Hi there, haven't posted in a while due to being away from poker, but hoping I could benefit from this forum's wisdom.

I just started a teaching job and have to allocate my contributions. Basically, I have zero idea of what to choose, and am looking for guidance, and would even prefer a direct recommendation as my understanding of how investments work is very amateurish.

Background: I'm 34 yrs old, my starting salary is 50,000, and I can afford / am electing to contribute 10% of my salary to my 403b. My salary won't increase much over the years (will probably cap out less than 6 figus), but hopefully I'll do tutoring and other things to allow me to contribute more as I get older.

Any help would be so very much appreciated. Here is the list of options they gave me:

http://i206.photobucket.com/albums/b...0options_1.png

google the various equity funds, figure out which one has the lowest rake, write 100%

The general process is you figure out your risk profile, time horizon and then select the lowest cost funds. You want no load , low expense funds. At your age your best option is 100% equities(stocks). Based on history there will be drawdowns of atleast 40%. So you have to be prepared to ride them out for the long-term to maximize return. If you cant stomach a rapid 40 to 50% drop in your account the risk profile would steer you more bonds, cash. This would reduce your returns though and isn't optimal.

That image was blurry but I saw some Fidelity and Vanguard funds. I would go with those for sure. Go heavy in stocks. Wish I could read the names of those funds. Here's a basic risk profile assesment. Hopefully though you can take a longterm view and go heavy stocks.
https://personal.vanguard.com/us/FundsInvQuestionnaire

Looked again and see so many funds that arent exactly what you need with the Fidelity's and Vanguard....unless you overdiversify a little. You basically just need a total stock market fund that tracks the Wilshire 5000 or S&P 500. That T Rowe Price Blue Chip Growth combined with the Vanguard International looks good as a possible first cut until we get more info on the other funds like expense ratios and loads.

MAEQX is probably your best bet. Should be your lowest expense ratio at 0.13 + whatever the plan fee is (maybe 0.60).

Other than that it depends on how you want to structure your investments. You don't need to be fully diversified within the 403b itself. It may be easier just to use MAEQX and then in a taxable or IRA account where you have more flexibility in choices you can add an International or a Bond fund if you want to.

Thank you guys. If there are two equity funds with similarly low expense ratios, is it better to go 50/50 with those because of it being inherently beneficial to diversify? Or should I just put it all in the one with lowest expense ratio you think?

No, if they are similiar ones you just need one. That Mutual of America inst Equity (MAEQX) alone is fine.

The advice in this thread is pretty bad. Just pick a target date fund. Pick a year that is roughly when you plan to retire. something like the 2050 fund. Those are broadly diversified portfolios that do all the work for you. Google target date funds and learn a bit more. They are perfect for someone like you who is not particularly interested or knowledgeable about investments.

That 2050 target fund you mentioned has a .77% expense ratio. That's high.

Look, I'm all about value and index investing. All of my money is in index funds that charge around .10%. But this is someone who has little interest in investing and might not touch his retirement plan again for a very long time. I think paying an extra half a percent is worth it to have a well diversified portfolio that slowly adjusts over the years without him thinking about it. It's well worth it rather than just shoving everything into one fund.

Yeah, that's a good point. The last thing anyone needs is to be 100% stocks a year or two before retiring. Unfortunately a lot of people are.

I dont want to say much other than not investing, AKA holding cash, is also a position. Not say you should or shouldn't. But just because you have money....doesnt mean you should spend it.

All this nonsense about being cash, owning gold, should I wait for the PS5 or buy the PS4...First of all, the analogy doesn't work because you can't time the market. Owning gold is a terrible long term ROI and cash loses to inflation and the opportunity cost of not being invested immediately. Unless you're the smartest person in the room and know what you're doing, timing the market is a fool's errand. Sitting in cash is only worth it if you pounce on an opportunity with a higher ROI to make up for the time you sat in cash losing to inflation and return you would've accrued while being in whatever you could've been in. Most people asking advice on retirement or long term savings are just normal people with a job, family, and maybe some assets. They don't have the time, inclination, or desire to put in the effort required to manage their money, and it's probably best that they don't anyway. Not always the case, but doing so could be the biggest mistake they ever make their entire life.

Just buy a Vanguard Target Date Fund (or TRowe, Fidelity, Schwab, any reputable company with low fees) and stop wasting your time reading this thread. Target Date Funds do all the work for you, make it impossible for you to **** your own money up and it's all at minimal cost.

The only cash people should sit on is 6-12 months of rough living expenses in case they get laid off or the unforeseen happens. Everything after that should be invested or used to eliminate debt, entity with the highest yielding interest first.

Target date funds are overly conservative. People need to be more aggressive for longer - including into their retirement. There, I said it.

Totally, the thing is efficient as ****. And its not like youre using the word in its own definition there.

Jesus, i just read more of your post. You are an EMH parrot or something?

Owning gold is not a terrible idea. But yes, obviously ROI is bad. It doesn't throw off cash flow... If you have complete faith in the powers that be, then by all means own US debt and DCA your way into greater fool markets that climb the wall of worry and flush when it gets bad.

To be clear, the normal people you talk about are the fish in the markets. Do you think the market exists to be a place for you to put your retirement savings? No. It exists to take your money. Do you think the finance industry proposes you steadily build that 401k because long term buy and hold is the only real winning strategy in the markets? No, it is because it serves their purposes...Wall Street has convinced Main Street to buy and hold (and always buy) so that they have someone to sell to when SHTF.

Its a game, its a racket:
1. play with house money (ty TARP)
2. lie stealand cheat (ty WFC, BAC, the list goes on...MBS, robo signing, etc)
3. sell to the suckers
4. blow the thing up and generate "system risks"
5. get bailed out
6 rinse was and repeat

For a long term investor it is actually easier than for a trader. I was young and just out of school back then. But now I know. '08 and all the printing, all the rate shenanigans. Very obvious point at which a patient rational investor could have timed the market.

Own some corporate and government debt in the mean time. Buy some real estate. Buy or start a small business. All of these are fine. But the notion that it is a good idea to just constantly funnel money into the markets because that is what they teach you in school and what your FA tells you to do is ******ed and it is what I am speaking out against here. Trying to help everyone.

Your FA is a frat boy in a suit who doesn't have a clue what is doing and probably failed statistics. But he sure can talk the back office's book and help you color in circles on that risk profile.

This is the intellectual cowards position who, because they can't or have not figured it out, deems it impossible to figure out.

It is convenient, it is expedient, and it is comfortable to buy in to the idea the move is to put 10% of every paycheck into the markets...regardless of:
-price
-time
-politics
-the fed
etc

And BTW, I am not suggesting that every can or should figure it out. But if you can't or won't then do something else. The stock market is not the only game in town. Buy a franchise, open an ABNB, get some CDs.

Or, STFU, stay in line, and do what you are told. Im sure Wall Street has your best interest in mind.

BTW, before you decide please do ask Greece, and frankly the entire EM economies, if Goldman and the US financiers had their best interest in mind when they sold them CDS denominated in USD.

Here is a book for you as a starting point:
https://www.amazon.com/Confessions-E...conomic+hitman

I don't know anyone that didn't think the end of '08 wasn't a good time to put money into the market. The question is, when was the good time to get out before then? (That's rhetorical, of course. It's easy to look backwards. Try it going forward.)

Also, I am compelled to say that I don't want to sound too negative about the markets. There is good there. I think equities are a great investment abstractly. Deep and efficient capital markets are the hallmark of wester society.

Debt and equities do add value. I think its Yuval Noah Harari who speaks very eloquently about the innovation that **** sapiens pioneered in savings and borrowing from future: https://www.amazon.com/Sapiens-Human...ywords=sapiens.

Also, I believe pretty strongly that everyone in this forum should read this book if they have not already. Former professor of mine and nobel laureate Doug North's: https://www.amazon.com/Structure-Cha...onomic+history

Agreed. But in fact, you don't even have to get out if you enter correctly. That rather clearly is the trickier part. You can buy and hold. I actually think it is fine. If you buy with patience and restraint.

I am just speaking out agains the notion that you should buy because...that is what you do. That is stupid...

I don't have financial advisor so I dunno what you're going on about. Have fun owning gold and getting nothing in ROI for it.

You went off on a mighty rant, I give you that, but you ignore that this person HAS A LIFE. He's not gonna buy a business lol...He has a life. A job, family, **** to do, places to go. It's like you didn't even read my post but you wanted to ***** about the GFC and how it got you shook or woke, maybe both. Go post in politics if you feel that way. I don't necessarily disagree with you about the finance industry being all about the fees and not optimal investing, but you act like Vanguard is some massive vulture with an army of leeches ripping off upper-middle America. Or Schwab. Whatever. I'm sure there's room for discussion there, but the fact remains this is your normal average everyday dude and not ToothSayer, you, or me, people very not normal lol...

Ha no, apparently we are talking past each other (not surprising).

1. you do not own gold for the ROI.
2. You can totally work and 9 -5 and buy a CD and a piece of real estate...
3. Didn't say you had an FA, I was speaking to general...hm disposition? of the industry. It doesnt matter if you have an FA or not if you do the exact same thing the FA does (guess you save the fees). But of course, then when you sell at the bottom, or at the very least, don't understand index rebalancing and why all your nominal gains don't pay for your toilet paper and electricity come retirement, you will have no one to blame but yourself.

Fees might be worth it to scape goat the FA no?

You think we're talking past each other because you're ignoring the purpose of this thread and willfully going off on tangents and rants about stuff you clearly want to vent on. That's cool and all, but it doesn't change the fact that OP is an actual person. With a life. I dunno about you, but if I had a family and a 9-5 and money to invest I'm not going to go buy a house or run a business and **** up my whole hustle when I've been on cruise control doing exactly what I want to do in life and enjoying it. This guy is a teacher and has not stated any other information other than his desire to optimize his savings ROI. This isn't some complicated life situation and unique individual who has time to **** around on the internet all day bc he's busy trading or playing poker or DFS or whatever and can do things like own real estate or run a business. He goes to work and comes home to relax. He's not a robot. The fees are supoptimal ONLY if you have the time, inclination, and will to put forth effort to figure this stuff out. And even then, novices make mistakes. Possibly catastrophic ones. I just described like everyone in upper middle America who is also not a complete weirdo.