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aviolentworld

Any Financial Advisors Here?? Help on investing for retirement

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So maybe somone here is a Financial Advisor and can help me understand something regarding my 401k.  I plan on meeting with one in about a year when I start up some Roth IRA's and kids college, but needed some advise on my current balance in my 401k. 

 

So I work for Lowes and have a decent retirement, but had a question regarding the Lowes stock I have invested in my 401K.  I have it split 50/50 with Lowes stock and Growth fund.   The issue is that the Lowes stock was the highest its ever been recently before this little crash we had.  Would it be smart to wait until it gets back to about the 105 mark and then move it into the Growth fund?  It seems the Growth fund is a little more stable than the Lowes single stock.  It went from 105 to 85 in a couple day span and I lost like 40k. 

 

 

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While it wouldn't be the end of the world for someone to give you a basic answer here, I would suggest that instead of waiting, if you have these questions to seek someone out in your area and build a personal relationship with them. A lot of people put off meeting with an adviser because they don't want to meet now when they're planning to do something in the future. Well, a lot of the time what ends up happening is that plans change a year from now and the meeting gets put of for another year, etc etc. Best time is always now.

Most advisers advise for free (only making money off of the things you decide to do with your money), and this way helps you and them to build a rapport and trust between each other so that they can follow you through your decisions and make sure things are going well for you over a period of time instead of a one-time suggestion over the internet. Fact of the matter is is that it's tough to give you a definitive answer without knowing much more about you, your preferences and risk tolerance, and where the rest of your finances lie. That's what I told all my clients when I was an adviser, anyway.

Hope this wasn't too soapboxy--just want things to work out well for ya, it's important.

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Even though I’ve been in banking for the last 11 years, I don’t consider myself crazy knowledgeable in this area BUT in my opinion I’d def wait til it went back up. Obviously I’d look at the past history of the Lowe’s stock. Like does it usually fluctuate up and down or is there a chance that it could steadily go down. That being said, I personally would try to recoup some of that 40k before moving it. You could also look at some other options, like a short term low risk annuity, typically they have decent to good interest

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29 minutes ago, backpackoat said:

While it wouldn't be the end of the world for someone to give you a basic answer here, I would suggest that instead of waiting, if you have these questions to seek someone out in your area and build a personal relationship with them. A lot of people put off meeting with an adviser because they don't want to meet now when they're planning to do something in the future. Well, a lot of the time what ends up happening is that plans change a year from now and the meeting gets put of for another year, etc etc. Best time is always now.

Most advisers advise for free (only making money off of the things you decide to do with your money), and this way helps you and them to build a rapport and trust between each other so that they can follow you through your decisions and make sure things are going well for you over a period of time instead of a one-time suggestion over the internet. Fact of the matter is is that it's tough to give you a definitive answer without knowing much more about you, your preferences and risk tolerance, and where the rest of your finances lie. That's what I told all my clients when I was an adviser, anyway.

Hope this wasn't too soapboxy--just want things to work out well for ya, it's important.

Yeah the hope is to be debt free by next July so we are going to meet with some people then.  I have talked with a FA and she will meet with us for free before we make any moves earlier than July.  I'm just more interested in what I currently have invested.  I'm not currently investing in my 401k,  but seeing it go from 192 to 150 I was wondering if moving stocks would work.  Obviously a question I would ask her also.

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9 minutes ago, KingTacoMunster said:

Even though I’ve been in banking for the last 11 years, I don’t consider myself crazy knowledgeable in this area BUT in my opinion I’d def wait til it went back up. Obviously I’d look at the past history of the Lowe’s stock. Like does it usually fluctuate up and down or is there a chance that it could steadily go down. That being said, I personally would try to recoup some of that 40k before moving it. You could also look at some other options, like a short term low risk annuity, typically they have decent to good interest

It was at the highest it's ever been a month ago at 105 dollars.  It went down to 85 recently.  Looking at my 2 funds in the 401k there was a greater percentage loss from the lowes single stock.  I think I will move if it goes back to around the same price.  

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caveat: not a financial advisor. the markets been pretty volatile the last 2 months and I think most of us believe the unprecedented growth of the last year is due for further correction.

 

on face value, lowes doesnt seem like a bad stock, ratios look good, etc. i dont think its a $110 value (not sure why it went up 50% in two months) but then it corrected with the rest of the market in February and then again when the tariff nonsense was announced (also looks like they missed earnings projection right around 3/2). I personally think its very risky to have a large portion of your retirement tied up in a single companies stock, but Lowes seems like a top-half selection as far as stock values go.

 

mutual funds are also going to be hit with market corrections, so its very likely your portfolio would have had exactly the same downturn had you been 100% in the growth fund. i just think single companies are risky, but there is no reason why well-run companies with stable profits and a strong market couldnt be a major part of a portfolio.

 

also they pay dividends and have some relative Amazon-proofness

 

just my thoughts

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*Also not a financial advisor (but someone who does enjoy watching the stock market)*

Since you bought your Lowes stock through an Employee Stock Purchase Plan (right?), do you know what the rules for selling shares are?  I want to say to sell some shares -- to avoid being so tied up in a single company, not because the shares are down 20% since January -- but I don't know what the implications of that would be.

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1 hour ago, harryq said:

*Also not a financial advisor (but someone who does enjoy watching the stock market)*

Since you bought your Lowes stock through an Employee Stock Purchase Plan (right?), do you know what the rules for selling shares are?  I want to say to sell some shares -- to avoid being so tied up in a single company, not because the shares are down 20% since January -- but I don't know what the implications of that would be.

I am actually purchasing these through my 401k.  its one of the 12 or so funds I can get.  Can't really sell since it's in the 401k.  I was purchasing at 17 dollars at one point.  I just can't see it going more than 105 so i'm hoping if it gets back to that I will move to a little less risky fund.

 

I actually do have a bunch of stocks I purchased through an Employee Stock Purchase Plan.  I am going to sell those pretty soon though.  Not looking to keep my ESSP plan after i'm out of debt. 

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34 minutes ago, aviolentworld said:

I actually do have a bunch of stocks I purchased through an Employee Stock Purchase Plan.  I am going to sell those pretty soon though.  Not looking to keep my ESSP plan after i'm out of debt. 

1

*Also not an expert but have dealt with this stuff at another company and heavily invested in the market+ a tiny bit in crypto*

Youll get taxed out the wazoo on that, and it'll be more painful if you don't sell them during the correct offering period. Most ESPP plans have the small print rules for how not to get taxed as well as other stipulations. I would recommend rolling your ESPP distributions over into an IRA/IRA Roth and then diversifying your spread of investments to avoid distribution taxes. 

 

Fidelity is really great and super easy to setup.  Might check them out. Would recommend getting proffessional help that knows the tax code extremely well because you can get screwed really easily. Lowes, like most companies, should have free pros to help through whatever institution they use for their retirement plans.

Edited by Kanellos

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13 minutes ago, Kanellos said:

*Also not an expert but have dealt with this stuff at another company and heavily invested in the market+ a tiny bit in crypto*

Youll get taxed out the wazoo on that, and it'll be more painful if you don't sell them during the correct offering period. Most ESPP plans have the small print rules for how not to get taxed as well as other stipulations. I would recommend rolling your ESPP distributions over into an IRA/IRA Roth and then diversifying your spread of investments to avoid distribution taxes. 

 

Fidelity is really great and super easy to setup.  Might check them out. Would recommend getting proffessional help that knows the tax code extremely well because you can get screwed really easily. Lowes, like most companies, should have free pros to help through whatever institution they use for their retirement plans.

Yeah thanks for the input.  I thought about rolling over to an IRA but don't think that's an option.   When doing some research I'm learning I should of sold at the maturity date with the ESPP.  It's already taxed before it's invested so I think the only thing I get hit with is the capital gains portion.   

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39 minutes ago, aviolentworld said:

Yeah thanks for the input.  I thought about rolling over to an IRA but don't think that's an option.   When doing some research I'm learning I should of sold at the maturity date with the ESPP.  It's already taxed before it's invested so I think the only thing I get hit with is the capital gains portion.   

Right, I see. I dealt with an ESOP, not an ESPP now that I think about it. I mixed the two up.  I dealt with a company separation awhile back, so I went through tax hell trying to figure everything out.  I think you're right. You wouldn't be able to roll over directly, but if you sold it and then contributed to an IRA, it would lessen the impact of the capital gains in theory I suppose.

 

Well, wish you the best of luck figuring everything out!

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On 3/14/2018 at 7:17 PM, somethingvinyl said:

I'm just a schmuck who's 37 and finally have been contributing to my state job's pension for 1.5 years. Following for an interesting topic.

Better to start now.  Don't want to be 65 and not have a little nest egg growing.

 

Does your company match your contributions for your pension?  I'm really glad my mom told me to invest in my 401k when I was younger.    I wish I would of contributed sooner and actually learned where my 6% was going though.

 

 My wife and I have been listening to Dave Ramsey and following his steps.  Mutual funds and stocks is one of the only things I really don't get.  Will probably learn more when I meet with my Financial Advisor.  

 

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26 minutes ago, aviolentworld said:

Better to start now.  Don't want to be 65 and not have a little nest egg growing.

 

Does your company match your contributions for your pension?  I'm really glad my mom told me to invest in my 401k when I was younger.    I wish I would of contributed sooner and actually learned where my 6% was going though.

 

 My wife and I have been listening to Dave Ramsey and following his steps.  Mutual funds and stocks is one of the only things I really don't get.  Will probably learn more when I meet with my Financial Advisor.  

 

Mutual Funds are just a blend of different stocks/bonds selected by the fund manager to fit a certain risk/return profile.

 

I think most employer 401k plans will offer an option targeted at your projected retirement date.  (IE if you are 30, you might select a 35 year plan that assumes you will retire at 65).  The plan will target higher risk/return options early on and then move toward lower risk bonds as you approach retirement.

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12 hours ago, Tardcore said:

Mutual Funds are just a blend of different stocks/bonds selected by the fund manager to fit a certain risk/return profile.

 

I think most employer 401k plans will offer an option targeted at your projected retirement date.  (IE if you are 30, you might select a 35 year plan that assumes you will retire at 65).  The plan will target higher risk/return options early on and then move toward lower risk bonds as you approach retirement.

yeah from what i'm reading you want to switch over to mutual funds with more bonds in them as you get older since there is less risk.

 

I'm currently in a growth fund that is mostly U.S. and International stocks and Lowes stock split 50/50.   When I go back into reinvesting for my 401k I'm probably gonna split it into thirds with it being the Growth fund, Target retirement fund and Lowes stock.   I only have 12 to choose from and these 3 have the best return over a 5 year period.  All the other ones are really too conservative at my age.

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So.....I am a Financial Advisor for a company that operates throughout North America. I am located in Canada and therefore not licensed to advise US residents.

I will say that employee stock purchase plans in general can be judged by the employer matching rate as well as the quality of the individual company.

 

For example - Costco (though a great company and stock) does not match employee contributions and merely saves the employee a commission on what may be otherwise an overpriced stock at the time of purchase. Railroad companies on the other hand generally match dollar for dollar effectively giving the employee an instant 100% return in a decent company. Then there are companies that are so bad that I would not buy stock if there were matching 10 shares for every one I bought. Most ESPP will have terms for how long you have to hold the stock before selling. Like any stock, it's best not to have all your eggs in one basket and diversify once the amount seems to big.

 

Lowes however is on my company's stock focus list with a buy rating. Independent research provider Morningstar has it as a Wide Moat Undervalued Company with Exemplary Management and a current price value of $90.

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On 3/17/2018 at 10:21 PM, aviolentworld said:

Better to start now.  Don't want to be 65 and not have a little nest egg growing.

 

Does your company match your contributions for your pension?  I'm really glad my mom told me to invest in my 401k when I was younger.    I wish I would of contributed sooner and actually learned where my 6% was going though.

 

 My wife and I have been listening to Dave Ramsey and following his steps.  Mutual funds and stocks is one of the only things I really don't get.  Will probably learn more when I meet with my Financial Advisor.  

 

Yes, my organization matches up to a certain percentage (I think it's 5-7%, not sure). I contribute 8% of my salary, so who knows, they might match that. But the caveat: you have to be employed for 5+ years to receive their contributions. I'll make two years this October so if I can stay at least five, that's my goal.

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This is an easily digestible book that I wish I read when I was a lot younger.

https://www.amazon.com/Millionaire-Teacher-Wealth-Should-Learned/dp/1119356296/ref=sr_1_1?ie=UTF8&qid=1521763877&sr=8-1&keywords=millionaire+teacher&dpID=51dEgYGR8ML&preST=_SY344_BO1,204,203,200_QL70_&dpSrc=srch

I'm on the right path now and I also have a financial adviser. Also, keep in mind that there are two types of advisers, one you pay to meet with and they make no money off of your investments, and the free to meet person who will make money off of anything you invest/purchase through them. You can probably guess where there could be a conflict of interest, so do your research.

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On 3/22/2018 at 8:16 PM, lexicondevil said:

This is an easily digestible book that I wish I read when I was a lot younger.

https://www.amazon.com/Millionaire-Teacher-Wealth-Should-Learned/dp/1119356296/ref=sr_1_1?ie=UTF8&qid=1521763877&sr=8-1&keywords=millionaire+teacher&dpID=51dEgYGR8ML&preST=_SY344_BO1,204,203,200_QL70_&dpSrc=srch

I'm on the right path now and I also have a financial adviser. Also, keep in mind that there are two types of advisers, one you pay to meet with and they make no money off of your investments, and the free to meet person who will make money off of anything you invest/purchase through them. You can probably guess where there could be a conflict of interest, so do your research.

i will keep that book in my amazon cart.  i have alot of books i want to read.  i just got an investing for dummies one and a mutual fund book by Bogle.  Any others you would recommend? 

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