Stock market😰

[dennis thompson]

I’m hanging in there so far,but it’s surely painful.
I’ve moved some money from technology to less volatile investments but there really is no place to hide, maybe cash, but you know what they say about market timing.
What are you doing?

[Maurice Mcmurry]

We have no investments but our kids grandparents bought them each a small portfolio. The value of one that was $14,000 is down to $10,000 in one years time.

[Zachary Hoyt]

I don't gamble, so I've been unaffected so far except for prices of things I have to buy.

[roger wiegand]

The market today is where it was 18 months ago. A year and a half with no gain is unpleasant, but certainly not much of a disaster.

Dollar cost averaging is your friend in investing-- adding a constant amount every month over a long period of time (and not trading much, if at all) will ensure that you capture the long term upward trend of the markets. I like a diversified portfolio (small ca. large cap, international, real estate, commodities, and bonds of various flavors) of very low cost index funds. Boring as heck, but it seems to work without any need for panic.

[Dave Fritz]

Nothing to do but ride it out. What goes up does comes down. We've been through this before. You can't outsmart Wall Street.

[Stan Calow]

Nothing to do but ride it out. What goes up does comes down. We've been through this before. You can't outsmart Wall Street.
I've dabbled since college days. And I quickly decided that by the time I think of making a move, its too late, the big boys have already done it.

[Scott Clausen]

I got lucky and threw some cash in at the dip after Covid was announced. Been watching and when I feel like when a new bottom has been found I will buy more. This last statement wasn't fun to open but I new there would be months like that.

[Ron Citerone]

IMO, long term is the only rational approach to investing in stocks. Short term is driven by irrational greed and fear. I am sticking to my long term plan.

[Aaron Rosenthal]

I'm in with the other long term investors. I have a ridiculous amount of cash on my balance sheet, and I'm going to be looking at putting some into short duration high yield bond funds. I'm also looking at some defence ETFs, sith a very short stop.
But, in this climate, money market funds may be the answer.

[George Yetka]

Ammunition.

I dont feel safe with anything else. The dollar is inflating quickly So keeping cash is out. I dont know where to go with stocks. Im in a few funds, I dont have alot of control as they are attached to managed accounts. My companies investments are still with the staple growers. google, etc

[Dan Friedrichs]

Over the past 5 years, the total US stock market is up 50% (10% per year). Meanwhile, if you were holding cash, inflation has reduced the value of that by ~9%.

Humans have poor intuition for exponential growth. If you put $50k in a low-fee broad-based index fund at the start of your career and left it alone for 40 years, by retirement age it would be worth >$1M.

[Michael Weber]

At my age I’m not heavily into stocks but still not pleasant to watch. I’ve lived through several major market corrections and my typical emotional response to safety was a mistake every time. I credit the insane rise over the last few years to 0% interest and millions of new investors playing because of free trading. The creation of ETF’s allowing daily trading and speculation of fund index’s may have contributed as well. I never saw that as a positive creation and just another contributor to volatility. Too many sketchy financial investments have been created. JMO

[Bruce Page]

I bailed last May. If I were a younger man I would just let it ride, as I always have before. At 71 I will probably would not make back what I lost in the last year.

[Jim Koepke]

If you put $50k in a low-fee broad-based index fund at the start of your career

How many people have access to $50k to invest at the start of their career?

Though it is wise to start saving/investing for retirement as soon as one starts earning wages.

My stock investments are still more than what was put in even though they are below their peak.

Likewise my precious metals have fluctuated but still above my initial investment.

On the other side of things, my antique tools have gone through the roof. Possibly my best investment and they can be used until they get sold.

jtk

[Bill Dufour]

The IRS allows every adult to invest $400 a month tax free. My parents did $35 A month,starting when $35 was a good amount, for decades and ended up with over one million. There are better funds now with much lower fees.
A low fee index fund will outperform almost all managed funds. Schwab is now about 0.02% a year for index funds.
Bill D.

https://www.forbes.com/sites/robertberger/2021/02/05/how-a-1-investment-fee-can-wreck-your-retirement/

[Kev Williams]

In my life I've had 3 "safe" mutual fund accounts $#!* backwards on me. The last one, when I got on had a 20 year average return of 13.8%. About 4 years in the dot-com crash took most of what I'd put in. Kept going, and just about the time it was making enough money I could let the account add its own monthlies, Enron crashed. After 3 months of my deposits not keeping up with the falling, I cashed out. I would've made about 5x the money if I'd just put the monthlies under the mattress.

I love gambling, but it doesn't like me one bit. On our last weekend trip to Vegas several years ago I played blackjack in 3 casinos...
I played 27 hands total, which resulted in 7 pushes and no wins.

I've since determined that my money must be earned, no freebies :)

[Ken Fitzgerald]

I have been investing since 1977. I am a conservative investor with more in stocks than bonds. Over the years I have withdrawn much more from the market than I put into the market and I am still in.

[Andrew More]

Don't know what's going to happen, but now is a good time to double your contributions. Also an emergency fund with 6-12 months expenses is also a wise plan. Otherwise do nothing, and avoid any info if your bothered by it.

[Thomas McCurnin]

I've been through at least four stock market crashes with my 401k starting in the 1980s. Hopefully, your portfolio is diversified so that cash, CDs, bonds, and blue chips form the foundation of the investment, with the rest keyed to various indexes to make money. I have a quite a bit of my discretionary non-foundational money in petroleum which is making a bundle right now. But yes, I have a bunch in index funds which are losing money. The best advice is to hang tough. I'll be lucky to make 1-2% this year. Two years ago, I made 20%, so it all evens out.

[Michael Drew]

I'm hoping we are at, or at least near the bottom of this pull back. I'm down about 15% for the year. It's painful to look at my portfolio.....

[Thomas McCurnin]

I'm hoping we are at, or at least near the bottom of this pull back. I'm down about 15% for the year. It's painful to look at my portfolio.....


A full 15% for your whole portfolio? You are not diversified enough, and need a bigger percentage of your nest egg in laddered CDs, cash, bonds, TBills, and Blue Chips. It sounds like you are 100% invested in the S&P or growth stocks.

[Bruce Wrenn]

What difference does stock prices make unless you are buying, or selling? Warren Buffet did alright by buying stocks that paid dividends. Think of stocks as ON SALE right now.

[Michael Drew]

A full 15% for your whole portfolio? You are not diversified enough, and need a bigger percentage of your nest egg in laddered CDs, cash, bonds, TBills, and Blue Chips. It sounds like you are 100% invested in the S&P or growth stocks.

If I were 100% S&P and Growth, I'd be down a lot more. Probably 35% or so.....

I was all cash in Oct, even though my gut told to stay in cash, I took a risk. It didn't pay off, obviously. I'm mostly in the Vanguard Wellington fund. The rest is divided between the Fidelity 500 fund and their banking fund. I was banking on interest rates giving the financial fund a bump.

I'm riding the wave now. Hoping for a bounce to regain some losses, then move it all to cash.

[Lawrence Duckworth]

I'm surprised no one has mentioned fixed annuities yet, they're soooo exciting!!! :D

[Todd Trebuna]

I lost about 30,000 in my 401k in one quarter. I moved the rest to a more conservative fund. I can retire in 4 years, but will probably have to work longer because of Covid and the recession.

[Stan Calow]

. . .
I'm riding the wave now. Hoping for a bounce to regain some losses, then move it all to cash.
Michael, how does holding cash make sense in a high inflation environment? Unless you have an account with very high interest?

[Lawrence Duckworth]

Michael, how does holding cash make sense in a high inflation environment? Unless you have an account with very high interest?


we're all losers Michael..

The S&P 500 index down 20.5%
Nasdaq, down nearly 30%
Dow Jones industrial down 15%

[Gary Ragatz]

we're all losers Michael..

The S&P 500 index down 20.5%
Nasdaq, down nearly 30%
Dow Jones industrial down 15%

Just to keep things in perspective, the S&P is where it was about 16 months ago. Same for the Dow. The Nasdaq is where it was about 21 months ago.

The Dow is 6% higher than it was at its pre-pandemic peak. The S&P about 14% higher. And the Nasdaq about 18% higher.

If you're a buy-and-hold long-term investor, you're doing just fine.

[Lawrence Duckworth]

Just to keep things in perspective, the S&P is where it was about 16 months ago. Same for the Dow. The Nasdaq is where it was about 21 months ago.

The Dow is 6% higher than it was at its pre-pandemic peak. The S&P about 14% higher. And the Nasdaq about 18% higher.

If you're a buy-and-hold long-term investor, you're doing just fine.

spin it up, but ytd we're losers.

[Gary Ragatz]

spin it up, but ytd we're losers.

But since close of trading last Thursday, the S&P and Nasdaq are each up about 1.8%, and the Dow is up more than 2%. I guess we're all winners! ;)

[Michael Drew]

Michael, how does holding cash make sense in a high inflation environment? Unless you have an account with very high interest?

I would keep it in cash long enough to gain some market stability and world events settle down a bit. Flip side to that, is things continue to worsen and we move from recession to depression. But I am not expecting much of bounce, other than the weekly cat bounces and flops. It may get better in Nov, but who knows.....

[Jerome Stanek]

I started out with $11,000 in one stock and haven't touched it. After it split and then split again I have over half a million in it.

[roger wiegand]

spin it up, but ytd we're losers.

So who cares about YTD? The market will gyrate, as it alway does. You only make yourself crazy by looking at your investments more often than once every 2-3 years. Over the last 1, 2, 3, 4, and 5 decades I (and the market overall) have done just fine.

[Lawrence Duckworth]

I’m hanging in there so far,but it’s surely painful.
I’ve moved some money from technology to less volatile investments but there really is no place to hide, maybe cash, but you know what they say about market timing.
What are you doing?

Roger

"I’m hanging in there so far,but it’s surely painful." Also the OP says he's moved some money, says there's no place to hide and is considering a cash position.

....I took that to mean he cares what's happening ytd.



If I were an investor... and I'm not, I would be on the sidelines with cash and be looking to take advantage of undervalued stocks.
but now daize for me....it's fixed annuities :rolleyes:

[Greg Funk]

If I were an investor... and I'm not, I would be on the sidelines with cash and be looking to take advantage of undervalued stocks.It's never easy to catch a falling knife :) or time the market...

[Alex Zeller]

So who cares about YTD? The market will gyrate, as it alway does. You only make yourself crazy by looking at your investments more often than once every 2-3 years. Over the last 1, 2, 3, 4, and 5 decades I (and the market overall) have done just fine.

What I don't get is why someone who doesn't know another person would say they are invested wrong. I agree with you 100%. The market is going to rebound. Those who are in more aggressive investments are going to recover faster and to a higher degree. I'm at least 5 years away from retiring so I really don't care that I'm down. This fall the GOP will control the House and with it congress will be divided. That's usually good for investments. When I'm close to retirement then I'll move my money to less risky investments.

[roger wiegand]

There's a lot of data about what works and what doesn't work in investing, and a trillion dollar industry based on getting people to do the wrong thing. It irks me.

Buying and holding a well-diversified portfolio of stocks, bonds, real estate and commodities in low cost index funds produces gains well matched to the overall market and economy with considerably less risk than any single or small number of investments, including cash which is subject to devastating losses in inflationary times.

Buying during falling markets and selling in rising markets can work OK, not not as well as buy and hold.

Trading on the market gyrations and trying to time the markets is virtually assured to cause you to not make as much money as you could, or to suffer real losses. Just look at actively managed mutual funds-- essentially all of them underperform their respective indexes. So even professional managers backed by tons of inside information and scads of computing power to analyze it fail to do as well as just broadly sampling the market.

People enjoy gambling, it can be fun. Setting aside a chunk of money to play the market with is fine, just know that it will, in all likelihood, cost you. I used to do that-- for a long time I bought Apple when the price dropped to $10 and sold it when it hit 25. Probably did that 6 times. Good fun, and I made money, but I completely missed out on it going from $25 to the equivalent of several thousand. After a few of the stocks I played that way went to zero rather than back up again I decided I had better things to do with my time.

[Tom M King]

Jerome, That sounds like Cisco back in the '90's. That was a good ride!

[Rich Engelhardt]

I'm surprised no one has mentioned fixed annuities yet, they're soooo exciting!!! :DLOL! That would be me!
Since I don't understand the market - I avoid direct involvement in the market.
The closest I come to the market is sticking money into an indexed annuity that's tied to the market, but, it offers protection on the principal.

It doesn't make much money - not enough to keep pace with inflation - but - it doesn't lose money, other than to inflation, either.

Not like my experience with variable annuities - those were a disaster.

[Scott Clausen]

There is dollar cost averaging and nothing wrong with that. In fact a lot of people sleep well at night not needing to pay attention to the market swings. If I feel the market is at or near highs I might get rid of a dog and place that as cash along with savings to wait for a drop. I also look in the mirror on a regular basis and repeat "I cannot time the market". I do the best I can and look away.

Kind of surprised nobody has mentioned Bitcoin. With it way down I must admit that I thought about it. At the end of the day I just don't understand what gives it value or what reduces its value. I also don't feel comfortable that a lost password is also a loss of 100% of the investment, talk about a down day at the market.

[Andrew More]

Indexing is great until everybody does it. At some point the tail starts wagging the dog, we might be getting close to that point, idk.

[Michael Weber]

I started out with $11,000 in one stock and haven't touched it. After it split and then split again I have over half a million in it.
Had to be Tesla I’m guessing.

[Greg Funk]

Had to be Tesla I’m guessing.I believe Tesla has only split once. You'd need to have bought in 2013 for those gains.

[Lawrence Duckworth]

So who cares about YTD?. You only make yourself crazy by looking at your investments more often than once every 2-3 years..

:D Well'p....I guess it's time for me to get up and go check on my Wachovia stocks :D

[Jerome Stanek]

Jerome, That sounds like Cisco back in the '90's. That was a good ride!

It was Revco drug stores bought out by CVS and CVS did the splits. I do get a nice did I do get a nice dividend check 4 times a year.

[Thomas McCurnin]

Indexing is not monolithic. There are hundreds of index funds. While many are tied to the S&P, many are tied to specific industries such as transportation, growth, blue chip, commodities, utilities, and the like. There is nothing bad or great about index funds. They are all part of a diversified portfolio along with specific stocks and other diversified funds. The key to any stock strategy is to have some growth stock for upside and some very conservative stock (cash, bonds, CDs, blue chips) for downside. Think of a stock portfolio as a football team--you need to play offense and defense.

[Andrew More]

Indexing is not monolithic. There are hundreds of index funds. While many are tied to the S&P, many are tied to specific industries such as transportation, growth, blue chip, commodities, utilities, and the like. There is nothing bad or great about index funds.

That may be, but most employers 401Ks allow their employees a pretty limited access to indexes. In some cases just a few from Vanguard and the like tied into the S&P500. Congress has also changed the defaults for investing such that when companies hire new employees they get signed up automatically for the retirement account, and the 401K is usually pointing at a 60/40 split using an S&P500 index as the stock portion.

As such we've got more and more money going into stocks that just have two signals: I want money (sell), I have money (buy). There are no other considerations, which means that as this portion grows (which is what's been happening as active management has consistently lost for years) there are fewer and fewer people picking stocks based on anything else. At some point that might become a problem, something even Jack Bogle agreed with.

[Terry Wawro]

I’m in my 60’s and retired. I don’t invest in individual stocks or try to time the market. Made those mistakes years ago. We now hold a mix of index funds that are invested in around 60% stock, 35% bond, and I keep about 5% in cash/money markets. Yes the past few months have been painful, but the market has been giving such strong returns over the past few years, there had to be a correction at some time. I’ll pull only 3 to 4% out a year so the ebb and flow of the market is not as painful as it looks when you are looking at the total amount down from previous peaks. Someone once said index fund investing is like walking up a mountain while doing a yo-yo. It goes up and down but slowly over time it still gets higher and higher. My big regret is not investing more earlier.

[John E. Hobart]

It's been a rough year this year, our portfolio was down abt 30% at the worst but it's recovered some, but we are still down abt 800,000 since early January. We are retired for 4 years now hope to have enough years left to get all that back and grow it another 50%. Just need to stay the course and ride it out.

[Thomas McCurnin]

Rule of Thumb for your 401k is take your age, subtract the age from 100 and that is the percentage of the 401k that should be in stock. So a sixty year old man would have 40% of the 401k in stocks, the rest in quality bonds.

I'm not understanding how a conservative investment 401k could lose 30% this year. Assuming the investor is 60 years old and has $1mm in the 401k, that would translate to $400,000 in stock. Yeah, the market is down, but not 30% from January. Assuming the investors picks were really bad, and the stock portion is down 30%, that is only 30% of 40%, so the portfolio would be down to about $280,000 and the bond portion would still be at or near $600,000, so the value of the 401k would be $880,000, about a 12% loss year to date.

The point of this exercise is that a diversified fund is what counts. We used Fidelity at our firm, but I checked with Vanguard and they have at least 100-300 cookie cutter plans for a single asset 401k (its hard to split the 301k into buckets, you have to use a single bucket, hopefully diversified) ranging from aggressive (emerging markets, small cap) to defensive (blue chips + S&P).

We meet in person with an investment advisor every January and discuss what our portfolio should look like for the following year, because this isn't a Ronco set it and forget it program. This year we tweeked it a little adding commodities petroleum and gold (which have gone crazy up). But since that great portion of our program is only about 10%, it doesn't put us into a wildly positive position, it does make up for some of the S&P losses which the last time I looked was around 15% down year to date.

[John E. Hobart]

Only about 35% of my money is in tax sheltered accounts, the rest is from my investments from the sale of a family business and inherited from my parents if I tried to move 40% of it in to a more conservative account I would be paying taxes on a little over
1 Million dollars so the 30 percent drop isn't any worse than the taxes that I would be paying, plus the principal is still there to continue to grow. Today with the markets up we gained ~70,00, so we just ride it out. I am a very aggressive investor, heavy in the tech side and have done fairly well I managed to turn 250,000 into 1,000,000 in 6 years. My wife and in are able to live on our Social Security income and the interest and dividends .We meet twice per year with our advisor and they have ran Monty Carlo
projections for us out to age 95 and the best says we should have an estate of maybe 40mill and the worst is abt 3 mill. So I think we will be ok.

[Dan Friedrichs]

We meet in person with an investment advisor every January and discuss what our portfolio should look like for the following year, because this isn't a Ronco set it and forget it program. This year we tweeked it a little adding commodities petroleum and gold (which have gone crazy up). But since that great portion of our program is only about 10%, it doesn't put us into a wildly positive position, it does make up for some of the S&P losses which the last time I looked was around 15% down year to date.

Overall good thoughts and analysis, but you're getting too complicated, here. Unless you have some special knowledge of these sectors, you're just relying on a "gut feeling" that these sectors will do better-than-average, while billion-dollar funds with far more information than you have have already priced their analysis into the market for these. When things go well (like they apparently did for you, here), it's tempting to pat yourself on the back for your investing prowess, but really, you just rolled the dice (and you probably intuitively realize that by only being willing to gamble 10% of the portfolio). Nothing wrong with a small allocation of "play money", though, as long as you realize you're playing.

People also over-rely on "advisors". If this advisor was any good at picking outsized investments, why would they be meeting with people like you 8 hrs/day? The best "financial advisor" is a therapist who can talk you out of the idea that you know better than others, keep you from making impulsive decisions, and keep reminding you the mantra of: Simpler is better - broad-based, low-fee index fund and forget it.

[Michael Drew]

I'm not a big Tony Robbins fan, but his book "Money, Master the Game", should be a prerequisite for anyone who plans to save for retirement. It is a bit dated, but the basic principles he lays out still apply.

So, regarding bonds, what bonds have actually made money the past two years? I would not consider bonds a safe haven of late.

[Andrew More]

Rule of Thumb for your 401k is take your age, subtract the age from 100 and that is the percentage of the 401k that should be in stock. So a sixty year old man would have 40% of the 401k in stocks, the rest in quality bonds.

I'm not understanding how a conservative investment 401k could lose 30% this year. Assuming the investor is 60 years old and has $1mm in the 401k, that would translate to $400,000 in stock. Yeah, the market is down, but not 30% from January. Assuming the investors picks were really bad, and the stock portion is down 30%, that is only 30% of 40%, so the portfolio would be down to about $280,000 and the bond portion would still be at or near $600,000, so the value of the 401k would be $880,000, about a 12% loss year to date.

I don't know if you've been paying attention to recent trends, but a good portion of this year bonds have been hammered along with stocks. TLT (a 20+ treasury ETF) has been down about 20% year to date, depending on the bonds in question you might have more or less losses. S&P500 was also down a similar amount. So generally speaking a minimum of ~20% loss for the entire portfolio, more depending on what else you might have money in. QQQ/Nasdaq has been doing much worse, and that's without venturing into individual picks, some of which have been absolutely hammered.

[Michael Weber]

I don't know if you've been paying attention to recent trends, but a good portion of this year bonds have been hammered along with stocks. TLT (a 20+ treasury ETF) has been down about 20% year to date, depending on the bonds in question you might have more or less losses. S&P500 was also down a similar amount. So generally speaking a minimum of ~20% loss for the entire portfolio, more depending on what else you might have money in. QQQ/Nasdaq has been doing much worse, and that's without venturing into individual picks, some of which have been absolutely hammered.
Beat me to it. I always check a bond funds duration value before investing. Mostly hold short term and ultra short term funds but it’s still been painful to watch.

[Thomas McCurnin]

Blue Chip Bond Funds yielded me 2% year to date, fairly long term 2 years plus. These are ultra conservative never fail companies. I'm not sure what bonds you are talking about.

As for not following the advise of an investment professional, I'm not sure how to respond to that without sounding snarky, but here it goes. These guys have 2-3 college degrees in finance, and usually have 10-20 years direct experience in the market. If an investor doesn't want to listen to trained professionals, then you might as well spin wheel of fortune or go to Vegas. These guys listen to me. If I'm in a panic, they calm me down and shift some of of the S&P buckets to bonds or cash. Often if I have a gut feeling, they let play around with $20-50k of the fund to invest in whatever. A couple years ago during extreme political strife, I was very nervous, so was the market, and got them to let me invest in gold. It turned out I made 20%, and while it didn't save my whole portfolio, it certainly made up for other losses. Sometimes gut feelings are good feelings. This year I put the gut feeling fund into petroleum, which is earning nicely. Again, it won't save my account, but is a nice counterbalance.

[Dan Friedrichs]

As for not following the advise of an investment professional, I'm not sure how to respond to that without sounding snarky, but here it goes.

Sounds like you have access to a good advisor - great. Many less good ones advocate for complex portfolios, charge high fees, and have financial interests that aren't aligned with their clients.

[Michael Weber]

All bonds carry a risk of default. The interest the bond pays reflects that risk, high or low. In addition all bonds and bond funds carry interest rate risk. If I purchase a newly issued bond paying 4% and decide to sell it later before maturity, and assuming interest rates have risen to 8% who is going to buy it when they could buy one paying 8%? No one of course. So I have to sell that bond at some level of discount to find a buyer. Thats interest rate risk. It works just the opposite if interest rates fall. My bond is worth more if it’s interest rate is 8% in a 4% market. Bond funds are sold at their Net Asset Value or NAV. The NAV value varies with interest rate changes both up down, like individual bonds, but by an average of the maturities of all the bonds in that fund. This is termed a bond funds duration. The higher the duration the more it’s NAV will change to reflect current market interest rates. Duration is always higher for long term bond funds and less for short term funds. Once again, if a sell of any portion or all of a bond fund is desired or forced due to circumstance, the NAV will reflect current market interest conditions either positive or negative for the seller. The current rapid rise in interest rates has negatively affected the NAV of all bond funds making them less valuable. Ergo, my funds are worth less than last week, month or year and I have technically lost money. Whether this bothers me or other bond investors is dependent on lots of factors but the fact remains the NAV of bond funds rise and fall just as the value of stocks do.

[Andrew More]

Blue Chip Bond Funds yielded me 2% year to date, fairly long term 2 years plus. These are ultra conservative never fail companies. I'm not sure what bonds you are talking about.

If you don't know which bonds after being given the ticker I think I know how to value your opinion in this area. Thank you.

[Edwin Santos]

Unless things have changed from when I studied finance, the combination of an inflationary AND rising interest rate environment will usually be very bad for bonds. Even if you're holding the bond to maturity where price is not your concern, the payments are being made in inflated dollars at a deflated coupon. This said, bonds can and should be an important part of most portfolios, depending on personal situation.
Look for intermediate to long term bonds to do well during periods of economic expansion (prosperity) and deflationary periods, especially declining interest rates. A fund like TLT would do well during such conditions.

An environment like this is challenging for almost all sectors in the financial markets. It just supports the good old advice of being a long term investor so years like this will get averaged out.

[Alan Lightstone]

...this isn't a Ronco set it and forget it program.

Yeah, it should be. I learned long ago not to get into financial discussions with people at work. Because they only tell you about the investments that made money, and conveniently avoid/repress from their memories the ones that lost money. Meanwhile, I've been retired for a few years, and the ones constantly talking about their investments are still working their tales off, with far less money.

Good Freakonomics podcast recently about how with the multitude of choices that Fidelity and Vanguard, etc... give for 401K contributions, the majority of participants pick bad choices. Or at least certainly not the best choices. The same applies for medical insurance choices.

Jack Bogle, the inventor of the index fund, has made more money for Americans than anyone on the planet. “Jack did more for American investors as a whole than any individual I’ve known. A lot of Wall Street is devoted to charging a lot for nothing. He charged nothing to accomplish a huge amount.” - Warren Buffett

https://www.cnbc.com/2019/01/16/warren-buffett-says-jack-bogle-did-more-for-the-individual-investor-than-anyone-hes-ever-known.html

[Perry Hilbert Jr]

I invested in real estate. Bought a farm in a growing suburban area. Had it 30 yrs this October. So far the value has increased about 8 times what I paid. There has been a lot of sweat equity and I am not including the farm equipment acquired over the years. Had an auctioneer in to see about selling off the equipment when the farm sells. He estimates the value of the equipment to be another 50 to 70K. (mostly 50 yr old used stuff, but still works.) I have some stocks, and they haven't done anywhere near as well.

[Andrew More]

Had an auctioneer in to see about selling off the equipment when the farm sells. He estimates the value of the equipment to be another 50 to 70K. (mostly 50 yr old used stuff, but still works.)

Don't know if you've been following the John Deere saga, but there's a strong demand for farm equipment that the farmers can work on themselves, and not rely on the dealer. It's driven up prices for older equipment like yours as a result.

[Greg Funk]

I invested in real estate. Bought a farm in a growing suburban area. Had it 30 yrs this October. So far the value has increased about 8 times what I paid. There has been a lot of sweat equity and I am not including the farm equipment acquired over the years. Had an auctioneer in to see about selling off the equipment when the farm sells. He estimates the value of the equipment to be another 50 to 70K. (mostly 50 yr old used stuff, but still works.) I have some stocks, and they haven't done anywhere near as well.That's a decent return (7.1%/yr) but slightly less than the Dow (7.8%) over the past 30 yrs.

[Edwin Santos]

That's a decent return (7.1%/yr) but slightly less than the Dow (7.8%) over the past 30 yrs.

There are a multitude of costs associated with the ownership of real estate that many people forget to include in their return calculations. I'm talking about costs like property taxes, maintenance, improvements, insurance and selling costs. To perform a true calculation, the investor should take the acquisition cost and add the accumulated sum of these other costs as part of the cost of owning the asset.

Investing in a marketable security like a stock or bond involves paying out once and once only.

This is not to suggest that real estate is not a good investment because in many cases it is. Improved real estate has a benefit of depreciation which will allow for tax deferral too. But in my experience returns are not nearly as high as people think for the reasons above and it is important to account for all the costs before concluding what your return is. This is not an opinion, it's a basic accounting and finance principle.

[Michael Drew]

For those of you who employ a wealth advisor to manage your money (in retirement), what's a good range for fees, and what company did you go with? I am 56 and trying to retire within the next 24 months (need to figure out where to live first). I've met with several advisors/consultants and have not decided who to go with yet. They all seem to share the same talking points, but none have really impressed me to date. Rates vary depending on the account balance too. I've spoken to Fidelity, Morgan Stanley, Merrill Lynch and Creative Planning, so far..... I liked Creative Planning the best, but my advisor would not be anywhere near me - and that bothers me. I like to have real, in person meetings. I friggin hate remote meetings though the internet.

[Dan Friedrichs]

For those of you who employ a wealth advisor to manage your money (in retirement), what's a good range for fees, and what company did you go with? I am 56 and trying to retire within the next 24 months (need to figure out where to live first). I've met with several advisors/consultants and have not decided who to go with yet. They all seem to share the same talking points, but none have really impressed me to date. Rates vary depending on the account balance too. I've spoken to Fidelity, Morgan Stanley, Merrill Lynch and Creative Planning, so far..... I liked Creative Planning the best, but my advisor would not be anywhere near me - and that bothers me. I like to have real, in person meetings. I friggin hate remote meetings though the internet.

Vanguard Personal Advisor Service. Yes, it'll be remote, but once set up, you don't need much (if any) continuing contact.

[Andrew More]

There are a multitude of costs associated with the ownership of real estate that many people forget to include in their return calculations.

Yeah, yeah, yeah. What if I just want to brag about it to my friends? :)

[roger wiegand]

For those of you who employ a wealth advisor to manage your money (in retirement), what's a good range for fees, and what company did you go with? I am 56 and trying to retire within the next 24 months (need to figure out where to live first). I've met with several advisors/consultants and have not decided who to go with yet. They all seem to share the same talking points, but none have really impressed me to date. Rates vary depending on the account balance too. I've spoken to Fidelity, Morgan Stanley, Merrill Lynch and Creative Planning, so far..... I liked Creative Planning the best, but my advisor would not be anywhere near me - and that bothers me. I like to have real, in person meetings. I friggin hate remote meetings though the internet.

Look at the Garrett Planning Network. They are an association of independent fee-for-service planners with members across the country. While individuals vary across the network they generally share a very high ethical standard and commitment to low cost investment strategies. Many, if not most, will not actually touch your money, providing advice only, eliminating all the usual conflict of interest issues that advisors working on commission suffer from.

[Michael Weber]

Vanguard Personal Advisor Service. Yes, it'll be remote, but once set up, you don't need much (if any) continuing contact.
Dan, I keep getting offered Vanguard Personal Advisor Service. Not sure what to make of it. I know only they charge some percentage of an individuals total portfolio. What exactly does your advisor do and have you been happy with your results? I’ve been with vanguard for several decades and historically they never allowed individual advise and would refuse to give it if ask. They would give facts of course but never try to tell you what you should do.

[Dan Friedrichs]

Dan, I keep getting offered Vanguard Personal Advisor Service. Not sure what to make of it. I know only they charge some percentage of an individuals total portfolio. What exactly does your advisor do and have you been happy with your results? I’ve been with vanguard for several decades and historically they never allowed individual advise and would refuse to give it if ask. They would give facts of course but never try to tell you what you should do.

I don't use them, but I know people who have. I think they charge 0.3% AUM. I think they advocate the "boggleheads" approach - put everything into a target date fund and forget it. So what you're really paying for is to have someone who you can talk to and who can answer your questions, and maybe provide some limited advice about how to best transfer existing accounts and how to do tax-efficient withdrawals. You're not getting any sort of highly-customized actively-managed portfolio, but that's the point: you're best served with a low-fee broad-based index fund, so that's what they give you. I imagine there are lots of novice investors (frankly, nearly all the posters on this thread) who need to be able to talk to a real person who can talk them out of making stupid decisions (ie - deviating from the "index fund and forget it" approach), so that seems to be the primary "service" they provide.

If you can put everything into a target date fund on your own, you probably don't need their service (or any service, for that matter).

[Michael Drew]

Vanguard Personal Advisor Service. Yes, it'll be remote, but once set up, you don't need much (if any) continuing contact.


Look at the Garrett Planning Network. They are an association of independent fee-for-service planners with members across the country. While individuals vary across the network they generally share a very high ethical standard and commitment to low cost investment strategies. Many, if not most, will not actually touch your money, providing advice only, eliminating all the usual conflict of interest issues that advisors working on commission suffer from.

Thanks. I have not heard of either. I'll check them out.

I've done well enough managing my own accounts for the past three decades, but with this current financial market, administration, I find myself not really knowing how to diversify my portfolio. I know I need help and am not too proud to admit that.

[Scott Clausen]

I have a broker but don't get any meaningful advice. I don't pay any fees but any trades have a steep commission. I talked to Fisher but they charge 1.25% to manage while Vanguard charges .3%. Not sure what Vanguard get for a stock trade, yet.

[Andrew More]

I have a broker but don't get any meaningful advice. I don't pay any fees but any trades have a steep commission. I talked to Fisher but they charge 1.25% to manage while Vanguard charges .3%. Not sure what Vanguard get for a stock trade, yet.

In my brokerage accounts at Vanguard the trades are "free". Usually what that means is they're selling the order flow, like Robinhood, and you might actually be better off paying for your orders. My other retirement account used to get a flat $12.50 a trade.

[Michael Weber]

In my brokerage accounts at Vanguard the trades are "free". Usually what that means is they're selling the order flow, like Robinhood, and you might actually be better off paying for your orders. My other retirement account used to get a flat $12.50 a trade.
I admit I have never heard of “selling order flow”. Had to google it. What a system! Evidently Robinhood is the king of profiting on that at more than 10x the profit percentage others make doing it. I wondered how they made their money selling free trades. Our financial systems are incredibly complex and getting more so. Good or bad? IDK but it’s scary.

[Michael Weber]

Thanks Dan for the Vanguard advisory information.

[Greg Funk]

This is not to suggest that real estate is not a good investment because in many cases it is. Improved real estate has a benefit of depreciation which will allow for tax deferral too. But in my experience returns are not nearly as high as people think for the reasons above and it is important to account for all the costs before concluding what your return is. This is not an opinion, it's a basic accounting and finance principle.One factor that can make real estate attractive is the degree of leverage available is much higher. It's often possible to buy property with a 5-25% down payment. Stocks are typically limited to 50% margin.

[Andrew More]

Anybody else like to brag that they're invested in "non-traditional assets" at parties? When I get a blank look I just tell them I'm hedging inflation by buying wood working equipment, some of which has already doubled in price. :)

[Edwin Santos]

Anybody else like to brag that they're invested in "non-traditional assets" at parties? When I get a blank look I just tell them I'm hedging inflation by buying wood working equipment, some of which has already doubled in price. :)

Not enough woodworkers at these parties you're attending. :)

[Edwin Santos]

One factor that can make real estate attractive is the degree of leverage available is much higher. It's often possible to buy property with a 5-25% down payment. Stocks are typically limited to 50% margin.

That's a good point. Especially in an environment of low interest rates like we've had for a long time now.

[dennis thompson]

Well I’m not feeling too bad about my stock losses after seeing that Berkshire Hathaway lost $53 billion in the second quarter, although they can clearly afford it. And as Buffett says, don’t look at quarterly investment losses or gains, easy for him to say :)

[roger wiegand]

As Mr. Buffet would be the first to tell you, you haven't lost (or gained) anything until you actually sell the asset.

[Thomas McCurnin]

So I had my semi-annual meeting with stock advisors yesterday. The good news, bonds are up, way up. So depending on the grade of bonds purchased, this is a 3-5% return based on the investor owning the actual bond, holding the bond coupon to full maturity (as opposed to investing in a bond mutual fund). The better news is that interest rates will likely go down in a year, so that 3% bond could be re-sold to investors shopping for 3% bonds in a 2% market.

The bad news is that the S&P still sucks, but year to date is about 10% for a pure S&P Index Fund, to 7% to one of the S&P Clones that usually tweek the S&P to get a few extra points return.

The good news is that there were several Specially Managed Funds (SMAs) which shop for value stock that are doing quite well on a three year horizon and year to date. We looked at a couple that had a 3 year return of 12% and a year to date of 7%

Consequently, we moved some stuff out of the S&P and into bonds and the aforementioned SMAs.

[Edwin Santos]

The bad news is that the S&P still sucks, but year to date is about 10% for a pure S&P Index Fund, to 7% to one of the S&P Clones that usually tweek the S&P to get a few extra points return.



Did you mean negative 10%? In real time, the S&P 500 is at -11.61% YTD as I write this.

[Bill Dufour]

Best investment I ever made was buying about 80 dollars worth of forever stamps about one week before they went up. Almost a 10% profit in a few days with zero risk. Olives went from 87 cents to 1.50. We saw some at a different grocery outlet in the mountains so we bought a case of 24? for 87 cents. We use them in salads. pizza, tacos etc so they will not go bad.
Bill D

[Dwayne Watt]

Vanguard PSA costs and level of advisor service are dependent on the amount of money that you place within their management control. Modest amounts (>$50k) are managed by committee (no exclusive advisor), more substantial amounts (>$500k) get you a personal advisor, and large amounts (>$5M) get a wealth management team. The advisor at each level is responsible for maintaining the agreed upon portfolio risk balance (stocks/bonds) and select appropriate funds using the "invest in most everything" approach. They do not use target funds but obviously have all Vanguard funds from which to choose. Vanguard funds are historically very low management fee funds, so that works in your favor as well.
I have no affiliation with Vanguard beyond having personal funds under PSA management. It seems like the right thing for my wife's and mine life situation. YMMV

[Thomas McCurnin]

Yeah, I meant -10% and yes, Vanguard is an excellent trustworthy company. Do be careful with their mutual funds, as the market can go up and the account value will go down for some inexplicable reason. Their bond mutual funds account is terrible, as the investor does not own the fractional bonds, and has no say so whether to hold the bonds to maturity or sell.

The S&P is at a three month high today! Inflation is down, gas prices way down, and things are looking better for 2023.

[dennis thompson]

Yeah, I meant -10% and yes, Vanguard is an excellent trustworthy company. Do be careful with their mutual funds, as the market can go up and the account value will go down for some inexplicable reason. Their bond mutual funds account is terrible, as the investor does not own the fractional bonds, and has no say so whether to hold the bonds to maturity or sell.

The S&P is at a three month high today! Inflation is down, gas prices way down, and things are looking better for 2023.

Tom
I wish I could feel as optimistic as you but looking a little longer term:
CPI is up 8.5% on an annual basis
PPI is up 9.8% on an annual basis
Gasoline is up about 44% vs a year ago
S&P 500 is down about 12% on a year to date basis
I'm fairly sure the Fed is planning to continue to increase interest rates
Congress's latest spending binge is not making me feel good either

[Dan Friedrichs]

The good news is that there were several Specially Managed Funds (SMAs) which shop for value stock that are doing quite well on a three year horizon and year to date. We looked at a couple that had a 3 year return of 12% and a year to date of 7%

Consequently, we moved some stuff out of the S&P and into bonds and the aforementioned SMAs.

What do these charge? Front loads, back loads, AUM fees?

[Thomas McCurnin]

All true Dennis, but ...

Inflation is down in the last month. S&P is up, way up, at a 3 month high as of yesterday. Gas prices are way down in the last 90 days. My analyst says interest rates will go down by late Fall.

So the trend is better news.

[Dave Zellers]

My analyst says interest rates will go down by late Fall.

So the trend is better news.

Trends can be crazy short. Bear market rally? That's when the smart money quietly exits the market. Inflation was roughly flat from the previous month but still up 8% YOY. Interest rates won't be going down if inflation stays at 8%. Gas prices down? Sure- if you look at the chart through a microscope.

Me? I'd be changing analysts. YMMV.

[Gary Ragatz]

Trends can be crazy short. Bear market rally? That's when the smart money quietly exits the market. Inflation was roughly flat from the previous month but still up 8% YOY. Interest rates won't be going down if inflation stays at 8%. Gas prices down? Sure- if you look at the chart through a microscope.

Me? I'd be changing analysts. YMMV.

The "smart money" never exits the market - only the fools do.

[Dave Zellers]

Never?

OK...

"Exits" can mean different things as you know.

[dennis thompson]

All true Dennis, but ...

Inflation is down in the last month. S&P is up, way up, at a 3 month high as of yesterday. Gas prices are way down in the last 90 days. My analyst says interest rates will go down by late Fall.

So the trend is better news.

Tom
Maybe your analyst is right,I hope so, but with inflation running at 8-9% and with the Fed having an inflation goal of 2-3%, I’d be very surprised if they can decrease rates this year.

[Michael Drew]

I do not understand bonds. I need to study up on them. With that admission, every single bond fund that I am "watching" in my Fidelity account - is still in negative territory for the year, as well as the past 12 month trend. All of them. They are not trending upward. If anything, their trend lines have flattened a bit, but they sure as hell are not going up.

[dennis thompson]

I do not understand bonds. I need to study up on them. With that admission, every single bond fund that I am "watching" in my Fidelity account - is still in negative territory for the year, as well as the past 12 month trend. All of them. They are not trending upward. If anything, their trend lines have flattened a bit, but they sure as hell are not going up.

If interest rates continue to go up bond funds will continue to go down, using a simple example ,if you own a bond paying say 3% and rates go to 4% on similar bonds ,your bond will go down to yield 4%. It can be more complicated than this depending on maturity, risk,etc, but that’s basically how it works.
An individual bond held to maturity will however, pay out the promised, usually $1,000, amount.( assuming they don’t go bankrupt)
A bond fund holding multiple bonds will react in the same way,but there is no “ maturity” on a fund since they will usually hold many bonds of different yields and maturities.

[Myk Rian]

The "smart money" never exits the market - only the fools do.
The smart money stays away from the market. I bought $500 EE bonds for 35 years. Still getting 6% earnings on them. I have quite a large pile of them.

[Edwin Santos]

The smart money stays away from the market. I bought $500 EE bonds for 35 years. Still getting 6% earnings on them. I have quite a large pile of them.

They're also exempt from state and local income tax, so for you in Michigan you are saving 4.25% tax which is a very good benefit.

The thing is it has been a long time since EE bonds were paying 6%. For example the annual rate they are paying right now is .10%. So you timed it very well. But I think if you invested in an broad index ETF you would have done better but admittedly with having to stomach volatility along the way. Maybe your strategy is the best way to sleep at night during turbulent markets!

[Michael Drew]

If interest rates continue to go up bond funds will continue to go down, using a simple example ,if you own a bond paying say 3% and rates go to 4% on similar bonds ,your bond will go down to yield 4%. It can be more complicated than this depending on maturity, risk,etc, but that’s basically how it works.
An individual bond held to maturity will however, pay out the promised, usually $1,000, amount.( assuming they don’t go bankrupt)
A bond fund holding multiple bonds will react in the same way,but there is no “ maturity” on a fund since they will usually hold many bonds of different yields and maturities.

Thank you for that.

So then it's better to just buy a bond and keep it till it matures, verse bond fund? I am unsure if I can do that with my 'work' 401K account. We do have the option of using Fidelity's Brokerage Link, which lets me buy almost any fund that Fidelity has access to, including all the Vanguard funds.

[dennis thompson]

Thank you for that.

So then it's better to just buy a bond and keep it till it matures, verse bond fund? I am unsure if I can do that with my 'work' 401K account. We do have the option of using Fidelity's Brokerage Link, which lets me buy almost any fund that Fidelity has access to, including all the Vanguard funds.

I won’t try to answer your question of individual bond purchase vs bond fund purchase, it’s far too complicated and the last thing I’m qualified to do is give investment advice.
I’d be surprised if a 401k would allow you to buy individual bonds, I know that mine only allowed me to buy stock or bond funds. Just call your 401k provider and ask them.
I use the Fidelity website very often for stock research and I’ll bet they have some pretty good information on investing in bonds and bond funds.

[Gary Ragatz]

The smart money stays away from the market. I bought $500 EE bonds for 35 years. Still getting 6% earnings on them. I have quite a large pile of them.

The ones that are 30+ years old have matured. They're not paying anything.

[Scott Clausen]

If raising interest rates is the only viable way to arrest inflation, I don't see any downward move on interest rates in the next year or more.

[Thomas McCurnin]

Once inflation has been controlled, the Fed will drop interest rates. My analyst says early 2023.

[Mel Fulks]

Just wondering , what KIND of analyst? I hope it isn’t a guy eagerly looking forward to getting HIS bales of new clean money ! Make
sure he is not wearing a shirt with way too long sleeves with a lot of numbers stamped on it !

[Dave Zellers]

I suppose inflation could be controlled by recession. Either way, regular people are screwed. Unless wages go up for regular people, they will fall farther and father behind. And increasing wages are inflationary.

Somebody has to pay for all the government spending that is being passed. And student debt forgiveness is right around the corner...

Reality awaits...

[Mel Fulks]

I suppose inflation could be controlled by recession. Either way, regular people are screwed. Unless wages go up for regular people, they will fall farther and father behind. And increasing wages are inflationary.

Somebody has to pay for all the government spending that is being passed. And student debt forgiveness is right around the corner...

Reality awaits...

The really old way of fighting inflation was “sack - a - city “. High profit by “low overhead”
Mel

[Tom M King]

Inflation has always been the answer to debt here, whether by spending more than comes in, or cutting taxes below what the government spends. Neither side seems to understand, or care much, but is quick to blame the other side. When anything and everything is operating on debt, inflation is sure to come.

[Thomas McCurnin]

Worldwide, the US is doing better. In the UK, inflation is 8.2%; Germany is 7.5%

Presently the US rate is 8.5% and going down from 9.1% in June.

[Scott Clausen]

I wouldn't pop the champagne cork just yet.

[Edwin Santos]

If raising interest rates is the only viable way to arrest inflation, I don't see any downward move on interest rates in the next year or more.

I think you're right. The economy is the ultimate aircraft carrier.
Doing a 180 from large interest rate increases to decreases within 12 months would probably confuse and spook the markets more than doing nothing. At best I could see interest rate increases stopping and holding status quo for a decent stretch while they monitor each quarter's new inflation numbers for a trend. Even that would be embraced by the markets.

[Dave Zellers]

My wife wanted me to throw a fit with the post office but I finally convinced her we may not get our mail delivered at all if I pitched a fit... (i reminded her of what Newman did with the mail on a Seinfeld episode )

I love it. I've been watching Seinfeld clips and interview snippets lately. Great stuff.

However in between doing nothing and pitching a fit, is a polite mention to the PO that your dividend checks could have blown away. Here, the package would be in a plastic bag dangling from the mailbox but the letters would be inside. But I do get your point as to how the postperson (!) might react when called out by her boss. As I type this, I think my approach would be to keep quiet as well.