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My wife, MBA and financial genius, just laughed her ass off at your '10%.' Then chortled at your '8%.'
When I read Charles' post, I KNEW someone was going to say this.
All your comment proves is that people with MBAs can be just as ignorant as everyone else when it comes to investing.
There are plently of balanced mutual funds (60-65% stock & 35-40% bonds & cash) that have returned close to 8% or more over the last 15 years--a period of lousy stock market returns and slightly better than average bond market returns. Many of these funds are common options in 401K plans.
In some cases cheaper share classes (and thus, slightly better returns) may be available for some funds in 401k plans and/or accounts with high balances (e.g. Vanguard recently lowered it's minimum to $50,000 for its cheaper "Admiral" share class).
15 Year Returns for:
Dodge and Cox Balanced: 8.53%
T. Rowe Price Capital Appreciation: 10.10%
Fidelity Balanced: 8.34%
Fidelity Puritan: 7.35%
Vanguard Balanced Index: 6.94%
Vanguard Star: 7.84%
Vanguard Wellington: 8.45%
FPA Crescent: 10.48%
Oakmark Equity and Income: 11.18%
American Funds American Balanced A: 7.78%
American Funds Income Fund of America A: 7.83%
Mairs and Power Balanced: 8.76%
Permanent Portfolio: 8.45%
Invesco Van Kampen Equity Income A: 8.80%
Manning & Napier Pro-Blend Extnd. Term S: 8.01%
Greenspring: 8.17%
Value Line Income & Growth: 9.06%
Bruce Fund: 14.11%
Leuthold Core Investment: 9.37%
Those listed below are more conservative than the others with roughly 60% bonds/cash & 40% stock.
thats how i got it up was when stock was low i bought stock then it went up and i got it into the 30's then it went back down so i moved it into the guaranteed interest account, so i wouldnt lose it all, then if something happens to my job i can take it out and do something else...
NO! NO! NO! Your 401K is not an unemployment fund. There's an additional pot of money required for that. Would you take money from your Social Security to start a business or use as unemployment? If the law allowed it, I suspect you would, despite it being a horrible idea.
You really shouldn't go into business for yourself with your current mindset.
When I read Charles' post, I KNEW someone was going to say this.
All your comment proves is that people with MBAs can be just as ignorant as everyone else when it comes to investing.
There are plently of balanced mutual funds (60-65% stock & 35-40% bonds & cash) that have returned close to 8% or more over the last 15 years--a period of lousy stock market returns and slightly better than average bond market returns. Many of these funds are common options in 401K plans.
In some cases cheaper share classes (and thus, slightly better returns) may be available for some funds in 401k plans and/or accounts with high balances (e.g. Vanguard recently lowered it's minimum to $50,000 for its cheaper "Admiral" share class).
15 Year Returns for:
Dodge and Cox Balanced: 8.53%
T. Rowe Price Capital Appreciation: 10.10%
Fidelity Balanced: 8.34%
Fidelity Puritan: 7.35%
Vanguard Balanced Index: 6.94%
Vanguard Star: 7.84%
Vanguard Wellington: 8.45%
FPA Crescent: 10.48%
Oakmark Equity and Income: 11.18%
American Funds American Balanced A: 7.78%
American Funds Income Fund of America A: 7.83%
Mairs and Power Balanced: 8.76%
Permanent Portfolio: 8.45%
Invesco Van Kampen Equity Income A: 8.80%
Manning & Napier Pro-Blend Extnd. Term S: 8.01%
Greenspring: 8.17%
Value Line Income & Growth: 9.06%
Bruce Fund: 14.11%
Leuthold Core Investment: 9.37%
Those listed below are more conservative than the others with roughly 60% bonds/cash & 40% stock.
while i agree 100% about balanced funds doing very well,going forward will be alot different i suspect. bonds had an amazing run up as interest rates fell. going forward from these levels bonds may be a dead weight so im not expecting the same returns i had even from my own portfolios.
with cash at zero, short term bonds at barely anything and longer term bonds falling im figuring 4-6% going forward for my pre retirement portfolio and retirement planning.
stocks did rather well the last 15 years as i think 15 years ago we were in the 4-5,000 range on the dow. things performed even better then the indexes show. the failure of alot of huge companies sank the dow,wilshire and s&p 500. if your funds didnt hold those issues you did way better. did you know apple and google account for 25% of the nasdaq 100 ? if anything happened to those 2 the nasdaq would sink big time but if you didnt own those 2 you may see a blip in your portfolio.
Last edited by mathjak107; 12-20-2010 at 04:08 AM..
this is exactley why long term the small investor left to his own devices never does as well as the markets do.then they complain the markets are rigged and you cant make money .
buying high and selling low or buying low and selling low are not ways to make money. if you think your going to sell low and then catch it lucky and buy back in before the turn around it aint happening . you have to guess rigtht 2x consistantly . when to sell and when to get back in.
you may get lucky once or twice but long term you will never keep getting it right.
if this was money that was supposed to cover you if you lost your job then this is not money that should be invested in the first place until you saved that emergency fund. thats 2 bad things you did.
while i agree 100% about balanced funds doing very well,going forward will be alot different i suspect. bonds had an amazing run up as interest rates fell. going forward from these levels bonds may be a dead weight so im not expecting the same returns i had even from my own portfolios.
with cash at zero, short term bonds at barely anything and longer term bonds falling im figuring 4-6% going forward for my pre retirement portfolio and retirement planning.
stocks did rather well the last 15 years as i think 15 years ago we were in the 4-5,000 range on the dow. things performed even better then the indexes show. the failure of alot of huge companies sank the dow,wilshire and s&p 500. if your funds didnt hold those issues you did way better. did you know apple and google account for 25% of the nasdaq 100 ? if anything happened to those 2 the nasdaq would sink big time but if you didnt own those 2 you may see a blip in your portfolio.
The investment grade bond index returned 6.08% over the last 15 years, which is only a little above the long term average of 6%. I think 4-6% for bonds going forward is a reasonable expectation. I think people who have their bonds in global funds (Loomis Sayles Global Bond) or multisector funds will do better than that (Loomis Sayles Bond).
The S&P 500 was up 6.68% over the last 15 years, definitely below average. Yes, I know mid & small cap stocks did better. But consider over the next 15 yeas, large caps may have a better run than they did over the last 15 and may even outperform mid/small caps. Valuetions for large cap stocks are more reasonable than they were 15 years ago, that's for sure, so that puts the odds in favor of them doing at least a little better over the next 15 years, maybe doing 8%.
The better funds that I listed, will likely continue to outperform the market by a percentage point or two on their stock picks and match market returns on their bond picks...so while 8% may be difficult to achieve, it won't be iimpossible for the better managed funds with reasonable to low expense ratios. So 8% may be optimistic, but it's far from delusional.
not delusional at all. as a potential retiree im preparing for the 4-6% range
but heck if long term we can do 8% why not......
the last 15 years saw bonds in all their glory as they started life far higher in rates and went lower reaping nice capital gains the last decade. now we are starting from the other end of the spectrum with little room for any capital gains.
since equities have had a pretty crappy decade it may be their turn to have nice gains and work back towards their historical returns.
typically up until now you could pull any 15 year time frame out of the last 75 years and the returns for a 50/50 mix were 7-8% consistantly.
not delusional at all. as a potential retiree im preparing for the 4-6% range
but heck if long term we can do 8% why not.......
It's always better to have low expectations and be pleasantly surprised than the other way around
Quote:
Originally Posted by mathjak107
the last 15 years saw bonds in all their glory as they started life far higher in rates and went lower reaping nice capital gains the last decade. now we are starting from the other end of the spectrum with little room for any capital gains..
Really, bonds only did a little above average at 6.08%. Decent, but nothing to scream about. Obviously, a few top notch funds like PIMCO Total Return did a percentage point better and the Vanguard Bond Index fund did 6.46%. If interest rates go up, bond prices will be hit, but if you keep dollar cost averaging into them, you should do ok and you'll get better interest rates going forward, so 6% could definitely still happen over the next 15 years, although I agree it's a little too optiimistic.
Quote:
Originally Posted by mathjak107
since equities have had a pretty crappy decade it may be their turn to have nice gains and work back towards their historical returns..
Right, that's what I was saying.
Quote:
Originally Posted by mathjak107
typically up until now you could pull any 15 year time frame out of the last 75 years and the returns for a 50/50 mix were 7-8% consistantly.
Right, and that was my point to the poster who's wife "chortled" at the thought of 8% returns over the next 15 years. My point was you don't necessarily have to do anything fancy to get that 8%. Pick one of the better balanced funds. Put money in the fund on a regular basis (and some extra when the fund is down if you can) and you have a decent shot at getting 8%.
NO! NO! NO! Your 401K is not an unemployment fund. There's an additional pot of money required for that. Would you take money from your Social Security to start a business or use as unemployment? If the law allowed it, I suspect you would, despite it being a horrible idea.
You really shouldn't go into business for yourself with your current mindset.
I was not going to use my 401k as an umployment fund i AM hoping to use it to start a trucking business and move my family out of this state...What do you mean by my current mind set???
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