Managed Funds Performance
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Patsy Said:
How to manage your own portfolio online without allowing brokerage fees to take too much of your money?We Answered:
It sounds like you have a good handle on the issues that you will confront. Modern portfolio theory says that you optimize your portfolio where you have maximum returns given the risk of the investments. Remember that the market only rewards you for market risk and not individual firm risk, so diversification, like you are looking for, is the way to go. Unfortunately, there are some studies that show that you begin to approach market risk in your portfolio once you have bought between 30 and 50 stocks. In addition to the brokerage costs, the time that you would spend actively maintaining a portolio to be truly diversified would amount to a full time job (not to mention the headache of doing your taxes with all the gains and losses). Mutual funds offer some of the benefits of diversification, but will cost you if you are not careful in selecting based on load and management costs. Over the long term, very very few portfolio managers continually beat the market, and the ones that do charge a premium for their services (look at Warren Buffet of Berkshire Hathaway) which erodes your gains. Typically, the easiest and cheapest way to diversify it to buy index funds. Since these fundes are constructed and maintained by a computer to mirror the risk of the market, the idea is that you receive what the market returns over the long term. An additional benefit of these funds is that you do not need to worry about management tenure, turnover within the fund, or any of the other considerations normally associated with actively managed funds. Hope this helps.Daryl Said:
What gives a better performance an index fund or an actively managed fund?We Answered:
depends on the manager and what the fees are.... probably the index fund the way the market has been latelyCory Said:
Are there fees associated with rolling over a 401k to an IRA?We Answered:
EJ is a commissioned based brokerage, and will try to steer you into A,B,C funds with front load fees and often higher annual maintenance fees.That is how their sales reps get paid.
I would look at Vanguard, Charles Schwab, and Fidelity.
Get a recent copy of Barrons and see which mutual funds you are interested in. Then see who offers them, and how much it will cost you to buy in.
The fund expense ratio is how the fund management team is compensated. You should try to find no-load, low exp.ratios when dealing with most mutual funds.
Fernando Said:
This is what I have so far but i need help with choosing the 5 mutual funds Can anyone help me out?We Answered:
Don't forget to set aside $20K (or an amt that will grow to $20K) for Cliff's wedding in 3 years - that's short-term money, and should be kept in "safe" investments. Also (I don't know if your prof cares about this), Cliff should have an emergency fund equivalent to 6 months' living expenses - this should also be kept in safe investments.For retirement, I would allocate as follows:
VFINX - 30%
FDIVX - 20%
FSLCX - 15%
FSICX - 20%
TRREX - 15%
I hope that helps. Good luck!
Darryl Said:
Doesn’t the media make more jokes about Hillary because of her poor performance?We Answered:
Well, almost two decades of her poor performance is good fodder for them. Let them have their fun, she deserves it.