possible to invest in an energy mutual fund with less than 25k
Groups | Search | About
User Password
Register Now! Lost Password?

Financial Planning - Financial planning in general. (Moderated) 

get this group's latest topics as an RSS feed add this group's latest topics to your My MSN content add this group's latest topics to your My Yahoo content  add this group's latest topics to your Google content  YahooMyWeb Yahoo!  Google Google  Windows Live Favorites Windows Live  del.icio.us del.icio.us  digg digg  Add to Netscape Netscape
Subject Author Date
possible to invest in an energy mutual fund with less than 25k Jouup 07-10-2007
Posted by Jouup on July 10, 2007, 10:49 am
situation: family with each member with either roth ira and conventional ira or
just
roth ira but in each of the various types of ira accounts, they have balances
below
25k individually

is there a fidelity or vanguard fund that allows them to invest in an energy
fund with
just 10k balance(s) ? every one that I looked at appeared to require at least
25k to
invest.

also, related to this question is an employer retirement plan 401k. what is the
method
to ask the plan administrator to make available an energy investment plan within
the
401k? in calling the company HR dept, they have a plan counsel and toll-free
service
for the banking institution that administers the plan but these people are not
the
money plan makers and noone seems to know who that is. in other words, I can
call up
the banking institution and ask anything about my investment selections or get
statements and make changes (which I can do online also) but these people have
nothing
to do with the actual investment plans (ie. large cap fund, bond fund, etc.) and
they
don't know who runs the plan choices yet the prospectus outlines clearly which
companies are used to run the components inside the 401k - these companies have
no
contacts within our HR dept either.

reason, obviously, why I'm asking is that all types of energy is becoming more
and
more expensive, with natural gas, oil, fuels, all becoming more expensive and it
would
appear to be a sound position long-term to drop all savings into an energy fund
or at
least a sizable chunk if possible


Posted by Andrew Koenig on July 10, 2007, 11:04 am

> is there a fidelity or vanguard fund that allows them to invest in an
> energy fund with just 10k balance(s) ? every one that I looked at appeared
> to require at least 25k to invest.

The Vanguard energy fund is available as an ETF (ticker symbol: VDE), which
you can buy through any broker in units as small as one share.


Posted by Dave Dodson on July 10, 2007, 11:23 am
> is there a fidelity or vanguard fund that allows them to invest in an energy
fund with
> just 10k balance(s) ? every one that I looked at appeared to require at least
25k to
> invest.

Fidelity's Select Energy Fund (FSENX) and Select Energy Services Fund
(FSESX) have minimum investments of $2,500.

Dave


Posted by PeterL on July 10, 2007, 12:07 pm
> situation: family with each member with either roth ira and conventional ira
or just
> roth ira but in each of the various types of ira accounts, they have balances
below
> 25k individually
>
> is there a fidelity or vanguard fund that allows them to invest in an energy
fund with
> just 10k balance(s) ? every one that I looked at appeared to require at least
25k to
> invest.


Often the entry level for IRA plans is a lot lower. Which funds are
you interested in?


>
> also, related to this question is an employer retirement plan 401k. what is
the method
> to ask the plan administrator to make available an energy investment plan
within the
> 401k? in calling the company HR dept, they have a plan counsel and toll-free
service
> for the banking institution that administers the plan but these people are not
the
> money plan makers and noone seems to know who that is. in other words, I can
call up
> the banking institution and ask anything about my investment selections or get
> statements and make changes (which I can do online also) but these people have
nothing
> to do with the actual investment plans (ie. large cap fund, bond fund, etc.)
and they
> don't know who runs the plan choices yet the prospectus outlines clearly which
> companies are used to run the components inside the 401k - these companies
have no
> contacts within our HR dept either.
>


Very unlikely. My experience has been companies or their HR dept.
don't really want to deal with that. There really is no incentive for
them to make changes unless you can get a large number of your fellow
employees to demand it. Also sector funds are considered to be more
volatile. They also don't want you to put your 401K funds in high
risk areas.


> reason, obviously, why I'm asking is that all types of energy is becoming more
and
> more expensive, with natural gas, oil, fuels, all becoming more expensive and
it would
> appear to be a sound position long-term to drop all savings into an energy
fund or at
> least a sizable chunk if possible


Posted by on July 10, 2007, 12:47 pm

> situation: family with each member with either roth ira and
> conventional ira or just roth ira but in each of the various types of
> ira accounts, they have balances below 25k individually
>
> is there a fidelity or vanguard fund that allows them to invest in an
> energy fund with just 10k balance(s) ? every one that I looked at
> appeared to require at least 25k to invest.

I'm not sure that in a <$25k portfolio I'd worry too much
about sector funds like Energy (or even in a couple of
portfolios which combine to, say, $75k, though in that
case, you could put the energy fund in one account).

That said, there are other options like ETFs - you'd
pay a brokerage commission to buy in (if you're paying
more than $15 commission, maybe find a better broker!),
but the expense ratios are rock bottom. Examples:
Vanguard Energy ETF (VDE) (note that 30% of its assets
are in only two stocks: XOM and CVX), there's also
the Energy SPDR (XLE) (it also has some 33%+ in just
XOM and CVX). (That should suprise nobody - XOM alone
is just gargantuan.)

Are you sure you really want to overweight energy?

XOM is the largest holding in the SP500 - if you've
got an index fund, you've already got more than 3%
in just that stock alone. Chevron's another 1-1/4%
of that index.

> also, related to this question is an employer retirement plan
> 401k. what is the method to ask the plan administrator to make
> available an energy investment plan within the 401k? in calling the

You talk to HR. I know you seemed to get a runaround, but
ultimately, they report to the same folks as whoever is
the trustee of the plan and those folks (plus their advisors,
etc at the investment company) are the ones who choose funds
for that 401k.

> reason, obviously, why I'm asking is that all types of energy is
> becoming more and more expensive, with natural gas, oil, fuels, all
> becoming more expensive and it would appear to be a sound position
> long-term to drop all savings into an energy fund or at least a
> sizable chunk if possible

You're not the only one who's figuring that. Prices of
those companies reflect exactly the expectations you
are talking about. That doesn't mean you aren't right
to want to overweight them - but it also doesn't mean
that doing so is a great idea.

Perhaps you'd like to list the funds you do have available
in your 401k and folks here can make some recommendations
amongst them. For what it's worth, I'd lean towards making
the 401k portfolio as "set-it-and-forget-it" as possible -
mine's in a target-retirement-fund - and work with some
other money for "play" (ie. overweighting stuff, etc).
There is an argument for having play money in a tax
favored account (ie. no tax consequences for transactions),
but you mentioned that you have IRAs in addition to the
401k, so perhaps allocate one (small!) portion of one
of those accounts as play money. For the rest - the
vast majority of your retirement money - set up an
appropriate asset allocation (well diversified and
automatic as possible) and just let it do its long-term job.


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting


Similar ThreadsPosted
What is the best mutual fund to invest in? July 24, 2007, 7:19 pm
I have about 90k to invest in a mutual / ETF October 9, 2006, 5:02 am
Mutual Fund Ques January 22, 2007, 7:15 pm
ETF vs Mutual Fund in Roth IRA July 14, 2007, 3:00 pm
Mutual Fund Price December 27, 2007, 8:01 am
New Mutual Fund vendor? March 2, 2008, 7:23 am
Mutual Fund Holdings Comparison December 17, 2006, 12:09 pm
what if the mutual fund company goes belly up April 25, 2007, 7:27 pm
mutual fund transaction fees October 12, 2007, 4:27 pm
Re: Why does Canada have high mutual fund fees? December 9, 2006, 12:46 pm

other essential online resources:
United States Treasury
US Securities and Exchange Commission
New York Stock Exchange
Tokyo Stock Exchange
Accounting and Tax Software Forums
Contact Us | Privacy Policy   XML SitemapXML Sitemap