IRA Funding Ideas

[Hugh R]

I've had my IRA with Smith Barney for about 15 years, and I'm not impressed, through their "Trak" fund program, they charge me 1.2% annual fee and over the last 13 years have given me a 6.6% annualized growth rate. Including a big dip between 1998 and 2003. Right now, absolute dollarwise I'm where I was in 1997, and I'm thinking of bailing on them. In looking at Oppenheimer, and a few others, they have high sales commissions, and annual service fees, and high exit fees.

Any thoughts on no load, or small load like 25 basis points, no sales commission mutual funds with a good 10 year historical rate of return?

[carnutzzz]

I've been pretty happy with Vanguard. They waive most fees if you carry a balance >$50k I believe.

One of the few companies not named in the recent late-trading scams.

Lots of good funds out there. Dodge and Cox is one to check out.

[jyl]

1.2% seems high.

You could transfer your IRA to a discount broker like Schwab and buy no-load funds or ETFs.

[pwd72s]

Originally posted by carnutzzz
I've been pretty happy with Vanguard. They waive most fees if you carry a balance >$50k I believe.

One of the few companies not named in the recent late-trading scams.

Lots of good funds out there. Dodge and Cox is one to check out.

AMEN on Vanguard! (and Dodge and Cox) In slow markets, brokerage fees can eat you alive, and brokerages are very clever at hiding what their fees really are. For example...if the equity market climbed only 2.5% in any given year? If you'd been in Vanguard's "Total Stock Market Fund", you'd have made a gain of roughly 2.2%. If you'd been in a brokerage index fund? You'd have suffered a loss. FEES MATTER! You need to crunch numbers, look at the bottom line. The number one question you should ask is if your broker was able to outperform the total market, return or loss, for that year. Few brokers, if any, do...just going by the figures you've given, I'd say your broker has failed, miserably! The greatest bull market of all time began in 1984 and ended in 2000. And your average yield was 6.6???? You are being raped!! Long ago, I decided I'd rather keep a Porsche in my garage over helping a broker put a Ferrari in his. Tip: Here's my wife's favorite posting board. She manages our portfolio, and we have NEVER suffered a losing year.."they" say timing doesn't work. We got out in January of 2000, back in March 2003. How does Cindy do this? She covers herself in wood ashes after stripping naked, then goes out back in the trees and reads chicken entrails by the light of a kerosene storm lamp...
http://socialize.morningstar.com/NewSocialize/asp/AllConv.asp?forumId=F100000015&csection=VanguardDiehards

[HardDrive]

I am with Vanguard as well for my 401k. Very pleased. I believe their Wellington fund is one of the longest lived funds out there.

[einreb]

I've been very happy with t rowe price for the past 10 years or so as a brokerage and for thier in-house funds. no front or end loading, low annual fees and a decent selection of funds. you can also set up a brokerage IRA that will let you buy other funds or individual stocks.

i used schwab for a small percentage of investments for a few years and found them annoying... they kept trying to 'up sell' me to fee advising and pushing their own funds. example... they pushed their S&P (.35% fee) index fund instead of vanguard's (.15%). if they were looking out for me best interest... why push a more expensive fund that does EXACTLY the same thing?

as for suggestions..... few funds beat indexes (like the S&P) and the fees are usually low. i split up my allocation between a certain percentage of large, small, international, bond and cash and only buy 4 or 5 morningstar rated funds. YMMV.

good luck. we need it, since monkeys and darts often beat the pros!

-bernie

[pwd72s]

Originally posted by einreb


good luck. we need it, since monkeys and darts often beat the pros!

-bernie

Bernie, You're saying Cindy is a "monkey"??? With darts? Could be..since she's "beaten" many investment pros for well over a decade. I'd tell you something else this "monkey" does well, beating the pros, but Z man would delete the post...I can't wait until she wants to read chicken entrails next. Actually, it's pretty simple...her fun computer time is spent on sites like the one I posted above, while I waste my time on Pelican & The Early 911S registry...investing and money management is her form of enthusiast hobby, the early 911 is mine. Hmmm, is there a lesson to be learned here? (edit) Actually Bernie, your thinking is damned sound...I'm just having some fun here, okay?

[einreb]

Originally posted by pwd72s
investing and money management is her form of enthusiast hobby, the early 911 is mine. Hmmm, is there a lesson to be learned here? (edit) Actually Bernie, your thinking is damned sound...I'm just having some fun here, okay?

Ha! no offense taken at all. I used to track stuff daily, but it made me sick to my stomach. I have a set plan and allocate accordingly. Its so simple even I can do it

[ken_xman]

Man o man. Where to start.
This is what I do for a living. I manage assets for Public and Private Corporations for Merrill Lynch.
Vanguard, Fidelity...etc...... all have low fees "the internal expenses & management fees" but rarely beat the benchmark.
The largest funds and longest lived funds are not always the best funds to be in. They accumulate massive amounts of capital and stray from the original investment policy. Never drive using only the rear view mirror.
You need to be gain access to institutional money managers.
Also look for private equity and hedge funds who have absolute return criteria.
ETF's.... are flawed. What if the market is flat the next 5 years?
The QQQ can have a "0%" return and run low expenses, but your return still is not where you want to be.
Let me say this quietly.....
YOU GET WHAT YOU PAY FOR.

Quick bio:
I manage almost $1B. Yes with a B.
My business partner and I are in the top 10 largest in ML.
AVERAGE account last year earned 17% and paid us a 1.5% fee.

**** Pelican invitation:
Call my office and ask for me siting the Pelican Board and I will manage your individual accounts. Currently 10% of our book is personal individual accounts, and I will take care of you.
Direct # 914-241-6417, in NY
Ken Christman

[pwd72s]

No offense meant, Ken...but excuse me if I pass. We'd rather do it ourselves and save the 1.5%...

[turbo6bar]

Originally posted by pwd72s
No offense meant, Ken...but excuse me if I pass. We'd rather do it ourselves and save the 1.5%...

1.5% for 17% return is not shabby.

[widebody911]

I thought the IRA was funded by whiskey sales?

[widebody911]

Originally posted by turbo6bar
1.5% for 17% return is not shabby.

Yeah, but what how about the 3 previous years @ -20%?

[Hugh R]

Good advise everybody, I'm looking at Schwab, where my wifey transferred her IRA from Smith Barney last year. On her own she's easily beat out my S-B account since the transfer.

Hey Widebody, what fund was -20% for the last 3 years?

[pwd72s]

Hugh, Widebody was probably thinking of the three year downslide of 2000-2003...well, not a complete 3 years, but things were pretty grim for a spell. During that downslide we were pretty much out of equities & into bonds...Ahhh, to be able to live calendar year '99 again...My IRA jumped 109%! What a good time that was, but I suspect it'll be a long time before we see a bull market like that again...Asset allocation & tolerance of risk, the name of the game.

[Hugh R]

Yeah, mine were in the tank during that time too. But my broker made more in fees than I have since 2000. Time to go to something else.

[pwd72s]

Hugh, you might give Vanguard a ring, see what they have to offer...I don't know how long for you until retirement, etc. They do have one fund that is geared well for a younger guy...it's a mix of an equity index and bonds...(I think it's called their target retirement fund) they "tune" this fund depending on your age...the closer to retirement, less in equities and more in bonds, thus protecting you from sudden market downturns right at retirement. Too many people my age and older (I'm 62) got hung out to dry during the major downturn that began in year 2000 because they were totally in equities (stocks)...and sadly, not enough working years left to make up the loss. If memory serves, the management fee of this fund is zilch...less than 1/4 of 1%, no loads, no exit fees. That's only one of many top performing funds that this family offers.
BTW, how to get people to walk away from you at parties? Back when the market was tanking, in the years 2000 -2002 say: "The market? Oh, we got out in January of 2000, we're pretty liquid right now, waiting for a buying opportunity."

BTW, I do NOT work for Vanguard...just a very satisfied customer.

[ken_xman]

Hey fellas.
Chew on this. Never less than 7% AFTER FEES. When the DOW and S&P were down Double Digits!

Dont bite my head off for this but...... mutual funds are for poor people.
They are unsophisticated.
If you want to invest that way, your choice.
If you need to ask WHY? ....... You are not as smart as you think.
The 1.5% is managiing the Equity Portion. Fixed income is NO FEES.

You want to piss your money away.... Go buy Bond funds, and the best equity fund in Money Magazine.

I get compensated very well for a reason. I clear what many public CEO's do not. HUMMMM wonder why.

[widebody911]

Originally posted by ken_xman
Chew on this. Never less than 7% AFTER FEES. When the DOW and S&P were down Double Digits!

Unless you're prepared to guarantee it in writing, it's not worth the electrons it's printed on. If I seem cynical, it's because I am. If I had a dollar for every wunderkinder money manager I've heard bumping his gums about how much money he's making, well, I wouldn't need a money manager.

[ken_xman]

Last point...pwd72s ... and everyone else.
I need to teach you something. The LAST place you want to be in a rising interest rate enviroment is a BOND FUND or bond / equity fund combo. Fed rases rates the bond fund will get destroyed in pricing. redemptions will kill you too.
You all sound older and will get hurt. Buy & own bonds direct.