Comments on: The 4-Fund Portfolio: Allocation Guidelines – Episode #37

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By: waway74

waway74 — Fri, 22 Jan 2010 09:57:33 +0000

Ethan,

Great show. One question from me, how about buying high yielding preferrence shares and use its dividends to buy more dividends, instead of buying bond fund. I just don't like paying >1% of annual management commission to the fund manager. Thanks.

By: club penguin cheats

club penguin cheats — Wed, 23 Dec 2009 04:15:16 +0000

You should always have a well funded money market fund even at age 25. Furthermore this guideline starts to get a bit risky the older you get i.e. above age 60.

By: contribute_401k

contribute_401k — Mon, 21 Sep 2009 07:57:36 +0000

Great! Thank for information, I'm looking for it for a long time,

By: 401k_ira

401k_ira — Fri, 04 Sep 2009 06:18:43 +0000

That's the great article! I just pass 'n read it, two thumbs up!

By: Steve83

Steve83 — Sat, 08 Aug 2009 19:13:44 +0000

Ethan,

I was wondering whether you can do a video on average annual returns for mutual funds. Discussing, the differences between all the returns (e.g. AAR, Cummulative Returns) and using the returns to evaluate future performance.

By: paulbjaylee

paulbjaylee — Sun, 05 Jul 2009 18:56:37 +0000

Many people I believe fall into the pit hole of your first 2 strategies. The thinking is what gets people to do crazy things, ruminating will only exacerbate the problem and make it bigger than it actually is. Taking change for what it actually is and embracing will fidelity 401k indeed help with coping and seeing the next logical step to take.

By: nhmcdel03

nhmcdel03 — Tue, 09 Jun 2009 15:30:14 +0000

Good information.

By: Fred Kern

Fred Kern — Wed, 22 Apr 2009 20:28:12 +0000

The statement about the interest the second year in the tips discussion where there was 3% inflation was wrong at $13.00, it should have been $10.30. I suggest that you edit these videos for correctness..

By: ethan

ethan — Thu, 15 Jan 2009 18:07:41 +0000

Hi Axels, that is totally understandable, the majority of people are allergic to volatility; we humans are extremely emotional when it comes to our money.

However, I would like to point out that you don't actually lose money during a market downturn unless you actually sell your investments during the downturn. Having said that, it is important you are not buying broad based index funds at market heights either, and you can avoid that through a Dollar Cost Averaging program ( see here http://www.thewaytobuildwealth.org/2008/12/doll...).

Spending a lot of time and energy worrying about 'paper losses' on broad based index funds is a waste. Furthermore downturns usually create real opportunity to buy additional slices of corporations at discount prices.

I would like to share two solutions to your allergies toward 'volatility' .

(1) Put your psychology in check and adjust your temperament to handle turbulence. Understand that by owning an broad based Index Fund you own everything, so unless you've given up on capitalism there is no reason to sell. Furthermore downturns create opportunity, so carpe diem!

(2) Investment the majority of your money in investment grade corporate and municipal debt and government bonds. Which you can also do through bond index funds (see here http://www.thewaytobuildwealth.org/ultimate-ind...)

Thanks for the great question and GOOD LUCK!

Cheers.

Ethan