401k and the "censored" curve

[JHZR2]

Your point "There will be a big expansion in the future." is right on in my opinion.

No arguments there. It’s a matter of allocation and DCA. I will say the one thing I don’t own is a dedicated tech index or fund. Many of the big tech companies end up in other funds of course. Ive never really looked into past history of performance, say, 1990 onwards, of evolving tech companies versus the broader market...

 

[JeffKeryk]

FAANGM

 

[Vern_in_IL]

I got my investment mix right now:

9% Principal lifetiem 2040
9% Fideltiy 500 index fund
15% Principal LargeCap Growth I Separate Account
20% Janus Henderson Enterprise N Fund
15% Principal MidCap S&P 400 Index
15% Principal SmallCap S&P 600
15% Invesco International Small-Mid Company A Fund

Any advise on this mix?
My "T. Rowe Price/Brown Advisory Principal LargeCap Growth I Separate Account" is lowest performing at .55% rate of return.
Fidelity 500 Index Fund is at 1.74% rate of return
Principal LifeTime Hybrid 2040 is at 3% rate of return, all others are 5+
Rate of return was based on a September the 1st start date, the Covid "V" was not included.

 

[Dave Hess]

Vern,

Looks like a balanced and very conservative mix.

 

[Fattylocks]

.

 

[Gladtojoin88]

I agree with pretty much everything you said. I am not a market timer either. I buy and hold. At 57, I have a very nice portfolio, and I own 10 homes, half of which are paid off free and clear, with just small mortagages (

Ambition for me !!!

 

[Vern_in_IL]

Vern,

Looks like a balanced and very conservative mix.

Yes, I need to go Riskier, so Should I stick with this 401K as is and start investing in like Schwab market "slices"? I can shave off 10% of my paycheck for something more risky.

 

[dareo]

There is a lot of gaming in the market. On Monday there was a health related announcement and 3 of my stocks shot up 30% in a day. 2 REITs and one refinery company but all had the same percentage gains. I knew at some point this year we would have this announcement but i never imagined things would jump so high. Traders were ready to move assets immediately. So you never know what will happen next.

 

[Wolf359]

I got my investment mix right now:

9% Principal lifetiem 2040
9% Fideltiy 500 index fund
15% Principal LargeCap Growth I Separate Account
20% Janus Henderson Enterprise N Fund
15% Principal MidCap S&P 400 Index
15% Principal SmallCap S&P 600
15% Invesco International Small-Mid Company A Fund

Any advise on this mix?
My "T. Rowe Price/Brown Advisory Principal LargeCap Growth I Separate Account" is lowest performing at .55% rate of return.
Fidelity 500 Index Fund is at 1.74% rate of return
Principal LifeTime Hybrid 2040 is at 3% rate of return, all others are 5+
Rate of return was based on a September the 1st start date, the Covid "V" was not included.

What are you trying to achieve? Most of those funds look ok. You should really compare them from the beginning of the year and include the bear market because that tells you how it performs in both an up and down market. Year to date would be a good way to tell how they're doing compared to other funds. Most of them seem to do ok vs the index that they're tracking. Some of them seem to have high expense ratios. I'm not a fan of that 400 or 600, they've only had a couple good years and the rest they've trailed the S&P 500. I've always hated international funds because on average they haven't done as well as the US market although everyone keeps claiming that they're the next big thing. Got tired of them under performing in the meantime. You could consolidate to fewer funds funds and make the S&P 500 a larger core holding. Compare the performance of those funds to the S&P 500.

 

[Dave Hess]

Yes, I need to go Riskier, so Should I stick with this 401K as is and start investing in like Schwab market "slices"? I can shave off 10% of my paycheck for something more risky.

Like what others have mentioned, technology is substantially driving these markets up. That’s why I recommend having a dedicated technology ETF or mutual fund in your portfolio.

I agree with Wolf to consolidate 6 or 7 of your current holdings into the S&P 500.

.

 

[gfh77665]

I let Fildelity Portfolio Advisory Service manage about 50% of my portfolio. I manage my 401K and company stock plan. Fidelitys PAS does a great job "tilting" the portfolio as market conditions change. They do charge a fee of about 1.5%, but it has been more than made up in its performance. They do a great job limiting the downside risk for me, while taking advantage of the dips along the way. I highly recommend it.

 

[Dave Hess]

I agree with pretty much everything you said. I am not a market timer either. I buy and hold. At 57, I have a very nice portfolio, and I own 10 homes, half of which are paid off free and clear, with just small mortagages (

Just wondering whats the total value of your 10 homes ?

Ball park estimate ?

.

 

[gfh77665]

Just wondering whats the value of your 10 homes ?

Ball park estimate ?

.

A very rough guess would be 2M total value, then subtract out what I owe in mortagages (400K), so net worth of real estate I actually own outright is about 1.4 or 1.5M.

 

[Dave Hess]

A very rough guess would be 2M total value, then subtract out what I owe in mortagages (400K), so net worth of real estate I actually own outright is about 1.4 or 1.5M.

Those were very wise investments you made over the years.

 

[gfh77665]

Yes, I saved diligently all my life and when the financial crisis hit, there was an abundances of foreclosures to pounce on. I bought most these homes for 50 cents on the dollar, then I rented them out. It was a gamble at the time, panic was in the streets, but it paid off pretty well.

 

[Dave Hess]

Any plans to buy more property next year when the big wave of foreclosures hit ?

2021 will have lots of opportunities for people with cash on the sidelines waiting to swoop in and buy....

 

[gfh77665]

Funny you mention that. I have a home a renter just moved out of one, so I did a light remodel and just listed it. I am also putting the finishing touches on the last home I bought, a flood home rebuild. So I will market two homes, cash in, and wait for an good opportunity to buy again. Right now its a sellers market.

So you can see I am a contrarian investor. I buy homes in times of panic or distress, and opportunistically sell when prices are high. Incidentally, this whole real estate thing is just a sideline for me. I have a regular full time job, 35 years and counting.

 

[PandaBear]

Inflation is the enemy. A million dollars is not what it used to be.

I would not set targets.

This. I am not happy with these sky rocket growth because this is really more of a panic buy on inflation.

 

[PandaBear]

Well done on your AMD. I believe the tech sector is only poised to grow.
The sector was originally semiconductors, computing hardware, and communications equipment.
Then came software companies, pretty much anything coding.
These 2 enabled the Internet. The 'net gave us e-commerce, social media and crowd share (Waze), and cloud based computing.
And now companies like Tesla are considered not so much a car company but a tech company.
Apple is building an EV. Oh yeah, have you seen the lines at the Apple Store? Heck, you need an appointment to get in!

I understand that my tech optimism is fueled by living in the Silicon Valley bubble. Optimism abounds here; I have it in spades.
Again, well done on your AMD stock. AMD was down and out for years; now they are a Valley darling once again.

You are probably just smarter and more logical then I am... Ha!

It is easy to cherry pick one or two winner after the fact. People sees how FB is winner but not the smaller guys they crushed along the way. They also didn't see how Intel, Nvidia, becomes so big by crushing all the smaller chips companies. Or Amazon, Expedia, etc. I believe in the days of low interest rate going to tech companies that invest heavily and winning is a great strategy, rather than dividend stocks that are stagnant and then suddenly go out of businesses.

I think the original idea of ETF fund investment is not which company is the best, but rather low cost and diversify. People said SNP 500 is overpriced, but they didn't mention 1) most of the growth came from the top several companies (FAANG for example), and 2) they can always diversify more into smaller cap stocks so they don't overpay. It doesn't mean managed fund is less overpriced, because they have the problem of picking the winner and overhead to pay for. Merrill Lynch once suggested me to buy BRIC based investment fund because they were great and diversify from tech. I'm glad I didn't listen and stay with tech stocks that I know well.

I bought a lot of AMD stocks back when they finally sold their FAB and the go fabless. I think I have 1/3 of my portfolio in it, bought when they were $7 and again when they were $28. Did the same when I found out MSFT were mostly a cloud data center company and they are #2 in the business as well. I'll do the same the day Intel fix their foundry business / going fabless, but I'll stay away for now.

I'll stay away from dividend stocks for a while, especially since I'm from a state with high income tax and interest rate is super low right now.

 

[JHZR2]

What are you trying to achieve? Most of those funds look ok. You should really compare them from the beginning of the year and include the bear market because that tells you how it performs in both an up and down market. Year to date would be a good way to tell how they're doing compared to other funds. Most of them seem to do ok vs the index that they're tracking. Some of them seem to have high expense ratios. I'm not a fan of that 400 or 600, they've only had a couple good years and the rest they've trailed the S&P 500. I've always hated international funds because on average they haven't done as well as the US market although everyone keeps claiming that they're the next big thing. Got tired of them under performing in the meantime. You could consolidate to fewer funds funds and make the S&P 500 a larger core holding. Compare the performance of those funds to the S&P 500.

Agree. I’ve always felt like small cap or especially mid cap should return well since that’s where you could pick up the rising stars, but I can’t objectively ever found that that materializes. I’ve had a few good years with my small cap index. I bought some mid cap index over the last year or two and it hasn’t been compelling thus far...

Agree too on international and emerging markets funds. They perform occasionally but not consistently it seems.

I’ve never looked to see if there’s any benefit to some other index that includes a number of the others to be more diverse but pick the best percentage of each. Maybe some 1000-ish share index? But I’m sure if that was a thing that outperformed, it would be discussed as a competitor to the S&P 500 index.