I suspect that TDA charges a fee to buy non-TDA mutual funds. Now you are in, it probably doesn’t matter. But TDA certainly has an equivalent low cost S&P500 index fund, so damn near the exact same thing as FXAIX.
Or consider VOO, Vanguard’s S&P500 ETF, which you can probably buy for a small or maybe zero commission. I mention that only because sometimes you can’t transfer propriety mutual funds between brokerages, which could cause a small hiccup down the road if you decide to switch.
This is what people mean when they talk about paying tuition when you start to invest. The only thing worse than paying tuition is not learning from it.
@DaddyO406 - My bad. I mistaken thought another mutual fund mentioned in the thread was your pick.
But, the point on the C fund remains - it is still a very worthwhile index fund equivalent. If I just wanted a plain vanilla S&P index fund, I would buy it in the TSP via the C fund (due to the very low fees).
Syke6, thank you for sharing this information with me! I understand what you are saying, and it makes sense. But I have to wonder, why do so many people go with managed funds instead of an index? I suppose, same as me, they just haven’t learned any better yet?
Daddy-O
Because they believe the advertising.
AJ
I personally don’t look at the load, but I look at the results - on a monthly basis. My company just changed from Lincoln Financial to Transamerica for our 401K. At Lincoln Financial I reviewed the trends of every mutual fund that I could invest in and weaned out the top 4 funds from a performance perspective and then added a massive (AUM) Vanguard fund that was highly recommended by the rep that called on us. After one month I dropped the Vanguard fund as it went up less than .1% and the other four went up more than 1%. The next month I dropped one more fund as it was rising less than the other 3. 3-4 months in I dropped one more mutual fund that was going up just a little bit less than the other two. After the 12 months the two funds I stayed in had gone up 40% and 35% approximately. The third fund went up 30% that I dropped and the Vanguard went up like 2-3% over the 12 months. I asked the rep if the firm got a special commission from Vanguard for recommending them and he admitted they did get something for every member who bought Vanguard.
So, now I am with Transamerica. The first thing I did was review all the funds that I could invest in. There were 3 that were the top performers. They have gone up 7% since Jan 1. I chose the one that was slightly ahead of the other 2 and to this date my pension fund has risen 1.8% - the fund family that Transamerica is closely tied to is Fidelity evidently. So, for myself performance is why I buy a fund and not the load because the fund that has a low load or fee may go up 5 or 8 % this year, but I really don’t care if the fund I picked goes up 15 or 20%. If you compare load/fee with pension plan profit you will see that one is talking about hundreds of dollars in fees or loads vs thousands or tens of thousands of dollars in profit. Some will say those hundreds of dollars in fees become thousands of dollars in the long term, but those thousands of dollars in profit become hundreds of thousands dollars. IMHO. At the end of the year I will check the performance of all those TransAm funds again and move my funds to the best performer. I try to tell the young guys that no one cares more about your money than you and the reps are motivated about their profit - not your profit…doc
Everybody wants to outperform the S&P 500. Everybody also wants to be a Hollywood star, or a NY Yankee with a .400 batting average. The reality is: you’re a beginner. You have a lot to learn. The best learning comes from experience (both positive and negative), but there are other things, too.
But to think you’re going to go from a standing start to “above average” means you think you’re going to outperform people who do this as a career, and another group (like us) that’s been doing it for 10, 20, 30 years and longer.
I suggest you reset your aspirations, as the stock market is a good place to make money, but it’s also a great place to lose money. If you think you were “forced” to put money in an IRA, that tells me you have not been very financially savvy over the course of your life and have much to learn.
So as not to be a complete downer, it’s possible you’ll be lucky with investing and do great! It also happens that people win at the roulette wheel playing Red 13. Those examples are a bit different, but “skill in investing” is not something that comes without effort. Congratulations on starting, I merely caution you to expect the road to have both ups and downs.
Doc,
Every time you buy or add more money to the Mutual Funds, you are paying them a 5 per cent commish, believe it or not.
Transamerica is an insurance company, and they make a lot of money in fees and commishes.
DON’T let them as you park your monies in an Annuities fund. You will lose, take off your clothes. 2008, the PRU (has as sell signal) almost went under if it were not for the Uncle Sam bailing out the Insurance industry. Billions would have been lost by all the HODLers (hanging on for dear life). Something to ponder.
Q1, can you buy stocks / etfs other than Mutual Funds with Transamerica.
Q2. can you transfer you account to FIDO (fidelity) or Chuck & Co. (Schwab) commish FREE and be your own manager. Preferably a ROTH IRA if possible.
Q3. you mentioned a top performer has gone up 7 %. Percentage of WHAT as I keep yelling at Arindam.
Q4. Are you buying any the Tetter Totters. eg, DDM / DXD. DDM is up 16.4561 percent in 21 days and still climbing. or about 10K so says Simon. Can the mutuals do that in 21 days.
I don’t think so Tim.
Q5. It appears you are not serious with the Simon Sez rules and have a bent on Mutuals.
Q6. Instead of the mutuals, why don’t you put a pool of money into the following https://www.sectorspdrs.com/ and let Simon Sez tell you exactly when to get in and when go get out and you become your own manager. Simon has a 999 to 1000 percent batting average when buying and selling. Of course, there will be some minor head fakes.
Q7. If a baseball player comes to the play 62 times and hits successfully singles and doubles 62 times, WHAT is his average.
Let’s tauk about the Tetter Totter. I bought 50K of SPXL / SPXS in February of 2006 to 2014 and earned a little over 12MM with a bankroll of 50K.
Then from 2014 to 2022 earning 13 MM with a bankroll of 100K. All the profits and principle are now in the Gold Vault paying a little storage fee.
I still have and play it 5 other sets. eg… QQQ / PSQ. Tetter Tottering GLL /UGL - NUGT up 78.7931percent / DUST bought today 4/14/23.
Since you like to play with the Vanguard folks, try my wife’s Ellevest.com’s portfolio and manage it per Simon’s rules. In order to be a successful manager, you have to burn the mid-night oil.
Class - Ellevest Matrix - per Simon’s Werld®
The following portfolio which I also manage for my wife.
re: Simon Sez II, III, Simon IV
re: Lucas
https://www.ellevest.com/ for women run by women.
https://www.ellevest.com/personalized-portfolios This is the matrix I use for my wife’s portfolio.
VTI - VOE - VEA - BSV - SHM - BNDX - VNQ
VTV - VB - VWO - JNK - HYD - EMB - VNQI
VO - VBR - BND - MUB - TIP - cash - FTGC
I use my Simon Sez II wait-one Day ARC to ARC strategy to Swing Trade them
I use my Simon Sez III wait one bar Label to Label to Swing Trade them as the primary.
I use my Simon Sez IV per the rules for the Red Green signals.
As my pet spider LUCAS says " Be the spider and let the prey come to you. " Lucas The Spider Creator Explains How He Makes People Fall In Love With Spiders | The Dodo - YouTube
http://production.assets.ellevest.com/documents/Ellevest-White-Paper.pdf go to page 4 to see The Matrix.
Backups: SCHD, SCHF, VYM, QQQ / PSQ, VUG, VXUS , VOO
I wish you the best,
Quill - a poor church mouse scratching for a living as a Swing Trader for over 45 years and an Investor over 60 + years.
------------ Vision - Multi-Millionaire…Goal - earn 1.3% - 2.5% compounded Daily per the 2.5 percent theory.
ps. I am light, Arindam yells louder.
p.s. with risk and money skills, play the 19-36 box and earn 500 to 600.00 every day as some sidebar action at Onlinebet.ag. Play the European table.
or play black / red House Way with risk and money management skills. Make your quota and call it a day.
Quill,
In another thread, you bragged about buying INTC on April 4 at $33.75 and said you had set a profit target at $35 something. However, INTC isn’t doing as you hoped. In fact, you’re under water on that trade.
Before you go around bad mouthing the investing decisions others make for themselves, you should take a look in the mirror.
Arindam
Quill,
I don’t think 401K’s have a commission (I may be wrong). Also, in my pension plan I can only buy a certain list of mutual funds. Did you read what I was writing? The OP was asking about mutual funds and telling us what he bought. This is a thread about mutual funds and pension plans, not day trading and swing trading. LOL…doc
To completely go off-topic, some 401(k)s offer a brokerage option that charge commissions. That said, @DaddyO406 has a TSP, not a 401(k). TSP recently opened a brokerage fund option that allows participants to purchase mutual funds (not individual stocks), but charges a $28.75 commission for each trade, in addition to charging $150 in annual maintenance and administrative fees. So that’s a pretty expensive option. If @DaddyO406 wants to buy individual stocks with his TSP money, he should roll the TSP into an IRA.
AJ
Aridam,
Nice view.
I am now working on an olde olde successful project many many years ago.
I have been spending 4 - 5 hours every night working on the project for the past month or two.
what is your opinion on Seasonality Trading? Good bad or ugggggly.
Since you spoke so eloquently. I’ll pass when I find my notebooks and the memory stix.
I wish you the best.
Quill -
Quill,
Seasonality is tradable. That has been well documented.
Arindam
Goofyhoofy,
Wow. So, my goal should be to be average? I said that I WANT to outperform the S&P500. I thought that was the whole idea behind The Motley Fool, including these discussion boards?
Ok, ok! I’ll stay off of your lawn, mister. Geez.
Daddy-O
This strategy has some fans and a lot of critics. It relies on persistence, trusting that despite the SEC-mandated disclaimer, past performance is useful in predicting future results.
The Callan Periodic Table of Investment Returns shows persistence across asset classes. Persistence would appear as horizontal stripes of color. Do you see any?
Imagine a strategy where you buy last year’s best asset class, hold for a year, sell, rinse and repeat. Look how often the color at the top jumps to the bottom the next year.
The Mutual Fund Observer colored the persistence of mutual funds. It’s bit stripey but not a lot.
They do call out one long term winner, Sequoia, soundly beating the SP500 over 40 years, 28,821% to 5,210%, or in CAGR, 15.2% to 10.4%. The article was written Jan 1, 2014. Since then, the SP500 has gained 124% while Sequoia has lost 40%. If after reading the article, you went out and bought this 40 year home run, you’d be very disappointed.
Aye Soe, Director of Global Research & Design for S&P Dow Jones Indices calculated persistence in actively managed mutual funds. Very few funds remain on top over time.
[quotas’, in my pension plan I can only buy a certain list of mutual funds. e=“physician, post:50, topic:91168”]
Also, in my pension plan I can only buy a certain list of mutual funds.
[/quote]
Are the mutual funds in house and not listed on the exchanges.
If in house, you can’t sell them in the open market.
Wall Street’s business model demands that they take 2% per year in fees commissions and trading costs from the average customer. If you can hold on to most of that 2% by investing in a low cost index fund, you only need to save about 1/2 as much money for retirement. Compounded investment returns over several decades are funny that way.
The 3 Big Numbers for Early Retirement: Four, Two and Zero
https://retireearlyhomepage.com/threebignumbers.html
and also
Minimizing the Skim – the Key to Retiring Early
https://retireearlyhomepage.com/minimizing_the_skim.html
intercst
intercst, thank you very much for that post! Very eye-opening reading, to say the least. While a lot of it is too late to help me, you can bet your sweet bippy I will be sharing this with my 5 children!
Daddy-O
<<While a lot of it is too late to help me, you can bet your sweet bippy I will be sharing this with my 5 children!
Daddy-O>>
That’s great. It’s almost 50 years ago that I took a 3-day Financial Planning course as an 18-yr-old Freshman in college where the instructor clued us in on the fees that stock brokers, mutual fund & insurance salesmen were skimming from you. It was by far the most valuable information I gleaned from my engineering education.
intercst
“Average” is a good place to be when, by definition, it means that half of people are below. If you think you have the expertise to be above average, good on you. Given that there are hundreds of thousands of professional investors who strive to be “above” and fail, I wish you luck.
YOu might notice from the number of people who liked my post that it was not perceived by them as a slam, just a slap to acknowledge reality. As I have already delivered the slap, here is my more concrete advice:
If you want surety, find a bank account paying reasonable interest. Investigate CDs; every dollar you are holding cash is losing money right now, and usually.
If you can stomach losses, look to put a fair chunk of your investment dollars in ETF’s rather than individual stocks. A company can go upside down or hit a rough patch for reasons far too numerous to mention, and you will be the last to know unless your close relative is an executive and reaches his fiduciary responsibility. An ETF has exceptionally low fees, and spreads risk among dozens or hundreds of companies.
You can bet on a “sector”, such as oil (energy), technology, utilities, automotive, food, pharmaceuticals, etc. or you can find ETF’s which slice the economy in different ways. You get the benefit of a mutual fund without the mutual fund fees - which nearly always make mutual fund returns below average.
Take a small pot of your small pot and try some individual stocks. This is akin to “training wheels”. Since you (admittedly) don’t have experience, you are better off learning with small dollars rather than your entire grub stake. Presumably some of those small bets will do well, some will not. Experience is the best teacher.
A year or two from now, if you think you have learned something, increase the size of your individual investments and pull back on your grouped ones (ETF’s).
The market generally increases 7% a year or so, but there are periods where it goes down (1930’s, 1970’s, 2008), sometimes for extended periods, and there have been multiple times when it stays flat for a decade. If it was easy everyone would win, and that’s not what happens.
I will just point out that the market right now is trading (overall) at a price-to-forward sales ratio of “2”, about the highest in history, and similar to where it was in 1999 just before the big bear market that crapped all over Nasdaq investors and brought the hysteria of the dot com era to a close. Typically that means the market will “correct” (aka: go down), so lessons will be learned and it might not be pretty. (The Fed is walking a high wire between controlling inflation and pushing a recession, if they lose balance it won’t be pretty.)
Finally, I would say: there have been lots of complicated posts in just this thread, including arcane charts, graphs, pretty pictures and more. Imagine if you wandered outside this thread and found the bazillions of systems, methods, and sure-fire investment strategies that people have devised over time. Why, it would be almost as many as reading tea leaves or pig entrails to find “the truth.”
Subscribe to a financial publication, or read multiple sites to learn: Bloomberg, Seeking Alpha, CNBC, Wall Street Journal, etc. And of course the Motley Fool. “Learning” is a prerequisite to wealth building. And understand that even the writers of those publications, who do it for a living, often get it wrong.
If you choose not to do that, or find it uninteresting, then an ETF or a bank account is your friend. It is remarkable that there are so few others. PS: Anybody who offers you a “sure fire” investment is not your friend. Really.
