Michael

Since you are no longer working for the company, you can roll your 401K over to a Traditional IRA in a brokerage account and you won't owe any taxes. If you take a distribution, that distribution will be taxed as normal income at your highest marginal tax bracket so I'd suggest not to do that. If you roll your 401K over (should be able to do it electronically), I'd suggest that you indicate to sell all your holdings before it is transferred to the brokerage just in case there is a transaction fee at the brokerage when you decide to sell the mutual funds. Although I suspect all your mutual funds are NTF funds at most brokerages, sometimes there is a holding period before they become "no transaction free".

I'm not sure about UK tax implications if you cashed out but I'm pretty sure there will be US tax implications. In most cases, you'd rather have smaller tax rates at retirement or when your income is lower then when you are working when the marginal tax rate is usually higher. Also if you pay taxes, you have to make more money to make up for the taxes paid.

jmood

Thank you!

So in that chart I just insert the abbreviation for the fund name to it's graphic, right?

But then, I don't understand how to evaluate the numbers. E.g. the % growth you quote above, where are they on that chart?

And those % numbers, does that mean e.g. that the S&P500, each $100 in it became $101.85 at the end of the year? I am sure this sounds dumb, but let me ask anyway. :-)

Michael

I already entered all the symbols of the different mutual funds you own plus the S&P500 in the last link.

In that case, the S&P500 rose 90.53%, RPMGX rose 78.74%, JSERX rose 74.58%, PRFDX rose 72.58%, and RERFX rose 38.09% over the past 5 years. You should be seeing those percentages that I indicated at the end of the graph.

Percentages only show up when you are comparing at least two different securities as I was doing. If you are looking only at one security by entering the symbol in the Get Quote box, then it indicates a number and that number is the price per share of the security and if I click on the 5 year chart, the chart will indicate the price per share for the past 5 years. In the following chart you will see that the price for JSERV was $28.44 five years ago (you can move the cursor to the beginning of the chart to see that) and the price today is $49.65.

5 Year Chart For JSERX

Comparing is more difficult to accomplish than looking at information about a security so do that to get use to that web site and when you are famiar with that, I'll tell you how to compare.

Michael

You are probably not going to understand much in the following recent thread but try to read it and click on the links to get practice understanding the web site. Once you've read the thread and clicked on the links, you can start asking questions in that thread and I'll answer your questions.

http://britishexpats.com/forum/trail...market-839010/

Michael

Luckily your T Rowe Price mutual funds don't have a 12b-1 fee but many from T Rowe Price do and usually that is an additional 0.25%-0.50% added to the expense ratio.

Mutual Funds vs. Exchange Traded Funds (ETFs)

Whether you own a mutual fund or a ETF, both are made up of securities (common stocks, bonds, preferred shares, gold, money market funds, cash, etc.). What is in a mutual fund or a ETF is defined in the prospectus and may be general (most mutual funds) or specific (ETFs). The securities are purchased by the fund and a certain percentage of each security makes up on share of a mutual fund or ETF.

Mutual Fund

When a mutual fund initially starts, there aren't any securities in a mutual fund but as soon as the first customers place orders to buy shares in that mutual fund, the fund manager starts buying securities with the money that is paid by the customers. Initial customers will likely be large institutions previously lined up so on the first day, several millions of dollars worth of securities can be purchased. As more customers buy more shares of a mutual fund during each subsequent day, the fund manager purchases more securities. The prospectus may say that the fund manager will only buy large cap stocks sold on the US market and if that is the only condition, the fund manager will decide what to buy but he/she will always buy large cap stocks but it is up to the fund manager how many to buy of each. Whatever is the total value of the of the mutual fund at the end of the day divided by number the number of mutual fund shares determines the price of each share in the mutual fund. So if there is currently $1 million in the mutual fund and there are 100,000 mutual fund shares outstanding, the fund will contain securities worth $1 million, and each share will cost $10. If today customers want to purchase $100,000 worth of that mutual fund, the fund will now have $1.1 million, will have securities in the fund worth $1.1 million, the funds will now have 110,000 shares.

If on a specific day, there are more customers selling the mutual fund back to the mutual fund company (redemption) than purchasing the mutual fund in dollar amount, the mutual fund manager has to pay the difference so that mutual fund sellers will be paid and that can either be done by paying out of the cash that may be in the fund or by selling securities that are in the fund and when that is done, the number of shares in the mutual fund decreases. So every day, customers have to give the fund manager notice that they want to buy or sell shares in that mutual fund typically about 4 hours before the closing bell so that the fund manager can make a decision what to do during the next 4 hours while the market is still open. Therefore with a mutual fund, the fund manager is constantly buying and selling securities and each day it may possibly be different with one day buying and the next day selling. Some fund managers leave 4%-6% of the fund assets as cash in the fund so they don't have to buy or sell every day but can pay redemptions out of the cash but customers are paying the expense ratio for that 4%-6% which doesn't make you any money.

Most mutual funds are actively managed which means that the mutual fund manager is constantly trying to decide which securities or buy or sell. At the end of each day, the fund manager has to calculate the price (the NAV) of each share of the mutual fund by adding the value of all the securities in the fund so that he/she can charge new customers the correct price and pay customers that redeemed shares the correct amount.

All of the above costs the customer money and part of that is the expense ratio to pay the fund manager and his/her staff, possible 12b-1 fees, as well as hidden charges such as trading fees, lack of profits off cash sitting in the fund, and possibly many other fees or expenses.

Exchange Traded Fund (ETF)

When an ETF starts up, the fund manager will get an agreement with market makers that they will sell the ETF to the public. The ETF will always track an index (could be S&P500, the DOW, NASDAQ 100, FTSE 100, Euro STOXX50, gold, a bond index, or any index that any company generates) and the ETF will be made up of all the securities in the index at the same ratio as the index. Initially the fund manager creates creation units which is made up of securities in the index and he/she sells the creation units to market makers who sell shares of the ETF to the public. From the time that the fund manager buys shares to create the creation units to the time they are 100% sold to the public, that is a matter of hours. Initially the market makers line up pension funds, mutual funds, hedge funds, investment banks, and other large institutions to buy the ETFs so that they can be quickly sold. However eventually the general public wants that ETF and they put in a bid and if a institution wants to sell at that price, the general public gets shares in the ETF.

Initially the fund manager may have created 10-1000 creation units worth $1 million per creation unit depending on the demand from market makers and each ETF share may be worth $100 or 10,000 ETF shares per creation unit. Six months later, the demand may be high and the market makers are asking for more creation units and the fund manager creates more creation units and distributes those to the market makers.

As an example, currently there is $167 billion (855.33 million shares at $195.72 per share) in the worlds largest ETF SPY which tracks the S&P500 and about 140 million shares are traded daily. Since the SPY ETF tracks the S&P500, it moves in price with the S&P500 but each share of the ETF was purposely made to be 1/10th price of the S&P500 index so someone can look at the S&P500 index and know what the price of the ETF should be. That is very common for S&500 tracking ETFs. ETFs are traded between customers so the fund manager doesn't see them again unless demand is low and the market makers want to reduce the number of ETF shares outstanding and they will purchase enough ETFs to create a creation unit and sell it back to the fund manager and the fund manager will sell the underlying securities back to the market and destroy that creation unit. An ETF doesn't track the index perfectly on a daily basis since it is sold based on supply and demand but over the long run, it is near perfect tracking. Look at the link below and there are two lines on the graph (one for the index and one for the SPY ETF) and sometimes it is difficult to tell that there are two lines.

10 Year Chart Comparing S&P500 Index to the SPY ETF

The only other things that the ETF fund manager has to do is receive dividends for all the securities in the ETF and distribute those quarterly to the brokerages and they will distribute them to the customers that own the ETF on a specific day in each quarter and the fund manger may also have to rebalance the securities in the ETF when the index is rebalanced. The ETF fund manager doesn't need to determine a price of the ETF since it is traded all day long and that sets the price.

When you buy or sell an ETF, it trades like a stock. You can sell at market or sell at a specific price. If you sell at market, the trade is instantaneous and you buy it for whatever someone is willing to sell it for and sell it for whatever someone is willing to buy it for and if you trade at a specific price, the trade will only occur is the "bid" matches an "ask" but if it is the SPY S&P500 tracking ETF, 140 million shares are traded daily and for the IVV S&P500 tracking ETF only 4.5 million shares are traded daily.

Since there is very little to do for a fund manager, the fees are normally much lower than with a mutual fund. So the typical 0.05%-0.10% annual expense ratio for an S&P500 index fund pays for everything the fund manager does and the fees he/she pays and it is difficult to have hidden charges since the ETF tracks the index (expense ratios are normally taken from the dividends). So the only fee besides the expense ratio is possibly a trading commission when you buy or sell an ETF. Luckily for brokerage's that 99.9% of the 4 billion shares traded daily (stocks and ETFs) on the NYSE and NASDAQ exchanges are not commission free ETFs.

Michael

If you eventually decide to rollover your 401K to a brokerage account and decide to roll it over to a TD Ameritrade account, I'll be able to answer your questions since that is the brokerage that I use. If you open an account with another brokerage, I'll only be able to guess what the menus look like in that account and the capabilities that it has. If you rollover a 401K account to TD Ameritrade, you can get the following bonus.

Offer valid for one new Individual, Joint or IRA TD Ameritrade account opened by 9/30/14 and funded within 60 days of account opening with $2,000 or more. To receive $100 bonus, account must be funded with $25,000 or more within 60 days of account opening. To receive $300 bonus, account must be funded with $100,000 or more within 60 days of account opening. To receive $600 bonus, account must be funded with $250,000 or more within 60 days of account opening.

Open a TD Ameritrade 401K Rollover Account with Possible Bonus

There are no hidden fees and the account is free (except for commissions where applicable and special needs) if you sign up to get you monthly statements on line. The following are the fees/commissions for a TD Ameritrade account. One of the advantages of using TD Ameritrade is that it has branch offices around the US and if you have a problem, you can walk into your local branch. Charles Schwab and Scottrade also have local branches but most others don't or only have a few so just about everything has to be done over the phone or via email if a problem occurs.

TD Ameritrade Fees

TD Ameritrade Commissions

To trade commission-free ETFs you must be enrolled in the program. ETFs eligible for commission-free trading must be held at least 30 days. If you sell an eligible ETF within the 30-day hold period, a short-term trading fee will apply.

You enroll online and it just takes a few seconds by clicking on the option to enroll and accept the agreement and you have to enroll for every account to get commission free ETFs for that account.

You can open an account and not fund it if you want to just look at the menus and features and I'd recommend that you open a taxable account first.

TD Ameritrade FAQ

Open Any Type of TD Ameritrade Account with Commission Free Trades For 60 Days Plus Possible Bonus

Eventually you could have a taxable account, a Traditional IRA account that was the rollover from the 401K, another Traditional IRA account that you contribute to, a Roth IRA account that you contribute to, and a HSA account that can all be gotten to with one login and everything works the same in all accounts. Initially you could purchase commission free ETFs and that would be simple to guide you but later when you understand how the market works and you are familiar how to analyze securities, you may possibly want to sell some of the ETFs so that you can pick individual stocks that you want.

If you open an account with TD Ameritrade and fund it with a certain amount of money, you'll probably get a call from TD Ameritrade trying to give you advice but what they are trying to do is to get you to signup with a financial planner where you will pay by the hour or pay for the year for investment advice. In most cases if you understand how to use financial web sites to find what you want, their advice is of little or no use since they have absolutely nothing that you can't find yourself and there are thousands of "experts" on the internet that can give you advice that is usually wrong.

Top 10 Value ETFs

10 Best Growth-Stock ETFs for 2014 - TheStreet Ratings

10 Large-Cap Growth ETFs To Fortify Your Portfolio - Forbes

Best and Worst Performing ETFs

An ETF that performed very well last year could underperform this year and that is one of the main reasons why the vast majority of mutual fund managers have problems beating the market over the long term. They may do better than the S&P500 for a couple of years but usually they then underperform the S&P500 for the next 4 or 5 years or longer.

Michael

If you decide to rollover your 401K to a TD Ameritrade Traditional IRA and want to invest in commission free ETFs, there a bunch to chose from but it is not that simple. In the following 5 year chart, it looks like Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) is performing best at 126.58%, Vanguard Total Stock Market Index Fund ETF Shares (VTI) is next at 95.11%, iShares Core S&P 500 ETF (IVV) at 90.76%, Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) at 25.94%, Vanguard FTSE Emerging Markets Index Fund ETF Shares (VWO) at 24.07%, and SPDR EURO STOXX 50 (FEZ) performing the worst at 3.26%. There are dividends that are not included so the actual performance will be slightly different.

5 Year Comparison of Commission Free ETFs

But if I select "YTD" and look at the graph, things changed around since the beginning of the year where VWO is now the best performer up from the 2nd worst performer, VBK dropped from the best performer to the 3rd worst performer, and overall the American market is performing worst than the previous 5 years.

YTD Comparison of Commission Free ETFs

Although I can guide you and make recommendations, you'll have to decide which ETFs you may want to buy. The US market has been in a strong bull run for the past 5 years outperforming every other market but it can't continue at that rate forever. However there are a lot of economic problems around the world and the German economy shrunk the last quarter after good growth in the last 5 years and it's market reflects that recent nervousness.

YTD Chart of German DAX 30

The Euro zone economies overall haven't really grown in three years and a natural gas shutoff from Russia over Ukraine could hurt the economies even more. The UK economy is currently the brightest major economy in Europe.

The Japanese economy has basically been in a recession for 24 years and it's stock market shows it. Even though the Japanese market is down about 65% overt the past 24 years as compared to the US market up about 500% during the same time, it's companies have the worst price to earnings ratio (p/e) of all major economies which means the companies aren't making much money.

Chart from 1984 for the Japanese N225

Chart for the S&P500

Although China is growing at a good pace, it is missing growth targets and although Chinese companies are selling more products, company profits haven't increased in the last 7 years and the chart reflects that.

5 Year Chart for the Shanghai Composite

All the BRIC economies (Brazil, Russia, India, and China) have slowed over the past 5 years with Russia in conflict with the west and Brazil and India with high inflation rates.

With all of the economic and geopolitical problems around the world, those economies may pull the US economy and stock market down since if those economies don't improve, they'll try to export more to the US and import less from the US. Many of the economies around the world are in trouble since their central banks and/or government policies were slow to react or reacted incorrectly.

Steve_

Which is why you need to watch it like a hawk. When the slowdown started in the housing market in 2005 I could see that it was going to lead to a recession, and I think a lot of people did (contrary to what I see in documentaries), so by 2007 I'd dumped anything even marginally risky and then in 2008 it all went off a cliff. I was very lucky really, had converted everything into CAD and it was the strongest major currency for several years afterward.

The two main problems at the moment imo are the end of QE, in theory it should strengthen the USD but it's unclear by how much and the other factor is the sky high levels of household debt. According to the DoL though there are a record number of job openings at the moment. So basically keep an eye on whether household debt levels start to fall.

You've mentioned social security payouts several times in your posts - one factor you need to consider as an immigrant to the US is what your SS payouts will actually be, because a lot of investment advice will not be as relevant. Because what you get from social security might be a trivial amount. SS is calculated over a 35-year period when you are 62 by working out what your average monthly income was over that time, so that means if you start work in the US after the age of 27 your SS payout will be less than is typically estimated. You may not even qualify for SS at all as you need at least 40 qualifying quarters.

Michael

The problem is there has only been 2 major stock market crashes since the great depression (2001 and 2008) so even watching the market like a hawk, you will likely be wrong if you get out of it and if you are wrong, there is currently no other place to put your money since bank deposits are very low interest and if there is another financial crash, holding high yield bonds or preferred shares are risky. Like you, I also predicted the last market crash and got out of the market in March of 2007 but I would say that was more luck than any great certainty since I don't have the ability to see what is really happening with the banking system and even if there are problems, central banks can possibly hold it together. The subprime lending was not that big of a problem (only about the same as the 1980s) but it was the derivatives that blew the problem into 5x-10x the subprime mortgage problem.

Right now I probably should be panicking since Europe is a mess economically and still has problems with it's banks, emerging markets are slowing, the world is loaded with debt, and like 2008, analysts are projecting strong earnings growth for the S&P500 and so the market appears to be ahead of it's self. All of that appears to be a recipe for disaster and does a person get out now because of that and guarantee that the best a person can do is capital preservation?

Does a person wait until there is a 10% correction and then get out but that happens a lot and the market reverses? Does a person wait for a 20% correction (a bear market) but that is not that uncommon and a reversal often takes place? That was the problem in 2008 when a correction started occurring in October 2007 and then the crash started occurring in September 2008 while all through the year, analysts are saying now is the time to take your money from the sidelines and invest but the market continued it's slide until March 2009.

No one has a sure fire recipe as to what to do in a bear market since they are all different but bull markets all have similar characteristics and only deviates when it becomes a bear market. During the October 2007 through March 2009 market pullback, hedge funds didn't know what to do. They'd short the market and it'd rise and they would get burned and then they were long and the market would fall and they'd get burned and then they were forced to sell because of margin calls and then the market would rise. When the market was near it's low, analysts would recommend getting into high value stocks (utilities) but when the market did recover, those high value stocks were the last to rise. So all the advice by experts was mostly wrong. There were so many false bottoms that few accurately predicted when to jump back into the market and sometimes like the Japanese market, there wasn't a bottom (still don't know if it hit it's bottom) which could possibly have occurred where the market could still be dropping today and the few that did predict the bottom of the market would have been wrong just like the ones that predicted the bottom of the Japanese market over the past 24 years were wrong.

Even though I was lucky to get out of the market before it started to drop and I was a hair away from jumping back in when it hit bottom, when it started it's rise, I always assumed It will pull back again but it never did and it wasn't until July of 2010 that I got back in when the DOW pulled back to 9,500. So although I reaped the benefits of getting out of the market, I didn't fully reap the benefits of getting back in when I should have.

Steve_

Well I don't think it was hard to see there would be a major recession in 2008, I think what was hard to see was that there was going to be a complete meltdown. I don't think the financial system really knew what to do, e.g. on CDs I thought the major banks had their interest rates too high for quite a long time afterward. They backed off, but it wasn't until around the end of 2010 they dropped to almost zero. Everything just kept bouncing along the bottom for some time.

I dumped a lot of my investment money into Canadian bank stock which I did because I thought it was safe, but it also turned out to be (to my surprise) a very good investment because the Canadian banks were never bailed out and a lot of American investors dumped their money into it.

The mistake I made was not dumping CAD before it tanked after Christmas and I knew it was going to happen too when the Fed announced the end of QE, I just wasn't paying attention - just don't pay attention for a week or two and you get burned. I could have gotten an exchange rate of around par but I ended up getting 92 cents so I lost a bundle on that.

Michael

To compare any security using MSN Money, first in the Get Quote box enter the symbol or start typing in the name and a list of possible securities will be displayed. After you select a security or click on Get Quote, the quote screen will be displayed. To the right of the screen is a day chart and underneath the chart select the length of the chart to display (1D, 5D, 1M, 3M, 1Y, 3Y,10Y) and when clicked on, a new display will display a chart for that symbol. This chart is in dollars and cents per share.

To compare that security with another security, click on Compare and you can check any of these (!DJI(the DOW), S&P 500 Index, or the NASDAQ Composite) to compare against. You can also compare up to 7 securities by entering a symbol in the Compare box and clicking on Add. Be careful since there are two boxes one on top of each other and you want to enter the symbol in the bottom box. If you use the upper box, it will change your original symbol to the new symbol. Once two securities are compared, it is represented in percentages with the left of the chart being 0% and the right of the chart being the current percentage increase or decrease since the beginning date of the chart for each security.

At any time, you can change the length of time of the comparison by clicking on a different time frame at the top. At the bottom of the chart, there are two sliding bars that can be moved so that you can see a different time frame. For example if you wanted to see the chart from Jan 1, 2013 to Jan 1 2014, you slide the left bar to Jan 1, 2013 and the right bar to Jan 1, 2014.

For example if I want to compare AT&T to Verizon over a 5 year period, I initially type in T or AT&T and select the symbol from the drop down list in the Get Quote box. Then I would select 5 years for the chart and then click on Compare and enter VZ or Verizon and select the symbol from the drop down list in the Compare box.

Michael

jmood,

You may also want to try the MSN Money Portfolio Manager under "Investing". You'll need a msn live or Hotmail account to use it. You can enter any symbol in the portfolio manager but if you enter mutual funds, they are only updated about 2 hours after the closing bell (about 6 pm eastern time). If you enter ETFs, they will be updated all during the trading day as trades are made.

Therefore if you enter some of the symbols from the TD Ameritrade commission free ETF list, you can watch them as they change prices during the day.

Money: Add, edit, or delete a transaction in Portfolio Manager

You may also want to try the following which by default has a list of all 500 stocks in the S&P500 Index and you can select any one and a chart will appear to the right displaying what is happening during the day to the price of that stock.

FreeStockCharts.com - Web's Best Streaming Realtime Stock Charts - Free

You can also use it as a portfolio manager for your own securities or securities that you want to watch but you have to register and login to use it for your own portfolio manager. For a portfolio manager, I prefer the MSN Money portfolio manager.

You will only see movement in prices if you look at either of those during trading hours.

Michael

What you are seeing on the chart when you click on a symbol on FreeStockCharts.com is a bunch of vertical lines which indicates the high and low price of that security during a 10 minute period (each line can represent as little as 1 minute if changed) with each vertical line having a horizontal line which indicates the price that the stock traded for at the end of that 10 minute period.

Therefore a day trader may watch the horizontal lines to determine when to buy and sell a security during the day. Actually a day trader wouldn't use that web site but instead would use a professional trading platform or Level II quotes which has a chart, a table of the current bids and asks, and a table of the trades that are made and all of that is in real time. Level II quotes are provided by many of the brokerages to their customers. A professional trading platform could be similar to Level II quotes or it could possibly be a program that monitors and automatically buys and sells securities (known as a high frequency trading platform) depending on the parameters entered by the user (a high frequency trading program is monitoring Level II quotes and with that information, makes a decision when to buy and sell securities). Since a day trader may be trading securities worth hundreds of thousands of dollars per day, each 0.5% move per $100,000 trade during the day in the correct direction is worth $500 if predicted correctly and each $100,000 may possibly buy and sell many different securities during the day.

A 0.5% or more price movement in a stock is typical for most stocks during the day and a stock price can both move up 0.5% or more and down 0.5% or more during the day. Some stock prices may possibly move 5% or more during a day if some news about the company is published or high speculation occurs.

not2old

curious to know what happen on both theses trades?

DDD 3D Systems Corp XNYSDD Stock Quote Price News


ACRX AcelRx Pharmaceuticals Inc XNAS:ACRX Stock Quote Price News

Orangepants

Kick me whilst I'm down - why don't you!

I was just playing around but cant believe I picked such a dead duck with DDD. Still sticking with AMBS (now AMBSD after the stock split) and I'll look at it again in 5 years when it has made some money..