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Ask HN: Where do you keep your 401k investments?

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Re: Ask HN: Where do you keep your 401k investments?

#31

Post by monroewalker »

dheera wrote: post #24

My 401K as of this moment: Traditional 401K: 100% GME Roth 401K: 100% IBIT/FBTC (bitcoin ETFs) This is not investment advice, but my general rule is to use 401Ks and IRAs for, high-risk, high-gain, short-term, tax-inefficient trades. My traditional 401K is mostly unvested company match. If GME crashes and I lose all of it, bleh, I change jobs earlier, no big deal. If GME skyrockets, I sell, then stay at my current co…

I'm sure you're already aware of the general consensus around how speculative cryptocurrency and meme stocks are but it's worth repeating that this is a very dubious approach. On GME specifically, this is a good documentary to watch: https://youtu.be/5pYeoZaoWrA?si=OuRp-NxyiYR8XmA0

I think it's worth it for you to consider reducing your allocation to these even if you have strong conviction in their long term success. If you do 25% GME/crypto and 75% index funds (or target retirement) then you're still going to be doing extremely well if these assets take off as hoped for but you'll be much better off in the alternative and less surprising scenario where they don't

Re: Ask HN: Where do you keep your 401k investments?

#32

Post by nosefurhairdo »

Agree that target date funds invest in bonds too early. I'm 100% in total market index since I'll be in the market for another 25+ years. May shift more towards target date funds as retirement approaches, but haven't thought that far ahead. I subscribe to the Bogle school of thought that low fee total market index funds + time in the market is virtually impossible to beat.

Re: Ask HN: Where do you keep your 401k investments?

#33

Post by hanska »

blessedwhiskers wrote: post #30
pram wrote: post #13

I rolled all my 401ks into an IRA on Betterment. They automatically buy Vanguard ETFs and some other stuff. Has some nice features like earnings projections and automatically setting your equity/bond composition (like you can set it to 10% bonds and it will automatically rebalance all your ETFs)

I actually just left Betterment because over the last few years their Core portfolio has really lagged performance of my non-Betterment investments (largely VTI, VTSAX, VBTLX in approximately 80/20 stock/bond split). Upon ACATS-ing over to another broker, I found they'd purchased some funds with high fees when there were really similar funds available with far, far lower fees. The only reason I can think of to buy a…

"The only reason I can think of to buy a higher expense fund when a much lower expense variant exists is in the name of tax loss harvesting"

perhaps it's because they receive kickbacks from that specific fund.

Re: Ask HN: Where do you keep your 401k investments?

#35

Post by crooked-v »

pram wrote: post #13

I rolled all my 401ks into an IRA on Betterment. They automatically buy Vanguard ETFs and some other stuff. Has some nice features like earnings projections and automatically setting your equity/bond composition (like you can set it to 10% bonds and it will automatically rebalance all your ETFs)

If you're robo-investing, just use the Vanguard robo-investor directly. It has basically the same functionality and lower fees (about 0.15% once you count them crediting Vanguard fund expense ratios).

Re: Ask HN: Where do you keep your 401k investments?

#36

Post by immibis »

2OEH8eoCRo0 wrote: post #11

I might sound like a bad idea to hold bonds so far from retirement but it can sometimes work out better than solely index funds. If the market crashes you'll be heavy on bonds and able to buy the dip when you rebalance. Check this out: https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Lar...

If the market crashes. My expectation is for the S&P to keep going up to the moon. Maybe with a brief crash at some time, but it's got an entire Congress worth of corruption behind it now. Never bet opposite of people with the power to influence the outcome.

Look what happened with COVID: it crashed, but then politicians immediately and for a long time printed a shitload of money to make it stop crashing. This is the new normal.

Market indices are already at all-time highs, and the Federal Reserve is indicating it may cut rates due to inflation being measured as negative (no matter how it feels in reality for you and I) and the USA is about to have the most pro-pump-and-dump run-the-country-like-a-business president ever (for the second time and not being willing to ) who I completely expect will find even more and better ways to take money from the poor and give it to corporate investors.

Therefore, as much money as I feel willing to risk on this is in broad market index call options. I'm not trying to convince you to buy the same, just stating my opinion.

Re: Ask HN: Where do you keep your 401k investments?

#38

Post by greenie_beans »

dheera wrote: post #24

My 401K as of this moment: Traditional 401K: 100% GME Roth 401K: 100% IBIT/FBTC (bitcoin ETFs) This is not investment advice, but my general rule is to use 401Ks and IRAs for, high-risk, high-gain, short-term, tax-inefficient trades. My traditional 401K is mostly unvested company match. If GME crashes and I lose all of it, bleh, I change jobs earlier, no big deal. If GME skyrockets, I sell, then stay at my current co…

> I believe there is a high chance in BTC going up drastically more in the next 1 year, in which case I'll sell and the government can't lay their rotten hands on a penny of it. If BTC crashes due to some short term economic crisis, I'll just hold until it goes back up some time in the next 25 years, which I believe is nearly certain.

curious why you think this?

Re: Ask HN: Where do you keep your 401k investments?

#39

Post by dheera »

monroewalker wrote: post #31
dheera wrote: post #24

My 401K as of this moment: Traditional 401K: 100% GME Roth 401K: 100% IBIT/FBTC (bitcoin ETFs) This is not investment advice, but my general rule is to use 401Ks and IRAs for, high-risk, high-gain, short-term, tax-inefficient trades. My traditional 401K is mostly unvested company match. If GME crashes and I lose all of it, bleh, I change jobs earlier, no big deal. If GME skyrockets, I sell, then stay at my current co…

I'm sure you're already aware of the general consensus around how speculative cryptocurrency and meme stocks are but it's worth repeating that this is a very dubious approach. On GME specifically, this is a good documentary to watch: https://youtu.be/5pYeoZaoWrA?si=OuRp-NxyiYR8XmA0 I think it's worth it for you to consider reducing your allocation to these even if you have strong conviction in their long term success…

Oof, no. I'm well aware of the advice and I don't agree with it.

I expect GME to crash and burn. I was going to change jobs at some point, in which case my traditional 401K funds will just disappear because they are not vested. If I happen to win the blue moon GME lottery I'll just stay a bit longer to vest the winnings. In my specific situation it's essentially buying memes with someone else's money at zero downside.

As for BTC, I don't use Roth 401K/IRAs as a retirement vehicle. I use it as legal tax avoidance on a very specific high-risk part of my portfolio that is tax-inefficient if it wins. Given the shitty 401K dollar limits I'm not going to put a cent of it toward stuff that's already tax-efficient if I have tax-inefficient stuff outside that can be swapped in.

The vast majority of my net worth is {municipal bonds, index funds, stocks} are all held in a normal brokerage account because they are not taxed as much to begin with. That's my actual stably-growing retirement fund, and much, much larger than my 401K.

This isn't investment advice, but if you are in a job where you are maxing out your 401K but saving much more outside the 401K than inside it, I'd encourage you to consider the math of doing all your index funds outside 401K and whatever high risk plays inside 401K/IRA. You may find the math works out better that way, like I do.

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