For those of you who had a very high stock allocation throughout your investing lifetime, how happy are you now? Are you thankful that your younger self was willing to go for it?
Nedsaid: I am pleased that I got started investing fairly early, I bought my first mutual fund in 1984 just after my 25th birthday. I am 65 now so I have been at it for 40 years now. I started out very conservative, my IRA was invested in FDIC Insured Certificates of Deposit when I was young but interest rates were higher then too. I remember buying 10 year US Treasury Zero Coupon Bonds at 8% back in 1989. With the bull market, I gradually got more and more aggressive getting to 94% stocks in my retirement accounts by age 40. In early 2000, I scaled back to 80% stocks and gradually reduced my stock allocation to 70%. My stock allocation is 65% in my retirement accounts and 59% including all of my financial accounts.
Or do you wish you did it differently? Were there some sleepless nights that could have been avoided? Would you rather have had more security at times? A larger emergency fund?
Nedsaid: I should have been more aggressive when I was very young, probably 100% stock in my retirement accounts. But again, interest rates were really attractive when I was in my mid-twenties. I did build a nice emergency fund, I have always liked good old fashioned money in the bank to have a financial cushion.
Conversely, did you invest more conservatively, like 50/50 throughout, and you ended up just fine?
More specifically, does anyone wish they used different investments? Perhaps longer term bonds? Safer bonds? Value stocks? Small-cap stocks?
Nedsaid: I think I did about as well as I could with what was available at the time. I was also learning, my gosh the 1980's and the 1990's were a much different era. The financial magazines of that era were more focused on individual stocks. I bought my first individual stock back in 1989. The big thing was to be invested without paying a commission and no-load mutual funds were the craze then. Indexing didn't start to get popular until maybe the early to middle 1990's. I started my first index fund in 1995 and I didn't really commit to indexing until I started a new job at a Healthcare non-profit in 1999. I did the three fund portfolio with my 403(b): I used Fidelity Spartan Total Stock Market Index, Fidelity Diversified International Fund, and Fidelity GNMA fund.
I also invested with Twentieth Century Investors (now American Century) which started as an Earnings and Price momentum shop, the belief that money follows earnings. There were good funds, I had success with their Growth funds and when they started their Value funds, I invested in those as well. The individual stocks were purchased using a Value discipline. So I still have individual stocks, I still own American Century mutual funds, and I have indexed more and more of my portfolio as I have aged.
For the slice and dicers, I’m wondering if you wish you had kept it simple instead? Many hours spent tinkering?
Nedsaid: In retrospect, I probably should have stuck with what I had and not done the Small Value tilting, which I started in 2007 after attending Merriman seminars. I always had a Value orientation with my stock investments, thus Small Value tilting seemed to be a logical follow on to what I was already doing. I already had Mid-Caps in my portfolio. I probably should have invested more aggressively in Tech and the Large Growth stocks but I have done okay.
Looking for some success stories, or if there is advice for future generations. Thanks!
Statistics: Posted by nedsaid — Tue Oct 08, 2024 10:31 pm — Replies 82 — Views 5071