Talk of The Villages Florida - Where do you invest now?

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Always remember that risk equals rewards. In today's markets to make 10% you would have to take a LOT of risk. I personally would look for a more reasonable return with a lower risk.

I am up 7% YTD with a fairly low risk portfolio and will be satisfied if it hangs in there or even a small decline by year end. My target objective in today's market is 5% so am doing better then target right now. I sit with an AA of age minus 15 (because of interest rate risk in bonds) and am almost entirely in low ER index funds with a small cap tilt.

Only non index funds I own are Vanguard Wellington and Wellesley and they would be in index funds except I have a tax issue if I sell them. And so far this year keeping them was a good decision.

Read Paul Winkler

Quote:

Originally Posted by l2ridehd (Post 531161)

I agree that you may not be getting the best advice. However don't despair, it is really not that hard. First a couple of things you and every other investor need to accept and believe.

1. Markets are very efficient and all price variables are already in place in all stocks.

2. You as an individual cannot possibly beat the market. In is not possible and any one who claims differently is making false promises. There is always a hot stock picker or a lucky mutual fund manager and they may do well for a few years, but every time the market will beat them. Even one of the very best, Peter Lynch, will admit he could not continue to beat the market.

3. Once you accept those facts, the only way to invest becomes very simple. Determine your level of risk and then pick the asset allocation (stocks vs bonds) that matches your position in life and risk tolerance.

4. Select a well know highly respected fund company. Fidelity, Vanguard, Schwab, etc.

5. Buy the lowest expense ratio index funds you can find that match that asset allocation. Use total stock market, total bond market, total international, and total emerging market funds.

6. VERY KEY. Re-balance when ever your asset allocation falls 5% out of balance.

This way you own the entire stock and bond market. By re-balancing you are always buying low and selling high. You will beat 90% of all stock pickers and mutual fund managers every year. You will beat 100% of them over 10 years. This is a very simple, easy to manage, low risk approach to investing.

:agree: Excellent Answer! Plus read Above the Maddening Crowd by Paul Winkler. He shows studies to backup up what l2ridehd says and gives you more information on why Asset Allocation works so well - If you use this methodology, things get very simple and you can have confidence that you are doing the right thing.

our guy put us in gold awhile ago its moved us up 5% so far so good

Quote:

Originally Posted by TomW (Post 539986)

I'm curious. For those of us who went through B-School in the 60's, the market today bears no relation to the fundamentals we studied back then. As a financial professional, you know you cannot sit in cash unless you want to lose ground rapidly. So let's say you have to make 10% on your investments going forward, how would you do it? Don't whine, don't whimper. You have a quarter century experience. How?

I am not out for good, just sitting it out for awhile. You are correct, all the old assumptions are out the window. I am fortunate that the majority of my money is in a 401(k) which has a fixed account that is paying 6%. Also, money in a qualified account can be shifted back and forth without triggering a taxible event. I have been successful (fortunate?) in moving money from stocks to cash and back many times in the last few years allowing me to increase my stock holdings by about 150%. I sell when I feel they have reached a temporary high, and buy back when they have reached what I consider to be a temporary low - it is not a strategy that works all the time, and is not for the squeamish, but has worked more often than not in my experience. Here's the secret for guaranteeing a 10% return........shhhhhhh... there ain't no secret!

Mostly dividend paying stocks. They pay me to wait for the market to come back. Even if it doesn't, I'll live off the dividends.

Quote:

Originally Posted by l2ridehd (Post 531161)

I'm a Portfolio Manager and I've been a portfolio manager for 14 years and I've been a broker for 30+ years.
I've seen many different ways to invest badly in my time but the easiest way to lose is to invest emotionally. People naturally are most comfortable buying when times are good and the stock is up and it feels good to sell and end the pain when the stocks are falling. For me the solution is to invest only when you can clearly see a bargain. You must be able to aproximate a fair value for a company so you can know when to buy and when to sell.
It is not a simple enough thing to put into a short post but it can be done reliably enough. With wide diversification the occasional value traps are more than offset by the majority of stocks reverting to normal values from depressed prices.
The market can be beaten. Many investors do so. I've done it by 2% + per year over the past ten years. It adds up to a lot over time.
For a good simple overview of the value philosophy I can refer you to a Buffett article from the 80's called the superinvestors of graham & dodsville. This article started me on my path of investing and it is as relevent today as ever.

Scotty

Quote:

Originally Posted by almost retired Scotty (Post 541404)

This is why I use options. Find the value stock at a bargin and then by selling puts get paid to buy the stock at your price if you get put the stock and pocket the premium either way

Seems like we have at least 4 approaches that work so far.
1. The dividend guys.
2. The options guys.
3. Price cycle approach as practiced by Old Coach.
4. The index fund approach as practiced by I2RH. (Does this include certain ETFs?)
Obviously there is no 'fire and forget' or sure fire method. I also note that all successful approaches require more than a passing knowledge of how the market operates. Thanks to everyone for the information.

Investing in real estate can be risky it's a good thing you got out when you did the bubble almost sank my company

Hello. I was an investment guru for years. yet I almost dont know anything in todays market. Subscribe to Motley Fool (look up on internet) and forget eft, mutual funds , rental (unless you are handy) and follow their advise. You can do it go gettum

Dividend blue chip stocks are a smart way to play the current market,but i have found some great deals in real estate.I realize most of you have no interest in real estate investing at this stage of your life,but the deals are out there,and the returns on your investment are excellent.You make your money in real estate when you buy and not when you sell,and i've found alot of great buys.

Give me your money and I'll invest it and make 1000% per day! ... NOT!!!!

Be very careful of who you can trust. Watch American Greed on CNBC.

As Pres. Regan once said ... "Trust, but verify". No one will care about your money more than you do. If you do not know how to invest ... learn. If you have a question about an investment keep asking until you get a very clear answer or don't invest until you do.

At our age the biggest threat to our money is something called "affinity theft". We give our money to someone we have come to trust because a friend of ours uses them.

If it sounds too good to be true ....

I have heard that a good place to invest right now is something called TIPS. Can one of you financial guys illuminate us as to what that might be?

I can tell you where NOT to invest. Everybody in The Villages should read this article - I can't post the link because of restrictions on this forum, but go to Google and search for "Index annuities safety trap cnn money" and read the CNN Money article from a few months back about these annuity scammers. 55% of complaints in FL involve these insurance / annuity scams, and I bet we all have a mailbox full of invites to their seminars.