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Originally Posted by GrabberGT
Alright, its taken me 2 days but Im now caught up on this thread from having taken a holiday break. I have a couple questions:
How about a little investing advise rearding fund selection. I already understand your viewpoint towards funds in general (Why paysomeone else to make selections you could make foryouself) but my Fidelity 401k provides only Funds as selections. I'm 37 with 30 years till retirement so I can afford to play with the riskier stuff. Rather than just throw a dart at a list of stock based funds, what should I look for? Highest annual return over the life of the fund with the lowest expense ratio? Fund information is limited. Its easier to look up the fund on Google. If a fund pays a dividend, (Not shown on Fidelity) do I get that dividend or does Fidelity?
Next step is to open a Roth IRA. What should I look for in a broker for my IRA. From Fidelity's page: "Investment choices - A wide range of mutual funds, stocks, bonds, ETFs, and FDIC-insured CDs" This leads me to believe that my choices, though wide, are limited to a selection. Are all brokers like this? Which one has the widest range of choices?
Thanks. I Love this thread and have learned a lot.
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You need to find their TRADING SYMBOLS... and then do the exact same research using Google or Yahoo Finance as you would with stocks... look for the best long term track record... or best total return over the long haul.
For diversification -- you can buy Large Cap - Mid Cap (this is the size of the companies they invest in) etc -- or you can also get some "International" exposure in various geographical regions - such as "Asia" etc... and they're also usually "Growth" or "Total return" or "Growth and Income"... The PROBLEM is that just because they have the "Growth and Income" label - doesn't mean they're invested in the right stuff to actually EARN their names!
Did I mention that MUTUAL FUNDS SUCK? They're designed to lull the masses into hibernation while they make massive fees for doing nothing... Don't even get me started...
IF THE FUND GETS DIVIDENDS -- they're reinvested. So yeah -- you get 'em -- and it will be reflected in the total return of the fund.
Did I mention that MUTUAL FUNDS SUCK?
Here's the other problem with mutual funds. You buy their "NAV" -- Net Asset Value" on any given day... but that can go DOWN just because maybe some company lays off half a zillion people - and those people MOVE their IRA's into Rollover IRAs and cash out of the stinkin' mutual fund they were all forced to be in.... so the mutual fund has REDEMPTIONS -- CASH they have to pay out - so they SELL shares of stock to cover the redemptions. They're not in control -- and more important - NEITHER ARE YOU.
But treat them as if they were individual stocks -- research them - look for the best PERFORMANCE over the longest period of time.
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ROTH IRA -- Just pick ANY of the BIG NAME discount brokers.... Schwab - Fidelity - TD Ameritrade etc... I have a Fidelity account -- I don't particularly like them -- or their website - but you can buy/invest in anything there that Schwab has. I prefer Schwabs website. But I actually have accounts about half a dozen DIFFERENT brokerages. One for bonds... Wells Fargo for an IRA (they have a division that if you're a big enough customer they'll hold "private paper" for you - most brokerages won't)... but for just good old fashioned information and ease of use... I like Schwab. It could also be that I've been using them for years... so I'm familiar with their website etc.