2/3 Do you put money in savings accounts, money markets or CDs?
\_ 99% checking, 1% cash.
\_ All of the above?
\_ how do you divide your money?
\_ stocks, mutual funds
\_ don't you have an emergency cash reserve?
\_ yes, it's called the wife
\_ But she has to compete with yermom on the streets
\_ For savings accounts, I really like ING. You won't find better
interest rates. Then I put some in CDs, and the rest in the market.
About a third evenly all around.
\_ i-bonds! http://csua.org/u/ay9 (treasury.gov)
\_ There is no point to CDs right now with rates so low. A savings
account and a money market are roughly the same in most
aspects, but the MM returns more. I only bother with a MM and
put very little in a savings tied to my checking. Most goes
into mutual funds of varying sorts (including MM-like types).
\_ Bleh, mutual funds are near worthless. Might as well just buy
QQQ on your own or just get the stock index fund.
\_ QQQ is an exchange traded mutual fund. Same idea as the
mutual fund with expense ratios and all.
\_ Thanks for the advice, Peter Lynch! If you really want
to know, I have an international fund, an index fund,
a bond fund, and a government bond fund and I am very
happy with them. You can feel free to put all of your
savings into GOOG.
\_ I don't really give a shit about what funds you personally
have. The point was that mutual funds in general are
worthless and the only funds you should invest in are
index funds such as QQQ. Just an FYI to people who
might be reading this and deciding on what they should
invest in.
The bottom line is: If you have the time buy bluechip
stocks and hold them.
If you don't have the time buy an index fund.
All other funds are worthless because they consistently
UNDERPERFORM the broad range bluechip market. In other
words, you're paying someone to do worse than simply
buying the index.
Frequent trading is worthless.
Owning stock in one single company may be worth something,
but you might also lose your shirt.
\_ Your point is idiotic. How will you get exposure to
the bond market without a bond fund? Buying
the NAQDAQ, Russell, Wilshire, or whatever index
is smart. That's why I bought it. It's also:
1. A mutual fund, 2. Only part of a portfolio.
Your statement that mutual funds in general are
worthless is retarded, especially when you advocate
buying an index fund.
\_ Try actually reading the statements, moron.
Mutual funds ARE worthless, because the ONLY funds
that consistently perform as well as the market
are INDEX funds, duhhhh! If that's the case all
you have to do is just buy the index, that means
buying and holding the bluechip stock individually.
It's not hard, it doesn't take a fucking Math
PhD to do this, and with Ameritrade it's cheap.
All you need is either a paper with stock prices
in it (i.e. Wall Street Journal people!) or
look it up on the web (again, not fucking hard
to do people!)
If you know absolutely NOTHING about buying stock
for $5 a trade and are afraid to manage your
portfolio or are too fucking lazy and want to pay
someone to do BASICALLY 20 HOURS OF WORK A YEAR
that's fine, go buy QQQ or Magellan or whatever
index fund you want. Capiche? Capiche, now stfu
and go comment on something you know about.
\_ You are a fucking retard!!! How will you get
exposure to the international market or to
bonds or to government-backed securities
without a mutual fund?! Your statement is
narrowly applied to the universe of US
equities. You use a lot of foul language, but
it doesn't conceal your stupidity. Mutual
funds are an easy way to get broad exposure
to different markets and as such are very
useful. You *can* buy T-bills and individual
stocks and perhaps even ADRs for every region
in the world, but mutuals make it cheap and
easy.
\_ I'm too ignorant about finance to tell which
of you two knows more about the subject, but
you're both very entertaining. Thank you.
\_ I would just like to point out that if
you had invested any money in QQQ from 2000-
2003 or so you got burned! Not that mutual
funds performed that much better ...
\_ You are an idiot.
\_ Bought QQQ at $100, eh?
\_ Sure. I DCA into the NASDAQ and
have since the early-mid 1990s. I
don't worry about a 3-4-10 year
period and neither should you.
\_ to both of you: please make a distinction between
actively traded mutual funds, and index funds.
Also, there are index funds which track different indices
such as bonds or international or sectors.
Foul language is also not necessary.
There are those who support the idea of using index funds
only.
\_ Often an index fund is a good buy. Many actively
managed funds do not beat their benchmarks. There is
no debate about that. The problem is when you are
trying to track 'microcap companies in a particular
nation' or similar. Indices do not exist for all
situations. A mutual fund can identify those
companies which are excluded from the index (or which
make up a miniscule % of the index) and purchase
shares. Sometimes individual investors cannot even do
that because of foreign regulations. If you decide to
weight heavily in small sectors like that then mutual
funds are great. Whether this is wise or not depends
on tolerance for risk, but one can certainly see
where individual equities or bonds might not be a fit
and no index (or only a poor approximation) exists.
\_ I don't keep a reserve. It is all in stocks and bonds. My
wife keeps a 2 month reserve though and she puts it a
savings account. I think she is being overly conservative.
\_ Are you nuts? I've got an 8-month cash reserve.
\_ This is all moot w/o knowing how much you make and
how much you spend. It's easy to save 8 months of
burger flipper salary. It's more difficult to save
8 months of MD salary. Expenses come into play, too.
\_ 8 months of my current lifestyle EXPENSES.
\_ Of course, but saving 8 months of
burger flipper expenses is pretty
easy. For most people, as income
rises so do expenses. If you live
with a roommate in a studio
apartment and ride bike to work then
you can have 8 months worth of
expenses saved easily. If you have
a mortgage and a car and such it is
much more difficult. Thus this x
month penis size comparison is lame.
\_ It's said that liars tend to assume
other people are lying. I guess
burger flippers make a similar
mistake.
\_ I think the point here is that
if your expenses are $120,000
per year (say) then keeping 8
months as a reserve is $80,000.
That's a lot of money to invest
in low risk investments "in
case of emergency." One can do
something better with that money
than a cash reserve. If it
comes to $8,000 it's quite
different.
\_ $8,000 to someone earning
$12,000 a year is a lot more
than $80,000 to someone earning
$120,000 a year. -tom
\_ Expenses, not earnings.
\_ "saving 8 months of burger
flipper expenses is pretty
easy." That may be true
for a fat sysadmin, but
it's not true for a
burger flipper. -tom
\_ I think you missed
the point. Saving
8 months of burger
flipper *expenses*
is easy on a fat
sysadmin *salary*.
Most people here
are in the latter salary
category, but expenses
are a choice.
\_ 8 months of expenses as single (no
SO) vs single (w/SO) vs married vs
married (w/children) are very
different.
\_ Perhaps I am nuts, I don't know. My job feels
pretty secure, we could live on either one of
our's salary and I have enough in stocks and bonds
equal to about 3 years salary, so even if the
market takes a dive, I can live for a long time
on that. I prefer more risk than you.
on that. Maybe I prefer more risk than you.
\_ I second that. Besides, if I get laid off,
company gives like 10.5 weeks of salary.
That's good enough for 5 months of expenses.
Add to that unemployment insurance, and I
can last 6-7 months. Also, if you are
invested in a diversified portfolio, with
ETFs, mutual funds, long, short bond funds,
etc., it's not that volatile, so there's
always something one can sell without too
much of a bad effect. Then there's
always family, if worse come to worse.
I don't buy the 8 months emergency cash
advice, unless you are rich and it
represents just a small portion of
your liquid assets. But in that case
why worry? I think the idea is to have
an emergency reserve of liquid assets as
opposed to an emergency reserve of plain
cash, and to not have any credit card
debt, or be living month to month due to
too expensive a lifestyle.
\_ Just because many mutual fund managers suck doesn't
mean there aren't good ones. I believe active management
still makes a difference if the fund manager is good.
And like one of the above posters have pointed out,
if you are interested in certain markets (eg. eastern
europe / russia / china / emerging asia, bonds, or even
Japan), you often have to buy a mutual fund. |
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