

 

[dorikin_86]

What company is charging 2%? Is it a big national company or some local, independent firm?

Did he only plan for you or did he manage your account, make the necessary trades, etc.?

Did you pay commissions on top of that 2%?

Local indepent firm. I don't pay commissions on top of 2% =)

He sells/buys stocks for me.

 

[2B]

Local indepent firm. I don't pay commissions on top of 2% =)

He sells/buys stocks for me.

Get your reading done and cut your losses ASAP.

 

[FinanceDude]

2% is VERY HIGH for an independent company. Schwab is a good cheap place to sell stocks and buy them..........