Investment guru’s like John Bogle, Warren Buffet and others have simply stated that you would be better off investing in a simple ETF or Index fund that tracks the market instead of the blended mutual funds that you are probably stuck in.
8% in 19 months is better than losing money, and it’s great to see that you are investing in your retirement!
There are 4 cornerstones to personal finance:
- Living within your means and not spending like a crazed consumer on depreciating, non-essential garbage items that society force feeds the public
- Saving money to a point where you’re not living paycheck to paycheck
- Properly investing since saving capital doesn’t give you much in terms of returns. Investing in property, stocks, ETF’s or Index funds tends to be the most common and liquid route, but people usually buckle from fear of losing and a lack of understanding of how these products work.
- Using debt in a positive way
I would give you some general advice regarding the 403(b). Start by trying to understand what you have in it. What are your investments? What is the composition? What are their holdings?
Generally, mutual funds will have some blend of Stocks (companies), Debt (bonds), Cash and Commodities. If you are heavily invested in stocks, you’re probably in poorly performing funds with higher than average fees.
SPY is an ETF that tracks the S&P 500 and one of the largest investment vehicles in the world. 19 months ago would have been about Jan, 2017. The SPY was at $225 / share, and today as I write this it’s nearly $280. It’s gained about $55/share since then, so the market return would roughly be 24%. Your 8% return does not stack up to that, but to be fair to the math, you probably have been contributing a portion of your paycheck each cycle to build the account to the point it is now, so you haven’t had the entire balance at work the whole time.
The bottom line is this: whatever has happened in the past, try to learn from it, try to understand how you’re invested now and then come up with a plan to get trained and educated so that you can invest with confidence. You can do this for yourself!
I’ve been training investors and traders for 13 years. It all starts with a strong why. If you have a desire to get control of your retirement, invest wisely and have fun doing it you can. But, it will take time to develop those skills. I would suggest you watch this short video on the process of developing as an investor.
Good luck!
