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Bonds are for morons. Cash is trash. Put 10% of your assets in equities immediately and 10% more every month until you are 60% in stocks. If volatility in account values makes you cry like a little girl then shred your statements unopened until the Dow hits 18000.
If you held bonds during the worst downturn in our lifetime, bonds did their job! They "zagged" when everyone who took on too much risk w/stocks bailed...
They are there for my diversification in my portfolio...plain and simple. I cannot hold 100% equities and I don't recommend that because of my puker factor. I can sleep at night. Not sure everyone can say that!
Trying to predict when to get in and out and how much they might fall and when is really silly, because no one on this website knows the answer....
Thank you, I think I am too heavy in bonds now??? I am really about 100% in bonds. Well 95% because I do have an emergency fund in cash. So I went from 95% stocks flying high until July of 2007 and grabbed my 17% gain that year before the big crash, got nervous (went all cash), as I knew real estate and stocks would tank, and was happy getting my 3 - 4% a year when everyone, and I mean everyone I knew lost 40% from October 2007 to Spring of 2009 or whenever the market started to recover. Then I think I got greedy and decided to get higher gains so did very well the past few years in bonds.
I might go 50% in the stable value fund, and then 50% in the bond funds. I really don't want to go back to equities, I will be retiring in a couple of years and will need some of this money in ten years. The fun of equities is gone for me. It feels too much like a casino. I did make quite a bit the 20 years I was in, and did make back all the losses from the tech. wreck and then some, but at my current age (52), a 40% loss is not something I have the stomach for. I have seen too many people lose that much just before retiring, and then not be able to retire.
Bonds are for morons. Cash is trash. Put 10% of your assets in equities immediately and 10% more every month until you are 60% in stocks. If volatility in account values makes you cry like a little girl then shred your statements unopened until the Dow hits 18000.
Oh Marco...been there done, that for about 20 years. I got into the market when the Dow was at 1,800. It was so much fun, returning 20 - 30% a year in the early 1990s. Man any dummy could get rich then. All of us thought we would have 4 million dollars by age 60 at least the calculators said we would because we were averaging 15% a year! Sweet! Then came the Tech. Wreck and reality... By the way, I am a girl!
Thank you, I think I am too heavy in bonds now??? I am really about 100% in bonds. Well 95% because I do have an emergency fund in cash. So I went from 95% stocks flying high until July of 2007 and grabbed my 17% gain that year before the big crash, got nervous (went all cash), as I knew real estate and stocks would tank, and was happy getting my 3 - 4% a year when everyone, and I mean everyone I knew lost 40% from October 2007 to Spring of 2009 or whenever the market started to recover. Then I think I got greedy and decided to get higher gains so did very well the past few years in bonds.
I might go 50% in the stable value fund, and then 50% in the bond funds. I really don't want to go back to equities, I will be retiring in a couple of years and will need some of this money in ten years. The fun of equities is gone for me. It feels too much like a casino. I did make quite a bit the 20 years I was in, and did make back all the losses from the tech. wreck and then some, but at my current age (52), a 40% loss is not something I have the stomach for. I have seen too many people lose that much just before retiring, and then not be able to retire.
Check out our national debt, and think about when interest rates are forced to go up (the recent rise in interest rates is nothing!), and think about what that will do to the bond market. It will be a huge slaughter.
Check out our national debt, and think about when interest rates are forced to go up (the recent rise in interest rates is nothing!), and think about what that will do to the bond market. It will be a huge slaughter.
OK I don't want to be "slaughtered." I have been working since I was 16, have been reading "Money" magazine since I was 22, (it just confuses me) the info/advice is all over the place, and all I have ever dreamed of is retiring, at a semi-young age and not retiring into poverty. Being "slaughtered" was never the goal. Thank you for your input. I hate the National debt too. So insane.
OK I don't want to be "slaughtered." I have been working since I was 16, have been reading "Money" magazine since I was 22, (it just confuses me) the info/advice is all over the place, and all I have ever dreamed of is retiring, at a semi-young age and not retiring into poverty. Being "slaughtered" was never the goal. Thank you for your input. I hate the National debt too. So insane.
I know it sounds scary, but it is what it is. Approximately $17 trillion in national debt and counting. $60 trillion total debt (all debts factored in including household, businesses, local, state, federal governments). And that's all with interest rates artificially suppressed to record lows by the Fed. Hard to see how any of this would turn out well for the bond market in the long run.
Check out our national debt, and think about when interest rates are forced to go up (the recent rise in interest rates is nothing!), and think about what that will do to the bond market. It will be a huge slaughter.
People have been saying this for awhile now... Even very smart people....
The problem is you, nor anyone on this site knows when and how steep rates will increase...it could be another 10+ yrs and the increase might be gradual. It could be next year....who knows.
Also, how will stocks fare if rates rise? I could post a dozen articles saying they will increase if rates do increase...
I tend to tune out most of the noise and stay the course along with being patient...I have a long way to go and still in the accumulation stage. If people really are nervous, then they can change the duration of their funds or look at other fixed alternatives like I-Bonds....
Most of my retirement money is in bond funds. They are tanking, down 4 - 6 % year to date. Do I just hold on and they bounce back like stocks? This is money I won't need or won't be using for the next ten years or so.
My option if I go to cash would be a Stable Value Fund returning around 2%.
My Bond funds are: TIAA-CREF High-Yield, DFA Inflation Protected Securities, PIMCO Total Return.
I was in stocks 1988 to 2007. Got out before the last crash and have been in cash and bonds since. Went heavy bonds the last two years, as the 3 - 4% returns were getting old, and yet my days of 5 - 12% returns are tanking. (Especially this month).
Is this just a blip? Do I go all cash and then get back in after a few months? Or just ignore this and five years from now will be glad I held on.
I put 15% of my pay into these funds and in addition fund Fidelity TIPS through a Roth IRA.
Thank you for any help and insight.
You seem to have this all-or-nothing mindset. That will almost always works against you. There is no one asset class that is "king" all the time. You should own a mix of assets because it is impossible to predict which asset class will be "hot" at any given period of time. The best way to do this is to own one of those target dated retirement funds or the classic "balanced" fund that invests in a mix of stocks, bonds, and cash (usually 60-75% stocks and 25%-40% bonds and cash).
For sure, interest rates are so low that bond funds are expected to only have low single digit returns over the next few years. Even bond fund managers like Bill Gross (of PIMCO Total Return) have admitted that much. But bonds usually (not always) act as a cushion when stocks get hit. A 3% or 4% hit to bonds is not really that bad considering it is not unusual for broad based stock funds to drop 10% in a month's time.
OK I don't want to be "slaughtered." I have been working since I was 16, have been reading "Money" magazine since I was 22, (it just confuses me) the info/advice is all over the place, and all I have ever dreamed of is retiring, at a semi-young age and not retiring into poverty. Being "slaughtered" was never the goal. Thank you for your input. I hate the National debt too. So insane.
Be careful, because the majority of the people on this site give reckless market timing predictions when they have no idea what they are talking about.
I could find a dozen people who have all different ideas about gold for instance..
Who's right? Who's wrong?
All of them who make predictions really don't know...
So my advice which has been constant is first, I'd check out a group of very knowledgeable people over at the vanguard diehards website...
They give very sensible advice. No recommendations on risky expensive funds, or market timing/daytrading schemes that always pop up here.....Most will take what the market gives them and outperform the majority of investors over the long term (which is the goal)
Stay even keeled and tune out the noise that frequents this site....its an uphill battle.
Check out our national debt, and think about when interest rates are forced to go up (the recent rise in interest rates is nothing!), and think about what that will do to the bond market. It will be a huge slaughter.
This could also slaughter the stock market as well. There may be nowhere to run, even cash. Look at what happened in Cyprus.
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By the way, I am a girl!
