Novice Level Investing Thread (1 Viewer)

[Dentist]

FBG's is a great community and I think there's quite a few of us on here that do a lot of our own finance managing.

I've seen many of you post on how you'd like to be involved in investing, trade and learn about the stock market, what choices to make for funds in your 401k, 529, Roth IRA, etc.

Dodds has a wonderful thread on stock market trading. The best minds on stock trading from FBG's are in that thread.

This thread does not replace that thread.

But this is for the guys that are just looking to get started. They may or may not even have a brokerage account, don't know how to read a stock chart, don't know what the difference is between an ETF and a mutual fund are, and just want to get some basic questions answered and some general investing ideas shared.

I'm a novice too. But thanks in part to the guys in the Dodds thread, I'm up to general speed on the market lingo and have a generally good idea on how to help you get off on the right foot.

So if you're a novice to intermediate investor, want to come in and ask questions, share some ideas about what you're invested in, com'on in. No question is too dumb in here.

But if you're looking to talk short term stock tips or day trade, head over to the Dodds stock forum - you'll get MUCH better advice there.

Stocks were volatile enough that i really didn't make any money in '11 either, but I'm hoping that all the education in here will give us a leg up in '12 and beyond.

 

[Dentist]

I have my brokerage accounts on Merrill Edge

I would recommend them if you have a decent amount of money at Bank of America.

I get 30 free trades a month for having a relationship at BoA, however i never use more than 3-4/month it seems.

Of my investing money, most is in a 401k at AXA Equitable, which I don't love, but it's where my business has its plan. I'm mostly in mid-cap and small cap stocks right now but am looking to get some foreign diversification, a little into bonds since i'm almost 35, and a little more large cap.

The rest is in Roth IRAs or Cash Management Accounts at Merrill Edge.

I am currently using the Roth IRAs for some exposure to things I can't get at AXA equitable:

In my Roth IRA I don't have enough money for individual stocks, so I've been using ETFs which are exchange traded mutual funds. These give me diversification and have very low expenses and I can buy or sell them at any time.

Some of the things I'm holding by ticker:

JNK - an ETF of high yield bonds - fairly good success here

PFF - an ETF of preferred stocks (this hasn't done well)

KBWD - an ETF of high yeilding real estate type companies (Called REITs) - it has a great yield but the share price has neutralized most of the yield - another less than great choice

MINT - an ETF that is basically a safe haven for cash.. pays a little under 1%.. it's where i keep money while i'm waiting for better opportunities, I don't like to be 100% invested because then you can't buy more if there is a market correction that puts things on sale.

NOM - missouri municipal bond fund (closed end fund) - this is in my cash account and the income it generates is tax free

PGF - an ETF of preferred stocks for financial companies (this was a bad pick as financials had a bad year) but it generates a nice yield and the dividends in this fund are only taxed at 15% - this is in my cash account

I am shopping for:

international exposure

a few speculative growth stocks that could be good plays if 2012 is a good year for a rebound

possibly some precious metal exposure via the ETF for gold - ticker IAU

 

[BeTheMatch]

 

[BeTheMatch]

First question(s):

I have one traditional IRA and another Roth IRA that I add to monthly. They're both mutual funds. I understand the difference between the Roth and the traditional IRA.

But, if I stick money in one of these places like E-Trade or Scott Trade, do you have different options for what you buy or how it's classified? In other words, can I buy a Roth IRA and still buy and sell stocks of my choosing within that Roth, meaning any earnings would be tax-free?

Or is just like having a bank account, where you can put in and pull out anytime you want, with any earnings subject to income tax?

 

[bueno]

Some comments for Dentist:

1 International Exposure

Define international exposure. I heavily invest in TSX and TSX.V stocks, mainly in the commodity sector. Many of these companies have businesses outside of the US and Canada. So that's one way of getting international exposure. The other way is to invest in companies that trade mainly on other exchanges but also trade on a US exchange: anything from NYSE to the pink sheets.

If you invest on a foreign exchange, or in stocks that trade mainly on a foreign exchange (even if you buy their US equivalent) you expose yourself to foreign currency exchange risks.

I will probably have a list of speculative commodity stocks in a few weeks. I have been mainly sitting on the sidelines since May, but I am looking to jump back in in January.

I recently picked up Northern Offshore (NFSHF - OTCBB) but trades primarily on the Oslo exchange (NOF). The company has secured a contract to drill four wells off the coast of Vietnam. At $180,000/day on a 400 day contract, the value is roughly $72 million. Pretty good for a small cap. Analysts see dividends of 2.7 kroner in 2012 and 3.5 kroner in 2013. That equates to $0.45 and 0,58 cents per share - pretty good for a $2.00 stock. Golar's John Fredriksen owns 1/3 of the company. I'm really impressed with what he did with Golar. I only bought 10,000 shares and that represents about 10% of their average daily volume.

The only stock I held in May was Lucky Strike Resources TSX.V - LKY. It has slumped in the past 45 days, I'm hoping because of end-of-year blues. The CEO is Cathy Fong, who was responsible for taking SilverCorp from a penny stock to a billion dollar company. Right now she has a Mongolian coal play and a rail contract to ship coal to China. I bought this for the longer term, which is why I didn't sell, and because I have confidence in Cathy. She has also invested in some of my start-up ventures, so it is a little bit of a mutual back-scratch. I'm sure Cathy and I will be investing in each other's projects again. Just be aware there is a friendship factor at play here.

High on my list is Zone Resources (TSX.V) but I need to see their year-end financials. I'm thinking this company is sitting on a 2 billion ton iron deposit in the Labrador trough, and they will be looking to be taken out by a major once they prove up the deposit. Currently trading below $0.10 with good share structure, a good management team and a great advisory board. I will probably buy 100,000 shares at $0,08 and hope it runs to $1.00, Might have others.

I bought these (or will buy) anticipating longer holds, but would be watching their progress closely. But DO YOU OWN DUE DILIGENCE DUDE!

2 Speculative Growth Stocks - see above.

3 Precious Metal Exposure

I'm not in love with gold right now. I will still look at some gold stocks, but mainly those on the verge of discovery or are emerging producers. I'm a little more interested in silver right now. I believe as the economy recovers, gold demand as a flight to safety will decrease. When inflation rears its head (and it will - the only thing saving us right now is the European mess) then it will be time to jump back into gold.

 

[bueno]

First question(s):I have one traditional IRA and another Roth IRA that I add to monthly. They're both mutual funds. I understand the difference between the Roth and the traditional IRA.But, if I stick money in one of these places like E-Trade or Scott Trade, do you have different options for what you buy or how it's classified? In other words, can I buy a Roth IRA and still buy and sell stocks of my choosing within that Roth, meaning any earnings would be tax-free?Or is just like having a bank account, where you can put in and pull out anytime you want, with any earnings subject to income tax?

I have both Roths and traditionals with different brokers. I can buy and sell within those accounts, but there are tax implications if I move money from one to another. I have moved money between two traditional IRAs or two Roths without triggering a tax event.

 

[Dirkswish]

 

[Prince Myshkin]

here's a real newbie question...

at what point does it make financial sense to start investing in the stock market? how much should be in savings at the bank before investing is warranted?

 

[BeTheMatch]

here's a real newbie question...at what point does it make financial sense to start investing in the stock market? how much should be in savings at the bank before investing is warranted?

People will say anywhere from 2-6 months' salary in savings in case of emergency before worrying about investments.

 

[Tecumseh]

.

 

[bueno]

here's a real newbie question...at what point does it make financial sense to start investing in the stock market? how much should be in savings at the bank before investing is warranted?

People will say anywhere from 2-6 months' salary in savings in case of emergency before worrying about investments.

In answer to #1, I would say to start investing once you have about $10,000 that you are prepared to risk. Remember that your money is not insured, and you could lose it all if you are really imprudent. With $10,000 you can invest $2500 in four separate stocks. In answer to #2, it depends on a number of things. Where I am right now, I don't worry as much about an emergency fund in the bank. I have lived two years on investment profit while still growing the portfolio. However, if I were in a different situation, I would have to take a number of factors into account including my job security, my ability to find a new job quickly, my health insurance, etc. 2-6 months income in a low-risk emergency account doesn't necessarily have to mean 2-6 months in a passbook savings or a cd, It might mean 2-6 months in a low risk stock that pays dividends. A municipal bond that is insured and has some liquidity can give you that emergency fund, for example, and still pay better than anything your bank can do for you.

 

[FUBAR]

at what point does it make financial sense to start investing in the stock market?

It's not really a "financial sense" question, it depends on your life, your debt, and when you'll need the money you're investing. Don't invest in stocks any cash you need in the next few years.

how much should be in savings at the bank before investing is warranted?

If your job is truly stable, 3 months spending IMO is plenty. If not really stable, 6 months. If your possibility of being laid off is high, probably closer to a year.One thing to consider is how much you're investing at a time, when deciding what type of account to use. If you're investing on your own, buying your own ETFs or stocks, you'll probably spend around $10 per trade. If you're investing $100 per month, you're already losing 10%. Mutual funds (check the load) make more sense IMO if you're investing less than $500 per month per trade.

 

[Dentist]

here's a real newbie question...at what point does it make financial sense to start investing in the stock market? how much should be in savings at the bank before investing is warranted?

give me some more info.age, marital status, home?, status of like a work 401k?there are a whole bunch of things you should do before even putting $1 in the stock market outside of a retirement account.

 

[Dentist]

Some comments for Dentist:

1 International Exposure

Define international exposure.

means i need to be involved in the international fund in my 401k more.or consider a broad index etf for foreign markets in my Roth IRA.

I'm not diversified enough to buy individual stocks overseas.

Thank you for the spec growth names though and for your thoughts on metals - i agree with those.

As with anything - i'm just "watching" a lot of things so that I know if they dip that possibly there is a good point to begin scaling into.

 

[Dentist]

Also some good topics for this thread might be:

good financial websites you visit

good financial books you've read

I have a lot of suggestions on this front but that's a pretty long post i'm not ready to write yet.

For what its worth i've read several stock and general investing books... so now i'm onto something more specific and am reading: "the Bond Book" by Annette Thau

if you were to buy just one or two books on investing the most comprehensive that covers just about everything money and is a good reference book to have lying around is:

"Where to put your money now" http://www.amazon.com/Making-Most-Your-Money-Now/dp/0743269969/ref=sr_1_6?ie=UTF8&qid=1325430656&sr=8-6

this is a MASSIVE book - you may want to see if your library has it - but if it's about money and explained simply, it's in this book.

also the "Bogleheads" guide to investing is also quite solid.

 

[Prince Myshkin]

here's a real newbie question...at what point does it make financial sense to start investing in the stock market? how much should be in savings at the bank before investing is warranted?

give me some more info.age, marital status, home?, status of like a work 401k?there are a whole bunch of things you should do before even putting $1 in the stock market outside of a retirement account.

early 30's, married, home owner (4 years in on a 30 year mortgage), very stable jobs (i teach at a public school and my wife is a college prof) with steady retirement plans. currently one kid, maybe more in the future be we are undecided at this point.

 

[Mystery Achiever]

Also some good topics for this thread might be:good financial websites you visit

Great sites to learn basics of....Investing and trading........ www.investopedia.comOptions .... www.optionseducation.comTechnical Analysis/Chart Reading.... www.stockcharts.com

 

[Dentist]

early 30's, married, home owner (4 years in on a 30 year mortgage), very stable jobs (i teach at a public school and my wife is a college prof) with steady retirement plans. currently one kid, maybe more in the future be we are undecided at this point.

so you have defined benefit pension retirement plans?are you roth Ira eligible? to know for sure google: Roth IRA income requirements 2012

 

[Prince Myshkin]

early 30's, married, home owner (4 years in on a 30 year mortgage), very stable jobs (i teach at a public school and my wife is a college prof) with steady retirement plans. currently one kid, maybe more in the future be we are undecided at this point.

so you have defined benefit pension retirement plans?are you roth Ira eligible? to know for sure google: Roth IRA income requirements 2012

yes both have defined benefit pension plans and are ira eligible.

 

[Dentist]

early 30's, married, home owner (4 years in on a 30 year mortgage), very stable jobs (i teach at a public school and my wife is a college prof) with steady retirement plans. currently one kid, maybe more in the future be we are undecided at this point.

so you have defined benefit pension retirement plans?are you roth Ira eligible? to know for sure google: Roth IRA income requirements 2012

yes both have defined benefit pension plans and are ira eligible.

your first brokerage account should be a Roth IRA account for you and your wife - that's 10k you can invest with no tax consequences and if you end up needing the money you can access anything but the gains at any time.

 

[Dentist]

Some financial websites i visit frequently:

finance.google.com

finance.yahoo.com

xtf.com - for evaluating ETFs

seekingalpha.com - a lot of articles discussing all types of finance, many are amateur written but are still good

investinginbonds.com - great site for bonds

cefconnect.com - great site for evaluating closed end funds

I follow quite a few finance people on twitter - i'll post those later

 

[JerseyToughGuys]

 

[MarshallPlan]

 

[Ned]

early 30's, married, home owner (4 years in on a 30 year mortgage), very stable jobs (i teach at a public school and my wife is a college prof) with steady retirement plans. currently one kid, maybe more in the future be we are undecided at this point.

so you have defined benefit pension retirement plans?are you roth Ira eligible? to know for sure google: Roth IRA income requirements 2012

yes both have defined benefit pension plans and are ira eligible.

your first brokerage account should be a Roth IRA account for you and your wife - that's 10k you can invest with no tax consequences and if you end up needing the money you can access anything but the gains at any time.

Be careful with that. You're still investing taxed money, so it's not without tax consequences. It's a nitpick, but to a first timer it could be misleading.

 

[Dentist]

early 30's, married, home owner (4 years in on a 30 year mortgage), very stable jobs (i teach at a public school and my wife is a college prof) with steady retirement plans. currently one kid, maybe more in the future be we are undecided at this point.

so you have defined benefit pension retirement plans?are you roth Ira eligible? to know for sure google: Roth IRA income requirements 2012

yes both have defined benefit pension plans and are ira eligible.

your first brokerage account should be a Roth IRA account for you and your wife - that's 10k you can invest with no tax consequences and if you end up needing the money you can access anything but the gains at any time.

Be careful with that. You're still investing taxed money, so it's not without tax consequences. It's a nitpick, but to a first timer it could be misleading.

well, ok.. not with NO tax consequences, but unless you do something weird like invest in MLP's or something, unless you touch the gains it's not a problem.... right? Am i missing something?

 

[guderian]

I'd recommend David Swensen's Book about personal investment. I haven't read it, but I did read the one he wrote targeted at institutional investors (Pioneering Portfolio Management) and he gives a lot of great advice and debunks a lot of the stupidity that kind of thrives in the market.

 

[Ned]

early 30's, married, home owner (4 years in on a 30 year mortgage), very stable jobs (i teach at a public school and my wife is a college prof) with steady retirement plans. currently one kid, maybe more in the future be we are undecided at this point.

so you have defined benefit pension retirement plans?are you roth Ira eligible? to know for sure google: Roth IRA income requirements 2012

yes both have defined benefit pension plans and are ira eligible.

your first brokerage account should be a Roth IRA account for you and your wife - that's 10k you can invest with no tax consequences and if you end up needing the money you can access anything but the gains at any time.

Be careful with that. You're still investing taxed money, so it's not without tax consequences. It's a nitpick, but to a first timer it could be misleading.

well, ok.. not with NO tax consequences, but unless you do something weird like invest in MLP's or something, unless you touch the gains it's not a problem.... right? Am i missing something?

No you're not missing anything, just that a lot of people are going to assume no taxes means totally tax free. Well, it's not really tax free. You're either going to pay up front or on the backend. My link

 

[SteevieG]

Here's one.. Kinda sad, but it is what it is.

I'm almost 50. I have zero retirement savings. Stable job. Wife is 53, stable job with a 401k (type) program. Not sure how much she has in it but it shows a pay-off per month of $800 if she works another 15 years and doesn't add anything to it. So we've got that going for us...

We owe $110,000 on our primary residence which is currently valued at a little over $150,000 and have a rental property totally paid off worth $75,000 and generating about $750 a month income. The total salary income for my wife and I is about $80,000 per year (low per FBG standards I'm aware...) and doesn't include the rental income.

I know I'm waaaaaay late to the retirement investing party... I'm getting ready to join my company's 401k plan. There are quite a few choices and I'm at a loss to know what to be in.

Most are Vanguard Target Retirement with 20__ fund numbers behind them, some are American Funds and there are a few others. I'm thinking an Index Fund should be a large percentage.

They also offer something called "Managed Account Service" by Advised Assets Group, which appears to let them do all the thinking for me (which may or may not be a bad thing). It doesn't really appeal to me, though.

I intend to work another 15-20 years and will/should have my primary residence paid off within that time.

I assume I should go a little riskier for a little while than a normal person my age who has been doing this for 20 or more years, but I don't know that for certain.

Any guidance is welcomed. TIA

 

[Workhorse]

 

[lakerstan]

Most are Vanguard Target Retirement with 20__ fund numbers behind them, some are American Funds and there are a few others. I'm thinking an Index Fund should be a large percentage.

The Vanguard Target Retirement funds are based on the date you plan on retiring. It assumes that someone older should take less risk than someone younger. It also assumes stocks have a higher risk than bonds.For example, a Target Retirement 2020 fund might be 60% stocks, 40% bonds.Whereas a Target Retirement 2040 fund might be 80% stocks, 20% bonds - a little more risky.ETA: 2020 and 2040 represent the years which are closest to your actual retirement year. So in your case, you plan to retire in 15-20 years, so looking at the 2030 fund is probably a good one based on their risk calculations.

 

[Dentist]

early 30's, married, home owner (4 years in on a 30 year mortgage), very stable jobs (i teach at a public school and my wife is a college prof) with steady retirement plans. currently one kid, maybe more in the future be we are undecided at this point.

so you have defined benefit pension retirement plans?are you roth Ira eligible? to know for sure google: Roth IRA income requirements 2012

yes both have defined benefit pension plans and are ira eligible.

your first brokerage account should be a Roth IRA account for you and your wife - that's 10k you can invest with no tax consequences and if you end up needing the money you can access anything but the gains at any time.

Be careful with that. You're still investing taxed money, so it's not without tax consequences. It's a nitpick, but to a first timer it could be misleading.

well, ok.. not with NO tax consequences, but unless you do something weird like invest in MLP's or something, unless you touch the gains it's not a problem.... right? Am i missing something?

No you're not missing anything, just that a lot of people are going to assume no taxes means totally tax free. Well, it's not really tax free. You're either going to pay up front or on the backend. My link

true. it's funded with post-tax money.. so you've paid the taxes once. It's just that it's not taxed anymore whereas with a cash account you're always getting taxed unless you lose.

But the original poster asked if he was ready to invest in the stock market.

He has defined benefit pensions with them both being employed by the government via schools.

So IMO I think his next move before investing in the market with post-tax money would be to put 5K for himself and 5K for his wife into a Roth IRA.

In that setting any gains would not be taxed (as long as it wasn't from the complicated investment MLP's).

It would be a great way to invest, although they are not good accounts probably to take on a high flyer in hopes of scoring big.

 

[Dentist]

Most are Vanguard Target Retirement with 20__ fund numbers behind them, some are American Funds and there are a few others. I'm thinking an Index Fund should be a large percentage.

The Vanguard Target Retirement funds are based on the date you plan on retiring. It assumes that someone older should take less risk than someone younger. It also assumes stocks have a higher risk than bonds.For example, a Target Retirement 2020 fund might be 60% stocks, 40% bonds.Whereas a Target Retirement 2040 fund might be 80% stocks, 20% bonds - a little more risky.ETA: 2020 and 2040 represent the years which are closest to your actual retirement year. So in your case, you plan to retire in 15-20 years, so looking at the 2030 fund is probably a good one based on their risk calculations.

this is pretty accurrate.Most financial GURUs will tell you that you can do better than Target Date funds.And they are probably right... unless you aren't very market wise, in which case I think they are fantastic choices.Target funds are kind of like accepting a "B" grade. You could possibly (but not positively) do better if you knew more about funds, the market, etc. You could certainly do a lot WORSE if you didn't know what you were doing and starting just messing around.Do this work fund have a "match" like do they match the first x% that you put into the fund?If not you may want to consider starting with a Roth IRA first, then going back to the company 401k because it is likely to have much higher fees than you could achieve by investing on your own.If there is a match, then you should contribute enough to get the full match, then come back to the Roth IRA, then if you still want to put more than that away, go back to the 401k

 

[rodg12]

 

[Ned]

Most are Vanguard Target Retirement with 20__ fund numbers behind them, some are American Funds and there are a few others. I'm thinking an Index Fund should be a large percentage.

The Vanguard Target Retirement funds are based on the date you plan on retiring. It assumes that someone older should take less risk than someone younger. It also assumes stocks have a higher risk than bonds.For example, a Target Retirement 2020 fund might be 60% stocks, 40% bonds.Whereas a Target Retirement 2040 fund might be 80% stocks, 20% bonds - a little more risky.ETA: 2020 and 2040 represent the years which are closest to your actual retirement year. So in your case, you plan to retire in 15-20 years, so looking at the 2030 fund is probably a good one based on their risk calculations.

this is pretty accurrate.Most financial GURUs will tell you that you can do better than Target Date funds.And they are probably right... unless you aren't very market wise, in which case I think they are fantastic choices.Target funds are kind of like accepting a "B" grade. You could possibly (but not positively) do better if you knew more about funds, the market, etc. You could certainly do a lot WORSE if you didn't know what you were doing and starting just messing around.Do this work fund have a "match" like do they match the first x% that you put into the fund?If not you may want to consider starting with a Roth IRA first, then going back to the company 401k because it is likely to have much higher fees than you could achieve by investing on your own.If there is a match, then you should contribute enough to get the full match, then come back to the Roth IRA, then if you still want to put more than that away, go back to the 401k

Also depending on the type of plan, you can make catchup contributions when you're 50+.

 

[BeTheMatch]

Dentist, after checking out those reviews of the different brokerage sites (http://www.onlinebrokerrev.com/main.php) you posted in the other thread, I didn't come away really feeling comfortable with any of them, for different reasons.

So, I think what I'm going to do is just open a non-retirement brokerage account on USAA. That's where my wife and I have all our banking, insurance, etc. We already have a traditional IRA there and a Roth that we contribute to with automatically monthly withdrawls. So it would be very easy for me to just set up another account there.

And their accounts seem comparable enough with $8.95 trades and decent research tools, etc. They are just a very solid company with great customer service and a pretty good track record all the way around.

I can just instantly transfer back and forth between checking/savings and the brokerage account this way too.

 

[Ned]

Dentist, after checking out those reviews of the different brokerage sites (http://www.onlinebrokerrev.com/main.php) you posted in the other thread, I didn't come away really feeling comfortable with any of them, for different reasons.

So, I think what I'm going to do is just open a non-retirement brokerage account on USAA. That's where my wife and I have all our banking, insurance, etc. We already have a traditional IRA there and a Roth that we contribute to with automatically monthly withdrawls. So it would be very easy for me to just set up another account there.

And there accounts seem comparable enough with $8.85 trades and decent research tools, etc. They are just a very solid company with great customer service and a pretty good track record all the way around.

I can just instantly transfer back and forth between checking/savings and the brokerage account this way too.

I love USAA.

 

[BeTheMatch]

Dentist, after checking out those reviews of the different brokerage sites (http://www.onlinebrokerrev.com/main.php) you posted in the other thread, I didn't come away really feeling comfortable with any of them, for different reasons.

So, I think what I'm going to do is just open a non-retirement brokerage account on USAA. That's where my wife and I have all our banking, insurance, etc. We already have a traditional IRA there and a Roth that we contribute to with automatically monthly withdrawls. So it would be very easy for me to just set up another account there.

And there accounts seem comparable enough with $8.85 trades and decent research tools, etc. They are just a very solid company with great customer service and a pretty good track record all the way around.

I can just instantly transfer back and forth between checking/savings and the brokerage account this way too.

I love USAA.

GB my father-in-law for being in the Navy back in the day. But didn't USAA open up to the general public recently? If they have, I would highly recommend them for EVERYTHING, especially car insurance. But like I said, we do everything through them now practically.

 

[Dentist]

Most are Vanguard Target Retirement with 20__ fund numbers behind them, some are American Funds and there are a few others. I'm thinking an Index Fund should be a large percentage.

The Vanguard Target Retirement funds are based on the date you plan on retiring. It assumes that someone older should take less risk than someone younger. It also assumes stocks have a higher risk than bonds.For example, a Target Retirement 2020 fund might be 60% stocks, 40% bonds.Whereas a Target Retirement 2040 fund might be 80% stocks, 20% bonds - a little more risky.ETA: 2020 and 2040 represent the years which are closest to your actual retirement year. So in your case, you plan to retire in 15-20 years, so looking at the 2030 fund is probably a good one based on their risk calculations.

this is pretty accurrate.Most financial GURUs will tell you that you can do better than Target Date funds.And they are probably right... unless you aren't very market wise, in which case I think they are fantastic choices.Target funds are kind of like accepting a "B" grade. You could possibly (but not positively) do better if you knew more about funds, the market, etc. You could certainly do a lot WORSE if you didn't know what you were doing and starting just messing around.Do this work fund have a "match" like do they match the first x% that you put into the fund?If not you may want to consider starting with a Roth IRA first, then going back to the company 401k because it is likely to have much higher fees than you could achieve by investing on your own.If there is a match, then you should contribute enough to get the full match, then come back to the Roth IRA, then if you still want to put more than that away, go back to the 401k

Also depending on the type of plan, you can make catchup contributions when you're 50+.

yes, the roth jumps to 6K over 50401k jumps from 17k to 22.5K over 50But i don't think the 401k catch up applies to him in this case, but the Roth catch up may

 

[Dentist]

Dentist, after checking out those reviews of the different brokerage sites (http://www.onlinebrokerrev.com/main.php) you posted in the other thread, I didn't come away really feeling comfortable with any of them, for different reasons.

So, I think what I'm going to do is just open a non-retirement brokerage account on USAA. That's where my wife and I have all our banking, insurance, etc. We already have a traditional IRA there and a Roth that we contribute to with automatically monthly withdrawls. So it would be very easy for me to just set up another account there.

And their accounts seem comparable enough with $8.95 trades and decent research tools, etc. They are just a very solid company with great customer service and a pretty good track record all the way around.

I can just instantly transfer back and forth between checking/savings and the brokerage account this way too.

everything i've heard says usaa is great but i have no experience.i wonder what scared you off the brokers though, many are very reputable like vanguard, schwab, etc.

 

[BeTheMatch]

Dentist, after checking out those reviews of the different brokerage sites (http://www.onlinebrokerrev.com/main.php) you posted in the other thread, I didn't come away really feeling comfortable with any of them, for different reasons.

So, I think what I'm going to do is just open a non-retirement brokerage account on USAA. That's where my wife and I have all our banking, insurance, etc. We already have a traditional IRA there and a Roth that we contribute to with automatically monthly withdrawls. So it would be very easy for me to just set up another account there.

And their accounts seem comparable enough with $8.95 trades and decent research tools, etc. They are just a very solid company with great customer service and a pretty good track record all the way around.

I can just instantly transfer back and forth between checking/savings and the brokerage account this way too.

everything i've heard says usaa is great but i have no experience.i wonder what scared you off the brokers though, many are very reputable like vanguard, schwab, etc.

I've had money sitting in a Vanguard fund for close to 10 years now and I'm still operating on a net loss. And Vanguard ranked last on that list of sites reviewed as far as a brokerage account.

 

[skillz]

I am looking into opening a brokerage account through a financial advisor instead of online. For the past few years I have just put money in my 401(k) and would like to expand my investing beyond that. The financial advisor quoted me a charge of 1.5% of total assets in the portfolio to manage my account. No other fees are charged to me for trading. Is that a typical way for charging for a brokerage account, and is the 1.5% unreasonable. I am going to start asking around but thought I ask the question here as well. Thanks.

 

[BeTheMatch]

I am looking into opening a brokerage account through a financial advisor instead of online. For the past few years I have just put money in my 401(k) and would like to expand my investing beyond that. The financial advisor quoted me a charge of 1.5% of total assets in the portfolio to manage my account. No other fees are charged to me for trading. Is that a typical way for charging for a brokerage account, and is the 1.5% unreasonable. I am going to start asking around but thought I ask the question here as well. Thanks.

Big mistake. You're paying them for nothing. You can buy set-it and forget-it index funds online for virtually no cost that will outperform almost every broker out there once you're done paying him.

 

[Dentist]

Dentist, after checking out those reviews of the different brokerage sites (http://www.onlinebrokerrev.com/main.php) you posted in the other thread, I didn't come away really feeling comfortable with any of them, for different reasons.

So, I think what I'm going to do is just open a non-retirement brokerage account on USAA. That's where my wife and I have all our banking, insurance, etc. We already have a traditional IRA there and a Roth that we contribute to with automatically monthly withdrawls. So it would be very easy for me to just set up another account there.

And their accounts seem comparable enough with $8.95 trades and decent research tools, etc. They are just a very solid company with great customer service and a pretty good track record all the way around.

I can just instantly transfer back and forth between checking/savings and the brokerage account this way too.

everything i've heard says usaa is great but i have no experience.i wonder what scared you off the brokers though, many are very reputable like vanguard, schwab, etc.

I've had money sitting in a Vanguard fund for close to 10 years now and I'm still operating on a net loss. And Vanguard ranked last on that list of sites reviewed as far as a brokerage account.

ok 1) keep in mind they are ranking sites for day traders. The main reason i sent you to that site was that it had a comprehensive review of what the fees and terms were.

I use merrill edge who is ranked very poorly on there and they have more than adequate usability for me, and because i'm a BoA customer it is by far the cheapest broker for me to use.

2) almost anyone who's held a fund for the "lost decade" is either flat or down some, that's not a reflection on vanguard or on their funds, it's more a reflection of the investing culture over the past 10 years.

Vanguard is ranked low because of their stock by stock transaction cost and limited functionality. But if you aren't actively trading and want extremely low investment fees including access to some excellent commission free ETFs it is a great choice.

My sister needed to open a brokerage account and she doesn't have the same relationship with BoA like I do, so I recommended to her either TD Ameritrade, Vanguard, or Schwab based on their commission free ETFs and low account maintenance fees.

 

[Dentist]

I am looking into opening a brokerage account through a financial advisor instead of online. For the past few years I have just put money in my 401(k) and would like to expand my investing beyond that. The financial advisor quoted me a charge of 1.5% of total assets in the portfolio to manage my account. No other fees are charged to me for trading. Is that a typical way for charging for a brokerage account, and is the 1.5% unreasonable. I am going to start asking around but thought I ask the question here as well. Thanks.

Big mistake. You're paying them for nothing. You can buy set-it and forget-it index funds online for virtually no cost that will outperform almost every broker out there once you're done paying him.

this is what this thread is for.

We're here to get you started so you don't get raped by fees like this.

there is no reason for you to pay that much money.

1.5% will kill a lot of your income.

 

[gmbacm]

for later

 

[BeTheMatch]

ok 1) keep in mind they are ranking sites for day traders. 2) almost anyone who's held a fund for the "lost decade" is either flat or down some, that's not a reflection on vanguard or on their funds, it's more a reflection of the investing culture over the past 10 years.

1. That's a good point. I forgot that it was geared to that niche.2. That brings up a larger question. Are all of these still firmly held beliefs, that you can't lose in the stock market over the long-term, still universally accepted? I mean, as a novice who's sat on the sidelines at the mercy of the ups and downs over the years, it just seems like a rigged system to me, one where all us poor saps who don't panic and stay the course are left to eat all the losses caused by all the fat cats that bail when they know we're heading for the iceberg.I just have real reservations about the stock market in general because of the last 10 years and just wonder if it will EVER be what it used to be. All this talk about the magic of compound interest... how's that working out for everyone that left it in for the past 10 years? We'd have been better off with it buried in the back yard, and we'll never recoup those losses. Meanwhile, all the bastards that took their money out just bought back in cheap, and the rich get richer.Am I wrong?

 

[Slapdash]

 

[skillz]

I am looking into opening a brokerage account through a financial advisor instead of online. For the past few years I have just put money in my 401(k) and would like to expand my investing beyond that. The financial advisor quoted me a charge of 1.5% of total assets in the portfolio to manage my account. No other fees are charged to me for trading. Is that a typical way for charging for a brokerage account, and is the 1.5% unreasonable. I am going to start asking around but thought I ask the question here as well. Thanks.

Big mistake. You're paying them for nothing. You can buy set-it and forget-it index funds online for virtually no cost that will outperform almost every broker out there once you're done paying him.

this is what this thread is for.

We're here to get you started so you don't get raped by fees like this.

there is no reason for you to pay that much money.

1.5% will kill a lot of your income.

So I should just go online to invest? I have all stock in my 401k and want to put about 100k in a bunch of other blended investments such as some stock, but other more stable investment options such as treasuries, bonds, etc. If I set up a brokerage account with the right place online, I can avoid paying such a high fee for someone to manage my account and also find a good mix of non-stock options to invest in? I'm a true novice here so spoonfeed me slowly on this if you could

 

[BeTheMatch]

I am looking into opening a brokerage account through a financial advisor instead of online. For the past few years I have just put money in my 401(k) and would like to expand my investing beyond that. The financial advisor quoted me a charge of 1.5% of total assets in the portfolio to manage my account. No other fees are charged to me for trading. Is that a typical way for charging for a brokerage account, and is the 1.5% unreasonable. I am going to start asking around but thought I ask the question here as well. Thanks.

Big mistake. You're paying them for nothing. You can buy set-it and forget-it index funds online for virtually no cost that will outperform almost every broker out there once you're done paying him.

this is what this thread is for.

We're here to get you started so you don't get raped by fees like this.

there is no reason for you to pay that much money.

1.5% will kill a lot of your income.

So I should just go online to invest? I have all stock in my 401k and want to put about 100k in a bunch of other blended investments such as some stock, but other more stable investment options such as treasuries, bonds, etc. If I set up a brokerage account with the right place online, I can avoid paying such a high fee for someone to manage my account and also find a good mix of non-stock options to invest in? I'm a true novice here so spoonfeed me slowly on this if you could

At USAA, and I'm sure all similar places online, you can get mutual funds called asset allocation funds which spread your money around in stocks, bonds and money market. That's what I'd do. There will be many of this kind to choose from. You can tweak the mix of those categories depending on your years before retirement and other factors.

 

[Slapdash]

ok 1) keep in mind they are ranking sites for day traders. 2) almost anyone who's held a fund for the "lost decade" is either flat or down some, that's not a reflection on vanguard or on their funds, it's more a reflection of the investing culture over the past 10 years.

1. That's a good point. I forgot that it was geared to that niche.2. That brings up a larger question. Are all of these still firmly held beliefs, that you can't lose in the stock market over the long-term, still universally accepted? I mean, as a novice who's sat on the sidelines at the mercy of the ups and downs over the years, it just seems like a rigged system to me, one where all us poor saps who don't panic and stay the course are left to eat all the losses caused by all the fat cats that bail when they know we're heading for the iceberg.I just have real reservations about the stock market in general because of the last 10 years and just wonder if it will EVER be what it used to be. All this talk about the magic of compound interest... how's that working out for everyone that left it in for the past 10 years? We'd have been better off with it buried in the back yard, and we'll never recoup those losses. Meanwhile, all the bastards that took their money out just bought back in cheap, and the rich get richer.Am I wrong?

I feel largely the same about most domestic public equity investing for both demographic reasons and the decreasing rate at which growing US companies go public.