Mutual Funds

>day trading NEET can't into dca

lol

Further expanding on this, you shouldn't expect to get rich from this. I use my Roth IRA as a sort of high-interest savings account. If you invest small amounts regularly, you'll be more or less shielded from fluctuations in the market. Yes, you'll miss out on the thrill of putting all your money in at the dip, but you'll also be protected from ruin if you put all your money in at the peak. I've been contributing 5500 a year (the cap for a Roth IRA) for the past 3 years and I'm at a total gain of 12%, which sure beats the hell out of what you'd get from a savings account.

Another benefit is that index funds generally have small or no fees and low expense ratio, so you get to keep more of your money.

The main reason I was advised to avoid IRA is that the taxes will fuck you when it comes time to pull out money compared to a mutual fund. Is that inaccurate, or do you think IRA gains outpace mutual fund gains enough to offset this? Also can I into IRA with a meager initial investment like I can with some mutual funds?

Okay, it sounds like you're misunderstanding what an IRA is.

It's basically an investment account. You add money to your IRA and you can use it to buy stocks, bonds, and mutual funds. Capital gains in an IRA are tax free if you withdraw after age 59.5. If you use a regular brokerage account you have to pay taxes on your gains.

You should research the differences between a Roth and a traditional IRA, but if you plan to use it as a sort of high-interest savings account, I would suggest getting a Roth IRA. Money you contribute to a Roth is after-tax, so you don't pay any taxes on it when you withdraw (after age 59.5). However, you can withdraw your principal (the amount you put in) at any time without tax penalty. You just can't touch any of your earnings/gains until you're old.

For example, if you contribute $5500 to your Roth IRA this year and have a gain of 10% (total account value 5500+550=6050), you can withdraw up to 5500 (your contribution) at any time without penalty.

Does that make sense? You can still buy mutual funds through your IRA, that's all the same.

Perfect sense. So yeah, a Roth IRA used to buy into a mutual fund sounds great. I guess my only question is if there are similar options that won't tax me before I'm a geezer, or won't punish me quite as harshly as the taxes may entail.

I'm also partly doing this with the advice that mutual funds are likely to have a better ROI than a 401k. My company isn't matching a whole lot and the advice was "Only invest as much as your company will match 100%, otherwise you're losing money". He may have just been cynical about 401k's though.

Vanguard

?

FCNTX

triggered

>FCNTX
Is this a stock code or something?

Sorry if this and "Vanguard" are easily-googleable, I've been checking in on breaks and I don't know how fast this board is yet.

A 401(k) is basically an employer sponsored IRA. You can buy mutual funds with the money in your 401(k), too. 401(k)s are generally pre-tax (unless your employer offers a Roth option), so you'll be taxed on it when you withdraw from it as a geezer, with the assumption that you'll be in a lower tax bracket then. My suggestion is that you contribute whatever % your employer will match. My employer matches the first 4% and half of the next 4%, so I contribute 8%. That's extra free money that you can put into your mutual funds.

You could alternatively open a regular brokerage account at Etrade, Fidelity, Schwab, etc, but then you're subject to yearly capital gains taxes. If you just want to beat your bank's savings account, you could open a savings account with an online bank like Ally or GE Capital (~1% APY) which have higher interest rates than banks that have physical branches. Or you could get a CD, where you give a bank some amount of money that they return X years later with something like 1.3% annual interest.

If you're trying to beat inflation, you're going to want to invest. My suggestion would be to open a Roth IRA with Fidelity or Vanguard and buy an index fund that tracks the S&P500 or the total stock market index. It's a good strategy if you don't have a huge amount of time to handle investing and just want to buy and hold.

For Fidelity, I would recommend FUSEX or FSTMX. (these are the fund symbols - all mutual funds are 5 letters and end in X)

Also OP, you should look up "dollar cost averaging", it's a straightforward investment strategy that won't get you rich but will help you make meaningful gains in the long run.

If you are going to look into CDs or better savings accounts, Barclay's offers high interest

Thank you for this wealth of info.

Currently I'm contributing to my 401k the same way you do here (it's 100% at 3%, 50% for the next 3% or something similar). You reminded me, my company recently offerend free year-long trials of a fiduciary 401k management service, and I signed up so I'll be taking advantage of that soon. This knowledge will help.

I think I prefer to have my account separate from my company, because I don't see myself being here until I'm old as shit and I don't want the 401k to be a complication in the case that I find a better position.

Also, I currently have Alliant through my job, and my savings accts both have 1%APY. This is where my paltry savings live right now.

Thanks. I've been given the impression that mutual funds will have a better return in the long run, although CD's are likely more reliabe. Is that wrong?

Looks like my ID changed.

Why are there ID's on this board?

>I don't want the 401k to be a complication in the case that I find a better position.
Normally, they'll let you roll your 401k over into an IRA or your new employer's plan. The employer match portion might take some time to fully vest, though.

What funds are your 401k contributions currently invested in? Employer 401k's usually only let you choose from a small list of funds.

>mutual funds will have a better return in the long run, although CD's are likely more reliabe. Is that wrong?

That's more or less correct. You're guaranteed a return on CDs, albeit a pretty pathetic one. With mutual funds, you'll be royally fucked if we enter a recession right when you retire, but barring that you're almost guaranteed to have a healthy gain by the time you're a geezer.

>Normally, they'll let you roll your 401k over into an IRA or your new employer's plan. The employer match portion might take some time to fully vest, though.

Oh, sweet. I don't think the vesting time is too ridiculous here but I don't recall it offhand. If I already had an IRA elsewhere would I likely be able to add my 401k into that account?

>What funds are your 401k contributions currently invested in?

I have no idea. Hopefully it's listed on my company profile. I don't recall making a choice for specific investments, I basically just chose to contribute with little more understanding than "it'll be saved" and "it'll be matched". There was probably a default "we'll do it for you" portfolio and I went with it. I'll check in a minute; I know I also kept paperwork I was mailed about the plan.

>That's more or less correct. You're guaranteed a return on CDs, albeit a pretty pathetic one. With mutual funds, you'll be royally fucked if we enter a recession right when you retire, but barring that you're almost guaranteed to have a healthy gain by the time you're a geezer.

Got it. I assume that after amassing more direct savings, and with more careful attention, it will eventually be worthwhile to make some riskier, shorter-term investments with a portion of the IRA principal/eaenings.
All this shit is reminding me, what does Veeky Forums think of Acorns?

>riskier, shorter-term investments with a portion of the IRA principal/eaenings.

read this:
sixfigureinvesting.com/2010/01/trading-in-ira-accounts-and-avoiding-free-riding/

Also, read up on fundamental analysis if you have some time. It'll help you pick stocks.
.

Looks like I overestimated my company.

> for every $1 you contribute, we contribute $1 on the first 1% and $0.50 on on the next 5% for a total match of 3.5%

I believe I'm on the auto-enroll rate of 3%, so I'll want to bump that up.

Also:
> Contributions will be invested in an age-appropriate Vanguard Target Retirement Fund based on D.O.B. and est. retirement age of 65

Apparently there are other investment options but the website to manage my 401k doesn't really give me options to change anything, suggesting I'll need to call the bank.

Also, looks like there is a Roth option, and vesting is at the 2yr mark.

After some more reading it looks like some of my misconceptions about "mutual funds vs IRA" were actually accurate "roth IRA vs traditional IRA" contrasts. Gonna up my contribution to the max company-matched, switch to Roth contributions, and I'll look into specific funds with the fiduciary guys.

I love it when I'm right about someone.

After some more thought, I'm doing a 50/50 split for traditional and roth until I do some more research and decide if I want to use the 401k as my primary investment vehicle or open an IRA additionally. I'll be amazed if I retire in a lower tax bracket than I currently am, but it's still feasible.

Please elaborate on your smug certitude.

id's change every day

they are there to stop samefagging of course

with Trump, a fund that tracks small & mid cap.

PLEASE DO NOT EVER VISIT THIS BOARD AGAIN!!!

I come her for lol's because every time I think people can't be more wrong about investing, they get wronger here.

You are on the right track, kind of.

How old are you? If you are in your 20s or early 30s, set up whats called a

>Vanguard brokerage account

very easy to use, you will need a 3k minnimum to start buying the fund called VFINX it is super low cost well diversed mutual fund that tracks the s and p 500

when you get up to 10k the plan swithces to whats called "admiral shares" and its the same fund but the expenses drop even lower! lowest in the industry.

Start there, but after you get that savings transffered and set up and auto deposit out of your checks to the fund. Start reading investing books, and please never come back here

t. a 28 year old with a 220k account balance while only making around 66 a year

So "do not ever visit this board again" translates to "get better investment advice somewhere else, like from books"

>you will need a 3k minnimum to start buying
Lol, maybe on a year

> set up [an] auto deposit out of your checks to the fund
This was my intent from the beginning, after figuring out where to invest on the first place

>t. a 28 year old with a 220k account balance while only making around 66 a year
I'm way behind, and I make less, but it's a start. Thanks.

> Vanguard brokerage account
Do you suspect a 401k won't let me buy into Vanguard or do you just think getting a separate brokerage account is better for other reasons?

Spent all morning looking into brokerage accounts and Money Markey accounts since I'll need more to make the initial investment for most funds. Turns out my credit union also offers a lot of investment options and I understand enough to start comparing them to other options.

Thanks Veeky Forums, this basically what I came here for.