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Old 11-05-2016, 09:26 AM
 
130 posts, read 101,381 times
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Something that hasn't been mentioned are Government securities. Because marketable securities aren't paying much now, I would suggest I Bonds (Savings Bonds) NOT EE Bonds. You can purchase up to $10,000 a year, in ten years you would have $100,000. I Bonds are tied to the inflation, and they earn interest for 30 years. They are guaranteed to double in 20 years (hopefully they will double in value before then). You can open an account at TreasuryDirect.gov and there are no fees. https://www.treasurydirect.gov/indiv...s/products.htm

Something that is thrown out at times are TIPS. They have terms of 5, 10 and 30 years. Because they are marketable securities, you will see them offered by brokers, which is silly since you can buy them directly from the Treasury and not pay any fees. But, you have to be careful with TIPS. They are "current income" securities, which means they pay interest semi annually. This means there is a tax liability each year. Because they are tied to the inflation, there can also be a tax liability on any increase to the principle each year. Oh, and don't buy a reopened TIPS unless you know what you're doing, you can end up paying quite a bit up front.

The only tax liability on savings bonds occurs when they mature (in 30 years) or when they are redeemed, whichever occurs first. I'm a big proponent of I Bonds and believe they belong in an investment portfolio. But that's me. Everyone has to make their own decisions. I just wanted to point out this investment.
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Old 11-05-2016, 10:42 AM
 
Location: Durham NC
1,190 posts, read 1,297,287 times
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Depending upon your time horizon you need to be aware of a few things. Money will be moving out of Europe and into the US until it starts moving into China. This might take 20 years or so but it will become apparent at some point in time. Negative/extremely low rates are a new development. Big money will not chase negative yields and they cannot invest in Gold like an individual, the market just isn't big enough. Real estate runs into the problem of governments chasing money and raising taxes on properties. So the only game in town for big money is stocks. Whether you choose a total market fund or one that invests in companies with enough float for the large institutions to play with is your choice. They do move the markets.
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Old 11-05-2016, 01:05 PM
 
71,607 posts, read 71,751,865 times
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Quote:
Originally Posted by jasperhobbs View Post
Wouldn't a balanced fund be in bonds at a time bonds are not a good buy?

So you say timing the market is the best way to invest?
no i am not saying time the market . i am saying your portfolio should follow what is happening in the big picture . you do not want to be to bond heavy in a rising rate environment . you want to nudge your portfolio to keep it on course like steering a big ship .

balanced funds would be in bonds but the bonds are a fixed allocation . if you are happy with the allocation then you know it isn't going to grow on you overtime like a target fund .

a fund like fidelity balanced is 60/40 . you can rest assured it will not end up 20/80 at some point and if bond rates are still, rising hurt you as much .

personally i rather see individual stock and bond funds so you can mold and shape the bond side to better fit the bigger picture . the models i use own no balanced funds today .
they have been swapped for individual stock and bond funds for better control . there are all kinds of bond funds and some do better than others at different times as well as some are less interest rate sensitive
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Old 11-05-2016, 02:42 PM
 
2,678 posts, read 1,543,054 times
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Quote:
Originally Posted by mathjak107 View Post
no i am not saying time the market . i am saying your portfolio should follow what is happening in the big picture . you do not want to be to bond heavy in a rising rate environment . you want to nudge your portfolio to keep it on course like steering a big ship .
This is a good definition of market timing. How can you be sure it is a rising market? The "big picture"?

This is why the pros do so well. They front run all the amateurs who make decisions on the big picture.
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Old 11-05-2016, 03:03 PM
 
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Interest rate trends can run lots of years . The trend down took 35 years with just some speed bumps along the way. As an example a few months ago my bond mix was mostly corporate and intermediate . A portion of that has been moved to less interest rate sensitive bond funds And that portion avoided much of the hit the last 3 months

wellesley income had half the bond portfolio in long term bonds . Today it is half that . They moved to shorter maturity's . My portfolio has been shifting and evolving for 30 years now .

It has had way more correct moves than an occasional wrong one .

We are not talking reacting to the noise . We are reacting to big shifts in things after they take hold. Even if you are wrong you won't be hurt . You just may not do as well . But with these trend changes rarely do things quickly reverse course so you end up being right far more times.

If rates keep rising bond funds will continue to lose ground just as they have the last 3 months. There are so many better choices that won't hurt you as much than a total bond fund or longer term treasury bond fund.

You don't have to get rid of a total bond fund but it would be smart to lighten it up and move some money in to other types of bond and income funds.

Total bond funds are anything but that. They are missing so many segments of the bond market

Last edited by mathjak107; 11-05-2016 at 03:22 PM..
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Old 11-05-2016, 03:18 PM
 
1,109 posts, read 594,815 times
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Quote:
Originally Posted by jasperhobbs View Post
I am 55 years old and have 10 to 12 years to go until retirement and have below listed goals to accomplish before retirement. Some have already been accomplished.

1) Have house and vehicles paid for. Done
2) Build up 401K - working on it
3) Build up Roth IRA -working on it
4) Have 100K available upon retirement in very accessible account. Needs work

#4 is the one I am not sure where to park the money. A savings account or CD's won't yield much but is safe.
Um....what are you doing with your money and your lifestyle? No worries, you're about average for a 55 year old American.....but is that a good thing?

It's all about frugality.

People in prior generations used to SAVE SAVE SAVE, and were better off for it. They were able to accumulate the capital they needed in order to make even more money either by investing or by starting a business. Either way the vast majority of people worked their butts off for it and then were responsible with their money: after they got paid they didn't go out and blow it all.

Now I suspect that I'll be working my butt off for the next 3 decades (I'm 30 now) to pay for your generation as you guys demand ever more and ever more services and subsidies.

And then my own generation will continue to demand subsidies for housing, schooling, daycare, addiction treatment, and everything else under the sun. Why can't people just be frugal and take care of their own lifestyle choices?

Good for you that you have a house paid for. A lot of boomers don't even have that nixed. Are people really planning on renting in retirement? Now that you have your house and cars paid off, you should be able to rack up your savings goals darn quickly. Best of luck.

Vanguard typically has the lowest cost mutual funds, I've been using them for 12 years now and some of the funds I adopted early on are already over the cusp of having paid for themselves while still retaining principle and still paying out dividends. By the way: I received no inheritance, just started saving at age 15 and enjoyed seeing my bank account grow by virtue of just not spending it, and have continued to do so since.
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Old 11-05-2016, 04:07 PM
 
2,443 posts, read 2,072,308 times
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Quote:
Originally Posted by InchingWest View Post
Um....what are you doing with your money and your lifestyle? No worries, you're about average for a 55 year old American.....but is that a good thing?

It's all about frugality.

People in prior generations used to SAVE SAVE SAVE, and were better off for it. They were able to accumulate the capital they needed in order to make even more money either by investing or by starting a business. Either way the vast majority of people worked their butts off for it and then were responsible with their money: after they got paid they didn't go out and blow it all.

Now I suspect that I'll be working my butt off for the next 3 decades (I'm 30 now) to pay for your generation as you guys demand ever more and ever more services and subsidies

And then my own generation will continue to demand subsidies for housing, schooling, daycare, addiction treatment, and everything else under the sun. Why can't people just be frugal and take care of their own lifestyle choices?

Good for you that you have a house paid for. A lot of boomers don't even have that nixed. Are people really planning on renting in retirement? Now that you have your house and cars paid off, you should be able to rack up your savings goals darn quickly. Best of luck.

Vanguard typically has the lowest cost mutual funds, I've been using them for 12 years now and some of the funds I adopted early on are already over the cusp of having paid for themselves while still retaining principle and still paying out dividends. By the way: I received no inheritance, just started saving at age 15 and enjoyed seeing my bank account grow by virtue of just not spending it, and have continued to do so since.
Um.... I am so sorry we will be such a burden to you.

Last edited by jasperhobbs; 11-05-2016 at 04:18 PM..
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Old 11-05-2016, 04:37 PM
 
10,604 posts, read 14,205,380 times
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I don't think a good investment planner would be telling you at your age that you should be going "safe".

You're in wealth generating years (even though the FAD is for people to insist they're gonna retire in their 50s).

A good investment planner would be doing customized stocks (not FUNDS) etc. Depending on your risk tolerance which, seems to be small so....

For example: Is CBS going to merge with Viacom? Are you willing to see if that pays off?

The FIRST thing you need to "DO" is PLAN for your retirement years' living and healthcare, potentially buying into a Continuing Care Community with fixed monthly pricing after your equity payment...that will last until you die. They offer all stages of care from Independent, to Assisted, to Memory Care to Skilled. For 55 plus or 62 plus. It's a form of "Long Term Care Insurance".

But people don't want to plan like that. They want to plan to ACCESS their MONEY. LOL Which is fine if the "accessing" is for your monthly living expenses that you've planned OUT.

And "protect their assets". Meaning the taxpayer pays.
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Old 11-06-2016, 01:31 PM
 
2,980 posts, read 2,706,178 times
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Quote:
Originally Posted by jasperhobbs View Post
Thanks Tuborg,

I am very conservative by nature and have structured investments that way. To me Vanguard, Fidelity and
T Rowe are good as it get for investment firms. Of course with my 401K, I have to go with what the company has selected (Black Rock)

My way of thinking in retirement is to have no debt and a good stash of available cash just in case along with 401K's, Social Security, IRA's and pension if available
One more good investment firm to add is American Century. They are a private fund company which has a family of funds and a brokerage division, just like the other three. I have used all four at one time or another and I have found the best service of the four is from American Century and Fidelity, both of which give five star service.

As for recommendations, you need to do whatever you feel comfortable with. There are no guarantees on stocks or funds, however have you thought about an annuity that gives such guarantees? It might be just what you are looking for, if you are not going to take any money out for ten years.
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Old 11-06-2016, 01:52 PM
 
71,607 posts, read 71,751,865 times
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annuity's work best when coupled with your own investing . they should be if anything part of your cash and bond allocation . they are not a comprehensive investment plan . the variable ones with equity investments are dogs generally . the fees and deductions from the balance once you draw an income usually end up having the minimum guaranteed growth the better deal . that is generally in line with what you could expect from bonds .

i only recommend spia's and your own investing ,as a combo .
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