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- Nov 30, 2016
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I told you it was a stupid question. lol My intention of what I said was 2% clear after tax/inflation.
I recall having an emerging market fund back then. It's OK with me if you don't check out what emerging market funds did in 2008.
From mid 2008 to March 2009, Wellesley lost 20%. That's still a lot better than other balanced funds. For example, Dodge and Cox Balanced lost 50% because it was heavy in financials.
I think that 5% safe investment that you can get back within a day with a phone call on the other thread is the best....
Only if he would tell us what it is!!!!
I did a little research on that 5% safe return thread. Found out the guy runs an un-registered fund that uses a proprietary algorithm to buy mostly winning Lottery tickets.
Seems reasonable. I'm in.
...Safety (as in let's not try to lose principal) is a concern. Any ideas?
I recall having an emerging market fund back then. It's OK with me if you don't check out what emerging market funds did in 2008.
I don't understand this post. I thought you wrote in your OP, not to lose principal. So it's ok to lose money then.
I can see where my post was confusing. I was just reminiscing about 2008 and what a disaster it was. In any case, I don't think getting 2% without a risk of losing principal is realistic. This guy was just wanting to come close to that (and probably not wanting to tie the money up for a huge amount of years).
But going into stock is not even an option if you do not want 'risk'....
As I mentioned, you can get at least 5% with preferred shares and possibly bonds that are very high rated... with the preferred the prices do not change that much if you pick correctly...
Texas, while what you wrote is correct, the higher yield potential does have a few associated risks.
Those are the risk of a call - the issuing company redeems the preferred shares at par ( usually $25 ) plus about 30 days accrued interest. So anyone buying a preferred above par could well end up losing if a call occurs at the wrong time.
The other risk is that of interest rate - as rates go up, other alternatives ( even other preferreds ) become more attractive, so a preferred stock which is akin to a bond, tends to decline.
And finally, there is always risk of the issuing company going BK, where all shareholders will take a bath, if not lose everything completely.
Oh, and a little known risk called Waldenization.........not known to those who do not invest in Preferred Securities.
So, unfortunately, there are still risks aplenty in the Preferred Stock Sector.
I agree with what you say.... but which has more risk.... a diversified fund that has 40% to 60% stock or a group of below call or close to call or even not callable yet bonds and preferred stocks that yield 4% to 5%
And you can get that 4% to 5% with very high ratings, not like what I am doing replacing my HY bond fund...
PFD is one I have liked. I do not like it as much in a rising rate environment but you may.Just curious if anyone knows of a few Preferred Stock mutual funds; I've considered it for some of the current cash/bond allocation. My cash allocation is too high, but I don't want to buy stock or most bonds right now, although I probably need to boost foreign bonds.
A concern is that I think both preferreds and dividend stocks are richly valued.
Just curious if anyone knows of a few Preferred Stock mutual funds; I've considered it for some of the current cash/bond allocation. My cash allocation is too high, but I don't want to buy stock or most bonds right now, although I probably need to boost foreign bonds.
A concern is that I think both preferreds and dividend stocks are richly valued.