Conservative. Idaho. Software engineer. Historian. Trying to prevent Idiocracy from becoming a documentary.
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"And we know that all things work together for good to them that love God, to them who are the called according to his purpose." -- Rom. 8:28
If you haven't read this, you might want to. I want all my readers to be rich. I have updated it with new learning about preferred stocks and retirement.
I'm curious - do you invest in mutual funds or index funds? I've seen convincing arguments that the latter perform better, because their overhead costs are tiny. Also, stock picking by traditional fund managers has been shown academically to perform no better than random picking, but they charge a lot to do it.
BTW, I'm one who is regretting being in too much cash, fearing another major upset in both stocks and bonds. Modern portfolio theory says to invest in asset classes that are anti-correlated. Unfortunately, the broad class of stocks and the broad class of bonds has, since the crisis, been moving in a highly correlated manner.
I have quite a bit in mutual funds. I know that the average index fund does better than the average stock fund for the reasons you give. But I don't buy average stock mutual funds.
I kept a lot in cash for a while after the crash, but I didn't move from stock funds to cash. I knew it would come back. I didn't sell my bonds because they were paying 6% or better.
Good stuff.
ReplyDeleteI'm curious - do you invest in mutual funds or index funds? I've seen convincing arguments that the latter perform better, because their overhead costs are tiny. Also, stock picking by traditional fund managers has been shown academically to perform no better than random picking, but they charge a lot to do it.
BTW, I'm one who is regretting being in too much cash, fearing another major upset in both stocks and bonds. Modern portfolio theory says to invest in asset classes that are anti-correlated. Unfortunately, the broad class of stocks and the broad class of bonds has, since the crisis, been moving in a highly correlated manner.
I have quite a bit in mutual funds. I know that the average index fund does better than the average stock fund for the reasons you give. But I don't buy average stock mutual funds.
ReplyDeleteI kept a lot in cash for a while after the crash, but I didn't move from stock funds to cash. I knew it would come back. I didn't sell my bonds because they were paying 6% or better.
ReplyDelete