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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • M* Rekenthaler on Retirement Income
    Through my State Teachers Retirement System, I learned of a lesser know vehicle known as a 401(a) plan, which was offered on a voluntary basis to individual teachers.
    Wish I had known about it earlier in my career.
    I always felt their was a knowledge vacuum when it came to 403(b) plan choices. More often that not, individual teachers had poor choices. It usually was an uphill battle to try and promote better options. This lead me to look beyond my local 403(b) offerings.
    The 401(a) plan, at the state level, was one of those choices for me. Glad I pursued it.
    https://investopedia.com/terms/1/401a
    401a-plans-rollover-rules
    bee bee in Other Investing
  • M* Rekenthaler on Retirement Income
    @hank Does a 1035 exchange ring a bell? Still valid.
    @catch22 - Nope. Simply a “403-B Custodial Transfer.” Odd in the sense that you were still making systematic contributions to the workplace plan and yet could turn right around and transfer that money to a new custodian (ie: another fund house). Partial transfers were allowed. It remained a 403-B and was still subject to all the rules governing them, including age. You simply filled out an app form & mailed it to the new custodian. I ended up, for better or worse, with a handfull of such accounts. Noteworthy - The employer’s name / ID appeared on those new accounts. You weren’t “leaving” the existing plan, but simply widening the scope of investments.
    ISTM that ability stemmed from a loophole in the IRS code. I suspect courts had taken a look at it and chosen not to curtail the process.
    hank in Other Investing
  • M* Rekenthaler on Retirement Income
    @catch22, 1035 exchanges are for personal annuities.
    Workplace tax-deferred annuities (401k/403b/457b) can be rolled over into T-IRA - in-service cash rollovers if allowed by plans, and cash rollovers on retirement/resignation/termination from jobs.
    yogibearbull yogibearbull in Other Investing
  • M* Rekenthaler on Retirement Income
    @hank Does a 1035 exchange ring a bell? Still valid.
    catch22 catch22 in Other Investing
  • Doug Ramsey, Leuthold CIO, on investing in the markets ahead
    the valuation on small caps relative to large caps is as extreme as the late 1990s. Remember that the S&P 50 corrected by 50% in 2000-02. The S&P Equal Weight index and small caps vastly outperformed back then.
    Reading this in other places lately. Along with the return of dividends, value . . . and the Talking Heads?
    I'm still waiting...I'm still waiting...I'm still waiting...
    I'm still waiting...I'm still waiting...I'm still waiting...
    I'm still waiting...I'm still waiting...
    The feeling returns
    Whenever we close our eyes
    Lifting my head
    Looking around inside
    The island of doubt
    It's like the taste of medicine
    Working by hindsight
    Got the message from the oxygen
    Making a list
    Find the cost of opportunity
    Doing it right
    Facts are useless in emergencies
    The feeling returns
    Whenever we close our eyes
    Lifting my head
    Looking around inside
    Happy Friday:
    WABAC WABAC in Fund Discussions
  • M* Rekenthaler on Retirement Income
    “401k for corporations came later and accidentally. ”
    That’s an invitation for further demur ... There were likely many reasons for the 401-K’s emergence - by and large workers’ welfare paramount. But a skeptic might suggest some of the motivation had to do with a desire of big corporations to shed their costly defined benefit pension plans. It also seems to me that the 403B’s growing popularity and success were an important factor leading to the establishment of the 401-K. The rules for the 403-B (as Yogi mentions) weren’t as stringent. In the early 90s I happened upon a read in the WSJ relating how it was possible for 403-B participants to easily transfer funds (while still employed and contributing) to another custodian other than the workplace sanctioned one. Wow! What an eye opener. I doubt many participants knew of that loophole. Transfer I did! That option / loophole was closed sometime around 2000 or a bit later.
    hank in Other Investing
  • M* Rekenthaler on Retirement Income
    if I recall properly, 403B's were pushed by lobbying groups of the insurance companies to become part of the IRS code. 401k's came later.
    College contributions to participants’ annuities have been “before tax” dollars to the individuals since the start of TIAA [by the Carnegie Foundation] in 1918, as are employer contributions to qualified pension plans. This was formalized in broader amendments to the Internal Revenue Code in 1942. In the 1950s, the School of Medicine at Washington University of St. Louis ... and the Johns Hopkins Medical School offered their medical doctors on the staff an arrangement whereby doctors could designate their entire salary or any part of it as annuity premiums, before taxes. Many doctors jumped at this chance.
    ...
    The IRS became interested, and a high Treasury official, Dan Throop Smith, a former professor at the Harvard Business School, pressed an amendment to the Internal Revenue Code that would limit tax-deferred college contributions to annuities to 10 percent of current salary.
    ...
    The final result was a reasonable compromise, permitting annuity contributions of up to 20 percent of current salary, with a formula for past service. In the Technical Amendments Act of 1958, Congress added Section 403(b) to the Internal Revenue Code as a replacement for all that had gone before in the college world.
    ...But the unexpected development was that the individual could voluntarily elect to fill the rest of the 20 percent if his or her employer was not contributing the full amount. The individual could transform part of his or her salary into “employer contributions” to an annuity under Section 403(b) by so-called salary reduction.
    ...
    Congress established 401(k) plans in 1981, permitting employer-sponsored deferred compensation arrangements within certain parameters.
    https://pensionresearchcouncil.wharton.upenn.edu/wp-content/uploads/2015/09/tiaa04031670.pdf
    Pension plans are little more than annuities funded by employers who put money into them; money that could instead have been used to increase employee pay. Section 403(b) makes this relationship between pension funding and reduced pay more explicit. It lets employees elect to forgo even more of their pay in exchange for greater employer pension contributions. Same as with Keoghs and 401(k) plans that came later.
    msf in Other Investing
  • M* Rekenthaler on Retirement Income
    403b for educational and nonprofit institutions originated much earlier and had simpler rules.
    401k for corporations came later and accidently. Their rules are more complex and features more restrictive. The fear was that companies with lots of resources would play games with direct-contribution 401k as they did with their direct-benefit pensions. Some 401k reforms only now provide features that were already available in 403b, and many were asking, "So, where is the beef?"
    The insurance industry lobbied hard to include annuities among the default options for auto-signups for 401k/403b but only the TDFs were approved. Most recently, a 401k reform allows income/annuitization within the TDF framework and that has forced cooperation among the fund families and insurance companies (only they can provide annuities).
    Workplace annuity leader TIAA should be mentioned. There are only 8 CREF VAs covering stocks, bonds, hybrid, m-mkt. The ERs for the cheapest R3 class (for large institutions) range from 0.17-0.26% (all-in), while the ERs for the most expensive R1 class (for small institutions) range from 0.41-0.49% (all-in). These are low ERs by any standard. Some workplace plans may have additional plan level fees that vary depending on whether the institutions subsidize 403b program as HR benefit.
    CREF Stock VA is the oldest VA around (1952).
    Of course, TIAA also has general (non-workplace) annuity programs that are much more expensive, but that isn't TIAA's main business.
    yogibearbull yogibearbull in Other Investing
  • TCAF, an ETF Cousin of Closed Price PRWCX
    +1.
    Crash Crash in Fund Discussions
  • M* Rekenthaler on Retirement Income
    @hank @yogibearbull et al
    A unique annuity.
    Fidelity Personal Retirement Annuity
    A 'lite' overview: Fido's annual fee = .25%. There are 55+ fund choices for investments, each having their own ER's. So, if fund 'x' has an ER of .75%, + the .25% fee, ones total annual charge would be 1%.
    Tax deferred growth.
    There may be some changes since I first read through the prospectus several years ago.
    The link will provide the full overview.
    @msf and I discussed this annuity choice several years ago.
    And @hank, if I recall properly, 403B's were pushed by lobbying groups of the insurance companies to become part of the IRS code. 401k's came later.
    catch22 catch22 in Other Investing
  • M* Rekenthaler on Retirement Income
    ”Many school districts just handover their 403bs to annuity companies and their salesmen to feast. It's a jungle out there.”
    Yes, the term “TSA” is testament to the importance of annuities to early 403Bs for public employees. I’ll double-check, but am pretty certain the 403-B preceded the 401-K. From hazy memory, the public institution where I began work in 1970 offered us either an annuity or the ability to invest in a front loaded Templeton mutual fund of our choice. But, ISTM, the latter was a newer option and that prior to the 70s employees there were limited to a traditional annuity (as described by @Yogibearbull). And thanks Yogi for the interesting additional information.
    hank in Other Investing
  • M* Rekenthaler on Retirement Income
    Annuities just don't make sense to me: the money ceases to be yours, and it becomes THEIRS. A charitable annuity for X amount may be a nifty way to give to a favorite charity, however. Better when rates are higher.
    That’s been my opinion over the years. But I’m no expert. It always seemed to me they were giving you back your invested sum over time with very little appreciation, if any. Of course, last time I looked interest rates were 1 or 2% on intermediate term bonds. A lot has changed since than. To wit … if you lived to be 120 you’d probably make out like a bandit.
    hank in Other Investing
  • Larry Summers and the Crisis of Economic Orthodoxy
    Wasn't it Peter Lynch who said "If you spend 13 minutes a year on economics, you've wasted 10 minutes." Sounds about right.
    Mark Mark in Other Investing
  • What happened to CCOR?
    That's great @davidmoran. Way to go man.
    The stock count is right in line with their declared strategy to own 20-25 stocks. So it's nice to know they aren't suffering from strategy creep.
    Depending on who you can believe in this crazy internet world, they're around 90% equities and their secret sauce is around10% AGPXX and around -.03 options on stocks in their portfolio. That's not the kind of thing that keeps me up at night. YMMV.
    WABAC WABAC in Fund Discussions
  • M*
    All of this is duly noted here. Thanks for taking the time to spell it all out! One small detail continues to bug me: M* has made it difficult now, to compare funds using the charting feature , for a 10-year time span. 1,3,5 years is pre-set. And "Maximum." But that could be back to 1911 or only as far back as last Tuesday.
    In order to compare funds for 10 years, you must enter it yourself. And when you do, the lovely, fabulous and marvelous people at Morningstar seem to have instructed the chart to go to the first or last day of the month, not the day you have entered. It's maddening. And so, I'm using M* less and less.
    I have tried Simply Wall Street. Have a couple of portfolios there. For a few days, going back some weeks now, they were all discombobulated. I went back to see what's what by now, and it seems to be functional again.
    Crash Crash in Fund Discussions
  • TCAF, an ETF Cousin of Closed Price PRWCX
    PRWCX portfolio Top Five. (dated 31 March.)
    Microsoft.
    Apple.
    United Health.
    Amazon.
    Fortive. (What do THEY do?)
    TCAF is quite obviously not a clone, and there is no bond component, either.
    I wouldn't own TCAF because the top 5 are what they are. All the companies I love to hate. Granted, PRWCX has owned them, too. Probably does own them still, I'm not sure. I did not look this time, past the Top Five.
    Yes, TCAF is bound to attract attention. And Giroux is quite capable. i am using TRP brokerage, still. But I'm less and less impressed with their other funds.....
    Crash Crash in Fund Discussions
  • TCAF, an ETF Cousin of Closed Price PRWCX
    I saw that top 25% of AUM were the huge high-flying tech stocks too. It makes me hesitate to add-to this ETF at this time (I did buy a few shares on the 2nd day to more easily monitor it's progress). All, except GOOGL, have 14-day RSI scores around 70. Maybe not a good buying opportunity. But that said, these tech stocks seem to have been more defensive than any other equity category this YTD.
    NASDAQ was up over 30% YTD as of yesterday. Apple hit an all time high. By contrast, the Dow was essentially unchanged YTD. What a disparity. Some pretty good funds aren’t doing much this year. VWINX was up less than 2% YTD as of yesterday. And we all know the sad tale of “safe” CCOR which was off 11-12% YTD at last check. Not meant to pick on any particular fund. Just to point out how crazy the markets have been lately.
    I have trouble dealing with fame (in this case Giroux’s), so vacated PRWCX early last year and am staying far away from the obvious attempt by TRP to capitalize on Giroux’s name with a semi-clone that’s much different than PRWCX by many accounts here. Hey, they’ve been losing AUM. Who can blame them?
    Re TRP - I think they generally do a good job with their diversified “spectrum-type” allocation funds. Some have reasonable fees. You can gain exposure to a literal rainbow of various equity or fixed income areas in one fund. And I’ve used TCHP in the past as a short term trading instrument. But you don’t want to be holding much of that one when tech tanks. It will be interesting to observe the extent to which TCAF sees use as a short term trading tool rather than a solid long term portfolio hold like its tamer cousin.
    hank in Fund Discussions
  • TCAF, an ETF Cousin of Closed Price PRWCX
    I saw that top 25% of AUM was the huge high-flying tech stocks too. It makes me hesitate to add-to this ETF at this time (I did buy a few shares on the 2nd day to more easily monitor it's progress). All, except GOOGL, have 14-day RSI scores around 70. Maybe not a good buying opportunity. But that said, these tech stocks seem to have been more defensive than any other equity category this YTD.
    MikeM MikeM in Fund Discussions
  • TCAF, an ETF Cousin of Closed Price PRWCX
    It appears based on todays NAV move, that TCAF is going to run hot (relative SPY). Not a problem if you want that. 25% of AUM are AAPL, AMZN, NVDA, MSFT, GOOGL.
    This brings up the question will the T/O be higher than I would have thought? IOW's will TCAF be more tactical in nature.
    I don't need to pay .31 to get a lineup like that.
    WABAC WABAC in Fund Discussions
  • Doug Ramsey, Leuthold CIO, on investing in the markets ahead
    I would be curious if he mentioned gold or real estate. In January he mentioned both to Market Watch.
    https://www.marketwatch.com/story/this-crazy-retirement-portfolio-has-just-beaten-wall-street-for-50-years-11672945313
    MikeM2 in Fund Discussions