Days Like Today...

[tesla]

...I'm glad of having a long-term investment strategy taking advantage of dollar-cost averaging.

That is all.

Comments

Re: 401(k)

[tesla-aldrich.livejournal.com]

I wholeheartedly agree, and even have a few suggestions. Please forgive me if this is old news to you:

If your employer does any kind of match, I would recommend investing to the maximum match (ex: my employer matches 100% of my contributions up to 5% of my salary. So the minimum I should invest is 5%).

Start NOW, or as close to now as possible. If you were to invest $2,500 every year at a 10% rate of return for the next 30 years, you would have just shy of $500,000. If, however, you were to wait 5 years and then invest $2,500 every year for the next 25 years, you would have less than $300,000. Wait 10 years and it's $175,000. (And the total difference in your contributions is only $12,500 or $25,000.)

An easy rule of thumb for deciding how risky your portfolio should be is to subtract your age from 120. The result is the percent of your assets that should typically be in stocks/stock mutual funds; the rest should be in guaranteed-return investments like bonds. BUT if you're trying to make up for lost time and/or you're okay with the risk, you may want to keep a higher percentage in stocks, because they tend toward higher yields.

I personally never keep more than 10% of my portfolio in my employer's stock, even though it has been outperforming the market like crazy. I would feel too stupid if it tanked one day and I lost everything.

I liked David Bach's book "Smart Couples Finish Rich." It's basic but thorough, and it's written in plain english.

Good luck! I'm just a layperson, but I'd be happy to chat with you about this stuff anytime.