Jump to content
Sign in to follow this  
oldhat

Dow Jones In Late April Of 1999 = Dow Jones As Of Today

Recommended Posts

Net gain = Nothing. Nada.

 

What a farce.

 

 

 

I'm forever blowing bubbles

Pretty bubbles in the air

They fly so high

Nearly reach the sky

Then like my dreams they fade and die

Fortune's always hiding

I've looked everywhere

I'm forever blowing bubbles

Pretty bubbles in the air

Share this post


Link to post
Share on other sites
stay the course -just make sure you are attending to your bond allocation to some degree.

 

 

I am. Plowing the same amount every week into my broad based and small cap equities funds. Just depressing to see my contributions vanish on the bottom line every week.

 

What do you mean by attending to my bond allocation? I'm 31 years old so I thought it would be a good idea to buy stocks cheap(er than usual). So I'm doing 100% stocks and holding steady on my bonds.

 

Maybe I can retire when I'm dead at this rate? ;)

 

The new Lost Generation.

Share this post


Link to post
Share on other sites
stay the course -just make sure you are attending to your bond allocation to some degree.

 

 

I am. Plowing the same amount every week into my broad based and small cap equities funds. Just depressing to see my contributions vanish on the bottom line every week.

 

What do you mean by attending to my bond allocation? I'm 31 years old so I thought it would be a good idea to buy stocks cheap(er than usual). So I'm doing 100% stocks and holding steady on my bonds.

 

Maybe I can retire when I'm dead at this rate? ;)

 

The new Lost Generation.

 

It's not necessary for a 31 year old to have a bond allocation. I think it's a good idea to own bonds at any age, if only to learn about how they work in a portfolio. Someday, you will have most of your money in bonds anyway, might as well learn about them now.

I agree with you . The perfect market for any young investor is for the market to crash and stay down for years and buy all of those shares dirt cheap, but it takes a lot of nerve. Who in the world would be buying bank a America, but Buffett.

Share this post


Link to post
Share on other sites

You are only 31? I guess your sign in name of OLD Hat made me think you were older.

 

Still, like Steve says its a good time to learn about bonds. I was late to the party and have just recently learned about bonds and how they work but I still don't know enough.

 

That said maybe bond ownership may become the new normal. If i can get 6-7% why not own a healthy amount of bonds?

 

 

Tony

Share this post


Link to post
Share on other sites

You are only 31? I guess your sign in name of OLD Hat made me think you were older.

 

Still, like Steve says its a good time to learn about bonds. I was late to the party and have just recently learned about bonds and how they work but I still don't know enough.

 

That said maybe bond ownership may become the new normal. If i can get 6-7% why not own a healthy amount of bonds?

 

 

Tony

 

 

Yesterday, our bonds went up. That's how it works for us old retired folks.

 

But OLDhat is in a totally different situation, he has 30-35 years of equity growth potential. For him, the market should crash to something like 5000 for the DOW, 500 for the S&P and 1200 for the nasdaq and stay down for years, reaping all of those cheap shares.

 

But for me, if that scenario should happen, it would be slightly more complicated. My choice is to rebalance my 70% bond allocation into equities. But I am going into a dividend paying equity balanced fund, VG Wellesley click here. That way, if the market stays down, as a retired folk, I can live off the dividends (as well as the Bond interest payouts, without touching principle). The worst thing for a retired person is to prematurally sell principle at low prices.

 

I have already transfered some bonds to Wellesley equities in the August lows, when our portfolio was unbalanced, there was 75% in bonds and only 25% in equities. According to William Bernstein, the rule of thumb is when the allocations gets 5% or more out of whack, rebalance back to the plan, which for me is 70% bonds and 30% equities. Been that way for years.

 

Steve

Share this post


Link to post
Share on other sites

Old Hat where was the equity market in 1981? The S and P traded at 136. It has grown nearly tenfold since. That is your time horizon. If you aren't selling today what do you care where it is? It only matters when you sell-which is (roughly) 20-30 years from now. As for bonds-you should have some in your portfolio. I build up a bond portfolio for clients before I build up an equity portfolio. 10k invested in Vanguard Intermediate Corp Bond Fund in '93 would be worth 30k today. Tripling your investment in bonds over an 18 year period. You should invest in both bonds and equities.

Share this post


Link to post
Share on other sites

Bonds are used to reduce risk and sometimes increases performance over a 100% equity position. Don't choose any bond or equity fund based on past performance. That's a sales pitch. Choose a bond allocation to fit your portfolio to reduce risk and costs. I would choose something like a total bond market index, its low cost, has 3rd mortage backed, 3rd Treasuries and a 3rd corporate. Never chase performance.

Share this post


Link to post
Share on other sites

MARK,

 

What kind of bonds do you recommend? Whats your take on a small allocation to high yield bonds ?

 

Tony

 

 

Generally, Treasuries, short term. The role of bonds is safety. During periods of deflation they provide income when the balance of your portfolio is decreasing. My view is that the safety provided in Treasuries is more important then the yield (and risk) from other bonds. Safety trumps yield. If you want more risk-use your equity portfolio to provide it, i.e. allocate more to Small Cap or Int'l. So I don't use Hi Yield to attain more return-bonds are for safety not yield.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

×
×
  • Create New...