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If you are going to invest in stocks now the place to be is International and not domestic stock. Great time to dollar cost average into all areas of international.Despite bonds being in a bad place keep them. I still follow John Bogle's advice of having your age in bonds. Follow his advice has serve me well in all markets. I am 59 years old and have a healthy growing portfolio despite ups and downs. And I sleep at night.
Way to go, Guido! I'm NOT following the Bogle guy's advice. I'm holding an aggressive portfolio, I suppose. Only 11% in bonds. But they were UP today, on a down day for stocks. Well, domestic stocks, anyhow. MAPIX and MAFSX were up by a penny and two pennies, respectively, today. Seafarer was down by a penny..... TRAMX up, but TRP Europe down. Mixed bag, so on the day I was down by 0.27%.
I don't necessarily disagree with you but when I started investing as a young man I went to reading Bogle and he has influenced my decision making and it has worked for me. I am glad that I did because I didn't know much about investing at that time.My first experience with a financial advisor was a disaster. I guess I should be frequenting the Bogleheads forum instead of here . But, I don't completely but into everything Bogle says about investing and he has been wrong at times as has just about everybody else. You probably know what you are doing. The average joe doesn't and Bogle's fundamental philosophies has worked for me amazingly well. As I have gained sophistication I have strayed a little from Bogle's advice with no ill effects because I am a bit smarter than I used to be.
Super aggressive portfolios however have never worked for me because it could never predict the right time to buy or sell and usually left me with disastrous results and that was under the wings of a Certified Financial Advisor!
I guess right now Bogle sounds lame but should we have another major correction that takes many years to recover from, Bogle's advice will sound so correct.
To repeat what I said in another thread, "If it works, don't screw with it!". By that I simply mean that there are many, many paths to financial security. Some may be more lucrative (and adventurous) than others, some certainly less so. But if what you're doing works for you, then be happy with it and leave it alone. That's not to say that one should absolutely never make any changes- sometimes new funds or approaches come along, and if you want to modify what you are doing with a portion of your setup, then give it a try. Whatever works!
NO ONE has an absolute "right answer" for any of this stuff. It's a dynamic, constantly changing scene with a few underlying repetitive themes. There will be some combination that works for almost everyone most of the time, but that particular combination may need to be changed/tweaked to reflect different life-stages and needs of any particular investor.
Thanks Joe You said it well-much better than I did. Actually I have to wonder if someone in 100% equities actually did better long term than someone with some bonds in their portfolio. Bonds have had an amazing run over several years -up until now.
Guido, To give you the quick answer - yes 100% equities would have performed better than a portfolio that held bonds. As an example using some Index Exchange Traded Funds - Since its inception (Sept. 29, 2003) AGG has returned 4.38% During this same period SPY (S&P 500 Index) has returned 8.51% Any percentage of bonds would have reduced your total return.
Was there not a ratio of stocks to bonds that factored in risk versus gains? In other words a person could invest 70/30 and almost achieve the same returns as being in 100% stocks but with far less risk.
I believe Professor Sharpe had it down to 64% stocks and 36% bonds.
Granted, stocks will always give one the better returns over the long haul but with higher risk.
Guido (don't reach first; or do you hear that all the time?) ---
>> as a young man I went to reading Bogle and he has influenced my decisionmaking
Oh, me too. I am not smart, really, about these things, and have lacked discipline at times. My investing-wise father (not really, often a fool with his own and his wife's / my mother's money, his greed leading to significant loss; but he did also run an MA, 200d and other cycles, timing advisory service way before its time was popularized, probably running it as a result of his foolishness ), replied to me about Bogle and others' similar advice: Oh, sure, sounds good, and probably is, but it is always *awfully* conservative.
I had figured that out on my own, I mean, 40% bonds at age 40, and half bonds a decade later, seriously? But it was very nice to have his confirmation.
Comments
I don't necessarily disagree with you but when I started investing as a young man I went to reading Bogle and he has influenced my decision making and it has worked for me. I am glad that I did because I didn't know much about investing at that time.My first experience with a financial advisor was a disaster. I guess I should be frequenting the Bogleheads forum instead of here . But, I don't completely but into everything Bogle says about investing and he has been wrong at times as has just about everybody else. You probably know what you are doing. The average joe doesn't and Bogle's fundamental philosophies has worked for me amazingly well. As I have gained sophistication I have strayed a little from Bogle's advice with no ill effects because I am a bit smarter than I used to be.
Super aggressive portfolios however have never worked for me because it could never predict the right time to buy or sell and usually left me with disastrous results and that was under the wings of a Certified Financial Advisor!
I guess right now Bogle sounds lame but should we have another major correction that takes many years to recover from, Bogle's advice will sound so correct.
Take care
Guido
To repeat what I said in another thread, "If it works, don't screw with it!". By that I simply mean that there are many, many paths to financial security. Some may be more lucrative (and adventurous) than others, some certainly less so. But if what you're doing works for you, then be happy with it and leave it alone. That's not to say that one should absolutely never make any changes- sometimes new funds or approaches come along, and if you want to modify what you are doing with a portion of your setup, then give it a try. Whatever works!
NO ONE has an absolute "right answer" for any of this stuff. It's a dynamic, constantly changing scene with a few underlying repetitive themes. There will be some combination that works for almost everyone most of the time, but that particular combination may need to be changed/tweaked to reflect different life-stages and needs of any particular investor.
Regards- OJ
You said it well-much better than I did.
Actually I have to wonder if someone in 100% equities actually did better long term than someone with some bonds in their portfolio. Bonds have had an amazing run over several years -up until now.
To give you the quick answer - yes 100% equities would have performed better
than a portfolio that held bonds.
As an example using some Index Exchange Traded Funds -
Since its inception (Sept. 29, 2003) AGG has returned 4.38%
During this same period SPY (S&P 500 Index) has returned 8.51%
Any percentage of bonds would have reduced your total return.
I believe Professor Sharpe had it down to 64% stocks and 36% bonds.
Granted, stocks will always give one the better returns over the long haul but with higher risk.
>> as a young man I went to reading Bogle and he has influenced my decisionmaking
Oh, me too. I am not smart, really, about these things, and have lacked discipline at times. My investing-wise father (not really, often a fool with his own and his wife's / my mother's money, his greed leading to significant loss; but he did also run an MA, 200d and other cycles, timing advisory service way before its time was popularized, probably running it as a result of his foolishness
I had figured that out on my own, I mean, 40% bonds at age 40, and half bonds a decade later, seriously? But it was very nice to have his confirmation.