341–350 of 358 posts
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What would you think about a system where a major institution (e.g. Vanguard) holds index funds, but the shareholder voting for each company in those funds is done by a different in-house team whose compensation is tied to the performance of that particular company? (More realistically, you'd just need a different team for each company in a given industry, but one team could vote for multiple companies that don't com…
I don't like it. It suffers from the same problems, but just window dresses them. There's no way to make that team financially culpable without charging fees related to the results, and those fees are largely what people are trying to avoid when using these low lost index funds. And those fees need to be very sizable to be consistent with the value of the decisions they're making. I think a better approach would be t…
I don't understand why that would be the case. Just charge a flat fee for the fund and distribute proportionally to the teams whose companies do best.
It sounds impossible to satisfy your desiderata with unsophisticated investors. They will have to delegate the task of assessing board decisions to someone.
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You can't really switch 401k providers when your employer picks them.
Every time I've had a 401k provided by work, there were multiple options from multiple providers. Is that not common? That said, we probably agree that it's a market without a lot of competitive pressure, and that often results in poor customer service (just as in the case of telcos).
It probably depends on what stage the company is in. My employer relatively recently went public, but we only have one choice of provider.
Think I may need to dig deeper into this. But a few questions that one of you may be able to answer. Seems like you won't get super large returns but on the other hand you won't risk super large losses either. But sounds like instead of having cash on a bank account, earning no interest, it may be worth putting them into EFT's? Or have I totally misunderstood? Is it only possible to tie your money up for longer perio…
There is a risk, but it is averaged over hundreds of equities instead of just a few, as with directly buying shares (unless you can afford to spread a lot; if you do, you can afford a wealth manager). If just a few equities are decreasing in value, it'll balance out. But if they all loose, like on October 19th, 1987, when the S&P 500 lost 20.47%, you'd be much poorer.
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> the stock price of a company has no direct bearing on its capital. Only at IPO time or when a company is raising additional capital is the stock price relevant for the capital. E.g. Google's stock price has increased 15x since their IPO, but that has had no effect on their capital. Any other time besides the IPO and when raising additional capital, it is just money changing hands between stockholders, the company d…
No, the decision is in the context of the market capitalization , not the stock price. If $10M company has a share price of $50/share, then it has 200,000 shares outstanding. If it has a price of $100/share, then it has 100,000 shares outstanding. A buyout, merger or acquisition is based on the total value of the company, not based on the smallest unit of ownership in that company.
Vanguard is the reason why Betterment and wealth front never made any sense to me. There is no way they can be better than just putting in vanguard funds myself. I still do t understand what their value proposition is.
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Can you name a few that support commission-free trades on ETFs/Mutual Funds for Roth IRA accounts? Can't find one using Google. Thanks.
Almost all of the top brokers have some sort of commission-free ETFs/mututal funds. - TDAmeritrade [1] - Schwab [2] [1] - https://research.tdameritrade.com/grid/public/etfs/commissio... [2] - http://www.schwab.com/public/schwab/investing/accounts_produ...
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That is exactly how tax loss harvesting works. Here's a quote from Betterment: "What is Tax Loss Harvesting? Tax loss harvesting is the practice of selling a security that has experienced a loss." https://www.betterment.com/tax-loss-harvesting/
No, you are not understanding how it works. Your portfolio can be in the black every single year, but you can still use TLH to improve your returns every single year by harvesting losses in individual securities. See: http://www.investopedia.com/articles/taxes/08/tax-loss-harve...
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I don't know what that is, I'm afraid. Is it something Vanguard would provide? If it's a US government thing, I don't live in the US, I would just like to invest in index funds (so anything that resembles Vanguard is fine with me).
Sorry, I missed the part where you mentioned living in the EU. One of the siblings comments has a good explanation for ITINs. My wife used hers to open a Vanguard account despite having no SSN at the time. She did have a visa and a US address though, so I'm not sure how it would work for you (and if it would be worth the trouble; probably not). I'm a French citizen, and wish I could help you regarding investing in th…
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> This is true any time you move brokerages, is it not? No. If you own the assets directly, and they are traded on the exchange (like the ETFs WF/Betterment use) they can be transferred around without triggering a sale event. Target date funds and the like would probably have to be sold. I have my tax advantage at VG and my taxable has been all over the place finally settling with CS for now.
Okay, you have me a little confused now :) I read my parent as saying that in order to move investments out of Wealthfront, you'll need to sell and pay capital gains. I read your comment saying this isn't necessarily the case. There seems to be some disagreement here. What am I misunderstanding? The ins and outs of investments and tax ramifications can sometimes seem very opaque to me, so I appreciate any education o…
With regular brokerages you can move stocks/funds around with a transfer.