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Hi from USA
Old 03-07-2012, 09:29 PM   #1
Confused about dryer sheets
Join Date: Mar 2012
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Hi from USA

Hello from the midwest. 29 y.o. here, just looking for ways to be more frugal with my spending. Will be lurking mostly, as I have some savings to invest but very conservative in investment style. Looking for a well-balanced mutual fund that will offer steady income (Vanguard?) and that I won't freak out about if the DOW drops 500 pts. I have had money invested in mutual funds before but freaked out both during the dip in 2008 and also in July of last year, as a result of the debt ceiling debate, worries about a downgrade of US debt, etc. I really freak out when the market shows uncertainty on an uncharted level, such as "We've never had this crisis before...." I really want to keep my funds in one place without worrying constantly or moving it around on a whim and thus losing money during unexpected rallies.

Anyway, any advice would be great considering my relative intolerance for risk but desire to invest in a solid, well-balanced mutual fund. Thanks in advance

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Old 03-08-2012, 02:24 AM   #2
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Welcome. Please feel free to use the search button at the top of the screen to look for postings about funds and different strategies being used. Good luck.

Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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Old 03-08-2012, 02:59 AM   #3
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tgc641, it sounds like your main problem is not which fund to choose, but whether or not having your money anywhere near the stock market, in general, is right for your personality.

Most of us here would love to be 29, for all kinds of reasons , but especially because we would know that a 5,000 point drop on the Dow - never mind your 500 - is something that we would have plenty of time to recover from.

Mutual funds do not, in and of themselves, protect you from market fluctuations; if anything, they expose you to overall market conditions, bull or bear, rather more than buying individual stocks (consider how AAPL has under- and then outperformed the market over various periods in the last 30 years). Thus, if you are likely to "freak out" because of a concentration of bad news in the media, you should probably stick to US Treasuries, or else pick a random ticker code, stick your money in that, and stop looking at the price.

If your #1 priority is to reduce the tendency to freak out when the news media tell you that the sky is falling, then I would suggest reading a lot about economics, history, and how society actually works. One of the first things you will probably learn (although that's not why I'm suggesting this program) is that the news media's #1 priority is to tell you that the sky is falling.
Born 11/1960, retired June 30, 2012; DW born 07/1957, retired July 31, 2019. Current portfolio is 1900K Euros, split 30 stocks/20 bonds/20 RE/30 cash.
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Old 03-08-2012, 05:45 AM   #4
Confused about dryer sheets
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Welcome tgc641! This is an awesome community that contains a ton of wealth building information. I've been lurking too & trying to figure out our path to retirement. Your biggest advantage right now is your youth, so take advantage of this time to save & invest and LBYM (live below your means). It's very tempting when you are in your 20s & 30s to buy the latest & greatest and get caught up in the 'keeping up with the Jones' mentality but DON'T DO IT! And don't freak out about the market - it's always going to go up & down. You have a long time to keep socking it away & watching it grow!!!!

Have fun on your journey!
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Old 03-08-2012, 01:21 PM   #5
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Congratulations on making a decision to SAVE rather than spend

I know exactly how you feel. I freaked out BIG TIME during the 2008 decline but held steady and didn't sell. I'm fully recovered and doing better, since I decided to put a whole lot more into the market while it was going down. Now I know better and feel that with my 40 year horizon (I'm 50 yo) that I'll have time for the market to recover from almost anything that happens.

If you're not comfortable in stocks then maybe move toward a 50/50 blend of stock and bond funds.

As for being frugal - I'm with you there ! There are alot of things I used to "need" until they broke and experimented with not replacing them. I realized I didn't miss them as much as I thought. Most of the stuff we have we "want" - we only think we need it !

Welcome to the forum and enjoy !
"For the time being no discipline brings joy, but seems grievous and painful; but afterwards it yields a peaceable fruit of righteousness to those who have been trained by it." ~
Hebrews 12:11

ER'd in June 2015 at age 52. Initial WR 3%. 50/40/10 (Equity/Bond/Short Term) AA.
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Old 03-08-2012, 03:43 PM   #6
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Welcome tgc641. Nothing wrong with your risk tolerance and outlook, good that you're thinking about FI at your age. I am curious why you're looking for "steady income" at 29, just the opposite of what many investors in the accumulation phase are looking for due to tax implications.
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 40% equity funds / 35% bond funds / 25% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
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Old 03-08-2012, 10:46 PM   #7
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In the last 150 years downturns in the US market have always been followed by recoveries. In many cases those recoveries have been to levels much higher than before the downturn in a surprisingly short period of time. The people who lost were the ones who got cold feet and pulled out of a down market and did not get back in early enough to realize the gains in the recovery. IMO the biggest potential economic problem in your future will be inflation. It has been low for quite awhile but it will come back and at least for some period of your life could be a big problem. Your best hedge against that inflation is to have your money growing in the market.
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Old 03-10-2012, 03:00 PM   #8
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Hi there!

Some time over the last few years, I made a slight shift in perception. Instead of wigging out (smile) when the stock market tanks, I think "ooh! Looks like stocks are on sale!". Instead of feeling fat and happy when a stock soars or doubling down on a hot stock, I think "Hmmn.. Are there any stock in my portfolio that are overvalued? If so, today would be a good day to sell and invest in a better deal."

It's a new and strange mindset, but I think it's working. Like you, I have a long horizon to retirement. (15-20 years even with ER). We have time to profit from downturns, so long as we keep saving capital to invest in the low points.


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