Another Finance Thread

[jumpdawg]

I have been looking over some of the old retirement threads. Wanted to see if there are any more current opinions.

I have to rollover an old 401k from a previous employer. Was going to just allow the Group controlling these accounts to handle the rollover. Now thinking about managing myself with Vanguard/Fidelity/Etc.

What are the latest opinions?

Also, I'm in NW MS and would not be opposed to a trustworthy local adviser.

 

[patdog]

It'd be hard to beat just rolling it into the Vanguard target retirement date fund for your age. If you do use an advisor, make sure to use one who is 100% fee based who makes no commissions of any kind on the products he recommends.

 

[johnson86-1]

I have been looking over some of the old retirement threads. Wanted to see if there are any more current opinions.

I have to rollover an old 401k from a previous employer. Was going to just allow the Group controlling these accounts to handle the rollover. Now thinking about managing myself with Vanguard/Fidelity/Etc.

What are the latest opinions?

Also, I'm in NW MS and would not be opposed to a trustworthy local adviser.

If you don't have to worry about doing a backdoor roth, roll over to vanguard or fidelity. If you think you may have to worry about doing a backdoor roth, if you are allowed to either roll it into your new 401k or keep it with your existing 401k, pick whichever doesn't have horrendous fees and investment options.

 

[Crazy Cotton]

I rolled mine into my Schwab account, which lowered fees a ton and gave me almost unlimited options. I put about 40% in an index fund (.01 fees), another 40% in a low-fee target retirement fund, and the last 20 % I'm having fun with buying and selling individual stocks. Make sure you're not losing 2-3% a year sticking with the current management, that can really cost you a ton over the long haul.

 

[FQDawg]

This is the best advice. Unless you absolutely know what you're doing in the market, your best bet is probably just going to be a target fund. It might seem boring but it'll give you your best results over the long haul.

 

[TheStateUofMS]

I think folks who set it and forget it in passive index funds are going to be worse off than those who chose good actively managed mutual funds or a good advisor. I think volatility is here to stay. Not to the extent we've seen the past couple months, but with the fed tightening and other central banks around the world about to follow suit, there will be less lidquidity and therefore bigger bid/ask spreads and more volatile markets.

You can be self directed still, I just wouldn't throw things at target date retirement funds or SPY index type funds and forget about it. I would be on the hunt for mutual funds with really good managers or get you a fee based adviser.

I think there's a lot of alpha to be had in the upcoming years.

Good luck!

 

[patdog]

Good luck finding the manager who can save you more losses than he costs you in gains by timing the market.

 

[TheStateUofMS]

57% of stock mutual funds beat the S&P500 last year.

 

[patdog]

Good luck with that 1-year sample size.

Link

 

[Dawg1976]

A target or balanced fund would be good if you just want to forget about it. If you need some hand holding when the market is on a rollercoaster then an advisor can be useful. When I retired I rolled everything over to Fidelity. I have an assigned private client rep but rarely hear from him. Maybe once a year. But he is there if I need him.

 

[TheStateUofMS]

The point is volatility is likely to increase, therefor active management will be worth the fee. There's plenty of good managers out there if you're not lazy and spend a little time on it. I also didn't say indexing will lose money, I just think you'll see more managers beat the indexes with volatility increasing and getting a little more normalized.

 

[tatedog]

A slight departure from your original question, but if a match isn't in play there are often much better options out there than a 401k. I wouldn't lose too much sleep over this unless you are making serious money, but it's something to think about. People often assume their employer's plan is way better than it actually is both fees and returns wise.

 

[Moe Cabelle]

I think you’re spot on. Rollover in a online brokerage acct & Manage yourself. Vanguard are renowned for being inexpensive. Pay attention and make occasional adjustments. If not comfy go target.

 

[Scottfield1]

Access your own situation

Good luck with that 1-year sample size.

Link

Pat dog is correct in looking at a one year sample size as a true indicator of an investment; however, absolutely avoid anything else he post regarding your own situation. Index funds have become so main stream, anyone believes they are money managers. In a fast rising market, passive index will more times than not outperform active managers. The issue is we rarely see highly appreciative markets, without a drastic volatile swing. Statistics rarely lie and this holds true with most active mutual funds. When researching any money manager, key stats should be alpha/beta, upside/downside capture ratio and sharp ratio over a minimum 3 year period. Also, pay attention to turnover and capital gains distributions; however, manager tenure is paramount. Don't listen to message board millionaires. Do your own research or find an advisor you are truly comfortable. Always check the advisors U-4 on the FINRA website before committing to do business with them.

 

[fishwater99]

Buy some of IT. Your be rich.

 

[Dawg1976]

As long as it's not some weight loss coffee.

 

[Dawgbite]

I have a small Fidelity Brokerage account that I manage myself just so I feel like I am contributing but I leave the real money to a professional.

 

[Cary Hudson's little bro]

It'd be hard to beat just rolling it into the Vanguard target retirement date fund for your age. If you do use an advisor, make sure to use one who is 100% fee based who makes no commissions of any kind on the products he recommends.

Vanguard is the best option to "set it and forget it" - only takes $1,000 to get it going. They go heavy in the market for you for the first few years and then lay it all down in mutual funds until your "target date"

 

[Scottfield1]

Vanguard is the best option to "set it and forget it" - only takes $1,000 to get it going. They go heavy in the market for you for the first few years and then lay it all down in mutual funds until your "target date"

Vanguard is average at best as a fund family. Take a look at T Rowe Price target funds as a comparison. If you are looking for cheapest, stick with Vanguard. Want performance, look around.

 

[She Mate Me]

http://www.businessinsider.com/warren-buffett-wins-million-dollar-bet-against-hedge-funds-2018-1

 

[revereno]

Buffett’s a smart man. The past decade was probably the most prime time to make that bet, plus challenging hedge fund managers and not mutual funds was another way to add extra layers of fees. The more people that index, the more profit Buffett can make.

 

[Go Budaw]

I think folks who set it and forget it in passive index funds are going to be worse off than those who chose good actively managed mutual funds or a good advisor. I think volatility is here to stay. Not to the extent we've seen the past couple months, but with the fed tightening and other central banks around the world about to follow suit, there will be less lidquidity and therefore bigger bid/ask spreads and more volatile markets.

You can be self directed still, I just wouldn't throw things at target date retirement funds or SPY index type funds and forget about it. I would be on the hunt for mutual funds with really good managers or get you a fee based adviser.

I think there's a lot of alpha to be had in the upcoming years.

Good luck!

“Worse off” is a relative term. There are many people who simply choose the guaranteed good return (say, 8-9% over 10+ years) from passively managed index funds as opposed to the possibility of excellent return (10-12% over 10+ years, before fees) from active management that takes place IF the timing of reallocations is ahead of actual market trends and IF the added fees from active management don’t wipe out the additional gains. If BOTH Of those things are in your favor, then you are looking at maybe 1-1.5% better return than the general S&P index funds return. Compounded over 30-40 years, that extra 1-1.5% certainly adds up. But you may not be lucky to get an advisor that is both cheap enough and successful enough to make it worth your while.

As always, it depends on the individual investor’s particular situation. How much are you saving for retirement monthly? How much do you and your spouse need / want for retirement? Are you willing to work a few years longer than planned if your actively managed fund underperforms vs. expectations? A general rule of thumb is the more money you are putting into retirement during your working years, the better off you will probably be with a passive index fund. This is because the increased fees from active management (basically guaranteed losses) are magnified with a larger account balances throughout the investment timeline, and you are far more likely to hit your “target number” even if your funds underperform vs. actively managed ones. Just my two cents.

 

[MSUCE99]

I did this a year or so ago and rolled my 401k's into a simple 3-fund portfolio at Vanguard. I'm very satisfied with this as a long-term buy-and-hold strategy for my retirement funds.

VTSAX - Vanguard Total Stock Market Index Fund
VTIAX - Vanguard Total International Stock Index Fund
VBTLX - Vanguard Total Bond Market Index Fund

Read about the 3-fund portfolio HERE: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=88005

Easy, VERY low expenses, and you only need to rebalance once a year or so. Capture the entire markets, not particular sectors.
NO ONE will care for your money as much as you will.

Best of luck.

 

[patdog]

T Rowe Price generally has excellent funds. Vanguard is much better than average. I have money in both. Generally, TRP provides higher returns in good markets and greater losses in bad markets.

 

[She Mate Me]

I think you're smart in this strategy. A few here probably think you're not. I would simply encourage you to be willing to move 25-50% of your money into a cash equivalent when markets are at clearly unsustainable highs (now for instance). It's not easy to do because you'll feel like you're falling behind if it keeps going up, but you'll certainly have a re-entry point well below today's levels if you're patient and that'll be a very safe way to boost your returns and reduce your exposure to unsustainable market levels.

 

[ShrubDog]

T Rowe Price generally has excellent funds. Vanguard is much better than average. I have money in both. Generally, TRP provides higher returns in good markets and greater losses in bad markets.

Agree with you on TRP. They haven’t been mentioned much in past threads and was wondering if any of y’all finance gurus had any input. I have been very satisfied with them.