I'm 60 and retired, I have 180k in a bank savings account making nearly nothing in interest. I’d like to put it in a HYSA (5%) or should i put a portion in index funds? I have 260k in an annuity. How do i maximize all this to make gains this year?
I’m closing in on retirement, and I have benefitted much from using a financial advisor. I didn’t really start early, so I knew the compound interest of index fund investing would not work for me. Funny how I pulled in over 80% profit than some of my peers who have been investing for many years.
I'm intrigued by this. I've searched for financial advisors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
She goes by ‘’Jennifer Leigh Hickman" I suggest you look her up. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
Thank you for sharing, I must say, Jennifer appears to be quite knowledgeable. After coming across her web page, I went through her resume and it was quite impressive. I reached out and scheduled
Like Warren Buffet said, dividends are only good if the business you’re investing into can’t make good use of that capital. So if you’re trying to invest into businesses with actual growth, looking at dividends is a waste of time. Why are you investing into a company if they’re returning capital to you because they think you can make better use if it than they can. It’s not much different from bond investing. The way I see it if you have a $1 million at some point, that’d be enough to create a portfolio that would pay you between 50k-70k in dividend income...
@@kurttSchuster A lot of folks downplay the role of advisors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for license advisors and came across someone of due diligence, helped a lot to grow my reserve notwithstanding inflation, from $275k to approx. $850k so far.
Dividends are irrelevant. A company can use extra capital to A) Pay dividends, B)share buybacks C) reinvest in itself The problem with dividends is the money will temporarily be out of the stock market (essentially cash losing to inflation), and also that capital gains are taxed more favourably then dividends. If a company doesn’t pay a dividend then all else being equal they will be guaranteed to have higher capital gains. Dividends are not a free lunch 💯
Want to thank you for your videos. Been looking for good investing videos for a very long time, and you are by far the best ive found. Knowledgable, yet humble, and no nonsense down to earth topics that are really helpfull, not hype.
Excellent advice. I did things a little differently and consistently over the years put everything in the Balanced Index Fund with Vanguard. The Asset Allocation is 60/40 stocks/bonds and it made me a millionaire. Now at the ripe old age of 57 if I had to do it all over again I would do exactly what Warren states here. I would have had a lot more money. Maybe 2 million instead of 1, but greed, fear and regrets don't belong in investing or your life so I'm happy with what I have.
That is so cool! I am in the early of my thirties i recently started investing, because i didnt have any financial culture and i used to spend a lot. I hope that by 60, i can achive financial independence. How long did your jurney took?
Thank you for this, especially your comments on the article that covers withdrawing during retirement. We're about to get there. Also showing how to use portfolio visualizer will be incredibly helpful for us.
4:49 this is the greatest advice he could give, and I'm so glad I got 25 years ago. It requires a bit of an attitude adjustment; when volatility is high and those phantom losses start showing up on the statements, I have myself trained to get a dopamine rush. Every contribution made during a slump is like a sweet slice of pie.
Excellent information, just the advice i was looking for. I have been searching for a straight forward simple advice for someone who does not understand finance.
I prefer aggressive allocations in retirement and I'm retired at 75/25 but I think part of the secret of making those aggressive allocations work is having a lower withdrawal rate. I'm currently 3% SWR and having to keep ACA costs down for 10 years will keep my expenses low. If market goes up much more, I plan to slowly slide into a 80/20 and work toward a 2.5% withdraw rate. I balance using "twist 1" in the study.
Hi Rob! I'm a brazilian retired military, and I started investing in US market (VTI 64, VXUS 16, BND 20). Thank you for your extremely helpful videos!!
I know it’s been about a year since you posted this comment, but I’m curious about your VTI/VXUS allocation. What is your reasoning behind choosing 64/16, and how is it working for you (aside from the current bear market)? I hope it’s working well. Thank you.
Well, only about 10% of financial advisors beat the index of a 10 yr period (to weed out pure luck) due to excessive fees. They need those fees for the second home, the yacht, etc. And of course, that's why everything is made to sound so difficult and there are thousands of funds to bamboozle people. That you can simply plonk 90% into VOO and keep 10% in CDs/short term bonds (effectively cash) and see returns better than 90% of advisors isn't something that's trumpeted too loudly by financial service shills.
I have heard pension fund managers refer to pension money as stupid money, because nobody questions or critically evaluates how their pensions are actually performing. Pension fund managers do NOT act as a fiduciary for the pensioners but rather extract high management fees while issuing vague and confusing annual reports.
Thank you so much for this awesome video. You're a wealth of know and I appreciate you taking the time to share you knowledge. I'm sharing your channel with my friends!
Excellent video. Thanks for taking the time to patiently explaining this tool and the concept behind this index investing. I appreciate your sharing of knowledge with the rest of us. Even though in Canada, I still follow and benefit from your content.
Love your channel. I am getting ready to retire and have seven 401ks that I want to move to S&P 500 index funds. With the predicted downturn in market, do you think now is a good time to move this money?
Good video. I'm not sure these "twists" in the article run counter to what Buffet has said about having 10% in short-term treasuries, i.e. use the cash to buy more stocks when the market is down or use the cash to avoid selling stocks when the market is down. I saw his recent interview w/ Charlie Rose and I think Buffet said he's been no less than 80% invested over the decades, so he probably wouldn't have an issue with something between 80/20 and 90/10 while waiting for opportunities to buy more.
Always enjoy your videos Rob, very informative and helpful. Thank you for sharing. For times when I watched your videos on cellphone (and I believe many do), I couldn't see the numbers on the screen, so I'd really appreciate if you could call them out. Cheers!
What do you recommend for someone like myself at 51 years old just starting out with a great job and able to invest 8k a month and wants huge growth in wealth in next 12 to 15 years? I do have separate pension and annuity through a union but I have little control there. I'll be using fidelity. Thanks much for insight.
Your channel is the best investment channel that I’ve seen. Do you have any advice how to protect investments from creditors excluding retirement accounts and 529’s. Thank you.
Using the Buffet 2-fund example outlined in this video, using portfolio visualizer I was playing with rebalancing vs. no rebalancing and as you can imagine the no rebalancing seems to always have higher final balance at the expense of having higher max drawdown than doing annual rebalance. I played with a few scenarios before/after both 2008 and 2020 crashes and results didn’t change. My question is I haven’t seen any tools that calculate tax implications into these simulations. I would think that over the long term, the case for rebalancing is even worse if you factor in tax implications of selling S&P 500 fund and paying long term capital gains tax in order to rebalance. Does anyone have any insight into this? I can’t find any mention of simulating these in portfoliovisualizer
ynotttt, seems to be the case. Interesting, since John Bogle seemed to encourage investors to do the 60-40 stock to bonds ratio. At any rate, have a mixture of mostly stocks compared to bonds, and leave it alone. No panic selling, if you even sell at all.
In an old interview, Buffet suggested people to put any good amount of money that one feel comfortable in cash and invest the rest in America (I guess S&P500 or Total Market ETFs). I'm sure he was pressed to say the 90/10 ratio at some point but I think it is really irrelevant. For wealthy or non-retired people, 90/10 ratio may be totally fine but it may not be good for the average retired people because they have to make sure the 10% covers at least a few years (say, 3-10 yrs.) of living expenses.
You're going to try it for only a year? Investing in the stock market is a long-term proposition, my friend. Any money you put in the stock market you should plan on not touching for a minimum 5-7 years.
Stumbled upon your channel a few days ago, and realized how financially unaware I have been all my life. Thank you for such lucid explanations! I really like the portfolio visualizer tool, curious if it is able to simulate different historical scenarios while back testing an investment strategy. If I want to backrest a strategy assuming the 2008 recession never happened, would the tool allow me to do that? if yes, how?
The closest you might come would be do two separate scenarios. Do the first test to end December 2007. Then take that ending amount and put as the initial amount on the second test. Set the start date to June 2009. That total 'should' be AS IF it never happened. FYI...those are the official dates given by the U.S. National Bureau of Economic Research for the timeframe of the recession. I just tried this using the 90/10 allocation, starting with $10,000 and no contributions. In the split scenario which is minus the recession, comes out to $1,564,801. Doing another scenario which includes the recession, also starting with $10,000 and no contributions, comes out to $1,083,322.
For younger investors, many recommend a 100% stock portfolio. I believe that approach is reasonable, but only if you can stick with it when the market drops (and it will).
The T1/T2 approach can be compared to gardening vegetables: your equities are fast-growing salad crops, your bonds are slower root vegetables. In a bad month for salads, it makes no sense to make this worse by cutting them back still further when you extract your 4% of meals. Instead, leave the salads in the ground and take your 4% in the form of the better-performing roots. When the salads grow back as conditions improve, they will do so quickly, restoring the 90:10 ratio. Or put another way, when times are hard, don't eat your seed corn.
What is your thoughts on the S and p 500 and Total stock market indexes being Tech heavy as by Market weight on the indexes it makes the Index funds much less diversified The Tech sector is like 25 percent or more than the whole index is it a issue ? is it a problem over time?
you are the best adviser i am trying to watch all your videos, investing is made simple in your TH-cam channel. I often heard about by and hold and contribute a certain amount monthly buy you are the one who show me really how it works, with the portfolio visualiser i lost many years trying to time the market, now i decided to begin 2020 by applying the rule by and hold an contribute frequently, thank you so much, it will be so simple for me to follow this rule.
@Rob Berger, coming from your insight is it wise if I am young to use VTI instead of VOO in this portfolio or am I better off with VOO? Also, at what age should I start thinking about including bonds in my retirement portfolio?
Thanks for your feedback, don't forget to hit the subscribe button. Reach out for enlightenment, tips and guide, I have the best investment plan for you✉️.. ..,.,
nice, i don´t usually have the patience for 20 or more minute videos, but you are getting to be the exception, congrats from south of your border, saludos
I often heard about Warren Buffetts quote about the S&P500 Investment, but never in detail. And I never saw the article , you introduced to us. So thank you for sharing. PS: i watch a lot of finance videos and podcasts (just for entertainment) but this seems to be one of a view chanells focusing also on older people, even retired once. There are more and more younger TH-camrs out there with so little real experience.Can't blame them, but why should i listen? (except for entertainment;-).
I have the same question. Yes capital gains taxes are not paid on entire portfolio balance, but still to rebalance every year that seems like it is a massive tax bill to ensure you keep the 90/10 split.
Taking this up a notch maybe...just my 2 cents. Maybe 100% stocks ..in VOO or VTI maybe ...until age 40-45? Then shift to 90/10, then 80/20 70/30 and so on etc. as age...(I know..that gets more boring but we cant live forever unless we are C.Munger maybe) and want more safety. Depends on investor really. Also , adjust to keep the ratio u want..each yr. The adjustmnts help to keep your ratio ...and also activates the sell high or buy low thing. Oh there you go...rebalance annually. Ok u have it covered.✔ Great vid right here.⭐
Great timing for your channel to show up in my feed! Excellent video. I am just getting into investing at my young middle age, lol, and right now I am learning as much as I can before I give away my hard earned money to make more money for my retirement. Up until now I kept my savings in a bank being afraid to invest and lose it .....The more I learn about investing, the less fear I have. Actually, my fear is gone, and I will be ready to invest as soon as I know better what i am doing and why. Subscribed!💲🌲💲
Is it wise to have sort term treasury etf in a taxable Account from tax perspective? My options are 403b (roth/pre tax 50/50), Roth ira , hsa, or taxable
Short term government bonds are basically a risk free asset. It complies with the CAPM model. Basically, you're taking all the risk into stocks. Bonds are there to mitigate risk.
Hi everyone, Could somebody please advise regarding the short term bond. Is this ETF on the UK Vanguard platform (USD Treasury Bond UCITS ETF (VUTY) would be an alternative to (Vanguard Short-Term Treasury Index ETF (VGSH).
Thanks for your feedback, don't forget to hit the subscribe button. Reach out for enlightenment, tips and guide, I have the best investment plan for you✉️.. ..,.
You said you believe 70/30 might be correct in retirement for some folks and the professor's research showed you could even perhaps move to 60/40 to achieve a 0% failure rate. But my question concerns how does your balance impact that allocation. If you had a retirement balance that under 60/40 generated returns that were double or triple what you actually needed to live off of and 60/40 is the safest in terms of failure rate, does the excess balance imply you should/could push the allocation to more equities or does it imply just the opposite?
I agree with warren buffet when he said to put 90% into the s&p 500 ....I would put the other 10 % into good businesses with a moat n high return on invested capital when the market crash n selling below values...
I can't help but think that maybe Bobby Axelrod is Cathie Wood? In episode 2 Mike brags that they've been crushing the S&P for 7 years on a row! Isn't that the case with ARKK? of course they haven't done that great but that's just recently. I dunno... AXE / ARK Hmmm there are some coincidence
For years I complained to my advisor that he wasn't even equaling the growth of the S&P 500. I was told that I was diversified. I said that financial advisors are the only profession where success is determined by whatever they say it is. We discussed this in Feb 2020 just before the recession. My portfolio went down 9% and the S&P went down 30% and he called me to rub my nose in it BUT from my portfolio's high before the crash to its high in Nov 2021 it went up 19%. The S&P from precrash high to Nov 2021 high went up 29%. I don't see any reason to use an advisor. Any S&P ETF will do the trick.
Sounds like u should have never used an advisor to begin with then. Only way u beat the market is risky stock picking. Which they would never do with ur money and ofc they are not going to just invest in s&p. Idk what u expected from them tbh. Not trying to be rude.
Here's mine... 60/20/20 ITOT/SCHD/IXUS... I know this is slightly different than what the great Warren Buffett suggests, but it creates just enough interest by diversification that I am able to hold it long-term. Also, I didn't include anything that I knew I would sell if the going got rough. I'm comfortable holding these three in these ratios until the end of my days. And I think that's more valuable than perfectly matching what Warren Buffett does. I'm 99% directionally correct and 100% convicted.
Fantastic info. Thank you! I really like seeing you back test this in Portfolio Visualizer and hearing about the different withdrawal strategy approaches.
What crosses my mind about DCAing during market highs when the market is clearly above the "Buffet indicator" is that we know we're overpaying, and we know that eventually the market will return to earth, so any growth during this period is purely illusory. I'd be inclined to simply hold cash over these periods, though seeing as how it could easily be the better part of a decade before the market equalizes when we could at least be making a dividend off of our investments, I wonder if there might not be an argument for buying something that pays a decent yield and is relatively liquid during high market times and transferring that money into the s&p only once the market falls below 100% relative to GDP. Thought?
I suspect for the $500 monthly contribution scenario, the CAGR showed did not included the amount of monthly capital contributed over time. It might simply took the end balance and annualized over the start balance of $10,000
Great except 10k in 1972 usd is 67,8k today. And 500$ a month was like 3393$ today. With theses numbers tuned down to 1972 (1473$ starter and 73$ monthly) you still get 1,7 millions dollar in 2022 after 50 years
My deferred compensation & thrift plan was invested a little at a time over 24 years It feels solid and relatively safe. Now I have a lump sum to invest and making decisions for that sum feels quite risky in comparison. How should a person invest a lump sum in retirement that you want to have available in a year or two for purchasing a home? Or should I leave it in a savings account for the 1-2 years?
Hey Rob, would you recommend trying out a 2-fund portfolio in a Roth IRA or is a personal investment account better? How do you decide what to put in a Roth IRA vs a standard investment account?
Should be for your overall portfolio which would include the Roth + taxable + traditional IRA + 401k. Never put bonds in the Roth (unless it is your only account). You want growth only there. ST bonds are fine in a taxable since they won’t kick out much interest anyway
I think Buffet and Munger also have some home bias just naturally as a result of being Americans and American stock dominating so much in their lifetime
The CAGR of 17% when we add monthly contributions, I found difficult to comprehend how it can be so high. I know we will be investing in some bad times to boost return, but just looks an extraordinary high number.
I'm 60 and retired, I have 180k in a bank savings account making nearly nothing in interest. I’d like to put it in a HYSA (5%) or should i put a portion in index funds? I have 260k in an annuity. How do i maximize all this to make gains this year?
Buy lots of Out of the Money Puts for NVIDIA, QQQ, BTC and SPY.
I’m closing in on retirement, and I have benefitted much from using a financial advisor. I didn’t really start early, so I knew the compound interest of index fund investing would not work for me. Funny how I pulled in over 80% profit than some of my peers who have been investing for many years.
I'm intrigued by this. I've searched for financial advisors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
She goes by ‘’Jennifer Leigh Hickman" I suggest you look her up. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
Thank you for sharing, I must say, Jennifer appears to be quite knowledgeable. After coming across her web page, I went through her resume and it was quite impressive. I reached out and scheduled
Like Warren Buffet said, dividends are only good if the business you’re investing into can’t make good use of that capital. So if you’re trying to invest into businesses with actual growth, looking at dividends is a waste of time. Why are you investing into a company if they’re returning capital to you because they think you can make better use if it than they can. It’s not much different from bond investing. The way I see it if you have a $1 million at some point, that’d be enough to create a portfolio that would pay you between 50k-70k in dividend income...
@@kurttSchuster A lot of folks downplay the role of advisors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for license advisors and came across someone of due diligence, helped a lot to grow my reserve notwithstanding inflation, from $275k to approx. $850k so far.
Do your own due dilegence
Dividends are irrelevant. A company can use extra capital to A) Pay dividends, B)share buybacks
C) reinvest in itself
The problem with dividends is the money will temporarily be out of the stock market (essentially cash losing to inflation), and also that capital gains are taxed more favourably then dividends. If a company doesn’t pay a dividend then all else being equal they will be guaranteed to have higher capital gains. Dividends are not a free lunch 💯
Divided may pay you top 6% as the investment goes down faster. SCHG SPLG grows more then 6% this is only my opinion.
Wouldn't it be kind of along the lines of profit sharing?
Thank you for all of your videos, Rob. The fact that these are free feels like a small miracle.
Thanks for all the videos, they are really helpful!
Want to thank you for your videos. Been looking for good investing videos for a very long time, and you are by far the best ive found. Knowledgable, yet humble, and no nonsense down to earth topics that are really helpfull, not hype.
Thank you for creating this channel. You’re fantastic.
Excellent advice. I did things a little differently and consistently over the years put everything in the Balanced Index Fund with Vanguard. The Asset Allocation is 60/40 stocks/bonds and it made me a millionaire. Now at the ripe old age of 57 if I had to do it all over again I would do exactly what Warren states here. I would have had a lot more money. Maybe 2 million instead of 1, but greed, fear and regrets don't belong in investing or your life so I'm happy with what I have.
That is so cool! I am in the early of my thirties i recently started investing, because i didnt have any financial culture and i used to spend a lot. I hope that by 60, i can achive financial independence. How long did your jurney took?
Are you daring hackers and and Identity thieves to take a crack at you ?
How much did you start with?
I think you sum it up well for the accumulation/growth period. The actual retirement is a whole other thing. Thanks for your insights.
What is it that you recommend to do then? @stephen geraci
Thank you for all your help
Nice work. Subscribed.
Great vid, best I've seen in a while.
Excellent. Thanks from Brazil.
Thanks for sharing this, Rob! Also for all the value you give.
Thank you, helpful.
I am actually a fan of Warren Buffett and I do own stock in Berkshire Hathaway because hes just one of the best investors of all time.
This video perfectly matches my investing style. Thanks Rob for this video.
Great! Excellent! Making it simple to understand
@Rob Berger thank you for another great video. The link to the article from Mr. Javier Estrada is not working.
Thank you for this, especially your comments on the article that covers withdrawing during retirement. We're about to get there. Also showing how to use portfolio visualizer will be incredibly helpful for us.
Hello Rob. Thank you for sharing your knowledge.
Would this be a good portfolio for a Roth IRA?
4:49 this is the greatest advice he could give, and I'm so glad I got 25 years ago. It requires a bit of an attitude adjustment; when volatility is high and those phantom losses start showing up on the statements, I have myself trained to get a dopamine rush. Every contribution made during a slump is like a sweet slice of pie.
It is the closest you can get to the 'buy low' part of 'buy low, sell high' formula.🤔
Excellent information, just the advice i was looking for. I have been searching for a straight forward simple advice for someone who does not understand finance.
thanks for sharing this.
I prefer aggressive allocations in retirement and I'm retired at 75/25 but I think part of the secret of making those aggressive allocations work is having a lower withdrawal rate. I'm currently 3% SWR and having to keep ACA costs down for 10 years will keep my expenses low. If market goes up much more, I plan to slowly slide into a 80/20 and work toward a 2.5% withdraw rate. I balance using "twist 1" in the study.
Ref to the video and seeing todays situation which bond etf do you recommend for such a 2 etf portfolio? Thank you
Excellent video
Thank you very informative
I'm a fan of this portfolio in retirement. I'm all in on total stock market during the wealth accumulation phase.
Hi Rob!
I'm a brazilian retired military, and I started investing in US market (VTI 64, VXUS 16, BND 20).
Thank you for your extremely helpful videos!!
I know it’s been about a year since you posted this comment, but I’m curious about your VTI/VXUS allocation. What is your reasoning behind choosing 64/16, and how is it working for you (aside from the current bear market)? I hope it’s working well. Thank you.
VTI...SCHG...SCHD ..is ALL you need...Bonds ARE trash!¡!
Hi, just came across your video. I invest in voo , vti and vym . Plan to retire in 11 years. Do you think I should be in all 3?
Which performs better: the 2 fund or 3 fund portfolio? I have heard that it's good to invest your age in bonds. What do you think about this advice?
It's amazing how large the financial services industry is given the ease of achieving respectable results. Great video.
Well, only about 10% of financial advisors beat the index of a 10 yr period (to weed out pure luck) due to excessive fees. They need those fees for the second home, the yacht, etc.
And of course, that's why everything is made to sound so difficult and there are thousands of funds to bamboozle people.
That you can simply plonk 90% into VOO and keep 10% in CDs/short term bonds (effectively cash) and see returns better than 90% of advisors isn't something that's trumpeted too loudly by financial service shills.
I see value.. i subscribe. I am simple
Hi Rob...want do you think of Blackrock i-shares?
What’s good vanguard short term government bond ?
Thoroughly enjoy your channel
That is the best 1 page about investing that I have ever read, and I have read thousands of pages on investing. You do an amazing job Rob. Thank you.
I have heard pension fund managers refer to pension money as stupid money, because nobody questions or critically evaluates how their pensions are actually performing. Pension fund managers do NOT act as a fiduciary for the pensioners but rather extract high management fees while issuing vague and confusing annual reports.
Rob Berger is the most impressive financial adviser on TH-cam, in my opinion.
It’s simple, easy to manage and very low cost. Pull from the bonds when stocks crash. Once you commit you need the discipline to stick with it
Keep the bonds alone. Just add to stock fund.
Very informative!
Hi Rob! Stopped by your channel. Nice video! Subscribing as a fellow TH-camr. Keep up the good work 👍
He's right, you know?
I started my IRA in January this year, and it's already up 30+%
Thank you so much for this awesome video. You're a wealth of know and I appreciate you taking the time to share you knowledge. I'm sharing your channel with my friends!
Most important thing is to keep investing consistently and regularly!
And don’t panic sell!
This is a retirement video. It's about taking out, not putting in.
Excellent video. Thanks for taking the time to patiently explaining this tool and the concept behind this index investing. I appreciate your sharing of knowledge with the rest of us. Even though in Canada, I still follow and benefit from your content.
Love your channel. I am getting ready to retire and have seven 401ks that I want to move to S&P 500 index funds. With the predicted downturn in market, do you think now is a good time to move this money?
Thanks!!!!!
what is a good treasury bill fund?
Good video. I'm not sure these "twists" in the article run counter to what Buffet has said about having 10% in short-term treasuries, i.e. use the cash to buy more stocks when the market is down or use the cash to avoid selling stocks when the market is down. I saw his recent interview w/ Charlie Rose and I think Buffet said he's been no less than 80% invested over the decades, so he probably wouldn't have an issue with something between 80/20 and 90/10 while waiting for opportunities to buy more.
90% VTSAX
10% VBTLX
What made you decide on VTSAX vs VFIAX? I’m the same with FSKAX but itching to switch to FXAIX.
@@horanz Why buy 500 American stocks when you can buy them all?
Mr. Berger, what are tour thought on a S&P EQUALLY weighted vice non-equally weighted?
Always enjoy your videos Rob, very informative and helpful. Thank you for sharing. For times when I watched your videos on cellphone (and I believe many do), I couldn't see the numbers on the screen, so I'd really appreciate if you could call them out. Cheers!
What do you recommend for someone like myself at 51 years old just starting out with a great job and able to invest 8k a month and wants huge growth in wealth in next 12 to 15 years? I do have separate pension and annuity through a union but I have little control there. I'll be using fidelity. Thanks much for insight.
Your channel is the best investment channel that I’ve seen. Do you have any advice how to protect investments from creditors excluding retirement accounts and 529’s. Thank you.
Do you have a video showcasing the importance of rebalancing your portfolio annually? (vs. not rebalancing, vs. rebalancing quarterly)
play with the tool yourself and you'll see
Using the Buffet 2-fund example outlined in this video, using portfolio visualizer I was playing with rebalancing vs. no rebalancing and as you can imagine the no rebalancing seems to always have higher final balance at the expense of having higher max drawdown than doing annual rebalance. I played with a few scenarios before/after both 2008 and 2020 crashes and results didn’t change.
My question is I haven’t seen any tools that calculate tax implications into these simulations. I would think that over the long term, the case for rebalancing is even worse if you factor in tax implications of selling S&P 500 fund and paying long term capital gains tax in order to rebalance. Does anyone have any insight into this? I can’t find any mention of simulating these in portfoliovisualizer
Warren is recommending a 90-10 stock to bonds ratio?
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ynotttt, seems to be the case. Interesting, since John Bogle seemed to encourage investors to do the 60-40 stock to bonds ratio. At any rate, have a mixture of mostly stocks compared to bonds, and leave it alone. No panic selling, if you even sell at all.
In an old interview, Buffet suggested people to put any good amount of money that one feel comfortable in cash and invest the rest in America (I guess S&P500 or Total Market ETFs). I'm sure he was pressed to say the 90/10 ratio at some point but I think it is really irrelevant. For wealthy or non-retired people, 90/10 ratio may be totally fine but it may not be good for the average retired people because they have to make sure the 10% covers at least a few years (say, 3-10 yrs.) of living expenses.
Depends on investment time frame, when you need to take money out, risk tolerance, no magic number for everyone.
Dude look like the guy you get when you do the aged app. Great video dough
im going to give a try on FXAIX and FXNAX for a year, 90/10 im 33 at the moment
At 33, you should be 100% equities
@@michaeldamico4403 not a big difference, im doing it for the fun of it, on my 457b plan im 100% Equity
wouldn't touch a bond in my 30's!
You're going to try it for only a year? Investing in the stock market is a long-term proposition, my friend. Any money you put in the stock market you should plan on not touching for a minimum 5-7 years.
Stumbled upon your channel a few days ago, and realized how financially unaware I have been all my life. Thank you for such lucid explanations!
I really like the portfolio visualizer tool, curious if it is able to simulate different historical scenarios while back testing an investment strategy. If I want to backrest a strategy assuming the 2008 recession never happened, would the tool allow me to do that? if yes, how?
The closest you might come would be do two separate scenarios. Do the first test to end December 2007. Then take that ending amount and put as the initial amount on the second test. Set the start date to June 2009. That total 'should' be AS IF it never happened. FYI...those are the official dates given by the U.S. National Bureau of Economic Research for the timeframe of the recession.
I just tried this using the 90/10 allocation, starting with $10,000 and no contributions. In the split scenario which is minus the recession, comes out to $1,564,801. Doing another scenario which includes the recession, also starting with $10,000 and no contributions, comes out to $1,083,322.
@@sunarf super helpful, thank you so much!
I’m new to investing.
Is there a reason to have 10% in short-term bonds, and not have 100% in a S&P 500 ETF. Thanks
For younger investors, many recommend a 100% stock portfolio. I believe that approach is reasonable, but only if you can stick with it when the market drops (and it will).
The T1/T2 approach can be compared to gardening vegetables: your equities are fast-growing salad crops, your bonds are slower root vegetables. In a bad month for salads, it makes no sense to make this worse by cutting them back still further when you extract your 4% of meals. Instead, leave the salads in the ground and take your 4% in the form of the better-performing roots. When the salads grow back as conditions improve, they will do so quickly, restoring the 90:10 ratio.
Or put another way, when times are hard, don't eat your seed corn.
What is your thoughts on the S and p 500 and Total stock market indexes being Tech heavy as by Market weight on the indexes it makes the Index funds much less diversified The Tech sector is like 25 percent or more than the whole index is it a issue ? is it a problem over time?
I don't see how it would be a problem? Is there something wrong with being 25% invested in one sector?
you are the best adviser i am trying to watch all your videos, investing is made simple in your TH-cam channel. I often heard about by and hold and contribute a certain amount monthly buy you are the one who show me really how it works, with the portfolio visualiser i lost many years trying to time the market, now i decided to begin 2020 by applying the rule by and hold an contribute frequently, thank you so much, it will be so simple for me to follow this rule.
@Rob Berger, coming from your insight is it wise if I am young to use VTI instead of VOO in this portfolio or am I better off with VOO? Also, at what age should I start thinking about including bonds in my retirement portfolio?
Thanks for your feedback, don't forget to hit the subscribe button. Reach out for enlightenment, tips and guide, I have the best investment plan for you✉️.. ..,.,
nice, i don´t usually have the patience for 20 or more minute videos, but you are getting to be the exception, congrats from south of your border, saludos
One of best channels for financial advice...
I often heard about Warren Buffetts quote about the S&P500 Investment, but never in detail. And I never saw the article , you introduced to us. So thank you for sharing.
PS: i watch a lot of finance videos and podcasts (just for entertainment) but this seems to be one of a view chanells focusing also on older people, even retired once. There are more and more younger TH-camrs out there with so little real experience.Can't blame them, but why should i listen? (except for entertainment;-).
Possible silly question here but wouldn't the capital gains taxes be astronomical on this type of portfolio once it gets to a higher balance?
Capital gains taxes are not paid on the portfolio balance.
I have the same question. Yes capital gains taxes are not paid on entire portfolio balance, but still to rebalance every year that seems like it is a massive tax bill to ensure you keep the 90/10 split.
Taking this up a notch maybe...just my 2 cents. Maybe 100% stocks ..in VOO or VTI maybe ...until age 40-45? Then shift to 90/10, then 80/20 70/30 and so on etc. as age...(I know..that gets more boring but we cant live forever unless we are C.Munger maybe) and want more safety. Depends on investor really. Also , adjust to keep the ratio u want..each yr. The adjustmnts help to keep your ratio ...and also activates the sell high or buy low thing. Oh there you go...rebalance annually. Ok u have it covered.✔ Great vid right here.⭐
Great timing for your channel to show up in my feed!
Excellent video.
I am just getting into investing at my young middle age, lol, and right now I am learning as much as I can before I give away my hard earned money to make more money for my retirement.
Up until now I kept my savings in a bank being afraid to invest and lose it .....The more I learn about investing, the less fear I have. Actually, my fear is gone, and I will be ready to invest as soon as I know better what i am doing and why.
Subscribed!💲🌲💲
12:17 are you sure it was monthly contributions - and not the rebalancing between 90% stocks and 10% T-bills - that juiced the CAGR from 10+% to 17+%?
Is it wise to have sort term treasury etf in a taxable Account from tax perspective? My options are 403b (roth/pre tax 50/50), Roth ira , hsa, or taxable
Is the software u r using there avail for all? Is it a pay to use type site? I will have to chk it out later.
Hi. Did Warren mention why he choose short term treasury over any other bonds? Thanks.
I guess because government bonds are non taxable, unlike corporate bonds
Government bonds are taxable for feds, no state tax here in IL
Short term government bonds are basically a risk free asset. It complies with the CAPM model. Basically, you're taking all the risk into stocks. Bonds are there to mitigate risk.
If you had to choose between a S&P 500 index fund vs total stock market index fund - would you select the latter?
Great question i think s&p includes more options
Hi everyone, Could somebody please advise regarding the short term bond. Is this ETF on the UK Vanguard platform (USD Treasury Bond UCITS ETF (VUTY) would be an alternative to (Vanguard Short-Term Treasury Index ETF (VGSH).
Thanks for your feedback, don't forget to hit the subscribe button. Reach out for enlightenment, tips and guide, I have the best investment plan for you✉️.. ..,.
Would FXAiX and vbtlx work in my 401k 🚀
You said you believe 70/30 might be correct in retirement for some folks and the professor's research showed you could even perhaps move to 60/40 to achieve a 0% failure rate. But my question concerns how does your balance impact that allocation. If you had a retirement balance that under 60/40 generated returns that were double or triple what you actually needed to live off of and 60/40 is the safest in terms of failure rate, does the excess balance imply you should/could push the allocation to more equities or does it imply just the opposite?
So a mutual or ETF S&P fund?
Either works just fine.
Mutual funds often have high fees compared to ETFs. Be sure to consider that before choosing.
I agree with warren buffet when he said to put 90% into the s&p 500 ....I would put the other 10 % into good businesses with a moat n high return on invested capital when the market crash n selling below values...
I can't help but think that maybe Bobby Axelrod is Cathie Wood? In episode 2 Mike brags that they've been crushing the S&P for 7 years on a row! Isn't that the case with ARKK? of course they haven't done that great but that's just recently. I dunno... AXE / ARK Hmmm there are some coincidence
For years I complained to my advisor that he wasn't even equaling the growth of the S&P 500. I was told that I was diversified. I said that financial advisors are the only profession where success is determined by whatever they say it is. We discussed this in Feb 2020 just before the recession. My portfolio went down 9% and the S&P went down 30% and he called me to rub my nose in it BUT from my portfolio's high before the crash to its high in Nov 2021 it went up 19%. The S&P from precrash high to Nov 2021 high went up 29%. I don't see any reason to use an advisor. Any S&P ETF will do the trick.
Sounds like u should have never used an advisor to begin with then. Only way u beat the market is risky stock picking. Which they would never do with ur money and ofc they are not going to just invest in s&p. Idk what u expected from them tbh. Not trying to be rude.
That’s what Warren Buffet says.
If I wanted to invest on my own, shouldn't I open an account with Etrade or Schwab or others?
Here's mine... 60/20/20 ITOT/SCHD/IXUS... I know this is slightly different than what the great Warren Buffett suggests, but it creates just enough interest by diversification that I am able to hold it long-term. Also, I didn't include anything that I knew I would sell if the going got rough. I'm comfortable holding these three in these ratios until the end of my days. And I think that's more valuable than perfectly matching what Warren Buffett does. I'm 99% directionally correct and 100% convicted.
nice
how do you deal with a 46% drawdown in retirement years
Love the quality, no-nonsense content Rob.
Fantastic info. Thank you!
I really like seeing you back test this in Portfolio Visualizer and hearing about the different withdrawal strategy approaches.
What crosses my mind about DCAing during market highs when the market is clearly above the "Buffet indicator" is that we know we're overpaying, and we know that eventually the market will return to earth, so any growth during this period is purely illusory. I'd be inclined to simply hold cash over these periods, though seeing as how it could easily be the better part of a decade before the market equalizes when we could at least be making a dividend off of our investments, I wonder if there might not be an argument for buying something that pays a decent yield and is relatively liquid during high market times and transferring that money into the s&p only once the market falls below 100% relative to GDP. Thought?
I suspect for the $500 monthly contribution scenario, the CAGR showed did not included the amount of monthly capital contributed over time. It might simply took the end balance and annualized over the start balance of $10,000
I am still confused FXAIX vs vfiax
No worries. Did a bit of creative searching & found him. Thanks again.
Great except 10k in 1972 usd is 67,8k today. And 500$ a month was like 3393$ today. With theses numbers tuned down to 1972 (1473$ starter and 73$ monthly) you still get 1,7 millions dollar in 2022 after 50 years
What do you think of the VGT or QQQ for long term hold?
Good question. I'll add them to an upcoming video.
@@rob_berger great maybe also do a comparison between VGT and QQQ and which would you prefer…thanks
@@rob_berger both intend to track the Nasdaq index I believe…
VGT is only tech ETF. QQQ is mostly Tech but has other assets. QQQ is more diversified.
@@miguelmercado6827 more diversified is Not always better
My deferred compensation & thrift plan was invested a little at a time over 24 years It feels solid and relatively safe. Now I have a lump sum to invest and making decisions for that sum feels quite risky in comparison. How should a person invest a lump sum in retirement that you want to have available in a year or two for purchasing a home? Or should I leave it in a savings account for the 1-2 years?
I personally would never invest cash in the stock market that I planned to spend in a year or two.
@@rob_berger totally makes sense. I had come to the same conclusion after posting the question. Thanks.
So investing with dca for life brings up higher compound interest? It is like the holy grail of investing.
Hey Rob, would you recommend trying out a 2-fund portfolio in a Roth IRA or is a personal investment account better? How do you decide what to put in a Roth IRA vs a standard investment account?
Should be for your overall portfolio which would include the Roth + taxable + traditional IRA + 401k. Never put bonds in the Roth (unless it is your only account). You want growth only there. ST bonds are fine in a taxable since they won’t kick out much interest anyway
Stocks in Roth. Bonds in Traditional.
Don Kemp can I ask where you would suggest to have a REIT fund? Roth? Or not? Thanks, Newby here learning.
I'm always curious why he suggests s&p500 over a total stock market index
A total market is just eay to spread out. Too many little positions to make a difference
The difference is nominal over time. Either works. The 500 was around longer
Jack Bogle actually said he preferred the total market index over the sp 500
I think Buffet and Munger also have some home bias just naturally as a result of being Americans and American stock dominating so much in their lifetime
It’s hard to know whether buffet means this genuinely or if he has his angle.
The CAGR of 17% when we add monthly contributions, I found difficult to comprehend how it can be so high. I know we will be investing in some bad times to boost return, but just looks an extraordinary high number.
imo im surprised its that low. monthly contributions are everything unless your initial investment is in the millions
Composed interest
@@EverylittlethingStephane *compound
Contribute on a regular basis and compound interest. The second builds momentum after a certain time and grows faster if capital untouched.