Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[SuperBowl4]

Invest in LEAD

[MahiMike]

Originally Posted by RunKC

Owning feels like such a sham.

You could always just burn your cash on renting the rest of your life. OMG.

[Nightfyre]

Originally Posted by RunKC

So I use Fidelity and they sold me their target managed fund for my Roth IRA.

My question is, why would I do that and not just get an S&P low cost Index Fund, specifically the Fidelity version FXAIX?

Here’s the comparison:

Fidelity managed target fund-average life of return to date is 7.70%. It’s got an expense ratio of 0.75%

Fidelity S&P FXAIX-average life of return to date is 13.22%. It’s expense ratio is 0.02%

It also seems like a large portion of the target fund is made up of the S&P anyway.

That seems like one hell of a huge difference. Any downside to this in your minds?

Target funds have a mix of bonds to reduce volatility based on the target date of the fund. The mix shifts more towards bonds as the target date gets closer, resulting in a higher expense ratio. So less risk is why there is a lower return.

[Rain Man]

Originally Posted by MahiMike

You could always just burn your cash on renting the rest of your life. OMG.

On that note, I didn't pay attention to the Trump tax changes as they relate to mortgage interest. But my impression is that the mortgage interest deduction won't apply to a lot of people any more since the standard deduction is higher. It seems like that would decrease home values, but I haven't noticed it when looking at sales. Anyone got any theories?

[Discuss Thrower]

Originally Posted by Rain Man

On that note, I didn't pay attention to the Trump tax changes as they relate to mortgage interest. But my impression is that the mortgage interest deduction won't apply to a lot of people any more since the standard deduction is higher. It seems like that would decrease home values, but I haven't noticed it when looking at sales. Anyone got any theories?

It's probably a big reason why NYC's housing market has been riggity riggity riggity wrecked.

[Buehler445]

Originally Posted by RunKC

So I use Fidelity and they sold me their target managed fund for my Roth IRA.

My question is, why would I do that and not just get an S&P low cost Index Fund, specifically the Fidelity version FXAIX?

Here’s the comparison:

Fidelity managed target fund-average life of return to date is 7.70%. It’s got an expense ratio of 0.75%

Fidelity S&P FXAIX-average life of return to date is 13.22%. It’s expense ratio is 0.02%

It also seems like a large portion of the target fund is made up of the S&P anyway.

That seems like one hell of a huge difference. Any downside to this in your minds?

You could split out some and put some in an S&P ETF, but I wouldn't do all of it.

Originally Posted by Rain Man

On that note, I didn't pay attention to the Trump tax changes as they relate to mortgage interest. But my impression is that the mortgage interest deduction won't apply to a lot of people any more since the standard deduction is higher. It seems like that would decrease home values, but I haven't noticed it when looking at sales. Anyone got any theories?

Yeah. My theory is that housing purchases aren't driven by Schedule A Mortgage Interest deductions.

[Rain Man]

Originally Posted by Discuss Thrower

It's probably a big reason why NYC's housing market has been riggity riggity riggity wrecked.

I'm looking it up, and it seems like the effect would be large on homes over $750,000 and on homes that are at the lower end of the national price range. I could do the math to figure out an estimate on the low end, but the general rule is that the lower the price, the more negative the impact.

So logically it seems like you'd see declines in prices at the low end and high end of the scale, and little or no impact on homes in the middle of the range (which is probably the $300-600k range).

[EPodolak]

Originally Posted by RunKC

So I use Fidelity and they sold me their target managed fund for my Roth IRA.

My question is, why would I do that and not just get an S&P low cost Index Fund, specifically the Fidelity version FXAIX?

Here’s the comparison:

Fidelity managed target fund-average life of return to date is 7.70%. It’s got an expense ratio of 0.75%

Fidelity S&P FXAIX-average life of return to date is 13.22%. It’s expense ratio is 0.02%

It also seems like a large portion of the target fund is made up of the S&P anyway.

That seems like one hell of a huge difference. Any downside to this in your minds?

Since it's inception in '88 looks like that S&P fund is 10.3%. But I can't see any advantage paying that much more in expenses for the target fund - it's a significant difference. I invest in a Vanguard S&P ETF and a separate Vanguard Bond ETF, re-allocate as I see fit over the years. Unless you have a stomach for volatility and potentially losing your shirt at a bad time, at least temporarily as in '08, don't go all in on a pure stock fund.

[ChiliConCarnage]

Originally Posted by Rain Man

On that note, I didn't pay attention to the Trump tax changes as they relate to mortgage interest. But my impression is that the mortgage interest deduction won't apply to a lot of people any more since the standard deduction is higher. It seems like that would decrease home values, but I haven't noticed it when looking at sales. Anyone got any theories?

Supply/demand.

https://fred.stlouisfed.org/series/HOUST

The 10 yr dropping has helped prop home sales back up also this year

Edit: runkc, Fidelity surely has index target date funds. Switch to one of those. You still won’t get 13% but neither will the S&P 500 over the next decade most likely. You won’t get jack shit like holding the s&p from ‘00 to ‘10 either while international outperformed

[petegz28]

Little tidbit that will surely go unnoticed but is definitely worth noting.....


The 2yr & 5yr bonds are no longer inverted. I have been watching that over the last few days and today (lsat night) they reverted.

[lewdog]

Originally Posted by petegz28

Little tidbit that will surely go unnoticed but is definitely worth noting.....


The 2yr & 5yr bonds are no longer inverted. I have been watching that over the last few days and today (lsat night) they reverted.

Let's ****ing ride!!!!

[Rain Man]

(Notices Tesla is up 17 percent today.)

(Smug smile.)

(Checks stock portfolio.)

(Still 5 percent below breakeven on Tesla stock.)

[kstater]

Originally Posted by Rain Man

(Notices Tesla is up 17 percent today.)



(Smug smile.)



(Checks stock portfolio.)



(Still 5 percent below breakeven on Tesla stock.)

Yeah their earnings report was pretty good, so I'd imagine tomorrow their factory is gonna catch on fire or something

Sent from my Pixel 3 XL using Tapatalk

[TwistedChief]

Originally Posted by petegz28

Little tidbit that will surely go unnoticed but is definitely worth noting.....


The 2yr & 5yr bonds are no longer inverted. I have been watching that over the last few days and today (lsat night) they reverted.

Correct. The curve has been steepening. The Fed will cut rates next Wednesday and then we're only priced for one more cut in 2020. Reasons include: 1/ some elements of a detente between China and the US in their trade dispute 2/ better news on Brexit (though this is still messy) 3/ the Fed instituting some liquidity injections that benefit the front end exclusively 4/ the US Treasury exploring - almost certainly at Trump's behest - issuing more long end securities.

The data has still been relatively tepid. And in 2020, a potential Trump/Warren election is seen as a major negative almost regardless of who wins.

[eDave]

Originally Posted by Rain Man

(Notices Tesla is up 17 percent today.)

(Smug smile.)

(Checks stock portfolio.)

(Still 5 percent below breakeven on Tesla stock.)

Remain wary of Tesla.