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tony

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  1. tony

    403b Inquiry

    Oh what horrible memories I have with Ameriprise. They are horrible based on my experiences. Do yourself a favor and jump over to Aspire, self direct the account into Vanguard or Fidelity Index funds and don't look back. If you have an annuity than you probably have a surrender charge . Pay it and move on with your transfer. Call Aspire , they will help you self direct/transfer the account into the funds of your choice. Don't be roped in to using an advisor because it will cost you more than the advice is worth. A 3 fund index portfolio or Vanguard target fund would be a good option .
  2. Tricia has the right approach. These discussions can get too technical at times with no proof of outcomes. I do think people's attitudes about risk does change as you get older. While you are building your portfolio most younger people optimistically want a lights out 100% stock portfolio. I did. But after experiencing some setbacks and with the realization that money is hard to save and to grow and easy to lose ( if you don't know what you are doing)your perspective does change a bit. That's why target funds made up of index funds at low cost are an ideal choice for most people. No one approach is going to be right for everybody however.
  3. It looks like you could go to Aspire and self direct the account without an Advisor and choose A Vanguard or Fidelity index fund or target fund portfolio.Also since you have Security Benefit, you have access to NEA Direct Invest which has a few very low cost options . You go to the Security Benefit webpage and fill out and send in the appropriate forms without a financial salesperson's help. Either option would work for you with Direct Invest being a little lower cost option than Aspire but with more limited options than Aspire but good enough options nevertheless. Direct Invest has been more of a challenge to get enrolled in in some school districts and the process I hear can be painfully slow for some. If you go into the 403b wise forum archives , much as been written both about Aspire and NEA Direct Invest.
  4. My feeling is you could always follow the great John Bogle's advice and always have your age on bonds. I personally think that might be a tad too conservative at your age. If you are a teacher, and have a pension plan and you plan of staying in the profession to go on and collect your full pension you could go 100% stocks. If you and your husband are both teachers, you will have two pensions. So why buy bonds at all? Plus you will also have social security. Whats most important is that you save all you can in a low cost option. Steve Schullo who posts here can probably be the best person to comment on bonds since he uses them effectively. Target funds make great sense to me because they do the guesswork for you and adjust your allocation for you and they include bonds. True the fees are just a tad higher but worth it in that it self manages for you. I think investment snobs like Ed don't like them because they cost more but they can prevent you from making investment decisions that you might regret and cost you in other ways. It's my choice for most investors who want to keep it simple. Vanguard's are quite cheap. If you couldn't stomach losing 50% of your portfolio adding Bonds / cash can act as ballast and prevent that huge loss from happening . If you have a weak stomach when the market goes South, better have a good bit of bonds. Incidentally before the corona virus hit the scene I shifted more into bonds on intuition that something bad might happen after a great market ride. As a result I lost very little of my portfolio's value but I don't recommend trying to time the market.I think Krow's recommendations are good. And when I call Ed an investment snob I do not say it with any intended animosity. Like Krow says there are no hard and fast rules. What's important is that you understand the difference between stocks and bonds and how they behave in relationship to each other.
  5. Good for you Tricia !! Direct Invest, that's a great option too so you are doing the right thing. The key now is to maximize your savings. Make it a top priorityand things will work out well for you. Don't know your age but if you are of a certain age you can accelerate your 403 savings beyond the limitations. Its called the catch-up provision. You can also invest in a 457 to the max independently of the 403b.And don't let the current economy scare you . Stay the course. Keep saving!!! I made many mistakes but the good thing is, even if you make mistakes and get fooled early on ,if you adjust your course like you did you will make up for any lost time invested in those BOZO insurance annuity high fee products. Tony
  6. Years ago I received a postcard in my school work mail box and it said basically that "the school board had just approved a new 403b saving vehicle and I was eligible to participate in it. It was a cleverr use of wording to create the impression that their product was endorsed by the school district and that I should call immediately. It was BS. Just an insurance annuity salesman trying to trick teachers into investing in a product that person offered. Look, I don't exactly know what this fixed indexed annuity university life policy is all about.. Probably even if I studied the details it would be hard to understand what I was getting into. Complexity and lack of transparency is the name of the game of these products because simply put, they are bad products and they know it and you can do without them. My advice is stay far away. All you need is an index fund portfolio . Vanguard , Fidelity, Aspire (self directing into Fidelity or Vanguard Index funds) are the way to go for retirement savings. (If you teach your defined pension plan is an annuity).Save every month as much as you can in these low cost index funds and you will be fine, A 3 fund low cost index portfolio or a target fund is all you really need for diversification. Also one more bit of advice, keep your insurance purchases totally separate from your investment purchases. Any company That combines investment options with insurance products is a no go in my opinion. Investments should be easy enough for 5th grader to understand. If it's more complicated than that its probably a rip-off. I'm not sure what kind of insurance you think you need beyond health insurance but be careful that you don't buy something you absolutely don't need. If you think you need long care insurance do your research on your own free from a salesperson's influence. If I may add, I am doing my father in law's taxes as he is in his eighties and last year an accountant charged him $2500.00 to do his taxes. I did them using turbotax for about $100.00. His financial advisor who is associated with a banking institution that has recently been cited for ripping people off and was fined, had this 83 year old man in 48 mutual funds. All repetitive and high fee and a 100% aggressive stock portfolio.And the advisor did a lot of buying and selling in his portfolio without his knowledge. His taxes are a mess and overly complicated thanks to an "advisor" Run away from these people. I know I didn't answer your questions directly and to the point but I hope I still made myself clear and answered your questions. I'm sick of these people. You must keep your antennas up and learn all you can on your own or somebody somewhere will take advantage of you. As another example, some guy tried to sell my dad when he was alive two cemetery plots for him. He(same guy same company) had already sold him a plot less than a year ago before approaching him again. I'm glad I was able to step in. I also am sick what some do to our senior citizens. Tony
  7. Certainly Ed you said what i was trying to say but you did so more concisely and eloquently as usual.
  8. Well this tool got my curiosity up so I went a head and tried it. Unfortunately I think this tool I posted only does UP TO 5years. ScottO's tools hopefully go further.Looks Like Fidelity OTC outperforms here but its not a fair comparison as the funds are in different investment categories Plus keep in mind, A better indicator would be to see how the OTC fund responds to a down market atmosphere like 2007-2008.
  9. This might be what you are looking for https://markets.ft.com/data/funds/us/compare. Click under performance and the chart is there.
  10. Cal You might try morningstar or this vanguard nifty comparison tool. https://personal.vanguard.com/us/faces/JSP/Funds/Compare/CompareEntryContent.jsp Sorry i gave you more info than you wanted or needed. I do think 25% in the OTC fund is a bit much but I don't know your age or your other holdings. We prefer index funds here. If you find a direct comparison chart please share.
  11. Continued Vanguard Total Index fund has an average ten year return of 10.03% Vanguard Mid Cap Index fund has a ten year return of 8.86% Fidelity mid-cap index 9.21% since inception 2011 Keep in mind Fidelity has different fund classes which may add certain fees and in a 403b the fees for the OTC might not match the retail fund performance or fees. If you buy the OTC fund in an annuity account your performance will certainly be lower because of added fees and often several layers of fees might be involved. If you buy it outside a retirement plan, it probably isn't very tax efficient and you will give back a good bit of your gains to the government in capital gains and dividends taxes. Index funds are much more tax efficient. I still believe a 3-4 basic low cost index fund portfolio over time will outperform this fund. If you wish to own it I would own it in addition to the index fund portfolio but not in place of it. Only 20% of managed fund outperform index funds over time and there is no guarantee that will continue to happen with any particular fund . OTC however will overlap with the total stock market index in holdings. I could not find charts that show growth of 10,000 over ten years as a comparison and i don't have the math skills to figure it out. I hope this helps Tony
  12. O.k This is some info. On first reflection OTC seems like a much better performer. It is . But keep in mind the OTC fund is a concentrated fund ( 200 -300 funds ) and not as diversified as a Total Stock Market Fund (3, 500 funds) which has the total market which reflects the total market. The OTC is very heavily invested in technology and has amazingly actually lost less in this down turn than the total stock market index if this info is accurate. The fees are much much higher for the Fidelity OTC Fund. So OTC for a managed fund is a great performer and is categorized as a mid cap fund / lower capitalization large caps fund. Info varies as some websites call the fund a mid cap others call it a large cap. A better comparison might be with a Vanguard Mid Cap Index Fund. Most managed funds usually do not outperform the market indexes over time. Fidelity OTC might be an exception, perhaps one of the 20% that do. But past performance does not mean that fund will continue to perform like it has in the past. Also, the fund has enjoyed a good ride over the last 12 years with a rising market.and it certainly is an aggressive holding. It is not diversified so you live and die by the performance of the stocks in its portfolio. I certainly wouldn't want to own it as my only holding if at all. It remains to be seen how far it would fall in a market crash. I used to own technology heavy stock funds and I learned my lesson as they can drop very hard and fast . The Fidelity OTC fund has had manager changes and will continue to do so most likely. This could cause a change in it"s performance.I owned a small cap managed fund years ago that was doing great, but once the star manager left I lost a bundle. The fund never returned to it's former glory. With an index funds you will never have to worry about that happening or a manager making bad market calls. Also, Fidelity index fund ( FSKAX) is newer so you would be better off comparing it over ten years to the Vanguard Total Index Fund. Also keep in mind, " the benchmarks for these two funds ( OTC and Total index) fall into different investing categories". Thie comparison may not provide complete or accurate results.
  13. I hope this is not a gotcha question. OTC Fidelity Total Market Index YTD -13.53% -20.97% — — — YTD as-of date 03/31/2020 03/31/2020 — — — 1-year 2.64% -9.28% — — — 3-year 12.64% 3.93% — — — 5-year 11.99% 5.72% — — — 10-year 14.77% — — — — 1-, 3-, 5-, 10-year as-of date 03/31/2020 03/31/2020 — — — Since inception 13.36% 11.28% — — — Inception date 12/31/1984 09/08/2011 — — — Expense ratio 0.89%— 0.01%— — — — — — — — —
  14. I think a possible solution should be that these two sites (Facebook and discussion board) have a direct link per post so both groups can quickly jump back and forth on related topics and both groups can comment and read comments. That might bring the sites more closely linked. They need linkage. Don't know if that's possible. I'm a little scared of Facebook.I've had some serious hacking of my account on facebook including an attempted identity theft so I use a fake name on my account now and fake location . Most folks don't think it can happen to them. I've subsequently convinced my wife to use a fake name. I call my account Fakebook. I like this discussion board because we carry on some pretty in depth discussions that expands a reader's knowledge beyond just telling them where to invest among their many choices. Plus we show passion here!! Their work is not done beyond that point.Posters need to realize that there is much more to investing than just picking a low fee option. Low fees are very important but we need to expand the investor's knowledge base beyond that if for no other reason than because , salespeople are pretty convincing smooth operators . I remember some advisors talking teachers out of good choices and back into bad choices. Better knowledge offers better protection. I realize that Bogle was once quoted as saying " Don't do something, just stand there" but he also said that investing is simple but not too simple or something along those lines. So our mission should be to holistically educate teachers and others to see the bigger picture. I think the discussion board does that.
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