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you likely missed all the best moves . the run up is based on all that growth we are supposed to see . if it pans out the juiciest gains already happened and are priced in .if f it does not happen we will fall as bonds and gold will likely be the horses .
like the old saying you waited so long for your ship to come in the pier collapsed by the time it arrived
I am a bit at a loss for what to do with the $230k. Most of the conservative funds like wellesly are 60% bonds and as the above article points out are a huge risk right now with little rewards to justify it.
On the other hand stocks are due for a bear market in the next few years but on the long run have a higher reward. I definitely don't want to just dump everything into a 90% stock fund like 2045 right now. I don't mind DCAing $2k per month going forward as well as my 401k 15%.
The $230k was originally accumulating due to career instability. I was looking to possibly do a radical career change to get away from the terrible job market for Chemists but ended up getting a pretty good and stable job that looks like it is going to last a good long while. I was also considering getting a house, but have totally nixed that idea due to the out of control govt in Illinois with property taxes spiraling more and more out of control (currently averaging 3% effective and rising). My current strategy is to accumulate wealth so I can eventually retire early and get the h#ll out of this state.
I was also always kind of leery of the stock market. My father read every book and watched every program and did stock investing. He had an uncanny nack for picking stocks that went bankrupt. Kaiser Aluminum, Montana Power, Omega Healthcare, GM bonds too many to list. Plus I went through 2008.
Oh c'mon. It's *never* too late to invest and make changes in how one invests. FFS, what's with the schadenfreudier-than-thou shtick? It's more than a little tiresome and it's downright toxic.
For anyone reading this thread, do not allow anyone on the Interwebs or C-D to suggest that you are screwed and all your best days are behind you. As long as you still have a beating heart and are at least somewhat of sound mind and have some $$$ to your name, you can put your money in some index funds ASAP and do exactly what many other people do.
If you want to play with some individual stocks then fine, enjoy, and also hedge your bets and put some $$$ into a couple broad-based index funds. Tune out and ignore those who want to bring you down and make you feel less-than. That's the long-running game beneath the surface here. Move forward and don't let others' opinions paralyze you.
I have no interest in picking individual stocks. Like I said, my father was way more knowledgeable than I am and he picked a ton of real losers. If 80%+ of the experts are unable to beat the indices what chance does an amateur like myself have?
The only thing I can think of is ladder some money in individual bonds with the intention to hold them towards maturity. That way I really don't have to worry about interest rate risk which becomes really just opportunity cost rather than actual loss of principle.
The only thing I can think of is ladder some money in individual bonds with the intention to hold them towards maturity. That way I really don't have to worry about interest rate risk which becomes really just opportunity cost rather than actual loss of principle.
There's no reason you couldn't combine a bond ladder with investing in indexed low-cost mutual funds. You just have to choose a brokerage which will allow you to do both.
I have no interest in picking individual stocks. Like I said, my father was way more knowledgeable than I am and he picked a ton of real losers. If 80%+ of the experts are unable to beat the indices what chance does an amateur like myself have?
The only thing I can think of is ladder some money in individual bonds with the intention to hold them towards maturity. That way I really don't have to worry about interest rate risk which becomes really just opportunity cost rather than actual loss of principle.
if you learn one thing from this forum learn that individual bonds are no safer than bond funds because you hold them . at the end you are just as behind if rates and inflation rise .
rates and inflation are joined at the hip . rates do not rise in a vacuum very much .
at maturity getting your 1k back years from now will buy a fraction of what it does to today .
an individual bond never sees a penny more interest along the way to maturity . so at the end getting your principal back takes a purchasing hit .
a bond fund always has it's interest increase along the way to offset some of the rise in rates . the fund is always replacing bonds with the higher paying bonds as they trade .
in both cases you will be behind purchasing power wise as even if held for the duration value the bond fund will still be behind the interest rate /inflation curve .
the bond fund has the added advantage though , that if the bond manager is good he can pick bonds that eventually get a credit upgrade so the fund is not just interest rate dependent .
so lets see some examples :
a bond fund that cost 10 bucks a share with a duration of 5 and paying 5% when you buy in will fall to 9.50 with a 1% rise in rates . but you will see an extra 1% interest over those 5 years making you whole again .
however you are whole back at your 5% level you bought in at , but you are in a 6% world now getting 5% . so you are still behind .
on the other hand getting your 1k back if rates jumped a full point will take about the same hit in purchasing power .
don't forget a 30 year bond will buy less than 1/2 of what it did 30 years later even at 2-3% inflation so holding to maturity is a loss . .
Last edited by mathjak107; 02-18-2017 at 03:11 AM..
FTBFX has beaten the same index every single time frame .
That is a meaningless statement. FTBFX is not an index fund and is not trying to follow an index, so measuring it against some index does not mean it is better; it is just different. FTBFX is a different fund than Vanguard's Total Market Bond fund. Just because they both have the word "Total" in their names does mean anything. FTBFX is 16% junk bonds; VBMFX has no junk in it.
Vanguard's VBMFX fund is considered to be very safe. It works very well for investors who like to own bonds for safety and put all the risk in stocks. FTBFX serves a different purpose - it juices returns by taking on risk. That is fine for investors who don't mind risk in their fixed-income assets but that is a different investing style.
As far as the fund's expense ratio - that is money it is taking out of your pocket. You would be getting even better returns with FTBFX if it did not charge so much in fees.
i said it is a total bond fund . if you want a GOOD total bond fund that has done way better than vanguards total bond fund go with fidelity's . it has proved to be better over the one ,3 ,5,10 and 15 year time frames . there is little "risk " difference between the two . that is silly .
t is bench marked to the same index as vanguards and strives to beat it which it does . the aggregate bond index is it's benchmark.
you can compare holdings they are similar but slightly different proportions . fidelity just changes the allocations to the same types of holdings producing better results . nothing wrong with that .
i see no reason to use vanguard fo total bond funds . they do not even have a team to evaluate high yield bonds so they stay away .
last year that was a great place to be , my fidelity high yield fund beat my equity's and with almost 1/2 the risk .
the only thing i hold at vanguard now is my s&p 500 index fund .
Last edited by mathjak107; 02-18-2017 at 07:43 AM..
i said it is a total bond fund . if you want a GOOD total bond fund that has done way better than vanguards total bond fund go with fidelity's . it has proved to be better over the one ,3 ,5,10 and 15 year time frames . there is little "risk " difference between the two . that is silly .
t is bench marked to the same index as vanguards and strives to beat it which it does . the aggregate bond index is it's benchmark.
"Strives to beat it, which it does"
Has. Has beaten the Vanguard fund. You cannot know it will continue to do so. History suggests it will continue to do so, but the investment graveyard is filled with strategies that went south unexpectedly.
In contrast, an index fund is nearly certain to closely match its index, whether the method is through full replication or statistical sampling.
If an investor wants an active fund, your recommendations are fine. If they want an index fund, they should probably actually buy an index fund. The Fidelity product you recommend is not an index fund.
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