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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 04:10 PM   #21
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

Thanks all of you for your wisdom and support.

Maybe I said it wrong, but I understand at my age TIME and waiting is what I need to worry about....nothing else.

To calm myself down though, I'd like a chunk of change earning about 5% that is NOT very volitile...bonds maybe? How do I go about buying bonds, or what funds offer a good stable yield around 5%?

Thanks!
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 04:15 PM   #22
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

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If on the last day on this earth I'm left with $1.00, I figure I'm ahead...
You made me smile -- thanks!
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 04:20 PM   #23
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

Quote:
Originally Posted by thefed
Thanks all of you for your wisdom and support.

Maybe I said it wrong, but I understand at my age TIME and waiting is what I need to worry about....nothing else.*

To calm myself down though, I'd like a chunk of change earning about 5% that is NOT very volitile...bonds maybe?* How do I go about buying bonds, or what funds offer a good stable yield around 5%?

Thanks!
I think you're nuts to bother, but if that's your bag your best choices are either a money market fund (yields over 4%) or s stable value fund (only offered in 401k plans and yield approaching 5%).
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 04:42 PM   #24
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

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To calm myself down though, I'd like a chunk of change earning about 5% that is NOT very volitile...bonds maybe? How do I go about buying bonds, or what funds offer a good stable yield around 5%?

Thanks!
Check out CD's. You can get 5% for a rather short term CD, or close to 6% with a long-term CD. If "stable" is what you need for peace of mind, go for it.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 04:49 PM   #25
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

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Check out CD's. You can get 5% for a rather short term CD, or close to 6% with a long-term CD. If "stable" is what you need for peace of mind, go for it.
I'm not seeing any CD's yielding 5%. Where are you seeing them....? I check bankrate.com usually.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 04:52 PM   #26
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

If you haven't saved up an emergency fund, or if you have some need for that money in the near future, you may be better off putting it in fixed income. *I remember losing a few hundred bucks on my first employee stock purchase when I was 22. *It was painful because I was selling the stock right away to get the employer 15% contribution and so that money was already spoken for. *

Most of us commenting on this matter have big nest eggs saved up and it's easy to get blase when that is the case. *But when I was just starting out at 22 and living paycheck to paycheck the stock market had a very real effect on my purchasing power that month. *If your situation is similar you might be better off not being in the market.

But there is something to be said for just getting used to it. *I think that only if you have watched small balances rollercoaster around will you be emotionally able to handle watching big balances whipsaw when you have saved up more.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 04:58 PM   #27
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

Quote:
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I'm not seeing any CD's yielding 5%. Where are you seeing them....? I check bankrate.com usually.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 05:47 PM   #28
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

If I were you I'd be less worried about my investment balances and more worried about Al talking about girding your loins :P
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 06:04 PM   #29
 
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 06:07 PM   #30
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

I honor and tip the hat to you Al for taking the time to do that, but I'm gonna have to take a point away for not finding the full sized picture I posted a few weeks ago...
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 06:16 PM   #31
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

I missed that one also. Does full-sized mean life-sized? Need to know if it is worth the trouble, thats all.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 06:16 PM   #32
 
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

It would be hazardous to my health to search through your last few weeks of posts. *I might read some by mistake.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 06:46 PM   #33
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

I look at the daily swings, and they are often over $1,000 these days. It irritates me but I get over it. The one thing that does bug me is when I check off - even mentally - a particular milestone - $10,000 increment, or whatever - and then a few days later I fall back below it.

As long as the general trend is up, I'm happy. For the last 6 mos or so, I've been tallying monthly, and either due to increased savings, 401 matches, gifts, inheritances arriving, or sometimes even market gains, I'm always up nicely - so I'm happy. Life is good.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 09:06 PM   #34
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

Quote:
Originally Posted by TromboneAl
It would be hazardous to my health to search through your last few weeks of posts. I might read some by mistake.
Rookies...

Get a glass of cold water or something before you click...

http://early-retirement.org/forums/i...0787#msg110787
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 09:07 PM   #35
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

There ya go thefed, whenever your portfolio is down and you're in the dumps, click that link.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-07-2006, 10:50 PM   #36
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

thefed,

My opinions:

First, you've received a lot of good advice.* You have to figure out what fits you best.

Second, I think that your feelings are normal and typical.* Most of us have experienced then at one time or another.

Third, you will become less sensitive to big market moves over time.

Fourth, keeping a (small) fraction of your money in a MM and/or bond fund isn't a bad thing even at your age IF it helps you "stay the course" during short and more importantly long term down trends.

MB* *
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-08-2006, 04:27 AM   #37
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

yesterday was a 10.000 dollar drop for me with a 9,000 the day before...the one thing you need to remember is that long term the avarages play out for most of us..if your 50/50 or 60/40 mix averages 7-8% as an example long term and last year you were up 15 and the year before 18 somewhere you know the avarages have to drop back and level off.like water seeking its own level....it still grows more money over time than anything else.....
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-08-2006, 09:09 AM   #38
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

Thanks for all the advice.

Right now, I like seeing a 5.88% APY for a 7-YR CD, or even 5.5% for a 5 yr.

That, to me, is a good after-expenses return. sure, 10% is better, but I see no problems with 5.88%, and maybe a bit more in the upcoming months.

I have all my calcs based on a 6.5% return, and that 5.88 is darn close!

And I truly do feel that the next year, at least, is going to be sideways or down, I think we've begun the trend.

The question I have to ask myself, though, is how to approach this? Do I divert my next few thusand to a long-term Penfed CD? Do I yank out a few bucks from my roth (only a 3k balance) and secure a 5.88% return? I think I might.....

The only difference, of course, are the tax implications....




Jason
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-08-2006, 09:38 AM   #39
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

Quote:
Originally Posted by thefed
Right now, I like seeing a 5.88% APY for a 7-YR CD, or even 5.5% for a 5 yr. That, to me, is a good after-expenses return. sure, 10% is better, but I see no problems with 5.88%, and maybe a bit more in the upcoming months.
Jason, it is great that you are thinking about this stuff at your age - well done. It can be "over-analyzed" though. Learn the principles, lay out a plan, and stay the course. Your comfort level is important, but with the right plan, you focus on whether you will be comfortable with the 10 or 20 or 40 year strategy, not just tomorrow's results.

A quick word on 7 y CDs - might make sense for you as a small part of your portfolio, but remember that this is a long time. If stocks and/or bonds do 10-15% or more for a couple of years (especially in the earlier years so the gains can compound), you will be wishing you had your money there. Even with a few down years thrown in, usually you will do better than 5.x%.

It's all about long term results and trade-offs. Main thing is to be in the game. Good luck.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-08-2006, 10:50 AM   #40
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

When I was in my tenth (or so) year of accumulation I came across a very large (about 60" X 24") wall chart of the DJI from pre 1929 to the then present.
I put a big red mark at the point where I had begun and wow, what a great feeling to see the 10 year increase.* I've since lost that chart, but seeing the overall upward progress over all those years gave me lots of comfort during the down times.
I wouldn't get too carried away with CDs at your age unless we get into a period of super rates like we saw in the 80's or you get a lot older. If you liquidate your stock funds now because of the current ugly days we are having you are almost assured of selling at a near term low.* No guarantee, but when you sell with emotion in the equation it always seems to be at the bottom.* Murphy's brother I think.
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