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Darrell, the only issue I have w/this is the emergency fund...if you don't have that, where do you take from in an emergency? the 401(k)? I think if one does not have an adequate EF, they should build it up immediately....(maybe you agree, but just wanted to point it out)
Thanks, I certainly agree. Saving for emergency fund should be number 1.
Someone in another forum basically said if I can't spend 4 hours a week looking at investment stuff then I shouldn't be investing period.
it is only as hard or as easy as you want to make it. i enjoy devoting next to nothing to my actual portfolio in time. i have been using a newsletter for decades and devoting 30 seconds a week to read an update in e-mail,
mathjak, What do you think of the portfolio I listed here on page 3.
I am probably going to choose that route or Vanguard's 2045.
i don't really know the funds well enough to comment. i only know fidelity funds in and out . i do a little bit with vanguard but i don't really follow their line up.
Darrell, the only issue I have w/this is the emergency fund...if you don't have that, where do you take from in an emergency? the 401(k)?
It's good to have an emergency fund and most financial advisors would tell you that it should be near the top of the priority list. But if you DIDN'T have one, you could take money from your Roth, if necessary, as you're allowed to withdraw contributions for any reason without tax or penalty. Or if you have a taxable investment account, you could withdraw from that, of course (although you'd owe taxes on any gains).
for someone with limited knowledge about investing and who does not want to learn i think target date funds are..... (drum roll)
the worst way to go about it out of all the ways possible.
why? because any fund that has a disregard for what is happening in the world and strictly buys assets based on my age is nothing i want to own.
think of the target date funds now that are maturing and are approaching an investors retirement.
know what most of those assets will be in ? bonds, nice risky bonds ,thats where . at a time you should lighten up on bonds they are loading you up without any concern for where we are in the interest rate cycle.
it depends at what part of the cycle. with rates this low they will fall in value once rates rise.
an intermediate term bond will lose 8% or so for every point rates rise. at this stage with rates having no where to go really but up its a guaranteed loss. we just don't no when we will see that rise but already coroprate bonds, international bonds and treasury bonds are down year to date.
What rates are you talking about? So a guy myvage should avoid bonds now at 28 yrs old?
It is important that you exceed inflation. Investing in bonds as a long term strategy is not beating inflation. You need to figure out your risk tolerance as mathjak says. That is key. If you are investing a lump sum or dollar cost averaging your investments will go up and down. It is the ability to not panic and lock in losses unless you have no choice is critical.
Finding the right fund is next. That is why you are asking the questions.
Investing in bonds as a long term strategy is not beating inflation..
Eh, not to correct you yet again, but bonds average roughly around 6% per year historically and inflation around 3%. Now, I wouldn't count on 6% returns for bonds going FORWARD for a while, but still...
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