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49 votes

50% portfolio in single stock, JPM - appropriate for 80 year old?

This seems to me irregular both in terms of risk, lack of diversification Me too. Is this a suitable allocation of assets? Putting 50% in one stock is acceptable, I think, if that one stock is a ...
RonJohn's user avatar
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25 votes
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What does one typically use as a money reservoir for stocks, when they are "on sale"?

TL;DR: Cash is king — and bonds are not cash. I've written about this in this other answer. Here's part of it: [...] inflation aside, why do we want our "equivalent to cash" position to be ...
Chris W. Rea's user avatar
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16 votes
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Should I exclude bonds from our retirement investment portfolio if our time horizon is still long enough?

Having cash and bonds in your portfolio isn't just about balancing out the risk and volatility inherent in equities. Consider: If you are 100% invested in equities and the market declines by 30%, you'...
Chris W. Rea's user avatar
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13 votes

Is it risky to move from broad geographical diversification into investing mostly in less developed markets?

what else is wrong with focusing on less developed markets exclusively? Less developed markets are risky, because they're volatile and prone to high inflation. That means you can lose a lot of money....
RonJohn's user avatar
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13 votes

How to maintain NAV (Net Asset Value) for family fund

This is working fine for tracking purpose, however, now I have a need where multiple family members would invest (add funds) and the NAV is calculated accordingly. Next, when any of the family member ...
mhoran_psprep's user avatar
12 votes

What does one typically use as a money reservoir for stocks, when they are "on sale"?

A lot of people (and it's common advice) only have x% of their portfolio invested at any given time. Depending on your tolerance for risk, you might leave 10-30% in cash/money market, for example. ...
Rocky's user avatar
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10 votes
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Why does a target 2050 retirement fund hold so much cash?

A standard 2050 lifecycle fund allocation like LifePath 2050 index funds will generally have a very tiny allocation to cash (~1% in this example) because as you mention the target date is far out and ...
rhaskett's user avatar
  • 6,608
10 votes
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What does it mean "You are buying the underlying asset"?

It means you are buying ownership of actual shares and all that goes with that. Other ways to gain an interest in a company might be more indirect. Examples include derivatives (futures, options, CFD ...
LoztInSpace's user avatar
9 votes

50% portfolio in single stock, JPM - appropriate for 80 year old?

Yes, this is terrible in terms of lack of diversification and concentrated risk. Conflict of interest? No, because there's no benefit to Morgan Stanley if a client owns shares of JPM. Mismanagement?...
Bob Baerker's user avatar
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9 votes

Can I open a Roth IRA AND get to choose what companies my money is getting invested into?

It sounds like you have IRAs with a financial/investment advisor attached. Some firms specialize in this and don't really offer IRAs that you can (easily) manage yourself. These can vary from shady (...
Nosjack's user avatar
  • 8,717
9 votes

How to maintain NAV (Net Asset Value) for family fund

I tried to google but all I can find is NAV associated with Mutual Funds only. Well that's essentially what you're creating so that research may be completely appropriate. You will need to separate ...
D Stanley's user avatar
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7 votes
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Post Tax 401k or Taxable Brokerage Account?

With my additional savings is there any reason i would want to do a post-tax 401k instead of keeping it in a regular taxable brokerage account? Let's clarify what you mean by "post-tax 401k". First ...
Magua's user avatar
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6 votes
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How should residents of smaller economies allocate their portfolio between domestic and foreign assets?

why should I have any bias in favour of my local economy? The main reason is because your expenses are in the local currency. If you are planning on spending most of your money on foreign travel, ...
Brythan's user avatar
  • 21k
6 votes

Bond ETFs as a means to achieve risk parity

This is an old question that has been bumped because of an edit, but there's one point that I think was overlooked: The "high risk" you're seeing for a bond ETF is comparing the risk of that ...
D Stanley's user avatar
  • 137k
6 votes

Understanding bond ETFs

Bonds can be bought and sold prior to maturity. If you download the holdings of an ETF from the manager's website, it will often include the prices of the bonds the fund holds. The price depends ...
Charles Fox's user avatar
  • 2,779
5 votes
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Asset allocation across multiple retirement accounts

A 401k is limited in its choices to what the plan supports. In particular, it is very rare for a 401k to support real estate investments. As such, it will generally be impossible to make your first ...
Brythan's user avatar
  • 21k
5 votes

What does one typically use as a money reservoir for stocks, when they are "on sale"?

Your question is based on the assumption that all investors hold their stocks during a 'crash' and therefore they have a limited amount of cash available during it. That assumption does not apply to ...
Bob Baerker's user avatar
  • 76.7k
5 votes

Post Tax 401k or Taxable Brokerage Account?

A post-tax IRA is not a very good deal. You don't save any taxes now. When you take the money out, you pay ordinary income tax rates on the gains. If you invest in a brokerage account instead, you ...
stannius's user avatar
  • 5,301
5 votes

50% portfolio in single stock, JPM - appropriate for 80 year old?

Given the capital gains basis on the stock, it would be practical for her to continue to hold it. It is potentially possible that JPM grow so much over the past 10 years that it went from a moderately ...
Jake Freeman's user avatar
5 votes

What percentage of my money should I invest?

You should not be looking at percentages. You should be looking at an absolute value for your emergency fund. I suspect way more than half of your money will end up going to the all-stocks high risk ...
juhist's user avatar
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4 votes
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Is adjusting my portfolio's distribution according to bad signals from news risky?

Markets are remarkably complex and driven by trillions of decisions made by billions of people. Furthermore, your own news sources contain biases of which you are probably unaware. You almost ...
Glen Pierce's user avatar
  • 2,583
4 votes

How should residents of smaller economies allocate their portfolio between domestic and foreign assets?

We face the same issue here in Switzerland. My background: Institutional investment management, currency risk management. My thoughs are: Home Bias is the core concept of your quesiton. You will find ...
Marc E.'s user avatar
  • 129
4 votes

Should I exclude bonds from our retirement investment portfolio if our time horizon is still long enough?

This is always a judgement call based on your own tolerance for risk. Yes, you have a fairly long time horizon and that does mean you can accept more risk/more volatility than someone closer to ...
keshlam's user avatar
  • 48.2k
4 votes

What does one typically use as a money reservoir for stocks, when they are "on sale"?

Assume that you have a regular income, with enough left over after living expenses that you can save or invest. Also assume that you think the market currently is over-priced*, so that you've been ...
jamesqf's user avatar
  • 11.1k
4 votes

Understanding bond ETFs

When I sell my share of ETF, the ETF gets the cash by selling the shares it owns. Is this the right thinking? No. Selling your ETF shares is just like selling any other security. They are ...
Bob Baerker's user avatar
  • 76.7k
4 votes

What is the "definition" of a "diversified" portfolio and why a diversified portfolio is better?

Diversification is a risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio constructed of different ...
FrankRizzo's user avatar
  • 1,201
4 votes

Investing in a target date fund for retirement

A general rule of investing is that as you get older, you reduce your market exposure. Traditionally, advisers have used the “100 minus your age” rule, which is the percentage of your assets that ...
Bob Baerker's user avatar
  • 76.7k
4 votes

How should I distribute investment types between differently-taxed accounts?

I treat all accounts -- taxable, 401(k), Rollover IRA & Roth IRA -- targeted for a single purpose as a single unit. Thus, in your shoes, I would KISS and not divide each account in quarters. ...
RonJohn's user avatar
  • 50.7k
4 votes

Can I open a Roth IRA AND get to choose what companies my money is getting invested into?

There is nothing about an IRA or Roth IRA that limits you to investing only in mutual funds or ETFs. You can use it to invest in companies you pick. You can invest it in bonds or bond funds. The ...
mhoran_psprep's user avatar

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