John M. Hoffman

Certified Public Accountant

Is John Retiring? NOT JUST YET...

Investing and Adding to Those Savings:

How to invest the assets is a major question. We have all watched the five years from March of 2009 through March of 2014 and seen how nice those stock market returns can be. However, we canít forget about the five years before all of that and recall how fast things melted down in 2007 through March of 2009. Interest rates are so low that you barely keep up with inflation if that. So what to do?

I have approximately 50% of my retirement savings invested in high yielding stocks that still offer some growth potential. Stocks like Exxon-Mobil, AT & T, GE, Glaxo Smithkline, as well as some real estate investment trusts, some utilities, and some master limited partnerships in the oil business.

I also have 25% invested in target maturity mutual funds (like a Vanguard 2025 fund). These funds allocate assets with a goal of becoming more conservative as we approach my retirement age. If for example a fund today is 80% stocks and 20% bonds, it might gradually get to 50 / 50 as we get close to the target date.

The other 25% is invested in mutual funds equally allocated amongst six sector funds. By allocating between sectors such as Energy, Healthcare, Financial, Technology, etc., I participate when a sector is in favor. By occasionally rebalancing amongst sectors I should, in theory, do some selling at highs and buying at lows. Hopefully I am not selling on the way up and buying on the way down.

Another important thing that I do is to add to my savings on a regular basis. I don't think I have missed a year in over 35 years of retirement savings. In doing so I have bought smaller numbers of shares at lofty prices and larger numbers of shares at lower prices.