OT: Investment/Retirement

[MittRomney]

There always seems to be a lot of investment knowledge on the board. Would like input if your willing.

I have a little money in CGM Focus. Been holding for a while waiting for it to regain losses from a few yrs back. Seems the fund/company has gone down hill a good bit the last 5-8 yrs.

Looking at rolling it into one or all of Vanguard: healthcare, mid cap value, and/or mid cap growth.

I have enough to meet the minimum investment on all three if I end up going with all three.

Existing account is Roth and will keep the Vanguards in a Roth also. This is a relatively small piece of my total retirement, so I'm already pretty diversified.

Thoughts or advice for a passive, novice investor?

 

[Dawgbite]

Don't know where you are located but if you are close to Starkville, go talk to Greg Bowen at Edward Jones. Set a goal and get a plan. So many people want to self administer their financial future, I was one of them until a few years ago. I learned more about my finances and what my options were in one afternoon with him than I had learned through 30 years of self taught mistakes and lessons. I still have a small brokerage account that I play the stock market with, it make me feel like I have some control and fuels my ego that I'm smarter than the average investor, I'm not by the way. Don't be passive, I wish I had met with him 10 years ago, I was diversified but no specific goal and no plan to reach it. I will retire August 18th 2021, I'll be 56 years old!

 

[Philly Dawg]

Buy Vanguard 500 and forget about it.

 

[johnson86-1]

Buy Vanguard 500 and forget about it.

^^^this^^^^.

Unless you just want to play with it, just buy one of the broader vanguard index funds and forget it. Or actually I think fidelity may be undercutting vanguards fees now. Either way.

Unless you are just awful with this type stuff, don't go to an 'advisor'. Good ones will provide a lot of help that still won't cover their fees if you compare it to just sticking everything in the vanguard total market fund. Bad ones will put a drag on your performance that could cost you hundreds of thousands of dollars over your life, depending on how much you invest and for how long.

 

[MittRomney]

Thanks for the tips

I actually already have an Edward Jones account outside of this one. This account isn't with them, but I still plan to discuss with the financial advisor there before moving forward. Just like to hear other view points.

The reason I mentioned those accounts with Vanguard is the 10 year and return since inception of those 3. Looked to be pretty good as compared to the S&P 500 and overall index funds. The mid cap growth and mid cap value are also index funds, so low fees. The healthcare fees also look pretty low.

 

[RBDog82]

Look at Betterment. Asset allocation with low cost ETFs for much cheaper than a financial advisor.

 

[treeddeep]

VTSAX
max 401k (18k) in low cost index funds if your employer allows it. Max your IRA (5.5k) is total stock market or S&P 500. Index funds are everything

 

[was21]

yep...or Vanguard Total Stock Market for a little more diversification

 

[WhiteShepherd07]

Greg is a great guy, colleague of mine. He will treat you right.

 

[Bulldogg31]

Not sure if it's an option for you, but I took part of my retirement and set up a Self-Directed 401K through a company called American IRA based out of Asheville. Within this account I can buy pretty much any investment instrument, including real estate.

We've bought a couple of rental houses this way and it's actually a pretty fun way to invest. Feels like I have more control, even though there are still risks involved.

Worth a look if you want to try some things not stock market-related.

 

[treeddeep]

yep...or Vanguard Total Stock Market for a little more diversification

This is VTSAX. It's where all my money will be the next 20 years

 

[Wizard of bulldogery]

I would go with a tech etf and an S&P 500 etf and maybe a healthcare etf. There isn't a load and expense ratios for the funds are low. 7 dollars for the trade if you do it online with TD Ameritrade. It is pretty simple. 40 bucks if you want to speak with someone over the phone. I'm in the industry so i know what i'm doing, but with an hour of research one can figure it out. Mutual funds even at 100k breakpoint you are gonna pay 4.25% load upfront for A shares and there are expense ratios as well. No load mutual funds have high expense ratios. C-shares you pay the load on the back end. If you have to exit the mutual funds early you also pay a fee. This is why I recommend ETFs even though it is technically not good for the advising business because it essentially amounts to them not making any commissions.

 

[Philly Dawg]

Absolutely forgot about it, even better.

 

[thatsbaseball]

Bet the whole thing on MState tonite !!!

 

[Captain Ron]

Not that there is only one way to prepare for retirement, but this has worked for me.

https://www.amazon.com/Get-Rich-Div...13285&sr=8-1&keywords=get+rich+with+dividends

This is not stock trading. It IS investing in high value companies that have never (some 80 years or more) cut their dividend. It is basically the power of compound interest and the "strategy" allows you to grow 401k and create an income stream for retirement.

Since reading this book over 5 years ago, I have beat the S&P over that time and sleep soundly as market downturns really don't matter and can actually be beneficial over the long term.

Disclaimer. I have no financial interest in the book and didn't know anything about it till my neighbor (who retired eary) suggested it. Extremely easy read BTW.

 

[UpTheMiddlex3Punt]

Dividends are overlooked by a lot of investors. If you can get an account with a brokerage that has a free dividend reinvestment program (DRIP), you can ride your way to good long-term returns.

 

[UpTheMiddlex3Punt]

My number 1 rule is if I can't understand it works (it being what a company does, how a particular financial instrument work, etc.) then I don't invest in it. After that, it's just a matter of making sure I get my money into my investments and stick with them.

 

[Captain Ron]

Dividends are overlooked by a lot of investors. If you can get an account with a brokerage that has a free dividend reinvestment program (DRIP), you can ride your way to good long-term returns.

meant to hit thumb up not down....

 

[Dawg1976]

I retired at 52 being passive. More than one way to skin a cat. As far as what is best for the OP, only he can decide. If he needs a little hand holding and one on one advice, perhaps a local guy is the way to go. I'm more of a buy and hold type guy using index funds. But to each their own.....

 

[dawgphd]

Check out Movement Capital in Jackson area.

Check out Movement Capital in Jackson area.

They are a boutique firm doing some really unique things.

Not sure if they are taking new clients but worth reaching out to.

 

[Go Budaw]

Its hard to go wrong with any of the Vanguard funds, but 500 index is probably the way to go if you are only wanting one fund. However, the one caveat to that is that it does have a disproportionate amount of large cap stocks. You may want to supplement with a small amount (10-15% of overall holdings) towards a small / mid cap fund or extended market index. Vanguard has excellent choices here as well.

As far as whether or not to hire an advisor, I’d say that it depends on your comfort level. But, just about anyone with any sort of modest financial literacy can do enough research to pick funds that will at least match the market bench marks. Financial advisors can get you into funds that may beat the market by 1-2% (or may not), but much of that gap is closed by fees even if you do beat the market. I personally like to pick my own funds and minimize expense ratio as much as possible to limit the fixed costs that I have to pay no matter how well the funds perform. One of the easiest things to do is look up the major market target date funds, and choose a balance that closely matches that asset allocation in fund type and percentage. Maybe deviate a small amount (no more than 5-10%) for a given asset type based on your personal preference and risk tolerance.

 

[treeddeep]

Its hard to go wrong with any of the Vanguard funds, but 500 index is probably the way to go if you are only wanting one fund. However, the one caveat to that is that it does have a disproportionate amount of large cap stocks. You may want to supplement with a small amount (10-15% of overall holdings) towards a small / mid cap fund or extended market index. Vanguard has excellent choices here as well.

As far as whether or not to hire an advisor, I’d say that it depends on your comfort level. But, just about anyone with any sort of modest financial literacy can do enough research to pick funds that will at least match the market bench marks. Financial advisors can get you into funds that may beat the market by 1-2% (or may not), but much of that gap is closed by fees even if you do beat the market. I personally like to pick my own funds and minimize expense ratio as much as possible to limit the fixed costs that I have to pay no matter how well the funds perform. One of the easiest things to do is look up the major market target date funds, and choose a balance that closely matches that asset allocation in fund type and percentage. Maybe deviate a small amount (no more than 5-10%) for a given asset type based on your personal preference and risk tolerance.

Or you could just go with the total stock market fund which captures those small & mid cap the S&P doesn't.

OP: I would read bogleheads to nail down your strategy.

 

[Go Budaw]

Or you could just go with the total stock market fund which captures those small & mid cap the S&P doesn't.

OP: I would read bogleheads to nail down your strategy.

^^^This also. Total Market Index can give you what you need.

 

[MittRomney]

Thanks for all the input.

Definitely have a few things to look in to.

I know a guy that invests in dividends. He's ultra conservative, so always assumed it was a low risk/low return kind of thing. I've never considered it before, but will now. Book looks intriguing. Lots of good reviews.

 

[johnson86-1]

I actually already have an Edward Jones account outside of this one. This account isn't with them, but I still plan to discuss with the financial advisor there before moving forward. Just like to hear other view points.

The reason I mentioned those accounts with Vanguard is the 10 year and return since inception of those 3. Looked to be pretty good as compared to the S&P 500 and overall index funds. The mid cap growth and mid cap value are also index funds, so low fees. The healthcare fees also look pretty low.

Those are all fine funds. You are just making bets on a particular sector in the context of the healthcare fund and for the mid cap funds you are just betting they have more room to grow than the already behemoth companies. Historically, that's been a good bet, at least with respect to small caps. You get more volatility and higher returns (and arguably higher risks) but it's been pretty close. I am actually weighted a little heavy towards small caps. I would be comfortable going completely with Russell 2000 type index, but I think we have in general layered so much bureaucracy over so many industries, that you're going to see the behemoths buy up a lot of potential growth companies before they get beyond the private money stage, so that the growth is going to balance out in the future (or even favor the large caps).