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Need a solid, good, consistent, un-flashy AA fund. (Closed thread.)
Does TRP treat "regular" 401(k)s differently from solo 401(k)s? I can't say. I guess you mean you were the only one covered in the 401k? I had the same sort of 403b with TRP. Then, yes, I was able to roll it over into an IRA, when I wanted to do so. That included PRWCX.
--- If a taxable account, an ETF basically has no short/long taxable annual distributions; with the exception of possible dividends for tax reporting. While traditional mutual funds will have these taxable events every year. There are many very acceptable etf's that a 30 year old should be investing into, and the ER's are generally very low. 30 years old= growth, growth, growth.......ride out the machinations.
--- Roth IRA....course, no annual taxation, annual limit for 2023 is $6,500. ANYONE may provide the money to fund the account, as long as the owner 'HE' has taxable income that satisfies the funding limits for the year. We funded our daughter's ROTH when she had income for a given year, starting at age 14. She kept her income for her needs at the time.
--- Has your son viewed the Fido site? If so, what is his opinion? If he is comfortable with the site, will he not he be the one maintaining the investments/site when you can not longer perform this function?
A full world of investment choices with Fidelity.
I provided a number of choices for a young niece and her mother using past performance numbers and what each investment was able to provide based upon their exposure in the investment world. The niece has many years in front of her for investing . They decided (the niece) to fund a Fido ROTH among six choices, mostly equally funded of:
---QQQ, etf --- BOTZ, etf (robotics +) --- FSMEX, medical tech. OR IHI etf, which about a twin for performance --- FHLC, etf, broad healthcare (some downside market protection) --- FTEC, etf, technology --- FBALX, a hard to beat for performance balanced fund, generally 70/30
A theme, yes, for a young person in particular; but also suitable in part for an older person, when adjusting some of the holdings positions by percentages. Redundancies with some holdings, yes. But, not a problem.
The above 6 bar chart from Sept. 13, 2016 (inception date limitation)
Time frame of niece's investment period chart< (3 years)>
'Course, this time frame includes the 2022 period of 'face slapping' until near the end of October when the equity and bond markets rotated towards a positive direction for performance. Generally, equity and bonds ranged down between -13 and -16% in 2022, including gains that started in October.
Does TRP treat "regular" 401(k)s differently from solo 401(k)s? I can't say. I guess you mean you were the only one covered in the 401k? I had the same sort of 403b with TRP. Then, yes, I was able to roll it over into an IRA, when I wanted to do so. That included PRWCX.
Did you already have PRWCX in your 403(b)? If I had owned shares in my 401(k), I could have rolled them over directly into a TRP IRA. AFAIK, TRP does not let you open PRWCX in a rollover IRA if you don't already own shares in the employer plan.
Some IRA custodians seem to suggest that you can buy into a closed fund when rolling over money from an employer plan so long as the plan offers that fund as an as investment option. For those custodians, it doesn't matter whether you personally invested in the closed fund before rolling over your account.
--- taxable account or Roth IRA ? Taxable. We intend to put his name as primary, and my wife as the other joint-owner. (She's 19 years younger than me. Like my dear son, she does not "grok" investing at all. But eventually, some things will move beyond my control. Eventually, EVERYTHING will move beyond my control.) A taxable account means no worries about running afoul of the splendid and gorgeous and marvelous IRA rules brought to you by the glorious IRS. --- If a taxable account, an ETF basically has no short/long taxable annual distributions; with the exception of possible dividends for tax reporting. While traditional mutual funds will have these taxable events every year. There are many very acceptable etf's that a 30 year old should be investing into, and the ER's are generally very low. 30 years old= growth, growth, growth.......ride out the machinations. I have made an executive decision, myself: no ETFs. I don't like the way they behave, somehow. I've owned and already sold two. No more ETFs.
--- Roth IRA....course, no annual taxation, annual limit for 2023 is $6,500. ANYONE may provide the money to fund the account, as long as the owner 'HE' has taxable income that satisfies the funding limits for the year. We funded our daughter's ROTH when she had income for a given year, starting at age 14. She kept her income for her needs at the time. My son does not possess an "investing bone" in his body, anywhere. Does not want to even deal with the necessary papers. He's about as organized as his mother. Has no desire to do any investing homework or come up with a plan, or learn the admittedly abstruse, esoteric jargon. I've had some conversations with him about it, trying to simplify and break it all down, avoiding the whacked, specialized terminology. He flatly told me: "All I need is a single fund that I can hold for a long time, and just let it ride."
--- Has your son viewed the Fido site? If so, what is his opinion? If he is comfortable with the site, will he not he be the one maintaining the investments/site when you can not longer perform this function? No, surely he's not seen the Fido website. He doesn't even know where to begin. Previously, I sent him MAPOX IRA paperwork, and he got entangled in it all and wasn't even sure where to fill out the forms. (I have since told him simply: Just look for the pages with blank spaces that tell you to provide X, Y and Z.) He is NOT dumb, just is the type who prefers to fly by the seat of his pants and eschews sorting, organizing, arranging----- or CLEANING HIS ROOM. LOL.
He will surely not be active in monitoring his mutual fund. Truthfully, I suspect I will be contributing the lion's share of what goes into it. And after getting a dose of Fidelity's website, that mutual fund will not be a Fidelity fund. (I think I've all but decided on RPBAX. He's not even going to CARE which one we use.)He is cobbling together three jobs to make a living. Doing alright for himself, in that regard. A full world of investment choices with Fidelity.
I provided a number of choices for a young niece and her mother.....
A theme, yes, for a young person in particular; but also suitable in part for an older person, when adjusting some of the holdings positions by percentages. Redundancies with some holdings, yes. But, not a problem.
The above 6 bar chart from Sept. 13, 2016 (inception date limitation)
Time frame of niece's investment period chart< (3 years)>
'Course, this time frame includes the 2022 period of 'face slapping' until near the end of October when the equity and bond markets rotated towards a positive direction for performance. Generally, equity and bonds ranged down between -13 and -16% in 2022, including gains that started in October.
Remain curious, Catch
Your thorough and thoughtful response is a thing I'm grateful for, @catch22.
At some point the perfect becomes the enemy of the good. Finding something that suits the investor described may not match up with "best" solutions. There is no guarantee that more, or professional, advice will "remedy" the situation given the druthers of the parties involved.
Is it an insurmountable burden for a young man working three jobs to potentially deal with taxes on capital gains if he gets past a certain income at some point, when the alternative is a money market fund?
Maybe somebody out there has the numbers on paying 15% on cap gains versus returns on a money market, or numerous other vehicles the beneficiary, or his benefactor, have varying interest in pursuing.
Is it an insurmountable burden for a young man working three jobs to potentially deal with taxes on capital gains if he gets past a certain income at some point
Thus, enter the ROTH IRA, eh? At least some burden reduction.
Is it an insurmountable burden for a young man working three jobs to potentially deal with taxes on capital gains if he gets past a certain income at some point
Thus, enter the ROTH IRA, eh? At least some burden reduction.
Excellent. El primero. First thing I did with #1 child after liquidating the UGMA. Next thing is making sure she has year 2 contribution ready to go.
Many of us are advising our children. Many of us may have more, or less, information, experience, education, wisdom, to pass on. One of the reasons this thread persists despite the original concerns of the OP.
Same goes for the grandson thread.
What to do? What to do?
Well. You can't do much more than the person you're "helping" is ready to accept in one sitting. Pay careful attention to eyes glazing over.
"...Well. You can't do much more than the person you're "helping" is ready to accept in one sitting. Pay careful attention to eyes glazing over." gobsmack! That last one: it was supposed to benefit whom?
PRWCX is closed to new investors, so I don’t know why people keep recommending it. Supposedly there are round-about ways to open a new account, but I view that as a myth. My wife and I had accounts with TRP for more than 25 years, and they wouldn’t let me buy, exchange or trade my way into PRWCX — despite numerous attempts. I finally transferred all of our TRP accounts to Fidelity to consolidate all of our holdings and make life easier. I kept some of my TRP funds in my Fidelity account, but exchanged the poorer performing ones to Fidelity funds (including FBALX). I also bought shares in the ETF counterpart of PRWCX through Fidelity.
In my opinion, the Fidelity website is vastly superior to TRP, although it probably takes time to familiarize oneself. It is much easier to research, compare and buy funds or ETFs from other investment companies through Fidelity than TRP.
PRWCX is NOT closed. I purchased TRAIX which is the institutional form of prwcx last week at Firstrade which has a minimum of $ 100. to purchase. Sorry ,but not a myth! If you have an account with them you would have to look it up in your account. It is also NTF. This post was made for those who might be interested in purchasing this fund. By the way I have owned PRWCX in another account for at least a decade but will hang on to it , so I do not have to pay the capital gains if I sold it at this time. Will just keep adding to the new TRAIX position.
PRWCX is closed to new investors, so I don’t know why people keep recommending it.
A few reasons: 1. It serves as a benchmark 2. It may be open to investors in 401(k) or other employer-sponsored plans that include it as an option 3. It is open to "mass affluent" investors (see below). 4. Some people own shares and are interested in how the fund is doing (is it a buy?).
Supposedly there are round-about ways to open a new account, but I view that as a myth.
Fund companies reward account size, not longevity. Vanguard opens some of its closed funds to Flagship ($1M+) customers. Artisan allows shareholders who hold more than $250K in its funds to buy into closed funds like ARTKX (see statutory prospectus). Similarly, T. Rowe Price allows investors holding more than $250K at TRP to invest in its closed funds, via its Summit program. This program replaced its Select Client Services in 2021. These "back doors" are not myths.
In a way, you were right to wait for TRP to partially open its closed funds. Around the end of 2020 T. Rowe Price reorganized itself in part to give it greater capacity. Not long after, it made its closed funds available to some investors.
Maybe you left before TRP sent out the memo. Or maybe, in splitting assets across institutions, you maintained only a toe hold at TRP. Whatever. Time is not what matters. I've had assets at Fidelity since before I was born (parents set up a UGMA account with really old fund shares). Yet Fidelity doesn't even offer me a free copy of Turbotax.
TRP's brokerage was always an adjunct to its fund business - offered as a convenience to its fund investors but not its mainline business. (A $35 fee each way on TF funds and a six month holding period is not competitive.) So it's not surprising that you would find Fidelity a better platform for securities aside from house funds.
Good luck with TCAF. It's not a clone of PRWCX - simply by its nature as a pure equity funds I expect it to outperform over time with greater volatility.
TRAIX is not available to purchase at TRP or Fidelity, and website says it’s closed to new investors. I’ll take your word that it is available at Firstrade, but I was not aware of this, nor was I interested in opening another account with a different investment firm.
PRWCX is NOT closed. I purchased TRAIX which is the institutional form of prwcx last week at Firstrade which has a minimum of $ 100. to purchase. Sorry ,but not a myth! If you have an account with them you would have to look it up in your account. It is also NTF.
Thank you for confirming not only that Firstrade says that one can buy TRAIX (which I have verified via a defunct account at Firstrade), but that one can actually buy shares there (which I can't test out).
By the way I have owned PRWCX in another account for at least a decade but will hang on to it , so I do not have to pay the capital gains if I sold it at this time. Will just keep adding to the new TRAIX position.
Have you looked into the possibility of transferring those shares in kind to Firstrade and having them execute a nontaxable conversion into the cheaper TRAIX shares?
@ MSF. Thank you for your suggestion. I have not as yet tried what you noted about an in kind transfer but I have thought about doing this. I have a gut suspicion Firstrade may not do this nontaxable conversion as they are usually not able to handle this type of transaction easily. Also their transfer agent Apex has made several errors in reporting mutual fund transactions to me in the past. But because generally Firstrade has so many institutional funds available with very low minimums I use them for most of my mutual fund buys. It is one of several brokerage accounts I own. Thanks again. Fundly
A lot of brokerages charge a transaction fees (e.g., $50) for purchase of mutual fund institutional class shares but they do not charge a short term redemption fees (the fund itself may have its own STR fees). Am I correct that Firstrade does not have a transaction fees but has a STR fees of $19.95 for Institutional class shares held for less than 90 days?
From Firstrade website - "A Short Term Redemption Fee of $19.95 will be applied to redemptions of mutual fund shares held less than 90 days. Broker-Assisted redemptions will incur a charge of $19.95. Redemptions of less than $500 will incur a $19.95 fee, unless the entire value of that fund is less than $500. For mutual funds transferred to Firstrade, the 90 day holding period will begin when the account transfer process is complete."
@Balu. You are correct about he STR fees you noted. If you are a.long term investor as I am ,this is unimportant. As we all know PRWCX/TRAIX is a gem and would be held long term in most cases.
@ Balu. All share classes sold are NTF from my experience. However with A class shares you would have to pay a load as dictated by the fund company. Firstrade unlike other brokerages does not waive these loads. Also no money market funds are available so I just use an ultra short ETF or fund. Do not expect Fidelity quality customer service. But I save considerable amounts of money here vs my other brokerage accounts. Good luck. Fundly
Firstrade is definitely good at providing access to share classes that are not available elsewhere. Such as T. Rowe Price class I shares (including closed funds). Access to oddball/institutional share classes is the reason why I've used Firstrade in the past.
But Firstrade doesn't make institutional class shares available for all funds. This can be problematic.
For example, MFS funds (class A shares) such as MIEJX can be purchased load-waived, NTF at many brokerages. However Firstrade seems to charge a load for them. And while MFS funds do have noload institutional class shares (e.g. MIEKX), they are not available for purchase at Firstrade. But they can be purchased elsewhere with no load albeit with a transaction fee.
There's no one brokerage that provides everything at the lowest cost. One either splits one's holdings across brokerages depending on the service/investment desired, or one finds the best one or two brokerages for most needs and lives with those.
Comments
I guess you mean you were the only one covered in the 401k? I had the same sort of 403b with TRP. Then, yes, I was able to roll it over into an IRA, when I wanted to do so. That included PRWCX.
Another Vanguard AA fund option would be VGSTX
Thanks, but... no. Vanguard= stinky poopy customer service.
--- taxable account or Roth IRA ?
--- If a taxable account, an ETF basically has no short/long taxable annual distributions; with the exception of possible dividends for tax reporting. While traditional mutual funds will have these taxable events every year. There are many very acceptable etf's that a 30 year old should be investing into, and the ER's are generally very low. 30 years old= growth, growth, growth.......ride out the machinations.
--- Roth IRA....course, no annual taxation, annual limit for 2023 is $6,500. ANYONE may provide the money to fund the account, as long as the owner 'HE' has taxable income that satisfies the funding limits for the year. We funded our daughter's ROTH when she had income for a given year, starting at age 14. She kept her income for her needs at the time.
--- Has your son viewed the Fido site? If so, what is his opinion? If he is comfortable with the site, will he not he be the one maintaining the investments/site when you can not longer perform this function?
A full world of investment choices with Fidelity.
I provided a number of choices for a young niece and her mother using past performance numbers and what each investment was able to provide based upon their exposure in the investment world. The niece has many years in front of her for investing .
They decided (the niece) to fund a Fido ROTH among six choices, mostly equally funded of:
---QQQ, etf
--- BOTZ, etf (robotics +)
--- FSMEX, medical tech. OR IHI etf, which about a twin for performance
--- FHLC, etf, broad healthcare (some downside market protection)
--- FTEC, etf, technology
--- FBALX, a hard to beat for performance balanced fund, generally 70/30
A theme, yes, for a young person in particular; but also suitable in part for an older person, when adjusting some of the holdings positions by percentages. Redundancies with some holdings, yes. But, not a problem.
The above 6 bar chart from Sept. 13, 2016 (inception date limitation)
Using standard charting.
Time frame of niece's investment period chart< (3 years)>
'Course, this time frame includes the 2022 period of 'face slapping' until near the end of October when the equity and bond markets rotated towards a positive direction for performance. Generally, equity and bonds ranged down between -13 and -16% in 2022, including gains that started in October.
Remain curious,
Catch
Some IRA custodians seem to suggest that you can buy into a closed fund when rolling over money from an employer plan so long as the plan offers that fund as an as investment option. For those custodians, it doesn't matter whether you personally invested in the closed fund before rolling over your account.
+1.
Is it an insurmountable burden for a young man working three jobs to potentially deal with taxes on capital gains if he gets past a certain income at some point, when the alternative is a money market fund?
Maybe somebody out there has the numbers on paying 15% on cap gains versus returns on a money market, or numerous other vehicles the beneficiary, or his benefactor, have varying interest in pursuing.
Many of us are advising our children. Many of us may have more, or less, information, experience, education, wisdom, to pass on. One of the reasons this thread persists despite the original concerns of the OP.
Same goes for the grandson thread.
What to do? What to do?
Well. You can't do much more than the person you're "helping" is ready to accept in one sitting. Pay careful attention to eyes glazing over.
gobsmack! That last one: it was supposed to benefit whom?
In my opinion, the Fidelity website is vastly superior to TRP, although it probably takes time to familiarize oneself. It is much easier to research, compare and buy funds or ETFs from other investment companies through Fidelity than TRP.
A few reasons:
1. It serves as a benchmark
2. It may be open to investors in 401(k) or other employer-sponsored plans that include it as an option
3. It is open to "mass affluent" investors (see below).
4. Some people own shares and are interested in how the fund is doing (is it a buy?).
Supposedly there are round-about ways to open a new account, but I view that as a myth.
Fund companies reward account size, not longevity. Vanguard opens some of its closed funds to Flagship ($1M+) customers. Artisan allows shareholders who hold more than $250K in its funds to buy into closed funds like ARTKX (see statutory prospectus). Similarly, T. Rowe Price allows investors holding more than $250K at TRP to invest in its closed funds, via its Summit program. This program replaced its Select Client Services in 2021. These "back doors" are not myths.
In a way, you were right to wait for TRP to partially open its closed funds. Around the end of 2020 T. Rowe Price reorganized itself in part to give it greater capacity. Not long after, it made its closed funds available to some investors.
Maybe you left before TRP sent out the memo. Or maybe, in splitting assets across institutions, you maintained only a toe hold at TRP. Whatever. Time is not what matters. I've had assets at Fidelity since before I was born (parents set up a UGMA account with really old fund shares). Yet Fidelity doesn't even offer me a free copy of Turbotax.
TRP's brokerage was always an adjunct to its fund business - offered as a convenience to its fund investors but not its mainline business. (A $35 fee each way on TF funds and a six month holding period is not competitive.) So it's not surprising that you would find Fidelity a better platform for securities aside from house funds.
Good luck with TCAF. It's not a clone of PRWCX - simply by its nature as a pure equity funds I expect it to outperform over time with greater volatility.
A lot of brokerages charge a transaction fees (e.g., $50) for purchase of mutual fund institutional class shares but they do not charge a short term redemption fees (the fund itself may have its own STR fees). Am I correct that Firstrade does not have a transaction fees but has a STR fees of $19.95 for Institutional class shares held for less than 90 days?
From Firstrade website - "A Short Term Redemption Fee of $19.95 will be applied to redemptions of mutual fund shares held less than 90 days. Broker-Assisted redemptions will incur a charge of $19.95. Redemptions of less than $500 will incur a $19.95 fee, unless the entire value of that fund is less than $500. For mutual funds transferred to Firstrade, the 90 day holding period will begin when the account transfer process is complete."
Thanks.
Am I correct that Firstrade does not charge a transaction fees for buying or selling institutional class shares? Thanks
But Firstrade doesn't make institutional class shares available for all funds. This can be problematic.
For example, MFS funds (class A shares) such as MIEJX can be purchased load-waived, NTF at many brokerages. However Firstrade seems to charge a load for them. And while MFS funds do have noload institutional class shares (e.g. MIEKX), they are not available for purchase at Firstrade. But they can be purchased elsewhere with no load albeit with a transaction fee.
There's no one brokerage that provides everything at the lowest cost. One either splits one's holdings across brokerages depending on the service/investment desired, or one finds the best one or two brokerages for most needs and lives with those.