403b Planning

Your best interest is our only interest

What is a 403b?

Simply put, a 403b can be an attractive alternative to your URS 401k.  Save on a pre-tax or Roth basis. A 403b plan is a retirement plan for specific employees of public schools, tax-exempt organizations and certain ministers. 

Choose a smarter 403b

Fidelity offers over 180 no-load mutual funds. Mutual funds are a great way to invest. They give you all the advantages of investing in stocks, bonds, and short-term investments. But they’re also extremely convenient — and they let you benefit from a professional manager’s experience. Here’s more about how mutual funds work, and the kinds of funds you’ll find in your workplace savings plan.

A Smarter way to invest

What is a mutual fund?

A mutual fund provides an individual investor with the chance to invest in many stocks, bonds, and short-term investments — all at once, and with one simple transaction. By gathering money from thousands, even millions, of investors and spreading it among many investments, mutual funds make it easy for you to take advantage of many of the market’s opportunities. Every mutual fund is managed to achieve a certain objective, ranging from lower return potential and less risk (a conservative objective) to higher return potential and more risk (an aggressive objective). Most workplace savings plans offer a variety of fund choices covering a range of objectives.

Inside your plan’s mutual funds: stocks, bonds, and short-term investments.

Mutual fund managers, also known as portfolio managers, try to meet their funds’ objectives by selecting from these three basic types of investments. And as a fund investor, you own a very small share of everything your fund invests in. 

How stocks, bonds, and short-term investments work within mutual funds:

Stocks

A share of stock represents ownership in a company. When you own shares in a mutual fund that invests in stocks, you own a small percentage of all the stocks that the fund owns. As the value of the stocks held by a mutual fund rises and falls, so does the share price (or net asset value) of the mutual fund. When a fund sells the stock it owns for a higher price than it paid, it earns a profit or “capital gain.” On the other hand, if it sells at a lower price, it suffers a “capital loss.”

Bonds

Simply put, a bond is a loan from an investor to an organization or institution. Corporations, governments, and municipalities issue bonds as a way to raise money. As you might assume, much of the return on bond funds comes in the form of interest. The value of bond fund shares can also rise and fall — often in response to interest rate trends — though these moves are more modest than with stock funds.

Short-Term Investments

Short-term investments are also known as temporary investments. These typically include marketable equity and debt securities as well as short-term paper. Since the investments are very liquid, it is typically right below the cash and equivalents on a company’s balance sheet.

Short Term Investments:

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Stocks

A share of stock represents ownership in a company. When you own shares in a mutual fund that invests in stocks, you own a small percentage of all the stocks that the fund owns. As the value of the stocks held by a mutual fund rises and falls, so does the share price (or net asset value) of the mutual fund. When a fund sells the stock it owns for a higher price than it paid, it earns a profit or “capital gain.” On the other hand, if it sells at a lower price, it suffers a “capital loss.”

Bonds

Simply put, a bond is a loan from an investor to an organization or institution. Corporations, governments, and municipalities issue bonds as a way to raise money. As you might assume, much of the return on bond funds comes in the form of interest. The value of bond fund shares can also rise and fall — often in response to interest rate trends — though these moves are more modest than with stock funds.

Short-Term Investments

Short-term investments are also known as temporary investments. These typically include marketable equity and debt securities as well as short-term paper. Since the investments are very liquid, it is typically right below the cash and equivalents on a company’s balance sheet.

Short Term Investments:

Read More

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Davis Financial LLC

A fee-based financial planning firm servicing Ogden, Utah. We strive to understand your goals, help you manage your retirement planning, guide your overall wealth strategy and help minimize your tax liability through a long-term and trustworthy relationship.

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