> Things are going a bit better than I expected. We’ll work through this. <
It’s good to see something that’s at least a little optimistic. Anyway, I’m getting older, so I want less of my money in the stock market and more in fixed income. I’m thinking I should be in ultra-low maturity stuff now, like a good money market fund. I’m curious what you’re thoughts are on this.
Thanks. I have been retired for 13 years (since age 60) though I stayed active in real estate investing until selling some pieces off the last few years. I will be active again when the cycle turns, I’ve done it since about 1980, started very small, worked my way up by reinvesting over time. Adding to my farm/ranch land is on my radar. That’s for enjoyment now and my heirs.
I agree with your general idea about the stock market and fixed income. I have been buying and rolling over short-term Treasuries since they started beating band interest rates plus T-Bond income is tax-free. My newer T-bill buys are paying over 4% annualized (3 month-6 months duration, I just keep rolling them when they mature.) I beat the banks plus pay no taxes, and there’s no risk of loss when you hold to maturity. That’s about 40% of my invested money outside real estate. (I have cash too, but don’t count that as invested money).
One suggestion you can research: Over half my stock positions are ‘preferred’ stocks. Their prices have dropped significantly as interest rates have climbed but they still pay their stated dividends. (Dividend income is taxed less than regular income). Their share prices are low now and will increase rapidly when rates turn the corner and go down again. I went through the same process in 2020 when they went down and shot back up again. Many of them are paying around 7-8% now. When T-bills peak and start down I will rotate out of them and into more preferred stocks, they are very interest rate sensitive.
I suggest reading on preferred stocks and how they work and their protections against loss which are better than common stocks. Good fortune with your investing!
My view is that the risk/reward ratio is bad on everything.
If you believe that and you are older (like I am) then your sole goal is to preserve capital as best you can.
That means paying all debt down to zero.
Once that is done then make sure you are well stocked in physical durable stuff that you use—don’t want to get caught in any type of shortages and of course that is a hedge against future inflation.
When you die you want your heirs to start laughing at what a “hoarder” you were—that means you were doing it correctly!
After that is done then T bills, high interest savings accounts etc. are your “cash”—80% of your holdings.
If you want to play with the remaining 20% or so do whatever you want....just make sure you can afford to lose it.