John M. Hoffman
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
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
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.