Results 1 to 5 of 5
  1. #1
    All-Star
    Points: 13,376, Level: 35
    Level completed: 4%, Points required for next Level: 674
    Overall activity: 0%
    Achievements:
    10000 Experience PointsVeteran

    Join Date
    Sep 2009
    Location
    La Fox, IL
    Posts
    1,201
    Points
    13,376
    Level
    35
    Thumbs Up
    Received: 2
    Given: 0

    Investing Question

    In my 401K, I currently have it all invested in Equity. I am looking at a mutual fund that invests in something other than equity right now. I am looking at high yield bonds and am wondering if anyone has any opinions as to a good mutual fund to use. I understand that interest rates have been at historical lows and they are bound to increase sometime in the future, therefore decreasing the value of bonds. My goal is to diversify my portfolio.

    I am currently only 1 year out of college so I do not have a lot of money invested, but My equities are pretty risky. I have 1/3 invested in international and 2/3 invested domestically. Domestically, I have most of my money tied up in small to mid cap companies with an emphasis in growth. I also have a small amount in a 2050 retirement target fund.

    Any ideas or opinions? Should i be looking at something other than bonds? Any suggestions of Mutual funds or ETF's to look at? Thanks in advance.



  2. #2
    Legend
    Points: 203,102, Level: 100
    Level completed: 0%, Points required for next Level: 0
    Overall activity: 23.0%
    Achievements:
    SocialCreated Album picturesVeteran50000 Experience Points
    dmclone's Avatar
    Join Date
    Oct 2006
    Location
    50131
    Posts
    13,292
    Points
    203,102
    Level
    100
    Thumbs Up
    Received: 190
    Given: 294

    Re: Investing Question

    For short term bonds I chose VFSTX

    For a mutual fund I chose VWELX



  3. #3
    Bench Warmer
    Points: 9,352, Level: 29
    Level completed: 1%, Points required for next Level: 598
    Overall activity: 0%
    Achievements:
    Veteran5000 Experience Points
    acqflisu's Avatar
    Join Date
    Apr 2006
    Location
    Davenport, Iowa
    Posts
    233
    Points
    9,352
    Level
    29
    Thumbs Up
    Received: 0
    Given: 4

    Re: Investing Question

    Quote Originally Posted by SCNCY View Post
    I am currently only 1 year out of college
    Diversification is a great thing....but I would not worry about that now. Assuming you are 24-ish, I would take advantage of a depressed market and research under-valued equities, maybe more value-based than growth and stay away from the bond market for the next several years. Look to diversify as the market returns and you gain wealth and years. Just an opinion of a middle-aged investor.


    If you wait until the last minute.....it only takes a minute.

  4. #4
    Hall-Of-Famer
    Points: 51,467, Level: 70
    Level completed: 23%, Points required for next Level: 1,083
    Overall activity: 1.0%
    Achievements:
    Veteran50000 Experience Points
    usedcarguy's Avatar
    Join Date
    Apr 2008
    Location
    Ames
    Posts
    3,680
    Points
    51,467
    Level
    70
    Thumbs Up
    Received: 12
    Given: 30

    Re: Investing Question

    What type of high yield bonds? Municipal? State? Corporate? There's been a huge move of people and fund managers moving to bonds as a means of capital preservation. If the yield is high, there's a reason. Just my opinion, but if you're looking there you're late to the party cause the herd is already there. If you believe rates are heading up, then the value of the bond has to drop so that the yield reflects market rates. IMO that's a sucker's bet. I would focus on companies with good cashflow, a good return on both assets and equity, don't have a ton of debt, and pay a decent dividend. Eventually the market will value them as they should, and meanwhile you get paid to wait. I do this by purchasing individual equities, although you can find funds that use a similar strategy. At your age and this point of the economic cycle, it's a slam dunk because based on those factors, stocks are dirt cheap right now. And if stocks are cheap, you'll be WAY ahead by buying the good ones. For the longterm, buy what's cheap and sell what's expensive. Just my $.02.


    Walking on water is easy. Just do it in December when it's frozen.

  5. #5
    All-Star
    Points: 13,376, Level: 35
    Level completed: 4%, Points required for next Level: 674
    Overall activity: 0%
    Achievements:
    10000 Experience PointsVeteran

    Join Date
    Sep 2009
    Location
    La Fox, IL
    Posts
    1,201
    Points
    13,376
    Level
    35
    Thumbs Up
    Received: 2
    Given: 0

    Re: Investing Question

    Thanks for the advice. I appreciate, just wondering if anyone else has any other ideas out there?



Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
  • Football
  • Iowa State vs. North Dakota State
  • August 30, 2014
  • 11:00 AM