Comments on: You need a new bond-fund plan

By: Jane

Jane — Sat, 01 May 2010 14:57:03 +0000

You’re thinking is correct: these kinds of savings should be kept in a place where they won’t lose value.
Keep savings for a house in a bank or money market fund. A two-year CD is fine, if don’t expect to buy any earlier than that.

By: curiousK

curiousK — Wed, 28 Apr 2010 19:39:03 +0000

Jane,

Where would you keep one’s savings for a house?

Would you use Vanguard for buying a 2 year CD?

I have been saving up for a house ($20k) and do not want to lose the saving.

In couple years I hope to have around $40k as 20% on a house.

Thanks in advance.

By: Jane

Jane — Wed, 21 Apr 2010 03:30:56 +0000

As you have my book, I’ll answer you in pages. For expected returns with different asset mixes, p 718-719. For suggested asset mixes by age, 723-726. For indexed stock funds, 850-853. For bond strategies, 920-927. For the different types of bonds and bond funds and what they’re good for, 927-949.

By: Eric David

Eric David — Tue, 20 Apr 2010 17:26:40 +0000

I first heard your interview with Larry Mantle on KPCC in February, and bought the massive book. I know that some place in there is the answer to my question but the dollars are burning a hole in my pocket. I currently have GMAC fund with Vanguard but would like to diversify a little further with, I think you suggested, a bond fund and an international fund. Please refresh my failing memory as to what you had suggested or would suggest at this time for a 10M investment. Thanks and keep on educating us.

By: Dan

Dan — Wed, 14 Apr 2010 04:07:04 +0000

Thank you so much for your confirmation and I will get your new edition, mine is quite old I confess.

By: Jane

Jane — Tue, 13 Apr 2010 18:02:52 +0000

You’re right to be uneasy. 100% stocks is completely inappropriate for someone your age. You caught last year’s market upswing, but were killed in the crash. Owning bonds would have cushioned your loss. 50% stock funds (with part of that in international and emerging market funds) would be close to the mark at 53. Vanguard’s bond fund is distinguished by its low costs–especially important for bond investing. The new edition of my book. Making the Most of Your Money Now, talks more about this.

By: Dan

Dan — Tue, 13 Apr 2010 01:37:04 +0000

Dear Jane,

I have stumbled on to your site out of uneasiness in my current investment strategy that has been developed for me by an consultant. I should say he is a friend and has years of experience and a grand reputation. But I am 53 and all of my investment money is going into stock funds 100%. I am just so uneasy with this and have been looking at bond funds such as Vanguards Total Bond Index. I read your book years ago and remembered your name and found you. Any thoughts would be helpful.

By: Jane

Jane — Fri, 09 Apr 2010 16:36:29 +0000

Please don’t listen to speakers who say that you have to get tricky to get ahead. They earn big commissions on put-and-call strategies, with no guarantee for you. They’re out in force, however, because of the reason you cite–rates too low on traditional safe investments.
From your comment, I gather that you can keep on working–I’d definitely do that. Wait until 70 for Social Security. Do you have retirement money that you know you won’t touch for at least 10 or 12 years? Consider a stock market index fund (maybe 35% in stock funds), with the rest of your money in bonds. Chasing yields is a big mistake. I suspect that more money has been lost chasing yield than in any other type of investment.
This is a tough time to have to retire. You have been caught in a national catastrophe.

By: Jane

Jane — Fri, 09 Apr 2010 16:29:11 +0000

You buy an immediate annuity at a time when you feel it’s important to use your remaining assets to guarantee an income for life. That’s normally in your later 70s or early 80s. You cannot time the interest rate market. What you can do is ladder your annuities, putting in some money now and some next year, etc etc. For a look at what other insurers are charging, see ImmediateAnnuities.com.

By: jim

jim — Wed, 07 Apr 2010 16:37:08 +0000

I got to ask. With the last bust in wall street, banks, toxic mortgages, and then to make it perhaps even worst, the federal government has pushed the taxpayer to assume the debt of risk failure models, mortgages, bank irresponsibiity , on and on, so national debt too high, all kinds of problems. How does American dig out of this hole, and to be more specific, I have a question on my own generation.
I am age 65, ready , supposedly , to retire, but my life savings took a big drop, and this was pushed upon all except those wise enough to have been in cash. NOw ,with what we have left, those in our age, we get only 1% interest , even for 100K large savings CD, and stock and bonds both rather at risk these days, how are we supposed to make it, earn equal to or exceed annual inflation? I heard one speaker say stop routine stock and bonds, or buy and hold, but go to use of puts and options? I think some did find this a tool for use, perhaps even got rich off it, but many of my own generation have not learned to use puts and options, surely that is not the only tool or hope we have in this day and time, is it? Learn market gimmicks and tricks, join some would say, the mentality of many who might have helped cause maket failure, by betting against success, like options to the down side do ??
cityjimmy@yahoo.com Looking for safe harbor…..