100xOdds
100xOdds
Joined: Feb 5, 2012
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January 13th, 2015 at 10:25:14 AM permalink
Quote: AZDuffman

Even at my age I have moved most of my stock investments (50% of IRA, 100% of short term) into utilities mutual funds. My logic is that they have steady income like a bond but there is some growth as population and energy growth continues. The two I am in have been at 10-20% return the past few years.

Get the heck out of most stocks, the market is being fueled by a printing press. The parallels to 2006/7 right now are scary. My thinking right now is auto loans will start to go bad the next 12 months. That was part of the start of it last time.



if that's the case, then why not healthcare mutual funds.
they've climbed an avg of 30%/yr this decade!
Craps is paradise (Pair of dice). Lets hear it for the SpeedCount Mathletes :)
Wizard
Administrator
Wizard
Joined: Oct 14, 2009
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January 13th, 2015 at 10:58:04 AM permalink
I recently bought stock in MGM and Wynn. Doesn't mean I am a stock expert, but just like the companies, and they say "invest in what you know."
It's not whether you win or lose; it's whether or not you had a good bet.
AcesAndEights
AcesAndEights
Joined: Jan 5, 2012
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January 13th, 2015 at 11:00:09 AM permalink
Quote: RaleighCraps

I am trying to figure out ways to preserve my IRA (401K) accounts given the current markets.
YES, I do know that trying to time the markets is not a recommended play, and many who try it, don't fare as well as they could have otherwise.


Welp you just answered your own question :p

I like OG's acronym - TINA - there is no alternative. Bonds especially are usually the go-to in a big bull market when you're expecting a pullback, but the current conditions with interest rates where they are and where they'll probably go make that unattractive too. Kind of uncharted territory.

Dropping a big chunk of change into stocks right now feels really bad, I agree. But if you're talking about an existing portfolio, remember that you purchased these shares in the past - at a lower price almost certainly - and no one is forcing you to sell. If there's even a medium size pull back, you're probably still in the green.

Anyway I'm a firm believer in modern portfolio theory, so I don't have a lot of advice here. My long term portfolio is:
15% US large-cap equity
15% US small-cap equity
15% REIT
15% International large-cap equity
15% international small-cap equity
15% emerging markets
10% medium term US bonds
For short-term, drop all of the 15% figures to 11.5% and and the bonds go up to 31%. Everything in low-cost ETFs.

My current job's 401(k) plan offers s*** for funds, so my allocation is a bit simpler there, 30% US large cap, 30% international, 30% US small cap, and 10% bonds. Same theme though.

I do own some gold and silver (physical metal, not through funds) that vacillates right around 5% of my net worth. This is mostly a holdover from my goldbug youth, but I'm not going to sell it...it sits in my safe and satisfies the irrational part of my brain that predicts some small possibility of hyper inflation and societal breakdown. I still don't have a gun to defend it though, so it wouldn't do me much good in that case :).

For a completely different direction than traditional stock/bond investing, you could always do some peer-to-peer lending through Lending Club or Prosper. I have used both of these platforms and I like them a lot. It's a steady stream of income and if you mostly buy the high-risk high-return notes your returns should be in the 8-12% range after the inevitable defaults. My oldest account is running 11.05% right now (over a couple of years) which I'm a little disappointed in, but I didn't know the ropes when I started it and bought too many low-interest notes and also bought too large a portion of individual notes (you really want to only buy $25 of a single loan to diversify your risk). Some say that it in another market crash/recession, these loans will start to default at a higher rate than they historically have as consumers are squeezed. They may be right. TINA.

Lastly, about the current market, here is some advice from my favorite financial blogger Mr. Money Mustache. He's my favorite for a reason and his advice will mirror mine about holding the course. He just dumped $100K into the stock market in November. Money talks.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
odiousgambit
odiousgambit
Joined: Nov 9, 2009
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January 13th, 2015 at 11:34:46 AM permalink
Quote: AcesAndEights

I like OG's acronym - TINA -



And I'd say I like your ideas too ... we pretty much converge.

Just for the record, in case somebody would wonder, I did not come up with "TINA" ... that can be googled
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!” She is, after all, stone deaf. ... Arnold Snyder
odiousgambit
odiousgambit
Joined: Nov 9, 2009
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January 13th, 2015 at 1:00:42 PM permalink
wtf, market was up nearly 300 points but ended up down, with oil up a bit at the end too ... geez
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!” She is, after all, stone deaf. ... Arnold Snyder
Intheknow
Intheknow
Joined: Jan 8, 2015
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January 13th, 2015 at 1:30:56 PM permalink
Vanguard.

Knowing your age would help on where to put your money.

Be thankful you have money to invest.
petroglyph
petroglyph
Joined: Jan 3, 2013
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January 13th, 2015 at 1:50:10 PM permalink
Quote: RaleighCraps

http://www.marketwatch.com/story/oil-above-100-never-again-says-saudi-prince-alwaleed-2015-01-12

Saudi prince says oil will never again go above $100 barrel. If the prince is right, where will oil end up?



Is it a good idea to be trusting Saudi Royalty about anything?

With 15 of the 19 coming from SA and never been an investigation, wtf. It would not surprise me in the least to find out much of the Sovereign wealth fund of SA is invested in Bakken shale plays, or going to pick them up on the cheap. So Ghawar goes dry in 6-7 years and we'll still be buying oil from the Sauds, only next time it will be drilled and pumped out of the Dakota's?

Watch what they do, not what they say. If they were our "friends" and open and honest and all about the direction of the price of crude, they should have told me 6 months ago that oil now would be below 50$. These are the same guys who decapitate women just for driving a car.
kewlj
kewlj
Joined: Apr 17, 2012
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January 13th, 2015 at 4:09:38 PM permalink
Real Estate. My primary home and a second house down the street that I am renting out. I am not feeling real secure about this (especially the second property investment) as the Vegas Real Estate market is still pretty shaky. Prices have drifted up nicely in the last 2 years, but there is still a large inventory of bank owned homes get to be put on the market. This should keep prices down for a while. On top of this despite that housing was overbuilt in the early 2000's, every where I turn there are still new developments going up. I am not sure where the demand is going to come from. ??
ahiromu
ahiromu
Joined: Jan 15, 2010
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January 13th, 2015 at 4:25:51 PM permalink
My risk will be the energy sector this year, but that's just gambling with a different title considering I'm looking at the short term.
Its - Possessive; It's - "It is" / "It has"; There - Location; Their - Possessive; They're - "They are"
AcesAndEights
AcesAndEights
Joined: Jan 5, 2012
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January 13th, 2015 at 4:27:33 PM permalink
Quote: kewlj

Real Estate. My primary home and a second house down the street that I am renting out. I am not feeling real secure about this (especially the second property investment) as the Vegas Real Estate market is still pretty shaky. Prices have drifted up nicely in the last 2 years, but there is still a large inventory of bank owned homes get to be put on the market. This should keep prices down for a while. On top of this despite that housing was overbuilt in the early 2000's, every where I turn there are still new developments going up. I am not sure where the demand is going to come from. ??


Not to rain on your parade J, but a home is a terrible investment. Here is a great article summarizing various reasons why... Not that I think no one should own their home, but it's best not to think of it as an investment.

A rental property can be a good source of cash flow, but there are lot of problems with it, mostly maintenance and occupancy. When you take those two costs into account over the long term, a rental property is usually worse than investing in the stock market. If you do a lot of maintenance yourself, that's great, but at that point it's a job and you can't really compute the cash flow as investment returns. It's getting paid for putting your time into it.

Anyway, this is a sore spot for me as I have had some friends get their asses handed to them trying to generate passive cash flow with real estate. Great when it works, and everything's going smoothly! Not so much when it doesn't.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer

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