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Message
2
Posted on 5/28/13 at 7:25 pm to vodkacop
quote:
25 small cap
25 large cap
25 MED CAP
25 international cap
Perfect
Posted on 5/28/13 at 7:51 pm to Vols&Shaft83
What age to add bonds?
Posted on 5/28/13 at 7:54 pm to jimbeam
quote:
What age to add bonds?
Ask Benny
Posted on 5/28/13 at 8:57 pm to Vols&Shaft83
quote:
Did you compare the returns for each of those? I'll save you the suspense, VTSMX wins in every time period....Considerably..... by at least 2% per year. My Roth funds and my SEP funds beat VTSMX over the last 1,3, 5, and 10 year periods, btw.
First you said target date funds have a lot of hands on management and that fees were higher. I gave you one example (of several) where that wasn't the case.
The returns are different because the funds have different goals.
The point is there are choices out there for people who would benefit from low fee, self adjusting funds. You may have funds that have had better historical returns, but that's not the whole picture.
quote:
Target-date funds, on the other hand, paint everyone of the same age with the same brush.
I don't think you've thought through the available selections, with Vanguard, for example. Just because you will retire in 25 years doesn't mean you need to choose the 2040 fund. Like you said, it depends on your risk tolerance.
Posted on 5/28/13 at 8:58 pm to vodkacop
quote:
how about: 25 small cap 25 large cap 25 MED CAP 25 international cap
The Dave Ramsey plan. Good choice.
Posted on 5/28/13 at 9:23 pm to Sigma
Except he probably shouldn't wait until all debt is resolved (with a self admitted inefficient method) before putting a penny aside for retirement.
And I did a quick google search...how is that his plan. I just see income percentages, not allocations.
And I did a quick google search...how is that his plan. I just see income percentages, not allocations.
This post was edited on 5/28/13 at 9:25 pm
Posted on 5/29/13 at 2:49 am to Volvagia
quote:
And I did a quick google search...how is that his plan. I just see income percentages, not allocations.
Are you talking about Dave's plan? The allocation is in his books and he mentions it during his radio show. I'll see if I can find a link.
Yeah, I wasn't commenting on when he should start funding retirement in relation to debt. It's hard to turn down that match at any point.
ETA: Here's a link. Although he calls them Growth and Income, Growth, Aggressive Growth, and International.
LINK
This post was edited on 5/29/13 at 2:54 am
Posted on 5/29/13 at 5:05 am to Sigma
quote:
Yeah, I wasn't commenting on when he should start funding retirement in relation to debt. It's hard to turn down that match at any point. ETA: Here's a link. Although he calls them Growth and Income, Growth, Aggressive Growth, and International.
Dave likes to say pause investing until you're out of debt. This is one of the only things I disagree with him on. If it's a debt that you're going to pay off in a reasonable amount of time with a low interest rate, like a car or a HELOC, go ahead and take the employers match and bust arse to pay off the debt before investing anymore.
However if it's high interest credit card or consumer debt, stop investing and pay that shite off. Nobody is going to invest well enough to beat 24.9% APR
As far as his allocation method goes, it's a simple, effective, and proven strategy for mutual fund investing.
Posted on 6/5/13 at 3:41 pm to Vols&Shaft83
quote:
Target date funds have a lot of hands-on management. As a result, the expenses are higher than for standalone mutual funds. Guess who pays those high costs? You, that’s who. Since expense ratios are recognized as the best predictor of mutual fund performance, you shouldn’t take this point lightly.
I have been meaning to try and figure something out about this, so I will bring it here. As far as I can tell, I can't see any mutual fund expenses / costs broken out on my 401k statements and other information available to me. Is it possible that my company pays these costs or is more likely they are they just hidden so I can't really see them?
I don't know much about the technical working of mutual funds and the expense ratios of most of the available funds in my plan are about the same anyway so it really doesn't matter from a practical sense.
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