Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I don’t care for Fidelity Funds. I think there are better options out there.
I'm glad you qualified that it's your opinion. Again I think that's an extremely broad statement and it really depends on the specifics.
Quote:
Not to mention, I would rather stick with a no-load fund with a small management fee.
Fidelity has numerous no-load funds and their other fees are reasonable IMO.
Quote:
I favor the Vanguard funds more, overall, but I don’t care for the Target Retirement 20XX funds.
Vanguard is well-known for being one of the best (if not the best) in terms of lower expenses and I have eyed them myself...but their returns on the whole haven't kept pace, which means bottom line they still aren't doing as well.
But overall, I just think it's foolish to dismiss an entire company. You have to take each fund on a case-by-case basis.
As for Retirement Funds, they're still pretty new to the market but so far on the whole don't seem to be doing very well, so I've avoided them.
As for small/mid-caps vs large caps, playing it riskier is all well and fine, but in the meanwhile it pays to have a steady producer in there. Plus large caps often tend to do well when the others aren't, and vice-versa...again keeping in with the diversity theme (and I think saying blue chips have no real growth potential is an oversimplification and means some may miss on some blue chips doing well). I'm an aggressive investor, but I don't think having a long time to invest means you throw all caution to the wind.
The real question is whether there will be further losses or whether the market has found a bottom.
Trying to time the market is one of the most common - and most foolish - investing mistakes IMO. Many people who know more than any of us here try and fail on a regular basis.
Vanguard is well-known for being one of the best (if not the best) in terms of lower expenses and I have eyed them myself...but their returns on the whole haven't kept pace, which means bottom line they still aren't doing as well.
Vanguard seems to be a little more conservative than some of the others. They do have some of the cheapest fees of any fund company.
<snip>
Quote:
Originally Posted by bill545
As for Retirement Funds, they're still pretty new to the market but so far on the whole don't seem to be doing very well, so I've avoided them.
Totally agree. In spite of all they hype surrounding these funds; they generally perform no better than a reasonably diversified portfolio.
Quote:
Originally Posted by bill545
As for small/mid-caps vs large caps, playing it riskier is all well and fine, but in the meanwhile it pays to have a steady producer in there. Plus large caps often tend to do well when the others aren't, and vice-versa...again keeping in with the diversity theme (and I think saying blue chips have no real growth potential is an oversimplification and means some may miss on some blue chips doing well). I'm an aggressive investor, but I don't think having a long time to invest means you throw all caution to the wind.
Currently, there is no difference between Vanguard’s large, mid and small cap funds. (Not unique to Vanguard.) Every one has a correlation coefficient with the S&P 500 of 97 and above. Basically one is the same as any other. A portfolio should have an exposure to large, mid and small cap funds but these three classes in and of themselves will not add diversification to a portfolio. A portfolio will need to have an exposure to a commodity fund, a REIT fund, a natural resource fund, a couple of foreign funds, two or three bond funds and a cash account to have any hope of being diversified. Equities are the heavy lifers of a portfolio, but one must be prepared to take some of the equity gains off the table when they are available.
Trying to time the market is one of the most common - and most foolish - investing mistakes IMO. Many people who know more than any of us here try and fail on a regular basis.
While I generally agree with you, I still think it is important to have a point of view. When it comes to 401k, tha point of view will be influenced by how far away from retirement you are, what your appetite for risk is, etc. etc.
I was fairly risk averse with mine and had 50% in fixed interest. That was more luck than good judgement! But the other 50% lost 40% of its value. My perspective now is that I have probably seen the worst of the losses so I am not changing the allocations. Still keeping 50% in fixed interest however.
After getting clobbered on stocks day after day after day it gets pretty old watching your 401k go down the crapper. I had about 80% of my funds in stocks and 20% in bonds. In January I had hoped that the trend would turn around and the stocks would start to pay off but they continued down another 5%.
It may have been a mistake but I made a change. I upped my bonds to 45% and cut my 4 poorest performing stock funds. Then I redistributed my funds to 60/40 stocks to bonds. Since I did that I haven't lost any.
OK I'm young and maybe this is a little conservative to be doing right now but I feel that with the market as volitile as it is there could be more potential risk for another downward spiral. And if that happens I'm in a better position to limit my losses. When it looks like the economy is turning the corner and starting to come back I'll change my stratagy back to a less conservative approach.
Trying to time the market is one of the most common - and most foolish - investing mistakes IMO. Many people who know more than any of us here try and fail on a regular basis.
Really? My 401K looks pretty good right now ever since I sold all my stocks several months ago.
I didn't lose 50% of my wealth like other people.
I think people were foolish to listen to those idiotic so called experts on cnbc and their financial advisors to stay the course.
Let's see where the stock market is at this summer. I wouldn't be surprised if it drops even more...I wonder if people will still be saying stay the course then.
OK I'm young and maybe this is a little conservative to be doing right now but I feel that with the market as volitile as it is there could be more potential risk for another downward spiral. And if that happens I'm in a better position to limit my losses. When it looks like the economy is turning the corner and starting to come back I'll change my stratagy back to a less conservative approach.
If you are under 30 this would be concerned rather conservative. Closer to 40, probably a little conservative, but ok. 50ish about right. Since this is a 401(k) you will be making bi-weekly contributions. You probably should make theses to the stock funds. After the capital gains are paid in Dec. move half of CGs to the bond fund. This way the bond fund continues to grow as will the stock funds. By using dollar cost averaging in the stock funds, you will be buying the shares at a reduced price from where they may be this fall/next year.
Over the next 20 years we will experience at least two more "world ending, jump out of the window" market crashing events. Use them for what they are - prime opportunities to acquire assets at record low prices. Take money off the table when the tide is rising. Buy in at the fall.
A portfolio should have an exposure to large, mid and small cap funds but these three classes in and of themselves will not add diversification to a portfolio.
Yes they will. But only to a modest degree and I don't mean to imply that that is "enough" diversification, as you pointed out.
As for bonds - if you're 10+ years out from retirement, phooey.
Quote:
Originally Posted by Jaggy001
While I generally agree with you, I still think it is important to have a point of view. When it comes to 401k, tha point of view will be influenced by how far away from retirement you are, what your appetite for risk is, etc. etc.
Sure. I was speaking more specifically to that "speculating" mentality (ie vs a long-term strategy thing).
Quote:
Originally Posted by drjones96
After getting clobbered on stocks day after day after day it gets pretty old watching your 401k go down the crapper. I had about 80% of my funds in stocks and 20% in bonds. In January I had hoped that the trend would turn around and the stocks would start to pay off but they continued down another 5%.
It may have been a mistake but I made a change. I upped my bonds to 45% and cut my 4 poorest performing stock funds. Then I redistributed my funds to 60/40 stocks to bonds. Since I did that I haven't lost any.
OK I'm young and maybe this is a little conservative to be doing right now but I feel that with the market as volitile as it is there could be more potential risk for another downward spiral. And if that happens I'm in a better position to limit my losses. When it looks like the economy is turning the corner and starting to come back I'll change my stratagy back to a less conservative approach.
A little?? Let me say I am by NO means an "expert" but IMO that is very much a panic move you may really regret. And again, thinking you can guess the market's upturns and downturns is a gambling game you will very likely lose....."stay the course" is IMO excellent advice, long term.
Quote:
Originally Posted by sheenie2000
Really? My 401K looks pretty good right now ever since I sold all my stocks several months ago.
I didn't lose 50% of my wealth like other people.
I think people were foolish to listen to those idiotic so called experts on cnbc and their financial advisors to stay the course.
Let's see where the stock market is at this summer. I wouldn't be surprised if it drops even more...I wonder if people will still be saying stay the course then.
Absolutely they will. I shudder to think how much you did lose by selling now. Remember the market has its ups and downs, but long-term it always goes up. Those "idiotic experts" knew what they were talking about.
Yes they will. But only to a modest degree and I don't mean to imply that that is "enough" diversification, as you pointed out.
As for bonds - if you're 10+ years out from retirement, phooey.
Not really. Pick any conbination of L, M, S cap funds and run a correlation coefficient analysis on them. They will all be within 5% of the S&P 500 which makes sense since they all tend to hold the same underlying stocks abeit in different percentages. Just because a fund has a title of L, M or S doesn't make them a L, M, or S cap fund. You need to look under the hood and analysis which stocks they hold. Many overlap significantly.
L, M, and S caps must be a part of a portfolio, but not the first three funds. If only three funds, pick a Mid Cap, maybe a commodity index fund and a bond. This will provide a level of diversification not possible with only US equity funds. The whole point of diversification is to reduce unsystematic risk. US equities share the risk factors thus in and of themselves will not diversify a portfolio. The analysis can be done with Excel. Load the past years closing prices and use the CORREL(a, b) function. Most advisor like to have a ratio below 85 - 90. I prefer below 80.
Bonds, BTW, are critical to the stability of a portfolio. Same with a cash account and it doesn't matter how long you have til retirement.
Last edited by dsnellen; 02-09-2009 at 08:57 PM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Again I think that's an extremely broad statement and it really depends on the specifics.
