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Response to elleng (Reply #3)

Fri Jul 11, 2014, 12:16 PM

4. another good investment strategy

I want to get rich in the stock market, but I hate doing all the research. So I take the lazy way out as recommended by Peter Bogle - founder of Vanguard Mutual Funds: I have determined from reading and experience that my current "risk tolerance" equates to about 70% investment in stocks. I keep the remaining investment in long-term treasury bonds. I do not own any individual stocks or bonds, but purchase the S&P500 index fund and the long term bond index fund (VFINX and VBLTX, respectively). Every six months, I check the balance. If it is still at 70% I do nothing. If stocks are up, then I sell some to get back to 70% (sell high, right?). If stocks are down, then I sell some bonds and buy stocks (buy low, right?). I have followed this approach since 1994 and I have averaged a tidy 8.5% return on my investments. It does not take much time and I do not have to do any research or stress out about market calamities - when it is time to rebalance I just do it.

When I have money to invest, I invest it gradually over many months. When I need money, I take it out gradually over many months. I dollar-cost-average. Not all my investment moves come at the best or worst time. It might be that I lose an opportunity but it is very safe (well, safe for stock market investing anyway).

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Arrow 11 replies Author Time Post
Tuesday Afternoon Jul 2014 OP
PoliticAverse Jul 2014 #1
Tuesday Afternoon Jul 2014 #2
elleng Jul 2014 #3
LineLineNew Reply another good investment strategy
kg4jxt Jul 2014 #4
elleng Jul 2014 #5
Tuesday Afternoon Jul 2014 #7
Sherman A1 Jul 2014 #8
kg4jxt Jul 2014 #9
Sherman A1 Jul 2014 #10
kg4jxt Jul 2014 #11
Tuesday Afternoon Jul 2014 #6
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