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Old 03-10-2019, 01:00 PM
 
Location: Suburban wasteland of NC
295 posts, read 170,680 times
Reputation: 271

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Quote:
Originally Posted by SuiteLiving View Post
Your mythical proles can open a zero cost account with Robin Hood and buy SPY or VOO or VTI to get a diversified investment that apparently is much better than the managed portion of your Fidelity 401k.
+1

If by prole you mean middle class, definitely. I started my 401k while overseas with 70% S&P 500, 30% small cap index. Their management fee runs around 0.03% total.

I opened a Fidelity brokerage account while working in a war zone.

I opened a Vanguard brokerage account most recently, while overseas, and now put most of my non-401k money in VTSAX. I still keep Fidelity because I like the way their site shows everything, I still have a few active funds I'm not psychologically ready to part with, and they have NASDAQ and Extended Market index funds I use with an IRA to balance how my 401k only offers the S&P and not VTSAX style total market.

The first index fund didn't even exist until 1974, I would imagine it was much later when most 401ks started to offer one, and from what I've read management fees used to run well over 1%. We don't have it that bad nowadays.
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Old Yesterday, 01:40 AM
 
25,377 posts, read 27,706,101 times
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Quote:
Originally Posted by RememberMee View Post
Just for the sake of education and as bs meter I keep a small 401k fidelity account from my previous employer. It is split 40/60 between a managed fund and S&P index fund. I stopped contributing in September 2017. As of March 7th 2019 I am still $300 short of September 2017 value. Remember these are the economic boom times I could not break even on my 401k
Big deal. It's not a savings account. Stock markets correct. The stock market correction of 2018 was not new or unusual. And as another poster pointed out, you can get an online savings account these days with no minimum balance that pays over 2%. My online account pays 2.25% APY.

Quote:
Originally Posted by RememberMee View Post
I wonder what will happen when a recession will knock on a door?
It will s*ck.

By the way, I agree we're not in boom times. That's a lie. But boom times or not, your expectations are unrealistic as far as short term fluctuations in the stock market goes. The time horizon you're measuring is way too short.
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Old Yesterday, 01:44 AM
 
25,377 posts, read 27,706,101 times
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Quote:
Originally Posted by RememberMee View Post
2.2% saving rates are offered by a few obscure online banking establishments. Do you have an account with them? .
Yes.

I've had an account with FNBO Direct for years now.

I'd rather put the bulk of my savings with a credit union or a smaller bank than a "too big to fail" megabank.

Speaking of which, I have a 40 month CD with my credit union that's paying just over 3%.
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Old Yesterday, 01:53 AM
 
25,377 posts, read 27,706,101 times
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Quote:
Originally Posted by RememberMee View Post
So genius tell us how you doubled your money in the past 8 years?
Actually, a Vanguard Total Stock Market Index fund or a Vanguard S&P 500 Index would would have more than doubled over the last 8 years (from 3-8-11 to 3-7-19)

10k in Total Stock Market turned into $24,758.
10k in S&P 500 turned into $24,541.
10k in something a bit more conservative like Vanguard Wellington turned into $19,453
10k Fidelity Balanced (roughly equivalent to Vanguard Wellington) would have turned into $19,204.
10k in Fidelity Contrafund would have turned into $25,875.

So, doubling your money--or getting close--was pretty easy if you just left the money alone for the last 8 years. I'll concede that I don't think the gains will come as easily the next 8 years. Hopefully, I'll be wrong.

But in any case, these things are sooooooooooooooo easy to look up, I don't know why you embarrass yourself by saying such things. All you have to do is plug some ticker symbols & dates into the Charts section of Morningstar.com.

VFIAX Vanguard 500 Index Fund Admiral Shares Fund VFIAX chart

Last edited by mysticaltyger; Yesterday at 02:17 AM..
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Old Yesterday, 01:58 AM
 
25,377 posts, read 27,706,101 times
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Quote:
Originally Posted by RememberMee View Post
I happen to have a money market account with Capital 1, it pays 2%, I better check on their saving account rates. Is 17% over 8 years better than nothing, that's a philosophical question, on one side it's better, on the other if you cannot catch up with inflation the end result is the same. Just another random number, oil change, the same car, the same oil, the same chain. March 2015 - $27, March 2019 - $40. Healthy 48% growth for Walmart in 4 years. 17% over 8 years for me, if lucky. Something has to give. It is not just oil change, or lumber, or tools, it is comprehensive run away of prices. And I somewhat doubt that corporate brass enjoying run away incomes frequent Walmart auto stores.
When proven wrong, just move the goalposts.
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Old Yesterday, 02:00 AM
 
25,377 posts, read 27,706,101 times
Reputation: 23655
Quote:
Originally Posted by SuiteLiving View Post
Your mythical proles can open a zero cost account with Robin Hood and buy SPY or VOO or VTI to get a diversified investment that apparently is much better than the managed portion of your Fidelity 401k.
Actually, Fidelity now also has zero minimum balance index funds, some with no expense ratio. Others have no minimums with very low expense ratios.
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Old Yesterday, 02:11 AM
 
25,377 posts, read 27,706,101 times
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Quote:
Originally Posted by happygeek View Post
The first index fund didn't even exist until 1974, I would imagine it was much later when most 401ks started to offer one, and from what I've read management fees used to run well over 1%. We don't have it that bad nowadays.
This is correct. (Minor quibble--I think Vanguard's S&P 500 Index fund started in 1976. I think theirs was the first, but I won't swear to it).

Even actively managed funds have slowly and steadily dropped their expense ratios over the last 20 years. The article below is almost a year old, but I'm 99.99% certain expense ratios dropped a bit more in 2018.

Longer term, the average expense ratio of actively managed equity mutual funds fell to 0.78% in 2017, down from 1.08% in 1996. Index equity mutual fund expense ratios fell to 0.09% in 2017 from 0.27% in 1996.

https://www.pionline.com/article/201...pany-institute
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Old Yesterday, 03:44 AM
 
68,395 posts, read 69,162,713 times
Reputation: 46178
Quote:
Originally Posted by mysticaltyger View Post
When proven wrong, just move the goalposts.
When people insist on believing their own bull ,it is impossible to convince them they are foolish in their thinking no matter how ridiculous their belief is
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Old Yesterday, 10:34 AM
 
617 posts, read 422,623 times
Reputation: 1406
I don't really get this thread. All of my investments went up by a good rate in the last 18 months. ...and I am a newb! If yours didn't, then you are doing something wrong.

Power drill I bought 10 years ago, was $100. Same brand replacement drill now ten years later, still $100 and is even lighter. Table saws, cross cut saws, drill bits, replacement blades... all seem mostly around the same price as I stroll the aisles. Not seeing the doubling in wood working equipment.

I do agree that lumber has increased in price. Lumber is 34.5% higher then it was in 2017 (NOT 8x as posted by the Op.)
That's a difference I do see in the aisles. There are multiple reasons. In 2018 was a severe Canadian wildfire, an ongoing trade dispute between the United States and Canada and limited rail capacity are the main culprits. Typically, up to 97 percent of American lumber imports come from Canada, and President Donald Trump imposed tariffs of more than 20 percent on Canadian lumber – making the import more expensive. However not seeing construction where you are is hardly an indicator of "no construction". There is so much construction going on all across the country. Especially the South. My gosh they are building like crazy here in Raleigh, NC. There are currently dozens of subdivisions with hundreds of homes in each going up all around me. All the Yankees moving south to escape the high taxes of northern states. Estimates are at the rate of 67 families are moving here A DAY. That's a lot of homes being built, and a major contributor of lumber prices as demand for more homes increases.
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Old Yesterday, 11:00 AM
 
Location: Suburban wasteland of NC
295 posts, read 170,680 times
Reputation: 271
Quote:
Originally Posted by mysticaltyger View Post
This is correct. (Minor quibble--I think Vanguard's S&P 500 Index fund started in 1976. I think theirs was the first, but I won't swear to it).

Even actively managed funds have slowly and steadily dropped their expense ratios over the last 20 years. The article below is almost a year old, but I'm 99.99% certain expense ratios dropped a bit more in 2018.

Longer term, the average expense ratio of actively managed equity mutual funds fell to 0.78% in 2017, down from 1.08% in 1996. Index equity mutual fund expense ratios fell to 0.09% in 2017 from 0.27% in 1996.

https://www.pionline.com/article/201...pany-institute
The Google machine backs you up; apparently Vanguard itself was funded by John C Bogle in 1974, while the first index fund launched 31 Aug 1976.

On a sidenote, another huge improvement for us average joes has been the rise of online 'discount brokerages' and the subsequent obsolescence of the mutual fund load fee. I'm too young to have seen these things in person, thank God, but I first heard about them from Dave Ramsey as he seems to be stuck in the 1980s with much of his spiel. I had to look up what the heck he was talking about, then felt quite lucky that I live in this era without a middle man between myself and Vanguard who needs to charge a load, the fact that everything is now a 'covered share' (something else I had to look up, non covered was before my time), and so on.

Investing really is not inaccessible for average joe in the middle class anymore, it literally takes 5 - 15 minutes to setup and maybe 1 minute a month after that.

Last edited by happygeek; Yesterday at 11:57 AM..
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