U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
 
Old 04-18-2014, 08:17 PM
 
48,516 posts, read 84,066,874 times
Reputation: 18051

Advertisements

Quote:
Originally Posted by golfingduo View Post
Thanks that is a great piece there. I hope that people here coming up "Millennials" can do some changes to help in making a good future life for themselves. This subject of saving and retirement will go on for a long time. Most people will never retire in the strict sense of the word. A good majority will work until they no longer can. But articles like this can help those of us that at least attempt to make a retirement work.
Its just a topic of the day that sales since so many loss so much in the last crash. The advise is from one side in opinion to another with many wanting to actual influence where money is invested.
Quick reply to this message

 
Old 04-20-2014, 02:32 AM
 
26,178 posts, read 28,581,435 times
Reputation: 24915
Quote:
Originally Posted by rational1 View Post
> the point is just being average is a poor choice to strive for.

Depends on whether you believe a fund is above average because it's smart of above average because it's lucky.

AND whether you are good at picking funds because you're smart or because you are lucky.

(Barring inside information, which is illegal) Everyone has access to the same information.

Personally I'm persuaded by the low-overhead index fund argument. But suit yourself.
I'm not knocking index funds....but if you buy actively managed stock funds that have below average costs (below 1%...hopefully below .75% which is not impossible for actively managed funds) and good long term track records (10 years or more), you have a pretty good chance of beating the relevant index for stock funds.

I'm thinking of funds such as:

Dodge & Cox Stock .52%
Mairs & Power Growth .67%
T. Rowe Price Equity Income .67%
Fidelity Contrafund .66%
Vanguard Equity Income .30%

Some of these didn't beat the S&P 500 Index by much, but that small advantage adds up over time. Some were less volatile than the S&P 500 overall.

The above listed funds are by no means an exhaustive list.

It's much, much harder for bond funds to beat their relevant indices, though.
Quick reply to this message
 
Old 04-20-2014, 02:45 AM
 
71,981 posts, read 72,020,102 times
Reputation: 49559
most managed bond bonds have twists and styles to them that do not link them to a proper index because one does not exist.

in the scheme of things fidelity stategic real return is linked to a bond index because it has to do bond swaps for commodities to get around fund laws but it is anything but a bond fund. its benchmark is barclays us tips.

fidelity capital and income is hardly just a bond fund. fidelity new market income is very different than a foreign market bond fund as it is denominated in dollars.

the list goes on and on of bond funds for which there really is no index so they lump it in just a certain group instead.

Last edited by mathjak107; 04-20-2014 at 03:06 AM..
Quick reply to this message
 
Old 04-20-2014, 06:47 AM
 
29,847 posts, read 34,929,245 times
Reputation: 11781
Quote:
Originally Posted by mysticaltyger View Post
I'm not knocking index funds....but if you buy actively managed stock funds that have below average costs (below 1%...hopefully below .75% which is not impossible for actively managed funds) and good long term track records (10 years or more), you have a pretty good chance of beating the relevant index for stock funds.

I'm thinking of funds such as:

Dodge & Cox Stock .52%
Mairs & Power Growth .67%
T. Rowe Price Equity Income .67%
Fidelity Contrafund .66%
Vanguard Equity Income .30%

Some of these didn't beat the S&P 500 Index by much, but that small advantage adds up over time. Some were less volatile than the S&P 500 overall.

The above listed funds are by no means an exhaustive list.

It's much, much harder for bond funds to beat their relevant indices, though.
Remember the thread title is about employer tax sheltered accounts. Choice there is often limited and fees can be plentiful. Your point is good advice if available and certainly is for taxable accounts.
Quick reply to this message
 
Old 04-20-2014, 06:50 AM
 
29,847 posts, read 34,929,245 times
Reputation: 11781
Not all index funds have Vanguard like low fees and the games have begun in marketing index funds with higher fees.
Quick reply to this message
 
Old 04-20-2014, 04:59 PM
 
Location: Haiku
4,188 posts, read 2,610,813 times
Reputation: 6178
Quote:
Originally Posted by TuborgP View Post
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.
We are retired although I pull in a little off consulting. Here is what we are doing (expense ratio in parens):

7% Cash
3% I Bonds (this will grow, but there is a yearly limit)
7% Vanguard TIPS bond fund

48% iShares S&P Total ETF (0.07%)
8% iShares small cap ETF (0.17%)
7% iShares Global 100 ETF (0.40%)
18% iShares Mid Cap ETF (0.18%)

The first 3 items are solely for a 5 year cash buffer.

The 4 equity investments make up more than 80% of our holdings. I am not particularly worried about volatility; the market has always gone up and down. Key is to be patient. That is what the cash is for.

The weighted total expense ratio for the equities is ~0.11%

I would like to get out of the bond fund all together. We are mostly trying to achieve inflation and principle protection for the cash buffer, and this is not a good way to do that. Maybe I will ladder CD's instead.

We are only a few months into this so I suspect there will be some fiddling with things as we learn more.
Quick reply to this message
 
Old 04-20-2014, 09:15 PM
 
26,178 posts, read 28,581,435 times
Reputation: 24915
Quote:
Originally Posted by mathjak107 View Post
most managed bond bonds have twists and styles to them that do not link them to a proper index because one does not exist.

in the scheme of things fidelity stategic real return is linked to a bond index because it has to do bond swaps for commodities to get around fund laws but it is anything but a bond fund. its benchmark is barclays us tips.

fidelity capital and income is hardly just a bond fund. fidelity new market income is very different than a foreign market bond fund as it is denominated in dollars.

the list goes on and on of bond funds for which there really is no index so they lump it in just a certain group instead.
I'm talking the plain vanilla bond funds here vs. the Barclays Aggregate Bond Index.

Now, sure, if you're gong to get more aggressive, then that might help...but the more aggressive bond funds charge more, so that often wipes out any return advantage.

There are certain bond funds that I have a lot of confidence in beating the Barclays index, but not many. And some are actually pretty aggressive, maybe too aggressive such as:

Fidelity Strategic Income (semi volatile)
Loomis Sayles Bond (can be volatile, though)
Loomis Sayles Global Bond (semi volatile)
Harbor Bond (more of a true core bond fund holding)
Baird Core Plus Bond (a recent discovery of mine...more of a true core bond holding)

Fidelity Capital & Income has too much stock, IMO. It's really not a core type bond fund, although the same could be said of Loomis Sayles Bond. Fidelity New Market income is also a niche fund, not a core bond holding.
Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


 
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:
Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top