My 401K is currently up about 15% this year. I’m pretty happy with that number and would like to switch all my current funds into something super stable. Say something that always nets +3%.
I know it isn’t the smartest thing to keep it there forever, but I’d like to keep it there until next year and end this year say up 16-18%.
What funds do you suggest / advice do you guys have? Obviously I’m not going to be retiring any time soon as I’m 26.
If you’re already with Fidelity just move into a bond-based fund with them or their soonest Target Retirement fund. Mine is with Vanguard and they have Target Retirement funds from 2010-2050 based on when you think you’d retire…the sooner the date, the less the risk they take.
I am in VTIVX, personally.
LoL Beck that is the opposite of what I want to do. I guess I can just move it into their target 2015. Just wondering if there was anything that historically has a 1-5% growth specifically. Seems most everything is high now and if it dips I’d like to keep what I made this year thus far.
We’re going to see a large growth, albeit maybe in 15 years, it’ll be substantial. What are you trying to accomplish? It might take a dip, but that’s what it’s designed to do. Let it ride out. Pigs get fat, hogs get slaughtered.
I’m just looking for short term stability. I have reached an amount that I’d like to transfer into a stable small growth market for say the next year. I’ll still be putting all my new investments into larger growth markets.
This. I want to put the bulk of my money into something stable so it won’t take massive losses in the next couple years. Then I’ll move it back when I feel a little safer… All my new money will be invested with some aggressiveness as usual, but the majority will just sit and humm along at 1-5%.
Anyone know a solid fund through Fidelity? I haven’t really looked into it yet. I’ll do that tomorrow.
I’m still not convinced of stability with bonds. Personally I look at bonds as a national savings account where smart money parks for safety over gains. As such I view bond money as a latent inflationary force just waiting to migrate to an investment providing better yields. How long will bond money sit there hoping for safety, could be a long time…who knows?
Let’s face it…it’s ALL a risk so be sure to diversify where possible and have enough hard market holdings (tangibles) to soften any soft market fallout (paper assets).
I realize this is counter US pride babble and traditional retirement advice…which is precisely why I like it. The market will give you 8% per year on average…till it doesn’t.
Sure but there are also ways to avoid the downturns and really make twice the money. Prehaps own some bonds and put options contracts around the trading range. Get them to expire 3-6 months out.
I understand options and leasing out the time value of your holdings to mitigate some risk (covered calls for those scratching their heads). I think we belong to a rather small group that understands options though.
Given the current level of market volatility would you rather be a net seller or net buyer within options?
Added—
I didn’t miss that you were suggesting buying put options, not covered calls. I just prefer to be an option seller wherever possible…I’d rather collect the rent check than pay someone else to rent property I own. I also like when decay works in my favor, not against me.
Well anyone touching options should account for & understand the leverage involved. Options can be used to foolishly swing for the fences, just as a futures or even a simple margin account can.
What did you get burned on? I’ve yet to be burned on writing naked puts. Covered calls I’ve been off on the strength of resistance and had shares swept away I wanted to keep, but at profit.
Thinly traded options can become illiquid & freeze up quickly, not to mention the spread is often a bit of a detriment…but if you’re playing blue chip contracts you shouldn’t ever suffer a 100% loss.
Sounds like you and Cougar like to gamble and are willing to accept a bit more risk than I am?
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Ahhhhh. 3x…leverage & decay & wild IV. I know a bunch of people that got burned on those. Most of us weren’t aware of what those ETF really were and the IV insanity at hand. I steered clear of the 3x stuff myself…I’m fairly risk averse.
Naw that was a mistype. We sells call contracts above the range and sell put contracts below it.
And Joe thats what I love about options someone is always on the losing side. Seems like there is always someone out there thats thinks the opposite of us and keep handing us their money.
I kinda figured you would want decay working for you. Good shit. Are you doing spreads & strangles? Actually I’ll PM you, sorry to be hijacking the thread here.
Hopefully some of the rambling was useful to somebody.
I was selling calls on FAZ after it shot up like 500% within a couple weeks in 08 because I knew the first rally would tank it huge with the decay and make me keep the gigantic premium on a 3x. I got margined out at a 150% loss with no warning. That’s when I stopped using Ameritrade. Literally the next day it dumped 40% and proceded to dump >90% by the end of the year when they would have matured.
That blows. I’ve heard many margin call complaints from retail traders over the years, all saying the same thing. What bothers me is it’s always said to be the margin calls fault, and it’s always a matter of days before the trade would have worked out. I believe this to be related to capitulation, where market timing can be EXCEPTIONALLY dangerous. Only the Goldman Sachs, MF Globals and the hedgies of the world have ways to avoid margin calls, retailers are simply their liquidity. IMO the best way to avoid a margin call is to refrain from over-leveraging, do not put yourself in a position that might become their pawn. You’ve learned a great deal from the event, it was only a total loss monetarily. The experience you gained should be considered priceless IMO.
How many people were short squeezed all the way up on Tulip Mania, or any bubble for that matter? Talk about insanity…TULIP bulbs being the investment of choice? LOL
