Investornew
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Blackrock (sold by Edward Jones), I believe is based in Ohio.
I live in Texas. There are no tax benefits to enroll in my state's 529 plan from what I understand.
Bogle advice on index funds
- Thread starter Investornew
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Blackrock (sold by Edward Jones), I believe is based in Ohio.
I live in Texas. There are no tax benefits to enroll in my state's 529 plan from what I understand.
Sunset
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I have found index funds to be a lot safer than buying individual stocks. An index fund is made up of 100's to 1,000's of stocks depending upon which you pick.
Example VTI holds currently 6,166 stocks
https://personal.vanguard.com/us/funds/snapshot?FundId=3369&FundIntExt=INT#tab=2
I have bought individual stocks, and while everyone likes to think of their winners, I also remember the losers, a few went totally bankrupt, and some just dropped 50% and stayed down there.
Some have lagged the market so much it's sad (like GE).
Example VTI holds currently 6,166 stocks
https://personal.vanguard.com/us/funds/snapshot?FundId=3369&FundIntExt=INT#tab=2
I have bought individual stocks, and while everyone likes to think of their winners, I also remember the losers, a few went totally bankrupt, and some just dropped 50% and stayed down there.
Some have lagged the market so much it's sad (like GE).
Okay, this is >another< way the "advisor" from Edward Jones has found to dip his hand into your money for his own benefit.
As I understand it, you live in Texas but have elected to participate in the Ohio 529 plan. That makes sense--Texas has no state income tax, so there's no "resident advantage" for using the Texas 529 plan. I am also invested in the Ohio plan (it is where I live, so I get some additional state tax advantages that you don't, but we are both in the same plan). The Ohio 529 plan offers some >outstanding< Vanguard options--very low cost, very simple set-and-forget implementation. Your Edward Jones salesman has found a way to extract even more money from you and the beneficiary of this college savings by routing your investment through his paws and into Blackrock funds. They offer >zero< advantage to you, and considerable costs.
What "12 month rule" is your advisor citing? is it an EJ or Backrock rule?
Here's what the Ohio 529 web site says about making changes to your investments:
"Can I make Investment Changes in my account? Yes. You can change the direction of your future contributions at any time. For existing investments, federal 529 law permits you to exchange the assets in your CollegeAdvantage account to a different mix of investment options twice per calendar year."
There >used< to be an IRS limitation of one 529 investment change per year (so, not really a "12 month rule"), but that was increased to 2 per year a long time ago. Your EJ salesman surely knows this, and if he claims ignorance he is either incompetent or is deliberately deceiving you in order to maximize the chances that you'll leave this money with him.
There's no apparent limitation put in place by Ohio as far as number of changes. Even if this move into Blackrock by your Edward Jones "advisor" counts as one change, you still have one more that you can make in 2017. I would use that opportunity to spring free of this EJ "advisors" clutches and Blackrock, and I would do it this week.
If the "12 month rule" is something imposed by EJ or Blackrock, then you have another reason to resent them and to get away. If it is their rule, you'll need to weigh the options:
- Stay with them for 12 months and pay their fees (good luck finding out all of them--they won't make it easy), and remember to get out at the 12 month point.
- Move the funds now, pay any penalty, be free of these vultures with no need to talk to this "advisor"again, and begin enjoying the investment options offered from Vanguard (total costs of about 0.2% per year).
Here's the Ohio 529 web site.
Their phone number is 1-800-233-6734
Here's a single page PDF with the available investment options. I'd suggest you strongly consider using the "Vanguard Moderate Age Based Portfolio" as a good starting point. Low costs, wide diversification, and they automatically adjust your investments over the years to have less expected volatility as the plan beneficiary approaches the age when the funds will likely be needed.
You should be as mad as a hornet right now--turn that into motivation to break free of this trap before it costs you (and the 529 beneficiary) even more. These 529 funds should be buying textbooks for someone you have chosen, not paying for the EJ salesman's vacation.
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MRG
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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+1
I w*rked in the institution and was one of the folks who did DR(not the exercises). I don't worry too much. The industry knows how long it takes to recover.
I use Vanguard and Fidelity. If you start to add accounts for different fund companies you have no clue where they're kept. It's possible to own maybe 50-100 different fund companies, all housed in the same datacenter on the same software and hardware.
Investornew
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I thought the 12 month rule was a federal law, if so, I'm stuck for the next 10 months, (maybe closer to 9 months by now). What made me upset also is that he selected Black Rock for me, without presenting me with any other options. Although Black Rock itself is not a bad college savings plan, when combined with EJ fees it's not so great anymore, so it was given a "neutral" rating by Morningstar.
Here's what I found about the federal law, 12 month rule, says you can rollover to a new plan only once every 12 months. (I wonder, however, if this 529 plan has already been churned by them, would that count as some kind of rollover also).
http://www.savingforcollege.com/articles/when-should-you-switch-529-plans
I will be receiving inheritance money next year and a while back, I had planned to take it all to EJ and let them handle it. The EJ adviser has even been asking me, when I'm getting this money, he wants a precise date and I told him I didn't know for sure. I'm at least grateful they won't be getting their hands on this inheritance money, now that I know better and am cutting the cord with them. That is one silver lining to the cloud.
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ducky911
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I am wondering if you had to pay a load when you changed to EJ Blackrock? I set up 529s with Maryland plans for my Grandchildren myself. Very easy no cost. Utah is also a highly rated 529.
You could pick a good 529 that you would like to move to and call them and tell them how you are getting screwed and I bet they can handle the transfer for you.
I have made, in the past, some costly mistakes thinking others cared about my money. It gets my hackles up even thinking about it. Chalked it up to my education expense.
You could pick a good 529 that you would like to move to and call them and tell them how you are getting screwed and I bet they can handle the transfer for you.
I have made, in the past, some costly mistakes thinking others cared about my money. It gets my hackles up even thinking about it. Chalked it up to my education expense.
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travelover
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Shameless vultures........
Fedup
Thinks s/he gets paid by the post
Why did you go back to them in first place? Reading this, I want to make sure my kids don't do anything in the not wise category when I'm gone. I told them to sit on the inheritance money for a year before they do anything.
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REWahoo
Give me a museum and I'll fill it. (Picasso) Give
Fedup
Thinks s/he gets paid by the post
Not controlling from beyond. I told them now, maybe it will sink in when I'm gone.Good luck in controlling their behavior from the Great Beyond.
Investornew
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Not quite. If you look closely at the accompanying text at the link you provided, Hurley is referring to each state's 529 program as a "plan." You are now in the Ohio plan, which is a pretty good one. If you wanted to change to the Utah 529 plan, you would need to change from one plan to another, and you can only do that every 12 months. But if you just stay in the Ohio plan (which I would recommend right now--or even permanently), you can change your assets around within that plan twice per calendar year.
What I strongly recommend you do is to contact the Ohio plan directly and explain your situation. (See my previous post for contact info for the Ohio 529 plan.) If you call the EJ "advisor" again, and he has the authority to change your investments (it sounds like he does), then he might just shuffle things around to use up your second move and lock you in. So don't give him that opportunity. The folks at the Ohio 529 plan can probably handle everything from their end and just put the assets where you want them (again, any of the Vanguard Age-Based portfolios would be a good choice). It may take a little doing on your part (notarized signature, etc), but it will be worth it. Let it be a little "surprise" to your friend at EJ.
At the very worst, if this "advisor" has burned through your two changes allowed in the Ohio plan in this calendar year, you'd have to wait until Jan 1, 2018 to make a move on your own. But ask the pros at the Ohio 529 office to be sure of the details.
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Please show me where you read this. He say to hold your age in bonds. He never said all equities
, I think you read that he said hold all you equity allocation in the 500 index fund.In addition to the excellent book the OP is reading there is www.bogleheads.org
This is a Vanguard-oriented web sie with many discussions about low-cost, primarily passive (index) investing. On that site there is a "wiki" that is a compendium of information - a virtual treasure trove of information for both new and experienced investors. I recommend it to the OP.
Note that although the site is Vanguard-oriented it is not Vanguard-sponsored nor will it try to sell you anything.
Fedup
Thinks s/he gets paid by the post
A lot of people here are also from Boggle head forum.
frayne
Thinks s/he gets paid by the post
I would think anyone with remedial math and reading comprehension skills could easily see the benefits of low cost, no load, index mutual fund investing. It sure as heck ain't rocket science and sometimes people just get hung up on analysis paralysis. IMHO it is truly a no brainer.
I think I understand the problem. In every other important area of our life when we face a seemingly complex issue with many choices (medical care, legal problems, big structural problems with a home, etc) it is worth seeking professional advice, and paying for it. With investing, it is natural for a new investor (or even an experienced one) to believe that folks who have special training, special tools, and the ability to dedicate their entire day to the pursuit can find the better stocks. And the advertising from Wall St makes the whole thing seem very daunting and complex. Especially if you are a person who seeks the "best buy" when you spend money, it take a deliberate, conscious effort to accept that buying the market is the best approach most of us can take (after considering costs and risk). Luckily, that approach is now easily available and, for most of us, if we start early enough and stick to the course, it is good enough to get the job done.
I have read several of Bogle's books as well. Also check out some of the posts on the Bogleheads web site. Taylor Larimore and Mel Lindauer have several posts on the topic. One post in particular by Taylor Larimore addresses the 3-fund portfolio in great detail...
socaldonnan
Recycles dryer sheets
I suggest you look at the website www.savingforcollege.com. It list the latest 529 plan performance as well as a comprehensive overview of thousands of portfolios.
The OP (Investornew) appears to have left the building about a week ago. . . . maybe a duel at 20 paces with the EJ advisor didn't go well.
