*Investors Blog*

Famous saying - There are two kinds of people who make predictions: those who don't know anything and those who don't know they don't know anything.

When the market crashes there is no time to get out. I was there in '87. The damage was done over a few hours. But then there was a great buying opportunity.

My plan is to be well diversified, hold a bit of cash and stay in forever. Over time we have done very well.
 
ecotourist said:
Famous saying - There are two kinds of people who make predictions: those who don't know anything and those who don't know they don't know anything.

When the market crashes there is no time to get out. I was there in '87. The damage was done over a few hours. But then there was a great buying opportunity.

My plan is to be well diversified, hold a bit of cash and stay in forever. Over time we have done very well.
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That's my plan as well; however I am willing to bet my idea of diversification is different from most. My portfolio is waaaaaay overweight in tech, but if I lost half or all of it the conservative side would easily carry me through. That's my strategy.

The lows are no fun and can even be devastating. But they are only paper losses (or gains). When it's time to slow down, it's time to get off the roller coaster.
 
At my age I am getting nervous about the markets. Going to pull out and place it somewhere safe. What is a safe place? Money markets?
 
walterjay said:
At my age I am getting nervous about the markets. Going to pull out and place it somewhere safe. What is a safe place? Money markets?
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The gold standard of safe is T-bills, backed directly by the US treasury. If you want the safest of safe. If you hold to maturity you likely don't have to pay state income tax on it either. Available in 4 weeks to 30 years - although technically T-bills are the ones less than 52 weeks. For the tax benefits I believe you want to buy them at auction, not from the market. You don't actually bid - as an individual investor you automatically get the high bid at auction.

Money market is likely fine. In theory it could break the buck, only happened to a few in 2008.

 
SC Maintenance said:
The gold standard of safe is T-bills, backed directly by the US treasury. If you want the safest of safe. If you hold to maturity you likely don't have to pay state income tax on it either. Available in 4 weeks to 30 years - although technically T-bills are the ones less than 52 weeks. For the tax benefits I believe you want to buy them at auction, not from the market. You don't actually bid - as an individual investor you automatically get the high bid at auction.

Money market is likely fine. In theory it could break the buck, only happened to a few in 2008.

Click to expand...

I'm not sure how to do that. Is this something T Rowe Price can do?
 
walterjay said:
I'm not sure how to do that. Is this something T Rowe Price can do?
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Is it a T-Rowe price brokerage account, where you can buy individual stocks and bonds - then you should be able to.

If its a T-Rowe price mutual fund account, then maybe not.

How long do you plan on leaving this money in something safe? If this is a 30 day thing, then I would just do a money market. If this is long term, then you should set up a ladder - so you have bills maturing at certain intervals.
 
walterjay said:
At my age I am getting nervous about the markets. Going to pull out and place it somewhere safe. What is a safe place? Money markets?
Click to expand...
You can be so safe it's dangerous. Returns on very safe investments (things like T-bills) are so low you can (and are likely to) lose after taxes and inflation. And that isn't good.

But what you can do is cut back on your equities. Some authorities recommend an investment portfolio where the % in fixed income is your age in years (so 65% fixed income at age 65 years), with the balance in equities. The equities will generally gain over time. I think that formula is a little conservative - but that's just me.

And you can go for "safer" equities: blue chip dividend stocks (or dividend stock ETFs), especially ones that have raised their dividends for decades. Are they going to go broke? Not likely. There could be a temporary loss in the market but it's a paper loss. If you don't sell it when a stock is down, you don't confirm the loss.

And you can diversify. I keep every investment as a small % of the overall portfolio (no more than 5%). If one of them turns out to be run by another Bernie Madoff I'm only out 5%.

I'm still about 70% in equities. That's way too high for my age. But I don't need the income from my investments. I've ridden the elevator both up and down and I don't sell when it's down. I might dump a losing stock here or there but only if I think they're heading for big trouble and I don't want to go along.
 
ecotourist said:
You can be so safe it's dangerous. Returns on very safe investments (things like T-bills) are so low you can (and are likely to) lose after taxes and inflation. And that isn't good.
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4 week T-bills are paying an investor equivalent of about 5.375%. You get that approx. in 4, 8 ,13, 17 and 26 week T-bills. CPI is like 3.5%, going to zero.

I am not telling anyone what they should or should not invest in, but its a positive RoR after inflation, has been for a while.

I have a bunch of money in t-bills (a bunch for me, a pittance for others here) that I hope to spend on a second home, assuming the real estate market ever normalizes. Its about time horizon, or risk appetite.
 
walterjay said:
At my age I am getting nervous about the markets. Going to pull out and place it somewhere safe. What is a safe place? Money markets?
Click to expand...
Sure you should have a decent chunk in money markets.

You also should buy some bonds, good company bonds AND gov bonds. NOT bond funds, although the funds might do OK if rates drop.

But I am also risk adverse. I own a variety.........
 
Pablo said:
Sure you should have a decent chunk in money markets.

You also should buy some bonds, good company bonds AND gov bonds. NOT bond funds, although the funds might do OK if rates drop.

But I am also risk adverse. I own a variety.........
Click to expand...
Schwab sold me a double tax free CA Muni Bond fund. You may have heard CA is not known as an income tax haven... This type of investment product is not for everyone, but it can make sense as part of a diversified portfolio.
If things went south, I could live on my SSI and this fund.

Schwab Wasmer-Schroeder
 
JeffKeryk said:
2023 is proving to be quite a year. I hope you are in the game. All time highs. If you can't make money in this market, well I don't know what to tell you. It's like free money...
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Dang................. I followed someone's advice here just a few months ago and moved everything to cash *, based on the pending doom and gloom.

*April fools?? We've recently met with an independent advisor for his pitch, compared to my current TIAA plan. Diversification is a common theme, but one's life stage and personal situation makes choices different for everyone. I've come to believe that there is no silver bullet, just different choices to get you to the same general place, give or take a few thou.....
 
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