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PBS Frontline : The Retirement Gamble, sorta Must See (1 Viewer)
- Thread starter Smack Tripper
- Start date
Binky The Doormat
Footballguy
4.7% return YTD in my Vanguard accts which is the majority of what we have.
Pretty much 50/50 mix of stocks and bonds. Stocks are mostly Vanguard funds, but still have individual stocks from prior portfolio. Some individual muni bonds in addition to Vanguard bond funds.
No, Fidelity - IIRC, about 60% in target retirement fund and 40% in a fund that mirrors S&P 500
Ministry of Pain
Footballguy
Great year to load up on more shares before the next big surge.
Fennis
Footballguy
rallying before EOY -.057%.
My current 401(K) mix:
LargeCap: Vanguard Russell 1000 Value Index Trust 25%
MidCap: Arisan Mid Cap Account 25%
SmallCap: DFA Small/Mid Cap Value Account 25%
International: Russell International Growth Account 13%
International: Russell International Value Account 12%
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Sand
Footballguy
NutterButter
Footballguy
Who was the guy that said he was going to all cash in this thread recently b/c he thought the market was going down?
Sand
Footballguy
Not me! Not sure who it was. I have no current plans to go to cash, but if signals like this get worse I will definitely start selling my winners to mute the pain.
Ministry of Pain
Footballguy
Are you predicting a major downturn for the economy?Sand said:
Sand
Footballguy
No, but fact is we have been in a long expansionary phase. Muted, but long. Right now we still appear to be in expansion mode, but if housing turns down and corporate profits degrade even more than they already have I can easily see a downturn.
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ghostguy123
Footballguy
That was me, but it was in the finance thread (though maybe others did too, I dont know).NutterButter said:
My VINIX (S&P) was at 194 when I did. I got back into VINIX when it was about 188-189 so I saved a bit. I shoulda waited till it hit the 170s a week or so later. Oh well.
IC FBGCav
Footballguy
I think one thing everyone here should know with retirement funds is don't try to time the market. So many bad stories about people doing that. They talked my wife into that work many years ago when things were crashing and I made her put it back in the next day, everyone else there got toasted.
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NutterButter
Footballguy
ghostguy123
Footballguy
Would you like my friend and advisers contact info so you can ask him?
He told me pretty convincingly the market was going to take a hit. It did. He told me to get back in. I did. It kept going down but he wasn't as convinced at that point otherwise I would have gotten back in around the low 180s and saved almost 5% more considering the S&P dropped a good amount in the 2 days after I transferred my 403b funds back from the money market to VINIX.
I have no idea why. There was no point in having him explain everything to me. He didn't want to anyway.
I don't recommend it. He even said he essentially never recommends it. He did this time. If he does again I will likely follow his advice.
Doctor Detroit
Please remove your headgear
No one, and I mean NO ONE knows what the market will do short-term. Please resign yourself to this fact and investing will be much easier for you to consume. The same guy who said the market is tanking is selling gold, silver, and reverse mortgages. They have no idea, Warren Buffett says as much.
What we do know is that the U.S. stock market will be higher than it is today in 10, 15, 30 years. That's what you need to concentrate on.
ghostguy123
Footballguy
That's fine. I agree. I trust this guy quite a bit though, and this time (hey maybe it was just total blind luck) he felt very strongly about it to the point where he took his money out of the market. It dropped about 10% somewhat quickly. He said he has never switched his money like that before and very well might not again.
I don't know what the hell he knew, or do I care. Probably insider trading crap, who knows.
It was a VERY short experiment for myself. It worked. Yay. I am not sitting here saying it was even necessarily the right move, but given what he told me and the subsequent outcome, it's hard not to think he knew something somehow.
But since nobody ever does, who knows. Either way, whatever. It's done and over and I likely dont do it again, so. It is what it is.
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NutterButter
Footballguy
SouthJersey
Footballguy
Does anybody know how taxes work with short vs long term gains/losses?
I sold some shares of a stock I've held for over a year. I want to sell some of my losers to offset the capital gains and to reinvest in something different. Do I have to sell losers that i've held over a year to offset the gains? Or if I sell anything at a loss (short term or long term) will it cancel out my gains in the eyes of the IRS?
I sold some shares of a stock I've held for over a year. I want to sell some of my losers to offset the capital gains and to reinvest in something different. Do I have to sell losers that i've held over a year to offset the gains? Or if I sell anything at a loss (short term or long term) will it cancel out my gains in the eyes of the IRS?
BeTheMatch
Footballguy
I think they're good in the sense that you can set it and forget and don't need to worry about rebalancing yourself. However, you need to take a look at the fees associated, because sometimes they can be higher than you'd like, and that matters a lot.
NutterButter
Footballguy
Just checked one of my accounts and my stock index fund has an expense ratio of .07% while a targeted plan is at .75%. That's the difference between 140 in fees vs 1500 in fees on a 200k account each year as well as the lost compounding interest on that money.
Short-term capital losses are more "valuable" because they can be used to offset short-term capital gains (which are taxed at a higher rate), but you can use them to offset long-term capital gains as well.
Scroll down
Dentist
***Official FBG Dentist***
It's accepting a B result for literally no work... a fine plan for 95% of people.
You can do better, but you probably won't, so take the B
SouthJersey
Footballguy
Wooderson
Fight The Power
That's about what I figured. I'm going to check fees if it's close I may just move it to one of these.
xulf
Footballguy
I find them to be way too conservative and way too expensive. If you are set on using one, I'd recommend finding one that is 20 years beyond your actual retirement date. That way they aren't shoving a ton of bonds down your throat.
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NutterButter
Footballguy
Not sure why you wouldn't just use a combination of bond and stock indices based on age, re-balance once a year and save a bunch in fees. Re-balancing is just a simple formula that would tell you what % you need to be in each investment vehicle and readjust your investments accordingly.
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Dentist
***Official FBG Dentist***
Vanguard's are pretty cheap. And before you say something like that you'd have to know his risk profile.. most people are probably riskier than they should be.
Having said that, I'd choose one personally 10 years past my date because I agree.
Dentist
***Official FBG Dentist***
Obviously this is the better choice. But the number of people who understand what to do, and then have the discipline to do that year in and year out are so effing low that these target funds are truly a brilliant invention.
NutterButter
Footballguy
So true yet so comical. They really can't make it any easier. You go to a screen that has all the investment options and next to your stock index, you type one percentage and next to the bond index you type the other percentage and click save. See ya next year.Dentist said:
Dentist
***Official FBG Dentist***
It's not just that.. There are so many people that when really pinned down wouldn't even really understand the difference between a stock or bond... haven't bothered to read a single internet article let alone a book on a basic investment strategy... wouldn't probably understand it even if they did... and are so scared of making the wrong choice that they do nothing.
The financial services industry will continue raking people over the coals for decades to come regardless of shows like the Frontline people put out on this topic due to ignorance...
It doesn't have to be hard... but there are so many people that are so stupid... and then a lot more people beyond that that could do it, but are so lazy... then there are so many people that are neither stupid or lazy, but just don't care! They put HOURS into researching their new blender, or their new car... but won't read ONE book on personal finance/investing.
They spend years of their life learning how to do their job, to make decent money... are so obsessed with getting a good salary... then won't spend just a weekend reading up on the information to grow and invest the money properly.
It's truly insane... Hell, most people will probably spend more time clipping coupons to save a few hundred dollars in their lifetime than they will spend researching investments.
xulf
Footballguy
I'm 35 so a long ways out still. The stuff in the TRowe 2040 is so stupidly heavy in bonds (TRowe is the only one i have access to in my 401k). I'm literally 100% in stocks. I admittedly am a gambler and I have 80% in VFIAX (Vanguard 500 Index Admiral) and 20% in VSGAX (Vanguard Small Cap Growth Index Admiral). With another 20-30 years, no reason to play it safe in my opinion.Dentist said:
Binky The Doormat
Footballguy
Just don't panic and sell if the market drops 50+% again.
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xulf
Footballguy
In 2008 my 401K was about 1/4 of what it is now (pre-drop). When the market went to hell, I started maxing out my contributions. I'm not going to keep anything on the sidelines and miss out on potential up-swings.
Binky The Doormat
Footballguy
This article is saying that 15%-20% is appropriate (newer allocation model) but still needing growth and having time to make up for market dips/drops I would feel ok with not having any bonds. Just know that you are going to have to be ready emotionally for some decent drops and not selling.
NutterButter
Footballguy
The general public is pretty much a lost cause in more ways than one. For our FFA brothers and sisters that inquire about target date funds, it should be pretty easy for them to be able to do the same thing themselves and save a bunch of money. A simple allocation formula like 120-age = stock percentage you have in your account. The remainder is bond percentage. Knock that down to 110 or even 100 if you're risk adverse and can't handle the swings in the market.
Binky The Doormat
Footballguy
Steve Tasker
Footballguy
Steve Tasker
Footballguy
South Jersey>
Keep in mind that if you sell stocks to realize losses for tax purposes, you can't re-buy the same securities within 30 days (for tax purposes). That's a "wash sale" and doesn't count for taxes. Just something to keep in mind. TIA.
Keep in mind that if you sell stocks to realize losses for tax purposes, you can't re-buy the same securities within 30 days (for tax purposes). That's a "wash sale" and doesn't count for taxes. Just something to keep in mind. TIA.
Wooderson
Fight The Power
wilked
Footballguy
I somehow doubt all of you 100% equities people are prepared to lose 50% of your portfolio within a very short period
If you hit your mid-late 30s or on to your 40s, your portfolio now has to double to recover that 50% haircut you just took (it has happened before, and will happen again). Sure, you have time...but you don't have that much time
Contrast that with having 20-30% of your portfolio in bonds, and your haircut is now more like 30%, with only a 60% gain needed to recover (likely a lot less since bonds will likely do well in that environment).
I see a lot of bravado and lack of fear in the posts above, people professing to being a gambler, YOLO, etc. Either you guys weren't heavily invested in 2008 or you have very short memories. The market recovered fairly quickly after that, but there is nothing saying it has to (see the Nikkei for an obvious example http://www.marketoracle.co.uk/images/2009/Oct/$nikk-monthly.png ). There is a reason why no Financial Advisor worth a damn would advise being 100% exposed in equities. Once you get into your 30s I would use 20% bonds as a floor, and as the hairline recedes and you start making actual projections / budget for retirement look to be more like 30-40%
If you hit your mid-late 30s or on to your 40s, your portfolio now has to double to recover that 50% haircut you just took (it has happened before, and will happen again). Sure, you have time...but you don't have that much time
Contrast that with having 20-30% of your portfolio in bonds, and your haircut is now more like 30%, with only a 60% gain needed to recover (likely a lot less since bonds will likely do well in that environment).
I see a lot of bravado and lack of fear in the posts above, people professing to being a gambler, YOLO, etc. Either you guys weren't heavily invested in 2008 or you have very short memories. The market recovered fairly quickly after that, but there is nothing saying it has to (see the Nikkei for an obvious example http://www.marketoracle.co.uk/images/2009/Oct/$nikk-monthly.png ). There is a reason why no Financial Advisor worth a damn would advise being 100% exposed in equities. Once you get into your 30s I would use 20% bonds as a floor, and as the hairline recedes and you start making actual projections / budget for retirement look to be more like 30-40%
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