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By JLP | October 23, 2007
I just received an email from Larry Swedroe, the author of Wise Investing Made Simple
, The Only Guide to a Winning Investment Strategy You’ll Ever Need, The Only Guide to a Winning Bond Strategy You’ll Ever Need (Affiliate Links) and other investing-related books. He kindly offered to answer any questions related to his newest book, “Wise Investing…” So, I thought I would ask if you have any questions for Larry. If so, either leave them as a comment or send me an email (JLP – at – AllFinancialMatters – dot – com) and I will forward them on to Larry. I’ll then post them in a question and answer format.
Ask away…
Topics: Books | 4 Comments »
Comments
October 23rd, 2007 at 12:22 pm
1. How do you feel about young people investing in EFT’s? Are they too complicated? Should we stick with index and mutual funds?
2. What is your take on dollar cost averaging??
3. If you could pick one stock to recommend someone invest in, what would it be??
October 23rd, 2007 at 3:46 pm
I am a single person with an income of over $150,000 and I have been maxing out my 401(k) for the past three years. However, I just realized almost all the funds in my plan all have management fees of at least .56% and expense ratios of well over 1%. Would it make more sense for someone in my position to reduce their 401(k) contributions to get the company match, and invest the their money in low fee mutual funds? Or does the tax advantage from the 401(k)outweigh the expenses?
October 23rd, 2007 at 5:38 pm
1. I only have mutual fund investments within retirement accounts, so I haven’t been worried about the effect of taxes incurred within the funds, which I’m aware might actually reduce the return in a non-retirement account. It seems that a fund that is OK in a retirement account might not be good in a regular investment because of taxes if I am understanding it correctly. My first question would be, am I understanding this correctly?
2. If I am understanding this correctly, What makes a particular fund better for a retirement account and what would make a better fund for non-retirement investing? Index funds that buy and hold with little turnover? Funds that grow from appreciation rather than dividend reinvestment?
Or have I just gotten too worked up over the “Returns after taxes on distributions and sale of fund shares” percentage that I saw in the prospectus?
October 23rd, 2007 at 7:20 pm
I am a huge fan of everything Larry does. If you really want to learn more about his theories, check out http://www.indexuniverse.com. Good stuff there.
I would like to see Larry describe why value provides a higher return than growth over the long term. I read a piece he did on this, but I think it would be great for the AFM readers to discover why.