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AppState
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Hello all,

I am 30yrs old and make 65k a year. I have 39k in my 401k (started it when i was 19 working at UPS) and I just recently started maxing it out at 17%. I have read through most of the post and see that you all seem to say put it in the SP 500 and keep it there. Well here are my options at work, what would be the best place to put all or most of my money towards:

ALZGI NFJ DIV VAL I (NFJEX
BTC EQUITY INDEX M
FID CONTRAFUND (FCNTX)
BTC MDCP EQ IDX M
DFA US TARGET VAL R1 (DFTVX)
FKLN SM CAP GRTH R6 (FSMLX)
SSGA RUS 2000 INDX S
DODGE & COX INTL STK (DODFX)
HRDG LVNR IS EMG MKT (HLMEX)
SPTN INTL INDEX INS (FSPNX)
VIRTUS FOREIGN OPP I (JVXIX)
BTC LIFEPATH 2055
BTC LIFEPATH RET
FED INST HIGH YLD IS (FIHBX)
FID STRATEGIC INCOME (FSICX)
VANG TOT BD MKT INST (VBTIX)
WFA SHORT TERM INST (SSHIX)

Last year I got burned and only earned 6%..... I think I moved to much around and tried to time the market. Thanks for any advice.

-Chris
Post Fri Jan 09, 2015 5:33 pm
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littleroc02us
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I don't see anything in that mix that excites me. What is your company contributing? Because if it's hardly anything I wouldn't be putting 17% into this 401k. I'd be taking most of my money and investing in something like Vanguard's VTSMX, which I love because it covers a broad area of around 3000 of US stocks and is aggressive. I haven't done any transactions other then direct deposits for 7 years and this year for example my Personal Rate of return was 16.6% without lifting a finger. You tried to time the market and you 6% and I'm sure that doesn't include fees.

So I would investigate your plan and see what type of match you get and base your decision on what % do contribute.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Fri Jan 09, 2015 8:01 pm
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oldguy
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The closest one to SP500 or Total Market is FCNTX. (And it's pretty close to VTSMX that littleroc suggested). I would put 100% of your contribution there - it's head & shoulders above anything else on the list.

Fidelity® Contrafund® 9.56% 19.55% 14.81% 9.66% 12.52%
For comparison, SP500 13.69% 20.41% 15.45% 7.67% ~11%
The returns are for 1 year, 3, 5 10, life of the fund..

The SP500 is an unmanaged index - and Fidelity's Contra is managed. But they've been around for almost 50 yrs and they are good at it. As you can see, their 10 yr and Life returns are slightly above the SP500 Index, that means that they are good at winnowing out the losers over time. (The SP500 can't do that, they are obligated to own the 500 index stocks only in the proper ratio, no buying/selling.) The important return for you (age 30) is the 30-yr average (12.52%/yr), you don't care about the 1, 3 5 yr stuff.

As for market timing - yeah, most of us can't do that. In fact, it is liberating to learn that. Then you are free to just invest & get rich w/o trying to "beat" the averages. BTW, historically only 15% of the professional fund managers beat the market - for 2014 it was about 25% - saw it in the Paper yesterday. And they seemed to be PROUD of that 25%, lol.)
Post Fri Jan 09, 2015 8:30 pm
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AppState
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Thanks for the advice guys.

Littleroc, the company matches 7%.

Oldguy, I thought I was good at timing in 2008-2010 avg was 13% moving stocks back and forth, but then again all the stocks were rising at that point in time after the mini crash. So I am going to try and not worry about losing 1k this week or that week and hopefully see my return stay around 12%/yr.
Post Fri Jan 09, 2015 9:32 pm
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oldguy
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quote:
I thought I was good at timing in 2008-2010 avg was 13% moving stocks back and forth,


http://politicalcalculations.blogspot.com/2006/12/sp-500-at-your-fingertips.html

Check the SP500 from 2/2009 to now, it returned 20.06%/yr by NOT moving stocks. Very Happy

But the important thing (as you said) is to look every week or so, but don't let yourself get stampeded into doing something. IMO, the wealth comes from incrementally investing (monthly) and never selling, just accumulate.
Post Fri Jan 09, 2015 11:13 pm
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GardenCat
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Hi,
Good advice from Oldguy.

Additionally,
1. contribute whatever $ to get the match into your 401K, the match is 100% instant return on your contribution! Contribute more if you feel like it and the fund does well...
2. open a Roth IRA with Vanguard or Fidelity (low cost, well managed organizations), and contribute whatever you are allowed based on your earnings, etc. Roth IRA $ is tax-free upon withdrawl once you are 55 years old, and there are no required minimum distributions once you turn 70 (currently anyway...).
3. if you are married, do the same for your wife or husband.

Just continue to contribute. Live below your means but don't deny yourself a good living standard. You have time on your side for investments to grow without you having to do much...

Good Luck!!!
Post Fri Jan 09, 2015 11:58 pm
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AppState
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Oldguy, Shocked That hurts to think about missing that 20%, well lesson learned.

GardenCat, my company matches 100% up to 7%, so you think I should just put 7% in and put the rest in an ROTH IRA??
Post Sat Jan 10, 2015 12:16 am
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GardenCat
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Not exactly.

At least get the match. Then you can decide where to put whatever else you want to invest for the future.

Things to consider:
How much time do you want to spend looking at and wondering about where your money is and how much is it making?

Make sure you have a liquid (readily accessible) savings to cover 6-12 months of your necessary living expenses, just in case... Not all of this needs to be in a "savings-type" account where currently you actually lose money due to inflation, but enough to allow you to get to the rest easily.

Read up on mutual funds and diversification and investing strategies enough that you understand WHY you want to put your money in any particular place.

If you feel you want to go to an official registered financial advisor, choose one that you will pay "by the hour" as they will not be trying to get you into anything that will benefit them with a payback.

Good Luck!
and remember, time is on your side...
Post Sun Jan 11, 2015 5:17 pm
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