Another one from MN

[GoodSense]

I've posted a few messages recently but thought I should properly introduce myself.

I'm 30, married w/o kids. We've always LBOM and have no debt except a mortgage, but we didn't start seriously saving until earlier this year. I wished I'd thought of ER sooner but frankly it didn't really occur to me, since almost everyone around me retires at 65 or 66 (or so it seems). Before ER became a goal, there was no real reason to save money, so we didn't do it diligently. Oh well, it's better late than never.

We are new in the investment area. Given the way the market was in the last couple of days, we don't know if we should buy or sell or hold steady. I gather from popular opinion that we should stay put for now and not be so easily affected. It's hard to do, though.

I'm glad I found this forum. It's good to be around people who share the same goal.

 

[bssc]

Welcome officially to the boards.

It is always good to have people unlurk and say hi.

This is a good place to get a long term view of the market, I think.

 

[Webzter]

Alright, another Minnesotan.

> we don't know if we should buy or sell or hold steady.

What are you in and why are you in it? If you don't know, then you shouldn't hold it at any price. If you do know, then consider it "on sale" right now.

My wife and I are pretty new to investing too. So, we own index funds and allocate according to our risk level. It's painful to check on down days, but in my case that just means that I hope my next purchase gets in there before it goes back up again.

If you're up for some light reading, check out "Bogleheads' Guide to Investing" and then go through the additional reading section at the back of the book.

 

[GoodSense]

Thanks!

Thanks for the welcome and recommendations. With regard to buy vs sell, I am mostly concerned with our REIT, which unfortunately was bought at the top of the market earlier this year and has dropped nearly 20% as of yesterday. It's in our ROTH, so I won't touch it for another 30 years, which means it's probably OK to assume it will bounce back . It's just a bit unsettling.

 

[megacorp-firee]

It's in our ROTH, so I won't touch it for another 30 years, which means it's probably OK to assume it will bounce back . It's just a bit unsettling.

Welcome to the board. IMO you are correct, it will bounce back ... the question is when. you're time horizon says you will be ok, as long as you are comfortable that the REIT is in the right allocation amount. Strongly suggest you try and get used to 'unsettling' as quickly as possible. It will save you from becoming overly stressed.

 

[Coach]

GoodSense, welcome to the board! And welcome to investing.

For peace of mind, develop a strategy that doesn't have you reacting to short term changes in the market. There's a great one -- periodic rebalancing of your portfolio. It helps you think long term, control risk, and buy low and sell high. And it makes it a lot easier to tolerate emotionally short-term market movement.

Coach

 

[GoodSense]

Rebalancing

Thanks for the tips! I just checked out the rebalancing article and it has a lot of good points. Probably a newbie question, but do people generally rebalance their entire portfolio, or do they have a balance for their taxable account and a different one for their retirement account, assuming there may be a possibility of retirement before 60? It seems to me that due to the different tax implications, it may be good to have two separate pies so to speak, one for taxable and one for retirement accounts? I'm probably making everything too complicated...

 

[Coach]

GoodSense, I hope you hear lots of different opinions, because there are a bunch of very wise and experienced people here.

Virtually all my investments are in retirement accounts, so I manage those as a portfolio with an asset allocation and periodic rebalancing. If I had substantial taxable investments, I'd treat them as a separate portfolio with its own asset allocation.

You're quite young and it's terrific to see you thinking about funding retirement. I wish I'd actually started thinking about it at 30!

You might be thinking that in order to fund retirement before 60 you should start working at taxable investments. I recommend you max out your tax-deferred investments first. Even early retirement is a long time out, and there are ways to get money out of some retirement accounts without penalty before age 59 1/2. I'm 56, and could have retired at 55, even with my paltry taxable investments.

Coach

 

[Webzter]

My opinion... think of it all as one big pie. Then, take advantage of a tax-advantaged account for the tax-inefficient stuff (for example, bonds and things that pay heavy dividends if you plan on reinvesting the dividends).