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Old 04-17-2014, 09:32 AM
 
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What is average? Is it matching the return of the index the fund is keyed to or is it beating 75% of non indexed funds trying to be in the top 25%? One mans average is anothers something else. Is it the return compared to the broader market or is it the percentage rank of the fund compared to others?
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Old 04-17-2014, 02:38 PM
 
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You can complain all you want about fees for a 401K, but you really don't have much voice.
Complain to HR, if the corproation chooses to accept the fees and pass them along, there is not much you can do

You suck it up or stop contributing to the company's 401K

You can try to actively manage your 401K but again, your hands are usually tied. You are limited to what funds the program has in the 401K program. many times limited to one family of funds

Also, many times the 401K program is setup to intentionally discourage actively managing your account. they limit how many times you can request to move money around.

The intent is that the average employee is stupid about investing and must be protected from themselves, so access to the 401K money and the investing of that money is hidden from the employee. The fees are the cost of someone else deciding how your retirement money is invested. If they are wrong, oh well, not their money, they were paid upfront.
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Old 04-17-2014, 03:27 PM
 
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Quote:
Originally Posted by TuborgP View Post
What is average? Is it matching the return of the index the fund is keyed to or is it beating 75% of non indexed funds trying to be in the top 25%? One mans average is anothers something else. Is it the return compared to the broader market or is it the percentage rank of the fund compared to others?
the answer as to average is this:

when you index you basically are accepting whatever returns the market throws at you in any given year .

good or bad you get the same return as every other investor doing what you are doing with out any attempt to do better than what the market hands you.

i look at managed funds not as something to be married to or marrying a manager as who knows when their luck will run out, and quite frankly i rarely care. i look at managed funds as investment styles or weightings that may be more appropriate at certain times than other times .

if you remember during the tech boom we were only holding low tech weighted funds and were really unscathed. the s&p 500 started out at 13% tech and was almost 30% tech at the peak.

by exploiting these major weightings and styles you attempt to fit the bigger picture more effectively.

sometimes you do some times you don't but overall that attempt has panned out to produce better returns.

if you look at the growth model of the newsletter we follow 100k invested in 1986 has surpassed just sitting in an s&p index fund by 500k today.
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Old 04-17-2014, 03:36 PM
 
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Index Funds Still Beat Most Managers - US News

Quote:
Think your mutual fund manager has what it takes to beat the market? If so, some new data from Standard & Poor's may make you think twice.

The mid-year S&P Indices Versus Active Funds Scorecard (SPIVA) shows that, with few exceptions, index funds have dominated their actively managed counterparts. As one example, over the past year, the S&P Composite 1500 beat 89.84 percent of all actively managed domestic stock funds. Over the past three and five years, those numbers were 73.24 percent and 67.72 percent, respectively. (For the purposes of the latest Scorecard, all returns are as of June 30, 2012.)

[Read: Understanding Your Mutual Funds' Portfolios]

"There is nothing novel about the index versus active debate," the new SPIVA report notes. "It has been a contentious subject for decades, and there are a few strong believers on both sides, with the vast majority of investors falling somewhere in between."

However, the Scorecard would suggest that on the aggregate, passive investors have the better argument. "[T]he trend of a large percentage of managers failing to outperform their benchmarks over a longer-term horizon remains consistent," according to the report.
Average is up to the INDIVIDUAL to decide for themselves what they are comparing. So for many it isn't a case of show and tell boasting but following a path that enables them to beat the average active mutual fund return.
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Old 04-17-2014, 03:40 PM
 
29,833 posts, read 34,918,975 times
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Quote:
Originally Posted by mathjak107 View Post
The answer as to average is this:

when you index you basically are accepting whatever returns the market throws at you in any given year .

good or bad you get the same return as every other investor doing what you are doing with out any attempt to do better than what the market hands you.

i look at managed funds not as something to be married to or marrying a manager as who knows when their luck will run out, and quite frankly i rarely care. i look at managed funds as investment styles or weightings that may be more appropriate at certain times than other times .

if you remember during the tech boom we were only holding low tech weighted funds and were really unscathed. the s&p 500 started out at 13% tech and was almost 30% tech at the peak.

by exploiting these major weightings and styles you attempt to fit the bigger picture more effectively.

sometimes you do some times you don't but overall that attempt has panned out to produce better returns.

if you look at the growth model of the newsletter we follow 100k invested in 1986 has surpassed just sitting in an s&p index fund by 500k today.
You are defining average to meet your individual psyche and financial karma. Not everyone is you! so please allow others their psyche.
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Old 04-17-2014, 04:02 PM
 
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correct!.. again there is nothing wrong with market returns. passive investing can be very nice .

i have an all etf model in mind i may try . i don't want to do it this year because my tax bill is through the roof with that lease rights sale but i may consider giving it a spin.

i will post it later if i have time.
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Old 04-17-2014, 04:40 PM
 
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the retirement portfolio i find interesting is :

2 years of withdrawals in cash in bucket 1. that is about 8% of the total


BUCKET 2

6% in BSV VANGUARD SHORT TERM BOND INDEX ETF

10% BND VANGUARD TOTAL BOND ETF

03% LQD I-SHARES INVESTMENT GRADE CORPORATE BONDS ETF

7% VTIP VANGUARD SHORT TERM INFLATION PROTECTED BONDS

5% VANGUARD WELLESLEY INCOME FUND (ONLY NON ETF).



BUCKET 3

23% VIG VANGUARD DIVIDEND APPRECIATION ETF

14% VTI VANGUARD TOTAL MARKET ETF

13% VXUS VANGUARD TOTAL INTERNATIONAL ETF

5% JNK BARCLAYS HIGH YIELD BOND ETF

5% DBC COMMODITY FUND ETF

NUMBERS ARE ROUNDED OFF.
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Old 04-17-2014, 04:58 PM
 
29,833 posts, read 34,918,975 times
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Quote:
Originally Posted by mathjak107 View Post
the retirement portfolio i find interesting is :

2 years of withdrawals in cash in bucket 1. that is about 8% of the total


BUCKET 2

6% in BSV VANGUARD SHORT TERM BOND INDEX ETF

10% BND VANGUARD TOTAL BOND ETF

03% LQD I-SHARES INVESTMENT GRADE CORPORATE BONDS ETF

7% VTIP VANGUARD SHORT TERM INFLATION PROTECTED BONDS

5% VANGUARD WELLESLEY INCOME FUND (ONLY NON ETF).



BUCKET 3

23% VIG VANGUARD DIVIDEND APPRECIATION ETF

14% VTI VANGUARD TOTAL MARKET ETF

13% VXUS VANGUARD TOTAL INTERNATIONAL ETF

5% JNK BARCLAYS HIGH YIELD BOND ETF

5% DBC COMMODITY FUND ETF

NUMBERS ARE ROUNDED OFF.
Many would agree. It would be interesting to have a well contributed to thread on investing in retirement and the different situations we are individually in. I know there are a number of in the forum but I wonder how many are retired and still putting new money to work and how.
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Old 04-18-2014, 05:08 AM
 
71,935 posts, read 71,971,035 times
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i think the etf model has a very nice balance , very low cost and high tax efficiancy.

interest rate risk over all is very slight .

of course there is no more exploiting a managers weightings and picks to try to gain some alpha but the trade off is lower expenses if you don't get that alpha as well as relatively hands off.

if i was a more aggressive investor as when i was younger i would most likely have stayed with managed funds and went for that extra alpha we were so successful at getting for decades but now i am much more conservative than i was.

the tax savings is nice along the way but it could be a lot more painful down the road when you sell these tax efficient etf's off for any reason.

the managed funds have taxes paid each year so the bang at the end isn't as hard.

today it is a lot harder to look at tax advantages because of rmds, taxing ss and the obama surcharges if your taxable income is to great.

i just entered it as a model on my fidelity watch list so i can compare to the fidelity insight models i am using.

Last edited by mathjak107; 04-18-2014 at 05:33 AM..
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Old 04-18-2014, 06:58 AM
 
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The reverse world of retirement investing
Quote:
If you've ever found yourself trying to do something in a mirror — surgery, for example — you've probably discovered that it's shockingly difficult to do. You think you're going for the appendix, and you find yourself wandering in the Isles of Langerhans instead.

Investing for retirement often turns many of the investment lessons you've learned and turns them upside down — in some ways, investing while you're taking money out of your account is starkly different from investing while you're putting money into your account.
Already rehashed over and over in this forum and probably not worthy of a new thread.
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