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Post by archer on Mar 24, 2023 5:27:05 GMT
I was talking to my son today and he had some questions on investing, the markets, etc, and early into the conversation he stated that he is looking to invest for a 10 yr time horizon, at which time he would take all the money and put it towards a home purchase.
I realized that I don't have a lot of advice for him, as all my investing has been geared towards retirement which is quite different in that I am looking for it to last 30 years taking only small amounts of money per year, and can weather the market storms.
If it is imperative that there is minimal risk, (due to needing all the money at one time), and hopefully as much growth as possible, how is the smart money usually handled? I'm thinking if he is wanting to be assured of not losing, we are at a pretty good time historically to by CDs. If he puts money into CDs at 5%, they can mature, or be sold nicely when interest rates go down. This might be a good start, as he plans to set aside $1K/month. In a year or so if interest rates go down, they will not be a good option for buying.
Also this money would have to be in a taxable account to avoid penalties.
Anyways, just wanted to see if anyone had any good ideas to think about given his situation.
Thanks!
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Post by Fearchar on Mar 24, 2023 7:48:33 GMT
Anybody with more than a 3-5 year horizon can be an investor. Less than that time horizon, it's better to be a saver and concentrate on things like CDs.
When Berkshire Hathaway trades with the Price/Book at less than 1.4, it's generally a good price to Buy as an investment. Currently, it's trading at 1.38. That said, there is portion control and while there are people like Warren Buffet who proportionally own a lot most investors would be well served to limit their allocation to a percentage that they are comfortable with.
We do have many traders on these boards, but that's best for people who have the time, inclination and whit.
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Post by steelpony10 on Mar 24, 2023 11:06:43 GMT
archer , My opinion is CD’s, treasuries etc.which should have some good rates for awhile. It helps if he could monitor costs of housing in the several areas he thinks he might want to live and watch that inflation rate. Back in the day being more aggressive (surprise) I used a municipal bond fund which started at 4%+ like VWAHX presently tax free and took the money out about 2 years before purchasing a home in increments so DCA into cash. VWAHH is depressed now, it has lost about 10% of it’s value to date which in my research is the near the most loss in recent times so it offers a good starting point but more risk, a step above CD’s and treasuries. In the long term higher distributions should be locked in at least 10 years and borrowing rates are apparently still going higher. We keep our “safe money” there. So maybe 8 years of a tax favored investment then DCA out at the 8 year mark and monitor housing prices to not over invest or stay with what you’re more familiar with which may be less risky and lucrative.
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Post by johnsmith on Mar 24, 2023 11:45:46 GMT
How about buying treasuries with 10 year term. next year buy treasuries with 9 year. after 8 year and so on.
At the 10 year mark, all of them will mature right when he wants to buy.
cons: if he finds the purrfect place at the 9 year mark, could sell the treasuries at a small loss (possibly). pros: no credit risk.
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Post by Chahta on Mar 24, 2023 15:12:55 GMT
I don’t forecast interest rates being higher than they are now in 10 years. 10 year treasuries should give a nice CG along with good interest along the way.
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Post by FD1000 on Mar 25, 2023 15:34:29 GMT
Not an easy answer. I looked at Fidelity,Schwab and I see 10 year CD at 5.25% but it's callable ( link). For 5 years I found 4.75% non callable. What are you going to do in the next 5 years? we only going to know after 5 years. Investing in other typical bond funds and hold for 10 years and hope for the best is tricky. Attachments:
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Post by Norbert on Mar 25, 2023 16:18:16 GMT
archer , Indeed, it's a tricky question. Locking in returns with a CD or T-Bonds is the safe bet. Anything else and your son could find himself underwater. Probably not, but nobody knows. One angle to consider, however, is real estate price developments. I recall looking at London RE in December 2008 and it was dirt cheap. (This isn't just hindsight; I posted about it at M* back then.) Anyway, the point is that should we happen to see a true crash in RE prices, it would be nice to be able to act at that moment, perhaps with parental assistance. This is not a forecast; a crash is just a possibility.
London prices recovered very rapidly; it was a one-time opportunity. I was going through a divorce and was unable to act.
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Post by archer on Mar 25, 2023 20:14:08 GMT
I think the current environment there isn't a lot of good options for risk free saving. Treasuries and CDs are low risk, but, there are also taxes to consider. I believe interest on CDs is taxable. CA doesn't tax interest on treasuries but the IRS does. I'm not really up to snuff on taxable accounts as most of my money is in IRAs, so I might not have the whole picture of tax ramifications.
I appreciate all you guys input.
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Post by catdog on Mar 27, 2023 2:49:41 GMT
Perhaps a target date fund. Unless you want to go with municipal bonds you will have to deal with taxes. Maybe plot a ten year timeline divided into growth, blend and fixed income. After five years start to reduce growth by 20% per year. As others have stated, not an easy situation to give advice on. One other thing to consider is property taxes. My wife and I live in New Hampshire. We are selling our house in a town where the municipal property taxes are $30 per thousand. We are buying in a town that has property taxes $11.37 per thousand.
catdog
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Post by retiredat48 on Mar 29, 2023 17:10:28 GMT
I have a very contrarian viewpoint here.
The problem with your son's situation is that he is just like most younger people...they want to save/invest, but plan to use some of it someday to buy a house.
The problem is they invest in things like CDs, and never gain in REAL GROWTH/WEALTH. Like, inflation is likely to exceed their returns. And home price rises might even exceed their returns.
Thus, the approach I always suggest is this. If you plan to save for a decade, invest as though you would be investing for retirement. Include a goodly amount of stock funds...maybe even 100%.
Then at about year eight, see where you are. Stocks simply outperform in the long run. If you are up substantially (markets at new highs) consider selling some to build cash positions to buy the home. If the market is typical, stay invested. If as you approach year 9/10 you have a bear market/recession, no problem. You simply wait/postpone your home purchase by maybe a year. Markets recover. And during this (recessionary) period you will likely find home prices stalled or declining a little...and mortgage rates FALLING...a huge benefit to waiting a little.
Like, don't make the tail wag the dog. Don't let an arbitrary 10 years out to buy a home define anything. One invests/acts in time periods as you find them, not as you hope for. Save/invest aggressively...mostly stock funds. Do not get wishy/washy bonds in the prime savings time of your life.
best wishes to your son...
R48
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Post by win1177 on Mar 29, 2023 17:53:31 GMT
I have a very contrarian viewpoint here. The problem with your son's situation is that he is just like most younger people...they want to save/invest, but plan to use some of it someday to buy a house. The problem is they invest in things like CDs, and never gain in REAL GROWTH/WEALTH. Like, inflation is likely to exceed their returns. And home price rises might even exceed their returns. Thus, the approach I always suggest is this. If you plan to save for a decade, invest as though you would be investing for retirement. Include a goodly amount of stock funds...maybe even 100%. Then at about year eight, see where you are. Stocks simply outperform in the long run. If you are up substantially (markets at new highs) consider selling some to build cash positions to buy the home. If the market is typical, stay invested. If as you approach year 9/10 you have a bear market/recession, no problem. You simply wait/postpone your home purchase by maybe a year. Markets recover. And during this (recessionary) period you will likely find home prices stalled or declining a little...and mortgage rates FALLING...a huge benefit to waiting a little. Like, don't make the tail wag the dog. Don't let an arbitrary 10 years out to buy a home define anything. One invests/acts in time periods as you find them, not as you hope for. Save/invest aggressively...mostly stock funds. Do not get wishy/washy bonds in the prime savings time of your life. best wishes to your son... R48 Agree 110%! Invest in equities while your sone is young and has the “risk capacity” to endure the volatility of equities. We (wife and I) have always had a very high equity allocation, and that combined with our high savings rate (15-30% per year) has resulted in us now having a very large portfolio. Has it been volatile- HECK yes! But we now have more than we will ever need, and Vanguard says we have had an average yearly return of 9.7% over the lifetime of our portfolio. When your son gets closer to the date he will need the money, he can take some risk “off the table”, by selling some of the equity and converting to bonds/ fixed income. But until then, he is at a point where he can take a LOT of risk, so go ahead and take it!
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Post by win1177 on Mar 29, 2023 17:55:37 GMT
I have a very contrarian viewpoint here. The problem with your son's situation is that he is just like most younger people...they want to save/invest, but plan to use some of it someday to buy a house. The problem is they invest in things like CDs, and never gain in REAL GROWTH/WEALTH. Like, inflation is likely to exceed their returns. And home price rises might even exceed their returns. Thus, the approach I always suggest is this. If you plan to save for a decade, invest as though you would be investing for retirement. Include a goodly amount of stock funds...maybe even 100%. Then at about year eight, see where you are. Stocks simply outperform in the long run. If you are up substantially (markets at new highs) consider selling some to build cash positions to buy the home. If the market is typical, stay invested. If as you approach year 9/10 you have a bear market/recession, no problem. You simply wait/postpone your home purchase by maybe a year. Markets recover. And during this (recessionary) period you will likely find home prices stalled or declining a little...and mortgage rates FALLING...a huge benefit to waiting a little. Like, don't make the tail wag the dog. Don't let an arbitrary 10 years out to buy a home define anything. One invests/acts in time periods as you find them, not as you hope for. Save/invest aggressively...mostly stock funds. Do not get wishy/washy bonds in the prime savings time of your life. best wishes to your son... R48 Agree 110%! Invest in equities while your son is young and has the “risk capacity” to endure the volatility of equities. We (wife and I) have always had a very high equity allocation, and that combined with our high savings rate (15-30% per year) has resulted in us now having a very large portfolio. Has it been volatile- HECK yes! But we now have more than we will ever need, and Vanguard says we have had an average yearly return of 9.7% over the lifetime of our portfolio. That’s a huge return, and I started saving and investing in my late teens. Now rapidly approaching 65, and retired last year. When your son gets closer to the date he will need the money, he can take some risk “off the table”, by selling some of the equity and converting to bonds/ fixed income. But until then, he is at a point where he can take a LOT of risk, so go ahead and take it! Win
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Post by FD1000 on Mar 29, 2023 22:06:21 GMT
I have a very contrarian viewpoint here. The problem with your son's situation is that he is just like most younger people...they want to save/invest, but plan to use some of it someday to buy a house. The problem is they invest in things like CDs, and never gain in REAL GROWTH/WEALTH. Like, inflation is likely to exceed their returns. And home price rises might even exceed their returns. Thus, the approach I always suggest is this. If you plan to save for a decade, invest as though you would be investing for retirement. Include a goodly amount of stock funds...maybe even 100%. Then at about year eight, see where you are. Stocks simply outperform in the long run. If you are up substantially (markets at new highs) consider selling some to build cash positions to buy the home. If the market is typical, stay invested. If as you approach year 9/10 you have a bear market/recession, no problem. You simply wait/postpone your home purchase by maybe a year. Markets recover. And during this (recessionary) period you will likely find home prices stalled or declining a little...and mortgage rates FALLING...a huge benefit to waiting a little. Like, don't make the tail wag the dog. Don't let an arbitrary 10 years out to buy a home define anything. One invests/acts in time periods as you find them, not as you hope for. Save/invest aggressively...mostly stock funds. Do not get wishy/washy bonds in the prime savings time of your life. best wishes to your son... R48 Or maybe we are in 2000 and the next 10 years will look like the following: See 2000-2010 PV( link) for SPY (lost 10% in 10 years), VBMFX(US tot bond), VWINX(35-45% stocks + corp bonds). See below: 1) First attach with the above results 2) Second attach with SPY results, and what if year eight is 2008? and why do I want to wait now 12-13 years? wait, and what if I want to buy a house in year 8? I made plans years in advance based on what I will do in the future and why it all worked extremity well, I never had to ponder, what if? BTW: 1) Last year was a bear market, and rates are much higher + home prices are still in the sky. There is no an exact recipe what markets will do in the next 10 years, and that's the problem. 2) Stocks valuation are not really cheap after over 10 years of high performance. Sure, investing in stocks is great for retirement. Investing for a house is different. 2 different piles. Know when to take risk, and when not. High % in stocks is not the only solution. If I must select, I would go with VWINX. Attachments:
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Post by archer on Mar 29, 2023 22:45:00 GMT
Thanks FD1000, retiredat48, win1177. Part of me would agree, but like many younger folks, he does have a bit of a recency bias. This bias is a repeat of the biases younger investors sunk roots into after 08 and as FD (and my son points out) 2000-2010. For my son's case, I respect his caution. History shows he will likely sacrifice return, and loose to inflating home prices. At the same time, history also shows we will likely enter a secular bear in the next 10 years, and declines are much swifter than he would ever respond to, AND, unlike a retiree who only plans to draw 3-4% he needs all his money at once. I invest heavily in stocks considering I will start withdrawals in 2 years. But I will not need all my my money then. In fact I will not need any of it, and am invested for my heirs rather than myself.
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Post by fishingrod on Mar 29, 2023 22:50:22 GMT
archer , Instead of CDs have you looked at plain vanilla fixed rate annuities? The are finally paying an acceptable rate again. I am not recommending the company I linked. I just put it there to give some idea of the rates being offered now. The only reason I mention them is the are one step from CDs with a stable firm and they compound tax deferred. I own two of them. One of them I bought in 2008, locked in at 5.70%. It will renew later this year. myannuitystore.com/annuities/fixed-annuity-rates/5-year/
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Post by archer on Mar 29, 2023 23:08:35 GMT
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Post by fishingrod on Mar 29, 2023 23:12:11 GMT
Just be sure to educate yourself, so you know exactly what you are buying. Don't be "sold" something.
I would purchase them through a dealer like Fidelity if they offer them. They should be no fees involved.
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Post by richardsok on Mar 30, 2023 3:05:13 GMT
Thanks FD1000 , retiredat48 , win1177 . Part of me would agree, but like many younger folks, he does have a bit of a recency bias. This bias is a repeat of the biases younger investors sunk roots into after 08 and as FD (and my son points out) 2000-2010. For my son's case, I respect his caution. History shows he will likely sacrifice return, and loose to inflating home prices. At the same time, history also shows we will likely enter a secular bear in the next 10 years, and declines are much swifter than he would ever respond to, AND, unlike a retiree who only plans to draw 3-4% he needs all his money at once. I invest heavily in stocks considering I will start withdrawals in 2 years. But I will not need all my my money then. In fact I will not need any of it, and am invested for my heirs rather than myself. I'm glad you wrote this, archie. I was thinking along your line of thought but didn't want to butt in and make myself obnoxious EVERY day this week. Stories like win's and 48's are ubiquitous among ALL smart people who had money to invest 1980-1990 or so. Some bought fancy cars and lived large. But intelligent people invested. They held. They prospered, whether it was in real estate or equities. I have to sheepishly whisper, though, there is no promise the same tactic will work for today's kids. My life was nothing like my dad's -- which was nothing like HIS dad's. Unless fusion is realized, it is debatable what enormous "new thing" like personal computers & smart phones will carry future economies to dizzy new heights of prosperity. (Once the Boeing 707 was built, air travel progress was essentially zero for the following half century.) Of course there WILL be bull markets and there will be crashes too -- only maybe for your son the crashes won;t all end like valentines like they did for us. Maybe one key for future wealth accumulation will be intelligent flexibility. Even people who are certain I am dead wrong will have to admit that, on a global geo/political/debt/economic scenario, your son's generation faces dilemmas never imagined by us. We were raised by the Greatest Generation. I believe your child and mine were raised by The Selfish Generation. It just might come to pass that your son will prosper if he develops some skill in timing the market. Our generation's path to wealth may be utterly different than his turns out to be. Maybe gold or farmland or desalination or productive real estate or aqua farming or unimagined efficiencies in medical care or a non-lethal yet impregnable national defense system or AI or -- who knows? So where should he start? Well, I blush to say it, but perhaps he could read my book.
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Post by archer on Mar 30, 2023 4:25:08 GMT
richardsok, "Maybe gold or farmland or desalination or productive real estate or aqua farming or unimagined efficiencies in medical care or a non-lethal yet impregnable national defense system or AI or -- who knows?" In his fledgling IRA he is thinking along these lines. Basically looking at current macro problems that will need solutions. For his house savings, he's just wanting certainty of maintaining principal. fishingrod, Thinking more about annuities, unfortunately he doesn't have a lump sum to invest. He plans to save $1000/mo. retiredat48, win1177, Thinking more about your suggestion to be more agressive, Even though his need to withdraw all the savings in ~10yrs gives reason to invest with less risk than if he were only making small withdraws as in retirement, the fact that he will only be contributing gradually allows for taking more risk initially and investing more conservatively as the 10yr gets closer, shooting for something like a 10/90 stock/cash to give a little more boost. He can always reallocate to 100% cash as the time comes near.
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Post by richardsok on Mar 30, 2023 10:25:09 GMT
Thinking some more on the topic ---
Your son will have to be either fortunate or wise in his marriage. Nothing will wrench him further off track from his goals than a divorce. He may have to willingly endure life's disappointments and learn to live with lower expectations; to find life satisfactions somewhere that have nothing to do with his marriage, and he must NOT assume he will be lucky. He cannot assume his bride will be forever immune from the social insanities that infect our modern culture. Nor can he assume "What you see is what you'll get." People really DO change. How will he feel or act when his bride gains forty pounds or destroys a car ... and then destroys another one? Or is bored? Or is unfaithful? How does he respond if, after a few years, she lets him know (in a hundred little daily ways) that HE is a big disappointment -- and that she can jolly well do without him?
I read somewhere that in order for a marriage to survive, it needs a minimum of five positive daily interactions for every negative one -- and I don't know what you do if your spouse won't play ball.
The great majority of men with a "smooth trajectory" of wealth growth never had a divorce. Some just grimly hang on to a life of petty disappointment and eat crow "for the kids". For some upper-class latino couples I know, man and wife lead largely separate social lives. She has her pals and he his. There are a lot of clever lies which are half-believed and any affairs are VERY discreet and, at a certain point, no one much cares. She shops and dotes on kids and grandkids while he provides and ... well, who knows what else?
When kids are in the picture, your pre-nup is just a starting point of ruin. If long term growth of wealth is the goal, your son will need to be either stoic or lucky. I don't know how you prepare for that. Or how to recognize a young gal with a tolerant heart and sensible expectations.
If she turns out to be a shopper or a narcissist or has prestige ambitions, your son can pretty much forget about his wealth goals.
When it comes to self-respect and life satisfactions, there are other things in life than great wealth. Sometimes enough really can be enough.
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Post by fishingrod on Mar 30, 2023 12:26:01 GMT
archer, My mistake. If that is the case I believe investing roughly half in Treasuries or CDs and half in the stock market. One can choose which is more opportune at the time and trim positions and add to positions depending on performance. Slowly decreasing allocation to stocks as the time grows nearer.
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Post by retiredat48 on Mar 30, 2023 19:32:23 GMT
OK, a general reply post to replies:
--richardsok. Not sure your discussion on difficulties of/in marriage affects ones method of making investments.
--The concerns on bear markets. (Oops, I have to stop posting as the sky is falling down here in Florida.) Back again...survived. YES there may be bear markets and even a decade of a bad market. HOWEVER, DOLLAR COST AVERAGING makes this an advantage. It was posted savings will be $1000 a month. So the son will be buying some stock shares at perhaps 50% values from peak. It is exactly those shares that give great outcomes. I emerged from the seventies with a good stock gain, even though the market was FLAT, 1966 to 1982.
--Note rolling ten year average returns from the past show little if any times actually "lose " money. And no twenty year return did. This was without dollar cost averaging buffer. You won't lose.
--And if these "dire" concerns the next decade develop, what does that mean to your money market funds?? More fed zero percent rates. Bondholders do not win...period.
--archer, you talked of a "recency bias" following year 2008, and young didn't invest. Of course, that is why you are giving your son guidance. After 2008 and on was an excellent time to invest for 10 years or more.
--My recently-deceased 103 Year old mother-in-law wanted "certainty of principal." So she accepted near zero percent interest on CDs for a decade. Where did that get her? She drew down her portfolio greatly, paying an ever expanding "nut" of monthly assisted living payments. So the family now inherits peanuts...but it was "secure."
--archer... you labeled my plan "aggressive." I don't see it that way. I view the risk is much greater that saving and investing in CDs and money market funds will result in a REAL negative return on investment, versus owning the means of production...aka stock funds., over the next decade.
--FD 1000 keeps these sky is falling times. But is he is again posting from market peaks. We are not now at a peak. Rather the market is well down...a good time to start. Maybe even secure some traditional large growth stock funds such as those having NVIDIA or Microsoft (FSPTX).
Again I will make a bet. I will dollar cost average FSPTX, $1000 a month for next ten years, and it will handily beat a 4% CD or Money Market return you select...investing $1000 a month. Any takers?
Fun thread.
R48
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Post by richardsok on Mar 30, 2023 19:39:45 GMT
r -- Title of OP is "Looking for some ideas...." and not "Looking for some investment tactics..."
Well, here's my idea: whatever else he does with investing, a young man's future success/failure in marriage enormously affects his trajectory of wealth accumulation.
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Post by FD1000 on Mar 30, 2023 20:01:16 GMT
OK, a general reply post to replies: --richardsok. Not sure your discussion on difficulties of/in marriage affects ones method of making investments. --The concerns on bear markets. (Oops, I have to stop posting as the sky is falling down here in Florida.) Back again...survived. YES there may be bear markets and even a decade of a bad market. HOWEVER, DOLLAR COST AVERAGING makes this an advantage. It was posted savings will be $1000 a month. So the son will be buying some stock shares at perhaps 50% values from peak. It is exactly those shares that give great outcomes. I emerged from the seventies with a good stock gain, even though the market was FLAT, 1966 to 1982. --Note rolling ten year average returns from the past show little if any times actually "lose " money. And no twenty year return did. This was without dollar cost averaging buffer. You won't lose. --And if these "dire" concerns the next decade develop, what does that mean to your money market funds?? More fed zero percent rates. Bondholders do not win...period. --archer, you talked of a "recency bias" following year 2008, and young didn't invest. Of course, that is why you are giving your son guidance. After 2008 and on was an excellent time to invest for 10 years or more. --FD 1000 keeps these sky is falling times. But not sure he is not posting from market peaks. We are not now at a peak. Rather the market is well down...a good time to start. Maybe even secure some traditional large growth stock funds such as those having NVIDIA or Microsoft. Again I will make a bet. I will dollar cost average FSPTX, $1000 a month for next ten years, and it will handily beat a 4% CD or Money Market return you select...investing $1000 a month. Any takers? Fun thread. R48 If I understand the OP, the question is how to invest all the money now first and wait 10 years for buying a house. DCA is proper for the saving portion for the next 30 years. If you could buy 100% CD or fixed annuity, sell monthly $1000 and buy SPY that could be a good choice, but you can't without a penalty. Buying MM isn't a good choice because CD locks the price, MM doesn't. I don't keep the "sky falling" thing. I question the 100% stocks. ========= R48 "We are not now at a peak. Rather the market is well down...a good time to start." + you recommend all in tech=FSPTX. FD: The first chart shows that FSPTX is down about 25% while SPY about 14%, that looks like really a lot but if you look at the second chart starting from 01/01/2009, FSPTX made about 3 times as much as SPY. Markets are still not cheap. PE10( www.multpl.com/shiller-pe) is a good yard stick to what stocks will do in the next 10 years. It is now at 28 which is pretty high. Then add the fact that the Fed isn't accommodating anymore as it did after 2009 for many years, and I would not be in 100% stock or anything above 30-40% when I want this money to buy a house in 10 years. ========== We also are not discussing flexible investors who adjust their portfolio, we want to hold for 10 years with no trades. When I deal with other people money, I use their style and mindset.
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Post by fishingrod on Mar 30, 2023 21:08:37 GMT
Just so people completely understand. And so I do too. I think archer ,s son will invest $1000 a month for ten years, accumulating along the way for a house purchase. It is in a taxable account. He will want this money accessible around the tenth year. He is concerned with a down market when he needs this money. What would you do?
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Post by fishingrod on Mar 30, 2023 21:14:02 GMT
I think Vanguard's Tax managed balanced fund VTMFX and possibly some Vanguard's Tax managed small cap fund VTMSX is an option. You could add in Vanguard's intermediate municipal bond fund VWIUX to adjust the stock allocation. As time draws nearer and at peaks you can readjust the allocation more conservative. You could even add/reallocate to Vanguard's short term muni fund VWSTX as time draws nearer.
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Post by retiredat48 on Mar 30, 2023 21:14:47 GMT
see next post
R48
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Post by retiredat48 on Mar 30, 2023 21:16:02 GMT
Just so people completely understand. And so I do too. I think archer ,s son will invest $1000 a month for ten years, accumulating along the way for a house purchase. it is in a taxable account. He will want this money accessible around the tenth year. He is concerned with a down market when he needs this money. What would you do? That's what I tried to answer in my posts.R48
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Post by fishingrod on Mar 30, 2023 21:19:26 GMT
I basically agree with retiredat48 , i am just using different funds.
The point is that even with all the up/down/sideways of the markets that over ten years you will still outperform CDs or Treasuries or annuities.
And you can adjust your allocation every once in a while to keep it within your risk tolerance.
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Post by archer on Mar 30, 2023 23:14:54 GMT
OK, we are getting to a page of replies here so I will consolidate some key points. My son will be DCAing $1000/mo. richardsok, He plans to marry next year, but I predict his marriage will be more stable than the stock market :-) Wife will be contributing equally. If there is a divorce, he wouldn't lose much if at all. I know, I've been there and came out fine. As FD reminds, my son will not be staying on top of this to make adjustments. He could, but I just don't see it. He is too busy with other parts of life. My opinion is that some stocks would definitely be in order. The problem with DCA into MM or CDs is that if, or should I say when, rates go down, he will be buying into falling rates, and if so, probably rising stock prices. Also, Once you pay taxes on minimal returns that I expect will always be lagging inflation, you have lost principal. The safest investments could very well not break even. retiredat48, You have a good point about starting DCA into stocks at what is arguably at or near current market bottom. Long CDs or treasuries were great for lump sum investing back in the early 80's, but we are not in that position now. Both ideas and tactics are helpful. Both help me think. I appreciate everyone's input. So far, I'm leaning toward the middle road between stocks and less volatile investing. And, maybe he will also become more focused on his investing for the nearer goal, which will help prepare him for retirement investing.
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