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I work in oil & gas and currently there are people who have been out of work for more than two years and depending on what goes on in the economy the stock market maybe down as well at that time.
In terms of diversification, a rule of thumb is not to hold a ton of your assets in the stock of your employer. Why? If the employer suffers a downturn for whatever reason, you might lose your job AND the value of the stock may decline. Just ask the poor former employees of Enron.
So, don't own a lot of stock in either your employer or in the general Oil & Gas industry.
So, don't own a lot of stock in either your employer or in the general Oil & Gas industry.
Unless you happen to work for Apple. Employees used to get a 15% discount on stock purchases, at least the time I worked there long long ago. But I don't know if they still do.
mathjak107 - Thanks for this but I checked out TLT and SHY and found their returns to be quite poor for a 15 year period. I noticed a little spike during recession but then I am invested in the long term not just for recession. Actually the chances of me needing money during good times is less because if I lose my job i can find one way sooner than in a recession.
Anyway, can you give me an example of a etf that has good mix of bond fund or dividend equity?
TLT was up almost 7% the last 15 years . stocks were up a round 9% . cash did less than about 1% so lets keep that in perspective .
.shy is a step above a money market . it is used to to take advantage of buying opportunities and offset the interest rate sensitivity of tlt .
you do realize their power is when stocks plunge as protection . tlt soared 34% in 2008 . had you had an equal amount in the s&p 500 it almost offset the 40% plunge .
different bond funds perform differently at different times no bond fund is forever nor should it be . you have to swap as times change .
i held a huge position in fidelity total bond fund for many many years . today that position is cut in half , it has to much interest rate sensitivity to be a large position today .
Thanks hikernut. I went over the treasury yields. I am trying to figure out why bother with treasury when there are online savings account that offer 2%? They offer FDIC coverage and there is no such thing as volatility, with treasury bonds I might have to deal with some volatility. Difference between 2% and 2.5% to me after taxes is insignificant and that is assuming 2.5% is guaranteed.
There's no single choice that has every advantage, and no the extra few basis points is not a big deal. With that said, where in the world do you find 2% today on a regular savings account? A five-year Treasury is not very volatile, certainly nothing to worry about IMO. Treasuries are extremely liquid and safe. Either route is fine, and these are just for holding a little dry powder. The equity markets are the place to grow one's wealth.
TLT was up almost 7% the last 15 years . stocks were up a round 9% . cash did less than about 1% so lets keep that in perspective .
.shy is a step above a money market . it is used to to take advantage of buying opportunities and offset the interest rate sensitivity of tlt .
you do realize their power is when stocks plunge as protection . tlt soared 34% in 2008 . had you had an equal amount in the s&p 500 it almost offset the 40% plunge .
different bond funds perform differently at different times no bond fund is forever nor should it be . you have to swap as times change .
i held a huge position in fidelity total bond fund for many many years . today that position is cut in half , it has to much interest rate sensitivity to be a large position today .
I overlooked the dividend portion of the return. I see now how it adds up to 7%, SPY has been up 9% in 10 years though and not 15 years. Anyway, do you think it will still hold up as well now that interest are about to go up. Low interest may have helped it a lot in the past
Unless you happen to work for Apple. Employees used to get a 15% discount on stock purchases, at least the time I worked there long long ago. But I don't know if they still do.
Yeah, I also worked at the Cupertino Fruit Company for over a decade. A discount for the employee purchase program (EPP) exists at many large companies. You put money in over the time period (6 months, I think), and on the final day the company adds 15% and then purchases stock with the total.
The best practice was to do a same-day sale. But I held on to every share. I shouldn't have done so, but in the end it worked out OK.
I thought it would be 60k a year if the average annual stock market gain is 10%.
You don't get that whole gain. You have to leave a cushion for when the market goes down and inflation.
I should have a half million to stick in the market either end of 2018 or some time in 2019 from selling some real estate assets. It'll go in a 100% equities (selection of stocks) portfolio where I'm contemplating to automatically transfer up to 3.5% (as long as dividends cover that) to my checking on a quarterly basis. The account will still grow safely.
No real reason behind that for me though. I'll call it my management fee and reward for having that account setup at a young age after living like a quasi pauper. All the cash and then some will probably end up back in it or a different one/asset, but I'd like to have the ability to maybe goof off a little and have fun money I don't think about.
The account will also be at a brokerage that will allow me to use it for collateral for loans when need be. It'll be quicker than going the traditional route with banks.
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