Howdy..............
OK, I get and understand all of the low and false U.S. interest rates and all of the hot money moving around; and yes, would it not be fun to go play with the big kids in the market place. BUT, holy cow; I think I might stand a better chance of living trying to dodge the 18 wheel trucks on an interstate highway during the heavy traffic period.
Just totally and amazingly insane from the fence I sit upon. NOW, if I could be a very nimble fund player and spend my whole day watching stuff.....perhaps, just perhaps; I would not get my investment clock cleaned beyond repair.
Regards,
Catch
Comments
I think 40-60% equities with a well diversified portfolio is a good allocation for someone near retirement (assuming that remaining 50% is in safe bonds - not like high yield etc.). I think, I would reduce this allocation to 20-30% for someone in 20 years into retirement.
In an extreme year like 2008, 50% equity portfolio dropped about 20%. But in the next year it gained about 20% and by the end of 2010 had already recovered its losses and more.
I would caution some of the alternative investments that are now sold as protection is likely to disappoint the investors. Some of these instruments are created for those investors who are burned by heavy drop in their portfolio and would not otherwise come back to brokers etc. and these products are simply there to lure back the investor and they are unproven in a real crisis or the cost of protection in a crisis could come at a cost that could impart the longer run returns (opportunity cost) of simpler vanilla portfolios.
Equities as any fund prospectus will tell ya are prone to ups and downs and gonna have loosin years. You can dampen that somewhat with certain funds that hedge risk in different ways, but you cant avoid it completely. If risk of loosing money is that important, shouldn't be in equities. Frankly, would question whether ya should be in bonds either unless holding one to maturity. Of the equity-like funds that hedge risk in various ways are PRWCX and OAKBX. Then theres TRRIX which is only 40% equity. A fund for grandmother I'd say.
Personally, I look at the averages and see the Dow lower than it was 2-3 years ago. The NASDAQ well below where it was 10 or so years back. Aint saying they cant go way down again, but am willing to run with 40-50% equities in a mix of diversified funds. We have a defined benefit pension and both draw SS, so no immediate need for that money and we'll take our chances growing it a little. Just some thoughts.
Take care- OJ
you've been doing great for the past 20s+ years [as well as the past 3-4 years when you've posted your retunrs], why change your mentality now especially w/ the retirement portfolio? I would have 95s% in bonds/cash/fixed income equities if I am more than 75s years old. Too much risks for me to have any in equities. I rather look at the car passing by the high way then to try to pick up a couple of leftover dimes and get run over by an 18 wheeler...however if you have a few bucks here and there to gamble, then place everything in equities... or betting on 3x sp500 futures.
I think the market will run out of steam in 12-24 months...difficult to say what will happen but I would rather be safe/slow as a turtle then to get burnt with all my gains.
but if you are willing to buy any 'funds' in the near future please do disclose the 'funds' name and i'll strongly consider to buy 'em with you [minimal of few Ks to start if possible for small investors like me
Actually, its a pretty decent segment on the inflation problem in the U.S. Recommend it for viewing if you have a chance.