Investing, Stock Market and Retirement Planning Thread

[NTP66]

With the Russia nonsense going on, how do you feel about investments in Total International Stock Index Fund? I have tried to stay just under 20% of my TSM allocation, but I think that might even be a little high now.

I completely forgot about this - sorry!

This is how I look at international diversification: I know that international diversification helps, mainly because of decreased risk. On the other hand, it seems to me that while internationally diversified portfolios are better in terms of characteristics like Sharpe ratios, the improvement comes more in terms of lower standard deviation than in terms of realized return. (I would go even as far as to say that realized return may be lower.)

Now - I am interested in foreign diversification more for personal investment (where I may need to withdraw sooner) rather than pension (where long investment horizon already averages everything out). In addition, while international diversification may be important for a "citizen of the world", it may be less important for somebody who will 99% likely live in the US until death - because being primarily invested in the US preserves "standing within the US society."

So - I do have foreign stocks in my portfolio, but way less than the "optimally world-diversified" portfolio that mimics the "world index." [When my employer allowed specific investment in merging markets, I invested more there - but basically because of higher risk/return feature.]

HOWEVER - I am a contrarian, so I *love* investing in securities that lost in value (especially since I hope that everything will rebound in the long run). So I have been actually buying more international ETFs (for my personal portfolio) lately.

lol, I predicted what you were going to say in that last paragraph. Just this week, I moved my wife's target fund into separate index funds, and actually went from 15% international stock down to 5%.

[Tomas]

With the Russia nonsense going on, how do you feel about investments in Total International Stock Index Fund? I have tried to stay just under 20% of my TSM allocation, but I think that might even be a little high now.

I completely forgot about this - sorry!

This is how I look at international diversification: I know that international diversification helps, mainly because of decreased risk. On the other hand, it seems to me that while internationally diversified portfolios are better in terms of characteristics like Sharpe ratios, the improvement comes more in terms of lower standard deviation than in terms of realized return. (I would go even as far as to say that realized return may be lower.)

Now - I am interested in foreign diversification more for personal investment (where I may need to withdraw sooner) rather than pension (where long investment horizon already averages everything out). In addition, while international diversification may be important for a "citizen of the world", it may be less important for somebody who will 99% likely live in the US until death - because being primarily invested in the US preserves "standing within the US society."

So - I do have foreign stocks in my portfolio, but way less than the "optimally world-diversified" portfolio that mimics the "world index." [When my employer allowed specific investment in merging markets, I invested more there - but basically because of higher risk/return feature.]

HOWEVER - I am a contrarian, so I *love* investing in securities that lost in value (especially since I hope that everything will rebound in the long run). So I have been actually buying more international ETFs (for my personal portfolio) lately.

lol, I predicted what you were going to say in that last paragraph. Just this week, I moved my wife's target fund into separate index funds, and actually went from 15% international stock down to 5%.

And I don't think going from 15% to 5% international is necessarily bad for a retirement portfolio. There is a well-documented "home bias" for portfolios pretty much anywhere in the world, and there is definitely a value in preserving your relative standing. If you are in, say, 80% wealth percentile now, it may be good to stay in the 80th percentile later when compared to fellow citizen who mostly invest in US securities only.

That being said, for personal portfolio, my moral compass was slightly tested when I saw RSX (Russia ETF) lose 86% of its value. I did not buy it - but on some level I am glad the exchange suspended trading it...

[NTP66]

Source of the post That being said, for personal portfolio, my moral compass was slightly tested when I saw RSX (Russia ETF) lose 86% of its value. I did not buy it - but on some level I am glad the exchange suspended trading it...

This just confirms that you have more crazy in you that most people I know.

[Tomas]

Source of the post That being said, for personal portfolio, my moral compass was slightly tested when I saw RSX (Russia ETF) lose 86% of its value. I did not buy it - but on some level I am glad the exchange suspended trading it...

This just confirms that you have more crazy in you that most people I know.

Seriously? Many people in my circles had the same jitters regarding the personal trade-off between buying assets in a country run by a tyrannical regime vs. buying a basket of primarily low-tech companies that derive their value from selling raw materials (which go up in price) - if simply for the option value of *some* benefits being preserved after bankruptcy reorganization (which, in addition, may be tilted toward shareholder recovery by the above mentioned tyrannical regime).
(And again, I did NOT act. And I hope I would not even now. But, again, happy that the tradeoff was taken off the table. )

[mac5155]

Who rebalanced their 401k with the S&P last week? Nice little chunk the last few days haha

[NTP66]

Who rebalanced their 401k with the S&P last week? Nice little chunk the last few days haha

[mac5155]

Almost 5% clip or so. Noice

[NTP66]

Just started what could be our final backdoor Roth conversions, if the BBB plan passes. Not a fan of them closing that loophole while also leaving the current limitations in place, because that's not helping people invest in their retirement.

[King Colby]

What's up with big BTC spike today

[dodint]

I'm holding USD, mostly.

[Troy Loney]

https://www.cnbc.com/2022/03/27/crypto- ... s-say.html

Could have something to do with this. Guessing institutional investors looking for more "clarity" are starting to apportion more funds to crypto with countries starting to finally define what the regulatory landscape is.

But, if we know one thing for sure, big US investment entities never engage in risky speculative assets.

[NTP66]

401(k) Savings Plans Get a Boost in Bipartisan Retirement Bill

What the bill proposes to do

The legislation would gradually increase the age at which savers must start taking withdrawals from 401(k)-type accounts and traditional individual retirement accounts to 73 next year, rising to 74 in 2030 and 75 in 2033. Currently, people who save money in those accounts must begin withdrawing money—and paying any taxes due on it—at 72. These required withdrawals can be a source of frustration for taxpayers who are still working or are trying to make their savings last in retirement.

While the law, if enacted, would help people who can afford to leave their money untouched, it could expose them to higher tax bills in future years. When required distributions kick in, they would be withdrawing more money annually over a smaller time period, said Ed Slott, an IRA specialist.

The increase in the age for required withdrawals “sounds better than it is,” he said.

About 80% of people subject to mandatory retirement account distributions withdraw more than the required minimum because they need the money, said Mr. Slott.

The bill would allow older workers to make bigger contributions. People 50 and older can contribute an extra $6,500 a year to 401(k)-style retirement accounts, for a total of $27,000. The legislation would raise that to $10,000 a year starting in 2024 for people ages 62, 63 and 64. The bill would require catch-up contributions to be made after taxes. Under the legislation, starting in 2024, the extra $1,000 people 50 and older can contribute annually to an IRA would rise to account for inflation.

Hey dickbags, how about allowing younger people to save more, you **** clown punchers?

[Beveridge]

Agreed.
They are all old so no motivation there but to help themselves.

[NTP66]

They probably figure most will already be dead, so the gov't. won't lose out on that cash.

[MrKennethTKangaroo]

If you contribute 20k for 30 years with a 3k employer match and a 6% return, you will have 1.6 million.

How much more does one need for retirement

[mikey]

$20,000 a year for 30 years?

The median income a 30 year old is $40,560, the average is $52,706; at 35 it's $50,000 and $66,320.

Ain't nobody got time for that...

[dodint]

Well now we know who makes those fabulous infographics about how millennials spend their monthly budget.

[NTP66]

Well now we know who makes those fabulous infographics about how millennials spend their monthly budget.

The last one I saw just showed how out of touch the writer was. Just insane.

[Beveridge]

It's not so much the amount, it's the timing.

Being able to do more now, gets me retired sooner.

Heck, I'd be ok if they changed the rule so that your maximum is tied between 401k and IRA. My IRA options are way better than my 401k options. I'd rather dump all my money in my IRA and only do the bare minimum for employer match.

[dodint]

Personally, I'm more interested in the return I could be getting if I could put my OASDI tax payments towards the investment vehicle of my choice.

[NTP66]

The IRA limits are also paltry and need to be increased. I'm sure that won't happen, just like I'm sure that they'll eliminate the backdoor Roth. I shouldn't have to go through this bullshit just to save money for retirement.

[Beveridge]

Personally, I'm more interested in the return I could be getting if I could put my OASDI tax payments towards the investment vehicle of my choice.

Heck yes.

I would opt out today if they said you can keep that money but you won't get social security when you retire.

I couldn't sign up for that fast enough.

I would even sign up if they said and we get to keep the money you've put in it to date.

[mikey]

PLTR calls are printing (well, minting, as it's a small time venture), boys, don't let me get hot again...

[NTP66]

STFU male Cathy

[mikey]

Ooh, and I get to win collegiate swim meets too?!?! Let's go!