Actually you're probably right. I know he made money off of the transaction. But he's made me plenty of money so it's been well worth it.
It's a sad day when a scum sucking transaction fee planner rips off his own son. No Loads! Low fees! Go with Vanguard. How often does active managment of retirement funds beat the indexes? (look it up)
The IDEX funds do look good as far as a one-stop-shopping for a single well-deversifed-across-mutliple-asset-classes fund. It should serve you very well.
My logic is one should not put all of their money in one or two mutual funds just like one should not put all of their money in one or two stocks. Do the research you need to do, then diversify.
Good advice a few years ago, but now we have target dated funds which are a single fund that are well diversified and never need rebalancing. If you are thinking clearly when you are investing, you have a financial goal in mind for the money like house down payment, kids' college, or retirement. Each of these goals can have dates attached to them, so picking the right target date fund should be easy enough. Another potentially huge plus is that if you are starting out with say $1000 or so for your goal, it is very hard to get completely diverified with that small of an amount. Only having to get into one fund relieves that pressure.
If you are in your 20's (which i'm assuming) then this is retirement money or money for a down payment on a home. Either way (unless you plan on buying a home soon) this money is for the long run. Therefore you should look at investing in a few of the stock mutual funds, as you can take the volatility of stock funds versus the lower long-term performance of bond/yield funds. I would mix them up as follows: 30% Oppenheimer Main St Opportunity 25% Legg Mason Small Cap Value 25% Goldman Sachs Mid Value 20% American Funds EuroPacific Fund (though intl. markets are a bit overvalued, its important to have an intl. component) This allows you to have your eggs in many baskets. Though a mutual fund diversifies you, if it is a specific asset class "Mid-cap value" for example, most companies in that class will perform in relatively the same fashion. There are no loads or breakpoints, so one might as well split the funds up into these four fund catagories. With the IRA, don't worry about the cost of commissions, worry about what you are buying. I know people that pay $7 for trades on Scottrade, but don't know what their investing in properly and though they may save $20 on fees, they lose because they aren't invested properly. For your IRA, if you plan on only starting with $2000 or so, the fees at any investment house would be a large percentage of your assets, so any gains would be negated by fees. I would simply open up a Vanguard Account and place it in the S&P 500 until you have maybe $10,000 to $15,000 to invest and then find a good quality advisor, buy good mutual funds and REBALANCE!! That means don't get overweighted in one asset class. My good deed for the day is this advice!
No reason to start 5.5% in the hole ... Interesting Warren Buffett quote (assuming he really said it...hehe) : "Diversification is a protection against ignorance. It makes very little sense for those who know what they're doing."
Vanguard. I think they really care about your money. I remember when I first opened my IRA, I told the representative I wanted to choose their most aggressive mutual fund. Then he said "Young man, listen..." and went on to give me a 15 minutes lecture on why I'd want to put my retirement money in a more conservative and less volatile fund. They really made me feel my money is in good hands.
Absolutely incorrect on both counts. I'll continue my rationale tomorrow, but both of these comments are fairly idiotic.
One needs a little context from this quote ... Buffett is NOT an average investor. He is not even an average "fund" investor. He places large bets and only a few of them. In fund terms he is not diversified. Most fund managers are required by their fund to be diversified; they do not have the option to follow Buffett's investment strategy. An average investor has neither the time nor the desire to research companies to find the needle in the hay stack like Buffett does. In Buffett's own words, the average investor doesn not "know what they're doing". I suspect that Buffett would even recommend to average investors that they diversify (or buy Berkshire Hathaway / A at $92,000 / share).
