I’ve been diligently working, saving and contributing towards financial freedom and early retirement, but the economy so far since the pandemic has eaten away most of my portfolio, what I want to know is this: Do I keep contributing to my portfolio in these unstable markets or do I look into alternative sectors.
Consider investing in stocks especially during a recession . While recessions can be tough, they can also offer good chances to buy low and sell high in the markets if you're cautious. Just remember, this is not financial advice, but it's a good time to think about buying stocks since having cash on hand isn't always the best option.
I'm cautious about giving specific recommendations since everyone's situation varies, but l've worked with " Sonya Lee Mitchell” for years and highly recommend her See if she meets your criteria.
The most underated "Not Financial Advise" channel on RU-vid! Concise but very informative, most importantly zero fluff and no click bait! I've learned so much from your videos Tae
The most important thing that should be on everyone's mind currently should be to invest in different sources of income that doesn't depend on the government. Especially with the current economic crisis around the word. This is still a good time to invest in various stocks, Gold, silver and digital currencies.
You always see people selling gold and silver saying how valuable it will be in the future but in reality more money is made buying and selling these commodities. And digital currencies have the potential to harm everyone. Tax cheats and criminals love digital currencies. The only value digital currencies have is what someone is willing to pay you for them. And it creates tons of air pollution harming everyone. I imagine you are selling these things and are just another hustler scamming people. You give terrible advice.
Like Warren Buffet said, dividends are only good if the business you're investing into can't make good use of that capital. So, if you're trying to invest in businesses with actual growth, looking at dividends is a waste of time. Why are you investing into a company if they're returning capital to you because they think you can make better use if it than they can. It's not much different from bond investing. The way I see it, if you have a $1 million at some point, that'd be enough to create a portfolio that would pay you between 50k - 70k in dividend income.
Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are alot of wealth transfer in this downtime if you know where to look.
You can have best of both worlds stocks and dividends. Why would you give up free money to a reinvest in your fund? That's why everybody's going to VTI for the last few years. It's the best of everything.
Great video, Warren Buffet, Elon Musk, Jeff Bezos and Cathie Woods just to mention a few emphasizes on the importance of investing, I've been keen to invest lately, my challenge is knowing when to sell/hold and how to grow profit consistently even in an unsteady market.
it's alright, the average investor struggles with when to sell or hold, as for making consistent profit even during a market crash, your best bet is having a professional guide you.
Thanks for your videos. This is one that helped me make the jump to get out of a manged fund situation and go it alone with the a simple 3 fund portfolio approach. Thanks.
increased losses for portfolios this quarter are predicted by market drops, skyrocketing inflation, a major interest rate hike by the Fed, andI rising treasury rates. How can I profit from the volatile market right now? I'm still considering whether to sell my million dollar bond and stock account.
After studying the trajectory of great assets like real estate, dividend paying stocks and gold, my conclusion is to buy and invest in what you can afford today! working with a financial advisor can certainly
Agreed, instead of panic or following a hearsay, I simply adopted the service of an advisor early 2020 amid covid-outbreak, and so far, I've attained my most measurable financial milestone of $650k after subsequent investments.
There are many financial coaches who excel in their profession, but for the time being, I employ Nicole Desiree Simon because I adore her methods. You can make research and find out more
Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
Munger died and buffett probably won’t last long. Berkshire hathaway is coming to an end. It seems we also have to consider the life expectancy of our brilliant management
VOO and SCHD is all you will ever need....folks that try to sell you in international markets are adding risk. Also, VOO is cheaper to hold that VTI so it's a clear winner long term.
If you have sole investment in one single country, that is an uncompensated risk as well. We’ve had enough Black Swan events to bet that the USA will not be top forever. Even 5% in international helps buffer against sudden crashes.
Berkshire Hathaway also buys preferred shares in companies like they did in Occidental Petroleum getting a guaranteed return common shareholders don't receive. They also privately own many companies.
Buffett is a great businessman. He did not get to be one of richest men in the world by investing in stocks but by buying businesses. He is a great asset allocator.
Stock futures erased some earlier gains Thursday, after the consumer-price index showed that headline inflation remained firm, while core numbers decelerated from August. I’m thinking of investing $400k into my stock portfolio but unsure about it
Predicting short-term market movements is extremely difficult in reality. It also essentially requires the investor to be right twice: they must perfectly time both their entrance to and exit from the market.
Quite true! You don't necessarily need to be a flawless investor; all you need to do is seek advice from an expert. I began investing in 2016 and pulled a profit of roughly $370k the following year despite having no prior investment knowledge.
I've avoided all of the problems that the volatile market brings. Nowadays, the best way to enter the market is to research, be patient, and seek advice when necessary. I am unable to manage my portfolio due to my line of work, I simply imitate the moves of “Vivian Carol Gioia” , a CFA, whom I watched on Bloomberg Business News.
Vivian appears to be very knowledgeable. I discovered her online webpage and read through her resume, educational background, and qualifications, which were all very impressive. She is a fiduciary, which means she will act in my best interests. So I scheduled a call with her.
I retired in my early 30's and it was not through index funds. I have been investing for nearly 30 years and here is the truth. Invest in index funds if you wish to average 6-8% annualized returns over your lifetime. If you do not have the time to study the world of business and economics, index is the only way.
My favorite thing about buffet is that he passed on apple for years, then ended up making the most money from it. That is exactly most people's experience with Bitcoin: "I don't like it because I don't understand it", then, a few years later, people change their minds and invest, then look back and realize it's been their best performer. Some are just starting that journey now. I was lucky enough to start in 2017, everyone will get there some day, some soon, some not until 2030; but everyone will have a small exposure at some point.
Buffett doesn’t understand Computer Engineering that well. As for bitcoin. There is no reason to buy it. If you buy company stock, the readon for buying is dividends. If you buy farmland, the reason for buying is space and potential to grow stuff. If you buy bitcoin, what can you do with it? Slide it up your digital Anus?
VFIAX is a mutual fund and requires $3,000.00 to get started, purchases/sales of this index fund occur on closing day (no control over price purchases/sales, passive approach). VOO is an ETF (Exchange Traded Fund), with no minimum requirement to start investing, invest with as little as $1.00, and ETFs are bought/sold in real-time (more active approach). I prefer ETFs but hold both, thru my work 401k I buy and hold mutual, and in my personal, I buy and hold ETFs.
Hi Tae, looking at the comments, you need to provide the other side of the equation - spending it. The 10% short term bonds should really be in Treasury Bills. You spend the Treasury Bill money when the market is not doing well - like today. It's protection so you won't have to touch your S&P500 portfolio when the market is down. This is also a "final state" when you retire, not nessasarly when your young and building wealth.
I recommend your channel to everyone. You do resume it all and I have been searching none stop since 3 years for my retirement portfolio. I will have 3 years of living expenses in the bank to avoid the noise and stress from the daily news. I will top up the depleted living expense years when the stock is doing returns. I will sleep very well. Thanks
My idea is that ... One must have 80%. Index funds 15 % government debt and the 5% upcoming alternative investments like crypto basically YOLO that 5 %
Does my plan seem sound given my circumstances? I am currently thinking of just doing a 2 fund portfolio just because im 34 and started investing late because no one talked to me about investing my whole life. And at my age, I need to catch up on growth. My plan is to try and max out my VOO (s&p500) in my Roth ira and roll over what little i have in my 401k into my bigger Roth 401k (for SCHD dividend fund) and contribute up to my companies small match. I'm also thinking this is good because VOO and SCHD don't have much fund over lap. Also having just to funds will let me compound faster given I can't contribute much anyways since I'm low income and only making a contribution up to the match anyways.
Great video I like the two fund portfolio approach just trying to pick the right allocations for each section. Any ideas, I am currently 35 years old. Thanks
Great video! Hello, I have a different Buffett recommendation 90% VOO and 10% BIL I forget where i saw it, I have been tracking it since September of 2023. Thumbs up and subscribed.
I understand the idea of holding bonds because they are less volatile than stocks, and therefore reduce the risk of being caught short in stock market crashes. Furthermore, I'm willing to sacrifice some return in order to obtain this measure of safety. However, when I look at the returns of Vanguard's Total Bond Fund, they are: 1 yr: -13.12%; 3 yr: -2.8%; 5 yr: -0.03%; and 10 yr: 0.99%. My question is, with returns that low, and the risk of short term loss still considerable (13% in one year? Yikes!) why not just hold cash? Settle for 1.0 to 1.5% gain, and no real interest rate risk.
Yeah, my thought exactly. It seems like Bonds are actually declining overtime, though they are known for safe travels, but if you look at the data ,it will be the only instrument that actually drains my portfolio.
@@RakibHasan-hs1me Yes. Just in terms of return, VSBSX has 5 and 10 year average returns of 0.74% and 0.57%, whereas Vanguard's Cash Reserve Federal Money Market has average returns of 1.29% and 0.85%. If a money market fund has better returns than a short term bond fund, I do not understand why Buffet chooses bonds, or why I should. Since I'm holding bonds and/or cash to weather downdrafts in the stock market, and since a total bond fund might drop double digits in a single year, it's not really giving me the protection that I'm looking for.
@@stevenblackthorne4790 He choose a 10% allocation to bonds, short term maturities of basically 1 year or less. BND is an intermediate bond fund and not what he would recommend for his wife. The reason for this allocation to short term treasuries is to 1.) have cash on hand if needed. 2.) to slightly reduce the volatility of the portfolio 3.) to capture higher rates on treasuries when the fed raises interest rates. Short term maturities would act the quickest in this regard unlike medium and long term maturities. 4.) Taxes, I would assume this would be held in a taxable account in the millions to billions of dollars. You would have some tax advantage in holding treasuries rather than BND.
Helpful video. When you retire, will you sell all your shares at once or incrementally over time? I know Buffet hates gold, but do you have any as wealth insurance?
Think, why would you sell all your stock at once and ensure a substantial capital gains tax bill for doing so? People only take out what is needed and let the rest continue to earn value.
Great content!! If you want your 2023 to be better. Now is the best time to put some money aside and invest it. It will help you build passive income and save you from the unexpected. I started my investment journey since 2014 and God has really blessed me with good returns..
Congratulations! I'm fascinated with investing as a single mom and juggling all of those things is quite difficult. I have invested € in some sectors but haven't seen any profit yet. Do you think I'm missing something?
For me i work with (Patricia Grace Ellis) a pro COACH.. Her knowledge and ideas has been top notch, since I started my work experience with her maximum profits has already been the outcome. It's has been a great experience so far...
Great videos. I have a question. How do you rebalance as you get closer to retirement? Do you sell your stocks and buy bonds before retiring? Or do you slowly just allocate more money to bonds each year as you get closer to retirement? I am thinking of using the two fund strategy. Your videos have been very helpful for me to understand this stuff. Thank you.
When you are say 5 years from retirement make sure you have no debt first and figure out how much you will receive in social security depending on when you have to trigger it. Then if you need more income to carry you through a 3 year market downturn put 3 years of your investment money in a short term bond fund or money market fund as a cushion. This bucket method is superior to having to much money in bonds which don’t even keep up with inflation. I would recommend you see a certified financial planner who is fee based now so they can run the numbers to quantify the big picture for you.
VSBSX ... great info. Thanks. Can you please make a video about Peter Lynch. I mean as far as allocations. I think he doesn't favor bonds. What account best for bond funds? 401k, Roth, brokerage? How does bond fund compare w buying direct from us Treasury
Why? You only been investing in the 2010's? Because otherwise QQQ is not really a great core fund. Heck, I don't think it's a good fund for any part of a portfolio.
@@leny7829 I know you implied it was not core, I brought that up to try and explain for me it would not be core NOR tilt. In other words, no place in MY portfolio. I am just curious why it's a "regret" since a simple s&p index fund since 2000 beats it in performance. It just had a crazy 10 year run (that by the way, ended and there's no knowing if it will pick back up). But if you want it for your portfolio there's nothing wrong mate. Good luck!
I set up a trust for my wife that is the same as Warren Buffet except that I am not putting any money in bonds. I have rentals that will throw off cash for the 4% and the overflow will be put into index funds.
target date funds are OK during your wealth accummulation period but not during retirement. This is because during retirement you are liquidating shares. I favor diversification in retirement so that you pick the fund with the highest relative value compared to your other funds (Remember Buy low sell high). Sell high is better than selling shares in a target date fund because you may be selling shares that may be relatively low in value. I am retired and i am now selling my commodity investments which are relatively higher than my equity investments.
i agree. i am doing something similar because active trading takes research, experience and time. my beneficiaries have no clue and will likely underperform. passive investments are set it and forget it. if you have the time and skills...go for it. if you don't, index funds are the way to go.
@@Omar-et7sb some active investors do out-perform passive investors if they have the experience, time and skills. however if they don't, then it is the other way around. do not assume passive investors ALWAYS out- perform active investors and Warren Buffet is proof.
@@vchanpe1 Oh, also there's no empirical evidence that active managers have skill. Over long periods, their performances are so close to luck that the academic community has fallen short of attributing skill. RenTec could change that but no one truly knows their methodology since they are all sworn to secrecy and sign NDA's
@@Omar-et7sb the key word you stated active investing "managers" versus active investing "individuals". Managers have to invest according to their propective while individuals have no restrictions. case in point: i sold all of my bonds and purchased wheat and oil commodities bc of the ukraine war and the fed raising interest rates (bond prices move in opposite direction of interest rates). my portfolio out performed the market. a manager of a balance fund cannot do what I did because he is forced to have bonds so his portfolio under performed.
@@vchanpe1 Good luck with that long term. I mean it sincerely. You'll need it since there's no evidence that your luck will last. That's why the (admittedly small, because it's hard to track) few studies in day traders show they end up losing more than they made over time...
But most international companies use the services of American accounting firms for their audits. Take that into consideration since for international companies to have access to investors they need to have their reports prepared by these international or American auditing firms.
A three-fund portfolio would be right for retirees. A S&P 500 index fund, short term bond fund, and cash. This is what I will have and be doing with it when I retire. 12 months of living expenses in cash 48 months of living expenses in short term bonds And the rest in a S&P 500 index As long as the market is going up each month I will draw from the S&P 500 index. If the market goes down any real amount I will draw from the cash. If I have used all of the cash, then I would start drawing from the short-term bond fund. Since the market has never been down for more than two years in a row having five years of safe money should be enough. Once the market has returned to where is started to go down, I will replenish my cash and short-term bond fund from the S&P 500 index fund. One thing that I would consider if it looks like the market will be down for an extended period, I would drop my expenses like canceling any expensive trips and delaying any major purchases until the market recovers and I might look to pick up a part time job just to make what I have stretch farther just in case the market takes longer than five years to recover.
My current retirement plan is similiar. 18 months expenses in cash, then I'll move down to 3 indexed funds with 10% in bond index (currently short term inflation protected securities index) 10-12% in a REIT index fund and the remaining in S&P 500 index. It has survived running through several financial stress test simulations. The REITs tend to bring it down a bit. Like your plan I would try to mitigate drawing from the S&P and REIT when the market is down so it can recover. I had considered adding a 2 year CD ladder so I would have 3 years expenses in case we have two bears with a short bull market in between, but CD rates aren't really that great and it would just be easier putting the money in a "high yield" money market then draw and replenish the fund during good times than remembering to reinvest in a CD investment month the next year when you had to take it out in March. So I'll probably just do it in a money market if I decide to add 2 more years of cash.
How should a retired person draw cash out of their portfolio? Sell what's up, sell what's down, sell to bring allocation closer to plan,...or....? Would the selling strategy change for bull or bear markets?
Yup. This is more sensible advice than 99% of channels around here... Now, keep in mind Mr. Buffet can handle significant Series or Returns Risks because he also has a lot of cash and a simply exorbitant amount of money. A more sensible portfolio in my opinion, is even simpler, VASGX. This Vanguard fund of funds is 80% equities and 20% bonds - but the Equities are international. The bonds are also international.
I got caught up early in my investing in trying to cover and think of everything and its a trap....keep it simple...in my 401k now I have 80/20 stock bonds and 80% in Index that has 50000$ invested and 13000 invested in bonds and can't be more happier with the returns...easy to maintain and if I want to add something different its easy to due.
The saying is, "when the US gets a cold, the rest of the world has pneumonia" if the US isn't doing so well, others will be feeling it even more, not doing better when we're down!
Those two ETFs are heavily reliant on S&P500’s performance. You’re good. It’s what you believe in. Both of those rely on tech and industrials. You’re fine. VOO’s fees are fire. You’re good dude
Why do you want to buy bond funds it is very risky with the interest changed? Look at this year all the bond fund goes down value when the interest rate goes up. If you have a small portfolio from 1 million - 10 million, you can buy the CD, or CD ladders at a 5.25% return with $250,000 FDIC-insured or short-term US treasury bills. With CD or US treasury bills, you can keep the principal of your money and collect the interest.
Not really. It's more of a problem if it crashes when you are retired or very close to retirement because you may not have the luxury of time to recover. That's why you want bonds. Unless you are independently wealthy and can shrug off a huge hit in stocks, those who are retired or close to it, should generally not have more than half their money in stocks.
What are your goals? Are you retiring in 1 year in which the market going down technically would be bad news for you, or if you're retiring 30 years from now why bother worrying of stocks being cheaper today?
Hi Kim. I've seen a few of your videos. And they are all great. You really break stuff down. Now GOD willing I'll be selling my house, moving out of state, then I just plan to rent. If everything goes well I shouks have about $300k. I would like to definitely get VTSAX but I don't know if I should do 2 or 3 fund portfolio for supplemental income? I was thinking , put most of $300k should go into VTSAX? If you can help me out with this. It will be greatly appreciated. GOD bless.
I would diversify. also depends on your age, and how much risk you are willing to take. If you are trying to be minimal lower risk, I would do 50%-60% in VTSAX (Or a different ETF like VOO), 30% in international ETFS (1 developed markets, around 70%. 1 in developing markets, around 30%). Fill the rest with short term bonds that will mature in 5 years. Especially if you want to to use that money to buy again. Now me personally as a 20 year old, if I had a $300K windfall, I would do 40-50% of that in American market ETF's (60% of that in VOO, 40% in a small-market cap ETF). 50% in international markets (60% in developed markets, 40% in developing). (this is around what I have now, except I have a lot more in a total market mid-cap Vanguard ETF than I would like. I also have some small cap funds like the Marijuana ETF as I believe it will shoot up when legalization happens) But I have a pretty high tolerance for risk, as I am in college and have no family to take care of. If you need more stability and plan to spend a chunk of that 300K soon in the future, you could definietly allocate more to bonds. If you also trust the American market more than international you could choose to neglect the international ETF's, but international ETF's are considered key to proper exposure to the market and are important for diversity in your portfolio.
when you already have millions going to your heirs, recommending them to put that money into index funds is a no brainer.. but also idk if there is a situation where someone ends up being worth 100 billion by investing in these same index funds.. great for retirement, but won’t make you ultra wealthy
They're the same thing. One is a mutual fund and the other is an ETF. You can invest in ETF's in any brokerage of your choice. But you can only invest in a mutual fund on the brokerage that the fund originates from. With that being said: VOO > VFIAX
Bonds are down due to the interest rate increases. When interest rates move down, bonds prices will go higher. Bonds are very sensitive to interest rates. So yes, they have been a bad hold for a few years, but that will change. Remember... the goal is to buy low and sell high. Cheers!
Does that Buffet combo beat the 50\50 hybrid of etfs VOO and VYM? over 10, 20, 30 yrs? Also, how much did the Buffet 2 fund strategy beat SP500 over each time period?? You can also diversify bonds w internarional bonds. Lol. Wonder how the VUG/VYM 50/50 did vs the 90/10 fund hybrid and then vs that other 2 fund hybrid and 3 fund hybrid. Need some stats, but thx.
For example, for could invest in either AOA (iShares Core Aggressive Allocation ETF), AOM (iShares Core Moderate Allocation ETF, or AOK (iShares Core Conservative Allocation ETF), depending on your state in investigating and risk tolerance, etc. but honestly everyone should just choose AOA out of these 3, LoL
Instead of an international fund that only invests outside the US, get a global fund that invests both inside AND outside the US for better returns. You said it yourself, the world is global, shouldn't you have a global fund?
