Beginner investor seeking advice

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Snickers_On
Posts: 7
Joined: Wed Aug 01, 2018 10:09 pm

Beginner investor seeking advice

Post by Snickers_On » Wed Aug 01, 2018 10:27 pm

So I've just discovered investing, and thanks to Reddit I believe I've already found the Jesus of investing communities. I just got finished reading the Boglehead's guide to investing, and the insight was great, I just wanted to follow up with advice that's a little more personalized as well. So thank you all in advance for your altruism and, hopefully, insults.

I grew up in a family with low income and no college education or finance background, so at 29 I'm just learning everything now. Here are some details about my current financial status:

Employed full-time at a salary of 90,000 annually
I have $160,000 in debt to the government for my student loans, at an interest rate of 7% (I'm currently on an income-based plan that's charging me 600/mo - anything I contribute afterwards goes towards the principal)
Between my checking and savings account I have approximately $19,000
I have $4,000 in a 401k
I have $1,000 in a Roth IRA
I have a cash flow of approximately $3,000/month
I have no credit card debt (I have a line of credit of 15,000 and credit score is roughly 680)
I am usually in the green roughly $1,000/month, and would like to start putting a good chunk of that towards investments
I am willing to take moderate risk

My financial objectives:
Have at least $1,000,000 saved for when I'm 65
Get an ROI of 50k within 5 years
I'd like to get to know healthy investing habits and how to refine them
I have a decent amount of spare time and like doing research and honing skills that help give me an advantage and expertise
Create a pretty portfolio. One that would make people go 'damn, that's one hell of a stock portfolio, brah"


How you can be my hero for a day (and maybe even tomorrow, too!):
Advise me on how to assess whether a company shares your values and is the right stock to invest in (and/or guide me to books that do this)
Tell me what kind of investments to jump on, and if you have recommendations of where to seek such investments that would be terrific
How much should I store in my emergency fund, versus how much should I put into secure versus moderately risky investments
Point me in the direction of news sources, apps, etc that you find helpful to check in on on a daily basis to brush up on your knowledge and skill
Hug me

Thank you!

RadAudit
Posts: 3095
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: Beginner investor seeking advice

Post by RadAudit » Thu Aug 02, 2018 6:14 am

Welcome to the forum.

Start here https://www.bogleheads.org/wiki/Getting_started
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The calvary isn't coming, kids. You are on your own.

student
Posts: 2678
Joined: Fri Apr 03, 2015 6:58 am

Re: Beginner investor seeking advice

Post by student » Thu Aug 02, 2018 6:21 am

If you are just learning, the usual recommendation applies. Max out 401k and Roth IRA, stick with the 3-fund portfolio https://www.bogleheads.org/wiki/Three-fund_portfolio or a target date fund.

22twain
Posts: 1610
Joined: Thu May 10, 2012 5:42 pm

Re: Beginner investor seeking advice

Post by 22twain » Thu Aug 02, 2018 6:26 am

Snickers_On wrote:
Wed Aug 01, 2018 10:27 pm
I have a decent amount of spare time and like doing research and honing skills that help give me an advantage and expertise
Create a pretty portfolio. One that would make people go 'damn, that's one hell of a stock portfolio, brah"

How you can be my hero for a day (and maybe even tomorrow, too!):
Advise me on how to assess whether a company shares your values and is the right stock to invest in (and/or guide me to books that do this)
Tell me what kind of investments to jump on, and if you have recommendations of where to seek such investments that would be terrific
If you want advice on stock-picking you had best go elsewhere. This forum is focused on broad-based index mutual funds such as Vanguard Total Stock Market Index (VTSMX for investor class shares, VTSAX for admiral class shares, or VTI for ETF shares), or whatever similar things you can find in your workplace retirement plan (401k, 403b, etc.).

Many people here have individual stocks only because of their previous (i.e. pre-Boglehead) investing history and selling them would incur large capital gains taxes.
Snickers_On wrote:
Wed Aug 01, 2018 10:27 pm
I am usually in the green roughly $1,000/month, and would like to start putting a good chunk of that towards investments
Many or most people here will probably tell you to max out your contributions to your 401k before you start a taxable investing account. For most of my career, all of my investments were in my 403b plan (like a 401k but for colleges and other non-profit organizations). I didn't start a taxable mutual fund account until after I received an inheritance.
My investing princiPLEs do not include absolutely preserving princiPAL.

selters
Posts: 620
Joined: Thu Feb 27, 2014 9:26 am

Re: Beginner investor seeking advice

Post by selters » Thu Aug 02, 2018 6:47 am

Contribute as much into your retirement account as you need to get whatever match you can get at your job. The rest should go towards your student loans.

Bogleheads encourage simplicity in investing. We do not think that trying to find and edge in the market is time well spent. Just invest in low cost total market index funds and if you want to increase your wealth beyond what you can achieve doing that, spend the rest of your time trying to increase your income.

Jon H
Posts: 108
Joined: Sun Jan 21, 2018 2:50 pm

Re: Beginner investor seeking advice

Post by Jon H » Thu Aug 02, 2018 7:06 am

How much you spend is the greatest determinant of how much you will need to save. Knowing your monthly budget is an important first step towards financial independence. One million is only $40k per year at age 65 (assuming a 4% withdrawal rate). Will that be enough? It depends on your budget. Adjust accordingly.

Pay off any credit card debt first. Then, pay off the educational debt. That’s a guaranteed 7% return.

Build an emergency fund of 3-6 months worth of living expenses.

Then try to save 15% or more of your income and invest in low expense ratio (low fee) index funds. Try to invest up to the level of your employer’s match % if any. Follow the order of investment (it is posted on here, search for it)

Invest no more than 5% of your portfolio on speculative investments (e.g. individual stocks, crypto, etc). Once it’s lost give up.

Prepare an investment policy statement and follow it.
Last edited by Jon H on Thu Aug 02, 2018 7:35 am, edited 1 time in total.
Consider gain and loss, but never be greedy and everything will be alright (fortune cookie)

User avatar
bertilak
Posts: 6165
Joined: Tue Aug 02, 2011 5:23 pm
Location: East of the Pecos, West of the Mississippi

Re: Beginner investor seeking advice

Post by bertilak » Thu Aug 02, 2018 7:09 am

[/quote]
selters wrote:
Thu Aug 02, 2018 6:47 am
Contribute as much into your retirement account as you need to get whatever match you can get at your job. The rest should go towards your student loans.

Bogleheads encourage simplicity in investing. We do not think that trying to find and edge in the market is time well spent. Just invest in low cost total market index funds and if you want to increase your wealth beyond what you can achieve doing that, spend the rest of your time trying to increase your income.
Best advice!

I want to add something about this:
Snickers_On wrote:
Wed Aug 01, 2018 10:27 pm
Create a pretty portfolio. One that would make people go 'damn, that's one hell of a stock portfolio, brah"
That's a little scary! Your portfolio should be boring, not exciting!
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker, the Cowboy Poet

BuckyBadger
Posts: 849
Joined: Tue Nov 01, 2011 11:28 am

Re: Beginner investor seeking advice

Post by BuckyBadger » Thu Aug 02, 2018 8:21 am

Welcome! Soon you'll be happy you found this place before you could make costly mistakes. I say that because if you've already read the wiki you should know that most of what your talking about here isn't Boglehead-ish, and if yo're interest in it you're going to want to find somewhere else to discuss it because you won't get very supportive comments on this board.
Snickers_On wrote:
Wed Aug 01, 2018 10:27 pm
I am usually in the green roughly $1,000/month, and would like to start putting a good chunk of that towards investments
This is great! Do you have a 401k or 403b at work? Contribute this money there immediately. It'll be pretax, so you'll have even more to play with. Post your funds and fees and if you get an employer match. If the plan is even reasonably good you should 1) contribute enough to get the company match for an immediate 100% profit, then 2) fill up a Roth IRA, the 3) go back to filling up your 401k.
Snickers_On wrote:
Wed Aug 01, 2018 10:27 pm
I have a decent amount of spare time and like doing research and honing skills that help give me an advantage and expertise
Create a pretty portfolio. One that would make people go 'damn, that's one hell of a stock portfolio, brah"
Now this is where things are getting a little sketchy, bro. If you are a Boglehead, then you don't need to do any research, and all the honing skills in the world with not give you an advantage. And to us, a pretty portfolio is a simple one with low fees. You'll impress the most of us with three funds, reasonably allocated across your accounts, with fees under 0.2%. SEXY!!
Snickers_On wrote:
Wed Aug 01, 2018 10:27 pm
Advise me on how to assess whether a company shares your values and is the right stock to invest in (and/or guide me to books that do this)
Tell me what kind of investments to jump on, and if you have recommendations of where to seek such investments that would be terrific
...
Point me in the direction of news sources, apps, etc that you find helpful to check in on on a daily basis to brush up on your knowledge and skill
Again, you need none of this.

Are you sure you read the whole guide? Because literally nothing you're asking for is something that we recommend on these boards...

Snickers_On
Posts: 7
Joined: Wed Aug 01, 2018 10:09 pm

Re: Beginner investor seeking advice

Post by Snickers_On » Thu Aug 02, 2018 2:03 pm

Hey everyone,

Thank you so much for the advice!

Yes I did read the advice that this is a practical guide to being financially stable and not a get rich guide, and that is my ultimate goal.

I do have a 401k and roth IRA and will work to cap those out, however I may not stay at my current job (currently of just under a year) for the 2-3 years it takes before the company matches 5%.

401k currently has 4,000 and my Roth IRA 1,000 - I'm going to dump the remaining 4,500 into the Roth IRA for 2018.

I do want to at some point try individual stocks - I know that's not the Boglehead approach I just thought some people on the forum might still do these investments as well.

I appreciate all the helpful words of wisdom!

HAWK23
Posts: 101
Joined: Sun Feb 25, 2018 3:59 pm

Re: Beginner investor seeking advice

Post by HAWK23 » Thu Aug 02, 2018 2:13 pm

Snickers_On wrote:
Thu Aug 02, 2018 2:03 pm
Hey everyone,

Thank you so much for the advice!

Yes I did read the advice that this is a practical guide to being financially stable and not a get rich guide, and that is my ultimate goal.

I do have a 401k and roth IRA and will work to cap those out, however I may not stay at my current job (currently of just under a year) for the 2-3 years it takes before the company matches 5%.

401k currently has 4,000 and my Roth IRA 1,000 - I'm going to dump the remaining 4,500 into the Roth IRA for 2018.

I do want to at some point try individual stocks - I know that's not the Boglehead approach I just thought some people on the forum might still do these investments as well.

I appreciate all the helpful words of wisdom!
General advice is to stay away from individual stocks but there are a few around here (me included) that own some individual holdings. The rule of thumb for those who do is to keep individual holdings less than 10% of your total portfolio (and to be comfortable losing this entire lot).

I started out the opposite way holding a majority of individual stocks before finding out about bogleheads. Now my total individual stocks account for about 33% of my portfolio (down from about 60%) and I'm doing my best to widdle this down further with all future investments going into the 3 fund portfolio. I'll definitely admit, however, that I own about 15 stocks including some Apple, Microsoft, Disney, Visa, and Amazon as well as some boring ones like Johnson and Johnson, United Health, Exxon, Waste Management, and Pepsi. I like to diversify my individual stocks across sectors and I try to keep my entire portfolio within a percentage point or two of Vanguard Total US stock (VTSAX) sector market weights. I use the Personal Capital app (highly recommend) to make sure I'm not severely overweight or underweight in any one sector using Vanguard Total US as my benchmark.

I'll add that I don't hold any individual stocks in tax advantaged accounts. All index funds in my Roth and 403b. Don't gamble with your retirement accounts.

BullHouse_BearMarket
Posts: 4
Joined: Sun Jul 10, 2016 4:19 pm

Re: Beginner investor seeking advice

Post by BullHouse_BearMarket » Thu Aug 02, 2018 3:26 pm

From a fellow 29 year old, kudos on realizing the importance of retirement planning at our age.

Now for my take on things:

Avoid individual stocks. I get the appeal. I started investing when I turned 18 and the first thing I did was ignore my dad's advice and start purchasing individual stocks. This was problematic for a few reasons.
1. I had no clue what I was doing.
2. I had limited money and could only spend $1,000 at a time, which meant only purchasing 25-30 shares at a time. Even with compounding my dividends into additional shares, the gains I made while sometimes high in percentage, were minimal in actual money.
3. Because I had no idea what I was doing, I made a lot of poor investments and lost all or most of the money put into those investments. Fortunately we are young and can absorb those costly mistakes over time, but I'd be much happier if I invested that few thousand dollars into an index fund instead.
4. Fee's to buy and sell stocks on top of capital gains tax suck.

All that being said, I did make some very good money on certain stocks but that was because I entered the market during the Great Recession and was able to buy stocks like Bank of America at $5 and then sell when it doubled or tripled in price. That was PURE LUCK! Do not think that will happen often.

After realizing that maybe my dad knew a thing or 2, I began looking at funds and discovered this forum. Thank god I did. I started a Roth using the 3 fund portfolio and later changed it to substitute the Total Bond for the Wellington fund as it made my total holdings more aggressive with stock holdings, which is what you should do for our age. ~90-95% stock is what someone our age should be invested in. I opened my Roth in July 2015 and have a Rate of Return of 8.6% so far.

So my advice from my personal experience regarding your Roth portfolio, 100% into funds, but if you want to play with some individual stocks, only commit 10% to those at maximum. Read some books and do some calculations before purchasing stocks. Will putting $1000 into a stock that costs somewhere between $30-50 be worth it after fees and taxes? How big of a gain in stock price would you need for that investment to be worth it? And finally, don't put all your eggs in 1 or 2 baskets. Putting half your stock budget into 1 stock is a huge risk and 9 times out of 10, won't pay off.

What is sexy and fun, is an average ROR of 8+ percent with compounding returns building your portfolio with no effort on your part.

Daedalus
Posts: 36
Joined: Sat Oct 21, 2017 5:22 pm

Re: Beginner investor seeking advice

Post by Daedalus » Thu Aug 02, 2018 5:49 pm

Best thing you can do when you're first "getting your feet wet" is to just simply invest. Put the money into the 401k and IRA and just keep pouring it in steadily month after month. My focus was always along the lines of: "OK get the first $10k invested, then get to $25k, then get to $50k, etc." Before you know it, you'll have a nice chunk of change started which creates the strong foundation for a wealthy portfolio :)

User avatar
Taylor Larimore
Advisory Board
Posts: 27636
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Two Recommendations

Post by Taylor Larimore » Thu Aug 02, 2018 6:09 pm

Snickers_On:

Welcome to the Bogleheads Forum!

After reading your Opening Post (OP), I have two recommendations:

1. Don't buy individual stocks. This is what experts say about that:
Alpha Architect: "Between 1983 and 2006, around 73% of firms had a drawdown larger than 50% (the S&P 500’s maximum drawdown during this period was around 44%). Holding one individual stock can be very risky!"

Barber and Odean Study: "Of 66,465 households with accounts at a large discount broker during 1991 to 1996, those that trade most earned an annual return of 11.4 percent, while the market returned 17.9 percent."

Michael Batnick, CFA: "Ordinary investors would be well served if they thought for a second about who they were transacting with. Over 90% of today’s volume is done by institutions, so chances are that your counter-party has done their homework."

Brett Arends, Wall Street Journal columnist: "Buy individual stocks only as a gamble."

Benjamin Graham: "I have little confidence, even in the ability of analysts, let alone untrained investors, to select common stocks what will give better than average results."

Bill Bernstein, author of The Four Pillars of Investing: "Picking individual stocks is like volleying with the Williams sisters."

Jack Bogle: "Attempting to build an investment program around a handful of individual securities is, for all but the most exceptional investors, a fool's errand."

Adam Bold, author, adviser: "Mutual funds don't have the pizzazz of the hot stocks of the moment. If you're looking for entertainment, go gambling in Las Vegas. But if you want to accumulate real money for your retirement and other goals, mutual funds are the safer bet."

James Dahle, MD, financial advisor, and author of The White-Coat Investor: “Think you know how to pick stocks? Then guess again. Every time you buy or sell the person on the other side of the trade likely has an IQ of 160, spends 70 hours per week analyzing his industry, and has access to computing power and databases you can only dream of.”

Dalbar Research Report (July 15, 2003): "The average equity investor earned a paltry 2.57% annually; compared to inflation of 3.14% and the 12.22% the S & P 500 index earned annually for the last 19 years."

Charles Ellis author of Winning the Loser's Game: "If you, like Walter Mitty, still fantasize that you can and will beat the pros, you'll need both luck and prayer."

Kenneth French: Former President of the American Finance Association: "The market is smarter than we are and no matter how smart we get, the market will always be smarter than we are."

Sy Harding, Forbes contributor: "My advice – avoid individual stocks! Even experienced full-time professional money managers, with staffs of trained people performing research, with access to data, software, and corporate contacts that most part-time investors could not come close to duplicating, struggle to match the market’s performance by buying, holding, or selling individual stocks."

Danial Kahneman, Nobel Laureate: "There is general agreement among researchers that nearly all stock pickers, whether they know it or not-and few of them do-are playing a game of chance."

Kiplinger Personal Finance “Eight Stocks to Buy Now” in the January, 2015 forecast issue under-performed its “Five Stocks to Sell” twelve months later.

Michael Lewis, former bond broker and financial journalist: "A vast industry of stockbrokers, financial planners, and investment advisers skims a fortune for themselves off the top in exchange for passing their clients' money on to people who, as a whole, cannot possibly outperform the market."

Mathwizard: The vast majority of trades you would make are between you and a professional investor. Both of you are assigning a value to the stock, and one of you thnks the price is high and another thinks it is low. Who do you suppose is more likely to be right.

Standard & Poor's: When the S&P 500 index was officially formed in 1957 to its 50th anniversary in 2007, only 86 of the original 500 companies still remained.

Larry Swedroe, author of many financial books: "Owning individual stocks and sector funds is more akin to speculating, not investing."

David Swensen, Chief Investment Officer of Yale University: "There's no way that spending a few hours a week looking at individual securities is going to equip an investor to compete with the incredibly talented, highly qualified, extremely educated individuals who spend their entire professional careers trying to pick stocks."

Eric Tyson, author of Mutual Funds for Dummies: The notion that most average people and non-investment professionals can, with minimal effort, beat the best full-time, experienced money managers is, how should I say, ludicrous and absurd."
2. Consider The Three-Fund Portfolio.
"Simplicity is the master key to financial success." -- Jack Bogle

Snickers_On
Posts: 7
Joined: Wed Aug 01, 2018 10:09 pm

Where to put my Roth IRA funds

Post by Snickers_On » Tue Aug 07, 2018 11:45 pm

[Thread merged into here, see below. --admin LadyGeek]

Hey all,

I just invested 5,500 (max contribution) to a Roth IRA fund. I did this through Fidelity, and as I'm browsing what to invest my funds in, I'm finding that the Vanguard Index Funds seem the safest, but Fidelity is offering lower expense ratios for their Index funds (Fidelity .015 to Vanguard's .14).

Can anyone say from experience which is a better idea for such a low investment amount? I'm 29 and looking for long term returns, so I'm willing to put up with some risk and volatility; I'm also nervous that the fees will eat up my account if I'm not careful.

Thank you!

Snickers_On
Posts: 7
Joined: Wed Aug 01, 2018 10:09 pm

Re: Beginner investor seeking advice

Post by Snickers_On » Tue Aug 07, 2018 11:53 pm

Thank you everyone for the advice!

I'm definitely looking to mostly play it safe in establishing retirement funds over a duration of time. I'm not in a position to be throwing around a lot of money. That being said, I am willing to take a little risk when I become more educated about stocks.

Can anyone advise me on good index funds for a Roth IRA? I just want to start investing towards growth but really don't understand the differences in the differend index funds. From what I've read so far the Vanguard ones seem to be the safest bet, but with my Roth IRA being through Fidelity there's a $75 sign-up fee. I can afford the $3,000 minimum (But any advice on what to do with the remaining 2,500?)

Do any of you have experience with Fidelity's high-cap index funds? Recommendations?

Thank you!

gostars
Posts: 439
Joined: Mon Oct 09, 2017 7:53 pm

Re: Beginner investor seeking advice

Post by gostars » Wed Aug 08, 2018 12:19 am

Depends on what funds are available in your 401k. Of the $9500 you have in total, you might want to put 10% ($950) of that in bonds, preferably in your 401k. You could then put 60% ($5700) into the US stock market, using either FSTVX at Fidelity or a TSM or S&P 500 fund in the 401k, and the remaining 30% ($2850) into an international fund like FTIPX at Fidelity, or perhaps something in the 401k. How you split that up depends on the 401k. If it has no good, cheap international funds (often the case with 401k plans), then put the remaining $3050 in the 401k in the best US stock fund available, and then the Roth would be split $2850 FTIPX and $2650 FSTVX. This would put you at 90% stocks, 10% bonds, with 33% of the stocks in international.

User avatar
FiveK
Posts: 5851
Joined: Sun Mar 16, 2014 2:43 pm

Re: Where to put my Roth IRA funds

Post by FiveK » Wed Aug 08, 2018 12:25 am

Perhaps one of the Fidelity funds suggested in Three-fund portfolio - Bogleheads, or FFNOX - Fidelity ® Four-in-One Index Fund, etc.

TwstdSista
Posts: 987
Joined: Thu Nov 16, 2017 4:03 am

Re: Where to put my Roth IRA funds

Post by TwstdSista » Wed Aug 08, 2018 2:05 am

My Fidelity Roth IRA is 100% invested in Fidelity Total Stock Market Index Fund Premium Class (FSTVX) ER 0.015% and I've been extremely happy with it.

FYI -- Purchasing the Vanguard fund at Fidelity will also cost you a $75 transaction fee.

TwstdSista
Posts: 987
Joined: Thu Nov 16, 2017 4:03 am

Re: Beginner investor seeking advice

Post by TwstdSista » Wed Aug 08, 2018 2:34 am

^ Fantastic suggestion by gostars. Remember to look at all of your accounts as a single portfolio. Also, no need to start multiple threads -- the moderators will likely merge them to keep all the information in one place.

mega317
Posts: 2557
Joined: Tue Apr 19, 2016 10:55 am

Re: Where to put my Roth IRA funds

Post by mega317 » Wed Aug 08, 2018 3:49 am

What makes Vanguards funds safer? There is absolutely no reason to use those in a fidelity account.

User avatar
LadyGeek
Site Admin
Posts: 49327
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Beginner investor seeking advice

Post by LadyGeek » Wed Aug 08, 2018 12:56 pm

Snickers_On, Welcome! In order to give appropriate advice, it's best to keep all the information in one spot. I merged your question back into the first thread. While it is a different question, they are all related to your portfolio.

If you have any questions, ask them here. (This isn't a big deal, don't worry about it.)
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

Glockenspiel
Posts: 586
Joined: Thu Feb 08, 2018 1:20 pm

Re: Beginner investor seeking advice

Post by Glockenspiel » Wed Aug 08, 2018 1:21 pm

Snickers_On wrote:
Wed Aug 01, 2018 10:27 pm

Advise me on how to assess whether a company shares your values and is the right stock to invest in (and/or guide me to books that do this)
Tell me what kind of investments to jump on, and if you have recommendations of where to seek such investments that would be terrific
Max out your 401k (~$1,500 per month), as soon as you are able to. Within your 401k, post your available investment options, and we can help you select funds that represent the entire market at low expenses. This isn't a forum to gain advice on how to pick individual stocks so people say "man, that's one hell of a stock portfolio, bruh!"

Mr.BB
Posts: 649
Joined: Sun May 08, 2016 10:10 am

Re: Beginner investor seeking advice

Post by Mr.BB » Wed Aug 08, 2018 1:25 pm

Congratulations on figuring out long-term investment at relatively early age. Always do the basics.
1 save as much as you can as long as you can starting as early as you can.
2) if your 401k offers a matching make sure you get it. That is free money.
3) Keep an eye on your expense ratios
4) Go online and play with some calculators. Expense ratios see what the difference is over 25-30 years on two different funds, it's shocking. Also play with saving calculators if you mKe 6% 7% 8% how much it adds up over 25 30 years.
5) Do not forget to have an emergency fund. Even if you start now just take even 25 bucks a month and put into a separate account that you never touch for anything but emergencies.
6) Since you're still pretty young, personally I wouldn't touch anything with a bond for 10 years then start adding it in around age 40.
6) When there are market corrections or recessions, try to save more.
7) Buffett said it best "you don't need a big snowball you just need a big hill."
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

Snickers_On
Posts: 7
Joined: Wed Aug 01, 2018 10:09 pm

Re: Beginner investor seeking advice

Post by Snickers_On » Fri Aug 10, 2018 3:02 pm

Glockenspiel wrote:
Wed Aug 08, 2018 1:21 pm
Snickers_On wrote:
Wed Aug 01, 2018 10:27 pm

Advise me on how to assess whether a company shares your values and is the right stock to invest in (and/or guide me to books that do this)
Tell me what kind of investments to jump on, and if you have recommendations of where to seek such investments that would be terrific
Max out your 401k (~$1,500 per month), as soon as you are able to. Within your 401k, post your available investment options, and we can help you select funds that represent the entire market at low expenses. This isn't a forum to gain advice on how to pick individual stocks so people say "man, that's one hell of a stock portfolio, bruh!"
I have the following investment options (in addition to a target date package option):


Asset Classsort down Subclass Fund Name Current % Desired %
Blended Fund Investments -- FIAM INX TD 2005 Y
%
Blended Fund Investments -- FIAM INX TD 2010 Y
%
Blended Fund Investments -- FIAM INX TD 2015 Y
%
Blended Fund Investments -- FIAM INX TD 2020 Y
%
Blended Fund Investments -- FIAM INX TD 2025 Y
%
Blended Fund Investments -- FIAM INX TD 2030 Y
%
Blended Fund Investments -- FIAM INX TD 2035 Y
%
Blended Fund Investments -- FIAM INX TD 2040 Y
%
Blended Fund Investments -- FIAM INX TD 2045 Y
%
Blended Fund Investments -- FIAM INX TD 2050 Y 100%
%
Blended Fund Investments -- FIAM INX TD 2055 Y
%
Blended Fund Investments -- FIAM INX TD 2060 Y
%
Blended Fund Investments -- FIAM INX TD INCOME Y
%
Bond/Managed Income Stable Value MIP II CL 1
view restriction(s)
%
Bond/Managed Income Income PIM TOTAL RT INST
%
Bond/Managed Income Income VANG TOT BD MKT INST
%
Bond/Managed Income Other VANG INFL PROT ADM
%
Short-Term Investments -- FID GOVT MMKT
%
Stock Investments Large Cap FID CONTRAFUND POOL
%
Stock Investments Large Cap TRP EQUITY INCOME
%
Stock Investments Large Cap TRP INST LGCAP GRTH
%
Stock Investments Large Cap VANGUARD INST INDEX
%
Stock Investments Mid-Cap ARTISAN MID CAP INST
%
Stock Investments Mid-Cap FID EXT MKT IDX PR
%
Stock Investments Mid-Cap H & W MID CAP VAL I
%
Stock Investments Small Cap ABF SM CAP VAL INST
%
Stock Investments International AF NEW PERSPECT R6
%
Stock Investments International FID DIVSFD INTL POOL
%
Stock Investments International FID GLB XUS IDX INS

Snickers_On
Posts: 7
Joined: Wed Aug 01, 2018 10:09 pm

Re: Beginner investor seeking advice

Post by Snickers_On » Fri Aug 10, 2018 3:08 pm

Mr.BB wrote:
Wed Aug 08, 2018 1:25 pm
Congratulations on figuring out long-term investment at relatively early age. Always do the basics.
1 save as much as you can as long as you can starting as early as you can.
2) if your 401k offers a matching make sure you get it. That is free money.
3) Keep an eye on your expense ratios
4) Go online and play with some calculators. Expense ratios see what the difference is over 25-30 years on two different funds, it's shocking. Also play with saving calculators if you mKe 6% 7% 8% how much it adds up over 25 30 years.
5) Do not forget to have an emergency fund. Even if you start now just take even 25 bucks a month and put into a separate account that you never touch for anything but emergencies.
6) Since you're still pretty young, personally I wouldn't touch anything with a bond for 10 years then start adding it in around age 40.
6) When there are market corrections or recessions, try to save more.
7) Buffett said it best "you don't need a big snowball you just need a big hill."
So you wouldn't recommend an index like the total vanguard for my Roth IRA? I was going to allocate towards an index fund for the lower costs since they're not actively managed, but again I'm brand new and know nothing.

I do have an emergency fund - it doesn't hurt to add to it but it's around $7,000 now.

And just to confirm: it's common sense that you should max out your 401k and Roth IRA every year before any other type of investment?

Do you have an opinion on the current money management apps? I'm exploring Acorns, Betterment, Robinhood and Mint. I like the idea of Acorns rounding up your purchases to help you save, but the costs seem like they may be too high to justify saving money there. Also, Robinhood apparently allows for free trades but keeps some of the interest, which also doesn't sound ideal for small investments.

Are there any stock analysts/websites for stock information that you like in particular? I want to try out a small amount of money on a few stocks once I feel I have enough resource information to be regularly updated and know how to fairly assess the future of the business.

Thank you I really appreciate the help! You all are great!

User avatar
FiveK
Posts: 5851
Joined: Sun Mar 16, 2014 2:43 pm

Re: Beginner investor seeking advice

Post by FiveK » Fri Aug 10, 2018 3:25 pm

Snickers_On wrote:
Fri Aug 10, 2018 3:08 pm
So you wouldn't recommend an index like the total vanguard for my Roth IRA? I was going to allocate towards an index fund for the lower costs since they're not actively managed, but again I'm brand new and know nothing.
Didn't see anything in Mr.BB's post that argued against Vanguard's total stock market (assuming that's what you mean) in a Roth IRA. It's actually a fine choice.
And just to confirm: it's common sense that you should max out your 401k and Roth IRA every year before any other type of investment?
It's often a good idea but depending on your income and 401k plan fees, other priorities can be better. See Investment Order for more.
Do you have an opinion on the current money management apps? I'm exploring Acorns, Betterment, Robinhood and Mint. I like the idea of Acorns rounding up your purchases to help you save, but the costs seem like they may be too high to justify saving money there. Also, Robinhood apparently allows for free trades but keeps some of the interest, which also doesn't sound ideal for small investments.
Yes, an opinion (i.e., not a proven fact): paying an unnecessary fraction of your investments to another company (e.g., Betterment) will not be favorable for you in the long run. Eventually (one hopes) you will have very little opportunity for tax loss harvesting because your investments will grow with time.

Something like Mint (or Quicken, or YNAB, etc.) that helps you understand where your money is going, however, can be worthwhile.
Are there any stock analysts/websites for stock information that you like in particular?
No.

gostars
Posts: 439
Joined: Mon Oct 09, 2017 7:53 pm

Re: Beginner investor seeking advice

Post by gostars » Fri Aug 10, 2018 4:35 pm

gostars wrote:
Wed Aug 08, 2018 12:19 am
Depends on what funds are available in your 401k. Of the $9500 you have in total, you might want to put 10% ($950) of that in bonds, preferably in your 401k. You could then put 60% ($5700) into the US stock market, using either FSTVX at Fidelity or a TSM or S&P 500 fund in the 401k, and the remaining 30% ($2850) into an international fund like FTIPX at Fidelity, or perhaps something in the 401k. How you split that up depends on the 401k. If it has no good, cheap international funds (often the case with 401k plans), then put the remaining $3050 in the 401k in the best US stock fund available, and then the Roth would be split $2850 FTIPX and $2650 FSTVX. This would put you at 90% stocks, 10% bonds, with 33% of the stocks in international.
Based on the funds available, here's how I would allocate them:
401k - $4000
$950 - VANG TOT BD MKT INST
$2440 - VANGUARD INST INDEX
$610 - FID EXT MKT IDX PR

Roth IRA - $5500
$2850 - FTIPX (total international stock market)
$2650 - FSTVX (total US stock market)

This gives complete stock market coverage for both US and international stocks at market weight and provides the asset allocation I mentioned above. In my opinion, Fidelity is a better choice for the Roth because you get access to the best low-ER funds with no minimums. Vanguard has $10,000 minimums to get into their lower-ER funds, and with a Roth split between two funds, that means 3-4 years of contributions plus growth to be eligible.

Mr.BB
Posts: 649
Joined: Sun May 08, 2016 10:10 am

Re: Beginner investor seeking advice

Post by Mr.BB » Fri Aug 10, 2018 7:39 pm

Snickers_On wrote:
Fri Aug 10, 2018 3:08 pm
Mr.BB wrote:
Wed Aug 08, 2018 1:25 pm
Congratulations on figuring out long-term investment at relatively early age. Always do the basics.
1 save as much as you can as long as you can starting as early as you can.
2) if your 401k offers a matching make sure you get it. That is free money.
3) Keep an eye on your expense ratios
4) Go online and play with some calculators. Expense ratios see what the difference is over 25-30 years on two different funds, it's shocking. Also play with saving calculators if you mKe 6% 7% 8% how much it adds up over 25 30 years.
5) Do not forget to have an emergency fund. Even if you start now just take even 25 bucks a month and put into a separate account that you never touch for anything but emergencies.
6) Since you're still pretty young, personally I wouldn't touch anything with a bond for 10 years then start adding it in around age 40.
6) When there are market corrections or recessions, try to save more.
7) Buffett said it best "you don't need a big snowball you just need a big hill."
So you wouldn't recommend an index like the total vanguard for my Roth IRA? I was going to allocate towards an index fund for the lower costs since they're not actively managed, but again I'm brand new and know nothing.

I do have an emergency fund - it doesn't hurt to add to it but it's around $7,000 now.

And just to confirm: it's common sense that you should max out your 401k and Roth IRA every year before any other type of investment?

Do you have an opinion on the current money management apps? I'm exploring Acorns, Betterment, Robinhood and Mint. I like the idea of Acorns rounding up your purchases to help you save, but the costs seem like they may be too high to justify saving money there. Also, Robinhood apparently allows for free trades but keeps some of the interest, which also doesn't sound ideal for small investments.

Are there any stock analysts/websites for stock information that you like in particular? I want to try out a small amount of money on a few stocks once I feel I have enough resource information to be regularly updated and know how to fairly assess the future of the business.

Thank you I really appreciate the help! You all are great!
$7000 for an emergency fund may seem like a lot to you, trust me I can go through that one good medical bill..lol. Sometimes more is better.
If your company is matching definitely max out which I believe is $18,500 if you can... it's free money! A total Market index funds excellent for a taxable account if you just start adding a little bit at a time to it over the years it will add up and it usually doesn't throw off much in capital gains so it's pretty tax friendly fund to use.
Ask for tracking I personally like using Personal Capital and I use Morningstar portfolio to give me a nice overview everything we have. Morningstar also has some excellent analysis programs and articles for stocks and funds. They have a two-week for free trial program and then I believe it's about $199 a year but it really covers a lot. Try for 2 weeks for free you can always cancel it.
Last edited by Mr.BB on Sat Aug 11, 2018 2:14 pm, edited 1 time in total.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

Snickers_On
Posts: 7
Joined: Wed Aug 01, 2018 10:09 pm

Re: Beginner investor seeking advice

Post by Snickers_On » Fri Aug 10, 2018 10:16 pm

gostars wrote:
Fri Aug 10, 2018 4:35 pm
gostars wrote:
Wed Aug 08, 2018 12:19 am
Depends on what funds are available in your 401k. Of the $9500 you have in total, you might want to put 10% ($950) of that in bonds, preferably in your 401k. You could then put 60% ($5700) into the US stock market, using either FSTVX at Fidelity or a TSM or S&P 500 fund in the 401k, and the remaining 30% ($2850) into an international fund like FTIPX at Fidelity, or perhaps something in the 401k. How you split that up depends on the 401k. If it has no good, cheap international funds (often the case with 401k plans), then put the remaining $3050 in the 401k in the best US stock fund available, and then the Roth would be split $2850 FTIPX and $2650 FSTVX. This would put you at 90% stocks, 10% bonds, with 33% of the stocks in international.
Based on the funds available, here's how I would allocate them:
401k - $4000
$950 - VANG TOT BD MKT INST
$2440 - VANGUARD INST INDEX
$610 - FID EXT MKT IDX PR

Roth IRA - $5500
$2850 - FTIPX (total international stock market)
$2650 - FSTVX (total US stock market)

This gives complete stock market coverage for both US and international stocks at market weight and provides the asset allocation I mentioned above. In my opinion, Fidelity is a better choice for the Roth because you get access to the best low-ER funds with no minimums. Vanguard has $10,000 minimums to get into their lower-ER funds, and with a Roth split between two funds, that means 3-4 years of contributions plus growth to be eligible.

Thank you! This is similar to what I was concluding on in terms of my 401k/Roth spending.

Post Reply