Poor Publix employee seeking 401k investment advice - no longer have Publix stock

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ralphboy
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Poor Publix employee seeking 401k investment advice - no longer have Publix stock

Post by ralphboy »

[Moved into a new thread from: Poor Publix employee seeking 401k investment advice --admin LadyGeek]
I'm a little bit down in the dumps. I got rid of my Publix stock in my 401k (Transferred it to 60% s&p 500, 20% RERGX (international), and 20% Bagsx (bond) and two evaluations later Publix announced a 5 for 1 stock split.
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typical.investor
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Re: Poor Publix employee seeking 401k investment advice

Post by typical.investor »

ralphboy wrote: Wed Apr 06, 2022 10:00 pm I'm a little bit down in the dumps. I got rid of my Publix stock in my 401k (Transferred it to 60% s&p 500, 20% RERGX (international), and 20% Bagsx (bond) and two evaluations later Publix announced a 5 for 1 stock split.
Cheer up! If you had had 1 share at $100, then after the split you would have had 5 shares at $20.

Anyway, you picked a very reasonable allocation. There is no point ever in looking bad and feeling remorse for not having picked the best performing allocation for whatever time you are looking at.

There is no way in advance to know what will be best. Choose a reasonable allocation and accept the returns.

And again, a stock split really doesn’t mean anything except you have more shares that are worth less. The reason it’s done is to make the shares easier to buy.
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ralphboy
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

typical.investor wrote: Wed Apr 06, 2022 10:05 pm
ralphboy wrote: Wed Apr 06, 2022 10:00 pm I'm a little bit down in the dumps. I got rid of my Publix stock in my 401k (Transferred it to 60% s&p 500, 20% RERGX (international), and 20% Bagsx (bond) and two evaluations later Publix announced a 5 for 1 stock split.
Cheer up! If you had had 1 share at $100, then after the split you would have had 5 shares at $20.

Anyway, you picked a very reasonable allocation. There is no point ever in looking bad and feeling remorse for not having picked the best performing allocation for whatever time you are looking at.

There is no way in advance to know what will be best. Choose a reasonable allocation and accept the returns.

And again, a stock split really doesn’t mean anything except you have more shares that are worth less. The reason it’s done is to make the shares easier to buy.
Thanks, I still have Publix stock that was given to me each year $24,000 worth and $8,000 worth that I purchased in another account. The amount that I had in my 401k made my portfolio almost all Publix stock (I had $11,000 of stock in it). Do you think I should invest more in Publix? I'll keep my 60/20/20 allocation but maybe buy $1,000 to $3,000 worth of stock and when I get my dividend every 3 months ($200); spend 25% to buy more stock. I have money in a brokerage account and roth ira that has some diversified investments.
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Re: Poor Publix employee seeking 401k investment advice

Post by 8foot7 »

ralphboy wrote: Wed Apr 06, 2022 10:00 pm I'm a little bit down in the dumps. I got rid of my Publix stock in my 401k (Transferred it to 60% s&p 500, 20% RERGX (international), and 20% Bagsx (bond) and two evaluations later Publix announced a 5 for 1 stock split.
A stock split is no news, really. It’s like having a twenty dollar bill and changing it out for four 5s. You have more paper but the same amount of money.
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Re: Poor Publix employee seeking 401k investment advice

Post by suemarkp »

Individual stock is a philosophical question. Generally, it should be avoided as individual stocks don't provide much diversity. Looks like Publix has still been doing well even in the current downturn, so be glad what you have is still doing well. I had Boeing stock and it was nice when it doubled and almost doubled again. Then the 737 Max crashes happened, Covid happened which reduced air travel, the 787 line was shutdown due to quality problems, the KC-46 tanker has many problems, and the new Air Force One was improperly jacked and they found mini liquor bottles inside from assembly workers. Stock price now is less than half of what it was. Boeing stock is less than 3% of my retirement portfolio.

So things can seem great until they don't. Maybe there will be one stumble and they will recover. But Boeing keeps falling on its face and can't get off the banana peel. No one can predict if or when these things happen to a company. That is why diversity is important in case you are unlucky and a series of unfortunate events hits the company where you have a lot of stock.
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Re: Poor Publix employee seeking 401k investment advice

Post by dogagility »

ralphboy wrote: Wed Apr 06, 2022 11:32 pm Thanks, I still have Publix stock that was given to me each year $24,000 worth and $8,000 worth that I purchased in another account. The amount that I had in my 401k made my portfolio almost all Publix stock (I had $11,000 of stock in it). Do you think I should invest more in Publix? I'll keep my 60/20/20 allocation but maybe buy $1,000 to $3,000 worth of stock and when I get my dividend every 3 months ($200); spend 25% to buy more stock. I have money in a brokerage account and roth ira that has some diversified investments.
What matters is your asset allocation across all of your retirement portfolio.

What is your total portfolio size (including publix stock value, 401k value, IRA value and HSA value, if you have one)?

In general, investing a large percentage of your portfolio in your employer's stock is risky. Publix stock value could easily decrease in value much more than the total stock market. The event that caused this decrease could also cause Publix to lay you off. Now you've lost your job and your portfolio has decreased significantly. It's better to invest in total market index funds rather than individual companies.

When Publix "gives" you stock, it is likely best to sell immediately and invest that money in your index fund-based retirement portfolio.
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

dogagility wrote: Fri Apr 08, 2022 5:38 am When Publix "gives" you stock, it is likely best to sell immediately and invest that money in your index fund-based retirement portfolio.
I don't think I'm allowed to do that. It looks like I can only take the money out for financial hardship or when I quit.

https://www.publix.org/retirement-and-s ... tributions
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typical.investor
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Re: Poor Publix employee seeking 401k investment advice

Post by typical.investor »

ralphboy wrote: Fri Apr 08, 2022 4:17 pm
dogagility wrote: Fri Apr 08, 2022 5:38 am When Publix "gives" you stock, it is likely best to sell immediately and invest that money in your index fund-based retirement portfolio.
I don't think I'm allowed to do that. It looks like I can only take the money out for financial hardship or when I quit.

https://www.publix.org/retirement-and-s ... tributions
Are you enrolled in the PROFIT Plan or the 401(k) SMART Plan?

For the PROFIT plan, it looks like Publix stock is the only option. For the 401(k) SMART, it looks like there are other options.

Or maybe you are enrolled in both. Publix contributes to both plans and I don't know if one is better than the other or if you can choose where your contributions go.

https://www.publix.org/retirement-and-s ... comparison
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

typical.investor wrote: Fri Apr 08, 2022 4:37 pm
ralphboy wrote: Fri Apr 08, 2022 4:17 pm
dogagility wrote: Fri Apr 08, 2022 5:38 am When Publix "gives" you stock, it is likely best to sell immediately and invest that money in your index fund-based retirement portfolio.
I don't think I'm allowed to do that. It looks like I can only take the money out for financial hardship or when I quit.

https://www.publix.org/retirement-and-s ... tributions
Are you enrolled in the PROFIT Plan or the 401(k) SMART Plan?

For the PROFIT plan, it looks like Publix stock is the only option. For the 401(k) SMART, it looks like there are other options.

Or maybe you are enrolled in both. Publix contributes to both plans and I don't know if one is better than the other or if you can choose where your contributions go.

https://www.publix.org/retirement-and-s ... comparison
I am in both plans. The PROFIT plan is where Publix gives employees stock as long as they work a certain number of hours each year (Which I do). In the Smart plan, I can also buy stock but I am not doing so. I am doing 60%(s&p 500)/20%(international)/20%(bond). Not sure if I should keep this allocation or do a 54/36/10 to mimic the fidelity target retirement date fund.
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Re: Poor Publix employee seeking 401k investment advice

Post by typical.investor »

ralphboy wrote: Fri Apr 08, 2022 5:16 pm
typical.investor wrote: Fri Apr 08, 2022 4:37 pm
ralphboy wrote: Fri Apr 08, 2022 4:17 pm
dogagility wrote: Fri Apr 08, 2022 5:38 am When Publix "gives" you stock, it is likely best to sell immediately and invest that money in your index fund-based retirement portfolio.
I don't think I'm allowed to do that. It looks like I can only take the money out for financial hardship or when I quit.

https://www.publix.org/retirement-and-s ... tributions
Are you enrolled in the PROFIT Plan or the 401(k) SMART Plan?

For the PROFIT plan, it looks like Publix stock is the only option. For the 401(k) SMART, it looks like there are other options.

Or maybe you are enrolled in both. Publix contributes to both plans and I don't know if one is better than the other or if you can choose where your contributions go.

https://www.publix.org/retirement-and-s ... comparison
I am in both plans. The PROFIT plan is where Publix gives employees stock as long as they work a certain number of hours each year (Which I do). In the Smart plan, I can also buy stock but I am not doing so. I am doing 60%(s&p 500)/20%(international)/20%(bond). Not sure if I should keep this allocation or do a 60/30/10 to mimic the fidelity target retirement date fund.
Mimicking the Fidelity target retirement date fund is fine I think. I mean stocks are likely to outperform bonds and I am pretty sure you will not have to spend out of the 401k plan early (via a loan), so there probably isn't a need.

The decision for 10% or 20% bonds isn't going to make a huge difference. The fact you are regularly contributing will. I think you are on a good path.
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Re: Poor Publix employee seeking 401k investment advice

Post by Wiggums »

student wrote: Fri Apr 24, 2020 6:27 am Personally I would
1) use Baird Aggregate Bond Fund for fixed income and State Street S&P 500 Index Fund for stock and forgo international in the 401k plan,
2) not use the Employee Stock Purchase Plan,
3) move away from RJ and buy a target date or life strategy fund at Vanguard (but check how much capital gain you have and what it is tax rate for it), and
4) read more about investing and this board.

Revisit the plan after 1-2 years. I think the advice of putting away 15% of your salary is a good one.
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Re: Poor Publix employee seeking 401k investment advice

Post by Bama12 »

Never say you are not smart enough for another job.
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Re: Poor Publix employee seeking 401k investment advice

Post by dogagility »

Bama12 wrote: Fri Apr 08, 2022 5:30 pm Never say you are not smart enough for another job.
+1
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

What do you all feel about doing 100% in the s and p 500 for my 401k and having my roth invested in FNCMX (Fidelity® Nasdaq® Composite Index Fund
), FSRNX (Fidelity® Real Estate Index Fund) & FSCSX (Fidelity® Select Software and IT Services Portfolio) 1/3 each?

https://fundresearch.fidelity.com/mutua ... e=o-NavBar
https://fundresearch.fidelity.com/mutua ... e=o-NavBar
https://fundresearch.fidelity.com/mutua ... e=o-NavBar
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Re: Poor Publix employee seeking 401k investment advice

Post by dogagility »

ralphboy wrote: Fri Apr 08, 2022 6:46 pm What do you all feel about doing 100% in the s and p 500 for my 401k and having my roth invested in FNCMX (Fidelity® Nasdaq® Composite Index Fund
), FSRNX (Fidelity® Real Estate Index Fund) & FSCSX (Fidelity® Select Software and IT Services Portfolio) 1/3 each?

https://fundresearch.fidelity.com/mutua ... e=o-NavBar
https://fundresearch.fidelity.com/mutua ... e=o-NavBar
https://fundresearch.fidelity.com/mutua ... e=o-NavBar
I suggest keeping your portfolio simple. Total stock (or SP500) market, total international index, and total bond market index. https://www.bogleheads.org/wiki/Three-fund_portfolio

If you "slice and dice" with the funds you posted, you are likely to chase performance, continually change investments, and ultimately reduce your portfolio value.

Keep it simple and stay the course.
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Re: Poor Publix employee seeking 401k investment advice

Post by ruralavalon »

ralphboy wrote: Fri Apr 08, 2022 6:46 pm What do you all feel about doing 100% in the s and p 500 for my 401k and having my roth invested in FNCMX (Fidelity® Nasdaq® Composite Index Fund
), FSRNX (Fidelity® Real Estate Index Fund) & FSCSX (Fidelity® Select Software and IT Services Portfolio) 1/3 each?

https://fundresearch.fidelity.com/mutua ... e=o-NavBar
https://fundresearch.fidelity.com/mutua ... e=o-NavBar
https://fundresearch.fidelity.com/mutua ... e=o-NavBar
In your employer's 401k plan I still suggest using:
1) State Street S&P 500 Index N ( > 80% of U.S. stock market) (SVSPX) ER 0.16%;
2) American Funds Europacific Growth R6 (both developed and emerging markets) (RERGX) ER 0.49%; and
3) Baird Aggregate Bond Institutional (intermediate-term investment-grade bonds) (BAGIX) ER 0.30%.

In your Roth IRA I suggest keeping things simple, use only very diversified low cost stock index funds like Fidelity@ Total Market Index Fund (FSKAX) and Fidelity@ Total International Index Fund (FTIHX).
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

dogagility wrote: Fri Apr 08, 2022 5:38 am What is your total portfolio size (including publix stock value, 401k value, IRA value and HSA value, if you have one)?
401k: $22,728
Baird Aggregate Bond Fund 19.08%
State Street S&P 500 Index Fund 61.24%
American EuroPacific Growth R6 19.68%

Brokerage: $33,158

PNQI (INVESCO NASDAQ INTERNET ETF) 48.75%
SOCL (GLOBAL X SOCIAL MEDIA ETF) 25.19%
FFNOX (Fidelity® Multi-Asset Index Fund) 26.04%

Roth: $11,562
FXAIX (FIDELITY 500 INDEX FUND) 49.10%
FSPSX (FIDELITY INTERNATL INDEX FUND) 24.37%
FXNAX (FIDELITY U.S. BOND INDEX FUND) 14.82%
FSMAX (FIDELITY EXTENDED MARKET INDEX FUND) 11.71%

Profit plan and Employee Stock Purchase Plan (Publix stock): $34,599

Crypto: $1,652
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Re: Poor Publix employee seeking 401k investment advice

Post by dogagility »

ralphboy wrote: Sun Apr 10, 2022 8:52 am
dogagility wrote: Fri Apr 08, 2022 5:38 am What is your total portfolio size (including publix stock value, 401k value, IRA value and HSA value, if you have one)?
401k: $22,728
Baird Aggregate Bond Fund 19.08%
State Street S&P 500 Index Fund 61.24%
American EuroPacific Growth R6 19.68%

Brokerage: $33,158

PNQI (INVESCO NASDAQ INTERNET ETF) 48.75%
SOCL (GLOBAL X SOCIAL MEDIA ETF) 25.19%
FFNOX (Fidelity® Multi-Asset Index Fund) 26.04%

Roth: $11,562
FXAIX (FIDELITY 500 INDEX FUND) 49.10%
FSPSX (FIDELITY INTERNATL INDEX FUND) 24.37%
FXNAX (FIDELITY U.S. BOND INDEX FUND) 14.82%
FSMAX (FIDELITY EXTENDED MARKET INDEX FUND) 11.71%
I
Profit plan and Employee Stock Purchase Plan (Publix stock): $34,599

Crypto: $1,652
If I were in your shoes, here's how I would allocate your retirement funds (assuming this is all for retirement and you have a separate emergency fund).

This will result in about a 90/10 asset allocation (stocks/bonds) and about 10-15% of your stock allocation in international funds.

My thought process here is to simplify your portfolio and reduce the expenses (expense ratio) as much as possible. High expenses are a very significant drag on your portfolio over the long term.

401k
Allocate $10K to the Baird Bond Fund.
Allocate all of the remaining money (about $12K) to State Street SP500 fund.

Brokerage account
Sell all of these funds and invest all of the proceeds (about $33K) in FSKAX (Fidelity Total Stock Market Index Fund).

I assume these funds in your brokerage account have been held by you for more than one year. This will result in no capital gains tax since I think your taxable income will be less than $41K in 2022.

Roth IRA

Allocate all of your funds (about $11K) to FSPSX (Fidelity International Stock Index Fund).

Profit plan and Employee Stock Purchase Plan (Publix stock)
Sell all of the stock purchased through your Employee Stock Purchase Plan and invest the proceeds in your Roth IRA.

If you participate in the ESPP in the future, sell the stock as soon as this stock is delivered to you. Invest the proceeds in your Roth IRA.

Cypto
Sell this all and invest the proceeds in your Roth IRA. (Keep in mind that you can only invest a total of $6K in your Roth for the 2022 tax year.)
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

I'll try and come up with a plan after looking at all of the advice that I have been given lol.

401k:
Use Baird Aggregate Bond Fund for fixed income and State Street S&P 500 Index Fund for stock and forgo international in the 401k plan (x2)
You need an asset allocation. Something like:
75% US stocks
15% Intl stocks
10% bonds
I suggest 20% bonds, 20% international stocks, and 60% domestic stocks.
I'd suggest:

40% S&P 500
15% Bond
20% International
25% Publix stock. <-- reduce this if you want, but you hold that much and I don't know how much it costs to sell so don't want to
$10000 S&P 500 <-- preferred fund here for low cost (x2)
(add Baird if you need more bonds) -> see if they can be added to the IRA first due to cost
(add RERGX if you need more international) -> see if they can be added to the IRA first due to cost
State Street Aggressive Strategic Balanced
S&P 500 and Baird Aggregate Bond Institutional . Split it 50/50 or whatever.
I think that (50% stock/50% bond) is a good target for when you are older and closer to retirement. You won't get much earnings on the 1/2 of your investment that you keep out of the stock market. Bond yields are just too low today.
Now, thinking about this $60,000, splitting it 50/50 between biggest potential to make the most amount of money and less risk, you would want to have $30,000 in stocks (for growth) and $30,000 in bonds (for less risk).
At your age, 30% bonds and 70% stock probably makes sense, but 40/60 or 20/80 could too. Putting 30% Publix stock into a 30/70 allocation would mean 30% bonds, 30% Publix stock and 40% other stock
Allocate $10K to the Baird Bond Fund. Allocate all of the remaining money (about $12K) to State Street SP500 fund.
Publix stock:
I would find a way to slowly sell the Publix stock they give you
Not use the Employee Stock Purchase Plan (x2)
If you stay with Publix, be wary of holding too much of their stock.
I would very strongly recommend that you maximize your Publix stock acquisition, and use this forum for everything else, and never mention your Publix stock again, because you will be eviscerated if you make that choice.
I don't see any drawback to holding Publix stock. But be diversified, buy mutual funds as well.
I would still buy your stock in Employee Stock Purchase Plan.
I would be very leery of going with company stock. I've seen that work out very badly, once at a grocery chain. (As in, everyone lost their retirement.)
My son works at Winco Foods, and they have a similar approach of giving employees stock and telling stories of long time employees who are millionaires. I'd consider that money a nice to have, but not count on it. You have no idea what can happen to the company in 30 years.
Your job and investments at Publix put your situation outside of the norm for bogleheads, so you're going to get some very conflicting advice. In the end, it's your decision, but there is more risk when your job and your retirement savings are dependent on a single company.
IRA:
Buy a target date or life strategy fund
Allocate all of your funds (about $11K) to FSPSX (Fidelity International Stock Index Fund).
FNCMX (Fidelity® Nasdaq® Composite Index Fund), FSRNX (Fidelity® Real Estate Index Fund) & FSCSX (Fidelity® Select Software and IT Services Portfolio) 1/3 each
Both our college age sons have FBALX. We opened the brokerage accounts over 22 years ago for them. DW and I have been at Fidelity 36 years and very happy with the Fidelity balanced fund.
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Re: Poor Publix employee seeking 401k investment advice

Post by ruralavalon »

That's quite a bit of conflicting advise to consider.

Your Publix 401k Smart Plan is a good plan and offers good funds, far better than many other 401k plans. So you should use that plan. You have decided on Fidelity for your other accounts.

I will suggest an order of proceeding with your remaining choices. It is not as complicated as it seems if you take the steps in order.

First, decided on the stock/bond allocation you want to use. (For example: 10% bonds, 15% bonds, 20% bonds.)

Second, decide on the domestic/international stock allocation you want to use, meaning the percentage of stocks you want to have in international stocks. For example: 00% of stocks, 25% of stocks, 40% of stocks, etc.)

Third, decide how much you want to use Publix stock in your asset allocation.

Read the wiki article Tax-efficient fund placement.

Fourth, pick funds to use matching your desired asset allocation. Strive for a combination of both broad diversification and low expense ratios, plus good tax-efficiency.

Read the wiki article Prioritizing investments.

Consider all accounts together as a single unified portfolio, rather than look at each account separately. It is not necessary that each account hold all elements of your desired asset allocation.

Picking funds to use is that last step, not the first.

. . . . .

Here are my suggestions for step one and step two.

What do you think?

First, I suggest about 20% in bonds or other fixed income investments (like CDs, savings accounts, money market fund). This is expected to substantially reduce portfolio volatility (risk), with only a relatively modest decrease in portfolio return. Graph, "An Efficient Frontier: the power of diversification". Please see:
1) Wiki article Bogleheads® investment philosophy, part 3 "Never bear too much or too little risk";
2) Wiki article, "Asset allocation"; and
3) Morningstar (8/20/2019), "The Best Diversifiers for Your Equity Portfolio".

Second, I suggest around 20 - 30% of stocks in international stocks. Vanguard paper (March 2012), "Considerations for investing in non-U.S. equities". Historically, allocating 20% of an equity portfolio to non-U.S. stocks would have captured about 84% of the maximum possible diversification benefit, and allocating 30% of an equity portfolio to non-U.S. stocks would have captured about 99% of the maximum possible diversification benefit (p. 6). (You can find lots of debate here on international allocation, opinions ranging all the way from 00% to 50% of stocks in international stocks. If you want more viewpoints on international stocks please try the Google search box, upper right, this page).

That works out to about 20% bonds, 20% international stocks, and 60% domestic stocks. Asset allocation is a very personal decision. You must decide on an allocation that is comfortable for you based on your own ability, willingness and need to take risk.

Consider all accounts together as a single unified portfolio, rather than look at each account separately. It is not necessary that each account hold all elements of your desired asset allocation.
Last edited by ruralavalon on Mon Apr 11, 2022 10:37 am, edited 3 times in total.
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

I was thinking the following plan:

401k: 100% s and p 500 --> I figure I get some international exposure with this.

Roth: 100% FBALX --> Even though it has a higher expense ratio than target date funds, it has better returns and a good history. I like that it has less international exposure. Do you think this fund would be too risky to hold for life?

Publix stock: While I'm in the process of selling my brokerage investments in $6,000 increments to fund my roth. I plan on reinvesting 100% of my Publix dividends to buy more shares. Then once I have moved all of my money in my roth account, use the publix dividends to fund my roth contributions. I will stop buying stock after this.

One thing I was unsure about is when to sell my brokerage investments. PNQI and SOCL have been tanking and I don't know if I should wait for them to get better before selling some of my shares. I have about $9,000 in FFNOX in my brokerage and I was thinking I could sell that first. The price for it mirrors FBALX:

https://www.buyupside.com/alphavantagel ... oefficient
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Re: Poor Publix employee seeking 401k investment advice

Post by ruralavalon »

ralphboy wrote: Mon Apr 11, 2022 10:33 am I was thinking the following plan:

401k: 100% s and p 500 --> I figure I get some international exposure with this.

Roth: 100% FBALX --> Even though it has a higher expense ratio than target date funds, it has better returns and a good history. I like that it has less international exposure. Do you think this fund would be too risky to hold for life?

Publix stock: While I'm in the process of selling my brokerage investments in $6,000 increments to fund my roth. I plan on reinvesting 100% of my Publix dividends to buy more shares. Then once I have moved all of my money in my roth account, use the publix dividends to fund my roth contributions. I will stop buying stock after this.

One thing I was unsure about is when to sell my brokerage investments. PNQI and SOCL have been tanking and I don't know if I should wait for them to get better before selling some of my shares. I have about $9,000 in FFNOX in my brokerage and I was thinking I could sell that first. The price for it mirrors FBALX:

https://www.buyupside.com/alphavantagel ... oefficient
Don't start with picking funds to use in each account. Decide the overall asset allocation you want to aim for.

What overall stock/bond mix do you want to aim for?

What overall domestic/international stock mix do you want to aim for?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

Is there a website like portfolio visualizer that shows funds from earlier dates? I would like to see how an international fund beat a domestic fund in the past. It's hard for me to want to invest any in international because every fund that I have looked at shows that it has performed poorly VS USA. Is a bond basically used for locking in profits from stocks via rebalancing?
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Re: Poor Publix employee seeking 401k investment advice

Post by Lionel Hutz »

ralphboy wrote: Mon Apr 11, 2022 10:38 pm Is there a website like portfolio visualizer that shows funds from earlier dates? I would like to see how an international fund beat a domestic fund in the past. It's hard for me to want to invest any in international because every fund that I have looked at shows that it has performed poorly VS USA. Is a bond basically used for locking in profits from stocks via rebalancing?
I would caution against over analyzing. Short term wins and losses should not be considered. The true boglehead answer is to have a globally diversified balanced portfolio, and stick to that plan.

A well managed, low cost Target Retirement fund may be a simple, sensible choice.

If you want to tilt away from International or Bonds, go with a broad based US stock index fund. Be sure you’re comfortable with volatility, then let it go and don’t tinker with it.
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

Lionel Hutz wrote: Tue Apr 12, 2022 8:43 am If you want to tilt away from International or Bonds, go with a broad based US stock index fund. Be sure you’re comfortable with volatility, then let it go and don’t tinker with it.
I guess I don't understand the point of having the bond fund in my 401k. I only get like $2-3 a month from it. Is its sole purpose to protect some of my money from a stock market crash?

I was looking at the "State Street Aggressive Strategic Balanced Securities Lending Series Fund Class I" offered in my 401k and it says, "The Fund seeks to offer a broad diversification and a disciplined rebalancing process by investing approximately 50% of the Fund's assets in U.S. stocks, 25% in international stocks, 13% in real assets and 12% in U.S. Fixed Income." https://my.voya.com/static/epweb/pdf/ffs/CH5U.PDF

I was thinking about investing 100% in that since I won't have to rebalance or worry about rebalancing at the wrong time and then maybe do the 2055 fidelity freedom index target date fund in my roth (FDEWX) or 2050 one (FIPFX).
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Re: Poor Publix employee seeking 401k investment advice

Post by Katietsu »

I think your current investments are better than most, if not all, of your proposed portfolios. The worst thing for portfolio returns is constantly changing strategies, in my opinion.
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Re: Poor Publix employee seeking 401k investment advice

Post by Lionel Hutz »

Lionel Hutz wrote: Tue Apr 12, 2022 8:43 am If you want to tilt away from International or Bonds, go with a broad based US stock index fund. Be sure you’re comfortable with volatility, then let it go and don’t tinker with it.
I guess I don't understand the point of having the bond fund in my 401k. I only get like $2-3 a month from it. Is its sole purpose to protect some of my money from a stock market crash?
Reducing volatility is one key element to bonds, yes.
https://retirementplans.vanguard.com/VG ... gBonds.jsf

Consider 2008: stocks lost 30-40%. Can you honestly say you would've held on while you watched $100,000 drop to $60-70,000? If yes, then congratulations you stuck to the principle of "buy low, sell high" and the Boglehead mantra of discipline and tuning out the noise. However, in reality, naturally many people can't stomach those kinds of losses (or were forced to due to job/life circumstances) and sold low, locking in losses.
I was looking at the "State Street Aggressive Strategic Balanced Securities Lending Series Fund Class I" offered in my 401k and it says, "The Fund seeks to offer a broad diversification and a disciplined rebalancing process by investing approximately 50% of the Fund's assets in U.S. stocks, 25% in international stocks, 13% in real assets and 12% in U.S. Fixed Income." https://my.voya.com/static/epweb/pdf/ffs/CH5U.PDF

I was thinking about investing 100% in that since I won't have to rebalance or worry about rebalancing at the wrong time and then maybe do the 2055 fidelity freedom index target date fund in my roth (FDEWX) or 2050 one (FIPFX).
If that mixture seems to work for you, then yes go for it. The most important part, in my opinion and as Katietsu shares just above too, is to leave it alone once you've set your suitable allocation. You can't succeed in timing the market, and constantly tweaking your portfolio in response to news and events will harm your returns.
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Re: Poor Publix employee seeking 401k investment advice

Post by ruralavalon »

ralphboy wrote: Mon Apr 11, 2022 10:38 pm Is there a website like portfolio visualizer that shows funds from earlier dates? I would like to see how an international fund beat a domestic fund in the past. It's hard for me to want to invest any in international because every fund that I have looked at shows that it has performed poorly VS USA. Is a bond basically used for locking in profits from stocks via rebalancing?
International stocks.
On Portfolio Visulalizer you can compare funds year by year over their entire history. Don't just look at the current numbers.

Example S&P 500 vs international. The annual returns for 25 years, year by year (1997-2022) are shown at the bottom. Many years international stocks outdid U.S. stocks.

Please see the wiki article Domestic/international.
Bogleheads ' wiki wrote:Consider that in international markets you will find...

7 of the 10 largest automobile companies
7 of the 10 largest diversified telecommunications companies
8 of the 10 largest metals and mining companies
6 of the 10 largest electronic equipment and instruments companies
5 of the 10 largest household durables companies
Despite the potential drawbacks of a perceived higher risk, the impact of currency fluctuations, higher investment costs, and an aversion to short-term underperformance relative to domestic markets, international stock investments provide a diversification benefit relative to an all-U.S. equity allocation.
International stock investing is the most often debated topic here. Many people here advocate 00% of stocks in international stocks. If that's what you want, that's all right.


Bonds.
In my opinion it's unwise to have a portfolio with 100% stocks and no bonds or other fixed income. In my opinion the primary purpose of a bond (fixed income) allocation is to reduce portfolio volatility (risk).

For example S&P 500 vs total bond market. In the crash of 2008 stocks lost 37%, but bonds gained 5.15%. In the dotcom crash of 2000-2002, stocks lost every year but bonds gained gained every year.

Please see the wiki article Asset allocation.

Please see the wiki article Bogleheads® investment philosophy, section on "Never bear too much or too little risk".
Bogleheads' wiki wrote:To know whether an asset allocation is right for your risk tolerance, you need to be brutally honest with yourself as you try to answer the question, "Will I sell during the next bear market?, which is very hard to accurately assess before you have already gone through a bear market.
. . . . .
It is easy to underestimate risk and to overestimate your tolerance for risk. Many people found out the hard way after the crash of 2008. Those people learned too late they should have been holding more bonds, so you should think carefully before choosing an asset allocation with high stock market allocations. If you have not been through a major market downturn before, it is hard to explain how your logical considerations of risk can quickly become emotional ones.
Many people with very high stock allocation sell off in a panic when the stock market crashes, then miss out on the recovery.

I suggest about 20% of portfolio in bonds, as a kind of minimum.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

Thanks, I'll stick with the 60/20/20 plan and maybe a target date or fidelity multi fund (ffnox) in roth.
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Re: Poor Publix employee seeking 401k investment advice

Post by typical.investor »

ralphboy wrote: Wed Apr 13, 2022 11:44 am Thanks, I'll stick with the 60/20/20 plan and maybe a target date or fidelity multi fund (ffnox) in roth.
That is an excellent decision I believe!!!!
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

Should I avoid investing in FPURX? (Fidelity Puritan Fund). I ask because I was comparing it to a 60/20/20 allocation and the final amount was similar but then I looked at the portfolio income between the two and there was a huge difference in favor of FPURX. I don't understand how FPURX barely beat my allocation even though it had a much larger portfolio income. Is this because of the higher expense ratio?

https://www.portfoliovisualizer.com/bac ... tion4_1=20
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Re: Poor Publix employee seeking 401k investment advice

Post by grabiner »

ralphboy wrote: Wed Apr 13, 2022 10:05 pm Should I avoid investing in FPURX? (Fidelity Puritan Fund). I ask because I was comparing it to a 60/20/20 allocation and the final amount was similar but then I looked at the portfolio income between the two and there was a huge difference in favor of FPURX. I don't understand how FPURX barely beat my allocation even though it had a much larger portfolio income. Is this because of the higher expense ratio?

https://www.portfoliovisualizer.com/bac ... tion4_1=20
(The benchmark you used, a 60/20/20 allocation, is not the right benchmark; Fidelity Puritan has very little US stock.)

Much of the distribution is a capital gain distribution, which is not income in the usual sense, but is money a fund is required to distribute for tax purposes. If a fund buys a stock and later sells the stock for a higher price, it has a capital gain. The IRS requires that this capital gain be paid to fundholders as a distribution, and that investors outside an IRA/401(k) pay tax on it as if it were a long-term gain (or as a non-qualified dividend if the gain was short-term). Thus, in the year 2021, the fund paid out $3.56 per share in distributions, but only $0.27 of that was dividends on its stocks and bonds, a yield of about 1%. The most similar index fund is Vanguard Balanced Index, which has a 1.65% SEC yield; the difference is primarily the difference between 0.07% expenses on the Vanguard fund versus 0.51% on Fidelity Puritan.

But even looking at actual income can be misleading. Stocks with high dividends don't consistently outperform stocks with low dividends. Bonds with high yields do tend to outperform bonds with low yields, but only because they have more risk.
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

I'll trust you guys and go with the three fund portfolio 60% Fidelity Total Market Index Fund (FSKAX), 20% Fidelity Total International Index Fund (FTIHX), and 20% Fidelity U. S. Bond Index Fund (FXNAX). I'm not exactly sure when I'll change the allocations. In the future should I decide to simply my life in retirement, does Fidelity have a good one fund for a retiree?
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Re: Poor Publix employee seeking 401k investment advice

Post by grabiner »

ralphboy wrote: Tue Apr 19, 2022 9:28 pm I'll trust you guys and go with the three fund portfolio 60% Fidelity Total Market Index Fund (FSKAX), 20% Fidelity Total International Index Fund (FTIHX), and 20% Fidelity U. S. Bond Index Fund (FXNAX). I'm not exactly sure when I'll change the allocations. In the future should I decide to simply my life in retirement, does Fidelity have a good one fund for a retiree?
Yes, the Fidelity Freedom Index funds are great all-in-one funds in an IRA or 401(k).
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

One more question, my plan was to sell my brokerage investments to fund my roth. Should I sell them in any particular order? My brokerage has:

PNQI (INVESCO EXCHANGE TRADED FD TR NASDAQ INTERNT) Acquired 2014, Quantity 100, Cost basis per share $69.86
SOCL (GLOBAL X FDS GLOBAL X SOCIAL MEDIA ETF USD) Acquired 2014, Quantity 200, Cost basis per share $20.54
FFNOX (FIDELITY MULTI ASSET INDEX FUND) Acquired from 9/16/21 and several purchases after, last one being 4/8/22, Quantity 157.655, Cost basis per share $61.64

Should I be selling only $6,000/year? I wasn't sure if I should wait for PNQI and SOCL to be worth more before selling them.
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Re: Poor Publix employee seeking 401k investment advice

Post by typical.investor »

ralphboy wrote: Wed Apr 20, 2022 7:45 am One more question, my plan was to sell my brokerage investments to fund my roth. Should I sell them in any particular order? My brokerage has:
I don't believe it matters much.
ralphboy wrote: Wed Apr 20, 2022 7:45 am PNQI (INVESCO EXCHANGE TRADED FD TR NASDAQ INTERNT) Acquired 2014, Quantity 100, Cost basis per share $69.86
SOCL (GLOBAL X FDS GLOBAL X SOCIAL MEDIA ETF USD) Acquired 2014, Quantity 200, Cost basis per share $20.54
FFNOX (FIDELITY MULTI ASSET INDEX FUND) Acquired from 9/16/21 and several purchases after, last one being 4/8/22, Quantity 157.655, Cost basis per share $61.64

Should I be selling only $6,000/year? I wasn't sure if I should wait for PNQI and SOCL to be worth more before selling them.
Yes, limiting it to $6,000/year (since that is all you can get in) is generally good approach. You will be in the 15% capital gain bracket once your income is over $41,675 (don't forget you also have a 12,950 standard deduction to reduce income).

In terms of waiting for PNQI and SOCL to increase in value, nobody can really know when a good timing would be.

I would just move to your target allocation as soon as you can but in a way that is mindful of taxes.
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Re: Poor Publix employee seeking 401k investment advice

Post by shepherd »

I’m late to this thread but Publix stock is one of the few stocks I would highly recommend that you purchase. It is private, well run and has a strong history of growth. A lot of Publix employees have become very wealthy by purchasing Publix stock. My children are all shareholders and my only regret is that they can’t reinvest dividends.
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Re: Poor Publix employee seeking 401k investment advice

Post by dogagility »

shepherd wrote: Wed Apr 20, 2022 2:26 pm I’m late to this thread but Publix stock is one of the few stocks I would highly recommend that you purchase.
It's great until it isn't... and then it might be very bad.
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

It's hard for me to stop investing in Publix stock by looking at its history:

Calendar YTD As Of 02/28/2022
17.13%

Previous 3 Months
5.82%

Previous 1 Year
17.13%

Previous 3 Years
18.62%

Previous 5 Years
13.21%

Previous 10 Year
15.31%

Inception
16.28%

However, since they give me 8% stock a year and I don't want to risk the worst case scenario; I am sticking to the bogleheads plan but still buying Publix stock every now and then (With my dividend, IRS return and extra savings). My roth will either be the three fund portfolio or target date fund (Even though I still am tempted to choose the balanced fund because it has had better returns - FBALX).
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Re: Poor Publix employee seeking 401k investment advice

Post by ruralavalon »

In my opinion that's a reasonable plan.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Re: Poor Publix employee seeking 401k investment advice

Post by t00sl0w »

shepherd wrote: Wed Apr 20, 2022 2:26 pm I’m late to this thread but Publix stock is one of the few stocks I would highly recommend that you purchase. It is private, well run and has a strong history of growth. A lot of Publix employees have become very wealthy by purchasing Publix stock. My children are all shareholders and my only regret is that they can’t reinvest dividends.
I have to agree with you on this as well.
I have some family and know other people who all retired from publix with publix stock and are living very comfortably.
Sure, diversify, etc, but publix stock is hardly a bad thing to own.
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

Maybe in the future, I can sell what's in my roth and transfer to Vanguard and put all of the money in their balanced index fund (VBIAX) when I reach retirement age. Was thinking about keeping my 60/20/20 allocation until 60, then selling and switching to Vanguard and VBIAX to hold for life.
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

I decided to go with the two fund portfolio. I changed my 401k contributions to 90/10; S&P 500 and Baird. I will hold on to what I have already invested in RERGX (International) and transfer the funds to the S&P 500 once the amount per share goes up to $75. My roth will also be 90/10; FSKAX (Total market index) and FXNAX (US Bond index). I'll buy more Publix; investing half of my yearly dividend. Once I end up receiving a quarterly dividend of $1,000+, I'll use that to fund my Roth each year. I plan on keeping my 401k contributions at $100 a week.
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Re: Poor Publix employee seeking 401k investment advice

Post by ruralavalon »

ralphboy wrote: Sat Apr 23, 2022 9:52 am Maybe in the future, I can sell what's in my roth and transfer to Vanguard and put all of the money in their balanced index fund (VBIAX) when I reach retirement age. Was thinking about keeping my 60/20/20 allocation until 60, then selling and switching to Vanguard and VBIAX to hold for life.
In my opinion Vanguard Balanced Index Fund Admiral Shares (VBIAX) is a reasonable fund choice when nearing retirement and in retirement, I use it myself for an ultra-simple one-fund portfolio.
ralphboy wrote: Wed Apr 27, 2022 9:05 am I decided to go with the two fund portfolio. I changed my 401k contributions to 90/10; S&P 500 and Baird. I will hold on to what I have already invested in RERGX (International) and transfer the funds to the S&P 500 once the amount per share goes up to $75. My roth will also be 90/10; FSKAX (Total market index) and FXNAX (US Bond index). I'll buy more Publix; investing half of my yearly dividend. Once I end up receiving a quarterly dividend of $1,000+, I'll use that to fund my Roth each year. I plan on keeping my 401k contributions at $100 a week.
In my opinion that looks like a reasonable plan, although it might be wise to keep some international stocks using American Funds Europacific Growth R6 (RERGX).

When practical I suggest increasing your 401k contributions to more than $100 per week.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

I'm nervous seeing the S&P continue to go down. Publix has been my only investment that has done well in the last 12 months. I kind of want to do 25% Publix stock (the maximum allowed) and 75% in the S&P for my 401k contributions.
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Re: Poor Publix employee seeking 401k investment advice

Post by MattB »

ralphboy wrote: Mon May 09, 2022 1:00 pm I'm nervous seeing the S&P continue to go down. Publix has been my only investment that has done well in the last 12 months. I kind of want to do 25% Publix stock (the maximum allowed) and 75% in the S&P for my 401k contributions.
I don't know how old you are. But I don't think the difference between your plan (25% Publix stock, 75% S&P within your 401k) and 100% S&P 500 will be that significant. The most important thing for you to do is to choose a course of action and commit to it. The greatest error would be buying things when they are doing well and selling when they are doing poorly.
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

I noticed today that the S&P was in the red but my RERGX was in the green (This is the first time I have seen that). Another day I saw the S&P go down more than RERGX. So, I may decide to use a target date fund for my roth.
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Re: Poor Publix employee seeking 401k investment advice

Post by grabiner »

ralphboy wrote: Thu May 19, 2022 8:37 pm I noticed today that the S&P was in the red but my RERGX was in the green (This is the first time I have seen that). Another day I saw the S&P go down more than RERGX. So, I may decide to use a target date fund for my roth.
It's pretty common that there are days the US market is down and the foreign markets (RERGX=American Funds EuroPacific Growth R6) are up. A diversified portfolio, either with a target-date fund or with separate US and foreign funds, reduces the risk of holding whichever market is doing worse.
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Re: Poor Publix employee seeking 401k investment advice

Post by suemarkp »

The market will recover. It may take a few months, or even few years. As long as you are planning to work for the next few years, buying things that are sinking is buying them cheap. Likewise, selling the S&P shares now is a mistake, as you would be selling low. The S&P can't go to zero unlike an individual stock. SO THIS IS THE BEST TIME TO BE BUYING THE S&P 500, ESPECIALLY IF DONE EVERY PAY CHECK.

Avoiding stocks during and after crashes was probably my biggest mistake in saving over the last 35 years. If you're within a few years of retirement or in retirement, then you may want to looks for some other alternatives. But even being retired now, my equities portion is still in the total stock market fund (VTSAX, FSKAX). I wish I could add to it every two weeks via a pay check.
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Re: Poor Publix employee seeking 401k investment advice

Post by ralphboy »

MattB wrote: Mon May 09, 2022 1:10 pm I don't know how old you are. But I don't think the difference between your plan (25% Publix stock, 75% S&P within your 401k) and 100% S&P 500 will be that significant. The most important thing for you to do is to choose a course of action and commit to it. The greatest error would be buying things when they are doing well and selling when they are doing poorly.
It looks like the return rate for Publix stock was 12.42% for the time period when I was buying stock and the S&P was 13.76% [August 2012-August 2021]. My 401k was almost 100% Publix stock and I did a fund transfer of 60% S&P, 20% RERGX (International), and 20% BAGIX (Bond). Now the profit that I made is going down each day :x.
grabiner wrote: Thu May 19, 2022 8:59 pm It's pretty common that there are days the US market is down and the foreign markets (RERGX=American Funds EuroPacific Growth R6) are up. A diversified portfolio, either with a target-date fund or with separate US and foreign funds, reduces the risk of holding whichever market is doing worse.
RERGX has a .45% expense ratio (Or something close to that); so I'm unsure if I should invest in it. For my Roth, I am debating between the 2055 and 2060 target date fidelity index funds. I'll be 65 in 2052 but will probably wait till 67 to collect social security. The allocation shown is US/International/Bonds/Short-Term Debt & Net Other Assets

===2055 fund (FDEWX)===

age 35 54/36/10/0
2027 40 54/36/10/0
2032 45 54/36/10/0
2037 50 54/36/10/0
2042 55 47/32/21/0
2047 60 38/25/37/0
2052 65 34/23/43/0
2057 70 30/20/49/1
2062 75 26/17/46/12


===2060 fund (FDKLX)===

age 35 54/36/10/0
2027 40 54/36/10/0
2032 45 54/36/10/0
2037 50 54/36/10/0
2042 55 54/36/10/0
2047 60 47/32/21/0
2052 65 38/25/37/0
2057 70 34/23/43/0
2062 75 30/20/49/1
suemarkp wrote: Thu May 19, 2022 10:18 pm The market will recover. It may take a few months, or even few years. As long as you are planning to work for the next few years, buying things that are sinking is buying them cheap. Likewise, selling the S&P shares now is a mistake, as you would be selling low. The S&P can't go to zero unlike an individual stock. SO THIS IS THE BEST TIME TO BE BUYING THE S&P 500, ESPECIALLY IF DONE EVERY PAY CHECK.

Avoiding stocks during and after crashes was probably my biggest mistake in saving over the last 35 years. If you're within a few years of retirement or in retirement, then you may want to looks for some other alternatives. But even being retired now, my equities portion is still in the total stock market fund (VTSAX, FSKAX). I wish I could add to it every two weeks via a pay check.
I will try to keep investing $75 a week in the S&P and $25 a week in Publix. I figure when I get a dividend check in the $1,000+ range, I can use it to fund my Roth target date fund each year.
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