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I'm so sick of the lies and myths that you guys spread around in relation to CDs v.s. being in the Markets. So let me break it down for you here buddy:
Stop right there, if the guy is an average Joe, non professional and non educated investor, he has NO BUSINESS being in the Market. He needs to only be in vehicles he understands like CDs. Period. Nobody should be investing in anything they don't understand just because "an expert" said it's a good investment.
If you refer to my thread here http://www.city-data.com/forum/inves...questions.html you will see a complete breakdown over the previous 20 years from late 1993/1994 to 2013, of the compounding rate of return breakdown of Balanced Funds v.s. Long Term CDs (CDs over 5 years).
Please go and review this thread as I don't want to repost everything here. All of the links, analysis, resources, are there for you to review. In summary, the compounding rate of return is what you are focused on here, NOT the average rate of return. Over this 20 year period, Balanced Funds like Vanguard Wellington and Vanguard Life Strategy have had an average compounding rate of return of 6% - 7%, where Long Term CDs have had 5% on average.
They only beat CDs by 1% - 2%, which quite honestly if we are basing our investment choices on past performance, why someone wants to ride the roller coaster for an additional 1% - 2%, makes no sense to me.
So this notion that the Balanced Funds are KILLING CDs, is just an utter myth/lie.
Another myth/lie. Tell me ONE time ever when Long Term CDs (5 years or more) were lower than the year's Inflation Rate? Let's examine the 1993/1994 - 2013 period that I did in my Thread.
Average inflation rate from 1993 - 2013 was about 2.3%
Average compounding rate of Long Term CDs was 5%
Average compounding rate of Balanced Funds was 6% - 7%
BOTH the Long Term CDs and the Balanced Funds beat Inflation hands down. Again, refer to my thread to see the full number breakdowns and DOUBLE CHECK my numbers for yourself so you can "see" for yourself.
So which is it? Are you advocating someone buy and hold for a long period of time, or are you advocating that they TIME the market? You guys speak out of both sides of your mouth all the time it's funny lol.
Again, more "insane" investor "lingo". Playing not to lose you say? What freaking sense does it make for someone to save money and invest it, just to lose it? They would have did better taking that money and blowing it on material possessions. At least they would have gotten some enjoyment out of it and stimulated the economy at the same time.
If you are a prudent investor, the FIRST thing you ought to be focused on is preserving your hard earned principal. The SECOND thing you ought to be focused on is getting the most passive return on that money while mitigating the risks in association with said returns. The THIRD thing you ought to be focused on is beating Inflation.
After you review my thread, either respond to me there or respond to me here, I would love to see what your response is after reviewing the information I presented.
A 5% compounded return over 15-30 years and 6% aren't close and 7% makes it even worse. The 5% is behind as the other returns are 20-40% more in the first year and get worse with compounding. I'm not sure how you don't see this while repeating the nonsense over and over
True, although I think it becomes pretty obvious when it's a bubble and when it's a bargain relative to recent years. I tend to wait until I see 5 year lows to sink money from my savings over and above what I normally invest every month.
I'm one of those people who doesn't "trust" the market, so I have around 50% of my savings in FDIC insured accounts, another 25% in long term conservative mutual and index funds, and 25% that I "play" with on the market. That's savings is separate than what I have going toward retirement. If it keeps going down, - maybe to 15000? I'll move a little over from the safe savings.
Days like today are when I'm very happy to have that strategy. In 2008 I was heavily invested in the market and I felt so sick and depressed when things went south. I swore to myself, never again. Am I missing out on returns? Sure I am. But peace of mind and normal blood pressure is worth a lot of money.
what about individual sectors, while the overall market is historically over valued , energy companies are at ten year lows in some cases , do you view the likes of chevron ,bp or shell as a buy right now ?
what about individual sectors, while the overall market is historically over valued , energy companies are at ten year lows in some cases , do you view the likes of chevron ,bp or shell as a buy right now ?
they could be fairly priced with iran about to come on line too . we are a wash in oil .
Yes--was listening to NPR today. Discussion about Obama oking Shell drilling the the Artic...
Likely not to happen too soon because of high cost to dig cheap oil...
But guy made the comment that the U.S. is basically self-sufficient with new discovered reserves/fracking reservoirs but came at high price...companies don't really want to produce those reservoirs and lose money...
Willing to bet real money that it will NOT do a reversal this coming monday. NOT.A.CHANCE.
Up 500 points since the market opened today. Reversal or just an upswing in a longer bear market, who knows.
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Unless you are a Fed Chairman (and even they don't know).
