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Help! Need 401K/IRA Investment Info!

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What's the difference between VIIIX and VFINX?
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About $197,000 in cover charge 😉 The VIIIX is an institutional share class where the minimum investment is $200k. VFINX is an investor share class with a minimum investment of $3k.

BTW, my personal opinion is that ETF Index shares such as VIPERS are better investments than standard index mutual funds.
 
Quick question before I contact these representatives. If I decide to go with "A" shares, such as Vanguard, what difference would it make who I purchased it from? What specific questions should I ask to get this spelled out in black and white? I need this spoon fed VERY simply, in other words! Why pick one investment company over another, if I'd be buying the same fund from any of them? Is it just a matter of deciding who takes my generous cheese offering?

Thanks!
 
Call up ING and try to transfer it to a 403B plan. They're pretty good and there are quite a few investment options. That's my advice...take it or leave it. 😉
 
Originally posted by: Ornery
The company I worked for is belly up. The 401K account no longer exists, because it was owned by the company. I was told to move the money, or take it in a lump and pay the fines and taxes. I already had it "Rolled Over" to an IRA. This IRA account is handled by the same company that handled our 401K. Same advisor, as a matter of fact.

Here's the sticky part. How do I tactfully ask this advisor whether I should move my money to some other account to avoid paying fees to them?

This just in: I called the Human Resources gal from our company, and asked where her funds were being put. Turns out they're going to the exact same place mine is. I guess if that's good enough for her, it should be good enough for me... no? 😕
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Don't accept the loads. IRA costs are pretty low at some brokerages. Do an account transfer to a differant broker that doesn't charge loads. If you like mutals use a mutal fund companies brokerage arm. Ie Vanguard or Fidelity.
 
Originally posted by: Ornery
Quick question before I contact these representatives. If I decide to go with "A" shares, such as Vanguard, what difference would it make who I purchased it from? What specific questions should I ask to get this spelled out in black and white? I need this spoon fed VERY simply, in other words! Why pick one investment company over another, if I'd be buying the same fund from any of them? Is it just a matter of deciding who takes my generous cheese offering?

Thanks!
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Cost of transaction is what matters. A typical broker is gonna charge you a trading fee to buy a mutal fund. Most funds require no such fee to invest in them, it's the cost of having the broker buy it for you. If you use a mtual fund companies brokerage arm they often allow you to purchase any of their funds at no cost (outside any loads that exist on individual mutal funds). Some of the brokers allow no cost purchases from select mutal funds. Stick to Vanguard funds when you buy, they have low annual expenses and most have no loads.
 
Originally posted by: rahvin
Originally posted by: Ornery
Quick question before I contact these representatives. If I decide to go with "A" shares, such as Vanguard, what difference would it make who I purchased it from? What specific questions should I ask to get this spelled out in black and white? I need this spoon fed VERY simply, in other words! Why pick one investment company over another, if I'd be buying the same fund from any of them? Is it just a matter of deciding who takes my generous cheese offering?

Thanks!
Click to expand...

Cost of transaction is what matters. A typical broker is gonna charge you a trading fee to buy a mutal fund. Most funds require no such fee to invest in them, it's the cost of having the broker buy it for you. If you use a mtual fund companies brokerage arm they often allow you to purchase any of their funds at no cost (outside any loads that exist on individual mutal funds). Some of the brokers allow no cost purchases from select mutal funds. Stick to Vanguard funds when you buy, they have low annual expenses and most have no loads.
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Most Vanguard funds have no loads? 😕 I thought they were an "A" share fund? Well, now I'm lost again. Are you saying I can buy a no load Vanguard fund? And perhaps I can buy directly from Vanguard, instead of going through a broker? It does have to be an IRA. God, I got more homework to do, I can see that!
 
Originally posted by: Ornery
Most Vanguard funds have no loads? 😕 I thought they were an "A" share fund? Well, now I'm lost again. Are you saying I can buy a no load Vanguard fund? And perhaps I can buy directly from Vanguard, instead of going through a broker? It does have to be an IRA. God, I got more homework to do, I can see that!
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http://flagship4.vanguard.com/web/corpcontent/scatRetMovSubcat.html

Click on transfer. You will notice that Vanguard Brokerage service offers "FundAccess" as one of the features.

FundAccess offers a choice of more than 2,600 no-load funds, including more than 900 funds with no transaction fees (NTF funds). For a complete list of fees, see our commission schedule.
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In addition to being a Mutal Fund company Vanguard also has a brokerage arm that does standard brokerage services just like Schwab or Etrade. The advantage of using them is you get no fee access to a ton of their funds.
 
I just got this email from the person that handled our 401K, and currently has my IRA cash. I mentioned that I was VERY interested in Vanguard, but was not yet ready to jump. What I meant was, I thought that they could buy me the Vanguard funds:
  • Ornery that is too bad. This means you will have to transfer away from
    our fund. Unfortunately we can't help you with Vanguard as they do not
    work with Investment Advisors. Just remember they are a no load shop so
    you will not receive professional investment advisory services. What I
    mean is you will not have a relationship with one person for your lifetime.
    At our fund, I will be your ongoing professional advisor for your lifetime.
Whoa, I didn't know this was the case. Well, so be it...

Just called the fellow about my Schwab appointment tomorrow. Told him I was interested in Vanguard, and does he still want to talk knowing that. He said they offer Vanguard, as well as Janus and others. If I understood him correctly, he said there would be a fee, but it's lower than Vanguard would charge me if I went through Vanguard directly. Plus, I still get the advice. Win, win, win situation is what he said, so he still wants to talk. If I can get a rental car by tomorrow, I'm there!
 
Originally posted by: Ornery
I just got this email from the person that handled our 401K, and currently has my IRA cash. I mentioned that I was VERY interested in Vanguard, but was not yet ready to jump. What I meant was, I thought that they could buy me the Vanguard funds:
  • Ornery that is too bad. This means you will have to transfer away from
    our fund. Unfortunately we can't help you with Vanguard as they do not
    work with Investment Advisors. Just remember they are a no load shop so
    you will not receive professional investment advisory services. What I
    mean is you will not have a relationship with one person for your lifetime.
    At our fund, I will be your ongoing professional advisor for your lifetime.
Whoa, I didn't know this was the case. Well, so be it...

Just called the fellow about my Schwab appointment tomorrow. Told him I was interested in Vanguard, and does he still want to talk knowing that. He said they offer Vanguard, as well as Janus and others. If I understood him correctly, he said there would be a fee, but it's lower than Vanguard would charge me if I went through Vanguard directly. Plus, I still get the advice. Win, win, win situation is what he said, so he still wants to talk. If I can get a rental car by tomorrow, I'm there!
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There is NO cost to buy into ANY Vanguard mutal fund. Some have a load on them (a fee to invest) but very very few. The guy you talked to is talking about having a professional advisor/manager. You don't need this, rollover your account to anyone you would like but take your assests and drop it into the Vanguard Index 500 and you will do well on your investment.
 
Originally posted by: Scarpozzi
Call up ING and try to transfer it to a 403B plan. They're pretty good and there are quite a few investment options. That's my advice...take it or leave it. 😉
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You won't be able to roll into a 403B unless you're working for a non-profit organization, no?
 
posted by: OrneryJust called the fellow about my Schwab appointment tomorrow. Told him I was interested in Vanguard. If I understood him correctly, he said there would be a fee, but it's lower than Vanguard would charge me if I went through Vanguard directly.
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You are getting bad information here. That Schwab rep appears to be giving you vague or misleading information. As rahvin said there are no sales fees for buying funds at Vanguard as it is a NO-LOAD fund family. You really should do your own research before you commit money or buy any services from anyone. (My initial reaction was Don't pay that $250 fee!) Try the Vanguard website, Morningstar.com (Discuss, Vanguard Diehards etal), and pick up <U>Mutual Funds for Dummies</U>. If you want to get a Vanguard fund, you're most likely better off buying it from Vanguard directly. Not a good idea to pay a fee to a brokerage house to buy a no-load fund. You should consider a no-load fund family that has a good variety of funds, like Vanguard or T.Rowe Price and as L vis says park your money their money market or a bond fund until you know what you want to do with the money. You might want to consider a Total Stock Market fund instead of a S&P 500 fund.
 
OK, I'm doing my due diligence, and SLOWLY getting up to speed. I've got a pile of books in front of me:Explorer windows open at:I've got guides and charts in front of me from:
  • Charles Schwab
  • Washington Mutual
  • McDonald Investments
I've got emails from friends extolling the virtues of:
  • Washington Mutual
  • Vanguard
  • American Funds
  • Variable Annuity
My goal today is to figure out how to get my IRA rollover, currently in limbo at McDonald Investments, transferred to a portfolio of no load funds.

Things to do:
  • Figure out which transfer form(s) to use. Complicated by the fact that my current IRA is not in any particular fund (with an account number) that I know of.
  • Decide how the portfolio should be divided between Equities and Bonds (70% & 30% is how I'm leaning)
  • Which no load funds to settle on
  • Who to buy the funds from?
I've emailed Vanguard about which forms to use, with no reply yet.

I see Vanguard 500 Index Fund Inv has an Expense Ratio of 0.18%, but I don't see where that expense is charged. I assume it is from an initial transaction fee, but not sure at all.

Suppose I decide to put $50,000 in VFINX. I pay some kind of transaction fee. Six months from now I decide to move half of that to VHGEX, which has an expense ratio of 1.19%. Will I have to pay another transaction fee? Suppose I move it back two months later? Do I have to pay the fee again? I'll have to check again with the Schwab representative, but I think he said I could snag those Vanguard funds through him with a 20% reduced transaction fee, which would be cool. Man, how much info can I expect from him before I'd be obliged to cut him in on some advice fees or something?

Do any of you juggle funds from one place to another to maximize your return? Two years ago I had my 401K totally in High Yield Funds, where it was skyrocketing. I could have moved it all to fixed funds just before the bubble burst, but didn't. One friend did and he's pretty damn happy about that. It would have been nice to move them back into the High Yield Funds again, just as the market hit it's low. All that would be required, is shifting from one fund to another online a couple times per year. No exotic day trading, or anything like that. Is this not normal or advisable for an IRA fund?
 
I see Vanguard 500 Index Fund Inv has an Expense Ratio of 0.18%, but I don't see where that expense is charged.
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Expense ratio is the annual management fee for running the fund (paying salaries, buying office supplies, etc.). Every mutual fund charages an expense ratio, and it has nothing to do with transaction fees. It is taken out of the value of the fund shares, so for example one share of VFINX might be worth $10.00 then after the fee is paid it's only worth $9.82. I'd assume the fee is actually pro-rated and deducted monthly or even weekly, but I don't know for sure.

It can be useful to compare expense ratios for two equivalent funds, for example VFINX and Schwab's SWPIX, to see that VFINX charges less to run essentially the same S&P500 fund.
 
It would have been nice to move them back into the High Yield Funds again, just as the market hit it's low. All that would be required, is shifting from one fund to another online a couple times per year.
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I imagine some people do, but it's a lot harder to time things given the 6-month holding period.

Since my IRA rollover was a very long term investment I just picked a mix of large-cap (VFINX), world (Janus, not doing so well) and small-cap (RYLPX) to buy and hold. Over 30 years I expect I'll do almost as well letting them sit as someone who shifts-and-wins, and better than someone who shifts and times it wrong. I didn't put anything in bonds since I already had CDs and a high-interest savings account.
 
Originally posted by: Ornery
Thanks Dave. You've been REALLY helpful! How much do I owe you so far? 😉
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I'll take that Schwab guy's $250 off your hands 😉

But seriously, you're welcome. The rollover and switch from 401k to IRA was confusing for me at the time too so I'm happy to try to pass on what I learned in the process.
 
Washington Mutual and American Funds are LOAD funds. Variable Annuities really shouldn't be considered until you've maxed out all your other investment options (ie 401k and IRA). For equities to bond ratio look at investorsolutions.com, Learning Center, Online Book, Chapter 12, Portfolio 5. As far as trading in and out of funds, what you want to do is figure out the proper asset allocation for you and simply re-balance your portfolio once or twice a year. You have plenty of time to figure out what you should do. You should consider a Total Stock Market fund as a core holding. Don't worry about owing the Schwab guy money. He'll let you know if and when you "owe" him.
 
Man, I'm getting antsy to get this done. Now that the DOW is down, it seems like a REAL good time to buy.

Correct me if I'm wrong here. The way I see it, if I want to beat the S&P 500, I'll have to take my chances with a managed fund, which of course has loads. No guarantee it will outperform an indexed fund, but that's the only way to accomplish this, right? And no, I'm not about to try and pick stocks myself!

A managed fund would have to perform well enough to not only beat the indexed funds, but it would have to also cover the costs of its loads. God, I hope I have this right!

My wife is apprehensive about purchasing Vanguard funds on my own. Being such a newb, I can see her point! I guess I could see about having Schwab purchase the no load funds. That would satisfy her, and I'd have an easier time of it, too. Here's what I was kicking around so far:
  • 40% VTGIX, SNXFX, DODGX or FLCSX
    20% VFINX, DODBX or FDGRX
    20% SWLBX
    10% VHGEX or FDIVX
    05% VTMSX
    05% JAFIX
Still doing my due diligence, but I feel like I've already waited too long!
 
Here's what I was kicking around so far:
40% VTGIX, SNXFX, DODGX or FLCSX
20% VFINX, DODBX or FDGRX
20% SWLBX
10% VHGEX or FDIVX
05% VTMSX
05% JAFIX
Still doing my due diligence, but I feel like I've already waited too long!
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Don't change a thing, that's a work of art. That's one of the best fund portfolios i've ever seen put together by an amateur. Schwab ought to pay you $250 to use that portfolio, not the other way around for your advisor to put together something that won't even be as good as what you came up with on your own.
 
If you're buying class A shares, there is a 5% load. As far as the 1.4% annual fee, that is crap. You should not have to pay 1.4%. The only instances I have heard of that is within a Variable Annuity, where the industry average annual fee is 1.4%. Shop around, get another broker who doesn't charge an annual fee.
 
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