Financial News

[southsider2k5]

Also have to keep in mind the loss of dollar cost averaging that occurs over time in 401k investing...I've been buying through my 401k from 2005 until now, which means I bought through the highest of highs and the lowest of lows, not to mention the dividends made along the way.

 

Which is why these retirement accounts MUST be viewed as VERY VERY long term investments. You buy throughout decades, not days.

 

And buying when things are cheap is a pretty successful long term trading strategy.

[Y2HH]

And buying when things are cheap is a pretty successful long term trading strategy.

 

And if they get cheaper?

 

That's the point of continual investment in a 401k.

 

I won't miss the cheapest cost, nor will I miss the most expensive cost...in the end, it averages out.

[bmags]

Hey question for thread.

 

I do not know if I'm asking the write question as I'm searching for the answer, maybe people don't do this.

 

I've been hoping to set up sending a portion of my paycheck monthly into an investment account to just go to an index fund.

 

I currently have a schwab account, doesn't need to be used for this. But do you know if there are typically minimums required on index fund purchases, and if so, what is that listed price called and where is it reported?

[Y2HH]

Hey question for thread.

 

I do not know if I'm asking the write question as I'm searching for the answer, maybe people don't do this.

 

I've been hoping to set up sending a portion of my paycheck monthly into an investment account to just go to an index fund.

 

I currently have a schwab account, doesn't need to be used for this. But do you know if there are typically minimums required on index fund purchases, and if so, what is that listed price called and where is it reported?

 

The best way to accomplish this is to call your broker and have it set up -- this is pretty much a 401k, but it's post-taxed. Some of the brokers have minimums for fund investing, others I'm not sure about, and then the funds themselves can have minimum's to start.

 

It's easier to just call your broker and tell them what it is you want to do for this kind of setup.

[bmags]

Thanks.

[southsider2k5]

Hey question for thread.

 

I do not know if I'm asking the write question as I'm searching for the answer, maybe people don't do this.

 

I've been hoping to set up sending a portion of my paycheck monthly into an investment account to just go to an index fund.

 

I currently have a schwab account, doesn't need to be used for this. But do you know if there are typically minimums required on index fund purchases, and if so, what is that listed price called and where is it reported?

 

There is a huge number of products out there that mirror the indexes, depending on what kind of account you are doing, and which specifically you are looking to get into, you have a ton of options.

 

For example, each mutual fund firm offers an SP 500 fund of some sort. There are also many different ETFs which mirror the indexes as well, in the case of the SP500, the biggest and best is the QQQ. The Dow Jones 30 Industrials ETF is the DIA. The ETF's trade like a stock on the open exchanges.

 

For my two cents, if you have a regular old investment account, and are looking to mimic the stock market return, I wouldn't invest in the funds, and instead would invest in the underlying major ETF. The big thing this allows you is the ability to be able to trade into, or out of the stock during any point in the trading day, as opposed to mutual funds who will take your order, but will only execute your trade after the close of trading at a set price.

 

If I am misunderstanding you and this is more of a retirement/IRA account, those things don't matter as much an the typical SP500 fund is probably better as they will allow you to use all of your cash on hand in a purchase and will award you partial shares, versus a stock trade which will only allow you to buy full shares, and the rest of your cash will sit in the account.

[cabiness42]

Probably half the people who smoke will never have serious health problems as a result. Doesn't mean it was a good risk-reward decision.

 

I'm glad you got lucky, but make not mistake, that is what happened. I'd buy back in right now if I were you.

 

By the way, not sure if it is occurred to you, but your gains are only partially made by price increases. I assume you have stocks in your mutual funds that pay dividends? By selling, you'll lose at least one cycle of those dividends across the board.

 

Not how the government retirement accounts work.

 

[bmags]

There is a huge number of products out there that mirror the indexes, depending on what kind of account you are doing, and which specifically you are looking to get into, you have a ton of options.

 

For example, each mutual fund firm offers an SP 500 fund of some sort. There are also many different ETFs which mirror the indexes as well, in the case of the SP500, the biggest and best is the QQQ. The Dow Jones 30 Industrials ETF is the DIA. The ETF's trade like a stock on the open exchanges.

 

For my two cents, if you have a regular old investment account, and are looking to mimic the stock market return, I wouldn't invest in the funds, and instead would invest in the underlying major ETF. The big thing this allows you is the ability to be able to trade into, or out of the stock during any point in the trading day, as opposed to mutual funds who will take your order, but will only execute your trade after the close of trading at a set price.

 

If I am misunderstanding you and this is more of a retirement/IRA account, those things don't matter as much an the typical SP500 fund is probably better as they will allow you to use all of your cash on hand in a purchase and will award you partial shares, versus a stock trade which will only allow you to buy full shares, and the rest of your cash will sit in the account.

 

Thanks!

 

Not a retirement account, just trying to move more of our money out of cash now that we have our house.

 

"For my two cents, if you have a regular old investment account, and are looking to mimic the stock market return, I wouldn't invest in the funds, and instead would invest in the underlying major ETF."

 

This is what I was trying to accomplish. I'll look into this today.

[StrangeSox]

I've had a vanguard total market ETF for 8 or 9 years now. It's paid decent dividends and more than double in value.

[Jenksismyhero]

Hey question for thread.

 

I do not know if I'm asking the write question as I'm searching for the answer, maybe people don't do this.

 

I've been hoping to set up sending a portion of my paycheck monthly into an investment account to just go to an index fund.

 

I currently have a schwab account, doesn't need to be used for this. But do you know if there are typically minimums required on index fund purchases, and if so, what is that listed price called and where is it reported?

 

Are you talking up front minimum amounts to invest? Or continued amounts after you've invested in the fund? As an example, the Vanguard 500 has 3k minimum to start, but thereafter you can invest as little as you want. There might be a low minimum, but I've put in as low as $100 at a time and it worked. All that info should be readily available on the fund page.

 

e.g, https://personal.vanguard.com/us/funds/snap...;FundIntExt=INT

[bmags]

I've had a vanguard total market ETF for 8 or 9 years now. It's paid decent dividends and more than double in value.

 

Thank.

 

How do you pay into it? When you have some extra money or did you try to structure investment?

[StrangeSox]

I dropped $1k into one time sort of as a spur-of-the-moment thing. Haven't touched it since edit: dividends are set to auto-reinvest

 

For my wife's IRA, we auto-deposit $X each month into that account from her check, and then I'll periodically go and dump that cash into one of the funds in there. I've tried to set up an auto-invest but always get frustrated with Fidelity's page and give up.

 

Which reminds me, probably should go move some of that money around now...

Edited September 25, 2015 by StrangeSox

[bmags]

Are you talking up front minimum amounts to invest? Or continued amounts after you've invested in the fund? As an example, the Vanguard 500 has 3k minimum to start, but thereafter you can invest as little as you want. There might be a low minimum, but I've put in as low as $100 at a time and it worked. All that info should be readily available on the fund page.

 

e.g, https://personal.vanguard.com/us/funds/snap...;FundIntExt=INT

 

Thanks, this is perfect. Less concerned with the initial amount, more with the minimum of adding to the account. Was hoping to send in a small amount each pay check so I don't have to "remember".

[southsider2k5]

Thanks!

 

Not a retirement account, just trying to move more of our money out of cash now that we have our house.

 

"For my two cents, if you have a regular old investment account, and are looking to mimic the stock market return, I wouldn't invest in the funds, and instead would invest in the underlying major ETF."

 

This is what I was trying to accomplish. I'll look into this today.

 

First things first, I noticed I said QQQ and SP 500, the Q's are actually the Nasdaq. Don't ask me how I did that, but...

 

The big caveat here is will it hurt you to lose this money. If the answer is yes, you shouldn't be in stocks/stock funds.

 

Assuming your are OK with the risk, I love the stock indexes for rate of returns. Long term, they will always out perform traded funds. The big ETF's to check into are the following:

 

SPY = SP 500

QQQ = Nasdaq

DIA = Dow Jones Industrial Average

 

 

 

[StrangeSox]

"VTI" is the vanguard total market ETF I have

 

eta: yeah definitely with ss2k5 on cheap index funds over anything else. They end up ahead in the long run without a bunch of fund managers leeching money from you.

Edited September 25, 2015 by StrangeSox

[southsider2k5]

Thanks, this is perfect. Less concerned with the initial amount, more with the minimum of adding to the account. Was hoping to send in a small amount each pay check so I don't have to "remember".

 

IIRC, you can go so far as to have your direct deposit channel an amount to money to your brokerage account with each check. Call your brokers 800 #, they will be able to tell you for sure.

[StrangeSox]

IIRC, you can go so far as to have your direct deposit channel an amount to money to your brokerage account with each check. Call your brokers 800 #, they will be able to tell you for sure.

 

I think for my wife, her check still goes to her checking account but then we have an auto-transfer set up between that account and her IRA. So that's another way of doing it, but that might be why the auto-invest options don't seem to work right for me.

[southsider2k5]

"VTI" is the vanguard total market ETF I have

 

eta: yeah definitely with ss2k5 on cheap index funds over anything else. They end up ahead in the long run without a bunch of fund managers leeching money from you.

 

There are hundreds of them out there, mimicking everything under the sun. I prefer the major ones for easy tracking and liquidity, but Vangard is a good company to be in as well.

[southsider2k5]

IIRC, you can go so far as to have your direct deposit channel an amount to money to your brokerage account with each check. Call your brokers 800 #, they will be able to tell you for sure.

 

Now that I think about it, my broker even has a bill pay entry that allows you to set up a transfer to my brokerage account like it was my electric bill. If you set it up as a repeated entry it would accomplish the same thing as a direct deposit.

[bmags]

All good advice.

 

Not looking to move all cash into savings, just take some risk on higher returns instead of

[Jenksismyhero]

All good advice.

 

Not looking to move all cash into savings, just take some risk on higher returns instead of

 

My wife and I did the same thing about 5 years ago. We had a decent chunk of change in our savings account and it wasn't earning anything. So I convinced her (she's very risk averse) to start investing that money in funds. We opened up a Vanguard account and bought into their total stock market, total international stock market, and total bond market funds. I provided them with my checking account info, did the initial investment in each, and then each payday they auto invest the amount I provided to them. It's super easy to set up and change when necessary.

[Cknolls]

If the choice is between a Mutual Fund and an ETF, I would go the Mutual Fund route......ETF's are not all they are cracked up to be.....the safer bet is a plain old mutual Fund, specifically an Index Fund...

[southsider2k5]

If the choice is between a Mutual Fund and an ETF, I would go the Mutual Fund route......ETF's are not all they are cracked up to be.....the safer bet is a plain old mutual Fund, specifically an Index Fund...

 

The major ones hold their underliers, which is what you want.

[NorthSideSox72]

Not how the government retirement accounts work.

Hm. It doesn't buy mutual funds?

 

[cabiness42]

Hm. It doesn't buy mutual funds?

 

As an individual government employee, I am buying into one or more specific funds, each of which is invested differently. However you are in the fund jointly with all other government employees, and any dividends paid out are rolled into the price of the fund. You don't have to have your money in the fund for any specific period of time in order to share in those dividends.

 

EDIT: Here, maybe this: https://www.tsp.gov/investmentfunds/fundsov...sonMatrix.shtml will help you understand it better.

 

On any given day, I can move my money between any of the funds, with the exception that for any fund other than G, once I move money out of a fund, I can't put more back in until the first of the next month.

Edited September 25, 2015 by HickoryHuskers