06-25-2014, 04:44 PM
(This post was last modified: 06-25-2014, 04:55 PM by Dividend Watcher.)
Jeepers, thought you were fishing by the way you worded it. I have no clue why it was transferred. I hope it wasn't so they could skim another fee off you.
The load is a sales charge that they take off the top when you first invest. Say you invest $10,000. The management firm takes $500 off the top to pay commissions, etc. and you only invest $9500. To me, that stinks. On top of that, they take over 1.5% every year to pay their ongoing costs. They need to make money too but when many funds charge much less than 1%, that seems high to me.
It depends how you got into it. Some corporations have it in their 401(k) plans and the investment company waives or reduces the charge. Also, some corporations are able to negotiate lower maintenance fees. Of course, I could never pin anyone down on exactly what fees I was paying when I worked for a large corporation with a 401(k).
The growth rate seems on par with what's to be expected. I believe that Morningstar rated it in the top 50 of 400 similar funds as far as performance goes.
I can only speak to what I would do. First, I'd consider any exit/selling fees. That will cut into what you would take away.
Since I am more focussed on creating a dividend stream for retirement and not touching principal until I have to, I'd be looking for individual dividend growth stocks. We've mentioned it here that most dividend growth stalwarts are at the high end of fair value right now so you may want to consider dollar cost averaging into positions. Invest $500 or $1000 or so every few months into stocks that appeal to you. Yes, the initial commission would be steep and on par with the fund fees but you only pay it once. AFL seems to still be undervalued, CVX or COP in the energy field are just slightly above fairly valued right now but they both pay a decent dividend. Coke (KO) is still yielding just under 3% and many consider that a fair benchmark of not grossly valued. Perhaps a REIT such as O, VTR, HCP or DLR would warrant a starting position.
Timing the market is a fools errand for me. I wouldn't be all in cash right now nor would I be jumping in with everything right now. If you are looking for DGI stocks, remember patience and time are on your side.
IIRC, your about the same age as me so there's some time but not loads of it so you don't want to make any drastic changes without thinking it through.
Jimbo, I just re-read your original post and had the transfer backwards. The fund you are in now, ACEIX, has an ongoing management fee of 0.79% not 1.53% of the old fund so that's a little better. The income yield is still only about 1.7% and you can certainly do better than that if you're comfortable holding individual stocks. Many have been talked about here.
The problem with making recommendations are they include my biases and may not be a good fit for you.
The load is a sales charge that they take off the top when you first invest. Say you invest $10,000. The management firm takes $500 off the top to pay commissions, etc. and you only invest $9500. To me, that stinks. On top of that, they take over 1.5% every year to pay their ongoing costs. They need to make money too but when many funds charge much less than 1%, that seems high to me.
It depends how you got into it. Some corporations have it in their 401(k) plans and the investment company waives or reduces the charge. Also, some corporations are able to negotiate lower maintenance fees. Of course, I could never pin anyone down on exactly what fees I was paying when I worked for a large corporation with a 401(k).
The growth rate seems on par with what's to be expected. I believe that Morningstar rated it in the top 50 of 400 similar funds as far as performance goes.
I can only speak to what I would do. First, I'd consider any exit/selling fees. That will cut into what you would take away.
Since I am more focussed on creating a dividend stream for retirement and not touching principal until I have to, I'd be looking for individual dividend growth stocks. We've mentioned it here that most dividend growth stalwarts are at the high end of fair value right now so you may want to consider dollar cost averaging into positions. Invest $500 or $1000 or so every few months into stocks that appeal to you. Yes, the initial commission would be steep and on par with the fund fees but you only pay it once. AFL seems to still be undervalued, CVX or COP in the energy field are just slightly above fairly valued right now but they both pay a decent dividend. Coke (KO) is still yielding just under 3% and many consider that a fair benchmark of not grossly valued. Perhaps a REIT such as O, VTR, HCP or DLR would warrant a starting position.
Timing the market is a fools errand for me. I wouldn't be all in cash right now nor would I be jumping in with everything right now. If you are looking for DGI stocks, remember patience and time are on your side.
IIRC, your about the same age as me so there's some time but not loads of it so you don't want to make any drastic changes without thinking it through.
Jimbo, I just re-read your original post and had the transfer backwards. The fund you are in now, ACEIX, has an ongoing management fee of 0.79% not 1.53% of the old fund so that's a little better. The income yield is still only about 1.7% and you can certainly do better than that if you're comfortable holding individual stocks. Many have been talked about here.
The problem with making recommendations are they include my biases and may not be a good fit for you.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan