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Analysis paralysis...money to invest but in WHAT
08-05-2019, 05:50 AM
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#1
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Dryer sheet wannabe
Join Date: Dec 2018
Posts: 10
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Analysis paralysis...money to invest but in WHAT
Hi, I’m one that’s been saving for a while and have about $182K in 401K and about the same in a smattering of other investments. I can save $3600 a month for retirement but the issue is WHERE?! It’s like you can find all these opinions that you should be disciplined and invest and hold but little on where that is deemed to work? Just read Millionaire Next Door and while I admire a lot the traits, didn’t help much on where the hell to put the money to become a millionaire. I should add to this point I’ve mostly picked well diversified Vanguard index funds, very little sector funds. I’m 37 and would like to retire @ 52 (which is when I get full pension @ 40% of my highest paid year at my employer). No debt except house which will be paid off by then. I do much better with an automatic investing scenario than having to be actively in it all the time. Suggestions welcome
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08-05-2019, 06:09 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2007
Posts: 13,228
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How about the Bogleheads 3 Fund Portfolio? It's pretty much what I do. Just determine your asset allocation mix (across all accounts) and invest to that. Once a year you might have to take a look at rebalancing to account for large run-ups or drops.
https://www.bogleheads.org/wiki/Three-fund_portfolio
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08-05-2019, 06:29 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,722
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- 401K to get the match
- max the Roth-IRA(s)
- possibly max the 401(K)
- taxable brokerage
Lots of ifs in that list. No one know what you're invested in now, and impossible to say much about next step(s).
For 15 years, I would guess most here would say put it in VTSAX, taxable account.
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08-05-2019, 06:39 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
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Put it in the S&P. If that goes south, we are all in trouble.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
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08-05-2019, 07:01 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 4,172
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Sounds like OP is doing just fine as it is............if more simplicity is desired, the 3 fund portfolio suggested by Running Bum is an option. There is even one school that suggests a 2 fund option (leaving out international which has lagged
US for some time now)
https://www.investmentnews.com/artic...ational-stocks
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08-05-2019, 08:02 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,374
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At age 37 and a 15 year time horizon, I would go all Total Stock and declare victory.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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08-05-2019, 08:06 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2008
Posts: 13,150
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Quote:
Originally Posted by RunningBum
How about the Bogleheads 3 Fund Portfolio? It's pretty much what I do. Just determine your asset allocation mix (across all accounts) and invest to that. Once a year you might have to take a look at rebalancing to account for large run-ups or drops.
https://www.bogleheads.org/wiki/Three-fund_portfolio
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+1.
I second the idea of the 3 Fund Portfolio. The beauty is just using the three index funds frees you up from having to decide what to invest in. Instead all you do is concentrate on what percent allocation of each is right for you.
__________________
Have you ever seen a headstone with these words
"If only I had spent more time at work" ... from "Busy Man" sung by Billy Ray Cyrus
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08-05-2019, 09:55 AM
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#8
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Thinks s/he gets paid by the post
Join Date: May 2016
Location: Mid-Atlantic
Posts: 2,676
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In addition to endorsing the 2 or 3 fund portfolio (I'm of the opinion that they both work fine, it's a personal preference), I'd like to address the analysis paralysis. I've run into this, too, and spent way too much time checking numbers and historical performance and all when I knew what I wanted to do, but was second-guessing myself. Now I've come to develop a policy of deciding on a broad strategy, and then once I decide, I make myself implement it immediately (next business day or three, which allows for w*rk and life stuff). Otherwise I tell myself that, if this strategy is really better for me in the long run, the longer I wait, the more I miss out. So for example, if you're all in cash, don't try to wait for a day when the market goes down or you may miss out! Just do it! Now! Go!
__________________
-Looking to FIRE in the mid-2020s, which would be our mid-50s.
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Analysis paralysis...money to invest but in WHAT
08-08-2019, 05:57 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Nov 2013
Location: Twin Cities
Posts: 3,941
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Analysis paralysis...money to invest but in WHAT
I would put all the taxable account funds in either Total Stock Market Index or S&P 500 Index for super fee and tax efficiency and forget about it. Then I’d buy the entire world’s economy by putting all the 401k and IRA money in a Vanguard Target Date 2035 Fund aimed at your 52nd birthday and forget about it. That way, you will automatically have a good asset allocation at age 52 FIRE. Oh, and you’ll be a millionaire per this simple calculator: https://www.bankrate.com/calculators...alculator.aspx
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08-08-2019, 06:43 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2016
Location: Colorado
Posts: 8,971
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If you have access to Fidelity, use their retirement planner tool and it will help you explore asset allocations. Where your money is invested (stocks, bonds, cash, etc) is more important than what it is invested in.
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08-08-2019, 08:48 AM
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#11
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Dryer sheet aficionado
Join Date: Apr 2019
Posts: 38
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One of the greatest investors of our lifetime, Warren Buffet, has often said the right investment for 95% of people is an S&P 500 index fund. It's a long-term bet on the world's largest and most powerful economy. And, by investing automatically each month, you're dollar-cost averaging; buying less when prices are high, buying more when prices are low. That's almost always a recipe for success.
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08-08-2019, 09:05 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,351
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Quote:
Originally Posted by court6449
... to this point I’ve mostly picked well diversified Vanguard index funds, very little sector funds. ...
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That is the winning strategy (except for the sector funds ).
"The Coffehouse Investor" by Bill Schultheis is a quick and beneficial read. Bill will make you very comfortable with your strategy and, in addition, gives you a recipe for pumpkin pie. (!) You can read a sample on his web site: https://www.coffeehouseinvestor.com/
If you want to go farther, "The Bogleheads' Guide to Investing" by Taylor Larrimore is a good second read, also quite easy.
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08-08-2019, 09:24 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Aug 2007
Posts: 2,873
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+1 for a 3 fund portfolio.
Or if you have access to a target fund, that’s even easier. And if you prefer fixed percentages, then look at Vanguard’s LifeStrategy funds. VASGX is one of my favorites (I don’t own it, but use it as a benchmark).
https://investor.vanguard.com/mutual...ifestrategy/#/
Even though it goes against many studies, I would gradually shift to this allocation instead of transitioning all at once, especially with the market run up we’ve had this year.
What I would do is figure out exactly what allocation you want. Once you do that, figure out what it takes to get there over the next 12 months and each month, move 1/12 of your current allocation to that allocation.
However, if there’s a correction, then you can accelerate your transition. Say the market drops 10%, go ahead and buy more equity funds.
__________________
Eat, Drink and Be Merry.
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