Stock Markets

[gingib]

I'm a CFP, and I completely understand your advisor/fee reference. I see too many advisor just sticking clients in a "model" that some fund company put together bundled with a fee plus an advisors fee. That is not what I do, and I'm not going to give away my strategy, but I have a strategy that took me a few years to figure out and has clearly worked for my clients over the last several years. My all in fee (funds .59 and advisory .85) for 2020 were 1.44, and my clients average return was 47.30%(which includes risk of moderate to moderate conservative - only 7 mutual funds). Some made in the mid 30%, some over 60%. For your portfolio of 90/10 in Vangaurd 500/Bond Index, your 2020 return would have been around 17.50% with fees of .043. I think making 17.5% is a heck of a year.

Yes! They averaged that return in 2020 or over 3 years? That is a great return. 2020 skewed it some

[gingib]

I am looking at doing something similar. Do you have stop losses on the ETFs to prevent big losses?

Investing is a long term investment! Set it and forget it.

Why would you sell on a loss anyways?

[squirrel]

I have cash that has been sitting on the side lines, completely separate from my long-term 401K. I feel like it is getting eaten up by inflation now so I want to put it in a somewhat liquid investment where I can limit a downside loss. It is currently in bonds and money market but looking for a better return.

[Throwin Darts]

I am looking at doing something similar. Do you have stop losses on the ETFs to prevent big losses?

I do not. I do not market time. I’m always fully invested and don’t accumulate cash. If there is a big swing down in equities and it pushes my asset allocation more than 2% off my target then I rebalance back to my target, which in that case would require selling bonds and buying equities.

[TwoHighways]

I have cash that has been sitting on the side lines, completely separate from my long-term 401K. I feel like it is getting eaten up by inflation now so I want to put it in a somewhat liquid investment where I can limit a downside loss. It is currently in bonds and money market but looking for a better return.

Utility stocks are pretty safe and many pay out a 5% dividend or more. They're pretty boring and the one I'm holding (PPL) in a retirement account seems to trade in a range of 27-30 the last few months, but better than just sitting in cash. Or take a little more risk and buy AM (natural gas pipeline operator) that has close to a 16% yield (and in my opinion, has plenty of capital appreciation upside).

[rtp]

Serious question here from an old guy......why would a young person be involved in any amount of bonds? They have decades to recover from any pull back in the markets and bonds havent paid jack squat in forever. I have a little over 18% of assets currently in bonds and have been shifting them out as they mature or get called because the ones I can buy now arent even covering inflation now.

[SaintBlaise]

Yes! They averaged that return in 2020 or over 3 years? That is a great return. 2020 skewed it some

The 3yr return would be 14.27%. That's V500(90%) VBond (10%)

[CSanders]

Serious question here from an old guy......why would a young person be involved in any amount of bonds? They have decades to recover from any pull back in the markets and bonds havent paid jack squat in forever. I have a little over 18% of assets currently in bonds and have been shifting them out as they mature or get called because the ones I can buy now arent even covering inflation now.

This is my thinking I'm 32 with 0% in bonds.

[TwoHighways]

market will probably sell the news tomorrow when Biden puts forth his stimulus plan this evening. wonder what bond yields will do. I'm staying the course, but do wish I had a little cash on hand to buy weakness, should the market sell off tomorrow.

[Milkfisher]

I feel like this is one of the ones that is way too high. Hell I thought the same for tsla to but it just keeps running. Those that have had huge runs I’m just not comfortable with personally unless I was in at the bottom

I got in on NIO about a month ago. Its been good for me.

[TwoHighways]

alternatively, maybe gold spikes on the news tomorrow (similarly to when the democrats took the Georgia senate races) and I can finally trim some of my holdings. It's been consolidating for months now in the 1800's since the run up last summer.

[98ag]

The reason to hold bonds is so you have something to sell and get in the market during the down turn. The allocation of 90-10 gives you 10 percent to buy in when everything is on sell. If you rebalance regularly then when the market dips the value you had at 90% goes down. In order to rebalance you have to sell the bond and buy the market. thus you are selling high and buying low. when the market goes up your market value will exceed the 90% and you will sell high and by bonds. If you have everything in the market then you don't have any ability to buy when things go low.

I believe there are some of the major brokers that have automated systems to do the rebalancing for you on a regular basis. Vanguard and Charles Swab both have them and they are really inexpensive for the value they add.

[Lone_Wolf]

Serious question here from an old guy......why would a young person be involved in any amount of bonds? They have decades to recover from any pull back in the markets and bonds havent paid jack squat in forever. I have a little over 18% of assets currently in bonds and have been shifting them out as they mature or get called because the ones I can buy now arent even covering inflation now.

Because it's looking alot like 1929, and it's a safe place to park your money right now, and wait for:

A: a big correction
B: THE BIG CRASH

Then you buy when there's blood in the streets.

[STGS]

Because it's looking alot like 1929, and it's a safe place to park your money right now, and wait for:

A: a big correction
B: THE BIG CRASH

Then you buy when there's blood in the streets.

I completely follow your thought process, but..... If a person has been in bonds for the past 24 months, earning 2.5%, while waiting on the big correction/crash, you have missed out on 40+% cumulative returns.

This feels a little bit like trying to catch a falling knife, i.e. timing the markets which is always a losing game, IMO.

[SJP51]

We in a melt up right now. Whole new experiment this time around, the government will print, print, print to keep the market from crashing. Before you know it, a loaf a bread will cost $20. This is concerning since I have three young sons.

I agree. This market is not "right". Some stocks suppressed by a year of lock downs shoud make nice rebounds from lows but there is a drop in the future to correct for the unjustified run-up in a broader market. JMHO.