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Originally Posted by retiredguy123
The inflation rate is currently 5.39 percent. But, my money market fund, where I have 30 percent of my portfolio, is yielding 0.01 percent. So, I just moved 10 percent of it into my junk bond fund, which is only yielding 3 percent. My short term and intermediate term bond funds are yielding 0.6 and 1.5 percent. My only investment that has any chance to exceed inflation is my S&P stock index fund. I feel like the Federal Reserve is stealing money from me by keeping interest rates artificially low.
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I hope you wrote this as a joke. It’s a serious problem, because plenty of advisers are suggesting that to keep your money safe, put a big chunk in the money market and a big chunk in bonds. I like the T. Rowe Price New Horizons Fund. I’ve averaged over 15% a year over the past five years. After two years, if the market dropped a breathtaking 30% and stayed there, I’d be where your money market funds would still be. And if it dropped 30% tomorrow and stayed there, I’d still have 60% more than I had in 2016 and almost 60% more than your money market account would have.