Investors Enter

[airportis]

I am 20 and just started a job at BMW for the time being until I get hired at a Fire Dept. I am working in the lot doing basically nothing getting paid $9 an hour. I do get benefits though and tomorrow have a meeting to start up my 401k.

The company matches up to 4% I believe, so I will take full advantage of that.

I am looking for advice on the funds they have for me to choose from. I am only 20 so I want to be aggressive.


Here are the funds....


MFS International Growth A MGRAX

ING International Value A NIVAX

Group 1 Automotive Inc. Common Stock (cannot exceed 30%)

Delaware Trend Fund

Allianz NFJ Small Cap Value Fund

American Funds Growth of America

Merrill Lynch Fundamental Growth Fund, Inc. (Class l) *couldnt find this one

Merrill Lynch Equity Index Trust *couldnt find this either

Van Kampen Growth & Income Fund

Oakmark Equity & Income Fund

Merrill Lynch Bond Fund Core Bond Portfolio *couldnt find

Merrill Lynch Retirement Preservation Trust *couldnt find


Any advice would be greatly appreciated! :00hour

 

[hedgehog]

American Funds are the best in my opinion. good luck

 

[vinnie]

Smart move you may what to post that here
http://www.madjacksports.com/forum/forumdisplay.php?f=45

 

[The Sponge]

These were my last investments so my advice is not so good.

If you had purchased $1000.00 of Nortel stock one year ago, it would
now be worth $49.00.

With Enron, you would have had $16.50 left of the original $1000.00.

With World Com, you would have had less than $5.00 left.

If you had purchased $1000 of Delta Air Lines stock you would have
$49.00 left

But, if you had purchased $1,000.00 worth of beer one year ago, drunk all the beer, then turned in the cans for the aluminum recycling REFUND, you would have had $214.00.

Based on the above, the best current investment advice is to drink
heavily and recycle.

It's called the 401-Keg

 

[BobbyBlueChip]

Int'l growth

 

[Morris]

You are young and it is smart to take the free money that the Co. offers. I always say take the most aggressive they have to offer at a young age. In fact I'm semi-retired and I'm still in the most agressive! The most important thing is don't touch it!! So how's the fire thing working out? GL!

 

[airportis]

You are young and it is smart to take the free money that the Co. offers. I always say take the most aggressive they have to offer at a young age. In fact I'm semi-retired and I'm still in the most agressive! The most important thing is don't touch it!! So how's the fire thing working out? GL!

Its going good, just waiting for the list to come out now.


The 3 I like most are

Van Kampen Growth & Income Fund

Oakmark Equity & Income Fund

American Funds Growth of America

:shrug:

 

[johnnyb.]

airportis,
kinda off subject but i wanted to know if your dealership sells mini coopers? if so is there a wait to receive one?
thanks & DELTX looks promising...

 

[saint]

Make sure the american funds isn't front loaded with their usual 5.75% fund fee, which comes out of your pocket into theirs. Their A fund usually is front loaded with the 5.75% expense. You give 10k they eat 575$ off the front before you even get your money working for you. Be careful.

Start with this book and if you like it i can give you more. It's a great starter, easy to understand and will really give you a good foundation. At your age to be thinking of these things is great.

Boglehead's Guide to Investing

 

[airportis]

airportis,
kinda off subject but i wanted to know if your dealership sells mini coopers? if so is there a wait to receive one?
thanks & DELTX looks promising...

they sell a few used ones but no new

 

[airportis]

Make sure the american funds isn't front loaded with their usual 5.75% fund fee, which comes out of your pocket into theirs. Their A fund usually is front loaded with the 5.75% expense. You give 10k they eat 575$ off the front before you even get your money working for you. Be careful.

Start with this book and if you like it i can give you more. It's a great starter, easy to understand and will really give you a good foundation. At your age to be thinking of these things is great.

Boglehead's Guide to Investing

Thanks Saint.

It looks like they all have the 5.75% front end load except Oakmark Equity & Income Fund which has 0%

 

[kneifl]

I have about $30K in that Oakmark fund right now, it has performed well for me when the market is bullish. It'll drop just as fast in a bear market though. Overall, a pretty decent fund. Good luck.

kneifl

 

[WhatsHisNuts]

American Funds are the best in my opinion. good luck

Much like in the political forum, your opinion isn't worth much hedge. :SIB


Airportis: The first thing I noticed is that you don't have many options, but you can still make it work. Rather than give you fund selections, I'll give you a strategy. Try to balance your account between domestic and foreign investments. Do not invest more than 50% of your portfolio in one country (including this one). Diversifiction is more than just having your money in different funds, but in different markets,economies, etc. If you need further reasoning, think about the stock market crash, collapsing economies, and so on. The second thing to do is to split your money up into a couple different groups (1 Large Cap fund, 1 Small Cap fund, 1 specialty).

My account is set up something like this:
Intl Fund 25%
Intl Fund 25%
Large Cap Domestic 25%
Small Cap Domestic 15%
Specialty 10%

When I research funds, look at 1yr, 5yr, and 10yr performance. I look for strong, yet consistant, performance.

Good luck to you.

 

[The Sponge]

Much like in the political forum, your opinion isn't worth much hedge. :SIB
:142smilie



When I research funds, look at 1yr, 5yr, and 10yr performance. I look for strong, yet consistant, performance.

Good luck to you.

Gm one thing i do is look at the political party's. When i get my quarterly statement i write on it who is in office. Like now i write Rep Prez and Dem congress. My opinion is that you can see patterns of what is the strongest when certain groups are in office. Just a thought.

 

[WhatsHisNuts]

Sponge - I don't dive that deep, but I don't discourage you or anyone else to do so. I think there are all sorts of angles, but in the end, diversification and track record analysis will help the average person get where they need to be.

 

[redsfann]

I would choose one fund and put 100% of your contributions in it. I'm going to guess that you will need to work there for 3+ years to get fully vested in the company's match--meaning that if you leave before being there 3(or whatever # of years the company chooses) you will only get a small % of that matching amount of money.
And it sounds like this will be a short-term job until you are hired by a Fire Dept--and your retirement plan will be very different being a public employee than it is being a private employee.
Employ the K.I.S.S. system right now--(Keep It Simple Stupid), as you will have plenty of time in the next 45+(!!) years of your working career to complicate your retirement savings plan.
Just my .02 cents here, of course. If you save early and often, your retirement will be much more enjoyable than for those that waited until they were in their 30s or even 40s to begin to save. The power of compounding is an amazing thing. Good luck with the firefighters job, if its anything like trying to get hired on in NJ as it is in Iowa, you've got your work cut out for you.

 

[airportis]

i have to wait 30 or 90 days for my 401k to kick in but starting immediatley i signed up for the employee stock option which you can do a max of 10% out of your check each week...i think its called ESRRP or something, but my question is where does the money go and is there a place they will give me to log on and check it?

 

[saint]

I too agree that you should keep it in 1 fund. Diversification is great, but most of those funds are set up to be diversified within the fund....so you don't need to choose different funds. That's the point of indexed mutual funds.

Really airportis, if you can go pick up the book Bogleheads Guide to Investing. It will really open your eyes. The key is to buy and hold, keep costs low with no load, low cost index mutual funds, and to have the right portfolio for your age and risk appetite. It's very easy to read as a newbie and really spurned my interest in where I want to put your money.

You will not get rich making paychecks, you will investing. All people talk about is their net pay, but at the end of the day it's your net worth that's they key.

 

[WhatsHisNuts]

i have to wait 30 or 90 days for my 401k to kick in but starting immediatley i signed up for the employee stock option which you can do a max of 10% out of your check each week...i think its called ESRRP or something, but my question is where does the money go and is there a place they will give me to log on and check it?

Depends on your provider. My last employer used Fidelity and I was able to manage the account online. It's pretty cool compared to how it used to be.


Saint: You have read an investment guide and you recommend putting all your money in one fund? I guess there wasn't a section on managing risk. That's kind of an important part of investing. If you think index funds or fund managers are good ways of diversifying, you are just plain wrong.

Don't put your eggs in one basket and don't put too much of your money into the company you work for.

 

[saint]

Depends on your provider. My last employer used Fidelity and I was able to manage the account online. It's pretty cool compared to how it used to be.


Saint: You have read an investment guide and you recommend putting all your money in one fund? I guess there wasn't a section on managing risk. That's kind of an important part of investing. If you think index funds or fund managers are good ways of diversifying, you are just plain wrong.

Don't put your eggs in one basket and don't put too much of your money into the company you work for.

I never said he should invest in 1 fund for his entire life. The last thing a new investor needs is to be changing and divying up money into multiple funds and getting eaten alive by fees they don't even know exist. The whole point of indexed mutual funds is to reduce your risk. I suggest figuring out wtf you are talking about before you come and lecture me.

For someone his age, he can put his money into something like the Vanguard Target Retirement 2050 fund, which is a portfolio made up of the following with various allocations:

* Vanguard Total Stock Market Index Fund
* Vanguard Total Bond Market Index Fund
* Vanguard European Stock Index Fund
* Vanguard Pacific Stock Index Fund
* Vanguard Emerging Markets Stock Index Fund

Some of those are higher risk, and some are not. Obviously, for someone as young as him a higher allocation will be in the total stock market fund in comparison to the total bond market fund. You can alter the allocations yourself, or in a fund that has a target retirement like this they are allocated for you. This is perfect for a new investor.
Each of those funds are then broken down into multiple holdings. That's the whole point of indexed funds. You act like I just told him to put his money in Disney stock. And who mentioned fund managers? The whole point of my post was you can do it yourself without having 5% of your money stolen by a fund manager.

Find me another mutual index fund with that much diversity in allocation, with fees that low and then we'll talk. Just starting out, he needs to buy and hold. Playing the stock market by buying and selling frequently will eat you up after the expenses. Indexed mutual funds are built to level out the risk, so at times when one part is at risk other funds are safe, and vice versa. You should take my advice and read the book I mentioned. I don't pretend to be an expert, but your post reeks of ignorance.