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Thread: Vanguard

  1. #31
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    Re: Vanguard

    Quote Originally Posted by JP4CY View Post
    VFIAX fund kicked *** this year.
    Shares on 1/18/13 $136.99
    Shares today 1/18/14 $169.58

    Not to burst your bubble, but that return is pretty consistent with the return of the market as a whole this year.



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    Re: Vanguard

    Quote Originally Posted by JP4CY View Post
    VFIAX fund kicked *** this year.
    Shares on 1/18/13 $136.99
    Shares today 1/18/14 $169.58
    Did not kick *** in 2008 when it went from 140 -> 70 in 6 months. Protect yourself from the bubble we are in.


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  3. #33
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    Re: Vanguard

    Other than price, passively managed funds (index) are pretty much the same so go with the cheapest. Vanguard also has some solid actively managed funds. You can save $$$$ by cutting out the financial products sales person (advisor) and do it yourself. Honestly, the salesperson has nothing to do with how those funds are managed, they simply hold the fund and collect a commission or a fee ( which is simply a higher, more consistent commission) for keeping an eye on something they can not control. Do not be fooled by the "fee structure". They are still earning a commission on the fee, just a larger commission. Money spent on fees is money not earned.


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  4. #34
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    Re: Vanguard

    If this thread hasn't made your decision crystal clear I don't know what will.


    Quote Originally Posted by CycloneRulzzz View Post
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    Re: Vanguard

    Quote Originally Posted by brianhos View Post
    Was going to let this play out for a bit to see if things continue this way. The market has only been up up up for 5 years which cannot last forever.
    True, but most financial advisors will lose your money just the same and give you the same lines about long term investing.

    If you get yourself an Ameritrade or Scott Trade account, buy yourself a mixture of Vanguard total stock index, REIT's w/ 6-7% dividend yields, and some individual stocks of decent dividend yielding stocks. In the long run you will beat your personal yield than using almost any financial advisor due to the fee difference.

    If you want to "time" the market or think it's overpriced, there are some "short" ETFs that you can buy, but I'd recommend those only with a bit of gambling money.



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    Re: Vanguard

    I truly cannot say enough good things about Vanguard, and its founder Jack Bogle. In the personal finance world, Bogle is a rockstar, akin to Warren Buffett. He even has groupies (bogleheads). Basically invented the index fund. In fact, Warren Buffett has a famous 10 year bet with a big hedge fund manager that essentially says you're better off investing your money in low cost index funds like through Vanguard, than having it actively managed by these so-called money gurus. The bet basically says anyone can manage your money and sometimes beat the stock market returns, but can they do it consistently, and will those returns still be higher after they take out their huge fees? Buffett is currently winning that bet after 5 years btw. Someone already mentioned the BogleHeads forums, which are a great resource. Let me also throw in this link to learn more about Vanguard and index funds:
    The bashing of Index Funds, Jack Bogle and a Jedi dog trick
    He also has a great stock-picking series on his website that's does a great job of simplifying investing. There's also a great video from Frontline about the long term costs of higher fees in retirement accounts (think $100's of thousands of dollars by the time you retire.) My interest is early retirement, and Vanguard is one important tool to get there. Good luck!



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    Re: Vanguard

    Maybe not a Vanguard related question, but more of a portfolio question. How do you manage an employer 401K and an IRA? When I say that, what kind of investments do you put in each portfolio, is one a very conservative portfolio and the other a risky one? Are they both the same amount of risk? Is one mainly a bond portfolio and the other in equity? I am curious because I have an employer 401K, but have thought about getting an IRA (Mainly so I have more options of funds to invest in). Any thoughts would be appreciated. Also, I am still on the young side at 26.



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    Re: Vanguard

    Quote Originally Posted by SCNCY View Post
    Maybe not a Vanguard related question, but more of a portfolio question. How do you manage an employer 401K and an IRA? When I say that, what kind of investments do you put in each portfolio, is one a very conservative portfolio and the other a risky one? Are they both the same amount of risk? Is one mainly a bond portfolio and the other in equity? I am curious because I have an employer 401K, but have thought about getting an IRA (Mainly so I have more options of funds to invest in). Any thoughts would be appreciated. Also, I am still on the young side at 26.
    First of all, great job thinking about this all in your mid 20's. Too many people aren't worried about retirement until it's too late. If it's me, I'd ask why you are looking to open a conventional IRA. Are you maxing out your 401K contribution already, ($17,500 this year) because that is a fantastic reason to open another IRA? If not, I would personally recommend maxing out your 401K through work first, as that will offer you the greatest tax savings. HOWEVER, if the funds in your 401K are not good, and/or the fees are too high, you might look at a traditional IRA before you max out your 401K. If that's the case I'd still recommend contributing enough to your 401K to get the full company match (if there is one) and then opening a traditional IRA through Vanguard. I'd say the strategy for retirement accounts is the same however. Since you're young, that means investing heavily in stocks, with maybe 25-30% in bonds and REIT's. Those will help hedge against market downturns, inflation, etc... Dividend stocks can be a great option too, but in your mid 20's, I'd say go for growth since you have 25-30 years before you hopefully retire early. Personally, I'd say stock index funds 70%, Bond index funds around 20-25%, and REIT's 5-10%. No need to keep one account more conservative than another, just keep both well balanced, and adjust as you get older.



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    Re: Vanguard

    Quote Originally Posted by AuH2O View Post
    True, but most financial advisors will lose your money just the same and give you the same lines about long term investing.
    I agree. When I got out of college in 2005 I had zero experience investing, and set up a Roth IRA with a full service broker/financial planner (local franchise of a widespread national chain). His argument against index funds was that a managed mutual fund wouldn't lose as much in a bear market. In 2009--after some fairly tumultuous times in the market--I worked the numbers backward on how my full service IRA account did vs. if I had invested in VFINX or other options on my own. I subsequently closed that account and transferred the assets to a self-managed online broker.

    I think financial planners can be good in some situations, however if I were to use one henceforth it would definitely be someone that charges a flat fee to look things over and offer advice. Any other arrangement is ripe for conflict of interest, IMO. In most cases if the advisor is also your broker, they are much better off selling you a front-load mutual fund with high fees (which besides the initial sales commission in many cases also provide ongoing kickbacks) than a low-cost index fund--even if the index fund is actually a better investment vehicle for you.



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    Re: Vanguard

    I am currently maxing out my 401K to the point if I increase my earnings, my company won't increase there's. I am not making enough to put away 17,500 for retirement. Since my company won't increase their amount in to my 401K, I want to find an IRA that gives me a lot of investment options. My current 401K options are limited in my opinion. I have the list of Vanguard target funds, and probably 6-10 other funds to choose from.

    The reason I am interested in a separate fund is so I can have my company 401K as a more risky or aggressive portfolio so I can take advantage of the company match, kinda like leverage. The IRA would be more conservative or more actively managed.



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    Re: Vanguard

    As many others have said, Vanguard is great. Low cost index funds. I love TRPrice, have all my stuff there, and probably would not have anything in managed funds but they are great on small value stuff. Have Vanguard funds thru 401k and they are excellent.

    There's a lot of good advice in this thread, let me add one point of emphasis: portfolio diversification thru Real Estate, in particular REITS.

    I've done some statistical portfolio theory work, and REITs really offer the least correlation to stocks (US or Intl) and bonds. You gotta have some REIT. I aim for 10%, you don't need to go nuts.


    Question for the group on bonds: is there any point buying bonds right now given the low rates? I'm getting to the age where I feel the need to start increasing my bond %. Not trying to time the market, but bonds are in for a big fall in the next few years.



  12. #42
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    Re: Vanguard

    At age 26, I'd go 100% equities. I'm 27 and do just that.



  13. #43
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    Re: Vanguard

    Quote Originally Posted by SCNCY View Post
    I am currently maxing out my 401K to the point if I increase my deferral rate, my company won't increase the amount they match. I am not making enough to put away 17,500 for retirement. Since my company won't increase their amount in to my 401K, I want to find an IRA that gives me a lot of investment options. My current 401K options are limited in my opinion. I have the list of Vanguard target funds, and probably 6-10 other funds to choose from.

    The reason I am interested in a separate fund is so I can have my company 401K as a more risky or aggressive portfolio so I can take advantage of the company match, kinda like leverage. The IRA would be more conservative or more actively managed.
    Your first sentence doesn't make a lot of sense. I attempted to correct terminology (see bolded above) to what I think you meant to say.

    The phrase "maxing out your 401(k)" refers to deferring up to the $17,500 (indexed) allowed by law. You've already stated you are not doing that. Once you've hit that amount, you've maximized what you're allowed to defer into a 401(k) plan for the calendar year. You can also refer to maximizing your 401(k) up the point your company will match your contribution. I believe that is what you're trying to say your already doing?

    I'm not sure there is a lot of value in treating you 401(k) investments differently than you do your IRA. Both represent your investment portfolio and I assume, both have the same goal -- saving for retirement.

    If I were you, I'd go to the boglehead forum I mentioned on the first page of this thread and lay out situation and ask others to provide their thoughts and opinions. These people geek out on this stuff and you'll be surprised at how at in-depth and thoughtful some of the answers will be. Here is the link. As you'll see, they even have a format they request you follow so that you're providing all the needed information people need to form an opinion on what strategies that might make sense for you:

    Bogleheads • View topic - Asking Portfolio Questions


    Last edited by capitalcityguy; 01-18-2014 at 02:18 PM.
    CCG

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    Re: Vanguard

    At 26, all retirement funds should be going into fairly aggressive positions (meaning stock funds and etf's). You've got 40 years to ride out the ups and downs of the market.



    Quote Originally Posted by SCNCY View Post
    Maybe not a Vanguard related question, but more of a portfolio question. How do you manage an employer 401K and an IRA? When I say that, what kind of investments do you put in each portfolio, is one a very conservative portfolio and the other a risky one? Are they both the same amount of risk? Is one mainly a bond portfolio and the other in equity? I am curious because I have an employer 401K, but have thought about getting an IRA (Mainly so I have more options of funds to invest in). Any thoughts would be appreciated. Also, I am still on the young side at 26.


    I was a victim of a series of accidents, as are we all.

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    Re: Vanguard

    Thanks for the advice. I am currently all in equities, with probably about 1/3 in international. I appreciate the input in how to treat two portfolios. Thanks!



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