Stocks, Funds what are your best investments?

[Tpoppa]

It seems like the market is poised for a decent run up over the next few years.  I'm always looking for a good funds add the retirement account.  What are your favorite investments and why?  I'll start.

 

FBSOX - Fidelity Select IT Services 

Strong returns, some of the best is the IT sector.  It also holds value pretty well during short term drops in the market. 

http://www.marketwatch.com/investing/fund/fbsox

Edited October 24, 2013 by Tpoppa

[Bad324]

subscribed! With the way I like to spend money I need to save/invest a bit more aggressively than I have been

Edited October 24, 2013 by Bad324

[magley64]

I'm heavily leveraged in real estate, it may not have as high of returns as other investments, but at least I'm not paying rent. (so that right there is like a 600 to 1,000 a month return)

Edited October 24, 2013 by magley64

[Jester_]

I have a portfolio managed by ING. I am at a 20% return so far this year and have a pretty good amount in there considering im in my mid 20s. Always trying to put as much into retirement as I can.

[Tpoppa]

I have a portfolio managed by ING. I am at a 20% return so far this year and have a pretty good amount in there considering im in my mid 20s. Always trying to put as much into retirement as I can.

Very wise to sock away as much as you can in your twenties.

 

Depending on your risk tolerance and mix, 20% is solid in this market. 

 

I am leaning toward more risk and (hopefully) more reward over the next 3-5 years.  Then I plan to get a bit more conservative.

Edited October 24, 2013 by Tpoppa

[Jester_]

I have my risk set at very high right now. I will leave it aggressive until I hit my 40s.

[Jester_]

I do like this topic though. I would like to break out and invest in some things on my own.

[Tpoppa]

I do like this topic though. I would like to break out and invest in some things on my own.

 

I had a professionally managed Fidelity account.  I was unhappy with the performance, so I took it over.  I still use Fidelity, but I manage it myself.  It's done much better since I took it over, AND now I understand how my $$ are being invested.

 

The market is huge.  I just try to understand certain types of investments that I am comfortable with.  For me, sector funds make the most sense. 

[Jester_]

I had a professionally managed Fidelity account.  I was unhappy with the performance, so I took it over.  I still use Fidelity, but I manage it myself.  It's done much better since I took it over, AND now I understand how my $$ are being invested.

 

The market is huge.  I just try to understand certain types of investments that I am comfortable with.  For me, sector funds make the most sense. 

Was the performance that bad? My wife has Fidelity but its not managed and she just lets it do whatever. I was trying to talk her into having them manage everything.

[Zorro]

Make sure you invest in a Roth IRA.  This is one of the best retirement options out there.  There's a reason why the government caps the contribution limits and why top earners can't invest in one.

1. you can take out your deposits at any time, tax-free, penalty-free.

2. all capital gains on investments are tax-free

3. when you're old enough to withdraw, all withdraws are tax-free.

 

My strategy is:

1. max out 401k

2. max out Roth IRA

3. pay extra on my house

4. no debt

5. find something else to invest in (still searching...looking for tax free).

[Jester_]

Make sure you invest in a Roth IRA.  This is one of the best retirement options out there.  There's a reason why the government caps the contribution limits and why top earners can't invest in one.

1. you can take out your deposits at any time, tax-free, penalty-free.

2. all capital gains on investments are tax-free

3. when you're old enough to withdraw, all withdraws are tax-free.

 

My strategy is:

1. max out 401k

2. max out Roth IRA

3. pay extra on my house

4. no debt

5. find something else to invest in (still searching...looking for tax free).

We bought our house when I was 24 so we started pretty early. It was a stretch for us to afford at first but im glad we got what we did because we didnt go buy another place in 3 years when we were in a better financial position and lose any equity. That said we are looking to build our own place on a bunch of land which will cost plenty of $$$ but by the time we are ready to retire it should be paid off.

[madcat6183]

What Zorro said, be careful not to over-invest in 401K, over what company will match/vest you in, doing that takes away from capital you can invest other places and easily out earn whatever the nominal earnings are on 401K.  Same idea as Zorro with Roth IRA, max it out, same with 529 for kiddo's.  All tax deductions so makes sense.

 

As for what I actually am into, I do whatever my guy tells me to. 

[Tpoppa]

Paying extra on a house isn't always a good idea.

 

I paid off my last house early, but I did it when the market was crappy.  At that time the math made sense to pay off the house.

 

I bought a new house last year when mortgages were really low...I won't be paying an extra penny unless the market craps out again.

 

If you bought or refinanced when the rates were low, I would think twice about paying extra on it.  Why pay extra on a 3.5-5% mortgage, when the market is easily returning 15%.   

[Tpoppa]

What Zorro said, be careful not to over-invest in 401K, over what company will match/vest you in, doing that takes away from capital you can invest other places and easily out earn whatever the nominal earnings are on 401K.  Same idea as Zorro with Roth IRA, max it out, same with 529 for kiddo's.  All tax deductions so makes sense.

 

As for what I actually am into, I do whatever my guy tells me to. 

He said max out 401k.  I agree with that.  Maxing out is $17,500 for 2013.

[Zorro]

What Zorro said, be careful not to over-invest in 401K, over what company will match/vest you in, doing that takes away from capital you can invest other places and easily out earn whatever the nominal earnings are on 401K.  Same idea as Zorro with Roth IRA, max it out, same with 529 for kiddo's.  All tax deductions so makes sense.

 

As for what I actually am into, I do whatever my guy tells me to. 

i'm thinking about getting a guy.  spoke to one...not sure about it at this time.

 

As for over-investing, the max is 17,500....my company's payroll dept wont let me put more than that in.  if you're saying dont put more in after you're getting the match from work, i disagree.  you can never have enough in 401k.  you can invest in other spots, like you're own brokerage account.  Just know that's post tax dollars you're investing (401k is pre-tax), capital gains are taxed, and you're more likely to blow it before you retire.

 

Paying extra on a house isn't always a good idea.

 

I paid off my last house early, but I did it when the market was crappy.  At that time the math made sense to pay off the house.

 

I bought a new house last year when mortgages were really low...I won't be paying an extra penny unless the market craps out again.

 

If you bought or refinanced when the rates were low, I would think twice about paying extra on it.  Why pay extra on a 3.5-5% mortgage, when the market is easily returning 15%.   

 

yeah...i refinanced and i got a good rate.  I agree with what you're saying.  I like adding extra because it's a guaranteed savings of 3.5% each month and i wont spend it or lose it in the market. 

 

As for returning 15%...that's a high estimate for long term investing.  Sure it's good now...but it also dropped like 50% in 2008.

 

So, i like to diversify, and adding extra to my mortgage is a different way of saving some money.

[Bad324]

Paying extra on a house isn't always a good idea.

 

I paid off my last house early, but I did it when the market was crappy.  At that time the math made sense to pay off the house.

 

I bought a new house last year when mortgages were really low...I won't be paying an extra penny unless the market craps out again.

 

If you bought or refinanced when the rates were low, I would think twice about paying extra on it.  Why pay extra on a 3.5-5% mortgage, when the market is easily returning 15%.   

 

this is quite the fascinating point. I've been paying extra on my mortgage pretty much since day 1 and my interest is 4%. Taking that extra money each month and investing it instead might just be how I get my start in something other than my Roth IRA

[owndjoo]

He said max out 401k.  I agree with that.  Maxing out is $17,500 for 2013.

i never agree with maxing a 401k. I prefer to invest only what the company will match(free money), and then put into a Roth and/or other avenues.  This is also for our government employees with deferred comps.  That money looks great until you realize that your pension puts you in a higher bracket and now you're paying a big chunk to access your retirement.  I like a nice whole life added into a plan as well since it will provide liquidity for any emergencies and a nice death benefit incase of the unthinkable... not to mention a lot of companies are now offering LTC access riders to help cover any nursing home stays.  It is quite a big world this investing game, so there are many different routes.  The key is not to be greedy, but also not to be scared.

[Tpoppa]

this is quite the fascinating point. I've been paying extra on my mortgage pretty much since day 1 and my interest is 4%. Taking that extra money each month and investing it instead might just be how I get my start in something other than my Roth IRA

 

It MAY be a good idea to pay extra, not always.  I'm not saying don't do it, just saying think twice...it's not a no brainer.  It's a good position to be in either way

 

Lets say your mortgage is 4% and you are in a 25% tax bracket.  Paying extra is saving you 4% minus the interest tax deduction of 25%.  4% minus that 25% deduction = 3% which is your actual savings from paying extra.  Instead of paying extra, can you invest that money and reliably return more than 3% after taxes?   Probably.

Edited October 24, 2013 by Tpoppa

[magley64]

this is quite the fascinating point. I've been paying extra on my mortgage pretty much since day 1 and my interest is 4%. Taking that extra money each month and investing it instead might just be how I get my start in something other than my Roth IRA

 

Where else can you get a loan for 4%?

 

Mine is 3 1/4%, and I won't be paying a dime extra on it until everything else is paid off, and i have more money than I know what to do with..

[Gump]

Sprint

Neogen

Visa

Discover

TSC

Most of those have doubled if not tripled.

Discover card is going to my next big ride,I'm hoping. They teamed up with paypal which will be in stores soon.

Woops this about funds.

Edited October 24, 2013 by Gump

[bloodninja420]

Make sure you invest in a Roth IRA. This is one of the best retirement options out there. There's a reason why the government caps the contribution limits and why top earners can't invest in one.

1. you can take out your deposits at any time, tax-free, penalty-free.

2. all capital gains on investments are tax-free

3. when you're old enough to withdraw, all withdraws are tax-free.

My strategy is:

1. max out 401k

2. max out Roth IRA

3. pay extra on my house

4. no debt

5. find something else to invest in (still searching...looking for tax free).

Roth IRA is as good as it gets, unfortunately it gets phased out over incomes above a certain threshold.

I still found a fun way to utilize them for my daughter. She works for me, and the money gets invested in a roth ira for her. A few of the benefits:

-the "work" classifies the income as Earned, which is required for IRA investment.

-since the work is for parents under $6000 she is exempt from Fica. Its also too low for her to incure income tax liability.

-I get the deduction as a business expense.

Not a lot of money involved, but $5000 tax free on both sides, earing and withdraw, is pretty good for a 9 month old.

Hopefully these accounts wont be raped before her retirement.

[Tpoppa]

Discover card is going to my next big ride,I'm hoping. They teamed up with paypal which will be in stores soon.

 

This sounds interesting.  I will be researching further.

[Gump]

http://www.forbes.com/sites/chrisbarth/2012/08/22/discover-and-paypal-join-forces-in-the-war-against-paper-money-banks/

[madcat6183]

i'm thinking about getting a guy.  spoke to one...not sure about it at this time.

 

As for over-investing, the max is 17,500....my company's payroll dept wont let me put more than that in.  if you're saying dont put more in after you're getting the match from work, i disagree.  you can never have enough in 401k.  you can invest in other spots, like you're own brokerage account.  Just know that's post tax dollars you're investing (401k is pre-tax), capital gains are taxed, and you're more likely to blow it before you retire.

 

 

yeah...i refinanced and i got a good rate.  I agree with what you're saying.  I like adding extra because it's a guaranteed savings of 3.5% each month and i wont spend it or lose it in the market. 

 

As for returning 15%...that's a high estimate for long term investing.  Sure it's good now...but it also dropped like 50% in 2008.

 

So, i like to diversify, and adding extra to my mortgage is a different way of saving some money.

Yeah I mean if you can max it and still have plenty for everything else sure, but in the end, my 401K isn't earning nearly what my other investments are, so no point in putting extra in there vs. other investments that earn 2-3X as much.  I.E. someone I know is putting 25% in their 401K, however employer only matches 3%, has never matched more.  They have no other investments anywhere and essentially are missing out on making a ton more cash elsewhere.  Their choice, but to me that doesn't make sense.

 

I do not make enough anymore after our comms were removed to straight salary to max out 401K and still invest in my kids college, Roth, and everything else I have, I guess that's my point.  Make sure the funds are placed accordingly to maximize return. 

[Tpoppa]

Yeah I mean if you can max it and still have plenty for everything else sure, but in the end, my 401K isn't earning nearly what my other investments are, so no point in putting extra in there vs. other investments that earn 2-3X as much.  I.E. someone I know is putting 25% in their 401K, however employer only matches 3%, has never matched more.  They have no other investments anywhere and essentially are missing out on making a ton more cash elsewhere.  Their choice, but to me that doesn't make sense.

 

I do not make enough anymore after our comms were removed to straight salary to max out 401K and still invest in my kids college, Roth, and everything else I have, I guess that's my point.  Make sure the funds are placed accordingly to maximize return. 

 

MC,

Are you saying the 401k choices your employer offers aren't that attractive?

If so, I would talk to HR about adding some better ones.  Also, you may be able to rollover your $$ into a Fidelity 401k.  That way you can invest in just about anything, while taking advantage of 401k pre-tax dollars.