Unsure of my Roth IRA

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mamani
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Joined: Tue Jan 24, 2023 7:22 pm

Unsure of my Roth IRA

Post by mamani »

My dad started me on a Roth IRA with Dodge & Cox, and I've been contributing to it for over 15 years now. Recently, I've begun doing more research on investing with low cost index funds. I currently have Roth IRA investments in DODGX/stock, DODFX/international, DODBX/balanced, and DODIX/income funds. They have all been good investments, but the expense ratios are .51%, .62%, .51%, and .41%. Based on what I've read, having low expense ratios and turn-over, should I / can I switch to a new investment company for my Roth IRA?
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RetirementClass2021
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Re: Unsure of my Roth IRA

Post by RetirementClass2021 »

mamani wrote: Tue Jan 24, 2023 7:38 pm My dad started me on a Roth IRA with Dodge & Cox, and I've been contributing to it for over 15 years now. Recently, I've begun doing more research on investing with low cost index funds. I currently have Roth IRA investments in DODGX/stock, DODFX/international, DODBX/balanced, and DODIX/income funds. They have all been good investments, but the expense ratios are .51%, .62%, .51%, and .41%. Based on what I've read, having low expense ratios and turn-over, should I / can I switch to a new investment company for my Roth IRA?
If you want to move your Roth to Fidelity, Vanguard or Schwab give one of them a call and they will walk you through the transfer procedure. You then can convert you present funds into funds of your choice.
VTI 30% VXUS 12% SCHD 18% BND 12% BNDX 8% SCHP 20% | Low-cost diversified portfolio | “Forget the needle, buy the haystack.” - John C. Bogle
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retired@50
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Re: Unsure of my Roth IRA

Post by retired@50 »

mamani wrote: Tue Jan 24, 2023 7:38 pm My dad started me on a Roth IRA with Dodge & Cox, and I've been contributing to it for over 15 years now. Recently, I've begun doing more research on investing with low cost index funds. I currently have Roth IRA investments in DODGX/stock, DODFX/international, DODBX/balanced, and DODIX/income funds. They have all been good investments, but the expense ratios are .51%, .62%, .51%, and .41%. Based on what I've read, having low expense ratios and turn-over, should I / can I switch to a new investment company for my Roth IRA?
Welcome to the forum. :happy

Generally speaking, yes, you can switch investment companies.

Is the current account held directly with Dodge & Cox?

If so, you can call your NEW investment company (also known as a custodian) and ask for the account to be transferred in-kind. This will keep your current funds in place during the transfer. Then, once you have the account transferred, you can sell what you don't like, and use the proceeds to buy what you'd prefer to own in your Roth IRA.

Whether or not you "should" do this is up to you.

Are you paying any fees besides the expense ratios, like to an adviser?

Regards,
This is one person's opinion. Nothing more.
retire2022
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Re: Unsure of my Roth IRA

Post by retire2022 »

op

Yes you can rollover your Dodge & Cox Roth IRA account to another custodian (Fidelity, Vanguard, Charles Schwab or any of them) see IRS chart:

https://www.irs.gov/pub/irs-tege/rollover_chart.pdf
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arcticpineapplecorp.
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Re: Unsure of my Roth IRA

Post by arcticpineapplecorp. »

mamani wrote: Tue Jan 24, 2023 7:38 pm My dad started me on a Roth IRA with Dodge & Cox, and I've been contributing to it for over 15 years now. Recently, I've begun doing more research on investing with low cost index funds. I currently have Roth IRA investments in DODGX/stock, DODFX/international, DODBX/balanced, and DODIX/income funds.
welcome to the group.

1. why this particular mix of investments? Seems to me you have two stock funds (stock and international), a bond fund (income) and a mix of stock and bond fund (balanced). Usually people who hold a balanced fund want an all in one fund so they don't have to rebalance their portfolio between their stock funds and bond funds as they get off kilter. So why hold individual stock and bond funds and then also hold a balanced fund in addition?

2. Not sure what else you have, but if you have tax deferred account (pretax 401k, etc) bonds are better in those accounts, which allows for stock in the Roth (rather than bond and/or balanced which contains bonds). You want the most growth in the Roth (which would be stocks) and bonds would be better in tax deferred accounts.

3. We don't know your overall allocation currently vs. desired and what else you might have in the mix, so you might want to edit your post according to Asking Portfolio Questions
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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GerryL
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Re: Unsure of my Roth IRA

Post by GerryL »

mamani wrote: Tue Jan 24, 2023 7:38 pm My dad started me on a Roth IRA with Dodge & Cox, and I've been contributing to it for over 15 years now. Recently, I've begun doing more research on investing with low cost index funds. I currently have Roth IRA investments in DODGX/stock, DODFX/international, DODBX/balanced, and DODIX/income funds. They have all been good investments, but the expense ratios are .51%, .62%, .51%, and .41%. Based on what I've read, having low expense ratios and turn-over, should I / can I switch to a new investment company for my Roth IRA?
My very first mutual fund was Dodge&Cox Stock. I chose it for my traditional IRA (before Roth was invented) because of the relatively low ER. Low for a managed fund. I never added any new $$$ to the IRA. It did very well over the years and was still going gangbusters even through 2009. Gradually I learned more about investing and about index funds and built up the 401k and Roth accounts that became available to me.

By the time I retired 20+ years after starting with DODGX, I finally bit the bullet and sold it all to invest in Vanguard index funds in order to consolidate and simplify my portfolio. It was a hard decision to make since it had done so well, and the ER wasn't outrageous when compared to so many other actively managed funds. I've never gone back to figure out whether I might have done better by leaving it in with Dodge&Cox. (What's the point?)

Continue educating yourself about investing and then decide what you want to do. For example, all index or a combination of index and actively managed? Once you are comfortable with your decision, execute it. Then commit. Avoid the temptation to back test to see if you would have more money if you could change the past. Avoid the temptation to keep tweaking. Good luck in your investing future.
Topic Author
mamani
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Joined: Tue Jan 24, 2023 7:22 pm

Re: Unsure of my Roth IRA

Post by mamani »

Thank you! This was all great advice. Once I rollover my account to another custodian, should I sell and buy new index funds gradually? Are there increments and amounts that would be better? I plan to keep it simple and switch to 70% stock / 30% bond index funds that I can essentially leave alone till I retire.
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Wiggums
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Re: Unsure of my Roth IRA

Post by Wiggums »

mamani wrote: Thu Jan 26, 2023 7:35 am Thank you! This was all great advice. Once I rollover my account to another custodian, should I sell and buy new index funds gradually? Are there increments and amounts that would be better? I plan to keep it simple and switch to 70% stock / 30% bond index funds that I can essentially leave alone till I retire.
No tax implications for selling within a Roth. Money that’s already in the market, I would sell what you don’t want, and buy what you do want to hold right away.

Since the Roth space is so valuable, I hold only the Vanguard total Stock market there. a fund that is likely to have the most growth potential. (Since it grows tax free).
"I started with nothing and I still have most of it left."
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