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I have a pre-tax retirement account that is in the 6 figures, I am retired, and won't need the money for 8 years. My past employer has a differed comp plan, that you could only be invested in about 4 areas, until recently you could transfer money to Vanguard. I placed my money in there stable value area because the more aggressive areas were to volatile for me, I wasn't concerned as much with making money than losing large amounts I worked hard to invest. I have very little tolerance for loses.
I just got my statement for year end and I made .005% interest, so I am considering transfering my money to Vanguard, where I need the help is I don't have a clue which funds would be best and how to diversify.
While you could get some fine advice from an amateur (like me) that works for you, the sort of things that are important to you are not appropriate to discuss on a public forum.
Get a few different kinds of preliminary meetings setup, I think firms the provide a straight hourly fee type advise / planning service have lots of pluses compared to firms that take a cut, but others disagree and try to do all their planning solo.
In either case you really owe it to yourself to bone up a bit on your own. You don't need to necome an expert, just get some familariry with the rwnge of options and what it really means to invest. If you have not read some books go to the library and check out stuff by Terry Savage, Ric Edelman, John Bogle and William Bernstein. You need to get your head in the game and understand risk of capital loss is not the biggest threats to being able to retire.
Chet offers great advice.. personally, I like to do things myself.
If I were retired, I would have about 60% of the money in dividend paying stocks. These same companies would also, A) make money and B) have enough Free cash to GROW their business and pay out some to their shareholders.
20% of it would be invested in something OTHER than stocks.
The other 20% I would have in safer investments.. (Maybe even a CD Ladder scheme)
Of course, that is me.. I am aggressive, ESPECIALLY if I would not need the $$ for 8 years.
Now, if I need the $$ NOW to start paying out for me to live on, I would be less aggressive.
In that case, I would put 40% in the dividend paying stocks, 40% in safer investments and the other 20% would still be in something other than stocks.
Vanguard VIG and VYM are two Dividend paying ETF's that I would consider for their investments that have dividends.
If you are a resident of PA by chance, I would highly recommend the Vanguard Long Term PA Bond fund for non-retirement assets. No taxes and good growth (esp now with every one freaking out over municipal bonds-good opportunity there)
This however wouldn't make sense for your retirement account.
The muni funds have been getting pounded . both because of rates rising and muni default risks. i would stay clear of any long term munis myself at least for a year or so. they lost almost 2% in just the last 3 weeks. thats huge for a bond fund.
you got 2 negatives working together... rising rates and credit risk. not a good combo so early in the game with rates still to low to own them with this outlook
The muni funds have been getting pounded . both because of rates rising and muni default risks. i would stay clear of any long term munis myself at least for a year or so. they lost almost 2% in just the last 3 weeks. thats huge for a bond fund.
you got 2 negatives working together... rising rates and credit risk. not a good combo so early in the game with rates still to low to own them with this outlook
Fear will not be any higher for muni's than now. i think in the 5 year term you will be very happy with the returns (given you don't need the money in that time). You aren't going to lose half your value like in the stock market. I think the worst year it was down was 3-4%
You make it sound like they are dangerous which isn't accurate-look at the returns:
I have a pre-tax retirement account that is in the 6 figures, I am retired, and won't need the money for 8 years. My past employer has a differed comp plan, that you could only be invested in about 4 areas, until recently you could transfer money to Vanguard. I placed my money in there stable value area because the more aggressive areas were to volatile for me, I wasn't concerned as much with making money than losing large amounts I worked hard to invest. I have very little tolerance for loses.
I just got my statement for year end and I made .005% interest, so I am considering transfering my money to Vanguard, where I need the help is I don't have a clue which funds would be best and how to diversify.
I appreciate any help in this matter.
Lynx
Join here Bogleheads :: Index and ask your questions. You will definitely get good advice.
I agree with the above. Also, learn to use the fund evaluator. Vanguard and Fidelity both have them as well as Morning Star and others. I don't have as much as you, but if I lose my money I want it to be because of me, not someone else. Be sure to pay attention to the fee section of fund evaluators as they will eat up your profits. I have noticed that so called fund advisers recommend the higher fee funds when I consulted with them. I sold my California muni's a year ago and glad to be rid of them. I did much better with Ginnie Mae but not so sure about going forward with them. Read, read, and read some more! Pay attention and don't wait so long to check your returns. Be proactive and read more.
Fear will not be any higher for muni's than now. i think in the 5 year term you will be very happy with the returns (given you don't need the money in that time). You aren't going to lose half your value like in the stock market. I think the worst year it was down was 3-4%
You make it sound like they are dangerous which isn't accurate-look at the returns:
this is A case where looking at the past performance means nothing .IF you dont think rates will be lower going forward then dont do it. personally i dont see lower rates going forward then we have now. rates really have no where to go but up. forget the past. that train left the station. we just completed a 30 year bull run in bonds but going forward will most likely be very different . the rates we are at are abnormal and lower then whats normal and typical . rates are a far bigger factor then fear on these. THESE BEING LONG TERM BONDS WILL FALL HARD WITH EACH INCREASE IN RATES
this is A case where looking at the past performance means nothing .IF you dont think rates will be lower going forward then dont do it. personally i dont see lower rates going forward then we have now. rates really have no where to go but up. forget the past. that train left the station. we just completed a 30 year bull run in bonds but going forward will most likely be very different . the rates we are at are abnormal and lower then whats normal and typical . rates are a far bigger factor then fear on these. THESE BEING LONG TERM BONDS WILL FALL HARD WITH EACH INCREASE IN RATES
I think you are throwing the baby out with the bath water IMO.
What are your recommendations for relatively safe investments with good returns moving forward then? Don't say money market funds or treasuries....I guess my point is-it is easy to criticize something, but provide some valuable alternatives.
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