You're only 38, assuming you're not trying to go the FIRE route you've 20+ years to ride out any correction/recession in the near term. Not a bad idea to add some bonds for ballast but you could probably stay 100% in equities for the next 10 years or so and do just fine. Just my 2 cents.
Screw the bonds. You have another 30 or 40 years till retirement. You can get some target retirement funds which transition to bonds over time but bonds will be a drag on your retirement. Go hard core on equities/stock funds.
Screw the bonds. You have another 30 or 40 years till retirement. You can get some target retirement funds which transition to bonds over time but bonds will be a drag on your retirement. Go hard core on equities/stock funds.
Most will likely regret that foolish notion.
For almost all of American history that is been a pathway to incredible riches (long-term).
You may want to look into whether you are allowed to option non-covered positions even in your Roth. If so, some plan to mitigate your risk would be wise. Currently you are driving a 1959 Corvair at 80 mph without seat belts. Unsafe at any speed.
He told a really dumb lie (I've beaten the DJIA for 30+ years!) and got wrecked for it, but he's a blowhard so he just keeps blustering and more wild claims.
Nope! I have not told a single lie in my adult life.
Hi Flagpole, you're either 1) a liar, or 2) too stupid to know how to accurately calculate annual returns.
Please let us know which is most accurate! Thanks!
Secret handshakes, special words used in certain ways within the group, utensil placement, hyper attention to grammar that adds nothing to the understanding of what is being communicated.
Sad
Carmine, sometimes—actually most of the time, if not all the time—one needs to exhibit the appropriate affectations in order to be communicated with at all. Without all of that stuff you mention, and more, there IS no communication, because one never gets the chance, or one is summarily dismissed.
Maybe you have never found yourself in a situation where those tools of conduct are valuable—but every interaction has its unwritten codes, and during communication you use tools of conduct as much as does anyone.
Regarding those specific things that the idiot mentioned, they have been literally the most valuable tools I have ever used, in addition to several languages and understanding how to dress and groom. Yes, seriously. And I know how to weld, do CAD, graft plants, design circuits, fight, fly planes, conduct trials and hearings, etc etc etc.
Maybe you are still young, but deportment, comportment, and etiquette are found in every interaction, and are eminently practical.
Carmine, sometimes—actually most of the time, if not all the time—one needs to exhibit the appropriate affectations in order to be communicated with at all. Without all of that stuff you mention, and more, there IS no communication, because one never gets the chance, or one is summarily dismissed.
Maybe you have never found yourself in a situation where those tools of conduct are valuable—but every interaction has its unwritten codes, and during communication you use tools of conduct as much as does anyone.
Regarding those specific things that the idiot mentioned, they have been literally the most valuable tools I have ever used, in addition to several languages and understanding how to dress and groom. Yes, seriously. And I know how to weld, do CAD, graft plants, design circuits, fight, fly planes, conduct trials and hearings, etc etc etc.
Maybe you are still young, but deportment, comportment, and etiquette are found in every interaction, and are eminently practical.
Any recommendations for my 401k? I've been 100% total market fund for the past few years. Age 38. Should I move some to bonds or stay the course? Balance is about 285k. It fell to the 220k range earlier this year.
The big market drop in 2007-2009 made me really rethink things regarding bonds.
The reason is that it took me ~3 years to get back (not counting contributions) to where I was before the drop. When that drop was supposedly a once-in-a-generation drop, and it only took ~3 years to get back, I re-considered things.
I have two categories of money:
Investments
Emergency Fund (cash)
The purpose of investments is to make money, not to hedge.
The purpose of the Emergency Fund is to take care of unexpected emergencies. Typically the advice is for an Emergency Fund to be 3-6 months of expenses. Well, if you are investing enough (15% minimum) then an Emergency Fund COULD be bigger. As long as you are investing enough for your retirement goals, it is more than ok to build up a cash stockpile. The goal of investing should not be to do the absolute best possible. It is to cover what you need/want to cover. I would consider a huge and/or extended market drop to be an emergency. So, I decided that rather than invest in bonds or CDs or other conservative things that retired people invest in (or people approaching retirement), that I would plan to have 3 YEARS of expenses liquid so that if the market tanked while in retirement, I could take care of expenses with cash while allowing my stock mutual funds to recover while keeping my investments leaning more aggressive. Do note that if you own your house outright (as I do) and you have zero debt (I have zero debt), and you don't have any unusually large other expenses (medical, etc.), then 3 YEARS or even more of expenses in cash is not that hard to gather.
Turns out that at this point it doesn't really matter for me about the Emergency Fund, because since 2009 the market has done so well that even if I took from my investment pile during a big downturn, it wouldn't really be a problem. I'm still going to keep the large Emergency Fund though because I like the idea of it.
Some advantages of a cash stockpile even beyond 3 years of expenses are that you could retire earlier than planned and put of taking Social Security for a while longer while also not paying any income taxes. If you are someone who is counting on Social Security to be a big part of your retirement income, you could retire at age 62, live on 3 years of expenses in cash that you had saved up (if you did this, you should have MORE than that saved up), and put off taking Social Security until age 65 or even later.
Anyway, long way to getting to the fact that I'm not a big fan of bonds. I'm not against anyone who wants to invest in them, but I'd rather invest more aggressively and have cash as a safety net.
“The big market drop in 2007-2009 made me really rethink things regarding bonds. The reason is that it took me ~3 years to get back (not counting contributions) to where I was before the drop. When that drop was supposedly a once-in-a-generation drop, and it only took ~3 years to get back, I re-considered things.”
Hmm, I would have thought bonds outperformed stocks 2007-2013. A NASDAQ weighted portfolio perhaps 2007-2015.
Any recommendations for my 401k? I've been 100% total market fund for the past few years. Age 38. Should I move some to bonds or stay the course? Balance is about 285k. It fell to the 220k range earlier this year.
The guy who came up with Modern Portfolio Theory won a Nobel Prize. Unless you wanna get totally BTFO'd when years like 2018 come around then take up some bonds
Just reading all these posts, and a few things come to mind: first, I agree that the primary purpose of investing is to make money, but the real point is over what timeframe, and what time-distribution function. Without that specificity, the statement has essentially no content.
To the subject of beating all the time, I know a guy who has beat since the mid-80’s, when averaged over 3-year time periods—that is, his 3-year performances since 1982 have all beaten the SP500. And yes, he has money, but never wagered more than 10% on the markets. His initial working capital came from a home equity loan at something like 14%!
Just so amazing that Flagpole's investment portfolio manages to beat the market pretty much every single year. The market goes on an incredible bull run for years and years. Flagpole's investment portfolio? Beats the market every single year. The market crashes like in the dot-com bubble or the 2008 housing crash where the S & P lost 54% of its value. Flagpole's investment portfolio? Beats the market every single year. No matter what you throw at Flagpole's investment polio ... it IS going to beat the market.
There are 3 certainties in life ... 1) death 2) taxes 3) Flagpole's investment portfolio beating the market - year after year after year after year ...
“The big market drop in 2007-2009 made me really rethink things regarding bonds. The reason is that it took me ~3 years to get back (not counting contributions) to where I was before the drop. When that drop was supposedly a once-in-a-generation drop, and it only took ~3 years to get back, I re-considered things.”
Hmm, I would have thought bonds outperformed stocks 2007-2013. A NASDAQ weighted portfolio perhaps 2007-2015.
Bonds are typically more conservative investments as you know. You don't look backwards and question what you did. That doesn't make your strategy bad necessarily. Also, don't include the big stock market drop in there (an unusually large drop). My position on this began in 2009 AFTER the stock market began to recover. People invest in bonds so that their portfolio is more conservative, hoping to not take a big hit if stocks go down...they DON'T invest in bonds hoping that bonds will make them a lot of money. So, since this is the case, it's not a bad idea to stay completely invested in stocks and increase your cash position.
Just so amazing that Flagpole's investment portfolio manages to beat the market pretty much every single year. The market goes on an incredible bull run for years and years. Flagpole's investment portfolio? Beats the market every single year. The market crashes like in the dot-com bubble or the 2008 housing crash where the S & P lost 54% of its value. Flagpole's investment portfolio? Beats the market every single year. No matter what you throw at Flagpole's investment polio ... it IS going to beat the market.
There are 3 certainties in life ... 1) death 2) taxes 3) Flagpole's investment portfolio beating the market - year after year after year after year ...
You don't even need extreme crashes or edge cases. The best performing asset class in 2018 was cash because of the huge crash near the end of the year
“The big market drop in 2007-2009 made me really rethink things regarding bonds. The reason is that it took me ~3 years to get back (not counting contributions) to where I was before the drop. When that drop was supposedly a once-in-a-generation drop, and it only took ~3 years to get back, I re-considered things.”
Hmm, I would have thought bonds outperformed stocks 2007-2013. A NASDAQ weighted portfolio perhaps 2007-2015.
Ok...I see what you were getting at there. I just don't think like you do AT ALL, so it took me a while there.
I don't think reactively. I think proactively. So, I wouldn't and didn't look at 2007-2009 as an "I wish I had a ton of bonds" moment. That period was an anomaly. I looked at that as "stocks, which are the best investment vehicle, only took about 3 years to recover from the worst stock market situation since The Great Depression. How can I stay aggressively invested in the stock market (which ultimately benefits me) and yet protect against another 3-year downturn like that?" The answer is all in with stocks. Cash reserves of 3 Years of expenses.