Struggling to invest on my own

[Anonymous]

What is your time horizon? If you are 30, not investing in the market is not conservative. If you are 60 it would make more sense, but not a path I would take as you will not outpace inflation and in fact will lose money to inflation by investing in saving accounts etc.

Also, are you eligible for a pension? If you are, that is like a bond fund portion of your savings and you can take more risk with a stock index especially if the pension has a cost of living adjustment.

My DH is uber conservative like you and will not invest in stocks. He has bought a couple of rental single family houses instead, so maybe you could do real estate instead.

Warren Buffet's advice to his wife for investing once he is gone is 90% S and P and 10% government securities. You could ratchet down the percentage in stocks, given your lack of risk appetite.

[Anonymous]

You need to think long-term (not super long term, but at least 10 years out). There is no way to take no risks -- if you aren't risking fluctuations, you're risking losses in the form of opportunity costs: you don't see as big an increase as you could have if you weren't fixated on never seeing a decline.

If you have a massive salary and live very frugally, you might be able to stash away enough in savings and bonds. The rest of us need equities.

[Anonymous]

Be willing to be a a risk-taker. Read financial news on a daily basis. Read podcasts. Read books. It’s almost impossible to predict the market but by being well-informed, you can hedge your bets against certain level of uncertainties. Allocate a few hours a week learning. There’s a learning curve and eventually you’ll get better.

[Anonymous]

1. Keep 6 months of emergency funds in cash/bonds/treasury
2. Figure out your risk profile, go to free portfolio analyzer and play with large sums (to you) to visualize gains and losses over a decade or longer
3. Align on a asset allocation, 80% stocks and 20% bonds (for example)
4. write it down on a piece of paper and stick to it
5. Agree on a % of salary that you want to invest, say 15% to start with and set auto debit
6. Rebalance 1-2 times a year (on set dates or bands )

Few other things, maximize your before tax accounts before investing in brokerage, the asset allocation principle still applies (largely though there are nuances) then ROTH IRA, HSA etc.. Boggleheads can guide you
6. Open a Vanguard account and based on your asset allocation pick stock and bond mutual funds (VTSAX is you want to do only US stocks for example)
7. Set up auto debit for every two weeks

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, you cannot make a lot of money if you're "extremely conservative". Period. You want money? Take risks.

I know this is the truth, just a little scary.

It's very important to know yourself and steel yourself against volatility. The worst is to put the money in and then say "I just can't take it anymore" and take it out when it's down, and then see that it goes back up again and then decide "Oh, I really should be in the market" and buy it when it's high.

But if you don't take risks, you'll lose out to inflation. So decide a percentage of your portfolio--maybe it's only 20% for you if you're that conservative that you're going to have in the market, and just dollar cost average it in and then keep adding to it--maybe on auto-pay so you don't have to think about it. Check your balance once a quarter and don't try to time anything.

[Anonymous]

OP, you need to think of inflation as a risk as well. HYSAs and treasuries might look great now but they've still below the rate of inflation. Ibonds keep pace, but you can only buy $10K per person per year. If you don't invest in stocks at all you run the very great risk of not being able to keep up with inflation. You don't say how old you are but if you have 30+ years until retirement, inflation should worry you more than the next stock market crash.

At least 30% stocks will help hedge against that. You could keep the safe assets you like and gradually add to a total stock index fund as others have suggested (I have VTSAX).

If you can't handle a pure stock fund, blended funds like Wellesley and Wellington as others have suggested are good as long as you're holding them in retirement accounts. If they're in taxable accounts the capital gains will hurt. For a blended fund that's appropriate for taxable, check out Vanguard's Tax-Managed Balanced Fund (VTMFX). It's 48% stock, 52% bonds and the bonds are federal tax-exempt municipal bonds.

[Anonymous]

Read the book Options as a Strategic Investment. Rookie move going to an advisor this is a DIY world unless you have way over low 8 figure net worth.

Ex you want to buy TSLA, AAPL,,insert name..
rookie move- TSLA dropped to 190 buy buy buy.
Educated Investor- Sell PUTS, Collect premiums on TSLA, worry about buying it later.. Oh and by the time I bought it ive already collected $40 in premiums... ah now I own it guess what sell covered calls collect more premiums

[Anonymous]

Anonymous wrote:What is your time horizon? If you are 30, not investing in the market is not conservative. If you are 60 it would make more sense, but not a path I would take as you will not outpace inflation and in fact will lose money to inflation by investing in saving accounts etc.

Also, are you eligible for a pension? If you are, that is like a bond fund portion of your savings and you can take more risk with a stock index especially if the pension has a cost of living adjustment.

My DH is uber conservative like you and will not invest in stocks. He has bought a couple of rental single family houses instead, so maybe you could do real estate instead.

Warren Buffet's advice to his wife for investing once he is gone is 90% S and P and 10% government securities. You could ratchet down the percentage in stocks, given your lack of risk appetite.

I'm 62 do that is part of my reluctance to get into the stock market. I am also in poor health and don't have five or ten years to ride out the ups and downs of the market.

I am not eligible for a pension. I think your husband investing in real estate is very smart.

A friend advised me to do just as you are suggesting and ratchet down the stock portion.

Thank you for your thoughtful advice.

[Anonymous]

Anonymous wrote:Read the book Options as a Strategic Investment. Rookie move going to an advisor this is a DIY world unless you have way over low 8 figure net worth.

Ex you want to buy TSLA, AAPL,,insert name..
rookie move- TSLA dropped to 190 buy buy buy.
Educated Investor- Sell PUTS, Collect premiums on TSLA, worry about buying it later.. Oh and by the time I bought it ive already collected $40 in premiums... ah now I own it guess what sell covered calls collect more premiums

I will check out the book, thank you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I have read and spent so much time on Bogleheads but am still struggling so much on how to invest. I am extremely conservative and know I can stick with things like Treasury Bills and I Bonds.

Does anyone have any recommendations for mutual funds, stocks or bonds in Vanguard?

Or does anyone have any suggestions for an advisor in the Montgomery County area that they trust?

Thank you.

Just do an s&p 500 etf or mutual fund, buy a little at a time. Get your feet wet. Start thinking you could probably do better than the s&p. Start researching individual stocks. Buy some of those stocks. After many years, realize that with all your effort and research you still barely beat or lag behind the s&p 500.

This is what I’m doing. Just opened my account with TB today

[Anonymous]

Anonymous wrote:OP, you need to think of inflation as a risk as well. HYSAs and treasuries might look great now but they've still below the rate of inflation. Ibonds keep pace, but you can only buy $10K per person per year. If you don't invest in stocks at all you run the very great risk of not being able to keep up with inflation. You don't say how old you are but if you have 30+ years until retirement, inflation should worry you more than the next stock market crash.

At least 30% stocks will help hedge against that. You could keep the safe assets you like and gradually add to a total stock index fund as others have suggested (I have VTSAX).

If you can't handle a pure stock fund, blended funds like Wellesley and Wellington as others have suggested are good as long as you're holding them in retirement accounts. If they're in taxable accounts the capital gains will hurt. For a blended fund that's appropriate for taxable, check out Vanguard's Tax-Managed Balanced Fund (VTMFX). It's 48% stock, 52% bonds and the bonds are federal tax-exempt municipal bonds.

I do worry about inflation. I am 62 so I don't have the advantage of time on my side.

Thank you for your suggestions.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, you cannot make a lot of money if you're "extremely conservative". Period. You want money? Take risks.

I know this is the truth, just a little scary.

It's very important to know yourself and steel yourself against volatility. The worst is to put the money in and then say "I just can't take it anymore" and take it out when it's down, and then see that it goes back up again and then decide "Oh, I really should be in the market" and buy it when it's high.

But if you don't take risks, you'll lose out to inflation. So decide a percentage of your portfolio--maybe it's only 20% for you if you're that conservative that you're going to have in the market, and just dollar cost average it in and then keep adding to it--maybe on auto-pay so you don't have to think about it. Check your balance once a quarter and don't try to time anything.

I'm OP and this is very helpful advice, thank you.

I'm going to have too learn to handle the risks like everyone else does.

[Anonymous]

Anonymous wrote:1. Keep 6 months of emergency funds in cash/bonds/treasury
2. Figure out your risk profile, go to free portfolio analyzer and play with large sums (to you) to visualize gains and losses over a decade or longer
3. Align on a asset allocation, 80% stocks and 20% bonds (for example)
4. write it down on a piece of paper and stick to it
5. Agree on a % of salary that you want to invest, say 15% to start with and set auto debit
6. Rebalance 1-2 times a year (on set dates or bands )

Few other things, maximize your before tax accounts before investing in brokerage, the asset allocation principle still applies (largely though there are nuances) then ROTH IRA, HSA etc.. Boggleheads can guide you
6. Open a Vanguard account and based on your asset allocation pick stock and bond mutual funds (VTSAX is you want to do only US stocks for example)
7. Set up auto debit for every two weeks

Thank you.

[Anonymous]

Anonymous wrote:Be willing to be a a risk-taker. Read financial news on a daily basis. Read podcasts. Read books. It’s almost impossible to predict the market but by being well-informed, you can hedge your bets against certain level of uncertainties. Allocate a few hours a week learning. There’s a learning curve and eventually you’ll get better.

Thank you. It's encouraging to know it's not too late to educate myself.

[Anonymous]

Anonymous wrote:You need to think long-term (not super long term, but at least 10 years out). There is no way to take no risks -- if you aren't risking fluctuations, you're risking losses in the form of opportunity costs: you don't see as big an increase as you could have if you weren't fixated on never seeing a decline.

If you have a massive salary and live very frugally, you might be able to stash away enough in savings and bonds. The rest of us need equities.

I understand with stocks I need to think long term but it's unlikely I have ten years. I wish I had started long ago.