They have been saying what they are going to do and then doing it:

http://www.federalreserve.gov/moneta...es20150128.htm

Posted this in another thread:

Say I am just beginning to get into trading, I see myself starting conservative with only a couple transactions per week but eventually I would like to make a few a day. Nothing major as i am not a day trader.

I know the transaction fees can be like $10/trade on etrade and such.

What are the best services like that to use? etrade?

My situation: 2 years out of college, spent most of my time focusing on student loans but I am refinancing to lower the interest rate and I believe I can make more in the market than the rate so I want to put less into my loans and allocate the extra $ in the market. I would probably start quite small (under 5 grand) into the market.

Any insight is much appreciated. I have a friend who was funded by his parents until now so he is in a better situation and has been investing already so this is where i have gotten the idea from.

You should probably ask yourself if you really are comfortable with day trading to start. It is very hard, in fact you will probably do very poorly at it, no offense. Don't believe me: http://www.businessinsider.com/inves...charts-2014-10

If you decide, "Hey I really shouldnt do this.", you should probably just take that $5k and dollar cost average it in to an index fund if you want to be hyper aggro or even some target date retirement fund (look at the Vanguard funds as these are pretty much the gold standard in the industry)- even though these arent really intended for non retirement purposes- until you get up to $10k. It's very hard to develop a properly allocated portfolio with less than $10k if you decide to invest directly in equities.

If you decide, "Hey, I really would like to manage my own trading.", you should look at https://www.robinhood.com/ . $0 commissions on trades. This will be your best best considering your average trade size is going to get destroyed by commission costs.

Best of luck to ya.

I work for a medium sized privately owned corporation with several subsidiaries. I used to work for one of those subsidiaries and have ~70K in a really crappy John Hancock 401K. I now work for the parent corporation and have a separate crappy John Hancock 401K. I recently contacted my old subsid plan administrator asking if I can roll over my funds into my own IRA. She said no because I still work within the same corporation despite not being with that particular subsidiary. Is this BS or legit? Fwiw, I did not ask about rolling it into my current 401K cause it is basically the same crappy plan.

The parent company dictates the rules of the subsidiary 401k plans. It is common that you will still be listed as an active participant in the old subsidiary plan unless you leave the entire company and go elsewhere. They can also only allow you to consolidate within another subsidiary's plan.

Damn. Thanks for the info. A follow up noob question...

30yo
Salary ~110K
Company matches 25% up to 12% (3% total).
401K in question is with John Hancock thru my current employer. The least expensive option I have is JFIVX with an expense ratio of .88. A few other index's are just under 1.0. I currently max out the 401K. I also put a very small amount of $ in a personal IRA thru vanguard.

Should I Max out my 401K or stop at 12% of my salary and put the rest in my vanguard accounts? For comparison, VOO thru vanguard has an E/R or .005.

Wow. That's an insane ER for an index fund. I would probably try to max the IRA out first and dump it in to one of those vanguard target index funds. They have very low ER and you can be more passive with that side of your investments.

The 401k money gets tricky. One part of me wants to tell you to dump it all in to an index fund but that's kind of risky. Maybe do like a 70/30 mix of index and a bond fund. Or if you dump it all in to an index fund, I would definitely try to balance out the portfolio with a bond index fund or a tax efficient muni bond fund in an aftertax brokerage account.

I'd probably avoid any ETFs, honestly.

Well they've been saying they will raise rates for quite a while now and it hasn't happened. In those minutes it sounds like they're saying they will remain patient and make "data-dependent" decisions. Again, that isn't really telling us whether they're closer to QE4 or actually raising rates. Sounds like it could go either way, unless I'm missing something? I'm trying to read between the lines here...

No. They said they were going to wrap up QE3, then wait see how things were looking re: inflation and labor approaching targets.

This is exactly what they said they were going to do and exactly what they have done. You don't "read between the lines" when someone keeps doing exactly what they have been saying they were going to do.

It doesn't "sound like that." They actually said that. No lines to read between, as it is in perfect alignment with what they have been saying and doing all along.

Stop trying to "read between the lines." In case you haven't noticed, the people who have been trying to second guess the Fed are the ones who have lost money.

Do you know what has happened in the past when the Fed has raised rates when starting at a low rate?

He gets a 25% immediate return on his 401k. I used a fancy calculator to determine that 25% is much higher than 0.88%. He should be putting 12% of his salary into the 401k. There is nothing at all tricky about the 401k. Perhaps you should explain your thinking.

You should give a rational as to why you wouldn't put it into ETFs. We'd all love to hear it.

Heard the ad again, it was a fixed index annuity.

So what you are saying is the company reduces someone's principle before buying the annuity in order to pay their salesman?

Brian, when he said he maxes his 401k, I assumed he was contributing $17.5k per year. So he has about a 4% spread between 12% and the max. He should absolutely be doing 12% because of the free money.

He should avoid any ETFs because he could set some type of periodic investment plan in to an index fund as opposed to an etf. He clearly stated he was a noob at investing so that throws up a red flag for me that this guy should really just set up a direct deposit right from his check to an IRA right in to a fund. He should not be dumping $5.5k in to an IRA at tax time and investing it all in to an etf at once.

Is that sufficient enough for you? I have to definitely +1 the sentiments another poster expressed in another thread about you being a dbag. Lots of your posts are very baiting and you have a decent Messiah Complex about you. Happy I could answer, though.

The company does not pay that out of your principal, however they make up the massive commission by suckering people in to riders as well as the massive surrender charge. Last I heard, some insurance companies were offering 10-12% commission on equity indexes annuities. As you can see, there is a clear self-serving bias for a broker to suggest this and I talk to a lot of people who think these are all the rave when in reality they are oversold and may not be the most suitable recommendation a broker can suggest.

The sick thing about EIA is that there has been back-testing done going back to pre-depression markets and EIA's would have underperformed a 60/40 portfolio net of fees very significantly. I forget the number but I think it was 8.08% annualized vs 5.85% annualized for the EIA.

Stay away from these. See FINRA's notice re: EIA for more information.

There are ETFs that he can do a periodic investment in commission free at various brokers and ETFs tend to have lower expense ratios, so I am not sure why you are thinking mutual fund rather than exchange traded fund. He could just plow some money each paycheck into AGG at a 0.08% ER and no commission at TD Ameritrade to get his bond holding, for instance.

Maybe I am missing something on TD's website but all I can find are periodic investment plans for mutual funds. First of all, he said he invests at Vanguard and I am not aware of any auto invest for ETFs at Vanguard. Second, even if said investment plans in to etfs existed, using your example, he could buy 1 share each pay period. I know it's commission free but that's just a huge waste of time Where he could accomplish the same thing in to a mf.

None of them have a periodic investment plan for ETFs that I am aware of, but he can set up direct deposit or automatic withdrawal/deposit. I don't see it being a "huge" waste of time when he will be getting less than half the ER by clicking a couple of buttons to purchase some AGG from time to time.

Have you ever actually talked with someone about trading when their only knowledge of investing is changing the %s on the investments their employer offers through their plan? It's of his best interest to just set up and set it and forget strategy which requires 0 effort on his behalf. Until he accumulates enough to invest in some type of discretionary management portfolio. Otherwise what will happen is he will set up the direct deposit, forget about investing in the etfs and then he will check his portfolio two years later and have $11k in cash that he absentmindedly did not get invested and has got that awesome .08% return on his money market.

He wouldn't be trading, this is all buy and hold that we are (both) suggesting.

He seemed a bit more diligent than to forget to actually purchase the shares, but I admit that is somewhat of a risk. I wouldn't put it as a big opportunity loss if he forgot, given current mutual fund and ETF yields - that juicy ~250 buckaronies he gets from being fully invested (assuming neutral case scenario of rates not changing) over the two years isn't exactly life changing money.

Lol. We've really gone for a spin here. I'm going to ignore the ETF argument for right now as I'm still a little unsure on if should I invest beyond 12% in my crappy 401K. Given my variables in age/income/etc, am I better off investing 5K additional with no match into the ****ty 401K, or should I put that 5K into an IRA that gives me more selection/lower cost?

The second.

Yes. Your hierarchy should be 1) 12% 401k 2) Max IRA at 5.5k 3) Anything else you can afford is at your discretion in to a non-retirement brokerage account, maxing out your 401k, or getting some other tax deferred savings via a low cost annuity vehicle.

Thanks for the clarification, maybe my word choice was a bit poor. Yes, I understand that the Fed's plans are dependant on the improvement of the US economy via various indicators and I understand that they said that.

A better way to phrase my original question would be:

What is your/anyones prediction on the type of economic data we'll be seeing in the near future? i.e do you buy into the US recovery enough that the Fed will feel confident to raise interests rates to 50 basis points or so within a year? Or are you more bearish on the economy and think QE4 is likely to occur?

Just looking for another opinion since I'm seeing a lot of conflicting data/reports on the extent of the US recovery.

Sorry. Everyone and their brother agrees with 1) 12% into 401k to get match, 2) up to max allowable IRA contribution ($5500), 3) party like it is 1999 or go back and max out 401k or do whatever because you are going to be fine.

There has never been a day in the history of the world when the future has been clear. The recent trend has been improvement. That is pretty much all anyone's got to work with.

I have to agree with Brian on this one, you might as well consult a magic 8 ball on rates.

Everyone has thought rates would increase, for the last 5 years. They have pretty much been wrong so far.