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Actively managed accounts
Posted on 4/26/24 at 11:56 am
Posted on 4/26/24 at 11:56 am
To keep it brief, when I quit my job in the service industry last year, I rolled over approximately 35k into an IRA account. Since that time, I haven’t touched it. It’s simply cash waiting to be invested. The problem is I have very little if any time to properly invest it on my own. Also being that it’s a relatively large sum, I’m very hesitant to haphazardly start investing myself.
I nearly pulled the trigger a few weeks back on a Fidelity actively managed account before I realized once I choose that route, they don’t let you reverse course.
Any advice would be greatly appreciated. Thx
I nearly pulled the trigger a few weeks back on a Fidelity actively managed account before I realized once I choose that route, they don’t let you reverse course.
Any advice would be greatly appreciated. Thx
4
Posted on 4/26/24 at 12:58 pm to Blizzard of Chizz
Set it in an S&P 500 index fund and forget it. At that value, an actively managed profile is a waste of time and money. I don’t think I’d even consider one for less than a million.
I suspect this might be a troll but idk.
I suspect this might be a troll but idk.
This post was edited on 4/26/24 at 12:59 pm
Posted on 4/26/24 at 1:02 pm to TheWalrus
^^^This^^^^
Voo or FXAIX, etc. Set it to reinvest the dividends..
Voo or FXAIX, etc. Set it to reinvest the dividends..
Posted on 4/26/24 at 1:06 pm to TheWalrus
quote:
I suspect this might be a troll but idk
Why would this be a troll? I’m asking a legitimate question because I want a legitimate answer… but since you seem to think it’s a troll, I’ll take that into account with your advice.
Posted on 4/26/24 at 1:07 pm to NATidefan
quote:
Voo or FXAIX, etc. Set it to reinvest the dividends
Thanks, I appreciate the feedback.
Posted on 4/26/24 at 1:21 pm to Blizzard of Chizz
VOO is an ETF and FXAIX is a mutual fund.
They both follow the S&P 500, there are other similar ones as well but both of these have low expense ratios (fees basically). They have very similar yields. They will go up and down, but over time have around an average 12-13% yield.
When you get closer (about 10-15 years out of retirement) you will want to consider diversifying and putting more in bonds etc. Things that are more steady, but may/will not have as big of a return.
Just put it in there and forget it.
The biggest advantage to VOO over FXAIX is that it is an ETF and not a mutual fund, so you can buy and sell at market price thoughout the day. FXAIX only buys and sells at the end of the day. If you are just going to buy and leave it, it won't matter a whole lot which one you go with.
They both follow the S&P 500, there are other similar ones as well but both of these have low expense ratios (fees basically). They have very similar yields. They will go up and down, but over time have around an average 12-13% yield.
When you get closer (about 10-15 years out of retirement) you will want to consider diversifying and putting more in bonds etc. Things that are more steady, but may/will not have as big of a return.
Just put it in there and forget it.
The biggest advantage to VOO over FXAIX is that it is an ETF and not a mutual fund, so you can buy and sell at market price thoughout the day. FXAIX only buys and sells at the end of the day. If you are just going to buy and leave it, it won't matter a whole lot which one you go with.
This post was edited on 4/26/24 at 1:38 pm
Posted on 4/26/24 at 2:22 pm to Blizzard of Chizz
quote:
Any advice would be greatly appreciated.
Do you mind giving some details, like your age or expected years left before retirement, time horizon on when you might need to use this money and at least your risk profile, meaning are you a conservative investor looking for capital preservation or are you willing to take some amount of risk to achieve potential growth?
Posted on 4/26/24 at 2:43 pm to Blizzard of Chizz
quote:
To keep it brief, when I quit my job in the service industry last year, I rolled over approximately 35k into an IRA account. Since that time, I haven’t touched it. It’s simply cash waiting to be invested. The problem is I have very little if any time to properly invest it on my own. Also being that it’s a relatively large sum, I’m very hesitant to haphazardly start investing mysel
While this is a large amount of money to you, this is not even on the radar of good active investment managers.
Any active manager that you could find with that asset base, is going to hit you with all kinds of "small account" fees - either clear fees or just higher percentage fees, and/or are going to give you to the manager that they hired 7 months after he graduated college cause he could not find any other job.
Find a good index fund and roll with it.
Posted on 4/26/24 at 2:44 pm to TheWalrus
quote:
I suspect this might be a troll but idk.
Or maybe this is a young buck just starting out for whom 35K is all they have.
You started out like that, too. Don't be an arse.
Posted on 4/26/24 at 5:13 pm to Jag_Warrior
quote:
Do you mind giving some details, like your age or expected years left before retirement, time horizon on when you might need to use this money and at least your risk profile, meaning are you a conservative investor looking for capital preservation or are you willing to take some amount of risk to achieve potential growth?
Just turned 44. I own my own home. I carry very little debt if any. I don’t live a lavish lifestyle because I’ve never really been about material possessions.. as far as investing, I consider myself aggressive. To put into perspective, that money was accumulated over a 3 to 4 year period on a measly server’s hourly pay contributing to the 401k. I realize I’m behind where I should be for someone my age, so I’m looking for potential growth.
Posted on 4/27/24 at 7:52 pm to Blizzard of Chizz
OK. Thanks for the background. And since you mentioned this in your OP,
I would at least do some reading on different types of ETFs in particular and equity markets in general, so that you can select some products that would be suitable for your risk profile. You really don’t need a fully managed type of account.
At 44, you can still achieve some growth and be able to weather downturns (which always occur). The main thing is DO NOT do what you see many people do and be tempted to (over) trade your investment account. Don’t let your emotions guide your decisions. You can go with an S&P 500 ETF that has a low expense ratio for the majority of your funds (set & forget) and choose some specialty funds that focus on biotech, artificial intelligence or whatever for smaller portions of your portfolio. Those will likely have greater volatility, but also a higher probability for accelerated growth.
Over the next 20 years or so, you should be fine. But if things go to hell in a hand basket, as some of the doom & gloom crowd preach, we’ll all be hunting deer on national forest land anyway.
Personally, I don’t lose sleep over things that I can’t control. And that’s why most of my net worth is in equity based products and some still in real estate. I make my living trading options now and I’m not expecting the CBOE to shut its doors anytime soon.
Best of luck to you. In my opinion, you’re on pretty solid ground and you can grow this account even bigger by staying the course.
quote:
The problem is I have very little if any time to properly invest it on my own.
I would at least do some reading on different types of ETFs in particular and equity markets in general, so that you can select some products that would be suitable for your risk profile. You really don’t need a fully managed type of account.
At 44, you can still achieve some growth and be able to weather downturns (which always occur). The main thing is DO NOT do what you see many people do and be tempted to (over) trade your investment account. Don’t let your emotions guide your decisions. You can go with an S&P 500 ETF that has a low expense ratio for the majority of your funds (set & forget) and choose some specialty funds that focus on biotech, artificial intelligence or whatever for smaller portions of your portfolio. Those will likely have greater volatility, but also a higher probability for accelerated growth.
Over the next 20 years or so, you should be fine. But if things go to hell in a hand basket, as some of the doom & gloom crowd preach, we’ll all be hunting deer on national forest land anyway.
Personally, I don’t lose sleep over things that I can’t control. And that’s why most of my net worth is in equity based products and some still in real estate. I make my living trading options now and I’m not expecting the CBOE to shut its doors anytime soon. Best of luck to you. In my opinion, you’re on pretty solid ground and you can grow this account even bigger by staying the course.
Posted on 4/28/24 at 9:35 am to Jag_Warrior
Agree with this. And as others have said, parking it in a low cost index fund or ETF for the S&P500 seems like a good option for you. You don't need a managed account for this amount if money over a long period of time. A buy and hold strategy will work well for you.
Posted on 4/29/24 at 10:59 am to Blizzard of Chizz
I have index funds and actively managed funds. I am convinced that in the long run you are better off just using Vanguard index funds.
Posted on 4/29/24 at 11:23 am to geauxpurple
What exactly is the definition of an "actively managed" account? I know folks who pay advisors 1-2% per year but these advisors make very few actual trades. The money mostly just sits in funds. I don't understand the point of paying someone a fee to let your money sit in a fund when I can go out and find an equivalent fund in Fidelity or Vanguard. I thought "actively managed" meant the advisor is actively making trades throughout the year, but maybe I just don't understand what it is these people do. Or maybe these people are grifters.
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