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[Zaraki_Kenpachi]

If you both work for one of the major banks, especially one that is married to a wirehouse or major broker dealer, you typically, as an employee, pay no custodian account fees on any accounts whether IRA or not AND you purchase a select few of funds at NAV and not at sales charges. Again, this is non 401K related. This applies to supplemental accounts you open to further add to your investment portfolio.

Additionally, you would not find the administrative fee under the funds section. The two are entirely unrelated. A 401K plan is just that, a plan, that has its own set of custodian fees that the employer pays a portion of and then passes remaining to you. Now, as mentioned before, if your Bank is married to a major wirehouse (Bank of America Merrill Lynch, Wells Fargo / former AG Edwards/ Wachovia) etc, then they would not have custodian fees on their plan because they are using in-house 401K plans. Make sense? Under these circumstances, If you can not find a fee, it's likely there aren't any.

Hope that helps.

I get some of those perks buy not all since I'm in a different division then asset management even though we handle securities at times but not directly like AM so I don't get to purchase at NAV AFAIK.

 

[Zaraki_Kenpachi]

That's bizarro. I know tellers that get NAV

Yeah, I know. I'll have to check they had a chart and I could have sworn it was AM/Everybody else but maybe I'm remembering wrong. I think I have the no custodian fees and such. You get most but not all the perks. My last job let me purchase at NAV, was surprised this didn't but I could have read it wrong. I just started get my benefits packages.

 

[Zaraki_Kenpachi]

You were right Randolph, other fees are paid by the company so the gross is the total in this case.

What's the difference between admiral shares and the etc for vanguard? Just a lower purchase price? Expense ratio seems the same. So it's literally 2 basis point difference between the two unless I only want S+p which is actually one basis point cheaper. Might just use the 401k for now since vanguard requires an initial 3k from what I remember.

Also, should I be looking at small cap instead of large cap since I have a long time horizon?

 

[GhaleonEB]

You were right Randolph, other fees are paid by the company so the gross is the total in this case.

What's the difference between admiral shares and the etc for vanguard? Just a lower purchase price? Expense ratio seems the same. So it's literally 2 basis point difference between the two unless I only want S+p which is actually one basis point cheaper. Might just use the 401k for now since vanguard requires an initial 3k from what I remember.

Also, should I be looking at small cap instead of large cap since I have a long time horizon?

Admiral shares have a slightly lower expense ratio, but that is all. We had a discussion about them on the last page, BTW.

 

[Zaraki_Kenpachi]

Admiral shares have a slightly lower expense ratio, but that is all. We had a discussion about them on the last page, BTW.

Are they? Both are listed as 5 basis points on their site... I'll check the other page tonight when I'm not on mobile. I might just be missing something.

 

[RumblingRosco]

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[Izayoi]

It's too bad that most people I know are far too poor to ever invest, even just 4% a paycheck means not putting food on the table... It's going to be a fucking disaster when my generation retires.

I'm worried. :|

 

[Piecake]

It's too bad that most people I know are far too poor to ever invest, even just 4% a paycheck means not putting food on the table... It's going to be a fucking disaster when my generation retires.

I'm worried. :|

The retirement crisis is far closer than that. The average near retirement age worker only has 12k saved up for his retirement. That is guaranteed abject poverty in old age. While that is awful, that might also indicate that some actual change will happen in the future so that this disaster will not keep repeating.

 

[Zaraki_Kenpachi]

VTSMX (Total Market Investor Shares) has an expense ratio of 0.17%. This is a mutual fund.
VTSAX (Total Market Admiral Shares) has an expense ratio of 0.05%. This is a mutual fund.
VTI (Total Market ETF) has an expense ratio of 0.05%. This is an ETF.

Ok, so same expense but one is a mutual fund vs. ETF. Is there really any difference to them? I know mechanically they're different but I don't see a downside... If anything it feels like the ETF is superior since you don't have to wait until end of day to get your price when selling but can also trade at a larger discount. Seems a wash at best.

 

[Piecake]

Ok, so same expense but one is a mutual fund vs. ETF. Is there really any difference to them? I know mechanically they're different but I don't see a downside... If anything it feels like the ETF is superior since you don't have to wait until end of day to get your price when selling but can also trade at a larger discount. Seems a wash at best.

I prefer funds because they are simpler, easier to dollar cost average, and you can stick all the money you want into a fund. With an ETF, you are limited by the stock price, so you are bound to have a remainder left over sitting in your money market account when you try to max out your 5.5k contribution. That remainder also just irrationally annoys me.

If its for a year or two, I dont think a .1% difference matters all that much. Expense ratios only start to fuck you over after 10/20 years. And who knows, the remainder sitting in your money market account might cost you more than the .1% difference.

 

[Dosia]

The retirement crisis is far closer than that. The average near retirement age worker only has 12k saved up for his retirement. That is guaranteed abject poverty in old age. While that is awful, that might also indicate that some actual change will happen in the future so that this disaster will not keep repeating.

Wow. My friends rag on me bc I put 20% of my check into 401k. Just hit 100k at 28, so hopefully this pays off in the end. I plan on working until I am 60.

 

[Zaraki_Kenpachi]

I prefer funds because they are simpler, easier to dollar cost average, and you can stick all the money you want into a fund. With an ETF, you are limited by the stock price, so you are bound to have a remainder left over sitting in your money market account when you try to max out your 5.5k contribution. That remainder also just irrationally annoys me.

If its for a year or two, I dont think a .1% difference matters all that much. Expense ratios only start to fuck you over after 10/20 years. And who knows, the remainder sitting in your money market account might cost you more than the .1% difference.

Ah, forgot about that with ETFs. Yeah, unless they have something else I don't have a couple grand to invest currently if that's a barrier with Vanguard so I think the small difference will be made up by not waiting months to start investing. I can always switch later but I guess I'll start with roth 401k contributions.

Any advice on the large vs small cap stocks? Is small cap too risky for long term or should I be looking at those since they mostly have higher yields on average. Can't decide between Large Cap index, small cap index, and S&P 500 index. Ratios are 7 basis except S&P is 4 basis points. Both Large and small are based on russell index of such investments.

Wow. My friends rag on me bc I put 20% of my check into 401k. Just hit 100k at 28, so hopefully this pays off in the end. I plan on working until I am 60.

Wow, 20% is pretty high for most. I wish my student loans and such allowed me to contribute that high of an amount. Hopefully one day.

 

[clav]

Ah, forgot about that with ETFs. Yeah, unless they have something else I don't have a couple grand to invest currently if that's a barrier with Vanguard so I think the small difference will be made up by not waiting months to start investing. I can always switch later but I guess I'll start with roth 401k contributions.

Any advice on the large vs small cap stocks? Is small cap too risky for long term or should I be looking at those since they mostly have higher yields on average. Can't decide between Large Cap index, small cap index, and S&P 500 index. Ratios are 7 basis except S&P is 4 basis points. Both Large and small are based on russell index of such investments.

Put 50/50 S&P and Small Cap.

S&P 500 Index will basically be your large cap.

 

[Piecake]

Wow. My friends rag on me bc I put 20% of my check into 401k. Just hit 100k at 28, so hopefully this pays off in the end. I plan on working until I am 60.

You are a bit ahead, but there is nothing wrong with that. Personally, I think it makes far more sense to save as much as you can so you don't have to worry, fret, and stress about retirement, and can possibly retire early or travel around the world during retirement.

Ah, forgot about that with ETFs. Yeah, unless they have something else I don't have a couple grand to invest currently if that's a barrier with Vanguard so I think the small difference will be made up by not waiting months to start investing. I can always switch later but I guess I'll start with roth 401k contributions.

Any advice on the large vs small cap stocks? Is small cap too risky for long term or should I be looking at those since they mostly have higher yields on average. Can't decide between Large Cap index, small cap index, and S&P 500 index. Ratios are 7 basis except S&P is 4 basis points. Both Large and small are based on russell index of such investments.

I prefer following the market exactly because I think making sector bets is a losing battle. I think you are far more likely to change things up - meaning selling and buying if your large/small cap ratio isnt working out - than if you just followed the market and ignore it. Of course, you will have to make that determination for yourself. Plus, the whole past returns do not mean future success thing. Just because small caps earned more historically does not mean that will be the case in the future.

I like Total Market funds, but if you dont have that, and considering that I prefer following the market exactly, I would advocate owning whatever percentage of market that that index represents. Id imagine its probably like 65% SP 500 and 5-10% for the small caps. You seem to be missing out on a mid cap index, so maybe something like 80% 20% is something that I would go with.

I really don't see the point of investing in the large cap index over the SP 500 since the SP 500 is cheaper and likely invests in more companies so has more diversification.

If you want to go heavily into small caps, I don't think they are all that much riskier over the long-term. They will likely have more volatility though. This is just mostly a guess.

 

[Randolph Freelander]

I keep playing with my ratios (I'm so very much not "set it and forget it" :S), but I presently have mine in:

S&P 500 - 45%
S&P Mid Cap - 15%
Small Cap - 15%
Nasdaq 100 - 15%
International - 10%

All indexes. There's some overlap with the Nasdaq and the 500, because it also includes large caps and many of the same stocks. I'm kind of not pleased with it, or the weighting (the Nasdaq fund has a huge component made by Apple, for example, which is also present to a smaller degree in the 500), but it seems a good mix overall.

 

[Husker86]

So I am about to move some money over to Fidelity's Spartan 500 mutual fund. Since the NAV updates a day late, will it hurt me to put money in on a day when the market is going down where the previous day it was up? Basically, if I put money in on a down day, the NAV price I see will be higher than the next day (if the current day ends up in the red).

 

[Piecake]

So I am about to move some money over to Fidelity's Spartan 500 mutual fund. Since the NAV updates a day late, will it hurt me to put money in on a day when the market is going down where the previous day it was up? Basically, if I put money in on a down day, the NAV price I see will be higher than the next day (if the current day ends up in the red).

When will this mutual fund be purchased?
When using the proceeds of the sale of a mutual fund to purchase another mutual fund, the purchase occurs on the settlement date of the sale as follows:

Mutual Funds in the Same Family
The settlement date for the sale is the same as the trade date. Therefore, the purchase takes place on the same date as the sale. On the sale and purchase of funds, you will receive the next available price.

Mutual Funds in Different Families
The settlement date for the sale is one business day later than the trade date. Therefore, the purchase takes place on the next business day following the sale. On the sale of your mutual funds, you will receive the next available price, and on the purchase of your mutual funds, you will receive the next business day's price.

This order first appears as a single order identifying both the sell and the buy. You can attempt to cancel the entire order before the sale executes. When the sell executes, the order will appear as a separate sell and buy order. After the sell order has executed, you can only attempt to cancel the buy order up until the buy order executes.

https://scs.fidelity.com/webxpress/help/topics/learn_trading_mutual_funds.shtml#whenwillpurchased

Honestly, if you are investing for the long term, this small advantage/disadvantage will be insignificant. So i wouldnt worry about it.

 

[edmuretully]

put everything in mortgage backed securities.

 

[NinjaMouse]

So I am about to move some money over to Fidelity's Spartan 500 mutual fund. Since the NAV updates a day late, will it hurt me to put money in on a day when the market is going down where the previous day it was up? Basically, if I put money in on a down day, the NAV price I see will be higher than the next day (if the current day ends up in the red).

You're going to end up killing your acct by trying to day trade (or otherwise time the market) with these mutual funds. The NAVs are a day behind and your trades won't execute until the end of the day. These things were designed for you to set it and forget it, for more extended periods of time, at least. I've found that a lot of the magic in these mutual funds, and presumably other types of investing, is in the dividends. You can see the price wiggle around all you want over a period of time, but if you're getting dividends, you'll still have a likelihood of respectable gains. But, if you're interested "up to the minute" pricing and activity, stay in the ETF realm.

 

[RustyNails]

Ugh. My PRR is destroyed for 2014. When will the selloff end? Soothsayers and two bit prophets are saying we arw gonna see selloffs to continue for the first half of 2014.

I am going to ride it out this time but it sure is painful as hell.

 

[clav]

Ugh. My PRR is destroyed for 2014. When will the selloff end? Soothsayers and two bit prophets are saying we arw gonna see selloffs to continue for the first half of 2014.

I am going to ride it out this time but it sure is painful as hell.

Tune out the news.

 

[Y2Kev]

Ugh. My PRR is destroyed for 2014. When will the selloff end? Soothsayers and two bit prophets are saying we arw gonna see selloffs to continue for the first half of 2014.

I am going to ride it out this time but it sure is painful as hell.

This careful watching of investments with long time horizons is unhealthy and often financially destructive. Pick good funds, set periodic rebalancing, and tune out.

 

[Randolph Freelander]

I maintain a spreadsheet daily with gains, losses, contributions, employer matches, etc., for my 401k. Complete with charts and graphs! I do it because I'm apparently insane. That, and it only takes a minute.

But I'm not looking to move anything around, I just want to maintain a record. Plus I like graphs.

 

[GhaleonEB]

Ugh. My PRR is destroyed for 2014. When will the selloff end? Soothsayers and two bit prophets are saying we arw gonna see selloffs to continue for the first half of 2014.

I am going to ride it out this time but it sure is painful as hell.

The market makes these kinds of moves very often, but the long term trajectory, which is the relevant horizon for retirement investing - renders them unimportant. Staying plugged into these kind of gyrations is good only for generating heartburn and potentially for prompting rash decision making. As Cyan said, tune it out. You'll be happier for it.

This is why I tally things up once a month - for tracking - and only allow re-balances or changes in strategy once a year (in January). I used to pay more attention, and it just added stress.

I maintain a spreadsheet daily with gains, losses, contributions, employer matches, etc., for my 401k. Complete with charts and graphs! I do it because I'm apparently insane. That, and it only takes a minute.

But I'm not looking to move anything around, I just want to maintain a record. Plus I like graphs.

I do the same, only with end of the month snapshots. I track investments, transfers, dividends, etc. I have one file with the monthly snapshot since the month I graduated college over 10 years ago. It has a single graph showing the total investments over that horizon, and one breaking out the composition (cash, retirement, college, savings, company stock). I make the file a bit better each year as part of my annual re-balancing. I am also slightly insane, but daily rather than monthly is downright certifiable.

 

[Randolph Freelander]

I do the same, only with end of the month snapshots. I track investments, transfers, dividends, etc. I have one file with the monthly snapshot since the month I graduated college over 10 years ago. I make the file a bit better each year as part of my annual re-balancing. I am also slightly insane, but daily rather than monthly is downright certifiable.

I'm not disagreeing with you, because yes, it is. And I do it anyway. :/

 

[RustyNails]

The market makes these kinds of moves very often, but the long term trajectory, which is the relevant horizon for retirement investing - renders them unimportant. Staying plugged into these kind of gyrations is good only for generating heartburn and potentially for prompting rash decision making. As Cyan said, tune it out. You'll be happier for it.

This is why I tally things up once a month - for tracking - and only allow re-balances or changes in strategy once a year (in January). I used to pay more attention, and it just added stress.



I do the same, only with end of the month snapshots. I track investments, transfers, dividends, etc. I have one file with the monthly snapshot since the month I graduated college over 10 years ago. It has a single graph showing the total investments over that horizon, and one breaking out the composition (cash, retirement, college, savings, company stock). I make the file a bit better each year as part of my annual re-balancing. I am also slightly insane, but daily rather than monthly is downright certifiable.

Yeah I have started maintaining a spreadsheet as well. Just that 2014 is not having a good start. Theres ice in my veins though I am not touching anything unless a zombie apocalypse happens for real.

 

[GhaleonEB]

Yeah I have started maintaining a spreadsheet as well. Just that 2014 is not having a good start. Theres ice in my veins though I am not touching anything unless a zombie apocalypse happens for real.

I feel you. I started investing when I started college, in 2000. In tech funds.

 

[Piecake]

Yeah I have started maintaining a spreadsheet as well. Just that 2014 is not having a good start. Theres ice in my veins though I am not touching anything unless a zombie apocalypse happens for real.

Dont touch it even then. Eventually the zombies will go away.

 

[RustyNails]

I feel you. I started investing when I started college, in 2000. In tech funds.

Damn. Thats a crazy rough start for sure.

 

[RumblingRosco]

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[Husker86]

I maintain a spreadsheet daily with gains, losses, contributions, employer matches, etc., for my 401k. Complete with charts and graphs! I do it because I'm apparently insane. That, and it only takes a minute.

But I'm not looking to move anything around, I just want to maintain a record. Plus I like graphs.

I do the same, only with end of the month snapshots. I track investments, transfers, dividends, etc. I have one file with the monthly snapshot since the month I graduated college over 10 years ago. It has a single graph showing the total investments over that horizon, and one breaking out the composition (cash, retirement, college, savings, company stock). I make the file a bit better each year as part of my annual re-balancing. I am also slightly insane, but daily rather than monthly is downright certifiable.

I do the same thing, but weekly! We got a nice spectrum of insane going on here.

I fucking love graphs and charts.

I have so much interspersed free computer time at work that I can't help but click that one Fidelity bookmark to look at my accounts. I also use Mint a lot, so the account values are always in my face. I know I will never be able to not look at my investment accounts on a regular basis.

 

[Zaraki_Kenpachi]

I'm thinking 70% small cap index and 30% international small cap index... Does this seem OK, or does it seem crazy?


Edit: Actually I'm leaning towards s&p index instead of small cap.

 

[iamblades]

I'm thinking 70% small cap index and 30% international small cap index... Does this seem OK, or does it seem crazy?


Edit: Actually I'm leaning towards s&p index instead of small cap.

The 500 or the 1500?

The composite 1500 is probably the better option for single fund index investors as it is more diverse and includes small and mid cap companies(albeit at relatively low percentages).

The overall weighting of the two indices aren't actually all that different(so the volatility of the small caps doesn't really affect you), but with the 1500 you will at least be involved from the ground floor if some small niche sector blows up into into a hundred billion dollar market without warning. The 500 index won't see that kind of growth industry until it's already mostly over.

Vanguard's total stock market fund tracks the S&P composite 1500 for instance, along with many other 'total market' funds. It's really only like 89% of publicly traded equities, but it's close enough for most purposes, once you get into the 2000+ component range, index funds become more expensive because stocks that small require a lot of rebalancing which results in more transaction costs for the fund, and you don't really gain much upside because those small caps are so volatile they are basically just noise.

 

[Zaraki_Kenpachi]

The 500 or the 1500?

The composite 1500 is probably the better option for single fund index investors as it is more diverse and includes small and mid cap companies(albeit at relatively low percentages).

The overall weighting of the two indices aren't actually all that different(so the volatility of the small caps doesn't really affect you), but with the 1500 you will at least be involved from the ground floor if some small niche sector blows up into into a hundred billion dollar market without warning. The 500 index won't see that kind of growth industry until it's already mostly over.

Vanguard's total stock market fund tracks the S&P composite 1500 for instance, along with many other 'total market' funds. It's really only like 89% of publicly traded equities, but it's close enough for most purposes, once you get into the 2000+ component range, index funds become more expensive because stocks that small require a lot of rebalancing which results in more transaction costs for the fund, and you don't really gain much upside because those small caps are so volatile they are basically just noise.

It's only the s&p 500. I can't are it being worse than a small, mid, or large cap index which is why I'm leaning towards that.

 

[clav]

It's only the s&p 500. I can't are it being worse than a small, mid, or large cap index which is why I'm leaning towards that.

100% S&P now.

 

[Cyan]

It's only the s&p 500. I can't are it being worse than a small, mid, or large cap index which is why I'm leaning towards that.

Small caps are higher variance and higher E(R) than large caps. Just as international stocks are higher variance and higher E(R) than domestic.

If you're going to ignore risk anyway, why not go all small-cap international? (note: not a serious suggestion)

 

[iamblades]

It's only the s&p 500. I can't are it being worse than a small, mid, or large cap index which is why I'm leaning towards that.

Worth noting that the smallest company in the composite 1500 has a market cap of 128 million, so it's not like you are dealing in super volatile penny stocks there.

Also since the index is weighted by market cap, the 500 top companies make up like 92% of the index.

It's not substantially different either way, the two indexes should basically always perform within a percentage point of each other at most because they share so many components, I just think there are a lot of really good profitable companies in that 500-1500 range that you miss out on with just the large cap fund. Most notably the large cap index completely under weights utilities and energy companies(aside from the big oil companies of course) because there are a relatively large amount of small local utility companies compared to say, banks or telecom companies.

 

[giga]

If you're going to ignore risk anyway, why not go all small-cap international?

This is what I do, except it's small cap in emerging markets only. Can't go wrong.

 

[Zaraki_Kenpachi]

This is what I do, except it's small cap in emerging markets only. Can't go wrong.

Except for emerging markers getting pumelled this past year in value. I'll 70% s+p and 30% international. I might weigh heavier on US though, international still doesn't look super appealing. I'll make my selections tomorrow. Thanks guys

Small caps are higher variance and higher E(R) than large caps. Just as international stocks are higher variance and higher E(R) than domestic.

If you're going to ignore risk anyway, why not go all small-cap international? (note: not a serious suggestion)

I sort of understand the snark but I'm still trying to understand things. People boast index stocks but there's a lot of different ones so I'm trying to figure out the difference. I have over 40 years to retirement if you follow stereotypical retirement. I'll make adjustments as market conditions change but to not go all in or close to it on stocks seems stupid currently. Unless something I invest in can't ever make back its losses they're temporary at best. If you have an argument for different allocation I'm all ears.

 

[Randolph Freelander]

Except for emerging markers getting pumelled this past year in value. I'll 70% s+p and 30% international. I might weigh heavier on US though, international still doesn't look super appealing. I'll make my selections tomorrow. Thanks guys

That last one was pure sarcasm. He actually just feeds his money straight through a shredder.

 

[Zaraki_Kenpachi]

That last one was pure sarcasm. He actually just feeds his money straight through a shredder.

That's still a higher return that emerging markets currently

 

[M-PG71C]

The volatility of the markets this year have really sucked. I've made no money technically. Not that it matters, I am a "set it and forget it" type of guy. But its interesting to watch. On the plus side I've finally transferred my former employers 401(k) to my TSP. It's taken two months or so but the balance is finally combined. Looks pretty lol!

 

[iamblades]

The volatility of the markets this year have really sucked. I've made no money technically. Not that it matters, I am a "set it and forget it" type of guy. But its interesting to watch. On the plus side I've finally transferred my former employers 401(k) to my TSP. It's taken two months or so but the balance is finally combined. Looks pretty lol!

I'm up 4% so far this year, like half dividends half cap gains. Of course 2% cap gains is basically flat, could easily lose that and more in a bad week.

 

[Dr. Feel Good]

Can someone help explain whether Roth account is worth it for me? I've historically only used straight 401K account, which my employer matches up to 6% of my paycheck. I'm not sure if they do the same on the Roth account, but does it ultimately really matter?

 

[RumblingRosco]

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[womfalcs3]

I've been reading up on index funds. I saw that this one has a high risk label: http://www.jadwa.com/en/fund/asset-...es/mutual-funds/jadwa-saudi-index-fund-1.html


Doesn't make sense to me(?). I thought by tracking all stocks, it would be low-risk.

 

[GhaleonEB]

I've been reading up on index funds. I saw that this one has a high risk label: http://www.jadwa.com/en/fund/asset-...es/mutual-funds/jadwa-saudi-index-fund-1.html


Doesn't make sense to me(?). I thought by tracking all stocks, it would be low-risk.

They might consider it high-risk as it's a 100% stock fund. Looking at their other funds, their equity funds are high risk, with currency and bond funds having lower risk profiles. I'm guessing it's based on the degree of volatility; while an index fund is a well diversified stock fund, it bears the market risk of stocks which is higher than other investment vehicles.

 

[chaosblade]

An index fund might also have more or less risk depending on what it follows. Something like emerging markets is considered higher risk than US total stock market.

 

[Husker86]

Can someone help explain whether Roth account is worth it for me? I've historically only used straight 401K account, which my employer matches up to 6% of my paycheck. I'm not sure if they do the same on the Roth account, but does it ultimately really matter?

If your employer matches, absolutely invest at least that first 6% into your 401k. If you open your own Roth (or even a Traditional) IRA, there will be no matching.

I would invest your 6% into your 401k, then if you want to invest further each year, you could open a Roth IRA for the tax benefits (you will not be taxed on any earnings if you withdraw money from your Roth once you enter retirement).

By the way, a straight 6% matching is incredible. One of the best matches I've ever heard. Most are 2-3% or so.

I think he might have been saying that he can convert his employer retirement account to a Roth 401k.

If they match the same then I think it would be better, if they don't then absolutely do not convert.

If that's not what you meant in your question then ignore this!

 

[RumblingRosco]

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