Is Buy and Hold Investing Dead?
Vložit
- čas přidán 29. 08. 2024
- Is buy and hold investing dead? A recent WSJ article suggests that the set-it-and-forget-it style of investing can't survive the current economic trends. I walk through my thoughts on the article, along with an important memo by value investor Howard Marks.
Join the Newsletter. It's Free:
robberger.com/...
Financial tools I use:
I track all of my investments, performance, fees, and asset allocation with Empower. It's Free:
go.robberger.c...
My retirement plan comes from New Retirement, the most robust retirement planner available at a reasonable cost:
go.robberger.c...
I used Capitalize for my last 401(k) rollover. They did all of the work, and it's Free:
go.robberger.c...
My budgeting tool of choice is Tiller. It downloads all your banking data to Excel or Google Sheets:
go.robberger.c...
We save and invest our credit card rewards. Here are some of my favorite credit cards:
www.allcards.c...
My Book (Retire Before Mom and Dad):
amzn.to/2MsRJ9B
------------
Video Resources
------------
Shiller PE: www.multpl.com...
CPI Chart: data.bls.gov/p...
Howard Marks' Memo: www.oaktreecap...
Vanguard High Yield Bond Fund: investor.vangu...
WSJ Article (Paywall): www.wsj.com/fi...
#buyandhold #investing #robberger
ABOUT ME
While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
I'm also the author of Retire Before Mom and Dad--The Simple Numbers Behind a Lifetime of Financial Freedom (amzn.to/3by10EE)
LET'S CONNECT
CZcams: / @rob_berger
Facebook: / financialfreedomguy
Twitter: / robert_a_berger
DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.
AFFILIATE DISCLOSURE: Some of the links on this channel are affiliate links, meaning at no cost to you I earn a commission if you click through and make a purchase and/or subscribe. However, I only recommend products or services that (1) I believe in and (2) would recommend to my own mom.
In the 1980s Peter Bernstein published an article showing that a 75% stock portfolio with the other 25% in cash would result in less volatility and better returns than the traditional 60% stock with 40% in bonds. He found that 30% of the times when bonds were positive, cash did as well or better, and of course when bonds dropped then cash did better. Then replacing the bonds with cash and adding more to the stock slice (from 60 to 75 is a 25% increase in stock allocation) to approach the volatility of a 60/40 resulted in better returns.
Buy and hold is eternal. It works. The longer the holding period the better.
I’ve been buy and hold 100% Total Market since 1987. Did just fine over the long term and let’s be clear, 10 years is NOT long term. Even my 35+ years of investing is not sufficient to predict the future results.
I will go to my grave believing the best portfolio uses a total world market buy and hold strategy. You can play around a bit with glide paths, the factor allocations between value vs growth, small vs large, conservative vs aggressive investment, etc. but in the end buy and hold the world equity market is the best strategy for those of us not named Warren Buffet.
Thx for another valuable video @Rob Berger. ❤
Wisdom. It really is this simple. But what would there be to do for all those involved in the financial world, incl. thousands of YT finance channels. They need clicks/reads too. Thus there will always has to be FUD. And those like Rob to pick it all apart.
Buy and Hold. An excellent argument to stay the course.
Great video! Read this article the other day and felt like panicking. Thank you so much for talking about it! So glad I’m subscribed to this channel!
High yield bonds have more risk than you think. The long term default rate is effectively 2.5 percent, which means you can expect to lose that much off your returns, so you are really looking at 5-6%. There is no free lunch.
Hold hold hold. Look at what this country went through in the 20th century. America been winning since 1776. Ride it out. Bad bad, bad week, bad month or even down year does not equal out to decades of overall production
💯💯💯💯💯💯
I prefer to think this way rather than sell my stocks and take losses. I know this isn’t the end of the stock market and so I choose to just chill out.
Buy buy buy..
Every empire ends and it's time for the US. The spending is catching up and their currency will become worthless.
As long as you didn’t buy ownership in a company back in 1776 and try to hold it until now.
Don’t just do something…sit there!
Just stand there!
Yes!
I am 69, order than you Rob, and remember the late 70s as I graduated from college and started my first job in 1977. I have to say it's easy looking back now but not so much during. My first house had a mortgage rate of 14%! Getting comfortable with an asset allocation and riding it up and down over the waves of business cycles is the best strategy. I realize that may be easier said than done.
Great video Rob.
As Waren Buffet is credited with saying, the stock market is there to take the money of impatient investors and give it to the patient ones.
The more people who follow the action described in this WSJ artical, the better off long term investors will be.
I always learn something from your newsletters. Thank you.
You are so welcome!
I am 100% equities. This market funk is making my retirement cheaper.
I started investing about three years ago. Indexes only, total market S&P and a little total international. I have never sold a single stock after buying and don't plan to for a long time. I could care less what the market is doing any given day. The best thing I can do is to accumulate and get out of my own way.
Everybody screams in every downturn cycle. I experienced it in 2001, 2008, 2013, 2020, 2022. Just ignore it, keep buying.
Just have to say, yours is one of the best finance channels on CZcams . And believe me I’ve seen just about all of them. Always enjoy your videos.
Rob the research and time you put into these videos are much appreciated. Thank your for your insights and keep up the good work!
I personally buy and hold. I’m not an indexer, though. I choose based on fundamentals, monitor fundamentals over time, always give companies a chance to navigate full business cycles, and make as few changes as possible.
Rob, thanks for continued steady hand approach to investing. I worry these types of articles derail several families (disappointing from a source such as WSJ). I would LOVE for your review of High Yield Bonds. Before setting my portfolio just before retirement I played with Portfolio visualizer extensively running different asset classes through Monte Carlo. For the bond portion of my portfolio I was always surprised (I'll say shocked) to find that setting your bond portfolio at 50/50 investment grade to high yield not only increased my return (expected) but also reduced the portfolio's worst year and std dev (unexpected). I moved to this strategy and it has saved the bond side of my portfolio this year. I anxiously await your analysis on this.
Investing in alternative income streams that are independent of the government should be the top priority for everyone right now. especially given the global economic crisis we are currently experiencing. Stocks, gold, silver, and virtual currencies are still attractive investments at the moment.
been having 50% of my portfolio currently in T bills and 50% in equities. not worrying 1 bit! equities do have to compete with rates for the foreseeable future, but businesses will continue to innovate and advance like they always have been for centuries.
Same here
Doing nothing and continuing to hold is almost certainly best for those in their 20's and 30's. Maybe 40's. For those 10 years from retirement however, waiting 10 years or more for the market to turn around feels like a wasted decade.
Point taken but as 71 year old nearing retirement, I have been buying for nearly 40 years and many of my major expenses are somewhat inflation proof. We finished building a net-positive efficient home before inflation spiked. It’s located in a town with relatively low property tax rates for this state. Our solar production more than covers energy consumption by the house and our EV. We have a well and septic system that I expect will compare favorably to water and sewer rates in more suburban communities. To avoid selling appreciated assets when paying off the construction loan, I financed about 10% of the final cost. That’s with a 15-year mortgage at 2.25%. Everyone’s experience is unique, but in my case I see no reason to change my rollover IRA allocation which is in three index funds covering total US and total non-US equities plus total US bonds.
I agree, two great books in my opinion, The Psychology of Money & Winning the Losers Game. What game are you playing & if long term it is difficult to beat the market year after year
Short time listener (just discovered your podcast), first time commenter. Excellent vid! Really appreciate the body of work you are putting out Rob. You are becoming the lighthouse for what is becoming a very foggy, and treacherous shoreline. Many thanks!
I saw that WSJ article and was hoping you would comment on it. Great Video. I will be interested to hear downside of high yield corporate bonds in future videos. Obviously would want in tax advantaged account.
For what it’s worth, I think your approach is the exact opposite of silly. It’s serious and it’s seriously prudent. Stick with this approach of not only super low cost funds and ETFs that are well diversified with excellent asset allocation but also you are getting terrific income tax diversification as well. Fabulous approach to not just investing for retirement but also investing for income tax diversification of your future retirement income. Bravo!
I like youre conclusion.
I’d also add that as interest rates go up, any existing bonds go down in present value. The FED may not raise interest rates again in the next year. But I highly doubt they will lower them any time soon. If they do change at all, I’d expect them to be increased.
Thus, I believe bonds may drop in value should the FED choose to increase rates again.
Just go and look at any bond funds and notice how they’ve lost value over the last two years.
Do you think long term, rates will come back down? as they were after 2008.
Buy and Hold works with index funds like vti for long term. But you have to babysit individual stocks. A fair amount of large cap dividend stocks are at the 20-year lows
Rob, your videos are so good. Thank you for your research, thoughtful comments, common sense, and presentation skills!
Thx Rob…as always, great to get your analysis on these types of articles. Thx for the efforts!
Constantly churning your portfolio is highly inefficient from a tax point of view. I've been buying and holding indexes for a long time, and if I wanted to liquidate it all today, I'd be facing a massive tax bill. I remember not long ago there were similar articles saying the 60/40 portfolio was "dead" because bond rates were too low. Ugh. OK, well, here we are with high bond yields. The market has a way of normalizing, but many people can't see the forest through the trees. Ride it out. And better yet, keep investing as you ride it out. If you're happy with long-term averages of roughly 8% - 10% per year, then all you need to do is ride it out. Stay properly allocated. Keep investing. Reinvest those dividends. Unless you're retiring tomorrow, you're just watching numbers on a screen go up and down at the moment without real consequences. As you near retirement, you can start concerning yourself with tactical actions that will allow you to become more defensively positioned. But, even then... there's a valid argument to be made that keeping a similarly allocated portfolio will do just fine even through retirement.
I'm starting to buy. Discount is on.
Your experience insights and rationale commentary are much appreciated, thanks
What a great review of an article that has probably put thousands of hard working Americans on pins and needles. Thanks for doing the research and thoughtful insight!
stocks are for employee compensation. They stopped being a prudent investment vehicle by 1990
“Buy and hold is eternal “- Jack Bogle
I’m in the 100 percent VTSAX set it and forget it for my investments. I also have no debt including no mortgage and plenty of cash in money market funds for emergency and future purchases like home repairs and future, reasonable cars
In the words of the late, great Jack Bogle "Buy and Hold is Eternal."
It would be interesting to see how incremental buying during the 00-09 period would compare, especially since that's how most people invest while in their working years. The portfolio return would be much better since there would be times when you are buying lower.
This is easy to see in portfolio visualizer. For example, if you invest 100% in US total stock market from 2000-2009 starting with 0 and adding 10K annually, you end up with 98K after accounting for inflation. Hardly a success given that you put in 100K in. You will have to wait a few more years to see substantial growth.
Schiller PE is inflation adjusted earning. So, during high inflation, the nominal earnings could be very high even when Schiller PE is very high.
@@dropby1913can my simple minded self ask the implications of your comment?
I did that and 2008 lost about half then kept incremental investing through to today. It came back and gains have been decent.
@@MichaelHallerandAssociatesinvestment is also about beating inflation. For example, if the inflation is 20%, I will be very happy if the stock goes up by 20%, even when there is no real gain.
Amazing video! Looking at the info and visuals I always go back to missing the largest days of the S&P 500 and the impact it would have mathematically on returns if you pulled the money out. I see it as buy and buy more, accumulate a nest egg so I never have to touch the original amount and can just live off dividends forever. 8-10% return average over a 30-year investment with $1000 put in a month adds up to a nice retirement.
Well timed Rob started DIY (advisor retired.) Too many stocks so unwinding to rebuild. For me simple w/good avg return. Thx for video. Edit: finally able to finish video. Read tracking error on HYB funds maybe not stable in bear markets, indices not easy to track and tracking error hasn’t been great (less last 3 yrs). Agree w/your end view. Also respect option to change and update.
Gotta ask: what if you are just entering retirement? What if 2024 turns out to be another 2000? We cannot avoid the drop. But, we no longer have time to wait for a recovery. Panic selling wont work, but you have to sell something to live. Each sale is now a larger portion of the portfolio. So even if you are lucky enough to live to a recovery, you will no longer have the assets to benefit?
Those were very good years for me as I had plenty of business and invested on an automatic basis! Every 5 days money was transferred to Mutual funds including my daughters 529 plan (started in 1991). I remember hearing the Obama Inaugural Address (08) while working at the last good project that came along for about 7- 8 years! That woman was running a day care business from her house which slowly didn't have enough clients to remain open! My portfolio grew slowly but I got to a point where I couldn't add to it not long after 08 and even had to pull some money out of taxable accounts to cover School taxes a couple of times!
Too many idiots did not live in the 1980s. CD rates were 16% and hone loans were over 16% too many people have been spoiled with 3% hone loans which caused a over priced home price bubble.
But the actual cost of a house is dramatically higher now. And salaries have not kept up across the board.
I grew up in the 80s. It seemed like there was a lot more options to getting a decent raise and prices wear super low compared to today. People seemed pretty optimistic back then. I think they probably didn’t expect as much but also didn’t need as much either.
@robberger if you compare inflation data from today to the 70s you have to realize energy is factored out today. In the 70s inflation reflected energy. You are understating inflation today when you make that comparison. You should know better!
It depends on the person and their personal situation, temperament, and goals
I stay in VTI, if it drops 4% I move 2% into SPXL x3 leverage, Every time total leverage position hits 12% down, I shift 2% more in to leverage...rinse repeat till SPXL position as a whole has a 10% gain, then shift it all back in to VTI...Steals the thunder of the drops feel free to backtest, Have made above market returns off leverage 3 times this year.
If I was younger and still working, 3-4% instead of the 2% would perform better.
14:00 thanks for the clarification Rob!!
Love the show. You should do a portfolio visualizer from 2000-2010 ish with a 4% withdraw rate. Do a 60/40 vs a 100 % s&p500. Blew my mind.
Try to run portfolio visualizer from 2000-2010 for 60/40 vs 100% mid cap.
Buy and hold investing is not dead, but it is a good title to get lots of clicks, and lots of people to make videos and write articles about it.
The equal weight S&P is much lower - it’s being skewed by the magnificent seven.
I read this article a few days ago and was wishing I could know what you thought about it. Wish granted!
I didn't become financially independent till I was ,in addition to buying my second house, I'm also making money on a monthly basis through passive income, and I've also met some of my goals. I really hope this motivates someone to know that it doesn't matter if you don't have any of these things yet; no matter your age, you can start today. Investing can help you change your future! By participating in the financial market, I took a significant decision.
Wow, interesting indeed! Currently I'm in need of investment ideas or tips. Earlier this year I hesitated and failed to take any action until now. However, I'm determined to try some new as I am very open to various investment ideas . I want to be retired in my forties or fifties. I really wish I can achieve what you have achieved and I believe it will happen
Excellent video Rob! Does this change your perspective on asset allocation between stocks & bonds?
Great video!!! One thought I have is that our country/goverment uses the premise of "too big to fail". So I think there will be pressures from the economy to keep results reasonable, since there is too much to lose if we had a depression like event. No real data to support this, but wishful thinking maybe. When you look at the market over 50 years, the trend is always up... lets hope that continues...
Excellent summary of the WSJ article and the current stock/bond environment. Nice job!
I agree that buy and hold is still extremely valid for most longterm investors. That said, I have a friend who has been a professional financial advisor for decades. He told me recently that he can't get anyone under the age of 40 to have a conversation with him about it. He said that younger people see the stock market as a video game (i.e., something that they can "beat and win"). He said that they trade stocks constantly, and it's part of the reason for recent volatility in the market.
By the way, Rob, I like the CGC Rom #1 in your collection. I can't tell, but I sincerely hope it's a 9.8 or better! 👍
GREAT CONTENT!!!! STRAIGHT TO THE POINT!! THANK YOU !!
Hi Rob,
Thank you for your videos. I have benefited from your investment discussions and presentations. I am over 67 and am interested in how you have designed your portfolio. . For example, the percentage you have allocated to total stock, Bonds or other type investment. If you could mention the Ticker Symbol for each of your portfolio investment, it would be great Many thanks.
I recently watched an old interview with Jack Bogle who likes the set it and forget it attitude, but says bonds are as important to a portfolio as stocks, and has had a 50/50 mix of each
🤘🏻Rob I love all your content and greatly appreciate it … you should make a video that the title is “this is not a recommendation” which contains your exact portfolio in percentages …. Hopefully, all of us regular customers realize, this is your portfolio… Not a recommendation for ours … but obviously the title of the video would be as blatant of a disclaimer as you could possibly give to protect you legally 😂
let me add this.. if you buy and hold 1 of the aristocratic or king stocks and it drops a little so what, your still getting a quarterly dividend without fail . and if there is a big big stock market crash like back in 87 and 20 and in 08 that is the time to buy as much of your stock as you can, no pun intended here but really stock up on your stock, and you are also doing dividend reinvesting so when you retire you will have a great amount of quarterly dividend money. and you will be living nicely. again just my 2 cents
Thank you for such a well done video with a clear analisis
Hey Rob do you have a podcast or somewhere thats easier to listen to your videos without all the ads like during a drive/jog?
One last comment, I'm also a huge fan of iBonds vs Bond ETFs, true you pay slightly more (very slightly) but it allows you to build ladders and in the event you need to liquidate you can choose which durations for tax planning purposes are best to exit. More importantly, for me, it allows the peace of mind that if you just hold to maturity you always get your principal back (very close). To me, the control that your own ladder provides you is well worth a one or two basis points of fees.
Just curious, why not create your own bond ladder using treasuries and high-yield CDs? I owned Bond ETFs and got killed when interest rates started to drop. Also, as rates start to drop, you could buy some high yield corporate bonds to juice up your returns. I'm doing this myself and wondering what the risks may be?
Wonderful video! Thank you!
Well said. Thanks much.
Hey Rob, love your show! Lots of great advice, many thanks.
Have a question - as far as paying taxes goes in retirement...I have a taxable account, tIRA and Roth. I have heard people mention using the Roth to keep your recognized income below a certain level to manage taxes in retirement. Is this really a best practice? Wouldn't you really rather protect your Roth funds so they can continue to hopefully grow? A one time tax payment from a Roth permanently decreases that amount of potential Roth growth. Trying to rationalize an approach, maybe at a high enough tax rate it is worth it? I'd appreciate your insight. Thanks!
0DTE options especially in indexes has definitely picked up. 0DTE. Makes up almost 50% of intraday price action.
Hi Rob, what are your thoughts on the JEPI ETF? Thanks.
I too saw my IRA dwindle in 2008 and again recently. My taxable vanguard total stock market fund has performed really well. However my IRA (the bulk of my portfolio) is 100% VBTLX and VTABX. I’ve been holding in the IRA since 2011 when I was 51. I’m turning 65 this year and can’t help but think Vanguard’s Personal Advisors (to whom I pay a quarterly fee) caused a blunder by keeping me in their rigid 50/50 stance. They are arguing with me about my desire to have more equities in the IRA. Would it be foolish to move some treasury bonds to a different investment? Equities? Tips? Reits? Corporate bonds? I feel like I have to do something. I am a widow - there will be no more income in my future other than SS.
Journalists rarely write the headlines it's usually a copy editor, news editor and they're rarely subject matter experts like the writer.
No it isn't, that is the only way to limit taxes. Also long term that is the best strategy. I have SCHD/SPLG 50/50. I will sell out of SPLG at 55 and just retire on SCHD. SCHD has the track record of growth, income, and protection in crashes. I'm confident in holding SCHD forever.
I am 7 years away from retirement. The brunt of my money is in SCHD/VIG/VEIPX. Even if bonds offer a good coupon rate, it will not outpace dividend growth in the long run. Uncle Sam will be forced to cut back on his crazy spending because the world will refuse to lend him money at some point.
AVGO is the single stock that is carrying SCHD and it's star performer. I'm just invested in AVGO since 2020 and I'm up 57% this year.
Dude ROM is my favorite hero after Spiderman. And yes, I am old too.
Using CAPE ratios to predict future returns was a miserable failure after the GFC with a lot of laughably pessimistic forecasts being made in 2011-13 that turned out to be all wrong and missed the bull market. If something doesn't work in the past, there is no reason to think it will work in the future other than random chance.
I'd love to hear more about your thoughts regarding the safety of high yield bond funds. My grandmother was in junk bonds back in the 80's and it was a disaster for her, though I don't really know the details. Any thoughts on high yield bond ETFs and how they compare? BBHY vs HYG for instance?
High yield bonds can be a good investment under the right circumstances. Now, may not be the best circumstances. The risk premium for high yield bonds over the last 20 years has been about 4.2%, with a range of 2.5 to 6.5%. VWEHX has a reported SEC yield of 7.21% presented in the video. VWEHX has an effective duration of 3.71 years, so you can use the 4 year Treasury for the risk free rate of 4.79%. That means the risk premium is about 2.42% (7.21% - 4.79%). If you actually use the recent actual distribution of $.0263 per month, or $.31 annualized, that produces a return of 6.25% (.31/5.05), or a risk premium of 1.46%. At the payout of $.31 a year, to achieve an average risk premium of 4.2%, you should pay about $3.45, not the current $5.05. Could VWEHX be a good investment? Possibly. For me, I would wait until circumstances provided a greater risk premium: Reduction of VWEHX price, or reduction in the 4-year Treasury.
You can use a similar approach to valuation for HYG, it is similar to VWEHX but HYG has a greater expense ratio.
What would be the purpose of the hypothetical capital you are deploying into these bond ETF’s? One year treasuries yield about the same as these.
ETF’s can be extremely convoluted in that there are can be counterparty risks, sponsor risks, hidden fees above the management fee, ect. To place any meaningful amount of money into these, otherwise I wouldn’t see the point in even buying them, you would want to understand them completely and many ETF’s lack transparency. Often professionals don’t understand them and an ETF does not mean safe.
To buy one year treasuries I would absolutely not purchase them in an ETF. My opinion on these is they are built for lazy financial advisors and generally ignorant retailers.
Remember long dated yield always assumes significant interest rate risk that is not asymmetric with respect to equity. The inversion means your are not appropriately paid for duration, as well as illiquid or insolvent. The more realistic risk is devaluation and opportunity cost, which may prove to be significant.
I think if you need to ask the question, stick with big box equity ETF’s and fire and forget. Let your grandmothers lesson be yours. Consider the possibility that you don’t need to have anything to do with commercial paper or bills. Despite the rhetoric on modern portfolio’s position you need to maintain a targeted fixed income allocation.
Ah, I didn’t mention high yield savings offer about 5% as well if you are looking to keep your powder dry. Though I get the feeling that may not be why you’re interested in these.
Plus... almost no one "sets aside $1,000 and looks back 20 years later". That cherrypicked example from the article was terrible. Most likely, that hypothetical family or investor would have continued to invest every month as they got paid, and that would have dramatically changed the results.
I don't have a choice, as I cannot pick good stocks to save my life. Dividend paying ETF's for the next 30 years, with some bonds and CD's, will have to do it. I can't afford to throw any more money away on individual stocks, and definitely not on trying to figure out the right time to buy and sell.
I buy individual bonds and hold until maturity. All bond funds, including high yield, will go down in value as rates rise. Ask Alexa if rates are done rising, since I don't know.
Invesco Bullett shares are a unique fund series in that all their bonds mature in their designated year and the fund liquidates in that year. BSJP is one high yield that matures in
2025 and is currently yielding 7.8 %.. People talk about the SP500 like it is a static index, but it is actively managed and changes constantly.. it has Never been this top heavy and less diversified than it is today. Looking at an equal weight fund like RSP will lower the CAPE ratio, but its return shows the real status of the market today.
Bond guru Jeffrey Gundlach says rates will continue to rise over time due to government debt that has to keep selling bonds..
Always do the opposite of whatever Jim Cramer tells you to do and you will win big every time!
It seems to me that most people who buy stocks aren't well informed investors, they are gamblers. Index funds don't provide good returns because they combine efficient companies with less efficient ones to lower the risk of a major loss from ignorant investing.
Index funds provide great returns though. Whatever source told you they don't is wrong
Stocks might keep up with inflation but even if they do you lose purchasing power due to capital gains and dividend taxes.
America is financially insolvent, and most Americans will never retire and die deeply in debt. Sad but true
Borrowing to retired people with unsecured debt is probably not the best decision companies would make.
Interest rates are now as high as they were for much of the 1990's, and we all remember how horrible the economy was then :eyeroll
And what was our national debt in 1990?
@@chrischris9157too high then, too high now. I recall everyone then talking about how it was too damn high. But by the end of the decade the Fed budget was running a surplus, not a deficit.
"Don't do something. Just stand there. " Jack Bogle
The 70s had 5% earnings growth a year on average and PE ratio went all the way down to 8. Inflation might lead to this happening again or if not then maybe worse.
JNK's yield is more like 9% today. There are also some floating rate junk funds that are paying over 10% and because they invest in floating rate debt, they have relatively low Duration.
My own fixed income portfolio is paying around 7.5% and probably 3/4 of it is in investment grade bonds.
Definitely not no risk though and no upside potential
@@robnelson6545- No upside? On my fixed-income? Probably not while rates are rising. But I do have several individual floating rate positions that seem mispriced - potentially with as much as a 20% upside...
With markets tumbling, inflation soaring, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly-which means more red ink for portfolios this quarter. How can I profit from the current volatile market, I'm still at a crossroads deciding if to liquidate my $125k bond/stocck portfolio.
The market is volatile at this time, hence i will suggest you get yourself a financial-advisor that can provide you with entry and exit points on the shares/ETF you focus on.
With the assistance of an investment advisor, I was able to diversify my $401k portfolio across multiple markets, earning over $980k in net profit from high dividend yielding stocks, ETFs, and bonds in just a few short months.
wow ,that’s stirring! Do you mind connecting me to your advisor please. I desperately need one to diversified my portfolio.
Good informative video 👍
The market has always recovered. Just hold your nerves and it’ll come good! I just yawn when I hear about a coming recession and stay fully invested in stocks. That has worked well for me.
I’m buying and holding for the rest of my life lol 💯🤷🏽♂️
Articles titled ‘Is Buy and Hold Dead’ date back quite a few years, 2009 ish. Is this just a subject that gets cycled and recycled by financial talking heads? Is 60/40 dead? etc.
Thank you Rob for these great insights. Would you be able to consider sharing some examples of specific ETFs that may be ideal for an International fund and value fund?
I have a video on my channel that talks a bit about international funds. that may be helpful. For the value fund, do you consider that to be mature companies producing plenty of cashflow, or companies that are undervalued?
thanks for the effort and the sharing. as to VWEAX, wouldn't a higher interest rate environment lead to a tightening of credit which would eventually make High Yield Corporate Bonds more vulnerable? thumbs up.
Great video.
Great video again Rob..I'm from the UK and my only portfolio is the s +p 500 etf ..maybe switching to say Vanguard All world etf which incorporates developed and emerging markets globally or Vanguard Global All Cap Which covers large mid small developed markets..any thoughts ?
What do I care about 10 year old P/E ratio? The technology was stone age back then. The world was different.
Rob where is the price/earnings ratio in empower. You mentioned that you could determine what your own price to earnings ratio is. I can’t find it. Thanks
Before 2022, my 60/40 retirement (403B) portfolio was doing great (stable with a decent divi). With the Fed interest rate actions, I’ve gotten “crushed” as both stocks & bonds took a beating. However, I believe when rates settle, I’ll be okay. I’ve also diversified a bit by moving about 25% of my portfolio to an S&P500, some cash @ 5+%, & a growth fund. We’ll see what happens🤞🏾
You got it backwards. Your portfolio did well because of FEDs artificial interest rates, now it tanks because of the true underlying market weakness. Also, current rates arent that high in comparison to historic values.
If you hold longterm there can be a recovery of stocks though even with interest rates of 5 to 8 %
Can you give us a general idea of the asset allocation you use for retirement portfolio?
Jumping into junk bonds reeks of market timing. When do you jump out? By the time you have that information, you're almost certainly too late. I will continue bogleheading
When you are close to retirement or in it, buy and hold is a bad option, especially when you have risk free investment options at 5% returns. Just sayin'.
This doesn’t work well in my head. SP500 doubles every 7 years. Would do much better in there wouldn’t it? There’s not a lot of risk at all in that, just volatility, but that’s accounted for in a 4% rule of thumb withdrawal rate in year 1, then adjusting that $amount by inflation every year.
@@NoRegertsHere Sequence of returns and losing part of your nest egg to volatility on the down years. Investing is generally over when you retire thus 5% risk free is better than 4% with volatile risk. A conservative stock portfolio is a better option when interest rates are low.
I think the money supply increase and low interest rates fuels the market after the 2008 financial crisis . Maybe a similar rise to the roaring 20s . The stock market needs a reset and why so many financial managers preach doom and gloom because they need the reset to reinvest . They don't want to invest at a top end of a market . This is a stagnated market and could go on for a decade or more . We may have had 30 years of returns in a decade