Posted on 06/02/2020 1:42:02 PM PDT by SteveH
given current uncertainties (in which one could include the potential for war with china over hk or tw), what should a prudent stock strategy be?
givens:
* recently invested in sp 500 index fund last december; currently hurting at -4.29%.
perceived background:
* lots of stimulus money sloshing around (?) where is all of that stimulus money ending up(?)
* tensions with china and an apparent ongoing deep state aversion to trump's re-election
asking for a friend
buy and hold for a long term return
I’ve got it dialed in. Gonna tell a friend.
You are only down 4.9%? That’s pretty good.
You ask questions without context.
How old are you? Can you lose the money? What is your risk profile? What is your investment time line.
With the information you’ve provided, my advice is: 6 3/4.
S&P is up 11.95% for last 12 months.
You need to be aware of the characteristics of different investment types.
Over the very long haul (not my opinion, a summary of last 100 years), the market index will return about 6 points over the 10-year bond. So, I’d expect an average of about 7% compounded for your SPY investment, with thrilling bounces.
But, the market is also characterized by variability. Most of the time it will be within 15 to 20% of the trend I mentioned above. But sometimes it will do worse, on the upside or downside.
So, if you are looking over the long term, SPY isn’t a bad place to go. But, if you’re worried about the fluctuations, maybe you should invest only half of your funds in that, and half in some bond fund. Or put the whole think in what’s called a “balanced” fund or “equity income” fund, and let them do the work for you.
The key thing to remember is that the larger your expected return, the less guaranteed it is.
I actually know what I’m talking about here IMHO.
“recently invested in sp 500 index fund”
hopefully, that was an ETF, NOT a mutual fund ...
umm, fidelity index fund... (bad?)
“umm, fidelity index fund... (bad?)”
it’s just that ETFs (exchange traded funds) are usually superior to mutual funds in multiple ways, particularly when dealing with taxes:
https://www.fidelity.com/learning-center/investment-products/etf/benefits-of-etfs
https://www.google.com/search?q=etf+index+funds
btw, i highly recommend schwab as a brokerage account, and no, i’ve got no financial affiliation with them other than being a happy customer ...
https://www.google.com/search?q=schwab
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