This is just peachy

[Japher]

In essience aren't we paying a fund manager to closely watch the market and to key in to trends which we ourselves are to busy to do?

That is just my point, however. What is to say they are watching the market that close or that they can recognize said trends? I can, and will, assume that they are watching the market closely, but what are they watching? Indexes, individual stocks, futures, trackers, their own portfolio? I would rather watch my own portfolio, so I assume they would to, that says nothing to their knowledge of options...

Do the watch or can they recognize trends? Sure. Yet, I am not going to trust them to be experts at this, especially since they are to engrossed in their own portfolios... Therefore, I prefer to take some time to learn these trends, learn for myself to recognize them, and learn how the market performs, before I invest.

So you know, I have a financial advisor, I have know idea why, but every now and then I get some good tips. They know alot about tax sheltering (which is something I don't need) they now how to measure your risk/reward values and they are good to have keep you in check so don't go on a gambling benge. Yet, if he tells me I should buy such and such stock I'm not going to just take his word for it! I will research the stock, research what he says is good about it, check historical situations associated with that stock, read their balance sheets, etc... Sometimes I agree, sometimes I don't. Sometimes I win and sometimes he wins... Says nothing to his knowledge, so I don't just take their words, so I am definitly not going to give them my money to manage on their own.

Case History: In 1992 my dad got a new advisor. He held him for 6 years (as tech was booming), my dad didn't pay attention to his portfolio, it went up 8% in 6 years when the market exploded. Needless to say my dad fired the guy. Some suck, some don't, but if you aren't watching your money, yourself, it may just disappear... Ever hear of commissions?

[Dinner]

I never pay commissions and I try to only invest in funds with an expense ratio of less the 0.75% though 0.5% is better. Still I see your point. Since we can invest in exactly the same manner as the index funds do is the reason for buying and index fund, and paying the fee, mainly useful to smaller investors who wouldn't be able to buy every stock on the S&P500? In essience we're paying them to pool our money so we can benifet from owning a piece of every stock on the index?

If you wanted to trust your own judgement then wouldn't it be best to skip all funds, index or other wise, and simply buy stocks?

[Japher]

That's mainly what I do; buy my own stocks, create my own fund. Don't get me wrong, I think a fund or two is good way to balance a portfolio to industries you don't want to keep an eye on, but the lack of control on how active that fund is managed really scares me. What I try to do is find good spiders, than monitor them for a while, check their holdings, then decide... I still don't buy for the spread, I buy for the industry (that is why I like small cap funds)...

Note: commissions are paid to brokers, not by you, to push certain funds that may be, or have the risk to, underperform... They don't volunteer this information, but if you ask they are obligated to tell you... One of my friends is a third party investor who pays brokers these commiusions, and sell funds, insurance, and stocks to high profile investors... Those who need those funds bumped...

Balanace your portfolio, but don't think that a fund, or group of funds,alone does that. How would you feel if you work on the "buy and hold" technique only to find out that you are actually selling/buying stocks every year because your fund manager is way too active? Even 0.5% can be a lot if the fund underperforms...

[Harry Seldon]

I buy stocks, too. It gives me a chance to play around and beat the system. I make decent gains with it (up about 15-20%) but I don't have serious cash involved either. I buy index funds because it's a fairly safe way to diversify, if not as safe as a savings account. With index funds at least I don't feel like I need to be constantly researching to make sure I don't ride the Cisco train into the sh*tter.

[Dinner]

So what do you folks think of this plan? For the Roth I'll dunp the Janus Mercury since it's been a dog and pick up a nice shiny Vangaard Index Fund, for the 401k I'll try to roll it over once a year so as to free myself from having to invest in the company's/Fidelity's choice of mutual funds, and lastly I still need to figure out what to do with my house down payment fund. I'd consider stock but my goal is to buy with in 6-7 months so a CD might make a better choice.

What do you folks think of that?

[Japher]

I think you have a good plan...

Make sure that you can roll out of the 401k without penalty before doing so, as you suggested.

Take the Vanguard, I think you will be happier, and keep an eye on that manager.

6-7 months is not a long time for any real gains without tremendous risk. CDs are at a low persentage 1-2%. Short term gains are going to be limited at best. Do you have a money market? Do you belong to a credit union? Most credit unions have money market accounts that can earn a little better than the CDs I have been seeing, plus they give awesome home loans. If anything I would take the money for your home and join a credit union (if you aren't in one already, there is probably one available through work) and drop it into a MM account, and forget about it until you want the house. The standing balance on that account for 6+ mos might help you get a better interest rate on your mortgage with that union. I would, before doing this, talk to the bankers and brokers there and see if you can a) qualify for the loan and b) have any advantage if you are a member for 6 mos...

If not, go to Vegas