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Old 11-02-2014, 06:26 PM   #61
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@Wrasil you are definitely on point with the long-term perspective to growth. A lot of folks have to reduce their overhead as well. After many years of thinking debt was the norm I focused on being debt free.
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Old 11-03-2014, 12:45 PM   #62
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Originally Posted by Amoeba View Post
You're trying to time the market, don't. The best approach to long-term retirement investing is to pick a diversified set of index funds and just leave it there to ride through the ups and downs. It has been proven again and again that passive investing outperforms trying to pick winners. Especially with a investment horizon of 30+ years.
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Originally Posted by Wraisil View Post
My 401k is set to re-balance quarterly and I evaluate what funds I'm in when I do taxes each year. I see what the balance is more often than that (all my accounts are linked to my USAA account so I can get a big picture view of my finances), but I'm good at ignoring it. My brokerage account gets more attention, but I trade as well as invest in that account.

One thing that will help in the future is seeing the swings, but knowing your returns. Once you see a 5% drop, but recognize that thanks to the power of compounding over time you are still up a large % overall then the peaks and valleys start to have much less impact.

Being down $500 in a day when you're up $10k or $100k doesn't sting as much as watching "almost all" of your total gains disappearing. Until you reach that point, it's just a matter of reminding yourself that what you see happening to your account "in the moment" means nothing. Investing is a journey in which you need to ignore 95% of the trip.
What would each of you say is your list of things to consider when researching funds and deciding what to invest in when it comes to your 401K?

Would you say that you think more about long-term gains with your 401K, but for your personal portfolio maybe more shorter term gains?
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Old 11-03-2014, 05:16 PM   #63
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Just keep it simple. A 3-fund strategy is really all you need. 1) U.S. large cap index fund (like S&P 500), 2) World market large cap index fund, 3) Bond index fund. This allows you to be diversified while minimizing expense ratio.

Index funds will have significantly less management fees than other funds, and is great for long term investments. Get these three if your 401k offers them. They will always have a S&P500 index variant.
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Old 11-04-2014, 12:52 PM   #64
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What would each of you say is your list of things to consider when researching funds and deciding what to invest in when it comes to your 401K?

Would you say that you think more about long-term gains with your 401K, but for your personal portfolio maybe more shorter term gains?
Funds that are low fee/expense (like Amoeba said, index funds are the best way to get that generally), and then funds that are invested in the assets I want to be investing in. Amoeba's example set of funds is a simple way to get a basic diversified portfolio and should work for most people if such funds are available in their 401k.

Shorter term investment strategies can be a lot more complicated because there are a number of factors which affect where to invest (such as time frame, how "needed" the money is", etc). What works for one person or one situation isn't going to work for someone else or that same person in a different situation so comparing them isn't really productive. My brokerage account is a mix of various types of investment strategies from "this money may be needed at any time" to "this money should grow for decades" personally.
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Old 01-02-2015, 12:37 AM   #65
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2014 was a good year for my 401K. Got a ROR of 15%.
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Old 01-02-2015, 09:52 PM   #66
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Nice. SP500 did 11% last year so you've beat it.
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Old 01-28-2015, 12:30 AM   #67
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Nice. SP500 did 11% last year so you've beat it.
Why do people use SP500 as a measure for how well their 401K did for the year? I never understood this.
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Old 01-28-2015, 01:18 AM   #68
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It's the standard benchmark index for the U.S. market.
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Old 01-29-2015, 08:07 AM   #69
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VGTSX (Vanguard Total International Stock Index Fund Investor Shares) is one low fee option.

https://personal.vanguard.com/us/fun...FundIntExt=INT
I am 27 years old and have been contributing to my 401K for 3 years now. My company has a JPMCB SmartRetirement 2050-C plan set up for me, which appears to be a set it and forget it type portfolio where they adjust funds automatically.
https://www.jpmorgansmartretirement....irement/SR2050

I'm currently putting 8% of my pay into it, and my company matches 75% of the first 6%. I have thought of bumping my contribution up higher, but I have been reading other threads stating that I should open a Roth IRA at my age and maxing that out first. The VGTSX from Vanguard also looks intruiging, but should I focus on my 401K and IRA before looking into anything else?
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Old 01-29-2015, 01:37 PM   #70
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It's not bad, though with 0.85% expense ratio. Depending on what other fund offerings there are in your retirement plan, you may not do much better.

You should always max out the company 401k match, then max out Roth, then add to your 401k as much as you can, in that order. If your tax bracket is low, you may even want to consider doing a portion of your 401k in Roth 401k as well.

Remember to diversify. The JP morgan fund goes aggressive at 20%-bond/80%-stocks until you're 40, then start transitioning to more bonds for stability/low risk closer to retirement. That's not a bad plan. With the three fund strategy you can do:

20% Vanguard Total US Bond index (VBMFX - 0.20% expense ratio)
40% Vanguard Total US index (VTSMX - 0.17% expense ratio)
40% Vanguard Total International index (VGTSX - 0.22% expense ratio)

And have a quality fire-and-forget plan at 0.20% expense ratio and great diversification for the long term. Admiral shares drops expense ratio to (0.08, 0.05, 0.12), or just 0.08% expense ratio.



The three-fund portfolio is discussed here on Bogleheads: http://www.bogleheads.org/blog/the-t...und-portfolio/
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Old 08-15-2015, 02:21 AM   #71
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YTD ROR is 3.58%
I think I have too much in blue chip stocks

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Old 08-17-2015, 10:36 AM   #72
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YTD ROR is 3.58%
I think I have too much in blue chip stocks
S&P 500 is under 2% YTD, Russell 200 is ~1% YTD, etc... sure, if you'd put all your money in the Nasdaq you'd be up more, but diversification doesn't just protect you from losses, it also mitigates gains... which may not seem all that great if you see double digit returns on the tech sector..... but if you avoid the double digit losses on the tech sector in other years then it all balances out...

Last edited by Wraisil; 08-17-2015 at 10:36 AM.
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Old 12-10-2015, 06:16 PM   #73
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Quick question...

I'm in portugal so based on this:

75% US Stocks
20% Foreign Stocks
5% Bonds
0% Cash/Cash Equivalents
(your data/suggestion)

Should I keep the 75% US etc etc
or
Should I do 75% EU, 20% foreign, etc etc?
I don't know whether you were using the US because you live there or because it's actually the best place to put your money even if you're foreign.

Thanks in advance.
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Old 12-14-2015, 08:27 AM   #74
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Originally Posted by E46_Pedro View Post
Quick question...

I'm in portugal so based on this:

75% US Stocks
20% Foreign Stocks
5% Bonds
0% Cash/Cash Equivalents
(your data/suggestion)

Should I keep the 75% US etc etc
or
Should I do 75% EU, 20% foreign, etc etc?
I don't know whether you were using the US because you live there or because it's actually the best place to put your money even if you're foreign.

Thanks in advance.
First, I'd like to clarify that none of the information I presented is a recommendation for any specific portfolio people "should" use, it is simply educational material. The "US vs Domestic" ratios I discuss are used to illustrate changes in anticipated risk and return levels (based on historical data).

The "long story short" version of the ~75/25 split is based on risk (as measured by standard deviation in the markets) vs returns, which looks something like this (1973-2013):



As you can see, while a portfolio of international markets only would have increase returns (historically) by ~7% (not add 7% to the returns, that's the percentage change in the returns) it would cause a ~25% increase in risk levels (again, percentage change). How much risk any given individual is comfortable with for what type of potential gains is an individual decision though.

As always, I don't provide specific recommendations for individual portfolio allocations here. I hope that explanation helps some though.
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Old 06-27-2016, 09:38 AM   #75
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Just found this thread. Props to Wraisil for putting this together, this is what makes the E46F community so great
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Old 01-02-2019, 11:20 AM   #76
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2019 bump...
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Old 01-03-2019, 11:45 AM   #77
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This subforum doesn't receive a lot of traffic unfortunately. You almost have to go join an investing forum.
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If you want to make a statement that we all ought to get on board to fight poverty, I'm with you. If you want to say that we ought to fight income inequality I'm not with you at all. Because I don't think that the rich guy stole from the poor guy. In fact rich people don't get rich by stealing from poor people because it turns out poor people don't have money.
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