Posted by MarkB_MI on January 01, 2015 at 07:08:43 from (70.194.10.67):
In Reply to: Re: Investments 2014 posted by Texasmark1 on January 01, 2015 at 05:22:46:
Mark, FYI I've got about three years to go before I retire. My 401k is about 70 percent in stocks, with most of the remainder in medium-term bonds. A bit aggressive, and I am slowly easing out of stocks.
You say you can't accept the risk of putting money in stocks, but can you afford not to? If you're in your sixties you'd better plan on your money holding out AT LEAST another twenty years. And if inflation returns it could take out a big chunk of your nest egg.
The problem with investing in bonds these days is that interest rates are near zero. When interest rates go up (which is the only direction they CAN go), bond prices will tumble. Your "no risk" investments will turn out to be very risky indeed.
With regards to losing 50 percent of your investment if the market takes a dive, I think you're looking at it wrong. When the market drops, you're not losing money, per se, as long as you don't cash in. After the market dived in 2008, a lot of discouraged investors took their money out of stocks. That turned out to be a bad idea, as they missed out on one of the biggest and longest bull markets in history. Those who kept their stocks got their money back and then some. And for those who moved everything they had into stocks, they made a killing. A drop in the market can be a risk or an opportunity, depending on how you look at it.
All the standard disclaimers apply: Past returns are not an indication of future performance, blah, blah, blah... Good luck in '05.
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