DO you think my current investments looking okay or should I choose some others from the available list. I am 39 and looking to be aggressive. Thanks....Can I upload a pdf here?
No you cannot upload or attach files to your postings. However, if it is not copyrighted, you can copy it and post the copy.At 39, you are probably years away from retirement. Fools will usually suggest that you invest almost entirely in equities (until you get within 10 yrs of retirement).For most people your core investment is an S&P 500 Index fund or a total market funds such as VTI. As your assets grow, people often diversify by adding growth funds, an international fund, a REIT fund, etc. Bonds and fixed income funds are not usually needed until later.
Hi mstrlucky74,I am also 39 and am perhaps a bit further along the path to FIRE than you; I have been saving and investing fairly aggressively since 1996. But really started to understand the possibility of FIRE in 1999.Somewhere in the early 2000s I had read enough online and offline (book) material to convince me that the keys to investing are:- overall asset allocation- minimizing expenses- staying the course through thick and thin- rebalancingThe rebalancing part involves where to add your new investment money when you are accumulating your nest egg. After you retire, it involves which assets to sell. Ultimately you are trying to keep your actual asset allocation in close sync with your desired asset allocation. One other wrinkle is that you should think about the tax consequences of your actions.All that being said, I will give you my asset allocation for roughly the last 10 years. It has served me very well. My buy-and-hold mentality, never selling on dips, and adding to the assets that are trailing in overall value seems to have propelled my net worth forward even during "the lost decade". Here is my asset allocation, which you could say is roughly 80% equities and 20% fixed income:40.0% Total Stock Market Index 5.0% Large Cap Value Index (VTV) 5.0% Small Cap Value Index (VISVX)10.0% REIT Index (VNQ)15.0% Total International Stock Index (Developed Markets) 5.0% Emerging Markets Stock Index (VWO)10.0% TIPS - Inflation Protected Securities (TIP) 5.0% Total Bond Market Index 5.0% Cash - Money Market, CDsREITs are often thought of as a stock investment, so if you consider them as such, you could say that I have 60% in US equities. 20% in international equities. My equity investments have a slight tilt toward value stocks, and a slight tilt toward small cap stocks. This is the result of content in "A Random Walk Down Wall Street" and "The Four Pillars Of Investing" as well as a generally contrarian attitude.My fixed income investments have a tilt toward inflation-protected securities, largely because I expected inflation to be looming as the US debt kept growing and growing. So far that has not been an issue, but the steady decline in interest rates has made TIPS a good investment until very recently. My small investment in the total bond market also reflects the current unusually low interest rates.Anyway, every 3-6 months I look at accumulated money in both 401k/403b and taxable accounts and add to the assets that are falling behind. I recently added more to TIPS, emerging markets, and REITS. I pay no heed to dire warnings. The last time I added a lot to emerging markets they were thought to be a horrible investment and I think I ended up gaining >25% in a year.Hope this helps. Find an asset allocation that fits your needs AND RISK TOLERANCE. Invest in the LOWEST COST funds/ETFs to achieve that asset allocation. Rebalance periodically, preferably by adding new funds to underperforming assets (rather than selling assets and incurring tax liability). Stay the course and NEVER panic in a market decline.Repeat for decades and retire ahead of the pack. My net worth crossed 7 figures last year. Good luck!-progmtl.
I really do not believe in asset allocation. You should be in the strongest assets available, and stay away from the weak ones. Sometimes this means being in cash while the market tanks, and then getting back in when the time is right.Staying in through thick and thin is terrible advice.The best decision I ever made was getting out of all my holdings in March of 2000. Some of those funds do not even exist any more, but I had excellent profits when I got out.
Sometimes this means being in cash while the market tanks, and then getting back in when the time is right. [...] The best decision I ever made was getting out of all my holdings in March of 2000. Some of those funds do not even exist any more, but I had excellent profits when I got out.May I buy shares in your crystal ball?
progmtl wrote:I am also 39 and am perhaps a bit further along the path to FIRE than you; I have been saving and investing fairly aggressively since 1996....I really like this advice. It's level-headed, sane, and relies on exponential growth over time (the most powerful force in the universe). Sadly, I have often deviated from this path.What has inevitably worked best for me is to contribute as much money as possible to retirement savings, especially any available 401K and ESPP (also IRAs, but those add up much faster), paying no attention to what's there at all beyond whatever initial setup decisions I make. Then, years later, when I look at the account for some reason my reaction is always "wow, I had no idea there was so much money there!" Long-term growth is like that. And it's really really easy as it involves no continuing work at all if you just hold forever.What has worked really badly is thinking I'm smart and picking great stock investments and trading them. That made me broke during the dot com crash, and has continued to do poorly for me since then. Sure I have some successes, but they get buried by the failures.A man's got to know his limitations. Know yours and behave accordingly.-IGU-(retired at 53 through sheer luck owning stock)
What has worked really badly is thinking I'm smart and picking great stock investments and trading them. That made me broke during the dot com crashI think you can do reasonably well investing in quality stocks. But you do have to know when to sell. Most pros suggest when you are down 10 to 15% you should seriously consider selling. Admit you made a mistake. Wait for better times.Even in the dot com era you did not get hurt too badly if you maintained diversification. Those who put everything into over valued speculative stocks got hurt. But many quality issues recovered fairly quickly.Every "correction" is different. Know your limitations. And know when conditions are unfavorable and get out.
I really do not believe in asset allocation. You should be in the strongest assets available, and stay away from the weak ones. Sometimes this means being in cash while the market tanks, and then getting back in when the time is right.I don't know if you still write your blog but you used to advertise it years ago. I read it and I recall the times when you were write "I don't know why that happened" or "I'm not sure what is happening next". Your posts here almost always indicate your certainty in where the market is heading and your ability to time it but your blog painted a different picture.PSU
Sometimes this means being in cash while the market tanks, and then getting back in when the time is right.I believe that is called Market Timing. I won't say that can't be done. I will say it is easy to confuse some lucky guesses at Market Timing with skill.Additionally, if you can do this, congratulations - you will be better at making a fortune than Warren Buffett.
Well here is the thing about market timing. It is no different from knowing when to buy a stock and when to sell it. Just look at the averages for your guidance, instead of an individual stock.It has nothing to do with having a crystal ball. It is just trend following.Nobody even claims that he can all the absolute top or bottom. Just that the market tends to trend, and you can follow the trend. Also, your timing does not have to be perfect - just better than buy and hold.Take a look at timing cube: http://www.timingcube.com/app/html?page=homeTiming cube has been around for some time, and has done well.I really do not recommend the product, since you can do it yourself, but it is a good example of what can be done with simple trend following. Just look at the record.Now if you cannot tell when to buy and when to sell a stock, you should not be investing.
What do you call trailing stops ?
I am 39 and looking to be aggressive. One word of caution. Many people think they can be aggressive or they can tolerate a market correction. That is until it actually happens. You wake up one day and check your savings and, WTF?!? where did that 30% go?Best thing is to sit down and write out your goals and write out your plan to get to those goals. This will help you stick to them better.Also, you don't have to hit home runs, plenty of singles and doubles will get you in the Hall of Fame too.JLC
"Staying in through thick and thin is terrible advice.""The best decision I ever made was getting out of all my holdings in March of 2000"I disagree with your first sentence.I don't question your second sentence for a second, but not one person at tmf (or anywhere else) told me to get out of all of my holdings in exactly March of 2000, nor did anybody tell me at the time that they were getting out of all their holdings. During the crash of 2008-9, there was nothing but gnashing of teeth and capitulation all around me and now there are dozens of people telling me in hindsight that they got out in 2008-9.The one investment that I have that I have ridden through thick and thin is my IRA which took a big haircut in 1987, another in 2000-2, and again in 2008-9, and now, with the help of contiued contributions and drips could be chopped in half and still have a higher nominal value than the highs of 2006-7.Furthermore, the drips that I bought in 2008 are now nearly double the purchase price even though my timing was wrong and they suffered a big haircut in March of 2009. Even if those drips lost half their value in the next year, they would be worth their purchase price and have a higher dividend yield than they had when I bought them.And even if I had been smart enough to get entierely out in March of 2000 and/or March of 2009, I was not smart enough to know when to get back in. In fact, I thought we would retest the lows of 2009 because I failed to foresee the power and will of the Fed to create money.As a result, my IRA, and my wife's increased contributions to the max for people over 50 started out as a hedge and turned into my best performers over the last 5 years.Staying through thick and thin has outperformed my trading accounts over the last 15 years.That being said, I guess I still time the markets to the extent that I have spent the last year paying off debts and increasing my savings rather than add to my nonsheltered accounts so that I will have a buffer against the whims of Congress, China, Europe and the Fed.That being said, I am not sure that Buffett does not time markets to the extent that he amasses cash during frothy markets to enable him to take advantage of crashes whenever they finally happen.
I don't question your second sentence for a second, but not one person at tmf (or anywhere else) told me to get out of all of my holdings in exactly March of 2000, nor did anybody tell me at the time that they were getting out of all their holdings. Joel,Why would they have? The concept is ludicrous.The NASDAQ hit an all time high of 5000 in March of 2000. By the end of the month it had suffered roughly a 10% correction, not unexpected and certainly no reason to head for the hills.Of course, it was grossly over valued at the time, so getting out would have made sense for anyone smart enough to realize that. The question, though, is what anyone smart enough to realize the market was over valued was doing holding stocks in the first place. The NASDAQ had hit 3000 in November of 1999. Three years later it would be half that. So if you were smart enough to realize the market was over valued in march of 2000, why wouldn't you realize it was 100% over valued 4 months earlier?Anyone who claims to have been smart enough to sell in March of 2000 is telling you, "Sure, I knew the market was ridiculously over priced in November. In fact, I decided that if it rose another 67% in the next 4 months I would get out for sure."
Joel,I (we) lost a ton of $$$ during 2000. But in 2007, AngelSpouse decided he would get out of the market. He told me what he was doing, but I stubbornly held onto my investments. Then...the market began to tank - just as he believed it was going to - and I began getting out. I believe I was out around June of 2008 and lost some money but not a whole lot. I believe my losses were less than $60K.In early March (March 6th to be exact) of 2009 I decided it was time to get back in. I hit it right at the bottom. It was sheer dumb luck.So I'm pretty much proof that you can't really time the market - win some, lose some. The thing is, you still have income coming in. When AngelSpouse and I were both still working we let everything ride the market ups and downs, too. But now that we are both retired, things look a lot different to us. We have not one single penny coming in (with the exception of that life-saver, Social Security) except from our investments. When you don't have anything coming in watching the market take away what you have is so scary I can't begin to describe it. You begin to panic. I always think I'm going to be a brave buckaroo, but I never am.Right now, I think the market is due for a correction. Possibly a huge correction. So I'm mostly out. I'm 1/3rd in stocks (funds and individual dividend payers), 5% in bonds (from one of the funds), and the rest in cash. Waiting. But I'm guessing, of course. Except that it's a guess based on a history of ups and downs in the market. When it goes up and up and up - it has ALWAYS come crashing back down enough to really hurt.I think what I'm saying is that it's not quite so hard to ride out the ups and downs when you still have money coming in from a secure job. But when there is zero money coming in and no job and you are well into retirement, things look a lot different. And a lot scarier. :)AM
I don't question your second sentence for a second, but not one person at tmf (or anywhere else) told me to get out of all of my holdings in exactly March of 2000, nor did anybody tell me at the time that they were getting out of all their holdings. The other elephant in the room is when did anyone tell you it was time to get back in?-murray
When you don't have anything coming in watching the market take away what you have is so scary I can't begin to describe it. You begin to panic. I always think I'm going to be a brave buckaroo, but I never am.This is precisely why people are open to Index Universal Life policies. In the event of death of the covered spouse, the surviving spouse receives more than the dead spouse could possibly have provided.There are no losses to principal or gains, and there's an opportunity for upside.
So I'm pretty much proof that you can't really time the market - win some, lose some. No, you are proof that you>/I> can't really time the market. Others have done well. Again, look at Timing Cube. So much of the discussion just comes from ignorance.
In early March (March 6th to be exact) of 2009 I decided it was time to get back in. I hit it right at the bottom. It was sheer dumb luck.Kudos to you for calling it though. About the same time, I thought it looked to be the market bottom. Only thing is I didn't do anything about it. I had been re-positioning my portfolio before and after, so I did come out ahead of where I was before the crash.
>>>I think what I'm saying is that it's not quite so hard to ride out the ups and downs when you still have money coming in from a secure job. But when there is zero money coming in and no job and you are well into retirement, things look a lot different. And a lot scarier. :) <<<<Which is why having retirement projection done professionally is important. You make sure your withdrawal rate remains sustainable.What you are doing is market timing and that doesn't work.
buzman wrote:Which is why having retirement projection done professionally is important.What is a "professional" going to tell me about allocation and withdrawal rates that I won't learn from playing around with this?http://www.firecalc.comAnd with this I can play around some more when things change in some unexpected way. Much better than some guy I have to keep going back to, and who I have to worry is suggesting I do things to help him rather than me.One interesting and unexpected thing I learned playing with that is about taking social security. So the basic options are at age 62, 65ish, or 70. I assumed that if you figure you'll live a long time (plan for 95ish) that it's best to postpone taking it until age 70. But I ran FIRECalc with my SS draw numbers and my current assets filled in and had it tell me how much I could withdraw from my retirement funds safely (meaning I would never run out of money over 40 years) per year. It surprised me that the number was a couple of thousand dollars bigger for the early SS payment than the middle one, and that was a couple of thousand bigger than the late one.It doesn't expose the internals of its calculations so I don't know exactly why there's this difference, but there it is.-IGU-
Firecalc is a very good program but it didn't seem to help AM and she posts frequently. What about buying a car every six, eight or ten years, college funding, home repairs or remodeling, travel, relocation? Firecalc assumes all those have equal importance. Most people have a baseline where they would be comfortable (X) but would like to spend (Y). Both have equal importance inside firecalc but they aren't.What about additional health care costs? Note these may increase faster than inflationI LOVE Social Security but relying on full projected SS benefits is imprudent. SS is a great program but it will only be able to pay 75% of promised benefits in 20 years. Firecalc is a good online retirement calculator but I've seen better and more robust tools. Granted they cost more but glad it works for you.
Firecalc is a very good program but it didn't seem to help AM and she posts frequently. -------That seems a very strange thing to say seeing as how you don't know me, how much money I have, or how much I spend/withdraw each year.I have only said that when you are retired its very scary when the market takes a dive and you watch your money disappear.I guess I don't understand what prompted you to say that.I will say that I'm not familiar with "firecalc" but I've read much about investing in all the years I've been doing it.AM
Plug your numbers in firecalc.From the investing books I've read, market fluctuations are fairly common.
I really do not believe in asset allocation. You should be in the strongest assets available, and stay away from the weak ones. Agreed. This implies tactics commonly termed relative strength asset rotation, or relative momentum, with a overlay of absolute momentum.Google those terms and you'll find some informative recent papers.-----------------Sorry about replying to a month-old thread -- I still have 400 free internet minutes left.Posted from mid-pacific 6 days out from Papeete, Tahiti.
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