Alright, so I have some money saved up and I want to go ahead and put it in some mutual funds. I'm not really sure how to go about this or what a good medium to go through is. Perhaps you can let me know some of your experiences and who you prefer to go through, or even some of your best performing funds. Thanks!

Looks like for a lot of funds you have to have an adviser and I really don't want to mess with that right now. What are your thoughts here as well?

[Edited on October 18, 2007 at 10:52 AM. Reason : .]

10/18/2007 10:41:59 AM

open a scottrade account and buy ETFs

for starters, start browsing http://finance.yahoo.com/etf and familiarize youself with what's going on in the world

10/18/2007 1:14:34 PM

Roth IRA...you can put the max 5k for this year and then next year another 5k. I opened my Roth in 2004 when I finally had some extra money! I also have a plan through work and I have another mutual fund that I put money in. It sucks when it does down but on well.....maybe you should wait until the end of the year before you do anything, would of been a good time about 2 months ago when the stock market was down 10%, it rebounded, but has been down each day this week!

10/18/2007 4:27:05 PM

why is it that you think having an advisor is bad?

i'm an advisor at nationwide....you aren't charged anything by the advisor depending on the type of relationship established. Usually the advisor just get a % of the upfront sales charge on A shares......You are charged this regardless of having an advisor or not. Having an advisor can help make the best decision about what funds you should invest in as well as other things.

Some advisors are only authorized to sell their companys funds and that can be a problem for some.....but generally those are the people that are chasing returns of specific funds. For the most part the asset allocation is the most important thing. This will help prevent overlap between funds and reduce over exposure to any specific stock or market segment.

If you have after tax dollars to invest and you have not taken advantage of your IRA limit then i would look to buy your funds within a roth ira account. Once your roth account has been active for 5 years (note the money does not have to have been invested in the account for 5 years, the account just has to have existed) you are free to take out the principle amounts invested without penalty, just not the interest. However it's best as with all "retirement" accounts to only invest money that you do not plan to use until retirement.

pm me if you want some more specifics, I used to work for the mutual fund company Waddell & Reed and have recently moved over to Nationwide Financial.

[Edited on October 18, 2007 at 5:28 PM. Reason : .]

10/18/2007 5:26:48 PM

^^fyi the max is 4k this year and 5k for 2008

10/18/2007 5:41:57 PM

Roth IRA.

you can go through Scottrade or a similar company.

buy index funds/index fund ETFs.

prob biggest holding should be an S&P 500 index, with maybe a large (or maybe mid) cap index, a small cap index, and an international and/or emerging market index. look for low expense ratios (Vanguard and T. Rowe Price are good places to start looking).


another easy, 1-stop shopping alternative is to buy a targeted retirement fund, at least for right now until you learn some basic stuff. Vanguard and T. Rowe Price are prob the two go-to companies here, too (and these funds also offer low expense ratios).

10/18/2007 11:59:10 PM

my adviser is with davenport & co. i have a roth ira and a few american funds mutual funds. my advisor and my portfolio have done well so far.

having an adviser works great for me personally. i'll be honest, i don't know a whole hell of a lot about it all and honestly i don't really care to. i keep up with the basics and research the things he suggests, but that's about it. i'd rather pay him for his expertise and spend my time doing other things i enjoy.

here's my whole take on investing fwiw. i think a lot of people want to think they really know how to invest and what to look for, and they may even get it right occasionally. i think ultimately, unless they're spending a lot of time/effort on it and have a skill for it, they're doing themselves a disservice in the long run. sure, they'll probably be fine when they settle down to retire BUT... will they have what they could have had using a professional? will they have to work an extra two years than expected? who knows. i wanted to minimize my chances of that, and preferred to go with someone that's proven to be successful.

to me, investing is just like any other life changing aspect of your life you trust to professionals. would you attempt surgery on yourself? defend yourself in a murder trial?

anyway, it's food for thought at the least. i'm sure i'll get some negative responses from the people who are going to make millions reading the wall street journal and google. i'm not saying there are people who do as well or better with their money than an adviser would. i just feel like it's very small percentage.

10/19/2007 12:29:57 AM

calling your own shots and making a lot of money at it isn't rocket surgery, at least if you recognize your own limitations (to include limitations EVERYONE is subject to, even the pros)

but i'd only recommend it if you enjoy doing it. if you don't have a sort of fascination with it and look at it as a sort of game (while still recognizing the seriousness of it, of course), then leave it to the pros. otherwise, you'll never devote the necessary amount of effort to it.

buying a targeted retirement fund is one very simple, low cost way of doing this.

another thing to consider is that until you are dealing with a rather substantial amount of money to have invested, an advisor's fees could be an inordinate expense. If he charges you, say, $500...that's no big deal on a quarter million dollar portfolio. If you're investing $10,000, it's a crippling expense.

[Edited on October 19, 2007 at 2:12 AM. Reason : asdfasd]

10/19/2007 2:11:28 AM

Quote :

"rocket surgery"

Heh. I agree that a a roth ira and with an index/etf/target retirement fund is the way to go. I was feeling lazy this year so I just bought 4K of vfifx the Vanguard 2050 Retirement fundo with an expense ratio of .2 which is pretty damn low. Be sure you check the expenses before you buy any funds. I also have an adviser through UBS but wouldn't recommend getting one unless you have a lot of cash to invest. You'd probably be better off just getting an account through Scottrade or directly through one of the mutual fund companies like Vanguard, Fidelity, T Row, etc. Whatever you do, just make sure you are diversified.

10/21/2007 1:02:50 AM

might want to hold off investing until about the middle of next year(besides the Roth)....since we are most likely going to be in a recession soon, the stock market will be going down down down down down for the most part for the next 2 years or so.

10/21/2007 1:03:42 PM

What are you basing that off of? The market just went down a ton last week. I would buy now. Besides, if he waits until after tax day he won't be able to get a 2007 roth.

[Edited on October 21, 2007 at 3:25 PM. Reason : ]

10/21/2007 3:21:26 PM

AT THE VERY LEAST... open up a ROTH at scottrade ... its easy, and definately the first thing you should do (if for no other reason, because you wont have to file extra information at tax time if its in your ROTH)

Secondly, look at a few different types of indexing stocks ... These stocks will perform better than mutual funds/ brokers advice/ advisor recommendations 80% of the time, and when they dont, its not by a substantial margin. That is really your safest bet over the long term.

Advisors are nice if you dont want to ever look at a stock or become even partially educated on finances.

If you want to know something about money in the future, then start learning now bit by bit, and eventually you will feel more confident in your understanding of the market.

Like I said, and many others have said, best way to go is index stocks for now.

10/22/2007 10:18:02 AM

by the way, MR financial advisor above is WRONG on his advice ... thats why you dont need an advisor. They just do what their bosses tell them to, but are not really that good at it on their own.


The rules for a roth are not as he stated

Quote :

"Once your roth account has been active for 5 years (note the money does not have to have been invested in the account for 5 years, the account just has to have existed) you are free to take out the principle amounts invested without penalty, just not the interest."

The only reason to wait 5 years is if you are trying to get an exemption for withdrawing interest earned in the account for reasons such as First time homeowners.

If you are only pulling out principle moneys, then you can pull them out at anytime as long as they were deposited from personal earnings that were already taxed (not IRA conversions)

Its basically a savings account that earns tax free gains, and still allows you to withdraw the principle at anytime.

Here is a link to back up my statements, for your educational purposes.

http://www.fool.com/retirement/retireeport/2001/retireeport010226.htm

btw, Fool.com is a great place for advice if you are looking to get started.

10/22/2007 10:48:55 AM

my advisor is with AG edwards. he runs my roth & money market & advises me on my 401k stuff

i'd much rather pay someone to manage all this crap for me. i figure the money i spend on him is worth it bc he gets me a higher return that i could get on my own

10/22/2007 8:55:01 PM

not necessarily

i mean, even Warren Buffett says that most people should just invest in index funds. It doesn't take an advisor to do that. You're pretty much just paying him to keep all of the proportions in line, which you could also very easily do yourself once per year or so.


and unless you have a pretty serious sum invested (that I find unlikely for most people our age, particularly those who aren't especially financially literate themselves), I find it very, very hard to believe that any advisor could outperform the market by a wide enough margin on average to make the cost of his services worthwhile.

10/22/2007 10:00:03 PM

I just bought some Berkshire today

10/22/2007 10:29:11 PM

why would one need someone to "run" a money market account for them?

10/22/2007 11:28:46 PM

somebody has to adjust the rate down

i just got my draft financial plan back and they're working on the reallocation of my portfolio - i could plot an efficient frontier and do all the research and switch around a couple of things - but i'm not about to spend the time - i was close to where i needed to be just on feel, but if i can get another point and a half with some simple changes and without having to do any work, it sounds good to me

[Edited on October 22, 2007 at 11:51 PM. Reason : sadfsad]

10/22/2007 11:42:26 PM

^^^ it's been on my watch list for several months, but i didn't have the money for it when the price was really depressed.

10/23/2007 12:25:20 AM

Advice from the index-fund mastermind

http://bankrate.com/brm/news/Financial_Literacy/Oct_07_investing_Bogle_a1.asp?caret=66a

10/23/2007 9:31:04 AM

Quote :

"by the way, MR financial advisor above is WRONG on his advice ... thats why you dont need an advisor. They just do what their bosses tell them to, but are not really that good at it on their own. "

damn sounds like someone had a bad experience
good catch though, you are right

I had originally included all of the information regarding the exclusions of traditional ira conversions and exemptions of qualified withdrawals, but felt that it was to much info to place in one post and would be skiped over. So as you can see the post was editied and from what i can tell i did a poor job of cut and delete. I was in the middle of cramming for the property and casualty exam at the time and have not checked back with this thread since.

And just so that you know, most advisors are 1099, they have no boss.....they have a manager at best who probably hasn't been in the field in quite some time.
This industry is very heavily regulated at this point and the amount of licensing and training required just to get a job as an advisor is more than anything I ever had to do in college.

However, you can get burned if you don't know what you are looking for. Ask your advisor if they have the series 65 or 66 IAR (investment advisor representative) license. Use of this license allows them to call themselves "financial planners" or "financial advisors" and requires them to maintain a fiduciary responsibility to act in your best interest. Their/our files and actions are much more heavily regulated than any type of financial sales representative.

But then that license coupled with a professional designation such as CFP is where you start to run into fee based financial planning, which seems to be what you all are concerned with. Any other advisor takes his comission off of the sales charge on mutual funds that you are charged regardless, so it's not any extra money out of your pocket.

i can see most of this crowd is set in their ways, so i'll leave it alone after this, but....

index funds are good for their low expense ratios, but they are not the end all be all especially since most of us here are so young. I have charted countless portfolio's on moringstar against index funds just for reference, with expenses included. Even the "conservative growth" portfilio at Waddell and Reed has outperformed the index over the past 10 years.
There are 2 sides to this story....the conservative side where it's not about chasing the returns of the market, but managing against the downside which you can't do if the whole market is down like back in early 2000s......i've never really checked but i don't know of any index bond funds, which are what would have saved your ass back then. The other side is the increased returns that you can't get without being risky.....go pick a few science and tech funds or at this point a euro/pacific or global natural resources fund and chart them against your index for an extended period of time. We can all afford to be a little risky because we have so much time to ride out the bumps. If you are truely looking for gowth you need to be looking overseas because that's where the potential is.

If you can handle your own investments good for you, just don't go around giving people pieces of information and telling them they don't need a professional.

You wouldn't try to talk someone through doing a clutch replacement on their car over the wolf web would you? A reputable advisor is like a reputable mechanic.....you are looking for the right credentials and someone that you can trust.

If it's your money, do your own research or take it to a professional, don't invest in something because I or anyone else said so.

10/25/2007 2:36:45 AM

Quote :

" Even the "conservative growth" portfilio at Waddell and Reed has outperformed the index over the past 10 years."

there are more indices than the S&P 500 tracker (which is, incidentally, a good thing to have as the backbone of your portfolio, but certainly shouldn't be the end all).

Quote :

"If you can handle your own investments good for you, just don't go around giving people pieces of information and telling them they don't need a professional. You wouldn't try to talk someone through doing a clutch replacement on their car over the wolf web would you? A reputable advisor is like a reputable mechanic.....you are looking for the right credentials and someone that you can trust."

I maintain that even a moderate amount of effort in learning a few basics would be more than sufficient in terms of managing the amounts of money we're talking about here. Do you really think a professional can--on average--do enough better than someone armed with a $12/year subscription to, say, Money magazine and a few minutes here and there to periodically read through http://www.fool.com? Enough to justify the cost of their advice? MAYBE with a $1,000,000 portfolio. No way with the $5000 to $50,000 portfolios that most of the people in this thread are talking about.

10/27/2007 12:42:00 AM

which is why, like i explained earlier, a lot of advisors are comission based......you are not paying anything extra. There is a sales charge on all mutual funds.....they get paid by the mutual fund companies....not you. You don't have to listen to them, but at least you have someone to call and ask questions if you need.

And yes I do think a professional would do better, especially if you are basing your decisions on money magazine. A professional will have access to tools that you as an individual would have to pay for. Pick up an ibbotson chart, research the money manager behind the funds you are investing in, there are a lot of things out there besides what the people in the media like suze orman are feeding you.

You are suggesting people invest for their retirement or anything else based off a magazine and a website?

Do what you want boys and girls......and good luck

10/27/2007 10:41:35 AM

Bankrate's comments on commission based financial advisers.

Quote :

"Always consider whether a planner's compensation requirements will interfere with his objectivity. Is he selling you a product because it's a good product for you or because he gets a larger commission on it? Some commission-based advisers associated with institutions such as brokerage firms or banks might have a quota they need to fill in order to keep their jobs, and the products they're pushing might not be the best for you."

10/27/2007 12:14:53 PM

Quote :

"And yes I do think a professional would do better, especially if you are basing your decisions on money magazine."

To clarify, I'm not saying to use any magazine just to get stock picks and fund recommendations to chase...I'm saying that if you read through http://www.fool.com and maybe a basic investing magazine like Money, you would have a working knowledge and be quite able to fend for yourself, especially at the levels of money we're talking about here.

I'm not knocking professionals on the whole by any means--I'm just saying that getting fairly good returns is not rocket surgery, and most of the people in this thread would be capable of doing it alone.

10/27/2007 2:15:07 PM

commission based advisors = bad bad bad bad idea.

10/28/2007 7:41:19 AM

So I'm still trying to figure out what the hell to do and I've missed out on about 3% gain in stock market over the last couple of weeks. Looking at ETrade as it looks like something that can be managed myself and easy to do so. Thinking about going through Vanguard as I have a buddy that works there. Still trying to figure it out.

10/29/2007 9:02:59 AM

I have Scottrade, but if you play on buying Vanguard mutual funds, then why not just sign up directly with them?

10/29/2007 9:03:49 AM

^ That would be the idea.

10/29/2007 12:04:37 PM

Quote :

"why would one need someone to "run" a money market account for them?"

sry i wasnt clear. my money market is with ag edwards. there are no fees associated with that. i had my mm at another place and ag edwards offered a higher return.

i could probably do what my advisor does for myself but i enjoy peace of mind & convenience. i dont feel comfortable managing this stuff and it would cause me to not invest as much which i dont want to do

its just a personal preference. a financial advisor isn't for everyone

10/29/2007 8:51:57 PM

Date        USD        Yield YTD % 

23-10-2007 26.888 65.23 
09-10-2007 25.649 57.61 
02-10-2007 25.7505 58.24 
26-09-2007 24.125 48.25 
18-09-2007 21.9979 35.18 
11-09-2007 21.474 31.96 
28-08-2007 20.4115 25.43 
21-08-2007 18.5764 14.15 
14-08-2007 19.4758 19.68 
07-08-2007 19.4057 19.25 
31-07-2007 20.4643 25.75 
23-07-2007 20.9788 28.91 
17-07-2007 20.3737 25.2 
10-07-2007 20.0164 23 
03-07-2007 19.4762 19.68 
26-06-2007 18.6302 14.48 
12-06-2007 17.2741 6.15 
05-06-2007 17.6933 8.73 
29-05-2007 17.5741 7.99 
22-05-2007 17.6815 8.65 
15-05-2007 17.239 5.93 
08-05-2007 16.9078 3.9 
01-05-2007 16.5543 1.73 
24-04-2007 16.5785 1.87 
17-04-2007 16.3968 0.76 
10-04-2007 15.7494 -3.22 
03-04-2007 15.1252 -7.06 
27-03-2007 15.1314 -7.02 
20-03-2007 14.7943 -9.09 
13-03-2007 14.6873 -9.75 
06-03-2007 14.2123 -12.67 
27-02-2007 15.615 -4.05 
20-02-2007 15.994 -1.72 
13-02-2007 15.6364 -3.91 
06-02-2007 15.9825 -1.79 
30-01-2007 16.0283 -1.51 
23-01-2007 16.1414 -0.81 
16-01-2007 16.1133 -0.98 
09-01-2007 15.8582 -2.55 

10/30/2007 7:04:20 PM

Do you day trade?

10/30/2007 7:16:40 PM

Nope. Not invested in stocks per se either. Just doing mutual funds for now.

Don't have appropriate resources as of now to start buying selling stocks on my own, but will soon get into that too.

10/30/2007 7:26:56 PM

I assume you don't buy and hold?

10/30/2007 7:27:25 PM

Huh? As I said, I am not (yet) into buying individual stocks (I don't have any of those online trading accounts). Just invested as of now (for a year) in some mutual funds through my bank.

Will soon open a trading account online and get into buying shares.

10/30/2007 7:32:11 PM

Through your bank?!?!?

10/30/2007 8:16:07 PM

list dem fundz.

10/31/2007 8:22:49 AM

I figure this is the best current thread to ask this question in...

So--I'm about to change jobs. How do I move my 401K from one to another (right now I have ING--they offer Edward Jones or another investment group that I can't remember off the top of my head), what should I do about my existing 401K until I can move it (which is 1 yr after I've worked at new job), OR should I go ahead and withdrawl it now and put it into my money market account until I'm elligible for theirs and then invest that money into the new 401K?

10/31/2007 8:56:28 AM

I had a hard time following your post, but I'd roll your old 401K into an IRA.

10/31/2007 10:03:23 AM

OK let's break it down then...

How do I move my $ in my current 401K from one to another? Right now I'm with ING. I can move it to Edward Jones or the other investment group that my new job offers. Are there forms? Do I just call them up and ask that it be moved? What's the actual process in other words.

What should I do about my existing 401K until I can move it? (ie, do I just let it sit in ING) I'll be elligible in invest at my new job after 1 yr.

Should I go ahead and withdrawl it now and put it into my money market account? or do something else like ^?

[Edited on October 31, 2007 at 10:19 AM. Reason : ]

10/31/2007 10:17:15 AM

You'll have to request a rollover form from your 401K provider. You'll want to do a direct rollover to avoid taxes/penalties.

Unless you have a fund with particularly low fees I would withdraw it now and roll it over to an IRA and then invest in mutual funds through whatever company you choose to get an IRA with (Vanguard, Fidelity, Scottrade, T Row, etc)

Does that cover the questions?

[Edited on October 31, 2007 at 10:25 AM. Reason : ]

10/31/2007 10:23:56 AM

Yep muchos gracias

10/31/2007 10:48:03 AM

then start fully funding that IRA (make sure you get Roth type)

then when you get to the 1 year mark at your new job, keep maxing out the IRA and start funding your 401k to the max extent that they'll match funds.

10/31/2007 8:29:40 PM

Why stop there? Max it out.

10/31/2007 9:29:07 PM

that's another option

i don't like having the money marked for retirement and subject to penalties until i'm 59.5

and personally, i like to be able to invest in whatever i want

for those reasons--along with the fact that they don't match at all--i don't participate in the TSP (Thrift Savings Plan) available to the military, which is more or less a non-matched 401k. I just max my Roth (full of funds, mostly indices), put money into a money market (serves as my savings acct/evergency fund/house DP fund), and invest in stocks in my Scottrade acct (where the lion's share of my savings/investment dollars go).

[Edited on November 1, 2007 at 2:10 AM. Reason : but for LK, that might be a good way to go. ]

11/1/2007 2:09:30 AM

y'all are smart.



[Edited on November 1, 2007 at 8:39 AM. Reason : ]

11/1/2007 8:38:42 AM

^^ Yeah, I have a Scottrade account as well with some non retirement funds, I just hate to pass up the tax advantage of investing in the 401K.

11/1/2007 8:45:05 AM

^^ thanks

it's really not rocket surgery at all...just takes a little getting familier with. kinda intimidating if you don't speak the language, but it's not tough conceptually.

^ yeah, the TSP--in addition to offering no matching (for me)--has a very limited selection of funds I can use. They offer something like a small-cap index, S&P 500 index, bond index, and a couple of other things.

11/1/2007 7:50:15 PM

Quote :

"but for LK, that might be a good way to go. "

Whatcha mean Duke? Elaborate in a PM if you'd like

11/1/2007 10:03:52 PM

if you aren't investing a ton (to the point where there is some reasonable chance you might want to pull some of that money before 59.5) and aren't looking to invest in things like individual stocks or less...ummm...pedestrian funds (and expend substantially more time and effort giving them their due attention), then it makes sense to (1) max out a Roth IRA, then (2) max out or at least heavily fund (at least up to the point they stop matching contributions) a 401k.


I'm by no means a brilliant, super-knowledgeable investor...but I do have a decent working knowledge--enough to point you in the right direction on some things. However, me giving you advice to do exactly the things I do would be silly--it would be like you asking for advice on cars (another thing I know a lot about) and me telling you to buy a hotrodded sports car, a crotch rocket, and an offroad-ready 4x4. What works for me isn't going to work for you--I invest a pretty inordinate percentage of my income compared to what the vast majority of people are going to want to do. Also, the military's TSP is analagous to--but not as good as--most civilian 401Ks (but we have our retirement benefits after 20 years, so it works out). Also, I pay a lot more attention to my investments than you probably have any interest in doing (at a minimum, I spend 10 minutes or so checking over my stocks every day...and it isn't unusual for me to spend an hour reading an investment magazine or researching companies or strategies online). Most people aren't going to approach investment like this, so my approach just isn't sensible for them.

Back to the car analogy--I'm totally cool with a high performance, modified, sports car, even if it isn't as reliable, requires a lot more maintainance, and needs some degree of know-how to both keep it running and drive it well. It is--compared to your average Accord or Camry--more unforgiving and more involving to drive...but if you do your homework on the modifications, maintain it well, and learn how to be a smooth hand on all the controls--and have a little bit of an adventurous streak, although certainly not totally fearless--it will reward you with killer performance and a great drive.

Most people don't want that, though, or we'd all drive a Lotus or an Evo. Most people want an Accord--plenty of performance, no-fuss, requires no attention, won't get you in trouble unless you're really hamfisted with it. I don't mean to imply that it's beyond your--or most people's--capability to own a screaming sports car or an investment portfolio like mine--it's just that suggesting that you get involved with either without knowing what you're in for is a disservice. There's a better way for the masses who really have no interest in getting in that deep.


(sorry, very long answer to a simple question)

11/1/2007 10:35:01 PM