mutual fund selection advice
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Anonymous
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I'm early 40s, plan to work until my 70s, have real estate investments and assets but not much in retirement accounts unfortunately. I'm working on that now as my new job provides a safe harbor and I can afford to also max out the annual contributions.
So that preface aside, I'm rolling about $100K from a prior 401K into an IRA (a Fidelity account). I did a search for Fidelity funds with Morningstar ratings of 4stars or more, low fees and then with good to high returns. Many of the funds returned were industry specific - biotech, IT, etc. What do you think about putting about $25K into four of these separate industry funds (very separate industries). the funds are a good mix of large cap and mid cap, but definitely growth and aggressive long-term. |
Anonymous
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you should have exposure to international as well.
growth is ok. agressive is more risky. look at the risk index and see if you can handle that. if it goes down 50% in a year, will you freak out and want to sell it? |
Anonymous
| OT but if you get charged a rollover fee you can ask Fidelity to reimburse you for it. I just found out today so wanted to share the good news. |
Anonymous
| personally I think you are chasing returns and are likely to be disappointed. I would just go for a broad based index fund and whatever industry does well you'll get a share of those gains. |
Anonymous
OP here. I tend to agree with this, but the IRA I'm rolling it into already has maybe $15OK in it with mostly index or large cap growth type funds. Shouldn't I diversify a bit more? |
Anonymous
no. you are diversified by being in the broad market. if you have no int'l that might be a way you could diversify, but I wouldn't try to diversify by putting money into sector funds. I once had a brokerage employee tell me I wasn't diversified unless my money was in different mutual funds and I laughed at him and rolled my funds to somewhere else. |
Anonymous
What if that particular fund's manager is an incompetent hack, though? |
Anonymous
You have about 25 years before you retire (70). Put all your retirement funds into Vanguard 2040 Target Fund. By doing this, you achieve diversified, automatic re-balance each year, automatic re-invest your dividend, and re-allocate as you age. |
Anonymous
that's why you either find a manager you believe in or (what I eventually came around to) buy an index fund. |
Anonymous
Buy an index fund and please don't plan to work until you're 70. If that works out, great, but you may have to retire earlier so be prepared. |
Anonymous
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Total stock index, international stock index, total bond index. Done. Don't over think it by trying to outsmart the market and pick sectors or industries.
Below is from people far more knowledgeable than me. www.bogleheads.org/forum/viewtopic.php?f=10&t=88005 |
Anonymous
+1. Exactly what I was going to say. For your age, maybe 65%, 15%, and 20% respectively. "Done." |
Anonymous
Vanguard Target Funds have all the mentioned indexes plus re-balance and reallocation for you each year as you approach your retirement. |
Anonymous
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Your plan is bad. You will be over- exposed to certain sectors.
Suppose you are 25 percent in healthcare, and then price CSS are introduced in ten years time. A big chunk or your portfolio could go down. Better to take the advice here - vanguard 2040' or at least a broad-based equity fund with low fees for most of the money. |
Anonymous
| How much retirement money do you have saved and what is your income? |