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Old 10-26-2011, 12:43 PM
GLS
 
1,985 posts, read 4,850,431 times
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Quote:
Originally Posted by Thinking-man View Post
Thank you, and thanks everyone.
i will look into it.

to address your comment specifically, i don't want to go with bonds because i'm trying to be as aggressive as possible given that i have a couple of decades worth of time.....

thoughts?
I agree with most of the other posters. You have not been "diversified". On the positive, with this thread you show commitment to do your own research.
As you progress you should develop a portfolio that has elements that grow whether the market is in a Bull or Bear phase. For example, the Vanguard Long-Term Bond Index (VBLTX) YTD as of 10/25/11 has yielded 18.51%. In a year when stocks are diving, 18.51% would be considered "aggressive" by any definition. Good luck.
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Old 10-26-2011, 01:38 PM
 
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Moved employer 401K into balanced and stable funds. Haven't lost anything and last year they paid 5% and 3.5% respectively. In this economy I would rather err on the side of caution.
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Old 10-26-2011, 02:21 PM
 
Location: Wisconsin
21,546 posts, read 44,085,236 times
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Quote:
Originally Posted by Thinking-man View Post
to address your comment specifically, i don't want to go with bonds because i'm trying to be as aggressive as possible given that i have a couple of decades worth of time.....

thoughts?
O, Mathjak! Where art thou?

Thinkingman,
you should always have bonds in your portfolio - at least 25%.
Quote:
Originally Posted by GLS View Post
I agree with most of the other posters. You have not been "diversified". On the positive, with this thread you show commitment to do your own research.
As you progress you should develop a portfolio that has elements that grow whether the market is in a Bull or Bear phase. For example, the Vanguard Long-Term Bond Index (VBLTX) YTD as of 10/25/11 has yielded 18.51%. In a year when stocks are diving, 18.51% would be considered "aggressive" by any definition. Good luck.
Bonds are an excellent component for diversification. The days of buy and hold are OVER - for ANY asset class. The key is rebalance. Review your portfolio for sectors that are overweighted due to profits, reap those profits (take some off the table - this year it's bonds (corporate and treasuries) and possibly gold) and reinvest in your poorer performing assets - i.e., presently equities.
Quote:
Originally Posted by Ellwood View Post
Moved employer 401K into balanced and stable funds. Haven't lost anything and last year they paid 5% and 3.5% respectively. In this economy I would rather err on the side of caution.
At my age, I prefer this, as well. The permanent portfolio is also a good choice. Past ten years, self-directed in cash, bonds, gold, equities has returned annualized over 9%. Setting one up next year for money I won't need for 15 years or more.

Permanent Portfolio Discussion Forum - Index

Somone younger can be more aggressive - BUT, BUT, BUT - diversify among asset classes.

Last edited by Ariadne22; 10-26-2011 at 02:37 PM..
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Old 10-26-2011, 02:58 PM
 
5,825 posts, read 13,332,050 times
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Quote:
Originally Posted by Ariadne22 View Post
O, Mathjak! Where art thou?

Thinkingman,
you should always have bonds in your portfolio - at least 25%.

Bonds are an excellent component for diversification. The days of buy and hold are OVER - for ANY asset class. The key is rebalance. Review your portfolio for sectors that are overweighted due to profits, reap those profits (take some off the table - this year it's bonds (corporate and treasuries) and possibly gold) and reinvest in your poorer performing assets - i.e., presently equities.

At my age, I prefer this, as well. The permanent portfolio is also a good choice. Past ten years, self-directed in cash, bonds, gold, equities has returned annualized over 9%. Setting one up next year for money I won't need for 15 years or more.

Permanent Portfolio Discussion Forum - Index

Somone younger can be more aggressive - BUT, BUT, BUT - diversify among asset classes.
When we were younger we were aggressive and diversified, and were lucky enough to move it back and forth. As we neared retirement we decided to play it safe.
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Old 10-26-2011, 04:00 PM
PDD
 
Location: The Sand Hills of NC
8,774 posts, read 14,891,494 times
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Since the value of the advice you get on the free internet is worth what you pay I would seriously take the advise or Mr Rational over the other "advisers"
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Old 10-26-2011, 04:02 PM
 
Location: Florida -
8,767 posts, read 10,864,802 times
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You didn't say how long you had until your contemplated retirement, but, I discovered something late in my retirement planning that I wish I had known sooner. "You can roll funds out of your company 401K into an approved (self-directed) IRA." (You can, of course, continue to contribute to your company 401K and take advantage of matching funds).

The advantage of the above in today's no-growth market might be a shift to a guaranteed INCOME annuity that would coincide with your retirement. For example, if you rolled $500K into a 10-year IRA-directed annuity, you could retire in 10-years with a guaranteed lifetime income of about $60K per year. That's about 7-8% annualized growth guaranteed! --- Not many company 401K's are doing that well!

While some people downplay variable annuities, and you need to understand what you are getting into and why ... I believe this market makes them an attractive investment alternative that is well worth considering. [I wish I had rolled my 401K out and into annuities about 10-years ago, instead of after retirement, but, IMO, they are still a good, fixed-income investment... in this market.]
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Old 10-27-2011, 09:30 AM
 
Location: Kingman AZ
15,371 posts, read 34,684,597 times
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Quote:
Originally Posted by Thinking-man View Post
hi,
for the past few years, i've been contributing the max to my 401k..........but here we are, close to the end of the year, i have about 16k added since jan. 1, and i'm pretty diversified, but yet, i have a 14.8% losss for the year (up to now!).

!
Gee since Jan 1, 2011 my 401 K is UP 26.9% as of this morning.
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Old 10-27-2011, 10:00 AM
 
29,815 posts, read 34,907,142 times
Reputation: 11735
Quote:
Originally Posted by Thinking-man View Post
hi,
for the past few years, i've been contributing the max to my 401k..........but here we are, close to the end of the year, i have about 16k added since jan. 1, and i'm pretty diversified, but yet, i have a 14.8% losss for the year (up to now!).

i know the market fluxuates but i would have been much better off if i had held cash instead. well, i guess to be fair, i have to take into account the tax breaks and the 4% employer contribution....but still.

i have close to 100k in my 401k but am contemplating the continuation......given the poor performance....year after year after year!

ps. (half of my total balance is with my previous employer.....and that account is up 0.2% over the past 5 years! silly!
I know you wrote this yesterday but you may want to double check your current ROI for the year. If you are down 14.8% you are in real high risk assets or very poorly managed funds. Compare your return rate with the current return rate on the major indices for the year and you will see why I am asking.
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Old 10-27-2011, 10:03 AM
 
29,815 posts, read 34,907,142 times
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Scrolling back I see the OP has updated his return. After today he should really be feeling better.
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Old 10-27-2011, 10:06 AM
 
29,815 posts, read 34,907,142 times
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Quote:
Originally Posted by Ariadne22 View Post
Oy vey. Who chose this "diversification" for you? Have you checked the holdings in each of your funds? Bet the ranch there is tons of overlap. Index funds duplicate the holdings in small, mid, large cap and international funds.

You are not diversified. Without knowing your choices, it's hard to identify better options.

You should have had some corporate bonds, mid and long-term treasuries, and reits this year a well as equities.

Looks like you may have your pick of many Vanguard funds. Putting all of it in VWINX would have been a better choice. Not stellar returns, but certainly not a loss. YTD return 5% so far.

You need good advice on a strategy and you need to REBALANCE at least once a year to keep the allocations in line.

Call Vanguard. Or get on their website. There is a better way.
There are a variety of Vanguard investment newsletters available for subscription. The OP can research the best of and if interested subscribe.
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