Comments on: How Comfortable Are You With Investing Your Retirement Funds?

By: Jackie

Jackie — Wed, 17 Mar 2010 03:46:24 +0000

Budgeting, it sounds like you’ve got things going that work for you, which is important. (Especially if they’re performing well too.)

By: Budgeting in the Fun Stuff

Budgeting in the Fun Stuff — Tue, 16 Mar 2010 20:33:05 +0000

I’m the person who glazes over when stocks come up, so my 401k is invested in the Vanguard 2035 target date mutual fund. Our Roth IRA is invested in the Fidelity 2040 target date mutual fund. Despite the crash, both are up overall, so I’m happy (I don’t know how much up exactly since I can’t check from work, but I think it’s over 10%).

My husband manages our Scottrade account and invests in individual stocks that pay high dividends. He’ll be doing the same with our second Roth IRA too.

I like the balance this gives us. The target date funds adjust from stocks to bonds as we get closer to those dates. The individual stocks are giving us a great dividend return.

By: Jackie

Jackie — Tue, 16 Mar 2010 12:48:21 +0000

Tom, by my husband’s approach do you mean having a professional handle his retirement money? I think many things go down when the general market goes down, except contrarian-type investments. I have a variety of investments myself, although I haven’t done anything with commodities or managed futures.

By: Tom Wachowski

Tom Wachowski — Tue, 16 Mar 2010 03:19:28 +0000

I must agree with your husband’s approach, Jackie. The problem with mutual
funds is that they are essentially fancy index funds. They are “relative return”
investments. So, when the general market goes down, it’s likely your mutual
fund went down, too. I’m sure your husband is taking advantage of “absolute
return” strategies, that is, strategies that aim to make money regardless of
what the markets are doing. How? They use a full set of golf clubs: stocks,
bonds, long/short, commodities, managed futures, REITs, currency, etc. Mutual
funds play with only a putter and wedge (stocks and bonds). In addition, what’s
most important is STRATEGY! Ray Lucia has the best strategy I’ve come
across called “Buckets of Money.” I highly recommend his book “Buckets
of Money, How to Retire in Comfort and Safety). No, I don’t get any kickbacks
for recommending him (I wish I did). I’ve found fee-only planners by searching
local firms on the net. Interview a few, ask TOUGH questions, and go with the
advisor who “gets it” and can show you a track record! KEEP IN MIND, advisors
that spend their time gather more clients can’t spend as much time managing
money. So, in my mind, an advisor is either a money manager or an
asset gatherer, he/she can’t be both well. Hence, I personally like to utilize third-
party institutional money managers (in interest of full disclosure, I am a fee-based
advisor utilizing third-party money managers). Let the “pros” manage money and
let the advisor help the client get strategy right. Fun stuff!!!

By: Jackie

Jackie — Tue, 16 Mar 2010 01:38:31 +0000

CF, that’s cool that you get a match + 4% for the 403b. Free money is always a plus. My husband found his fee only planner inadvertently via me. I’d been shopping around for term life insurance and the person I ended up buying it through was also a fee only planner.

By: ConsciouslyFrugal

ConsciouslyFrugal — Mon, 15 Mar 2010 18:13:16 +0000

I have a target-date mutual fund through Vanguard with my employer-based 403b. Right now, it works for me, because Vanguard’s fees are low and I don’t want to do a lot of research. Although I did pick a date a little past my projected retirement date, just so I’d have a higher percentage of stocks.

We get a match and an additional 4% for the 403b. But next year I’m going to start contributing the max to a Roth IRA. I really have no idea at this point where I want to invest it. I thought about a good ol’ Index fund, but now “experts” are complaining like mad about them. How did your husband go about finding fee-only help with the fiduciary responsible joy? I have been extremely unhappy with all of the financial planners I’ve worked with (3 so far). Each one of them has completely ignored my requests in favor of a product that was good for them but not so much so for me. Enraging!