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The 50% in the S&P and then the other 50% into some high risk commodity. Probably silver, maybe GBTC for kicks. It's only $10k, I need more than that for my downpayment.
What's your mortgage interest rate? If you want to be completely safe, pay down your mortgage.
Here is what my Vanguard FA sent me today:
- This is the second strongest bull market in history, Vanguard has lowered our expected return
of stock returns
- Vanguard U.S. stock market forecast for the next 10 years: 3-5% per year
- Vanguard Global stock market forecast for the next 10 years: 4.5-6.5%
Well, it depends on how you define "safe". If that means 50% not risking your principal, then your only options on that front are bank CDs, or treasury bonds.
As far as the other 50% goes, I'd put it in a moderate but sturdy, low cost mutual fund like Vanguard Wellington.
Ha! That would be my same answer, based on the conditions the OP made.
Put $10,000 into SPY. Sleep on it for 25 years, and it becomes $54,200.
Not too shabby for doing next to nothing.
However your purchasing power is cut in half, so really it's about $27,200. Take away either long term capital gains or income tax and you're left with maybe $23,000.
Still, your $10,000 would be worth $5,000 so you've still made much more money. Staying in cash for the long haul is financial suicide.
I couldn't and wouldn't want to pick just one thing to hold 25 years. I look for startups that are going to be the next big thing, like Facebook was. I'm becoming worried that google, facebook, and apple are going to monopolize internet content and start to censor anything that's not politically correct. I hope some startups can come along to challenge the dominance of say youtube for example.
The internet is taking the natural course of evolution.. what used to be a bunch of small things is becoming a few huge entities.
When I worked at Apple (this was before Jobs came back) they literally had no cohesive Internet strategy. They just couldn't figure out what their play was going to be. They spent a lot of $$$ on their own online community to compete with AOL, they even attempted to port the service to Windows. The irony is their eWorld service was actually AOL beneath the eWorld/Apple surface, but 1 code revision behind at all times, per the AOL contract. eWorld folded rather quickly and the subscribers were shuffled off to AOL.
So I wouldn't worry too much about Apple somehow changing Internet policy or blocking things. That's a slippery slope and they (should) know better.
I would add $3K to my APPL position and $2K to my BRK-B position. 10 or 20 years would be fine for both. I would hold the remaining $5K in cash until something on my watch list pulled back far enough for me to start a new long position.
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