If you are already 60% in equities and not miles from retirement, you may want to be more cautions.
Take a 50% drop like in 2008 and you are in trouble
I'm c.10 years away from retirement. And my bond funds will soon be paying me a solid 3% interest which will boost portfolio returns nicely, and 60/40 portfolios have never stayed negative for many consec years.
my guess is that in June and onwards we'll start getting some very good news on inflation and people will rush back into stocks as inflation fears reduce.
Bonds paying 3% when inflation is 7% are not too useful, I agree.
But to risk more than 60% of your liquid assets when you will be retiring in ten years is a big gamble.
Another 2000-2002 or 2008, or worse (certainly possible) could put you in a deep hole.
feels to me that someone is blowing up and suffering a forced liquidation. Which is a golden buying opportunity, if true. Taking advantage of one entity's suffering is fair game in investing.
On the other hand, the way interest rates have done a never-before-seen rise...suggests that there will be several blowups that will force down the markets, not just one.
So probably wise to save some powder for the next one. And the one after that.
But on the third hand, when someone blows up, word will get out and vultures will move in and start buying the pieces, knowing the crash is temporary. Money will move into the markets.
Lose $28k on 2 separate days within 1.5 weeks on an investment of less than $400k!
I knew there was a reason I got out of the market for about 5 years once I got within a few years of retirement
I've lost more money this year than I made in my entire 20s
My psychological problem is that I retired this year and between my spouse and my Soc Sec and pensions wedare getting $80k per year. And, in this market, I am losing far, far more than that despite having a very limited amount in equities.
I've lost more money this year than I made in my entire 20s
My psychological problem is that I retired this year and between my spouse and my Soc Sec and pensions wedare getting $80k per year. And, in this market, I am losing far, far more than that despite having a very limited amount in equities.
to be a good investor you don't need to be smart....you need to have a strong stomach so you can sit through times like these.
if you don't want to be a good investor, you should buy an annuity.
Down at least 10% in one day on my three biggest stock holdings.
You need to tie up your $ for 30 years to get a 3% per year annual return.
well that's complicated but not really true.
A bond mutual fund or ETF is a marketable security and completely liquid.
but the 3% you might get (soon)....is not fixed. it would go down if interest rates fall.
Or up if interest rates rise.
You have to tie up your $$ for a long term to get a safe 3% CD or bond return (ignoring that inflation adjusted stuff). I trade on Schwab and to get 3.5% I need to buy a 10 year CD.
If I do that and inflation remains at 7% to 8%, the value of the CD (or bond) is well below what I paid for it.
I keep buying short term bonds and CDS to avoid this
My psychological problem is that I retired this year and between my spouse and my Soc Sec and pensions wedare getting $80k per year. And, in this market, I am losing far, far more than that despite having a very limited amount in equities.
to be a good investor you don't need to be smart....you need to have a strong stomach so you can sit through times like these.
if you don't want to be a good investor, you should buy an annuity.
As long as you realize that being a "good investor" might mean taking serious losses
A bond mutual fund or ETF is a marketable security and completely liquid.
but the 3% you might get (soon)....is not fixed. it would go down if interest rates fall.
Or up if interest rates rise.
You have to tie up your $ for a long term to get a safe 3% CD or bond return (ignoring that inflation adjusted stuff). I trade on Schwab and to get 3.5% I need to buy a 10 year CD.
If I do that and inflation remains at 7% to 8%, the value of the CD (or bond) is well below what I paid for it.
I keep buying short term bonds and CDS to avoid this
sounds like iBonds would work well for you, as long as you can manage the lockup/s
