Author Topic: The old Edward Jones saga - revisited  (Read 1478 times)

Nitstein

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The old Edward Jones saga - revisited
« on: March 11, 2018, 08:14:46 PM »
Being young and ignorant, my wife and I invested through Ed Jones.  That will never happen again.  But, we now have a balance with them of $90K broken up between two Roth IRAs, a traditional IRA, two 529 plans, and an after tax account.  Pretty much all of it is held with American Funds.  We already paid the huge 5.75% loads for A shares.  We do own about $5K in individual stocks in the EJ traditional IRA.

American Funds claims that they perform better than index funds, even considering the loads and the expense ratios.  A lot of forum comments I have read say that in the past AF just got lucky and didn't loose as much in 2008.  However if you take AF hand picked example, they did beat the market. 

I'm 99% convinced that its time to move everything out of Ed Jones American Funds and put it in Fidelity.  Fidelity even said they would reimburse for EJ closing fees for 3 of our accounts.  We were looking at almost $600 in closing fees just to get away.

Here are a few questions.

1.  Most of our American Funds mutual funds we own, have an expense ratio that averages out around .80 or so.  Part of this are 12b-1 fees that go back to EJ.  Is there any reason to keep these funds?  From everything I've read and heard I should dump them as fast as possible.  On the positive side, they say they'll outperform index funds.  On the negative side, the expense ratios are high, and we have to pay Ed Jones $100 a year for IRA fees. 

2.  Assuming we move things out of Ed Jones, where should the 529 plans roll over to?  Our state has 529 index investments that have 0.19% expense ratios and are tax deductible for state taxes.  Or are there other benefits to rolling them over to Fidelity?

3.  What is the best move for the after tax account?  We have no plans in the near future for adding to it or taking from it.  Should we put it in our Roth?  I will note that we are in the 22% tax bracket and are looking for pre-tax investments, though I don't know if that is relevant for this account. Moving forward with our investments, I'd like to get more dividend paying stocks.  My realistic retiring goal would be in my early 50s, but we'll see how that goes.  First I need to get things like this straightened out.

Thank You!  Any additional recommendations are appreciated! 

Nitstein

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Re: The old Edward Jones saga - revisited
« Reply #1 on: March 16, 2018, 01:19:59 PM »
Another motivation for the 529 plan rollover is that to rebalance the accounts to something more conservative within the American funds we own, we would have to buy into a different American fund, which would require more loads...

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I'm pretty sure Ed Jones did not move things around in the IRAs because I would have to approve that... but who knows. 

I've been going back and forth on my decision to sell the Ed Jones IRA American Funds.  Certainly going forward we will be putting into index funds in Fidelity.  But considering we already paid the loads and we are supposedly in some of the best actively managed mutual funds, I'm hesitant to roll them over.  We own the following in IRAs with expense ratios listed.

AMRMX 0.60
ANCFX  0.60
ANWPX 0.75
NEWFX 1.04
SMCWX 1.07
AWSHX 0.58
CWGIX 0.77
AGTHX 0.64
CAIBX  0.59
AMECX 0.56
AIVSX  0.58
ANEFX 0.78
AIBAX  0.62
AHITX  0.69

I've tried specifically looking at these compared to a market index fund performance.  Some of these have outperformed the market index in different time periods.  Others have not.  The hardest thing for me to wrap my head around is that these are all in different asset allocations.  When I look at the Vanguard tool for comparing mutual funds, it gives me a message effectively stating that these funds are not comparable to the market index.  So it's not apples to apples.  Does anyone have guidance on how to effectively compare these to index funds?  Thanks.

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Slightly different subject...
My 401k options include a Fidelity S&P 500 Index Large-Cap option, a Vanguard Mid-Cap Index option, and a Vanguard Small-Cap Index option.  That link for jlcollinsnh (I think) says a total market index is the best.  What percentage of each of my options would you put together to get the best return? 

Also, my 401k offers a short and intermediate term bond index options.  There is also a "inflation protected" bond fund option.  For the portion of my 401k that I want in bonds, most of it is in the short term index.  I'm also starting to put some in the "inflation protected" portion.  I don't understand bonds all that well.  But I hear that longer term bonds may be not a great choice right now because if interest rates increasing.  Are these good moves?

Thanks very much!   

nick_mmm

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Re: The old Edward Jones saga - revisited
« Reply #2 on: March 16, 2018, 09:37:21 PM »
I have found feex - https://www.feex.com to be a good tool for finding similar funds with expense ratios and returns.