Author Topic: 403b is so confusing! want to take a look?  (Read 4279 times)

dandypandys

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403b is so confusing! want to take a look?
« on: May 13, 2015, 08:32:18 AM »
After reading and on part 6 of the stock series with http://jlcollinsnh.com, i took a look at my 403b .. i had only just met with the Transamerica consultant last month and he made changes right there based on questions he asked me. What this looks like, runs counter to the simplicity of just having vanguard VTSAX .. so i upped the percentage here for future allocations of that stock to 21% and decreased the international ones by half of what they were. I was trying to look at the fees for each thing but it was confusing@ why is the Gabelli asset 1 thing, as much as international ones?
I'm confused newbie.
What I am seeing here is most people here have the  VTSAX, not all this variety, does this look bad?

update, trying to get the pic here without giving away my identity, hopefully this works:
https://www.dropbox.com/s/0rszh1dbjktvi8z/Screen%20Shot%202015-05-13%20at%2010.05.54%20AM.png?dl=0
« Last Edit: May 13, 2015, 08:54:49 AM by dandypandys »

DrF

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Re: 403b is so confusing! want to take a look?
« Reply #1 on: May 13, 2015, 08:45:25 AM »
That is just ridiculously allocated. Did the adviser suggest putting a little bit into each and every fund???

I'd put it ALL into Vanguard total stock index until you can figure out a little more on investing and asset allocation.

You can find more info here on MMM or on bogleheads.

dandypandys

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Re: 403b is so confusing! want to take a look?
« Reply #2 on: May 13, 2015, 08:52:51 AM »
yup, why did he do that! just to make money off a dumb dumb perhaps?
grr
i scared of putting it all into Vanguard, idk, i better finish reading the stocks thing first, then readdress.

DrF

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Re: 403b is so confusing! want to take a look?
« Reply #3 on: May 13, 2015, 08:58:44 AM »
Just for reference, I have 100% of my wife's 401k going toward VINIX and 100% of my 401k going toward FSEVX.

2 funds, cover a broad spectrum of the market. If you want to add international, research it first. If you want to have bonds, research it first.

tdogz

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Re: 403b is so confusing! want to take a look?
« Reply #4 on: May 13, 2015, 11:01:36 AM »
I would recommend taking all the funds in the Large Cap and Small/Mid Cap categories and transferring them to Vanguard Total Stock Market. That fund is already an index of the entire US stock market, so the other funds are just tilting you toward specific sectors (Value, Growth, Mid Cap, Small Cap, REITs, etc.). If you decide to tilt your investments, I believe that you should know why you are doing it first.
You can also worry about the International and Bond categories after you feel confident that you understand the options you have available. They are a relatively smaller chunk of your portfolio, so I don't see it as urgent that you jump in and make changes just yet.

I don't know if you have any IRAs or other retirement accounts, but if you do you might consider using them for your international and/or bond funds (if you decide you want the diversification of those asset types) and use your 403b strictly for Vanguard Total Stock Market.

seattlecyclone

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Re: 403b is so confusing! want to take a look?
« Reply #5 on: May 13, 2015, 11:05:38 AM »
Yeah, there's no reason to invest in that many funds. Some of these funds directly contradict each other! For example you might have some reason to invest in the Vanguard Value fund or Vanguard Growth fund, but probably never both!

dandypandys

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Re: 403b is so confusing! want to take a look?
« Reply #6 on: May 13, 2015, 11:11:00 AM »
Wow, why did the guy suggest this then? ugh, so annoyed, but glad i have you all to help me. Next month when i can make changes again i will definitely your advice. By then i should be finished learning on the stock series.

forummm

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Re: 403b is so confusing! want to take a look?
« Reply #7 on: May 13, 2015, 11:18:44 AM »
Yeah, there's no reason to invest in that many funds. Some of these funds directly contradict each other! For example you might have some reason to invest in the Vanguard Value fund or Vanguard Growth fund, but probably never both!

I disagree. Aren't the Vanguard index funds just the stocks in the value fund and the stocks in the growth fund plus some other stocks?

forummm

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Re: 403b is so confusing! want to take a look?
« Reply #8 on: May 13, 2015, 11:20:02 AM »
There's no reason to be in ~20 funds. Unless you're a secret billionaire.

bogleheads.org/wiki/investment_policy_statement
www.bogleheads.org/wiki/Lazy_portfolios#Three_fund_lazy_portfolios

dandypandys

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Re: 403b is so confusing! want to take a look?
« Reply #9 on: May 13, 2015, 11:31:29 AM »
There's no reason to be in ~20 funds. Unless you're a secret billionaire.

bogleheads.org/wiki/investment_policy_statement
www.bogleheads.org/wiki/Lazy_portfolios#Three_fund_lazy_portfolios
I wish! But i feel rich in life's abundance of fun times :)

TheOldestYoungMan

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Re: 403b is so confusing! want to take a look?
« Reply #10 on: May 13, 2015, 11:47:36 AM »
He may have recommended that because he firmly believes in it.  The folks around here generally don't recommend it, and for many many reasons.  Doesn't make us right.  We are placing our bets based on a handful of assumptions that we all agree are pretty decent assumptions.

Once you read everything, you make up your own mind.

It's pretty awesome that vtsax is even in your 403b.  I have jealousy.  I'd "rebalance" to 100% vtsax assuming a certain couple of things.

1.  It's the lowest cost index fund in there.  To check that, just make a little chart, and look up each fun independent of the information they gave you.  Somewhere in there is the expense ratio, usually between 0 and 5 %.  I thought I knew everything, but I actually found in my 403b once I did this that there was a Vanguard fund I'd never heard of with a lower expense ratio that I could pick.

2.  You philosophically embrace index investing.  It jives with your worldview and you believe you can stick to it long term.  It fits with your investment goals.

seattlecyclone

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Re: 403b is so confusing! want to take a look?
« Reply #11 on: May 13, 2015, 02:52:17 PM »
Yeah, there's no reason to invest in that many funds. Some of these funds directly contradict each other! For example you might have some reason to invest in the Vanguard Value fund or Vanguard Growth fund, but probably never both!

I disagree. Aren't the Vanguard index funds just the stocks in the value fund and the stocks in the growth fund plus some other stocks?

"Growth" and "value" are typically portrayed as two opposing investing strategies. If you believe one strategy is better than the other, you may buy a growth fund or a value fund in addition to (or instead of) a total market index fund, but I don't know of a good reason to purchase both.

forummm

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Re: 403b is so confusing! want to take a look?
« Reply #12 on: May 13, 2015, 03:04:21 PM »
Yeah, there's no reason to invest in that many funds. Some of these funds directly contradict each other! For example you might have some reason to invest in the Vanguard Value fund or Vanguard Growth fund, but probably never both!

I disagree. Aren't the Vanguard index funds just the stocks in the value fund and the stocks in the growth fund plus some other stocks?

"Growth" and "value" are typically portrayed as two opposing investing strategies. If you believe one strategy is better than the other, you may buy a growth fund or a value fund in addition to (or instead of) a total market index fund, but I don't know of a good reason to purchase both.

Yes, they are "opposing". I think there is little overlap between Vanguard's version of the funds. But both have historically outperformed the full index (who knows if that will continue). EDIT: Nevermind--mixed up the lines here. Growth and blend are about the same, but blend wins over this time period.

https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&LargeCapGrowth2=100&portfolio3=Custom&portfolio2=Custom&portfolio1=Custom&annualOperation=0&initialAmount=10000&endYear=2014&mode=2&inflationAdjusted=true&annualAdjustment=0&LargeCapValue1=100&startYear=1972&rebalanceType=1&annualPercentage=0.0&LargeCapBlend3=100
« Last Edit: May 13, 2015, 05:01:59 PM by forummm »

seattlecyclone

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Re: 403b is so confusing! want to take a look?
« Reply #13 on: May 13, 2015, 03:27:04 PM »
Your link shows the blended fund performing in between the growth fund and the value fund, not worse than both. Perhaps it's a different story if you pick different start/end years?

forummm

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Re: 403b is so confusing! want to take a look?
« Reply #14 on: May 13, 2015, 05:00:23 PM »
Your link shows the blended fund performing in between the growth fund and the value fund, not worse than both. Perhaps it's a different story if you pick different start/end years?

Ha! You're right! My bad.

TomTX

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Re: 403b is so confusing! want to take a look?
« Reply #15 on: May 14, 2015, 05:17:29 AM »
Ridiculously scattered and unfocused. Probably a CYA for the advisor so that you are always invested at least a drip in whatever fund did best this quarter.

Unless you have at least $50k AND really want multifunds - I would put 100% in VTSAX.

$50k-$250k, think about either some international OR bonds.

Over $250k, you really should have 2 funds, maybe 3 (VTSAX, international stock, bond)

dandypandys

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Re: 403b is so confusing! want to take a look?
« Reply #16 on: May 14, 2015, 05:46:45 AM »
there is 100,ooo in there right now, it has been 13 years in the making. 3% from me, 7% from employer.. i just upped mine to 4% :) There is a Roth option too, but i haven't got to that bit of my stock learning yet. It was only last year the job changed from Fidelity to Transamerica. This all happened automatically because i didn't oversee the change, because i was too overwhelmed at the time. Maybe this is why there are so many, at Fidelity i had these choices:  https://www.dropbox.com/s/d215x264pqw7o1y/Screen%20Shot%202015-05-14%20at%207.27.50%20AM.png?dl=0