The post whore thread.

[buffalobo]

Seen any Bullseye up north?

Snagged a pound for decent price at Bass Pro just before Christmas, have not seen any more since (have not looked that hard either , no time).

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[Irving]

What life change has happened to OBC that he's not in here as much any more?

[HoneyBadger]

Yeah, I'm not at all convinced. Ramsey says that the three important points are 1) Actually investing money, 2) the rate of return, and 3) fees. He's putting fees last and saying they are least important with respect to the first two. He glosses right over the fact that fees directly affect the rate of return. Yes, but wouldn't you be willing to pay a higher fee to get higher net returns? (For example, pay an extra 1% annual maintenance fee for a fund that does 3% better) In fact, there will be fees regardless of if there is any positive return at all. This is why it's important to pick good funds. He goes on to try and vilify people that question high fees as being anti-capitalist (which is completely BS*) I had to go back and listen to it again... I took that mini-rant to mean that he was sick of people whining about capitalists trying to make money (If you don't like the fees, the take your money elsewhere, etc) , then goes on to try and convince the caller that a fund with a front-loaded commission fee of 5% can actually be cheaper than an average 2% maintenance fee. If you weren't convinced by the math here, then maybe investing isn't for you... a one time 5% fee followed by a .5% fee for the next 10 years equals exactly 1% averaged out over 10 years. This is a situation where an up-front (front-loaded) fund may be more advantageous than a "no-load" fund that charges 2% annually (where the annual average is therefore 2%). During that whole time, all I could think about is how whatever the performance of your fund, you'd lose 2-5% of the return. If you don't like this, then create and manage your own fund. Then other people will pay you to manage their wealth. (BTW, this is true for all mutual funds. There is no such thing as a mutual fund that doesn't have fees. The whole point is that the fees should be worthwhile, but as I've said, there are bad funds out there, which is why doing your homework is so important.) He never even really discounts the video (You are right about this. I misled you to believe that he was directly responding to the video, when in reality, he was responding to an investment question that was loosely related to the video) because he admits that "a large amount of mutual funds under perform the market, but there are plenty that do better." Okay that's fine, but what are those percentages, and how would you know which funds will perform better than the market until it's too late? Based on long track records. Don't even consider a fund with a track record of less than 10 years. 5 and 10 year averages should outperform the indexes by several %. Every fund is required to report these numbers in their prospectus. The video (and other sources I've been reading) says that 80% of actively managed funds under perform the market. Ramsey doesn't directly dispute that figure, but if those numbers are true, and you don't find out until the end of the year how your fund did, then what is the reason to attempt to beat the market when you have an 80% chance of losing? Again, by wisely choosing funds with good track records. I believe it all has to do with human psychology where everyone thinks that if they hand the reins over to an "expert" that they'll be okay. On top of all that, the fund manager takes a commission out of YOUR investment every time the fund is "adjusted" (stocks bought/sold). This allows the fund manager to constantly pay themselves commissions out of your money under the guise of "adjusting" the fund for your best interest. If this is happening to your money, you need to find someone else to manage your money. But who's really making the guaranteed money here? Capitalists who are 2 steps ahead of you and I.

I keep running into people talking about the Vanguard index funds and it really seems to be a fan favorite of the personal finance and early retirement bloggers. I do like a couple of Vanguard funds. I also have some money in a T Rowe Price fund. One guy even openly talks about how people who first come to his blog think he is just advertising for Vanguard. For others reading this discussion, the idea behind the Vanguard index fund is that the fund has all the stocks in the S&P 500 so the performance mirrors the market, which over the long run, has continued an upward trend since the beginning of its existence. This is true. This is why any wise investing is always good. If you invest nothing, you'll predictably come out with nothing. As I've said before, index funds are a little safer than some mutual funds, such as small cap (aggressive growth) funds. The index fund has low fees because there is no buying and selling of stocks to try and beat the S&P500 because you already own all of those stocks. It's really a buy and hold method that counts investing for the long term, holding on during the ups and downs, and relying on the historical trend of market growth over time. This is also true. One of my best-performing mutual funds has large holdings in Amazon, Google, Apple, and Alphabet Inc. I'll have to log into my account to check, but I think it's 5 year average is something like 4.5% above the S&P 500 and the 6.125% upfront load that I paid less than 1 year ago has already paid for itself and any gains from here on out (apart from the annual maintenance fee which is less than .5%) are purely profit.

One interesting thing to note is that the argument for index funds, and against mutual funds is that EVERY mutual fund contains the small print warning of "past performance does not guaranty future performance." So the pro-index people will point out that data shows over the last 25 years (since index funds were created) that only 20% of mutual funds and active fund managers are able to out perform the market as a whole every year, and while a manager or fund may out perform the market one year, there is no guaranty that they will the next year. All while at the same time pointing to the historical graph of the market overall with a very strong upward trend over all of history. The answer is of course that mutual funds don't have all the companies, so just like trying to hand pick stocks, if you were to buy stock in Joe's Discount CFL Bulbs, and the company goes under, you stand to lose 100% of your investment. There is no bounce back because the company is done and the historical time line has ended. Whereas by owning all the stocks in the market, while at times the stock price value WILL drop with the market crashes, the market as a whole doesn't cease to exist and has shown time and time again that it will recover. In addition to that, if the market ever does crash to the point that it is no longer recoverable, then none of your choices will have mattered anyway. That of course is why people deal in precious metals as well. One could argue that if the stock market crashes, metals won't be worth much anymore either. I'm not going to take that position though, because I just don't know. It's no wonder that the early retirement bloggers are all suggesting that compound gains be married to learning to greatly reduce spending habits, because that insulates you from temporary market crashes. If you are only living off of 20% of your income and saving and investing the other 80% (this is actually possible and there are plenty of examples of people who do this and thrive), and then the market has a big crash (which it will) and you temporarily lose 60% of your investments, you don't have to panic as much because the reality is that you're still living off of only 20% of your total income. If you happen to lose your job at the same time, how difficult would it be to find a job at 80% lower income to keep you alive in the mean time? No need to walk away from a mortgage you can't afford or jump off a bridge because your nest egg took a hit. These are valid points, except this one: The "past performance" jargon is in the small print because a federal regulation requires it to be there.
In summary, there are many different types of mutual funds - some are intended to be higher risk portfolios and some are lower risk. A well-managed higher-risk fund will outperform the market most of the time. If you don't want the additional risk, then play it safe and do indexes. I don't think that index funds are evil, or bad, or wrong. Index funds are a great way to invest your earnings. However, some mutual funds will always be able to do better. I saw some mutual funds that did better than 30% in 2014 and better than 25% in 2015. When I looked at their holdings, they were mostly in the healthcare industry. If Obamacare goes away tomorrow, those funds are royally screwed and their 2016 earnings could be -40%

*I don't like drinking in bars and restaurants. While I may not be able to recreate my favorite restaurant meal at home, and can stomach paying a premium for a meal prepared by someone else, the liquor store sells the EXACT same alcohol as the bar/restaurant for as little as 1/6th of the price. Since there is no benefit of me paying $6 for a bottle of beer at a bar, when I can get that exact same beer for less than $1, I just don't do it. I'm not against the price that bars/restaurants charge for alcohol, I've just made the personal decision to opt out of that. I personally think it's great how much of a profit margin bars make on alcohol. I think the person who invented "table service" is damn genius to get idiots to pay that much for alcohol. I just won't pay it. This is the same argument against fees in mutual fund packages. If fund managers set up a fee schedule and people are willing to pay those fees, then more power to them. It doesn't mean you're a liberal who hates America (as Dave Ramsey suggests) just because you seek to avoid fees. He gets distracted and has lots of pent up aggression (micro-aggression? ) against anti-capitalists and whiners who don't understand how capitalism works. His mini-rant here was not very well placed.


Finally, I can't contribute much to the reloading discussion because I haven't been paid since the end of last month while waiting for this new job to start, and I still have a tiny amount of consumer debt. Once that all clears up, I'll allow myself to spend, as little as possible, on some projectiles to rebuild my stash for competition this year. In fact, a little bird told me that someone on here is sitting on 12k .223 projectiles they may be willing to let go. I think I'll look into that when the time comes.

If you're looking for some .223 or 9mm projectiles, I have some of each, along with brass, primers, and powder. Maybe your bird can fly out here in a few months and pick them up for you.

[HoneyBadger]

Annnnnnd..... I'm exhausted.

[Great-Kazoo]

Not yet.

USPS? I think the post lady has been alternating days off, like every other day.

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That's good, cause i haven't sent it yet

[Great-Kazoo]

What life change has happened to OBC that he's not in here as much any more?

Decided he was going to start acting like an adult.

[Great-Kazoo]

If you're looking for some .223 or 9mm projectiles, I have some of each, along with brass, primers, and powder. Maybe your bird can fly out here in a few months and pick them up for you.

What am i, chopped liver?

[Irving]

Okay, I appreciate your explanation of front loading commissions. Could you circumvent this by purchasing $1,000 in funds, then the next day, week, month, whatever, put the rest of the money you want into the fund? Or does that 5% commission come out of every single investment? If the commission comes out each transaction, it'd be interesting to see the numbers over 1, 2, 5, 10, and 20 years on investing $500 a month in a front loaded mutual fund compared to the static 1% of the Vanguard fund.

[HoneyBadger]

What am i, chopped liver?

If you please.

[HoneyBadger]

Okay, I appreciate your explanation of front loading commissions. Could you circumvent this by purchasing $1,000 in funds, then the next day, week, month, whatever, put the rest of the money you want into the fund? Or does that 5% commission come out of every single investment? If the commission comes out each transaction, it'd be interesting to see the numbers over 1, 2, 5, 10, and 20 years on investing $500 a month in a front loaded mutual fund compared to the static 1% of the Vanguard fund.

This is a completely valid question, and I am not qualified to answer it for you. I think many front-loaded funds probably have minimum investments (sometimes $10k or more), but I'm not sure if that applies to additional investing over time. Time to call a broker. I don't have a broker and I manage some pretty simple stuff on my own through my bank (USAA) but I am going to have a broker within a year or two (because I'll be contributing a decent amount into my retirement and other investments again).