Josem - In case you're confused, let me just reiterate or clarify something:
In general, bonds are guaranteed by the issuer, meaning if Microsoft issues bonds, they are obligated to meet the terms of the bond. A guarantee is only as good as the entity that makes it, right, but this is why you'll hear things like "AAA rated bonds" or "Junk bonds", because those ratings are based on our expectations the company will be able to meet their promises.
If you're holding the bond for its entire life, you don't need to worry about the price. However, as a short-term vehicle, that isn't the case, so at some point you'll need to find someone to buy the bond from you. The price may be different based on current interest rates, with the relationship being bond prices decrease as rates increase. (Or, prices increase as rates decrease)
Varacross explained it, but I'll just give you another example:
in the year 2005, you purchased a 10-year bond from Microsoft with the interest rate @ 5%. So you have a piece of paper you paid $1000 for, and the interest you're getting will be $50 a year for 10 years. After 10 years the paper expires, and microsoft will give you back your $1000. Fast forward to today. It's 2011 and you decide you want your money back, but since Microsoft doesn't have to give it to you for another 4 years, you basically have to use ebay in order to sell the bond today. How much can you sell it for? Well, it depends. That was a 2005 bond. What if the new 2011 bonds from Microsoft have a yield of 2%? Do you think someone would rather get $20 a year or $50 a year? Exactly! Your bond is way better, so people will probably give you more than $1000 on ebay. Even though they will only get $1000 from microsoft in 2015, they'll still might buy it from you for $1100 because they're also going to get an extra $30 a year from Microsoft until 2015.

I don't know why that post was addressed at me, I understand how bonds work just fine

I have 25 shares of LTD and 50 shares of SKS...

Thoughts? first stocks ive ever bought.

What are you gonna do with your $5 dividend check this year?

On a serious note, when and why did you buy them? Also, congratulations on your first stock purchase!

Ill try to not spend it all on hookers and booze.

WEll i just have money sitting in the bank, friends said i should buy some stock, im bored, and cant play online poker anymore, so i figure this is a suitable replacement.

I invested in these two companies on the suggestion of my friend. He said LTD was a safe investment, and SKS was risky, so i did both, but put more in the safe one. Is there a place i can talk more about what stocks to buy? i have been researching things all day, and need to learn more, and need to understand what im reading, and to find out if im understanding what im reading.

Its all very fun and exciting right now

- Location: Slovakia (EU)
- Income: student/part time work for RL + ~1k eur from poker/month
- Risk tolerance: Medium/High
- Timeframe: 7-10 years
- No Debt, Emergency cash (5k eur)

Looking to invest 1k eur monthly, from poker side income. I'm thinking some indexes (ETF), and a bit of local (Czech) company stock. Investment horizon is variable, I will withdraw when it seems good to do so. So no problem adding a couple of years to timeframe. How do I find the ETFs I would want? Any books/articles/forums you can recommend? Generally, I prefer least effort approach

hey zlo,

i'm a noob too. i found this article to be a great starting place:

http://www.bogleheads.org/wiki/Lazy_Portfolios

Age: 25
Income: $80k-$100k
Risk: Moderate
Time frame: Long term
Debt: Minimal student loan debt, not really a variable.
Location: Houston, TX

Need to make my elections for my retirement account for 2012. My options are:

Vanguard Prime Money Market Fund
Vanguard Intermediate-Term Bond Index Fund
Vanguard Wellesley Income Fund
Gabelli Asset Fund AAA
Vanguard 500 Index Fund
Vanguard Windsor II Fund
Columbia Acorn Fund
Vanguard Mid-Cap Index Fund
Janus Overseas Fund J
Vanguard Total International Stock Index Fund
JP Morgan Small Cap Equity Fund Select

Allocate.

i'm a noob but i'll take a shot.

it's hard to allocate when we don't know anything about the rest of your portfolio. what kind of account is this -- 401k, roth ira? do you have emergency savings? any other investment or brokerage accounts?

if you want something simple, the wellesley might be a reasonable choice since it offers quick diversification. if you have a larger portfolio strategy, you'll likely want bonds (like the intermediate term bond index) and high-growth options (maybe that small cap fund?) in your retirement account. i don't know anything about the non-vanguard offerings.

gl!

What are the expense ratios of those funds? Is this your entire retirement portfolio? And I'm guessing this is for a 401k, right?

thanks for the reply, oofrome. i'm slow getting back to it and don't have many specific follow ups, but your guidance helped me continue doing my homework.

iow, is it fair to say that i should be looking to put high-risk/high-reward vehicles in my roth? and the reason for this is that i "own" 100% of the contents of the roth (as opposed to my 401k, where i will pay taxes upon distribution, hence i "own" only the after-tax portion of that account)?

you correctly sussed out my question. my research indicated that determining an asset allocation strategy is of critical importance, but this is no more useful to a babe-in-the-woods like me than the advice "play tight and aggressive" is to a poker noob. knowing that i'm starting in the right ballpark is very helpful.

next, i will post my first cut at a portfolio strategy!

fwiw, post #1276 should've been directed at you, and not Josem, and that was just in case all the bond talk confused you. Sorry Josem!

Currently, yes.
The reason is sort of a roundabout way of looking at it. You'll own 100% of the roth as soon as you turn 59.5 years old. Right now you have two things going for you:
1.) your age allows you to be able to invest for a long period of time with any retirement account.
2.) any return on investment within the Roth is 100% yours. You don't owe any taxes on them.

So by investing in a manner that maximizes returns, you are taking advantage of both of these. I think what you were saying is what I made for point #2, but point #1 is equally important.

oof,

#1 is important but applies equally to all of my retirement accounts, right? #2 is what's special about the roth.

and yes the bond stuff upthread was helpful (though probably not to josem ). given my assets and level of interest, i'm planning to stick to bond funds for now.

...as you will now see, since i finally finished my portfolio rough draft! it's formatted for bogleheads where i intend to take it next for more feedback, but lucky 2+2ers get an early sneak preview!

PORTFOLIO OVERVIEW
==================
Emergency funds: $10k in savings account with online bank (getting 0.7% -- looks like it's time to shop for a better rate?)

Debt: < $5k student loan debt (paying this off is already on the todo list)

Tax Filing Status: Single

Tax Rate: 25% Federal 0% State (WA)

Age: 33

Desired Asset allocation: 65% stocks/35% bonds

Intl allocation: 50%

Current portfolio: ~$75K

Funds available in 401(k):
Vanguard 500 Index (VINIX) (0.05%)
Vanguard Developed Markets Index (VDMIX) (0.22%)
Vanguard Emerging Mkts Stock Idx (VERSX) (0.22%)
Vanguard Inflation-Protected Secs (VAIPX) (0.11%)
Vanguard Interm Term Bond Index Intermediate Bond Index Vanguard Funds (VIBSX) (0.11%)
Vanguard Mid Capitalization Index (VMCIX) (0.08%)
Vanguard Short Term Bond Index (VBSSX) (0.11%)
Vanguard Small Cap Index (VSISX) (0.12%)

American Century Growth Large Growth (TWGIX) (0.80%)
Artisan Mid Cap Value (ARTQX) (1.21%)
DFA Emerging Markets Value (DFEVX) (0.60%)
Davis NY Venture (NYVTX) (0.89%)
Eaton Vance Inc of Boston (EIBIX) (0.79%)
Gabelli Equity Income I Large Value GAMCO Investors (GCIEX) (1.19%)
PIMCO Short Term Instl (PTSHX) (0.45%)
PIMCO Total Return Instl (PTTRX) (0.46%)
T Rowe Price Dividend Growth (PRDGX) (0.68%)
T Rowe Price Inst Mid Cap Growth (PMEGX) (0.65%)
Thornburg International Value (TIVRX) (0.99%)
WF Advantage Sh Dur Govt Bond (MNSGX) (0.60%)

QUESTIONS
=========
0. my investment horizon is mostly long, but i would like a short- to mid-term safety valve. i've burned out of this career before, and i reserve the right to do it again. sometimes you just gotta bum around the world for a few months, buy an airplane, and/or start a business! but this isn't like saving for a house i know i plan to buy in 5 years because maybe i want to do it in 1 year or 10 years or never. given this nebulous investment "goal", should i:
- keep more money liquid (larger "emergency" fund in savings, rolling ladder of CDs)?

- set aside a dedicated travel/airplane/start-a-business fund and invest it in bonds/fixed-income since my timeline for this money may be so short that i can't accept the volatility of equities?

- not worry about this goal specifically because if the need arises, i'll be able to find cash in one of my diversified assets? (related: http://www.bogleheads.org/wiki/Placi...ntaged_Account)


1. Vanguard Total Bond Market Index Fund (VBMFX, BND) is not available in my 401k.
a) can i reasonably approximate it using the funds below? if so, any recommendations for/resources about figuring out good ratios?
Vanguard Inflation-Protected Secs (VAIPX)
Vanguard Interm Term Bond Index Intermediate Bond Index Vanguard Funds (VIBSX)
Vanguard Short Term Bond Index (VBSSX)

b) different Lazy Portfolios suggest approaches using all short-term bonds, all intermediate-term bonds, or all VIPSX. how do i figure out if i should go all-in on one of these bond funds vs spreading my bond allocation across all three?

c) should i look to one of the other available "fixed-income" funds (PIMCO Short Term Instl (PTSHX) (0.45%) and PIMCO Total Return Instl (PTTRX) (0.46%) are the cheapest available) instead of trying to approximate VBMFX?


2. bogleheads and many other personal finance bloggers seem to really like vanguard. vanguard's funds have some of the lowest expense ratios (which, i understand, is perhaps the most important indicator of an index fund). however, the equivalent fidelity funds are said to be nearly identical (in spite of slightly higher ERs). my roth ira is already on fidelity. should i:

a) go ahead and open my brokerage account on fidelity so that everything is in one place and rebalancing is simpler?

b) keep the roth at fidelity while having the brokerage account at vanguard so that i have access to the "benchmark" index funds and for diversity in investment account vendors?

c) move roth to vanguard and open brokerage account at vanguard because vanguard is the best for "passive, long-term, low-cost index fund-based investing"?

Country: France (but I am American, so I am not sure if I have more options because of this)
Income: 50k euros per year
Risk Tolerance: Medium
Timeframe for investment: Medium-Long
Debt: None

I have 35k euros sitting in a bank account and I want to put it to better use. What should I do?

well i don't create a new topic..

i've got 15k €, and i live in italy, i'm 19 and i live with my parents.
i would like to use ALL this money for my roll...
so here it is the problem...
i've got 1 accont on ong (about 12k €), my main room, 1 account on ps (for playin sometimes mtts, about 1k €), other accounts on other room for other promotion (0,5k €), and in my bedroom i've got 1k €). then i'll have an account at the post office for 1,5k € which gave me 2% of "interest" (dunno if it's the correct term, i'm italian so forgive me...) for year...
i play nl100 trough 400... so i think that 6k € on ong are enough + knowing that i could take all the other money if i have a terribad downswing...
having the 80% of all my money on a pr is a big risk? where i should take the money?

Age: 23
Country: US
Risk Tolerance: Relatively High
Timeframe: 3-5 Years
Debt: Zero
Amount in savings: 100k
Income: 60k a year (this is before taxes)

Been looking to make some income from passive investments, but am not sure what to invest in. I like the interest which come from bonds, but I am afraid that if interest rates go up in the near future my bonds will be worth considerable less.

I am also thinking about getting a house since interest rates are so low and I can probably get a low mortgage rate.

Anyway any thoughts on what best to invest in will be greatly appreciated.

where are you looking to purchase the house?

Age: 23
Country: US
Risk Tolerance: Relatively High
Timeframe: Until Retirement (Roth IRA)
Debt: Zero
Looking to invest ~2-3k into my Roth IRA
Been making crappy wage as a temp for $/12hr but I figure I should toss some if not most of the money into my Roth IRA.

Currently living at home so very little expense. I currently have a Vanguard account and I want to invest in something that will avoid inflation if possible

England
Part time student so not much income
moderate/high
Long term/Short term whatever is best

basically just recieved £5000 and wondering what I can do with it, gonna finish uni and get a job so just wanna stick this £5k somewhere and see if i can get any return

A target fund at Vanguard is probably your best bet.

Country: UK
Income: >$100k (from poker)
Risk Tolerance: medium-high (4 on a 1-5 scale, where 3 is medium, 5 is high)
Timeframe for investment: not sure - 5-15 years

I want to invest £100k-£200k probably into an index fund like Vanguard.
Would blend of 80% stocks / 20% of bonds fit in the "mid-high" risk level category (if not - what ratio would?).

Would diversifying be a good idea - say split evenly into US, EU (or UK) and emerging markets, with 80/20 stock/bonds blend for each?

I'm a complete investing fish, so I would appreciate some basic advice.

Also - is getting 4% returns (above inflation) reasonable expectation for the mentioned strategy? 3%?

Thanks

up plz...

Someone smart read this for me please. http://www.ubank.com.au/ub/web/usave...-savings-bonus

It's an Australia bank offering 6.11% interest for a savings account. Only catch I seen so far is that you have to set up an auto bank transfer of $200/month