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  1. whyme

    Switching vendors; need help!

    Sorry if I played a roll in scaring Sophia away--are you still with us, Sophia? The point I was trying to make, perhaps badly, was that any diversified low-cost index fund portfolio (including a one-fund target date portfolio) should be fine, if she sticks with it.
  2. whyme

    Switching vendors; need help!

    I'm not sure whether Sophia is still with us, but for what it's worth, I'd say that pursuit of ideological purity is the only argument for that level of precision in asset allocation. I daresay that a broadly rounded allocation would over time yield a small bit more or less than the fractional percentages, but will be close enough that there's no way to predict which one will do better over, say, thirty years. If Sophia wants to include the (historically well-performing) small caps and emerging market stocks, something like the list below would be simpler to maintain and, for all practical purposes, equally good: 50% Fidelity 500 Index Fund (FUSEX) 15% Fidelity Small Cap Index Fund (FSSVX) 15% Fidelity International Index Fund (FSIVX) 10% Fidelity Emerging Markets Index Fund (FPMAX) 10% Fidelity Intermediate Treasury Bond Index Fund (FIBAX) But Sophia (or anyone else reading this) shouldn't get hung up on the allocation, beyond the one big decision about the percentage of stocks vs. bonds. The rest of it will at best yield a marginal improvement, and you'll find as many suggestions as there are interested investors. When the argument gets to that point, it's indicative that nobody has a correct answer, and any reasonable option that you'll stick with (including all of the suggestions on this thread), along with regular contributions (and living below your means so that you can make those contributions larger) should do the trick of preparing you for a prosperous retirement.
  3. whyme

    Switching vendors; need help!

    Hi, Tony. You're right--if she's thirty years or more from retirement, she'll do well with 90% or even 100% stocks. But only if she sticks with that plan through the thinnest times. That's the great danger that many people don't appreciate--if you bail out when it seems like your hard-won nestegg is falling to zero, you "realize" those losses and can wind up with worse returns than if you'd stuck with a bank CD or savings account. And it's much easier to agree to that in theory than it is to hold on when you realize your life savings is down 20%, now 30% now 40%... There is also a tendency to contribute less or not at all when the investments seem to have gone bad, though as you know well, Tony, those are great times to add to your holdings, as if the stocks were "on sale." I'm not opposed to the "aggressive" allocation: indeed, my own approach has been pretty much all stocks (now, virtually all in the form of index funds) until fairly recently, as I've entered my sixties and begun to approach retirement. (I was able to step up my contributions in the 2007/8/9 period, which has worked out well since then, though not without some nerves and, I'm embarrassed to admit, a bit of forced selling due to stocks purchased on margin.) I've continued my regular contributions at a relatively high rate, which I think is the best thing you can do to insure success. But I know people who bailed out near the bottom of that recession, and those investments are lost forever. Same with the "tech bubble." So it comes down to knowing yourself. If Sophia has a long time horizon, perhaps she should take another bit of Bogle's advice: "Don't Peek!" In other words set up a portfolio, contribute regularly, automatically (and a little more than you think you can afford) and don't pay attention to the financial news.
  4. whyme

    Switching vendors; need help!

    OK, Sophia, now I see the post with the funds you have available. I don't know why those other funds are listed in my Fidelity 403b and not in yours--please do your best to suss out the fees in your plan, in case your version has snuck some costs in that mine doesn't have (In my case, it's just a $5 per quarter fee, plus the underlying expense ratios of the funds). But the funds you have listed are low cost and seem fine to build a portfolio. Based on the funds you've listed, I'd suggest something along the lines of Tony's suggestions, but only IF you are comfortable with just 10% bond funds. The big decision about the "aggressiveness" of portfolios is this one: what proportion is in stocks vs bonds? A 100% stock portfolio may give you the highest growth over time (twenty years or more), but it will expose you to moments of stomach churning volatility--you literally need to be prepared to stay the course (don't sell, keep contributing) when the value of your portfolio goes down by 50% or more. (That doesn't happen often, but it likely will happen, quite possibly more than once, in your investing lifetime.) Once you are within ten or fifteen years of beginning to access this money, you will almost certainly want to shift a larger percentage to bonds (which over time have been less volatile, and offered less appreciation, than stocks). If you simply want to avoid the drastic fall in the value of your accumulated assets that happen in a severe stock market decline, you might consider more bonds even if you are decades away from tapping the money. Many people find that the relative stability provided by a portfolio with, say, 30% or 40% bonds makes investing easier and still allows for good returns. Tony suggested a 90% stock/10% bond portfolio, which is indeed agressive. If you are willing to commit to staying in a portfolio with that level of volatility, go for it.
  5. whyme

    Switching vendors; need help!

    Hello SophV. I have a Fidelity 403b and these three funds ARE available there: Fidelity Total Market Index Fund (FSTVX) = 0.015% Fidelity Global ex US Index Fund (FSGDX) = 0.06% Fidelity U.S. Bond Index Fund (FSITX) = 0.025% The names they list are slightly different, for example the Total Market fund shows up as FID TOT MKT IDX PR (FSTVX). All of the low cost index funds have the "PR" designation (which, confusingly, stands for Premium). Those three funds would make a fine long-term portfolio. If those aren't offered, what is the closest thing? The problem with Fidelity is that they have many similarly named funds on offer, most of which are substantially more costly than the "PR" funds.
  6. I endorse the idea of travelling internationally, Ed. I wish I'd done more of it, but I treasure the two international trips I did manage decades ago (England/France and China). I hope to have enough money and health that I can travel extensively upon retiring in a few years. But it's a great thing to do when you're relatively young, the cliches about being broadened by travel have a sound basis in fact. Plus it would certainly give you a more realistic sense of whether (or where) you'd care to take on the ex-pat life.
  7. Cost-of-living comparisons are popular in retirement discussions, but I wonder how many people actually make decisions about where to retire based on cost of living. I gather that lots of folks from the northern states retire in Florida or Arizona, but is that because of the tax situation? I'm in Los Angeles--everyone that owns a house here could sell it and live relatively high on the hog in Oklahoma or Tennessee or Michigan, but I don't see people doing that. When people do relocate, in my purely anecdotal experience, it usually involves a strong family or social connection in their new location (some folks relocate for jobs, of course, but here I'm thinking about retirement--there's a lot more mobility earlier in adulthood, and the Mr. Money Moustache crowd may deliberately choose to establish themselves in a low cost zone). As far as I've seen, in retirement most folks don't move at all, if they can avoid it. I gather that some people want an adventure and a chance to reinvent themselves on limited means, so they decamp to low cost destinations like Panama or Ecuador. Makes sense. But I suspect the percentage of people who do that is tiny; personally, I don't know anyone who has made that move. Are there statistics about this? Seems to me that the idea of home exerts a much stronger pull than calculations about affordability.
  8. Exactly, Ed. I think it's fair to say that both of us exhibit an above-average level of attention to the specific characteristics of funds, yet we both managed to get derailed by Fidelity's confusing lists! Caveat emptor. If one is not willing to triple-check their decisions, even with the reduced Fidelity fees I'd still recommend Vanguard for most folks. If you're with Fidelity, check, check and check again to be sure you've picked the right funds.
  9. I think there's some more confusion here, and I think the confusion reflected in this thread is by design: Fidelity deliberately makes it hard to understand which fund is which (this may offer some insight into their "loss leader" strategy with the zero funds). FSGDX is the Global ex-US fund, not the International Index Premium fund (FSIVX). The latter has only about .5% Emerging Markets and a very tiny fraction of small or micro cap, according to Morningstar. FSGDX is also very light on the small caps, though I am not sophisticated enough to know whether that reflects an accurate market-cap weighting, but it appears to hold around 18% Emerging Markets.
  10. Fidelity Total International Index Premium does not appear in my 403b. The available options include the Global ex US, Fidelity Total International Equity Fund (with a 1.15% ER!), and Fidelity International Index Premium 0.045% ER), which is the developed markets fund that I had earlier mistaken for a total international index. Slightly less simple, but one could look at a combo of the International Index PR and the Emerging Index PR as an alternative international option in the 403b--I haven't done the analysis to see whether that would create any meaningful advantage, beyond the ability to control the weight of Emerging Markets in the portfolio. (BTW, the Zero funds have yet to appear, and I'm still not clear on whether Fidelity plans to make those an option within 403b accounts.)
  11. My mistake. Total Int'l is indeed 0.06%. I mistakenly looked at the "Fidelity International Index" (FSIVX) which is 0.045%. The latter fund is focused on developed markets, omitting (I think) "emerging" market securities. This is another reminder to anyone considering Fidelity--they have many funds (most of which are far more expensive than these low-cost index funds), they often have similar names, so one needs to be very careful when selecting funds. Here's a link to the recently discounted funds: https://www.fidelity.com/mutual-funds/investing-ideas/index-funds
  12. Here you go: Fidelity Total Market Index Fund (FSTVX) = 0.015% Fidelity Total International Index Fund (FTIPX) = 0.045% 0.06%. Fidelity U.S. Bond Index Fund (FSITX) = 0.025% Fidelity Freedom Index (FJIFX, FIHFX, FDKLX, etc) = 0.14% (net ER, shows a gross ER of .18) Fidelity Four-in-One Index Fund (FFNOX) = 0.11% (net ER, shows a gross ER of .13) Note that the Total International ER differs from your figures, Ed. Total Int'l is 0.06%. It looks as though the two zero ER offerings will be introduced as distinct funds, not simply rolled over from the current total market funds. Those zero funds do not yet show up among the 403b offerings. FYI, reduced price index funds include 0.025% ER on the Mid Cap and Small Cap funds. 0.03% on Short, Intermediate and Long Term Treasury Bonds. Emerging Markets, 0.08%.
  13. Just looked at my Fidelity 403b. It does show the Total Market ER at 0.015%, down from the already-low figure you mention above, Ed. I hold a fund called something like Global ex-us, not the one called Total International, but very similar (offhand, I don't recall why the "Global" one seemed preferable, but I had some small reason for preferring it). That one hasn't changed--it still shows an ER of 0.06%. PS: It appears that several of the "PR" index funds have just had their ERs reduced, including Total International (now 0.045%) and Small Cap (if I remember correctly, that was down to 0.025%). At first glance, it looks as though fee reductions are being passed on to 403b holders, though you never know what the future holds in these matters. PPS: Here's a link to the current costs of Fidelity's line of low-cost index funds, in each case less than Vanguard. https://www.fidelity.com/mutual-funds/investing-ideas/index-funds
  14. If Fidelity extends the no-fee funds to their ETF classes, and if Vanguard makes Fidelity ETFs no-transaction-fee (which I think they are doing), then it would be possible to hold the Fidelity ETFs for no fee within a Vanguard account. We'll see. I'll keep you guys posted when I determine whether my Fidelity 403b funds migrate to a zero expense ratio.
  15. Thanks, Ed. I don't know where the info is online, but I can attest that a $5 quarterly fee comes out of my own Fidelity 403b. I do not know whether all Fidelity 403bs have the same fee structure. It looks to me as though Fidelity has decided fight for market share by meeting or undercutting Vanguard to appeal to cost-sensitive do-it-yourselfers, while continuing to promote their traditional profit centers (1%+ personal management fee, numerous funds in excess of 1% ER) to less astute clients.