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[GhaleonEB]

If you are buying vanguard funds just go vanguard. No fees to buy their funds or ETFs, and no yearly fee with minimum OR with electronic statements.

Edit: If you are buying stocks just pick whatever you want with the most reasonable trading fees.

FWIW, I'm with Fidelity and that describes them as well. I have yet to pay a fee of any kind, and their index fund have very low expense ratios. I'm in the process of transitioning my portfolio to mostly index funds.

They don't have a lot of them, so Vanguard may have more, not sure. I know their total stock market index is nearly identical to Vanguards.

 

[giga]

Would putting some funds in a bond market index be a bad idea right now, considering future interest rates?

 

[Piecake]

Would putting some funds in a bond market index be a bad idea right now, considering future interest rates?

No. holding bonds is useful for asset allocation and if you invest for the long term, a few dips here and there won't matter. We don't know what will happen to the interest rate in the future. People were all doom and gloom 10 years ago when the interest rates sucked. Well, bonds improved because they went even lower.

So dont worry about it and use it for asset allocation

Also, I prefer Vanguard because Vanguard is owned by the funds themselves and, as a result, is owned by the investors in the funds.

I think that is a lot better business model than what companies like Fidelity have, and I want to support it

 

[giga]

No. holding bonds is useful for asset allocation and if you invest for the long term, a few dips here and there won't matter. We don't know what will happen to the interest rate in the future. People were all doom and gloom 10 years ago when the interest rates sucked. Well, bonds improved because they went even lower.

So dont worry about it and use it for asset allocation

Also, I prefer Vanguard because Vanguard is owned by the funds themselves and, as a result, is owned by the investors in the funds.

I think that is a lot better business model than what companies like Fidelity have, and I want to support it

Definitely a long term investment for me. Thanks!

 

[Aroo]

Hello everyone. Just subscribed after a recommendation to read this thread from a fellow Gaffer when I bumped the "What to do with 10K" thread.

Vanguards, will be sure to try and read up on that. Feels like I need to do something with my money before some one else does (or like the bank making money off of my money without me seeing a cent right now.)

Subscribed.

 

[GhaleonEB]

So, what's a good mix between US total market index, bond index, and international stock index?

I'm transitioning our portfolio to mostly index funds, but I'm still not solid on the allocation. Right now I'm thinking 60% US market, 20% international, 20% bond. But the advice I see really varies. The mix is for retirement, in Roth (both IRA and 401k), so we're planning not to tap into them for ~25 years. I want to set up a balance and ten just let it go, aside from small rebalancing along the way.

 

[RumblingRosco]

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[Piecake]

So, what's a good mix between US total market index, bond index, and international stock index?

I'm transitioning our portfolio to mostly index funds, but I'm still not solid on the allocation. Right now I'm thinking 60% US market, 20% international, 20% bond. But the advice I see really varies. The mix is for retirement, in Roth (both IRA and 401k), so we're planning not to tap into them for ~25 years. I want to set up a balance and ten just let it go, aside from small rebalancing along the way.

I personally go 40/40/20 since if you look at the total world composition by countries

https://personal.vanguard.com/us/funds/snapshot?FundId=0628&FundIntExt=INT#tab=2

North America makes up 53% of the total world stock market (9% of that is Canada). So about half is the US. I like track the world index as close as possible since you really don't know what will happen in the future. No guarantee that the US stock market will outperform the world.

I am personally not a fan of slowly increasing your bond allocation as you age. I really think you only need to do that when you hit 50 or so. Then you can start making some serious adjustments. I think 15 years is enough time to protect yourself from a volatile stock market. The rest your investment life should be maximizing return, and the stock market is the best way to do that

Why not just do world? Well, it would be easier, but I think 40/40 split is good enough and it means a lower expense ratio

Definitely a long term investment for me. Thanks!

http://econlog.econlib.org/archives/2003/06/bond_market_bub.html

The bond market!! Oh noes!

 

[GhaleonEB]

I would say 60/20/20 is solid for a 25 year outlook, while slowly increasing your % of bonds and decreasing your % of US/Int as you come closer to that 25-year mark. Could even consider reducing bonds to 10% or less for the first 5-10 years of that 25 years if you're willing to take on a bit more risk.

I feel like 15-20% would be my floor for bonds, as I don't want to tip too heavy into all stocks. But as these are in Roths, I plan to keep a high mix of stocks a ways into retirement. We have other funds (our company retirement fund) we'd tap first, and then the Roths after so they have time to compound and grow as much as possible tax-free before we start drawing them down. So I'm currently planning on keeping a pretty steady asset allocation into retirement, and then rebalance down gradually after.

I personally go 40/40/20 since if you look at the total world composition by countries

https://personal.vanguard.com/us/funds/snapshot?FundId=0628&FundIntExt=INT#tab=2

North America makes up 53% of the total world stock market (9% of that is Canada). So about half is the US. I like track the world index as close as possible since you really don't know what will happen in the future. No guarantee that the US stock market will outperform the world.

I am personally not a fan of slowly increasing your bond allocation as you age. I really think you only need to do that when you hit 50 or so. Then you can start making some serious adjustments. I think 15 years is enough time to protect yourself from a volatile stock market. The rest your investment life should be maximizing return, and the stock market is the best way to do that

Why not just do world? Well, it would be easier, but I think 40/40 split is good enough and it means a lower expense ratio

To the bold, I agree, not planning to adjust it up. I think that's a strategic mistake, especially since growth needs to fund ~30 years of retirement. Cutting that short so early could be really costly.

Thanks for the reference point on Vanguard's fund, I think I'll use that as a guide.

 

[Gallbaro]

This is the end, my beautiful friend.

 

[RumblingRosco]

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[sc0la]

FWIW, I'm with Fidelity and that describes them as well. I have yet to pay a fee of any kind, and their index fund have very low expense ratios. I'm in the process of transitioning my portfolio to mostly index funds.

They don't have a lot of them, so Vanguard may have more, not sure. I know their total stock market index is nearly identical to Vanguards.

Yeah I assume other funds are rebalancing to compete better with vanguard on expense ratios. All I was saying was that if are looking at vanguard, or fidelity funds already to go ahead and open your brokerage account with that respective company for the lowest fees. Fidelity will charge you to buy vanguards funds and vice versa, if they even offer them.

 

[giga]

Should I understand what's going on here?

He bought 10000 shares of ZNGA at $10.

 

[RumblingRosco]

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[GhaleonEB]

Yeah I assume other funds are rebalancing to compete better with vanguard on expense ratios. All I was saying was that if are looking at vanguard, or fidelity funds already to go ahead and open your brokerage account with that respective company for the lowest fees. Fidelity will charge you to buy vanguards funds and vice versa, if they even offer them.

Yeah, I see that's what you were saying now. I see Vanguard and index funds discussed so much that I wanted to put it out there that other brokerages had similar if not identical offerings (though not as comprehensive as Vanguard). But that was really tangential to your (good) point.

I'm actually following Bogleheads strategies with Fidelity index funds. If I could start all over, I'd probably be with Vanguard, but I consolidated things a bit since my work goes through Fidelity for 401(k) and such.

 

[evergoo]

So, what's a good mix between US total market index, bond index, and international stock index?

I'm transitioning our portfolio to mostly index funds, but I'm still not solid on the allocation. Right now I'm thinking 60% US market, 20% international, 20% bond. But the advice I see really varies. The mix is for retirement, in Roth (both IRA and 401k), so we're planning not to tap into them for ~25 years. I want to set up a balance and ten just let it go, aside from small rebalancing along the way.

My asset allocation has evolved over the past 2 years. At first, 70/30 stock-bonds (50/50 domestic-international), then 80/20 (60/40 domestic-international), and now it's 90/10 (70/30 domestic-international). 90/10 rationale comes from 120 - my age, 70/30 domestic-international comes from the picture below. 2/3 of my investments are in Vanguard index funds and the other 1/3 is in dividend growth blue-chip stocks. My goal is to beat the S&P 500 with individual stock picks. It requires a tremendous amount of research and the payoff doesn't seem to be worth it, but I'll continue to pursue this challenge.

I'm getting really aggressive as a Dividend Growth Investor because I want to retire in my early 50s. Biggest concern with retirement is healthcare.

 

[Ecotic]

The problem is that video game companies rarely have spikes where all of the sudden you can make tons of money off them. It is possible to pop in and make 10-15% but its a risk.

I think Nintendo is probably the most interesting video game stock right now. It is trading around all time lows, but they still have great cash flow and a never ending stable of games they could potentially draw from. Sometimes their ASK screws everything up, but right now it is ok. There is money to be made there for the brave.

They're trading within a $11.50-$14.00 range, and have been for a while now. What I've been doing is popping in at $12 and selling at $13.50-$14. Then waiting a few days later when it's back to $12 again, and I can go in with a little more cash to buy more shares.

They're trapped in a generational cycle that's going to be terrible for them (so no upside), if it keeps fluctuating every 2 weeks from $12-14 then there's a lot of money to be made by following this narrow range they're trading in.

 

[toxicgonzo]

Gamestop is up in after hours trading.

This is probably because of Microsoft's backpedalling on Xbone's DRM scheme.

 

[Piecake]

Gray and Carlisle relate this story to demonstrate their point. A professor of psychology analyzed the Minnesota Multiphasic Personality Inventory (MMPI) test responses of more than 1,000 neurotic or psychotic patients. He used the data to build a model allowing him to predict final diagnoses. His model was accurate in 70 percent of the out-of-sample results, a figure greater than that of even the most experienced psychologists. He then ran the test again, this time providing psychologists with the model's prediction. To his great surprise, the psychologists continued to underperform the model. The psychologists thought, wrongly, that they could add something to the model. Unfortunately, they subtracted from it.

Grey and Carlisle provided the following case as further evidence. A statistical algorithm was developed to predict the outcomes of Supreme Court decisions. Even though this doesn't appear to be an area ripe for statistical analysis, the data showed that six variables explained the decisions. The model was tested against the forecasts of a group of 83 legal experts. The model's prediction was 75 percent accurate, whereas the experts were only 59 percent accurate.

Grey and Carlisle noted that studies have shown that models outperform experts in fields as diverse as "the detection of brain damage, the interview process to admit students to university, the likelihood of a criminal to reoffend, the selection of good and bad vintages of Bordeaux wines, and the buying of purchasing managers." Thus they concluded that investors are best served by tricking themselves into doing the right thing. And the way to do that is to rely on passive, quantitative methods to pick stocks, not qualitative methods, which are subject to human error. "The power of the quantitative approach is both in the protection it affords us against our own gambling instinct and in its relentless exploitation of the small edges provided by others' errors."

http://www.cbsnews.com/8301-505123_162-57589635/trust-models-over-instincts/

 

[Husker86]

I almost wish I could lock myself out from viewing my portfolio daily. I'm up 1.77% from when I started my Roth IRA a few months ago, but it stings that my portfolio was just 7.5%+ a month or two ago.

 

[Piecake]

I almost wish I could lock myself out from viewing my portfolio daily. I'm up 1.77% from when I started my Roth IRA a few months ago, but it stings that my portfolio was just 7.5%+ a month or two ago.

You just need to drill it into your brain that weekly, monthly, and yearly fluctuations do not matter when you are investing in a ROTH. I mean, who cares? Its not like you can take anything out of it until you are 60 anyways. Just stick to your plan and you'll come out ahead

 

[Gallbaro]

This is the end, my beautiful friend.

Fire in the Disco!

 

[GhaleonEB]

You just need to drill it into your brain that weekly, monthly, and yearly fluctuations do not matter when you are investing in a ROTH. I mean, who cares? Its not like you can take anything out of it until you are 60 anyways. Just stick to your plan and you'll come out ahead

Yup. I've had a ROTH for 14 years. We tally things up at month end and that's it, then do our annual rebalance. Long, long term.

 

[Chris R]

When do I have to have my yearly contribution to my Roth IRA in by? Added some more on the dip today but probably won't have the rest until later this year.

 

[Piecake]

When do I have to have my yearly contribution to my Roth IRA in by? Added some more on the dip today but probably won't have the rest until later this year.

You can invest in your 2013 Roth until tax day for 2013. So April 15th 2014

 

[Meier]

Someone explain to me what's happening with my Sprint stock. I got an email from Scottrade and clicked the link and it's a bit confusing to me. I guess Softbank bought and them are merging and the stock may go away or something? Will I get a buyout of my shares at a higher price if this happens?

Activision down to $13.74. Smh.

 

[FlashFlooder]

Someone explain to me what's happening with my Sprint stock. I got an email from Scottrade and clicked the link and it's a bit confusing to me. I guess Softbank bought and them are merging and the stock may go away or something? Will I get a buyout of my shares at a higher price if this happens?

Activision down to $13.74. Smh.

Whatever terms they agree to buyout on, you'll get what you're due.

So if it's a cash deal ($xx per share), you'll see $xx times the amount of shares you owned.
If it's a stock swap, they will give you a certain amount of Softbank shares.
If it's cash & stock, you'll get a combination of both.

I'm assuming this is a cash-only affair since Softbank is a Japanese company (?), so most likely you'll just wake up to a pile of money (from my rough calculations and limited knowledge of the deal, $7.15 per share) in your trading account.

Important to note that cash option is treated as sale (so tax laws come into play), while a stock swap isn't counted as a sale until you sell the converted stock.

Congrats on riding this one out, I held Sprint for about a year and sold it just a few months too early, it seems.



In other news, my favorite stock (ARNA) is currently experiencing a nice little explosion. Rumor has it that 1083 scripts were filled in the first 3 days it was on the market, which is pretty phenomenal. For comparison, Qsymia (by VVUS) filled only 108 scripts in its first full week on the market. This could be the beginning of a nice short squeeze for ARNA, with close to 65M of its 217M outstanding shares being short. If the first official report of script numbers is anywhere near what is being rumored here, it's going to be quite the ride.

 

[FlashFlooder]

You just need to drill it into your brain that weekly, monthly, and yearly fluctuations do not matter when you are investing in a ROTH. I mean, who cares? Its not like you can take anything out of it until you are 60 anyways. Just stick to your plan and you'll come out ahead

While this is true, you CAN actively trade within a Roth. So it does make sense to pay more attention to it than, say, a 401k.

 

[Meier]

Congrats on riding this one out, I held Sprint for about a year and sold it just a few months too early, it seems.

Thanks for the explanation, that was what I figured would happen. I don't actively trade.. just have a fairly large (for me) position in Activision and have held Sprint since the iPhone announcement which has ended up being a solid return but I don't have a ton of shares so this won't amount to too much to me sadly. I should have sold ATVI when I had the chance.. fallen over 2 bucks in the last 3 months or so.

 

[Gallbaro]

You just need to drill it into your brain that weekly, monthly, and yearly fluctuations do not matter when you are investing in a ROTH. I mean, who cares? Its not like you can take anything out of it until you are 60 anyways. Just stick to your plan and you'll come out ahead

Since you have already paid taxes on the contributions, you can withdraw that balance,

If you do portfolio allocation and have multiple accounts, you would use the Roth for income generating holdings. A traditional IRA being better for appreciation.

 

[RumblingRosco]

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[IGotBillySoSpooked]

Can anybody help me understand this? I'm not entirely in tune with the workings of the stock market, so any help would be appreciated. Here goes...

I'm involved in a group investment with 7 other relatives. We recently had an individual withdraw his shares (leaving 6 left in the fund). All of us have an equal share of the pie - 600 total shares of the Vanguard 500 Index Fund (around 85 shares each). He took the cash and ran, which obviously still leaves us remaining members with around 85 shares each. So, at this precise moment, my total value remains unchanged.

I am wondering how this withdrawal impacts the future growth of the fund, specifically wondering if it is at all detrimental to the six of us left with shares.

As it is currently set up, any divided payments are reinvested into the total fund by purchasing additional shares. The fund has grown from around 550 shares to 600 total shares in the past 6-7 years. Obviously, with fewer total shares involved, it results in smaller quarterly dividend payments, which in turn means slower growth of the total fund.

My rudimentary calculations suggest that the overall rate of growth of each individual share of the total will remain the same, even if the total value of the fund is obviously lowered.

Am I missing anything?

 

[Sanky Panky]

My rudimentary calculations suggest that the overall rate of growth of each individual share of the total will remain the same, even if the total value of the fund is obviously lowered.

Am I missing anything?

You are correct. No matter who participates in the fund, price appreciation and dividends are given on a per share basis, so your individual % return (on your existing shares) for a specific period will not be affected by people pulling out their shares.

The only limitation of people pulling out would be flexibility in buying larger (less liquid) investments that may require X amount of $ in total to buy. With index fund shares, this isn't really the case.

 

[RevoDS]

Can anybody help me understand this? I'm not entirely in tune with the workings of the stock market, so any help would be appreciated. Here goes...

I'm involved in a group investment with 7 other relatives. We recently had an individual withdraw his shares (leaving 6 left in the fund). All of us have an equal share of the pie - 600 total shares of the Vanguard 500 Index Fund (around 85 shares each). He took the cash and ran, which obviously still leaves us remaining members with around 85 shares each. So, at this precise moment, my total value remains unchanged.

I am wondering how this withdrawal impacts the future growth of the fund, specifically wondering if it is at all detrimental to the six of us left with shares.

As it is currently set up, any divided payments are reinvested into the total fund by purchasing additional shares. The fund has grown from around 550 shares to 600 total shares in the past 6-7 years. Obviously, with fewer total shares involved, it results in smaller quarterly dividend payments, which in turn means slower growth of the total fund.

My rudimentary calculations suggest that the overall rate of growth of each individual share of the total will remain the same, even if the total value of the fund is obviously lowered.

Am I missing anything?

Nope, your calculation is correct. Your shares will still grow at the very same rate as it used to do because you've got the same amount invested in the same assets as before (on an individual basis, that is).

I'm puzzled, however, as to why you'd pool funds together if all you're doing is place it in a single index fund. Is it because there's a minimum investment amount, or is there some tax-related benefit?

Why go through the hassle of coordinating all of these people when you could really get the same effect by buying the same fund individually and get the flexibility of adding and removing money whenever you want instead of having to force everyone to invest the same amount?

 

[IGotBillySoSpooked]

Thanks for the replies, guys. Great help.

It is a trust set up by my aunt, hence the group thing.

 

[RevoDS]

So I'm tired of waiting for a sizeable pullback in US stocks that never comes, and I've realized lately that I've been very US-centric in my quest for stocks. So I just started looking at Canadian stocks a bit more in order to diversify and put some new money to work.

I already own just a few Canadian stocks of the large-cap, dividend-paying kind in BMO and BCE.

I've started researching a few more:
THI - Tim Hortons (always liked this one. Simple, hugely profitable company)
MTY (the company that owns basically every shopping center fast food you can name and is buying even more buy the day)
QBR - Quebecor
MRU - (I like that one. Relatively cheap, they're not growing fast but they're literally throwing money at shareholders via huge buybacks and a small but growing dividend. Seems cheaper than it really is due to the sale of their stake in the next stock
ATD - Couche-Tard (another fast grower)

So I'm asking you guys who've dabbled in the TSX stocks, what are your favourites? What stocks are you buying or holding?

 

[evergoo]

I don't know much about Canadian stocks except that Prem Watsa owns a ton of BBRY stocks. He has a tremendous investment record and the stock is sold near its 52-week low.

Unfortunately, Blackberry doesn't return dividends and I have not yet seen anyone with a new Blackberry.

 

[Ether_Snake]

So I'm tired of waiting for a sizeable pullback in US stocks that never comes, and I've realized lately that I've been very US-centric in my quest for stocks. So I just started looking at Canadian stocks a bit more in order to diversify and put some new money to work.

I already own just a few Canadian stocks of the large-cap, dividend-paying kind in BMO and BCE.

I've started researching a few more:
THI - Tim Hortons (always liked this one. Simple, hugely profitable company)
MTY (the company that owns basically every shopping center fast food you can name and is buying even more buy the day)
QBR - Quebecor
MRU - (I like that one. Relatively cheap, they're not growing fast but they're literally throwing money at shareholders via huge buybacks and a small but growing dividend. Seems cheaper than it really is due to the sale of their stake in the next stock
ATD - Couche-Tard (another fast grower)

So I'm asking you guys who've dabbled in the TSX stocks, what are your favourites? What stocks are you buying or holding?

Only have CAE, had it for years. I can sleep on it because as I always say simulation is the future.

 

[HammerOfThor]

Not reply stocks related, but what are your investment thoughts on something like Lending Club

 

[Unknown Soldier]

I don't know much about Canadian stocks except that Prem Watsa owns a ton of BBRY stocks. He has a tremendous investment record and the stock is sold near its 52-week low.

Unfortunately, Blackberry doesn't return dividends and I have not yet seen anyone with a new Blackberry.

I would only buy BBY if I was hoping for an acquisition for a lot more than market value. Otherwise it's junk, no one wants BlackBerry 10 and the sales reflect that.

 

[No Love]

Anyone here done penny stocks? I have an amazingly consistent one. I get 30-50% gains on average. I'm at the point where it's about to start averaging $1k+/week in profit. It's rather surprising because most penny stocks can vary wildly over a period of days or weeks...

 

[Unknown Soldier]

If you aren't in on Sony now, you might want to get in.

By this time next year who knows how high it will be after the PS4 launches and sells every unit Sony can make.

 

[greyshark]

If you aren't in on Sony now, you might want to get in.

By this time next year who knows how high it will be after the PS4 launches and sells every unit Sony can make.

What percentage of Sony's total revenue comes from their gaming division?

 

[renascent]

If you aren't in on Sony now, you might want to get in.

By this time next year who knows how high it will be after the PS4 launches and sells every unit Sony can make.

The Sony stock is going up not because of PS4, but due to the fact that they may finally spin off Sony Music into it's own entity and not let it meddle with it's electronics side of business. That decision should've been made over a decade ago.

 

[renascent]

So I'm tired of waiting for a sizeable pullback in US stocks that never comes, and I've realized lately that I've been very US-centric in my quest for stocks. So I just started looking at Canadian stocks a bit more in order to diversify and put some new money to work.

I already own just a few Canadian stocks of the large-cap, dividend-paying kind in BMO and BCE.

I've started researching a few more:
THI - Tim Hortons (always liked this one. Simple, hugely profitable company)
MTY (the company that owns basically every shopping center fast food you can name and is buying even more buy the day)
QBR - Quebecor
MRU - (I like that one. Relatively cheap, they're not growing fast but they're literally throwing money at shareholders via huge buybacks and a small but growing dividend. Seems cheaper than it really is due to the sale of their stake in the next stock
ATD - Couche-Tard (another fast grower)

So I'm asking you guys who've dabbled in the TSX stocks, what are your favourites? What stocks are you buying or holding?

I don't know about THI. They're feeling the squeeze from a lot of newcomers and I'm not sure how much longer they will remain profitable. I hold Couche-Tard, Dollarama and Loblaws, has they are stalwarts in the retail sector, with Couch-Tard having a big international presence. Most of their value is in the acquisitions they do, but still, they hold a big share of the 24hr corner store market.

 

[HammerOfThor]

Anyone here done penny stocks? I have an amazingly consistent one. I get 30-50% gains on average. I'm at the point where it's about to start averaging $1k+/week in profit. It's rather surprising because most penny stocks can vary wildly over a period of days or weeks...

Details on the stocks?

 

[greyshark]

Details on the stocks?

I think you have to sign up for his newsletter to find out.

 

[Onion_Relish]

Is amd the play right now? Because I'm thinking amd is the play right now...

 

[Ovid]

I think you have to sign up for his newsletter to find out.

LOL.

 

[RevoDS]

Anyone here done penny stocks? I have an amazingly consistent one. I get 30-50% gains on average. I'm at the point where it's about to start averaging $1k+/week in profit. It's rather surprising because most penny stocks can vary wildly over a period of days or weeks...

Glad for you!

Be careful though, if it ever stops working, don't insist.

Penny stocks work for trading...until they don't.