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danrobertson

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  1. Steve, I like your questions. I suggest that anyone who gets on could ask your questions if they can get them in. I wonder who on the board speaks for indexing. I suspect they think they all do, but none of them can list the advantages. I doublt if they realize that the indexes match the benchmarks because they are comprised of stocks included in the benchmark list of investments. Yes, this is sort of circular sounding, but still worth figuring out. Also, there are different benchmarks: small cap, total stock, total bond, and many others. So it is not fair to compare small cap gains to the total stock market benchmark. Yes, this is basic, but I don't think CALSTRS is conversant with these concepts. The retirement board members are undoubtedly interested first in their own retirement security, and I would wager that the people allowed to call in will look at their micro interests. I suppose that would be my primary interest, but hopefully some callers will help the conversation focus on what has been learned in the recent decline, such as how to rebalance. My question would be that the board ought to invest in Vanguards Total Stock index for the $100 Million investors, costing under 3 basis point. Best of fortunes, Dan
  2. I believe it's time for the contestants to put up their results. This contest was proposed by IRA over a year ago and several of us have entered. You may recall a 5 year duration. My update is a 22.11% gain for 06, based on a $50,000 portfolio: now worth $61,091. Dodge and Cox Balanced 5K (14.17%) D&C International 10K(27.89%) D&C Stock 5K (19.00) Vanguard Emerging Mkts. 15K(29.45%) Vanguard Primecap Core 15K(12.65%) I put these into their own portfolio in Morningstar and report their calculated percentage gain. Had I not done so well I might not even bring it up. This portfolio did well because it is diversified and very low cost..actually .56%, pretty aggressive, don't you think? Best of Fortunes, Dan
  3. It has to be paid back..even though you are borrowing from yourself, you are getting money that was not taxed YET, because it is supposed to be taken out after you retire. But if you take it early you will pay it back with money from income that has been taxed or will be taxed. So you are paying a tax on the money you repay to your account, and will pay taxes on that same payment money again, when you take it out after you retire. Is it worth it? I doubt it...Best of Fortunes, Dan
  4. Jawnaw: the advantage of the $200 consultant is that he/she listens, and advises in a way that bypasses financial self-interest. The self-interest of agents is of course the fees they will collect over the lifetime of your investing, fees which diminish your success in the market, and which are also charged when your portfolio of funds loses money...once you sign up with them you are put into a fee structure that insures an income to the provider. This is the customery business practice of the companies agents select. After you have made an informed decision about your investing plans, why should you have to continue paying? A caveat of this approach is the need to watch the market for wild swings, such as potential recessions, higher inflation which might lead to a different investment strategy, etc. People who do it themselves and do not want to watch for such awful things chose passive investments and might chose, for example, the "couch potato" approach of 50% Vanguard Total Bond Market and 50% Total Stock Market. The market is dynamic and always changing..and by the time you and I see a trend so do lots of other people, so we need to look with our best good sense, be familiar with our own greedy excitement, and occassionally take a dispassionate visit back to our advisor. Most of the people at this site are continually updating our awareness of what makes sense for retirement and how can we protect ourselves from overcharges while still getting the best results. A fun and fulfilling challenge. Much more fun than turning it over to the cookie monster in the school cafeteria, the pusher, the annuity guy, etc...Best of Fortunes, Dan
  5. Just an added thought: you might use the Tiaa/Cref for your REIT investment, if that is part of your overall allocation, Vanguard for indexed investing (small/mid-caps) and bonds, and Fidelity for your favorite sector funds. And Vanguard has a few good sector funds too...Best of fortunes, Dan
  6. I am sorry you have had to go through your medical problems and then the financial mess of getting your money out. It seems to me that you might qualify as a "hardship withdrawl" since you are less than 5 years of being cancer-free, besides the IRS would not mess with you if you send the appropriate medical backup. While that would save the 10% penalty the regular tax on the rest (state and federal) implies you might need to take out 50K to get your $32...but building a tourist site, to code, etc. sounds like a big stretch of stress and angst..the best present to the family might be your presence..a picnic here and there, maybe an outdoor concert...this is not exactly THE answer but possibly helpful...the best to you in your recovery and new efforts...Dan
  7. Hi Steve..Two comments..(1) I thought the Efficient Market Theory states that the market is always properly valued due to the "best thinking" of all the investors..so the tech bubble seems to bunk that notion. Likewise, just recently, before early May, the CNBC commentators were all (it seemed to me), fully invested and encouraging everyone to look more closely at large caps as the next area for EMT to work its wonders..with energy costs the conventional thinking it going down the tubes.. and, (2) I used a fee based advisor to look at my portfolio to get another perspective and rationale for portfolio changes that might be necessary for my retirement income. He had some very good ideas which I implemented. I would not go to a salesman or broker for this sort of advice. Thank you for all your good work. Best of Fortunes, Dan
  8. FEB..Vanguard is very low priced due to very little advertising and self-promotion..for example, they don't pay commissions to sales people, which saves the investor a lot of money..Fidelity is privately owned by a family, I believe..and American is like most fund companies, but with a better reputation than some..Good luck, Dan
  9. Annie..I had success by getting the transfer form from the new company I wanted to go to, and then returned the form to them..They send the transfer request to the original company and get the transfer for you..and yes, it is advisable to know if there is a back-end fee for getting out of the first fund so you are making an informed decision...Generally the insurance company funds are more expensive that non-insurance funds..most of the hoopla about over-priced funds involves annuities and the costs of insuring your principal, and high fees for the agents... Just to warn you, there are likely the same sorts of products at the new district you are going to..As a rule it is safer to collect your information about fees and fund costs before you buy and run them by this forum..Many of us have experience with these funds and can help you by sharing some pros and cons so that you are less likely to be surprised down the road by hidden costs (marketing costs/"loads" at the beginning of buying a fund or at the end when you want to cash it out, and other possible complications). The nice person with the cookies in the cafeteria and the "free" literature is paid well to be "happy to explain this all to you"..so be wary..Share your information and you will be able to rest better knowing you have unbiased friends who are saving each other from overpriced options...Best of fortunes, Dan
  10. Tony, I set up a Roth, on my own, while I was having deductions taken out for my 403b..two separate "pots" of money..Depending on age, goals, time to retirement, etc. the fund you select might be a targeted date when you will retire, such as 2035, or 2045, whatever, with T.R. Price or another company...the district or employer does not necessarily have to be involved..You might even get an automatic deduction from your savings/checking account on a monthly basis to go into the fund..Since your paying taxes anyway, at the front of the transaction, you don't have to think of it as being part of a "sheltered" investment, i.e., you don't need brokers/administrators, or any middle men to do this... While I think this sounds nice it is still very important to know that the money has to stay there..and you need to know the rules about taking it out, lest you want to use it for a down payment and then find out the penalties are horrendous (e.g., putting you into a higher tax bracket, 10% penalty...stuff like that)..Nevertheless..I am pleased as punch that I set mine up..I have a lot of money there now...which will be tax-free when I take it out...Best of Fortunes, Dan
  11. Joshua..the Roth is an excellent product to keep so you can have money earning tax free..it can generally be in the same no-load mutual funds such as those in Fidelity, Vanguard, and Tiaa-Creff..In other words, a family of funds can put your money in as a Roth, a 401K, a 403b..whatever you ask for..A Roth with a brokerage account is more likely to make less for you because they are in the business of moving money around and taking a little bit with each move..better at your age to transfer it into a target retirement account, such as with T.Rowe Price's..low fees, excellent reputation, and they don't "massage" the account..like so many salesmen do..Good luck..hope you cancelled out on the salesman..this is a golden opportunity to do this right, with all the information first..Best of fortunes, Dan
  12. Yes, the initial salary reduction form starts the money and the transfer request form to Vanguard authorizes Vanguard to go to your fund and get some or all the the money you put in already to go to Vanguard. One smart person I know has the salary reduction go to Fidelity..Fidelity has been authorized to then put that money into 4 places: 3 good funds, and the last fourth into a money market fund (it doesn't make much but it is safe)...Every few months she asks Vanguard to move the money from her Fidelity Money Market into her Vanguard Fund. Initially this probably seems complicated with all the paperwork/waiting/learning from mistakes, etc...So it would be prudent to get started in some good Fidelity funds and forget about Vanguard for now...just so you can get into some smart places and let it grow for a bit..and do the transfers later..I would include a foreign fund among those you select in Fidelity, particularly Asian Pacific, or broad international... The employer won't care about any of this..they just transfer the money to the Fund Family you specify..and after that, your choices are between you and that Fund Family...Best of Fortunes, Dan Also, regarding TIAA Traditional..I do get the 4.5% Scotty mentioned...I went in to it several months ago when the interest rate was 3.5 or so..When I found out the new rate I moved all of the money to their Money Market fund for one day and then back to Traditional. Now I get the 4.5%! (instead of 3.5%).
  13. Interesting...rather than answer your question the agent questions the whole site..why is that? perhaps his clients have been asking him if he read the three L.A. Times articles by Kathy Kristoff on retirement and the rip-off insurance companies...But back to your question..I have been in the same position, Jackrabbit, and your choices are improving..there is usually some way to transfer money..but with the 5% it is certainly a nice incentive...I think the employer is to be commended and probably might want to make a change or add a fund to maximize his match...rather than have it eaten away by some greedy coorporation..in other words, some of his match is being lost in fees too...and it might be easy to do something about it...Best of Fortunes, Dan
  14. Speaking of "teeny tiny print"..if we got rid of that there might be clear and better understood products available. Most new teacher consumers, unfortunately, skip the fine print and depend on trust. By the way, what are the sources of income/commission for salespeople, i.e., I wouldn't think from the funds "expenses" because that presumably is for the fund's "home office" (analysts, paperwork, big bosses) but I don't know..from 12b fees, from front loads and back loads?...just where? Thanks, Dan
  15. Steve, I also watch Uncle Lou..a real treat..he helped me with the language of investing with his polite but well-directing clarifications. He had a healthy attitude about money and investing which he enjoyed sharing in his beginning dialogs. The format was always the same but I didn't mind..his guests were interesting and showed that economic advisors and analysts are also uncertain about investing, leading me to accept the idea of not taking all this too seriously or personal. Along the way, here in L.A., we had Richard Ney on channel 22, a morning business channel before CNBC and Bloomberg..His message was quite pointed: the floor specialists at the N.Y. stock exchange are manipulating prices and you don't stand a chance. Nevertheless! there are some clues from their deviousness which can guide investing...and he had an exciting Fidelity Select collection of funds to recommend (and manage for you if you wished)..also a Newsletter, of course...(twas my first subscription). These guys helped me a lot! Both are in the ethers now..which must be kinder than insurance companies and the tech. market...Best of Fortunes, Dan
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