Hello all,

This is my first post, so please don't hold it against me. I am an investment newbie - married, 2 young kids, 35 years old with nothing invested and like all of us, worried about my investment future. I've just separated from the ilitary, started a new job with a state employer, and have limited choices for their ORP (Optional Retirement Plan). I'll be putting in about 16K (matched) yearly. I need to select one of their Fund families before I can get started.

I've gone through Morningstar.com, Fool.com, the Yahoo Finance board and there is plenty of advice about everything else. So, here are my options: AIG (VALIC), Fidelity, ING, Lincoln National, Metropolitan Life, and TIAA-CREF. I've looked at 1/3/5 year fund family performance and everything looks very silimar. I've looked at individual funds and they are all over the map. I've got limited time to make a decision and the amount of information out there is extremely overwhelming. I've also spoken to representatives from each company and each of them has 'the best' amount of options (of course.)

What I am asking for is for opinions on which company might be a better choice and why, over the long term. I'm not looking for overnight success, golden tickets, or any other market 'magic' - I believe in investing in the long term, hopefully with reasonable returns for a nice retirement. Thank you for your time.

-EB

Without more information, I'd agree with the others that Fidelity and TIAA-CREF are probably your best bets among the options available to you.  Since you don't have a lot of time to devote to researching the individual funds, my advice would be to allocate primarily to low cost index funds

Best,
Oildog

Thanks for the input. Knowing who is easy to deal with is as important to me as fees, options, and performance. Ant oher insight and experience would be more than welcome. Right now I'm reading up on portfolio diversification (lg Vs sm cap, growth Vs. blend , etc...) so I can go in with eyes wide open.

I'm still waiting to hear (they don't work weekends?!? :)) from each of the reps whether I'll have unrestricted access to all funds or which funds I will have access to.

Thanks all.

-EB

Geech..Nice Choices... LOL ! Alot of Ins. Co.'s with big fee's.. Ask your new boss> " how much is the Company owners getting in Kick backs"  LOL  or they probably have them due to a tie in deal with there Group health and Admiinstration programs..( I used to sell LN and Met yrs back when in the Ins. 'Racket"...)

But, be as it may.. if your stuck with them only? I'd go the Fido.. and Do you really have to put so much into it? ( I assume that $16k = 10% of your Income of $160k/yr? )       At this early stage of your Life? Remember, you got College ( Min. $50k each) and Weddings ( Another $50K ea) to pay for too comming up...so best get those covered first.. ( really makes you double think about having more kids, doesn't it?  LOL )

and your odds of a Divorce? now bordering on 55% and She Gets most of the $!            + Child support and Alimoney..( Watch "Two & half men" show )

and all this "Long Term" stuff is all nice and dandy..Only one problem?

What would you have Really done in 1987( Dropped -27%), 98 ( dropped some 30%) and how about during the last Bear market of 2000-Early 03' ( -58% tot by end of 1st qtr 03')? most bailed, while others Hung themselves in their Tree in their backyards and others took 3 more yrs after just to break even again..

Pick whatever gives you no more than 60% Equities and at least 40% In Bonds..

FYI? Did you know Bond Funds Outperformed the S&P for the past 8 & 10 yrs...

and if your really a LT type? What R  U looking at it's Most recent, 1,3 & 5 yrs for? They were All Bull Market yrs! Anyone can do well in a Bull, it's who does Well in a BEAR that counts..Go back now to the past 8 & 10 yrs.. and reconfigure things...

There..feel better now.?...

Scarey isn't it...

Oh yeah! Welcome to the Mess. boards... Were Investing reallly is a Crap Shoot..

As far as the amount we're investing into the 403b, it's a set amount from my employer, The University of Texas - for this year, $16k from me, matched by my employer. Roth is not an option for us.

We'll be looking into setting up other funds for the kids (2 boys, 3 years and 1 month old) college and other contingencies (weddings, bail bonds, trial lawyers :)) in the future (one thing at a time).

As far as divorce, we've been together 13 years and 10 years married this year with no issues. I think we'll be OK.

 -EB

So, Fidelity it is. I'll be meeting with my rep today and setting up an appointment with a CFP to do some brainstorming. In the meantime, I've been going through the list of funds available and coming up with favorites based on expense ratios, performance, and Morningstar rating (4* or better).

I'm still kicking around the 100% equities versus including a small portion of bonds (80/20) to stabilize the returns/losses should the market volatility continue. I think, though, based on my age (35) and expected duration of contributions (25-30 years), at this point I'm willing to accept more risk for higher returns and am leaning toward 100% equities with a Kiplinger split since that offers good steady growth with moderate risk and hopefully some stability:

60% lg cap (15% blend, 15% growth, 30% growth)
20% international

10% mid cap
5% sm growth
5% specialty (nat resource)

Any comments or advice on that? Oh, by the way, here is the link to the funds available ( https://www.mysavingsatwork.com/taxexemp... any advice or comments on that would be awesome as well. Thanks again!

-EB

I won't comment on any Fidelity funds as I have never invested in them but I am sure you will get some very good advice from others.  Just wanted to thank you for your service in the military.  Best of luck.

btw, the link doesn't really get you to any kind of fund selection that I can see.

~Dan

 [edit] You may also want to post this over at the Fidelity forum as well.  Erryl is a good source I would listen to if he responds.

I can't help with your question, but I did find the problem with the link.  Here it is:

https://www.mysavingsatwork.com/taxexempt/assets/utex.pdf

 

Totally disagree with this post...  I'm 20 yrs senior of the original poster, mid 50's, and I'm 90 % in equity.  I don't plan on changing that in the next 10-15 yrs.

bonds, t bills, don't keep up with inflation. Art and commodies are the same as the crap table, housing can be good if you are in the field (construction, realestate), running a business if you did that all your life, meaning mid life career changes don't pan out.  so what's left?  equities.

I support investing in the best of the best funds based on track record. If a top performer drops for over a yr,  dump it.  At 35,  targeting top performers, your $ should double every 3-4 yrs.

I like fido, because I like one place to do all my investments.

If a top performer drops for over a yr,  dump it.  At 35,  targeting top performers, your $ should double every 3-4 yrs.

[/quote]

To double your money every 4 years, you need a 19% rate of return.   I don't think any sensible, diversified portfolio is going to achieve this.   Even if you'd put all your money into a red-hot sector like PRLAX, your 10-year average annual return would only be... 19%.

I think that you have a pretty easy choice... and I hope you see it my way... go with Fidelity.

TIAA-CREF may be lower cost, but it does not have a wide enough choice of funds to allow you to put together a diversified portfolio.  They are very weak in SC and value funds... and this will cost you in performance.

I am not that familiar wth the others, but I bet they fall short in the variety and number of choices and the expense ratios.

erryl

Would love some input into my prospective portfolio. I'm trying to diversify and avoid all-eggs-in-one-basket. I've gone through multiple sites for research. Just want to bounce this off all of y'all who've been playing along with me.

Here's the %-age overall breakdown:
----------------------------------
60% lg cap (15% value, 30% blend, 15% growth)
20% international
10% mid cap growth
5% sm growth
5% specialty (nat resource)

Here's the funds I selected:
---------------------------
Large-cap value
5% - UMBIX Excelsior Value & Restructuring
5% - ICSLX MainStay ICAP Select Equity Portfolio
5% - FSLVX Fidelity Large Cap Value

Large-cap blend
5% - FVDFX Fidelity Value Discovery
5% - NBPTX Neuberger Berman Partners - Trust Class
5% - FFIDX Fidelity
5% - FFNOX Fidelity Four-in-One Index
5% - FSTMX Spartan® Total Market Index - Investor Class
5% - PRSGX T. Rowe Price Spectrum Growth

Large-cap growth
5% - FCNTX Fidelity Contrafund
5% - FDFFX Fidelity Independence
5% - JAMRX Janus Researc

International
5% - REREX American EuroPacific Growth - Class R-4
5% - FIGRX Fidelity International Discovery
5% - FICDX Fidelity Canada
5% - VHGEX Vanguard Global Equity

Mid-cap growth
5% - ACRNX Columbia Acorn - Class Z
5% - RIMSX Rainier Small/Mid Cap Equity - Investor Class

Small-cap growth
5% - RYVPX Royce Value Plus - Service Class

Specialty
5% - FSDAX Fidelity Select Defense and Aerospace

 ---------------------------------------------------------------------------

I'm looking forward to your comments!

 -EB

I think your portfolio has far too many funds.  When people talk about "not putting your eggs in one basket," it is in reference to securities, not mutual funds.  Generally, mutual funds are already widely diversified across a large number of securities, so there is no need to hold a large number of funds (unless you are allocating to specialty funds like FSDAX).  If anything, holding a large number of active funds makes it more likely that your portfolio will perform like a market index fund, but with higher fees. 

For any new investor, my advice is to use low-cost index funds.   FFNOX is an excellent option.  You could allocate most of your assets to that fund and make adjustments on the margins by adding foreign; bonds; small-caps etc. as you see fit. 

Best,
Oildog

I would look at these funds before I made a final discussion.

Large Cap: STRGX,FDFFX,JARTX,JORNX.

International: HAINX/HIINX,GIGSX,JAOSX

Mid Caps: CGMFX,FLVCX/FLVIX,HFTFX

Small Caps:HRVIX,STSCX,RYVFX ( better thanRYVPX)

 I would go with maybe 4 large cap funds,3 International,3 Mid caps and 2 Small caps for a total of 12 funds.

Only an opinion for what it's worth.Good luck.

Ron

boatmanea,

I also work for the UT System as well and currently have my investements with Fidelity.  In addition to your ORP contributions, you should also be eligible to contribute additional pretax dollars via the TSA through Fidelity as well.  The contribution limits to the TSA are the same as those for and IRA. 

I agree with oildog that you chose too many funds.  Talk to the rep, and hopefully they can work out an investment plan with you based on your goals.  If not, seek some additional advice, although you probably do not have too much time before you have to decide.

 Paul

I figured that I was going a little overboard as I thought about all the funds on my drive home. I think I'll knock it down to 10 to 12 total.

 As far as other places to invest, we're certainly looking at other options, but want to get the 403b started and see where we sit financialy before I begin contributing to other areas (IRA, TSA< etc...)

 Thanks all! I really appreciate your comments!

 -EB

Allright, here's the final cut. Thank you very much to all of you who've spent time commenting and providing your opinions and critiques. It was very much appreciated and helpful. I'll be sending this in to the portfolio manager Monday.

Large cap
15% ICSLX MainStay ICAP Select Equity Portfolio
15% FVDFX Fidelity Value Discovery
15% NBPTX Neuberger Berman Partners - Trust Class
15% JAMRX Janus Research
Foreign/Emerging markets
10% LZEMX Lazard Emerging Markets - Institutional Class
10% VHGEX Vanguard Global Equity
Mid cap
10% FLVCX Fidelity Leveraged Company Stock
Small cap
5% RYVPX Royce Value Plus - Service Class
Specialty
5% FNARX Fidelity Select Natural Resources

-EB