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You are not limited to US bonds in dollars. Other countries are already paying higher returns. Plus, the dollar is flying high right now. When it drops, which it eventually will do, you will get a windfall on exchange rates. Google international bond funds, order some prospectuses (prospecti?) and think about it.
Bonds yield what they say they will yield, but if you buy 2.5% bonds and bond rates go up to 5%, nobody is going to want to take the bonds off your hands. You will have to hold them to maturity or take a bath selling them.
One alternative is to buy short-term bonds or short-term bond funds. That way, as interest rates rise, your bonds or funds will mature and can be reinvested sooner. Of course, your return on the bonds or funds will be small. Another alternative is to invest in established dividend paying stocks or high yield dividend index funds. Your risk exposure will be less than the general stock market and you can get a dividend yield in the 2-4% range.
Are you sure the return on short-term bonds is better than CDs now?
Why is there such an aversion to CDs? Yes the return is low, but if bonds are even lower, or possibly negative, what is the advantage of bonds?
That is my whole point, which hardly anyone, so far, is getting.
Bonds yield what they say they will yield, but if you buy 2.5% bonds and bond rates go up to 5%, nobody is going to want to take the bonds off your hands. You will have to hold them to maturity or take a bath selling them.
That was my point. I am not an expert, but you don't have to be an expert to understand that.
However, the TIAA advisor apparently does NOT understand, and would be happy to see me throw more than $300k of money I worked hard for, into bonds.
Some people are afraid of water and will not swim. Some are afraid of flying and will not travel in a plane. Some people are afraid of crowds and live in isolation. In your case it seems you cannot tolerate risk and volatility with your assets and you are very limited in opportunities for investing.
These sorts of viewpoints are not generally open to logic or facts or discussion. With your viewpoint you obviously do not want risk including typical investments such as stocks, bonds, or ETFs. You previously mentioned interest in a fixed annuity. That might be your best option along with leaving any non-annuitized money in FDIC insured accounts. Without any substantial investment growth, you should consider the effect of inflation. Inflation is currently low but historically the average has been about 3.5%. It is likely that about 20 years from now you will need twice the money to maintain your standard of living. If you can now receive say a $1000/month from a fixed annuity, you might want to consider spending only $500/month and putting aside the remainder for use in later years.
Unless you are willing to become more flexible in your risk tolerance, you are only likely to be frustrated with any more detailed ideas about investment strategies or facts.
You missed the whole point of my post. I told the adviser I can't tolerate risk -- and it is a fact that anyone who is retired should avoid risk if possible.
Advisers routinely recommend a large percentage of bonds to retired investors, to avoid risk. BUT THAT IS NOT A SENSIBLE STRATEGY RIGHT NOW.
The adviser was not thinking, didn't want to actually do any work or research.
According to what I read so far, lots of people, including experts, are questioning the idea of bonds being a relatively safe and dependable way to generate income.
Things change, and advisers who do not think can give very bad advice.
...and it is a fact that anyone who is retired should avoid risk if possible.
No, it is not a fact. In fact, avoiding all risk instead of just mitigating risk is one of the biggest mistakes a retiree can make. And that is just one example of why you shouldn't be attempting to provide investment advice to others.
Quote:
Originally Posted by Good4Nothin
Sorry if it seems like I am complaining about TIAA again. I am really just complaining about one TIAA adviser.
Ah, so now we come to the real reason for this thread: It's yet another in a series of threads you've created to complain about your TIAA advisor. Are three threads enough, or will there be a fourth?
You missed the whole point of my post. I told the adviser I can't tolerate risk -- and it is a fact that anyone who is retired should avoid risk if possible.
.....
I don't think I missed the point at all. I understand you want to avoid risk. Your TIAA advisor tried to steer you towards bonds which will give you some returns and have minimal risk. I get it. Minimal risk is still too much for you. Instead you will take the path that preserves your capital under all circumstances and ensures inflation will eventually hit hard.
I will also stick with my original assessment. Trying to discuss investing with someone who is afraid to invest is pointless. I can only imagine the stress your TIAA advisor must have had. It would be like trying to discuss aviation safety statistics with someone who is afraid to fly. The discussion would be a waste of time.
You are certainly entitled to manage your money as you choose. There are plenty of others who all but stick their money in a mattress. Those of us who have invested for decades and are now enjoying the fruits of our investments can only shake our heads in wonder.
I don't see what your problem is with this. It is your $$; do whatever lets you sleep at night. If you're happy with a money market or CDs, go for it and get on with life.
I will also stick with my original assessment. Trying to discuss investing with someone who is afraid to invest is pointless. I can only imagine the stress your TIAA advisor must have had. It would be like trying to discuss aviation safety statistics with someone who is afraid to fly. The discussion would be a waste of time.
Some people have a need to defend experts, no matter how nonsensical.
Investing a large amount of money in bonds right now almost guarantees you will lose A LOT. It has nothing to do with risk.
If CD rates are currently higher than what you can expect from bonds you buy today, then risk is not a factor.
Right now, dependable stocks could be a much better idea than bonds.
That is my point, which no one wants to understand.
Many of us start posts because we want to hear other points of view and to learn. You seem more than adamant in your beliefs and argue strongly with anyone, in this case a majority, who has a different view.
Why did you post and what is it you want to accomplish? Are you again trying to warn others that your TIAA advisors do not understand want you want? I have had wonderful experiences with my TIAA advisors. They do not work on commission and seem to be trying to understand what I want and provide me with plans to fulfill my goals. I have had only very minor issues with TIAA and those were quickly corrected.
Are you trying to warn others against buying investments with any sort of risk? Are you trying to warn others that buying bonds is risky?
You stated you have a very limited understanding of investing. If you are looking for information or advice or facts, plenty of us would be willing to help. That does not seem to be the situation and I am totally confused about your posts on this thread.
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