• The TUGBBS forums are completely free and open to the public and exist as the absolute best place for owners to get help and advice about their timeshares for more than 30 years!

    Join Tens of Thousands of other Owners just like you here to get any and all Timeshare questions answered 24 hours a day!
  • TUG started 30 years ago in October 1993 as a group of regular Timeshare owners just like you!

    Read about our 30th anniversary: Happy 30th Birthday TUG!
  • TUG has a YouTube Channel to produce weekly short informative videos on popular Timeshare topics!

    Free memberships for every 50 subscribers!

    Visit TUG on Youtube!
  • TUG has now saved timeshare owners more than $21,000,000 dollars just by finding us in time to rescind a new Timeshare purchase! A truly incredible milestone!

    Read more here: TUG saves owners more than $21 Million dollars
  • Sign up to get the TUG Newsletter for free!

    60,000+ subscribing owners! A weekly recap of the best Timeshare resort reviews and the most popular topics discussed by owners!
  • Our official "end my sales presentation early" T-shirts are available again! Also come with the option for a free membership extension with purchase to offset the cost!

    All T-shirt options here!
  • A few of the most common links here on the forums for newbies and guests!

Mutual Fund recommendation for young (20s) kid in 401k rollover

3kids4me

TUG Lifetime Member
Joined
Jun 16, 2004
Messages
1,876
Reaction score
12
Points
498
Location
Connecticut
Can anyone recommend a good mutual fund for a young, single kid for his first 401k rollover funds? He opened an account with Fidelity for the rollover, so something no load that they offer would be good.

I was thinking a regular large cap stock fund, and not an ETF so he doesn't have to watch it, but would like other opinions. Thanks!
 

PigsDad

TUG Member
Joined
Nov 1, 2006
Messages
10,072
Reaction score
7,075
Points
898
Location
Colorado and SW Florida
Resorts Owned
HGVC Elite: SeaWorld, Surf Club, Charter Club, Valdoro
An ETF is just a different method to buy a fund -- you don't need to track it any differently than a standard mutual fund. With that said, some of my favorites right now:

SPYG - ETF that tracks S&P 500, very low expense ratio (0.15%)
RSP - ETF that is an "equal-weight" version of the S&P 500; it doesn't let the larger-cap stocks dominate the fund
OAKMX - Large Cap mutual fund with a very good long-term track record

Kurt
 
Last edited:

3kids4me

TUG Lifetime Member
Joined
Jun 16, 2004
Messages
1,876
Reaction score
12
Points
498
Location
Connecticut
Thanks - this is a great start.

He has already put some in VTI - I think that's a large cap ETF, right? (Or maybe not...says "Total Stock Market.") What would be a good fund to balance that with? Appreciate it!

P.S. No bonds at his age, right?
 

kwelty

TUG Member
Joined
Jul 18, 2005
Messages
364
Reaction score
216
Points
404
Location
Charlottesville, VA
Resorts Owned
Outer Banks Beach Club II
Samoset Rockport, ME
Harbor Ridge MDI ME
Tree Tops Gatlinburg
I second that on the RSP, it has a better performance record than the S&P 500. Fidelity is a great financial company with low expenses.
 

"Roger"

TUG Review Crew
TUG Member
Joined
Jun 6, 2005
Messages
4,413
Reaction score
3,209
Points
598
Fidelity and Vanguard are both low on expenses.

You might look at the appropriate Vanguard Target Funds. (Target 2060, for example, is designed for people who would retire the year 2060 or thereabouts.) These are funds that automatically adjust asset allocation (bond vs. stocks) as retirement dates approach.
 

Paumavista

TUG Member
Joined
Jun 14, 2005
Messages
741
Reaction score
331
Points
424
Location
Seneca, SC
Our recommendation

Fidelity and Vanguard are both low on expenses.

You might look at the appropriate Vanguard Target Funds. (Target 2060, for example, is designed for people who would retire the year 2060 or thereabouts.) These are funds that automatically adjust asset allocation (bond vs. stocks) as retirement dates approach.

This is what we recommend for our kids.....depending on their ages and when they imagine they may someday like to retire. You don't have to do a lot of "thinking" or analysis.
 

SMHarman

TUG Member
Joined
Jan 14, 2013
Messages
4,171
Reaction score
86
Points
183
Location
NY NY
P.S. No bonds at his age, right?

No bonds. There is a school of thought that puts Social security into the bond pot so your bond investment should be reduced further still.
 

SmithOp

TUG Review Crew
TUG Member
Joined
Jun 17, 2010
Messages
7,609
Reaction score
3,403
Points
499
Location
Huntington Beach, CA
Resorts Owned
HGVC King's Land 2BR Premier 23.040K Points.
Fidelity and Vanguard are both low on expenses.



You might look at the appropriate Vanguard Target Funds. (Target 2060, for example, is designed for people who would retire the year 2060 or thereabouts.) These are funds that automatically adjust asset allocation (bond vs. stocks) as retirement dates approach.


I have mine with Fidelity Target Date fund but I picked when I will be 70 and have to start RMDs rather than retirement date, although for kids nowadays it might be the same if they keep pushing out the SS date.


Sent from my iPad Mini 4 using Tapatalk
 

geekette

Guest
Joined
Jun 6, 2005
Messages
10,777
Reaction score
5,531
Points
848
Diversify among large and small, domestic and international stocks. Don't bother with bonds, growth is more valuable to him at this point.

Index-mirroring funds generally have lowest expenses and ETFs are generally less expensive but may require trade fee to buy/sell where mutual funds generally are commission free. I don't do funds much but owned SPY and DIA altho I do not know if Fidelity offers them.

Please congratulate him on having savings to roll over and being smart enough to roll to self.
 

artringwald

TUG Review Crew
TUG Member
Joined
Apr 22, 2011
Messages
4,737
Reaction score
3,679
Points
448
Location
Oakdale, MN
Resorts Owned
DRI: The Point at Poipu, 3 deeded weeks, 1 of which is in The Club.
How much does he have to invest? Many funds have minimum purchase limits. If there's not enough for the limit, ETF's are the answer. Funds usually don't have any commission for buying and selling like ETF's do, but if your just looking for a single long term investment, that won't matter.
 

dioxide45

TUG Review Crew: Expert
TUG Member
Joined
May 20, 2006
Messages
47,354
Reaction score
18,922
Points
1,299
Location
NE Florida
Resorts Owned
Marriott Grande Vista
Marriott Harbour Lake
Sheraton Vistana Villages
Club Wyndham CWA
An index fund is probably the best option. It isn't very often that an actively managed fund will consistently beat the indexes, especially when the extra fees of an actively managed fund are included.
 
Last edited:

Talent312

TUG Review Crew: Veteran
TUG Member
Joined
Jul 4, 2007
Messages
17,461
Reaction score
7,277
Points
948
Resorts Owned
HGVC & GTS
Two large-cap ETF's in my IRA's are --

... SPHQ (S&P500 High Quality) -- 130 holdings w/emphasis on industrial and consumer discretionary sectors:
Gap, 3M, McCormick, TJX Companies, Omnicom Group, W.W. Grainger, Emerson Electric , Church & Dwight, C.H. Robinson, Hormel Foods.


... IWY (Russell Top200 Growth) -- Top 10 Holdings:
Apple, Microsoft, Facebook, Amazon, Alphabet Inc. (Google), Verizon, Coca-Cola, Disney, Home Depot.
.
 
Last edited:

taterhed

TUG Member
Joined
Sep 28, 2011
Messages
4,536
Reaction score
1,901
Points
399
Location
Virginia
Resorts Owned
Westin WKORV OFD
Marriott's Grande Vista
Worldmark x2
SVV Bella 81k
Fidelity life-cycle fund. Set it, forget it. Easy for young investors that don't need to start 'tinkering' with their investments and desire growth.

Here is the link to set your fund date and view the results:
https://www.fidelity.com/mutual-funds/fidelity-fund-portfolios/freedom-funds

Based on twenty-something (25) retiring at 65 (40 years):

Fidelity Freedom Fund 2055


63% Domestic Equity Funds
27% International Equity Funds
10% Bond Funds
0% Short-Term Funds
https://fundresearch.fidelity.com/mutual-funds/summary/315793851
 

SMHarman

TUG Member
Joined
Jan 14, 2013
Messages
4,171
Reaction score
86
Points
183
Location
NY NY
How much does he have to invest? Many funds have minimum purchase limits. If there's not enough for the limit, ETF's are the answer. Funds usually don't have any commission for buying and selling like ETF's do, but if your just looking for a single long term investment, that won't matter.
Funds have a 'load' instead of a trade commission. They also have a wider bid offer spread.
 

artringwald

TUG Review Crew
TUG Member
Joined
Apr 22, 2011
Messages
4,737
Reaction score
3,679
Points
448
Location
Oakdale, MN
Resorts Owned
DRI: The Point at Poipu, 3 deeded weeks, 1 of which is in The Club.
Funds have a 'load' instead of a trade commission. They also have a wider bid offer spread.

None of the Fidelity or Vanguard funds that I've bought had a load.
 

3kids4me

TUG Lifetime Member
Joined
Jun 16, 2004
Messages
1,876
Reaction score
12
Points
498
Location
Connecticut
Thanks again!

Some things I found out while helping him with this:

1. Many ETFs (at least through Fidelity) do not require a commission to buy - this is great for the young investor with minimal funds

2. Even Fidelity's Freedom Fund for his projected retirement year has 10% invested in bonds!


So with that info, I put 10% in a no-commission bond ETF (which we can always move if we decide that it is too conservative) and 90% in a total stock market ETF. (This one had a commission but was worth it given the amount going in.)

Thanks again for the advice!
 

easyrider

TUG Review Crew: Elite
TUG Member
Joined
Aug 21, 2005
Messages
15,044
Reaction score
8,001
Points
948
Location
Palm Springs of Washinton
Resorts Owned
Worldmark * * Villa Del Palmar UVCI * * Vacation Internationale*

dioxide45

TUG Review Crew: Expert
TUG Member
Joined
May 20, 2006
Messages
47,354
Reaction score
18,922
Points
1,299
Location
NE Florida
Resorts Owned
Marriott Grande Vista
Marriott Harbour Lake
Sheraton Vistana Villages
Club Wyndham CWA

artringwald

TUG Review Crew
TUG Member
Joined
Apr 22, 2011
Messages
4,737
Reaction score
3,679
Points
448
Location
Oakdale, MN
Resorts Owned
DRI: The Point at Poipu, 3 deeded weeks, 1 of which is in The Club.
And what is their bid offer spread.

Their bid offer spreads aren't an issue, at least not directly, because the funds are priced just once a day, and everyone pays and receives that same price. When I'm ready to trade, I track a similar ETF near the close of the market to decide whether I want to trade that day.

They both discourage frequent trading of most their funds (money market funds excluded), but in different ways. I like Vanguards method better. If you sell a fund they won't let you buy it back for 1-2 months, depending on the fund. You can sell anytime. Fidelity lets you buy it anytime, but if you sell too soon you get charged a fee. The first time I sold too soon I got a tsk-tsk-tsk phone call and they waved the fee. I do most my trading on Vanguard to rebalance. I'm a big fan of couch potato investing.
 

cgeidl

Tug Review Crew: Rookie
TUG Member
Joined
Jun 13, 2005
Messages
1,081
Reaction score
124
Points
273
Location
Fairfield,CA
For the Young

Invest in Growth. Try FANG Facebook,Amazon,Netflix,and Google(now alphabet) I will bet a million to one if I am living that this will beat any of the other recommendations for 2060. Only Problem is I will be 125 years of age then and will claim I never wrote this. Seriously go for growth in major growing companies.
 

SMHarman

TUG Member
Joined
Jan 14, 2013
Messages
4,171
Reaction score
86
Points
183
Location
NY NY
Invest in Growth. Try FANG Facebook,Amazon,Netflix,and Google(now alphabet) I will bet a million to one if I am living that this will beat any of the other recommendations for 2060. Only Problem is I will be 125 years of age then and will claim I never wrote this. Seriously go for growth in major growing companies.
Have you forgotten how a tech heady portfolio crashed and never recovered in the web 1.0 dot com boom bust.

Diversification is critical to all portfolios.
 

Talent312

TUG Review Crew: Veteran
TUG Member
Joined
Jul 4, 2007
Messages
17,461
Reaction score
7,277
Points
948
Resorts Owned
HGVC & GTS
Some things I found out while helping him with this:
1. Many ETFs (at least through Fidelity) do not require a commission to buy - this is great for the young investor with minimal funds
2. Even Fidelity's Freedom Fund for his projected retirement year has 10% invested in bonds!

So with that info, I put 10% in a no-commission bond ETF (which we can always move if we decide that it is too conservative) and 90% in a total stock market ETF. (This one had a commission but was worth it given the amount going in.)

IMHO, that's fine.
"They" say to use this age-based this formula to determine your stock/bond ratio: 110 - your age... so 110 - 30 = 80-stock/20-bonds. It makes sense that, as you age, you'll want less risk and more stability while allowing for some growth.

For Bonds: I prefer active management (no-load MF's) over an indexed-based ETF becuz I want someone at the helm selecting for risk. I also buy individual bonds becuz, even if bonds lose value due to rising interest rates, you'll still get their face-value back at maturity.

For Stock: I use a spreadsheet with Morningstar data to track and rank selected ETF's + No-Load MF's in four classes -- Large Cap, Medium-Cap, Small-Cap and Foreign. Generally, over time, Large-Cap's have done better than the others, and ETF's have done better or as well as the MF's.

Of course, one-size does not fit-all and YMMV.
.
.
 
Last edited:

bogey21

TUG Member
Joined
Jun 8, 2005
Messages
9,455
Reaction score
4,662
Points
649
Location
Fort Worth, Texas
This may be a way out thought as I don't know how much the young guy has or even if the product is available at his age. Nonetheless, I would look and see if a Deferred Annuity is available. If it exists, he could pick the starting age somewhere between 65 and 80 for annuity payments to start. Like I said "a way out thought".

George
 

Talent312

TUG Review Crew: Veteran
TUG Member
Joined
Jul 4, 2007
Messages
17,461
Reaction score
7,277
Points
948
Resorts Owned
HGVC & GTS
This may be a way out thought as I don't know how much the young guy has or even if the product is available at his age. Nonetheless, I would look and see if a Deferred Annuity is available...

Sorry, but I have'ta say this is not a good idea. IMHO, no 20-something should be looking at any sort of annuity. These no reason for a young-person (or for that matter, anyone still building retirement funds) to tie up their $$ that way, or pay the hefty fees that insurance companies charge for doing what? Managing your investments the same way you could yourself, for free.

They serve a certain niche for those who need the security, but as for me: I'm not a fan.
 
Top