Financial News

[StrangeSox]

S.&.P. Announces $1.37 Billion Settlement With Prosecutors

 

no one will ever actually be criminally prosecuted for wrecking the world economy, unfortunately.

[bmags]

What a jobs report. I would be surprised if q4 GDP does not get substantially revised upward.

[StrangeSox]

Huge revisions to the November/December numbers.

 

http://www.businessinsider.com/january-jobs-report-2015-2

 

On Twitter, David Wessel of the Brookings Institution noted that with these revisions, November marked the strongest single month for job growth since November 1997.

 

These revisions also make the last three months the best three months for job gains in 17 years.

[southsider2k5]

Huge revisions to the November/December numbers.

 

http://www.businessinsider.com/january-jobs-report-2015-2

 

Perfectly corresponding with the crash in energy prices.

[bmags]

I'm very frustrated by our 401k fund options, all of which seem very expensive. There is a small employee match, however. They do have aggressive/moderate models that just throw you in %'s of all of them, but I don't understand how to calculate costs of that.

[StrangeSox]

Max the match and put the rest in your own IRA if you want better options.

[bmags]

Perfectly corresponding with the crash in energy prices.

 

I would have thought that energy crash would have propped up GDP and consumer numbers more than jobs reports. But, obviously the revisions of recent GDP reports have been greater than 1% since q1 of last year.

[StrangeSox]

I would have thought that energy crash would have propped up GDP and consumer numbers more than jobs reports. But, obviously the revisions of recent GDP reports have been greater than 1% since q1 of last year.

Yeah, I'd think that any economic spur from dropping energy prices would lag a little behind the actual prices, and that employment would lag substantially behind that.

[southsider2k5]

I'm very frustrated by our 401k fund options, all of which seem very expensive. There is a small employee match, however. They do have aggressive/moderate models that just throw you in %'s of all of them, but I don't understand how to calculate costs of that.

 

Honestly, the best thing you can do it manage it yourself. Look to see if you company has an SP 500 fund/ETF. For your main investment you should put 100(- your age) % into the fund. The balance of your age should be put into a conservative-ish bond fund (something based in American blue chips).

 

If you are 30 years old...

 

70% into an SP fund.

30% into a bond fund.

 

All of those managed funds are so much more expensive to be in (fees) than the simple SP funds, and historically they underperform the SP on a long term basis. Yes, they might win years as being better, but once you factor in fees and such, you are better off in the SP. Remember every extra fee you pay for aggressive management, is that much higher of a return you need to earn to get similar results.

 

Just my two cents.

[southsider2k5]

I would have thought that energy crash would have propped up GDP and consumer numbers more than jobs reports. But, obviously the revisions of recent GDP reports have been greater than 1% since q1 of last year.

 

It usually takes 6 months to a year for those things to be felt in the economy as a whole, but hiring accelerating is a good sign that corporate America is buying into this being a real thing.

[StrangeSox]

My thought has always been that if it's not an index fund, I'm probably getting ripped off.

[southsider2k5]

My thought has always been that if it's not an index fund, I'm probably getting ripped off.

 

I don't know about getting ripped off or not, but historically money managers don't out perform the SP on a long term basis. Sure they might win a few years in a row, but it almost always doesn't last.

[NorthSideSox72]

My equities portion (which is about 85% of my portfolio) is mostly index, but not entirely. You can use an SP500 for your large equities, and a Russell 2000 index for the small to medium side. But I also have a little money in each of EUR and APAC funds for global spread, and a div-heavy value fund as well.

 

[Y2HH]

I don't know about getting ripped off or not, but historically money managers don't out perform the SP on a long term basis. Sure they might win a few years in a row, but it almost always doesn't last.

 

I don't know...I kind of agree with him that it's a rip-off because of the astronomical fees they charge, especially considering they never outperform the index they're based off of (and attempting to beat) over time.

 

If an S&P 500 Index exists in a 401k, it's the ONLY stock based fund I suggest people put money into, maybe a smaller percentage into a similar bond index, and possibly a small percentage into a foreign index, but the latter is not necessary.

 

The biggest mistake I see people make with 401k's is they tend to think they have to buy a small cap fund, a mid-cap fund, a large-cap fund, bond funds, growth funds, value funds, etc...so they end up with small stakes in a bunch of different funds, and they do this for "diversification". The problem is, what they seem to be missing is the S&P500 Index *IS* the definition of stock diversification -- all by itself. It's the top 500 companies on the market, and it means you're buying a small piece of each one of them. All 500 of them. People tend to think because they're buying "one" fund, that's all they own is that one single thing.

 

...and in the end, the S&P500 Index ALWAYS beats the small caps, the mid caps, and the large cap funds, not to mention it's a benchmark, so it's nearly cost basis free (~0.10%), and if/when one of those small companies becomes a big one -- they get listed on the S&P500 and you own them, too. The point of the S&P500 is that you'll never under or over perform the market on a long term basis. And it's cheap. And that's good.

Edited February 6, 2015 by Y2HH

[southsider2k5]

I don't know...I kind of agree with him that it's a rip-off because of the astronomical fees they charge, especially considering they never outperform the index they're based off of (and attempting to beat) over time.

 

If an S&P 500 Index exists in a 401k, it's the ONLY stock based fund I suggest people put money into, maybe a smaller percentage into a similar bond index, and possibly a small percentage into a foreign index, but the latter is not necessary.

 

The biggest mistake I see people make with 401k's is they tend to think they have to buy a small cap fund, a mid-cap fund, a large-cap fund, bond funds, growth funds, value funds, etc...so they end up with small stakes in a bunch of different funds, and they do this for "diversification". The problem is, what they seem to be missing is the S&P500 Index *IS* the definition of stock diversification -- all by itself. It's the top 500 companies on the market, and it means you're buying a small piece of each one of them. All 500 of them. People tend to think because they're buying "one" fund, that's all they own is that one single thing.

 

...and in the end, the S&P500 Index ALWAYS beats the small caps, the mid caps, and the large cap funds, not to mention it's a benchmark, so it's nearly cost basis free (~0.10%), and if/when one of those small companies becomes a big one -- they get listed on the S&P500 and you own them, too. The point of the S&P500 is that you'll never under or over perform the market on a long term basis. And it's cheap. And that's good.

 

This is theory I subscribe to.

 

[Y2HH]

Keep it simple in your 401k's, people. If you buy S&P500 Index, when the markets hot, you'll be hot right along with it. When the market crashes, you'll crash right along with it. When it rebounds, you'll rebound right along with it. But you'll NEVER under perform it during any of those possible events, which is the point.

 

Keeping a long term outlook is the hardest part for people...remind yourself this is for retirement, not next week...unless you happen to be in you're 60's.

 

As you age, you start divesting into bond indexes at a higher and higher percentage...because they're boring, and they tend to do almost nothing, even during bad times.

 

This was the return on my personal 401k last year:

 

Personal Performance From 01/01/2014 to 12/31/2014: Increase 12.11%

 

That gain was from using the following split:

 

80% S&P500 Index

10% Bond Index

10% Foreign Index

 

As of now, my split is:

 

60% S&P500 Index

20% Bond Index

20% Foreign Index

 

Because I'm getting older...

[bmags]

There is not a single index fund offered.

 

I definitely need answers, I'd love to manage myself as there are plans I am a fan of, but I do not know how employee match is affected if I move to Roth.

[bmags]

btw thanks everyone for the information.

[southsider2k5]

There is not a single index fund offered.

 

I definitely need answers, I'd love to manage myself as there are plans I am a fan of, but I do not know how employee match is affected if I move to Roth.

 

Anyway you can share the names of the options you do have?

[Y2HH]

There is not a single index fund offered.

 

I definitely need answers, I'd love to manage myself as there are plans I am a fan of, but I do not know how employee match is affected if I move to Roth.

 

Post the funds they're offering here, and their cost basis' expense ratios.

Edited February 6, 2015 by Y2HH

[bmags]

Let me export it this weekend, I don't want to format them right now.

[NorthSideSox72]

There is not a single index fund offered.

 

I definitely need answers, I'd love to manage myself as there are plans I am a fan of, but I do not know how employee match is affected if I move to Roth.

 

Not a single index fund? I've never heard of a provider who didn't at least have a 500 index.

 

Post the funds they're offering here, and their cost basis'.

 

That too, though I think you mean fees, not cost basis. Cost basis is how much you pay to purchase it, which in the case of Mutual Funds is either the clean price or dirty with fees up front. It's the fee level, and how/when it is charged, that are relevant here.

 

[StrangeSox]

There is not a single index fund offered.

 

I definitely need answers, I'd love to manage myself as there are plans I am a fan of, but I do not know how employee match is affected if I move to Roth.

I'm sure it's gotta be in the employer's plan to get the employer match. My company started offering a Roth 401k option, but that just has to do with pre/post tax treatment. The options in the two plans are identical.

[bmags]

Not a single index fund? I've never heard of a provider who didn't at least have a 500 index.

 

 

 

That too, though I think you mean fees, not cost basis. Cost basis is how much you pay to purchase it, which in the case of Mutual Funds is either the clean price or dirty with fees up front. It's the fee level, and how/when it is charged, that are relevant here.

 

I am excited for people to see what I'm looking at to know if there are alternative terms that I don't understand.

[Y2HH]

Not a single index fund? I've never heard of a provider who didn't at least have a 500 index.

 

 

 

That too, though I think you mean fees, not cost basis. Cost basis is how much you pay to purchase it, which in the case of Mutual Funds is either the clean price or dirty with fees up front. It's the fee level, and how/when it is charged, that are relevant here.

 

Correct, I meant expense ratio.