Where do you guys put your money?
Recently by boss yelled at me for not putting part of my bonus into a Vanguard IRA fund. He went on and on about how his returns from them are great, how their fees are low etc etc. My question to everyone is where is your long term money? Which firm do you have it in? 401K aggressive? ETF's? Mutual Funds? Which one? I just want to get an idea. Thanks!
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Where do tickerhounders put your money?
Answers
391 points
4085 points
EthanR answered one year ago …
ChiDog, for a 401k, your boss is telling you a pretty good place for your money to be. Vanguard is a well known, highly regarded mutual fund firm. The Vanguard 500 imitates the returns of the S&P 500. I am not sure if a 401k will give you the choice of putting money into an ETF. Most of them just have mutual funds or company stock, if you work for a public company.
A portion of your money, be it from 401k or from IRA should be in aggressive growth areas if you have a long term horizon. From your picture, you look like a young guy, so I would think you can go aggressive. But that does not mean penny stocks or low priced unheard of companies. Usually it means stocks of companies that are trying to achieve growth by putting earnings back into their business, and usually they do not pay dividends. These companies are often volatile, meaning when the market does well they go up a lot, but when the market sells off, they can go down 20 or 25% in the span of a week or two.
Dave Ramsey, TV and radio financial host, often recommends dividing one's mutual funds into aggressive growth, growth, growth & income, and international for the best diversification.
2775 points
Oldman answered one year ago …
More than half of my investments have been and continue to be Foreign; Mutual funds, closed-end funds and ETF's, and stocks (mostly ADR's, some Can Roys, and some individual stocks purchased via AUX and TSX; about 1/3 is money market or TIPs or liquid, no risk type (except for depreciation). If a position rises above 50%, I put a trailing stop in, when it reaches 110% in a taxable account, I sell 1/2 and buy something else.
No individual security is more than 2 % of the portfolio. This doesn't count any of the ETFs, Mutual Funds or
closed-end funds, because they seldom go bankrupt. I try to buy high-yielding stocks, which pay me to hold their risk...some have been total disasters, but many pay my minimum required distributions and estimated tax requirements and will for several years to come.
Phew! Having said all that, I'm at the end of an investment binge going back 50 years. I don't have a job, I need to plan to hire help to do some of the chores I used to tackle when I was a younger person (it's really terrible to know exactly how to seal a roof, but be unable to get up there to do it.)
So now I'm managing disbursements from the accumulation, and it is a taxing time. I would suggest starting a Roth, if you don't have one, because if you live long enough and have average returns from a diversified portfolio...taxes at marginal rates on the withdrawals from sheltered accounts will be in excess of 30%!
I don't have children, and not a lot of relatives left, so I'm not planning a big estate thing.
EthanR's response above is very good, and a bit general...for a young beginner, Vanguard has great, low cost index funds and if they're available via your company's sposored plan, go for them first to capture any matching funds, and because the minimums are waived. I would put a portion into emerging market (about 10%) and another 25% into BRIC funds, and divide the rest among the U.S. style boxes, but I don't foresee tremendous returns from the U.S. indexes for the next 2 years, because of the overhang from the housing, consumer debt and credit squeeze.
The other thing is to have patience, and take advantage of the opportunities that emerge. A few years back, I used MSN's stock screener to find high dividend-paying companies that had relatively low debt and decent cash flow, and up popped PCU and SID, anong others, some of which I already had. But I bought round lots of each, and sold 1/2 when they doubled, and they're still growing. Others, such as FordingCanadianCoal and TELOZ had bad dips, and I sold them, when they stopped paying dividends. Recently I bought TELOZ again, and if the Gulf Coast drillers don't get wiped out by hurricanes, the dividends will continue.
Others, such as TNH (Terra Nitrogen) PGH (PennGrrowthEnergyTrust), etc., I had to sell from the sheltered accounts, when they converted to limited partnerships, but I bought others, such as Atlantic Power Income Fund (ATPWF) and Pembina Pipeline, and Primary Energy Recycling , etc., which won't convert to limited partnership form.
My accounts are about 1/2 sheltered, 1/2 taxable, because the MRD's, after taxes had to go somewhere, and I don't need the income at present, but my Mom's 97, and I will need to supplement my income some 15 years from now...
So this is the view from the other side of the age divide.
139 points
Redsky answered one year ago …
I put half in international mutual funds: Emerging markets, India, Asia X Japan and BRIC + some global equities for stability.
Since I am living in a so called emerging market [Egypt], the other half went in local mutual funds, they seem like a good buy nowdays, plus our economic outlook is OK for the next 5 years.
Did not invest in local real estate because I think we'll have a bubble burst very soon - similar to what happend in the US.
Cheers
S
175 points
ricTICros answered one year ago …
Much of it foreign stocks, plus when I see a stock moving up that I like, I sell puts below the market price; if the stock continues to rise I pocket the premium when the put expires. If the stock drops below my exercise price I either buy the stock at the reduced price or close the option
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3963 points
MNSL answered one year ago …
In addition to good answers above, I like to add some more:
I think we must build up our portfolio according to our experience, age and knowledge. If you are confident about your investment strategy and if you know that you can get above average returns then you must stick to you own investment method. In addition according to market situation we have to change our portfolio to get maximum returns. Sometimes short term and medium term investment will be good strategy due to volatility in the market. although I prefer long term investment.
Some prefer diversification. I think over diversification will not get better return in the long run. There are some intelligent investors they do not diversify their investment portfolio at all. Currently I have invested only in 04 companies both local and foreign including Asain frontier market. With following characteristics:
Potential for long term growth- exposure to China
No competition at all and with strong demand for their product for next 05 years
Dividend yield more than 20% plus capital gain –
Return on equity more than 25%- Higher earning per share. Turn around company with strong demand fro their products, innovative; competitors can not compete with it now
Stable market share, less debt effective cost control methods potential for market expansion including export market
119 points
zellic answered one year ago …
I live in Saskatchewan, Canada which is a commodity and agriculture based economy. Back in the eighties and nineties when when our economy was in the dumps due to high interest rates and low commodity prices. I started to buy local real estate especially rental properties, which were very very cheap.
It took alot of work and persistance to get good tenants, rents were low and vacancies were high.
As I amassed my real estate porfolio, the prices started to increase as interest rates decreased.
Fast forward to 2007, guess what, Commodity prices are going through the roof, "Condo Conversions" are the rage,vacancies are very low and tenants are behaving for fear of eviction.
Times are good, housing, prices have gone through the roof. with multiple offers and bidding wars on property listings. It is time to bail before our bubble bursts ( and it will, real estate cycles).
If I live in a depressed area in the US or Eastern Canada, I would really consider real estate a possible investment. Price are low, the bottom is near and then it will go back up. Also these people who lose their houses need a place to live. It is also difficult for them to buy again because of credit. Lots of potential.
106 points
noah answered one year ago …
im extremely new to this (im 23) but im putting 6% into various funds - mostly foreign - through my 401k with my company matching that but after taxes i take another 10-15% and put it into stocks (right now AAPL and V). i'm eyeballing one or two mutual funds that are fairly stable with solid returns that i plan on putting fairly large chunks into and lastly i am putting 5% into an HSBC savings account with great rates. i like how its going so far.
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