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Author: brokenwing1 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19378  
Subject: New/retired/invester needs help Date: 3/16/2001 12:31 PM
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I'm retired early from a accident on the job and recieve DSS and retirement from work. I recieved a lump sum and I want to invest. I'm looking at the VINX fund, I think I can invest about $50,000 and leave it for about five years. After that I will have to use some each year. I'm 55 years old and not very sure of how to invest. I hear that it doesn't matter if the market is down or not to invest in a index fund.
I would really appreciate any help. Thank You
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Author: rjm1 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6384 of 19378
Subject: Re: New/retired/invester needs help Date: 3/16/2001 1:03 PM
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I'm retired early from a accident on the job and recieve DSS and retirement from work.
I recieved a lump sum and I want to invest. I'm looking at the VINX fund, I think I can
invest about $50,000 and leave it for about five years. After that I will have to use some
each year. I'm 55 years old and not very sure of how to invest. I hear that it doesn't
matter if the market is down or not to invest in a index fund.
I would really appreciate any help. Thank You


I think this is a good time to invest (I know the market will not go down) an an index fund is a good choice.

Since the market may go down in spite of what I think, you might want to do dollar cost averaging. Maybe invest 1,000 every week.

The point is timing the market is hard. So if you do not want to take the plunge now then go in slowly. Just remember don't put your money into the market and when it goes down get out. You are in for the long term ans should do ok.

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6385 of 19378
Subject: Re: New/retired/invester needs help Date: 3/16/2001 1:03 PM
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Greetings, Brokenwing1, and welcome. You wrote:

I'm retired early from a accident on the job and recieve DSS and retirement from work. I recieved a lump sum and I want to invest. I'm looking at the VINX fund, I think I can invest about $50,000 and leave it for about five years. After that I will have to use some each year. I'm 55 years old and not very sure of how to invest. I hear that it doesn't matter if the market is down or not to invest in a index fund.

I assume you're new to both Fooldom and to investing. That's great on both counts! You have wandered into a forum that believes you, as an individual, can do far better for yourself than most professional money managers. Provided, that is, you take some time to learn a few basic investment concepts and do some self-examination to see where you fit on the risk tolerance scale. Therefore, why not take some time now -- not later -- to be sure about what you want to do. Start first by reading The 13 Steps to Investing Foolishly, which you can find at http://www.fool.com/school/13steps/13steps.htm. You should also read the articles in our Investing Basics area at http://www.fool.com/school/basics/investingbasics.htm. These missives will suggest some important things you should consider.

While you're doing all that, also take some time to explore the various nooks and crannies of Fooldom to see what others are doing and what they're discussing. I also recommend you read our 13 Steps to Foolish Retirement Planning at http://www.fool.com/Retirement/Retirement.htm along with our Managing Your Retirement area at http://www.fool.com/retirement/manageretirement/manageretirement1.htm . All of these articles will help give you some insight as to what you can do. In the process of all that reading, you'll gain a wealth of knowledge and information that will serve to clarify how you want to approach this very personal issue.

Finally, don't be afraid to ask a question anywhere in Fooldom. Folks around here are great about answering questions and clearing up misunderstandings.

Regards..Pixy


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Author: GrayWulff Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6386 of 19378
Subject: Re: New/retired/invester needs help Date: 3/16/2001 1:16 PM
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brokenwing1:

Sorry about your accident. I retired myself at 54 (one year ago) after a nasty little health problem reminded me I'm mortal.

I'm a little concerned about your post, so forgive me if I tell you some things you already know.

VFINX (Vanguard's S&P500 Index fund) is a great choice if decide invest in stocks. My concern is about your time horizon.

You say you'll need some of that $50,000 in five years. Whatever portion you will need should probably be taken out of stocks 3 to 5 years before you need it. Why three to five years? Well, if the market tanks again like it has this year, you could be forced to sell your VFINX when the price is depressed. What you want to do is sell it when the market is hitting new highs, not recent lows. Three years is about as long as any bear market has lasted, so you have a fairly good chance of selling your VFINX at a profit some time in the next 3 to 5 years.

So, invest in VFINX if that is your choice. Then watch the market and begin selling stocks and buying CD's or bonds, but not bond funds as the time approaches. Probably you don't need the entire $50,000 all at once. Probably you will begin using it to supplement your cash flow in 5 years. If that is true, then it makes sense to put some of it into stocks.

The basic principle here is that you match maturities to your needs. In other words, if you need $10,000 in March 2006, then buy a bond or CD that matures and will be worth $10,000 in March 2006.

Hope that's clear. Don't hesitate to ask if it's not.

Cheers,
GW

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