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Astro_IHB

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Hi everyone, I have a few months left in my company before I retire ?. and I would like to know about the options that I can consider for my retirement plan. I am taking about some real good investments so that I get my future secured (want it secured for the kids too). I have a few options that I can look up to like REI, mutual funds and stocks?..but need a bit of advice from you to make a better decision.
 
Well, first of all, welcome and congratulations on your retirement.



Shrimp paste is a possibility....but I think CD's are the way to go until this banking crisis works itself out. Think asset preservation. Awgee will tell you physical gold, IR2 will tell you real estate (because it always goes up !), Nude will make some suggestions about bondage futures, Graph about Goldman Sachs ;)



Take it all with a grain of salt and poke around these forums. This topic has been discussed ad naseum during the past year.
 
I probably wrote this on IHB before but I'll be happy to say it again...:) The typical argument for actively managed funds is there is the possibility a fund manager can beat the benchmark, but in reality, they're all about the same. So with appreciation being the same more or less, the advantage goes to the asset with lower "property taxes." You keep more of your money instead of paying it to the fund manager (or tax collector in our hypothetical example. So instead of conventional actively managed mutual funds, consider the exchange traded funds (ETFs). There are dozens of low cost ETFs that track various benchmarks, like the Nasdaq 100 (QQQQ) or S&P;500 (SPY) or Biotech (BBH), etc. There are also ETFs for practically every investment theme under the sun like real estate and international indexes (there's your exposure to shrimp paste). You can buy them or short them, although as a long-term investor you'd probably just go long; shorting is usually for market-timers, something that many people think they are good at but few if any succeed.



The advantage is that conventional mutual funds have high expense ratios around 1% to 2%, while ETFs have a low expense ratio, usually under 0.5% of net asset value, and often under 0.1%, for example the QQQQs last time I checked have an expense ratio around 0.08%. To put in real estate terms, imagine owning a typical $500,000 condo in middle class Tustin with "conventional" property taxes of 1% (if you're lucky) or 2% (if you're in newer locations with Mello Roos). You'd be paying $5,000 to $10,000 a year to hold that asset. But what if you could own an $500,000 condo in middle class Irvine with "ETF-like" property taxes of 0.1%, meaning you'd only pay $500/year.



You obviously can't elect ETF property taxes in the housing market, but you certainly can elect ETF expenses in the financial markets.
 
Fumble,

Nice information there. My beef with ETF's is that they usually get pounded if there is any sort of issue.... Of course diversification is the answer to that problem.

-bix
 
[quote author="Astro" date=1217505393]Hi everyone, I have a few months left in my company before I retire ?. and I would like to know about the options that I can consider for my retirement plan. I am taking about some real good investments so that I get my future secured (want it secured for the kids too). I have a few options that I can look up to like REI, mutual funds and stocks?..but need a bit of advice from you to make a better decision.</blockquote>


Best advice...don't post a question like that here and DON'T ACT on any recs :)
 
i second fumbling and optimusprime. if you don't have an opinion on the direction of the mkt or understand your own risk profile, you should just diversify in some low expense index funds and not worry about it.
 
I think it would be best for Astro to do alot of research.


To help him or her in this regard, I suggest we each recommend one or two books that we think may be helpful.


I will go first.


"The Creature from Jekyll Island, a Second Look at the Federal Reserve" by G. Edward Griffin
 
I'm investing in my boys:



<a href="http://www.bres.boothbay.k12.me.us/wq/nnash/WebQuest/little_red_hen.htm">The Little Red Hen</a> - Sara Cone Bryant



<a href="http://www.uulongview.com/sermons/bellies_with_stars.html">The Sneetches</a> - Theodore Geisel



<a href="http://members.tripod.com/ah_coo/engine_that_could.htm">The Little Engine That Could</a> - Watty Piper



<a href="http://www.shelsilverstein.com/html/books.asp">The Giving Tree</a> - Shel Silverstein
 
While the suggestions all seem worthwhile and thoughtful, I think Astro was asking for <strong>FINANCIAL</strong> investment advice as opposed to personal investment advice.


From time to time folks ask what a "good" financial investment might be, without realizing how what might be good for one investor may not be so good for another. Maybe I am wrong, but I think these folks need to learn how to research their investments and I am hoping the astute IHB bloggers can help Astro out with some direction.
 
[quote author="skek" date=1217558083]My turn!



A Treatise of Human Nature, David Hume

City of God, St. Augustine</blockquote>


<em>IPO sings in his head as he reads skek's post</em> - "David Hume could out consume Schopenhauer and Hegel, and Wittgenstein was a beery swine who was just as sloshed as Schlegel."
 
I agree that a forum is not the best place to look for financial investment advice. Each investment is specific to one's personal belief, personality and risk tolerance and it takes a lot more time to fully explain an investment thesis than what is available in a single post on an internet forum. Plus, since you are approaching retirement it sounds like you would be more interested in a stable revenue base than trying to go for that 10-20% risky annual gain.



The housing market going down creates a clear dowtrend from which several investment themes can be played (most of them negative in some way), but it is an uphill struggle as there are many institutions trying to fight the downslide through any means possible, including morally dubious ones - so I wouldn't recommend such a risky strategy to a retiree.



I think something can be said in leaving your holdings in cash and read on investments and investment strategy. After reading a while you get to a point where you feel "ready" to try some things on your own without relying on someone else's investement advice.



Of course, if investing is not an activity you find enjoyable (investing and making money are NOT the same activity! everybody finds the latter enjoyable, but not all enjoy the former), then hiring a financial advisor would be advisable.
 
[quote author="awgee" date=1217562820]While the suggestions all seem worthwhile and thoughtful, I think Astro was asking for <strong>FINANCIAL</strong> investment advice as opposed to personal investment advice.


From time to time folks ask what a "good" financial investment might be, without realizing how what might be good for one investor may not be so good for another. Maybe I am wrong, but I think these folks need to learn how to research their investments and I am hoping the astute IHB bloggers can help Astro out with some direction.</blockquote>


I can't imagine anyone that looks this happy needs any advice:



<img src="http://bestuff.com/images/images_of_stuff/210x600/astro-from-the-jetsons-6681.jpg?1173427636" alt="" />
 
First, a basic investing <a href="http://www.amazon.com/Investing-Dummies-Fifth-Eric-Tyson/dp/0470289651/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1217541242&sr=1-1">Primer.</a>





Second, a jaded view behind the <a href="http://www.amazon.com/Liars-Poker-Rising-Through-Wreckage/dp/0140143459/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1217541198&sr=8-1">curtain.</a>





Once the first seems basic to you, move to the second. When you still want to invest knowing who's holding the cards on the other side, you'll know what decision you want to make.
 
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