The market is getting fairly bloated, once it starts to get rocky don’t hesitate to go to all cash.
Meanwhile, timing the market is probably THE most difficult thing to do!!! It’s easy to understand the concept of “buy low sell high”. The trouble is knowing what is low and what is high.
Agreed. I realized my post above was a contradiction. What I should have said is buy and index fund an invest in the market currently. However history shows that most bull markets last about 5 years. This one maybe getting long in the tooth. BUT! Past performance of the market is NO indication of what the future may bring lol.
Regardless I totally disagree with riding out the lows and highs. When the train stops, it will be quick. Set some firm stops. Don’t ride it to the bottom.
In regards to advisors I started with guy that was an insurance salesman that sold some funds as well. He was a hunting buddy of a friend of mine and I was na?ve and did not know what credentials to look for. I started reading some money magazines my dad was passing on to me and asking my “advisor” some questions. About the time I realized he did not know the answers to my questions and kept on pushing a whole life policy my way I realized I was dealing with the wrong guy. The guy I deal with now is a straight up financial advisor. His fees are in line and he is well respected in the community. Don’t get me wrong you need to be up to date on your options but having a good advisor takes some of the pressure off. It is kind of like going to a foreign area to fish. Hiring a good guide with solid understanding of the area ups your chances of finding fish. At the same time you had better at least know how to feather the spool and keep your rod tip up to get the big one to the boat.
In regards to advisors I started with guy that was an insurance salesman that sold some funds as well. He was a hunting buddy of a friend of mine and I was na?ve and did not know what credentials to look for. I started reading some money magazines my dad was passing on to me and asking my “advisor” some questions. About the time I realized he did not know the answers to my questions and kept on pushing a whole life policy my way I realized I was dealing with the wrong guy. The guy I deal with now is a straight up financial advisor. His fees are in line and he is well respected in the community. Don’t get me wrong you need to be up to date on your options but having a good advisor takes some of the pressure off. It is kind of like going to a foreign area to fish. Hiring a good guide with solid understanding of the area ups your chances of finding fish. At the same time you had better at least know how to feather the spool and keep your rod tip up to get the big one to the boat.
I am investing money to use before im eligible for my 401 k, and putting a good amount into it. You will possibly want some cash before you are 59.5. I think a good advisor is worth the $$$. Just find one that will treat you right. Dont bother with Merril Lynch unless you have 250k.
Good, bad? I know the fees are a little higher, but am I better off doing something like that or taking a risk by investing myself (knowing that I’m a market novice, but learning)
Target funds automatically rebalance risk as they get closer to the target date. They’re ok if you just want to use crock pot “turn it on and forget about it” mentality.
I get a consistently better return using my advisor with a 4 way portfolio split; Aggressive Growth, Growth, Growth and Income, and International.
Dear 23…Target Date Maturity funds were designed to be default options for passive 401K investors. They are designed to gradually reallocate the investment mix of stocks, bonds, and cash as the portfolio approaches it’s maturity date… They are made up of market index investments so that they will track those benchmarks within each asset class. The longer out the maturity date the more aggressive the asset mix…ie heavy in stocks vs. bonds vs. cash. As the portfolio approaches the maturity date it reallocates towards a mix less heavy in stocks, more heavy in bonds and cash. It’s a useful tool for passive investors who do not see themselves reviewing their portfolio’s risk parameters and adjusting in due course. Asset allocation is a fundamental risk management tool, and having it done for you beats not doing it at all, but it ain’t hard to do on your own, and you could afford yourself a better return with a more customized approach to investment choices and risk management. You said your plan is a Vanguard plan, and that is an excellent fund company with very low expense ratios. One of my all time favorites.
Personally, I would go with a low rate index fund that mimics the S&P over a target fund. That being said, I could do my line of work until I die, so I can accept a bit more risk.
Target funds will rebalance to more bond exposure based on your arrival at retirement.
Interest rate risk remains a problem as you may be piling into bonds as interest rates maybe moving up. Short duration bond funds will help but your nest egg may move down with rising interest rates.
