For all those that have young families with regular jobs and don't have time for day-trading or climbing the steep learning curve for investing in individual stocks, bonds, etc .... I offer the following advice in order of importance:
Rule #1: Have a yardstick, keep it simple, re-evaluate monthly, and have an exit strategy.
Rule #2: Have a yardstick, keep it simple, re-evaluate monthly, and have an exit strategy.
Rule #3: Have a yardstick, keep it simple, re-evaluate monthly, and have an exit strategy.
Have a yardstick: I use the S&P 500 index as my yardstick. Less than 1 in 3 professional fund managers consistently beat this index. It's a tough yardstick to beat year in and year out.
Keep it simple: I use ETF's but mutual funds will do if company matching-fund programs are all that's offered. To keep it really simple, you really only need to buy/hold/sell SPY (the S&P index ETF). If you're a little more savvy, over-weight 50% of your portfolio with sector and/or industry ETF's that are currently out-performing the S&P. There's no need to hold more than 10 ETF's and holding only SPY is just fine.
Re-evaluate monthly: I set my calendar for the first trading day of each month and revaluate ... buy, hold, sell, or rotate.
Have and exit strategy: My exit strategy is simple: I get out of all of my equity (stock) positions when the S&P 20-day and 50-day moving averages fall below the 200-day moving average ... actually, I tweak this rule a bit and exit at 2.5% above the 200-day moving average. Using this rule prevents large drawdowns. Over extended periods (say 10 years) ... expect to be in equities about 2/3's of the time and be prepared to exit the market a couple of times/yr if needed. Knowing when to get out and stay out is more important than knowing when to get in.
My current core holdings are (I'm aggressive this month): Index/Sectors (50%) IYF, IYE, IYM, IJH, IJR and Industries (50%) AIRR, IAI, IAT, XME, SOXX. Next evaluation date is the first trading day in January (Jan 2) and I'll re-evaluate and rotate accordingly.
Lastly, I pay about $250/yr for on-line access to http://www.etfscreen.com/ and http://www.stockcharts.com/ .... for selecting out-performing sector/industry ETF's, back testing, and monthly monitoring my market exit strategy.
Hope this helps someone. If you have a different strategy, I'm sure a lot of young Ags just getting started would like to hear from you.
Rule #1: Have a yardstick, keep it simple, re-evaluate monthly, and have an exit strategy.
Rule #2: Have a yardstick, keep it simple, re-evaluate monthly, and have an exit strategy.
Rule #3: Have a yardstick, keep it simple, re-evaluate monthly, and have an exit strategy.
Have a yardstick: I use the S&P 500 index as my yardstick. Less than 1 in 3 professional fund managers consistently beat this index. It's a tough yardstick to beat year in and year out.
Keep it simple: I use ETF's but mutual funds will do if company matching-fund programs are all that's offered. To keep it really simple, you really only need to buy/hold/sell SPY (the S&P index ETF). If you're a little more savvy, over-weight 50% of your portfolio with sector and/or industry ETF's that are currently out-performing the S&P. There's no need to hold more than 10 ETF's and holding only SPY is just fine.
Re-evaluate monthly: I set my calendar for the first trading day of each month and revaluate ... buy, hold, sell, or rotate.
Have and exit strategy: My exit strategy is simple: I get out of all of my equity (stock) positions when the S&P 20-day and 50-day moving averages fall below the 200-day moving average ... actually, I tweak this rule a bit and exit at 2.5% above the 200-day moving average. Using this rule prevents large drawdowns. Over extended periods (say 10 years) ... expect to be in equities about 2/3's of the time and be prepared to exit the market a couple of times/yr if needed. Knowing when to get out and stay out is more important than knowing when to get in.
My current core holdings are (I'm aggressive this month): Index/Sectors (50%) IYF, IYE, IYM, IJH, IJR and Industries (50%) AIRR, IAI, IAT, XME, SOXX. Next evaluation date is the first trading day in January (Jan 2) and I'll re-evaluate and rotate accordingly.
Lastly, I pay about $250/yr for on-line access to http://www.etfscreen.com/ and http://www.stockcharts.com/ .... for selecting out-performing sector/industry ETF's, back testing, and monthly monitoring my market exit strategy.
Hope this helps someone. If you have a different strategy, I'm sure a lot of young Ags just getting started would like to hear from you.