Comments on: Money’s Only 7 Investments You Need is Wrong

By: Is Money’s only 7 Investments that you need wrong? « How to Make 7 Million in 7 Yearsâ„¢

Tue, 27 May 2008 08:42:11 +0000

[...] month Money Magazine published an article listing the only 7 investments you needÂ - and Kevin atÂ No Debt Plan wrote a follow-up piece that summarized the options [...]

By: Don’t Feed the Alligators » Blog Archive » Target Retirement Funds for Medium Term Savings?

Fri, 23 May 2008 00:53:24 +0000

[...] trading so the realized gains are low. They are now available at most major brokerages. As Kevin at No Debt Plan shows, one huge advantage of a TRF is that the barrier to entry into the fund is substantially [...]

By: Joe @ SimpleDebtFreeFinance.com

Joe @ SimpleDebtFreeFinance.com — Thu, 22 May 2008 20:15:31 +0000

I think the reason for having bonds at all is discussed later on in the article, or the magazine at least. Specifically: Asset diversification studies have shown that portfolios with 10-20% bond exposure can generate 90% of the returns of an all stock portfolio, but with significantly less of a roller coaster effect. Given the panic that is common to most investors when the market is climbing toward the stratosphere, Money probably though it wise to provide an asset mix that would be easier for those investors to swallow and hence stick with over the long term.

By: AJC @ 7million7years

AJC @ 7million7years — Thu, 22 May 2008 01:17:18 +0000

Great Post because Money is trying to have you invest in EVERYTHING … doesn’t work.

But, I hate, hate, hate funds … any, but mostly the ones with fees (eg Target Funds).

The again, investing directly in a few select investments is a strategy of the rich and those who want to BECOME rich.

Of course, not everybody wants to be rich, so for them I agree with your second strategy – but, drop the bonds, just Funds #1 and #2 will do.

You might be interested to know that Warren Buffett agrees 100%: I was just at his Annual General Meeting in Omaha where he said that IF you don’t want to take the time to learn about investing directly then you should just dollar-cost-average into a broad piece of “American Business” … which he went on to clarify as meaning Fund # 1 (except he specifically named Vanguard for its very low costs, but I know that Fidelity fund is pretty cheap, too).

By: Frugal Babe » Archive » 153rd Carnival of Personal Finance

Frugal Babe » Archive » 153rd Carnival of Personal Finance — Mon, 19 May 2008 20:52:43 +0000

[...] Debt Plan has a great article about what investments we really need in order to have a well-rounded portfolio.Â The ins and outs of minimum investments requirements, [...]

By: Philip

Philip — Tue, 13 May 2008 18:40:01 +0000

Sounds like we are in very similarly then, I look forward to seeing what changes you may make in the future also.

By: Kevin

Kevin — Tue, 13 May 2008 18:28:33 +0000

@Philip: That’s something I don’t really understand either. I guess Vanguard is taking a more conservative stance — it’s only 10% in bonds, but it’s still 10%. For my age, that’s about 6% too much. But like I said this was our first foray into the Roth IRA world so we picked the most diversified option to start. Later on we can add additional funds like more of the Total Stock Market fund to help tweak our allocation.

By: Mom @ Wide Open Wallet

Mom @ Wide Open Wallet — Tue, 13 May 2008 17:32:29 +0000

I agree with you 100%. I love love love the target funds. I have one and so does my husband. I like knowing that it’s adjusting for me as I get older. I don’t pretend to know enough about investing to think I could readjust my retirement account properly.

By: Philip

Philip — Tue, 13 May 2008 13:17:06 +0000

My only question is why does the target retirement fund have investments into bonds? When you have a 2050 target date shouldn’t that be 100% stocks, and not in bonds?

That said, right now my money is going into a Vanguard retirement fund, with a cut going to International (VGTSX)