[kittysoman2013]

Here is my investment strategy geared towards retirement:

Open a Roth IRA (personally, I choose Vanguard, mods, it is not my intent to spam on behalf of Vanguard)

Allocate 50% in Vanguard S&P 500 index fund

Allocate 20% in Vanguard Morgan Stanely International Index Fund

20% in a small cap value fund

10% in Vangard's Inflation indexed bond fund (it invests in Inflation Adjusted US Treasury Bonds).

My approach is to diversify, take advantage of dollar cost averaging (meaning, take a fixed amount of money every month and invest it according to the above allocation), hedge against credit risk (US Treasury bonds have excellent credit because the government can simply print up money to pay it's bills), inflation risk (international fund and Inflation Adjusted US treasury bonds hedge against inflation and the bonds pay interest according to the new rate of inflation, so inflation never harms the purchasing power of the interest I collect), currency risk (investing in foreign economies through the international index hedges against the US dollor and vice versa), interest rate risk (dollar cost averaging in the bond fund helps to hedge against interest rate risk as well as investing in the non bond market in general).

I think my strategy is simple, easy to understand and works. What is your investment strategy towards retirement?

[Senter]

Here is my investment strategy geared towards retirement:

Open a Roth IRA (personally, I choose Vanguard, mods, it is not my intent to spam on behalf of Vanguard)

Allocate 50% in Vanguard S&P 500 index fund

Allocate 20% in Vanguard Morgan Stanely International Index Fund

20% in a small cap value fund

10% in Vangard's Inflation indexed bond fund (it invests in Inflation Adjusted US Treasury Bonds).

My approach is to diversify, take advantage of dollar cost averaging (meaning, take a fixed amount of money every month and invest it according to the above allocation), hedge against credit risk (US Treasury bonds have excellent credit because the government can simply print up money to pay it's bills), inflation risk (international fund and Inflation Adjusted US treasury bonds hedge against inflation and the bonds pay interest according to the new rate of inflation, so inflation never harms the purchasing power of the interest I collect), currency risk (investing in foreign economies through the international index hedges against the US dollor and vice versa), interest rate risk (dollar cost averaging in the bond fund helps to hedge against interest rate risk as well as investing in the non bond market in general).

I think my strategy is simple, easy to understand and works. What is your investment strategy towards retirement?

Wow! No replies!

I agree with your strategy but given the state of the US economy I would get familiar with the determination of major market tops and bottoms and save the losses resulting from riding the market down and requiring a couple of years to get back to where you were at the top.

People who have never attempted this and who listen to the traditional warnings against trying to pick tops and bottoms, and against "market timing", will tell you it just can't be done. I've been studying tops and bottoms for over 40 years and in 1980 I told my broker who subscribed to Joseph Granville's "early warning call" that either "tomorrow or the next day" she would get that call from Granville and told her to sell all my stocks and put the money in a money market fund. She said "oh, no! You're crazy 'Johnny!' All our top corporate analysts are saying the market is going up! All the media analysts are saying the same thing! "

I told her they were all wrong and reaffirmed my wish to sell. She reluctantly agreed. The next morning Granville called with the early warning. She wanted to know how I knew.

Jumping ahead to 2007, in September I told my boss/friend that we would see one more new all-time market high within a month and then the market was going to turn into a bear market that would be deep and years long. I also told my dental hygienist the same thing because 8 months prior I had persuaded her to invest in the stock market. She was cautious but took my advice and sold all her funds. The next time I saw her she expressed great gratitude.

This year, in the latter part of February I saw the market index gap downward. That was my confirmation signal. I jumped into a leveraged bear fund with most of my assets and at the bottom of that drop when we saw it turn upward, I had a 74% gain in my assets. Now I'm waiting for the next signal that it is going to continue down to the REALLY low levels.

I understand posters and I know some will jump in here and accuse me of boasting and/or of making up stories. Fine. Have a good time. But the reason I'm telling you this is to show you that identification of the major tops and bottoms isn't so difficult and can be done, and I don't spend a lot of time on it either.

There is something called "the fifty-percent correction" in a bear market. That is when the market drops half way to it's ultimate depth, but then rebounds in a "correction". It fools most analysts, market pundits, and investors. They proclaim a new bull market, only to see it plunge as they hang on saying "it's gonna bounce" and "it can't keep going down" and "I've lost so much value now that I can't afford to sell" and finally "OH SHIT, I'M SCREWED!!! I'M GETTING OUT!!!" ----- right about at the bottom when they should be buying.

I believe the recent plunge was the 50% correction. You can figure out how low that would mean the market will go in the next year or so.

So think about this: given the state of our economy and the damage the pandemic has done, do you really think we are going to see a string of new all-time highs for the next 6 months or year or 2 or 3? I don't think we'll see any. I think the market is looking for the news that will send it down to new lows.

The market has historically seen bull and bear markets. Before "quantitative easing" the rule was 4-year cycles (roughly). Two up and two down, and they coincided "somewhat" with presidential elections. Things changed. But bull and bear cycles, however long they run, will still happen.

Good luck.