100k to invest. Need help with Fidelity fund choices? (growth fund, payment, buy)
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But you can't really time the market. Nobody can. Sure, they can try but there is no way to know what the market will do unless one has a crystal ball.
There are multiple ways to enter the select portfolio. For you a form of dollar cost averaging would probably be best. Since you are doing it in after tax u would need 2.5k per fund unless that has changed. As you note because they are high beta funds s volatile market like we have now could make a move either way. But with that little amount any lost in the big picture is eh. You could go in with a more conservative fund and slowly transfer money into the select portfolio.
lottamoxie has etfs, but she's got stop orders to limit losses when the market dives. Do you really want to do that much thinking at this time? Do you know enough to make the correct decision or choose the right allocations appropriate to the current environment?
I still have a few ETFs, but did get stop lossed out of the others, which locked in gains on those funds. It was super easy peasy to set up a stop loss %. You do it once per fund, best to do when you buy it and are not in some emotional state over the market, and then you don't have to think about it as the stop price moves automatically. Funds go up, you don't get stop-lossed out. Funds move down, you only sell when the price hits your pre-determined exit point and it all happens automatically, so it takes the emotion out of the equation.
The bulk of my investments are in the newsletter funds and I did purchase more. I do like ETFs and will likely continue to dabble in those on the side. ETFs can be more volatile but I take that into consideration (and set up appropriate exit points).
I am the OP, money is cash savings. No, I don't plan to jump all in. Even the fidelity insights sample says to ramp up slowly into their growth model (8 chunks or so).
I did it in chunks as well, though completed it over a 3 month period of time. The monies were in other funds so I needed to sell and consolidate and that took some time.
There's nothing wrong with putting it in over a period of time, keeping that period of time to less than a year for sure, and optimally no more than 6 months if you can swing it. You don't have to put 100% in on day 1.
One reason to buy Vanguard Funds in Fidelity is that some Vanguard Funds have very low fees and have preformed exceptionally well over the years, I recently bought VWINX via Fidelity, and the second might be Vanguard's policy on beneficiaries from joint accounts and a third might be that some of us do not like having accounts all over the place.
It's my understanding that you can't get Admiral Shares when they are bought via Fidelity. That makes the expense ratio 0.22 instead of 0.15, doesn't sound like a lot but with enough in VWINX over enough years that could make a difference worth the administrative hassles.
This is contrary to what Warren Buffet says. He says index funds are what people should invest in especially if they are new to investing. Jack Bogle says the same thing.
That may very well be, but you quoted me out of context: Here is he entire quote again:
Quote:
Originally Posted by Ariadne22
Lastly, I will repeat, again, what I said upthread - as a novice, in this current environment, you shouldn't be considering index funds or etfs. They're too indiscriminate in their selloff when times get bad and you can get hurt much worse than with funds.
Example: DJIA lost 4.63% on 2/05 - on that day my portfolio dropped 2.63%; S&P dropped 4.09%, my portfolio dropped 2.63%. Index funds can be brutal in a down market.
The example given is why I said what I did.
And, as far as Bogle goes,
Quote:
Originally Posted by TuborgP
One of the open realities that sometimes is missed by non Boglehead advocates of index funds center on the following tidbits:
Jack Bogle founded Vanguard funds
Vanguard funds are at the core of Index fund investing
Jack Bogle is the guru of index investing
Jack Bogle owns active funds
All of that meet the mega Vanguard Wellington fund.
And, if that's too subtle, Wellington is a managed fund - as is Wellesley.
Further, as I said:
Quote:
Originally Posted by Lizap
If a stock or mutual fund drops 50%, you have to make 100% just to break even. Index funds are not going to shield you from a devastating drop.
The whole point of this thread is information-sharing to avoid reinvention of the same wheel and save costly time errors. Why should a novice take years to learn how to improve return and reduce risk when others are willing to share their knowledge.
If people are going to cherry-pick selectively out of context, there's no point in posting at all.
Last edited by Ariadne22; 02-12-2018 at 08:02 PM..
It's my understanding that you can't get Admiral Shares when they are bought via Fidelity. That makes the expense ratio 0.22 instead of 0.15, doesn't sound like a lot but with enough in VWINX over enough years that could make a difference worth the administrative hassles.
Not for me, I like to keep it simple but I am sure to some others, every dollar may count and I cannot blame them, on say 1 mil, I believe the difference would only be $700 a year, please correct me if I am wrong? we spend many times that going out to eat most months.
Also I believe Vanguard does not allow beneficiaries on joint accounts, Fidelity does, please also correct me if I am wrong?
It compared historical returns from three investment strategies: putting a sum of money into the market all at once, dollar-cost averaging and splitting that money into equal monthly investments, and just holding cash. While dollar-cost averaging fared better on average than waiting on the sidelines, the clear winner is the front-loaded, lump-sum investment.
In Figure 1, we compare the historical performance of immediate and systematic
investing across three markets: the United States, the United Kingdom, and Australia.
For the systematic plan, we invest the cash in a balanced 60% stock/40% bond portfolio
in 12 equal monthly installments. We then evaluate the returns of both immediate
and systematic investing across rolling 12-month historical periods. (See page 7 for
additional details about the methodology.)
In each market, immediate investment led to greater portfolio values approximately
two-thirds of the time. On average, immediate investment outperformed systematic
implementation by a high of 2.39 percentage points in the United States and a low of
1.45 percentage points in Australia. These findings are unsurprising. Stocks and bonds
have historically produced higher returns than cash, as compensation for their greater
risks. By putting a lump sum to work right away, investors have been able to take
advantage of these risk premia for a slightly longer period
Putting it in all at one time and then getting hit with a correction (10%) would be disappointing. It could take months to recoup those losses, or perhaps it would only take a few weeks, hard to say. If Fidelity themselves (FI&M newsletter) are suggesting chunks of contributions as an option then it can't be too bad. Whatever it takes to get the $$$ in there and out of idle cash is a good thing in the long run.
It compared historical returns from three investment strategies: putting a sum of money into the market all at once, dollar-cost averaging and splitting that money into equal monthly investments, and just holding cash. While dollar-cost averaging fared better on average than waiting on the sidelines, the clear winner is the front-loaded, lump-sum investment.
In Figure 1, we compare the historical performance of immediate and systematic
investing across three markets: the United States, the United Kingdom, and Australia.
For the systematic plan, we invest the cash in a balanced 60% stock/40% bond portfolio
in 12 equal monthly installments. We then evaluate the returns of both immediate
and systematic investing across rolling 12-month historical periods. (See page 7 for
additional details about the methodology.)
In each market, immediate investment led to greater portfolio values approximately
two-thirds of the time. On average, immediate investment outperformed systematic
implementation by a high of 2.39 percentage points in the United States and a low of
1.45 percentage points in Australia. These findings are unsurprising. Stocks and bonds
have historically produced higher returns than cash, as compensation for their greater
risks. By putting a lump sum to work right away, investors have been able to take
advantage of these risk premia for a slightly longer period
Did this study take in to account an over-valued market?
I doubt it.
Best to dollar cost average.
What I heard today is that the market will take another swing down late this week or next. Best not to put all your eggs in one basket. Do it gradually!
Did this study take in to account an over-valued market?
not sure if they specifically targeted an overvalued market but volatility is a regular aspect of a market whether it is overvalued or not, if you look at 2014 and 2015 there was plenty of pullbacks and rises so I am assuming the study takes into account a typical market. 2017 was unusual because it was just a steady rise.
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