[David70]

My 401k has been pretty flat (mostly index funds)

YTD S&P is up 2.19%
YTD DOW is up .03% (I realize essentially zero)
YTD Nasdaq is up 8.26%

Why the heavy losses this year unless risky investments? You also might be doing far better than I am in good times.

Edit - One other thought, October was a great month, if looking at a statement from the end of September it might be worth also looking at the end of October balance.

[RJ_]

Definitely a rough quarter, but decent on the year.

I also noticed my old company 401k rolled to a new provider, and all of the accounts automatically got put into a much higher expense ratio (+.5%) default managed fund. So that was cool.

[Dalko43]

Originally Posted by M_Six

I know the markets have been tough, but dayem! My supplemental retirement funds got moved from a recently closed fund to one that would "better diversify" my investment. The former fund was safe and rarely lost a lot, although gains were slow (but at least there were gains). This new fund not only lost every penny I put in last quarter, but that amount again. 200% loss of new investment funds for the quarter. I swear I could do better than these "professionals" just by random choice.

The whole point of having a retirement fund is to let it grow in the long term.

Some people advocate using riskier funds, which normally carry the potential for higher returns in the short term.

Others advocate using more diversified or broad-market funds, which generally return what the major indices return, but with a bit less risk.

There will no doubt be subjective banter on this issue, but there are studies which have demonstrated that one of these approaches has a much higher statistical chance of better returns (in the long term) over the other....in case you're interested in reading up on some of these studies:

http://us.spindices.com/multimedia-center/what-is-spiva


My advice: if your retirement account (IRA, or whatever it is) is not already invested in broad market index funds get it reallocated that way sooner vice later...these market swings you're seeing are simple undulations...many analysts (whom you rarely see on CNBC or FOX) are predicting that much greater market corrections still lay ahead in the future.

Also, if your all-in-expense for these accounts (whether they be IRA's or taxable ones) is anything more than 1.5% (fund fees and adviser fees) you really should reconsider your relationship with both the fund and the adviser (depending on how the fee breaks down).

IMO, anything above 1% for fees/expenses is outrageous. 1.5% and above is highway robbery.

[M_Six]

"Wall Street suffered its worst session in over a month on Thursday..."


AARRRRHGGGHH!!!

[BayMoWe335]

Scary part is, the bottom is a long ay down from here...look at the charts.

I've taken a slight beating. Sucks.

[John 070]

What's particularly troubling is that Bogle said to expect 3-4% for the next decade. He's not perfect, but he's realistic and isn't selling anything. Many of the calcs are based on much more. I am old enough to have gotten 2 defined benefit pension plans--it was canceled at my 2nd job literally the 2nd year I was there. You bet I've let neither cash me out with a lump sum. And yes, one of my former employers' 401ks also moved all of my money out of a 500 index fund and into something else. It's amazing to see some of the mutual funds are 6 figures...then again I've been working since 1931.

my point is if you don't have imho over 5 mil., there's no point in having your junk actively managed, although I'm sure some sales people disagree....

[John 070]

Originally Posted by BayMoWe335

Scary part is, the bottom is a long ay down from here...look at the charts.

I've taken a slight beating. Sucks.

That's not the worst, imho the worst is to have an expectation of 3-4% over the next decade....

[John 070]

Originally Posted by Dalko43

The whole point of having a retirement fund is to let it grow in the long term.

Some people advocate using riskier funds, which normally carry the potential for higher returns in the short term.

Others advocate using more diversified or broad-market funds, which generally return what the major indices return, but with a bit less risk.

There will no doubt be subjective banter on this issue, but there are studies which have demonstrated that one of these approaches has a much higher statistical chance of better returns (in the long term) over the other....in case you're interested in reading up on some of these studies:

http://us.spindices.com/multimedia-center/what-is-spiva


My advice: if your retirement account (IRA, or whatever it is) is not already invested in broad market index funds get it reallocated that way sooner vice later...these market swings you're seeing are simple undulations...many analysts (whom you rarely see on CNBC or FOX) are predicting that much greater market corrections still lay ahead in the future.

Also, if your all-in-expense for these accounts (whether they be IRA's or taxable ones) is anything more than 1.5% (fund fees and adviser fees) you really should reconsider your relationship with both the fund and the adviser (depending on how the fee breaks down).

IMO, anything above 1% for fees/expenses is outrageous. 1.5% and above is highway robbery.

I don't like > .17 lol

pretty sure my wife has a target retirement fund that is 5 star gold with morningstar that is more than double the above....

[MightyMouseTech]

In Canada, so closely tied to TSX, but nearly flat for the year so far. Not bad. Most of the funds are dividend based, so flat works.

[BayMoWe335]

Emerging markets are awful.

[M_Six]

Originally Posted by BayMoWe335

Scary part is, the bottom is a long ay down from here...look at the charts.

I've taken a slight beating. Sucks.

This is my biggest worry. I feel like I'm standing at the edge of a bottomless pit with one "expert" telling me to "stay calm, it's not that deep" and another shining a strong flashlight into the abyss and still not seeing bottom. The markets are so heavily manipulated that I'm thinking that having traditional market knowledge is no longer enough to survive.

I mean, are these guys right?

http://economyandmarkets.com/economy...ming/?z=362045



As long as the state doesn't figure out a way to yank our defined pension plans out from under us (or I/we lose our jobs), we'll still be ok. But I'm hoping to be more than just ok in my retirement.

[other_evolved]

Ugh....guys like Harry Dent operate on the "broken clock is right twice per day" theory. They make MASSIVE predictions, and yell them from the rooftops in hopes to attract people to their fee-based scare tactics. Then, when something even remotely close to their prediction occurs, they point to it as evidence that they are all-knowing.

No thanks!

[1MOREMOD]

Partial recovery last month

[David70]

Originally Posted by John 070

What's particularly troubling is that Bogle said to expect 3-4% for the next decade. He's not perfect, but he's realistic and isn't selling anything. Many of the calcs are based on much more. I am old enough to have gotten 2 defined benefit pension plans--it was canceled at my 2nd job literally the 2nd year I was there. You bet I've let neither cash me out with a lump sum. And yes, one of my former employers' 401ks also moved all of my money out of a 500 index fund and into something else. It's amazing to see some of the mutual funds are 6 figures...then again I've been working since 1931.

my point is if you don't have imho over 5 mil., there's no point in having your junk actively managed, although I'm sure some sales people disagree....

To clarify, he's talking real return after inflation (roughly 6-7% before inflation)?

I had a pension fund that gave me no choice but to cash me out when I left. On the bright side I walked away with the money and didn't have to worry about it not being there 30 years later.

Also, worrying too much about what happens this month, next, in the next 6 months or a couple of years is a waste of time. Long term, low cost, and overall outlook for someone with many years until retirement is the most important. If the stock market drops drastically it can be a good time to put some extra money into it (look at it as a long term advantage) and not worry about the rest.

I also agree with the above, statistics show long term most (far more than average) actively managed funds don't beat index funds so I prefer to stay with the more sure bet.

[gtron]

overall: (-20.37%) *close tab*

i didn't just see that.

time for some i wish i were happy right now music

[MightyMouseTech]

Originally Posted by gtron

overall: (-20.37%) *close tab*

i didn't just see that.

time for some i wish i were happy right now music

Jesus! I wasn't even hit that hard in 2008.

[gtron]

Originally Posted by MightyMouseTech

Jesus! I wasn't even hit that hard in 2008.

"overall" might have been a bad choice of words. it's overall in one ira. i'm not sure where i'm at across the board.

even though, that's just ridiculous! haha - laugh or cry i guess. i have a good amount of time to let it ride and bounce back though.

oddly enough, i'm not really into these kind of investments because it's just too much of a gamble and i can't keep up with it.

[MightyMouseTech]

Ya, in the long run does not really matter. Only thing that matters is in the end.

[Dalko43]

Originally Posted by John 070

I don't like > .17 lol

pretty sure my wife has a target retirement fund that is 5 star gold with morningstar that is more than double the above....

Quite honestly, people should be expecting no more than .6% for an all-in expense (including both fund fees and adviser fees) when discussing retirement plans, especially indexed-based ones. The all-in expense should be much lower for something like a corporate 401(k) or similar retirement plan.

Now if someone wants to go it alone, and put their own portfolio together and buy directly from a fund company, they can get the all-in expense even lower, but there's a whole list of pro's/con's associated with managing your investments solo.

Morningstar's star rating system is marketing ploy, nothing more, nothing less....researchers have proven over and over again that past performance is not indicative of future performance when it comes to funds/stocks/assets.

As for Bogle's predictions about the return over the next decade, I would highly recommend all investors (whether they be active or indexed-based) read this man's book, The Little Book of Common Sense Investing:
https://play.google.com/store/books/...oDBQ&gclsrc=ds

While index investing seems simple on its face, there is a great amount of detailed research and nuanced understanding that goes into formulating a good strategy. One of Bogle's main points was that while most active investors (think hedge fund managers, aggressively-tilted stock/bond funds, private equity investors, ect.) try to outperform the broad market indices, their attempts, known as speculative investing, often amounts to little more than a fraction of a percent of the market's overall returns.

The basic implication is that most active investors expose themselves to a whole lot of risk for what ultimately is very little reward.

[David70]

I have two main accounts for investments, one is my 401k with the company I work for and the other is with Vanguard for personal, Roth IRA and Rollover IRA. My overall expense ratio in Vanguard is .11%.

I have done a decent amount of reading on the subject and have decided to go mostly with Index funds, very low cost, and manage it myself. I think roughly 25% of actively managed funds beat the benchmark they are matching, then trying to find ones that do it year after year makes it very unlikely I would come out significantly ahead even if I was smart enough or lucky enough to select them.

For me, I don't see enough value in having outside help to make it worth the cost of this help. I also don't see why having a small group of diversified Index funds, tailored for my level of risk, age, and goals, needs to be a complicated calculation or selection. I am also suspect of people telling me what I should invest in who also make money selling the product they are recommending, no different than going to the Ford dealer and him telling me the best car is the Ford "X".

[Dalko43]

Originally Posted by David70

I have two main accounts for investments, one is my 401k with the company I work for and the other is with Vanguard for personal, Roth IRA and Rollover IRA. My overall expense ratio in Vanguard is .11%.

I have done a decent amount of reading on the subject and have decided to go mostly with Index funds, very low cost, and manage it myself. I think roughly 25% of actively managed funds beat the benchmark they are matching, then trying to find ones that do it year after year makes it very unlikely I would come out significantly ahead even if I was smart enough or lucky enough to select them.

For me, I don't see enough value in having outside help to make it worth the cost of this help. I also don't see why having a small group of diversified Index funds, tailored for my level of risk, age, and goals, needs to be a complicated calculation or selection. I am also suspect of people telling me what I should invest in who also make money selling the product they are recommending, no different than going to the Ford dealer and him telling me the best car is the Ford "X".

Diversified asset allocation and low cost....those 2 aspects are key to long-term success in the market...you're definitely using a well-proven approach.

As for going it alone...that's definitely an option. There are advantages to having a financial adviser help you with index-investing...tax-loss harvesting; rebalancing; developing a model portfolio and guidelines; withdrawal planning when you hit retirement; factor-tilting....there is a lot that goes into index-investing, despite its seemingly simple approach. But certainly anyone who indexes, by themselves or otherwise, is much better off than going with some high-priced active money manager.

Also your observations of active investors/funds are spot on. Yes, there is a small minority (anywhere from 25% to 30% depending on the study you cite) that do outperform market indices (and thus index funds) on an annual basis...the problem with using an active approach:
1) how do you know in advance which active fund will outperform? Statistically speaking only 25%-30% will be outperformers and past performance is not indicative of future performance, so its not like a rating system will aid you in your selection.
2) how long will a successful active fund outperform the market indices? There are few studies which demonstrate a lack of consistency in performance for the overwhelming majority of active funds.

[ASBSECU E93]

I'm actually up about 8% since July....few stock have carried me though.