Struggling to invest on my own

[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.

Maybe your husband is the smart one: if he locked in 3% mortgages on those rental properties, he'll probably do better than you in the stock market over the next 30 years -- and with far less volatility.

[Anonymous]

Anonymous wrote:

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.

Are you in good health and/or does longevity run in your family? My grandmothers lived to 95 and 101. When I hit my 60s I'm planning for another 30 years on the planet, so will still be invested somewhat aggressively in stocks.

If you've spent time on Bogleheads then you know the recommendation for extremely conservative investors is to have at least 20% in the stock market throughout your retirement. I would start dollar-cost averaging into VOO and VTSAX today, and keep going until your asset allocation is 20% stocks, 80% fixed income. Set the dividends to reinvest. Most important, DO NOT LOOK AT HOW YOUR STOCKS ARE DOING. Don't check the balance. Don't sell on a drop. Think of it as long-term insurance.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

Are you in good health and/or does longevity run in your family? My grandmothers lived to 95 and 101. When I hit my 60s I'm planning for another 30 years on the planet, so will still be invested somewhat aggressively in stocks.

If you've spent time on Bogleheads then you know the recommendation for extremely conservative investors is to have at least 20% in the stock market throughout your retirement. I would start dollar-cost averaging into VOO and VTSAX today, and keep going until your asset allocation is 20% stocks, 80% fixed income. Set the dividends to reinvest. Most important, DO NOT LOOK AT HOW YOUR STOCKS ARE DOING. Don't check the balance. Don't sell on a drop. Think of it as long-term insurance.

PP again - sorry, I meant to say VOO *or* VTSAX. Not "and". You only need to pick one, depending on whether you prefer an ETF (VOO) or a mutual fund (VTSAX). Returns are nearly identical so it comes down to personal preference.

[Anonymous]

Anonymous wrote:

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.

Maybe your husband is the smart one: if he locked in 3% mortgages on those rental properties, he'll probably do better than you in the stock market over the next 30 years -- and with far less volatility.

He is so conservative he paid cash....so no cheap mortgage leverage.

[Anonymous]

OP is extremely conservative. Maybe stick with the ibonds and treasury bills so OP can sleep at night. OP is 62.

[Anonymous]

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.

OP, investing and picking funds is easy. The hard part is dong the financial planning before you pick your investments. Most people are too lazy or don't know the value in planning and end up making unforced errors.

[Anonymous]

Anonymous wrote:

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.

If you don't have ten years, don't waste any time on regret!

You're doing what you can now -- I'm really impressed by how thoughtfully you're asking for and taking advice.