Anybody over forty and close to fifty will surely appreciate this post.
Over the last five years I’ve hit the books pretty hard on investing for retirement. The rules for retirement have changed dramatically since 2006 and will never be the same again regardless of what you brokers tell you.
How many time have you called you broker/fund manager to ask they why your portfolio is performing so poorly and have gotten a response like “don’t worry you’re dollar cost averaging and when the market comes back you be rich” or ” you’ve lost way less money than many others”
These days when you are investing in new mutual funds ask the question what the performance of the fund has been since inception. Most companies will not provide that data for anything longer than 10 years.
While these financial institutions continue to grow and take people’s money I figure I should she some light on this.
Considering an 8% return on investment after fees your money doubles every 10 years. Also 5% CD money was available 10 years ago.
I still get my Prudential prospectus on their mutual funds and want to share it with you. Let’s see if you can find the path retirement. It’s based on a 10,000 investment over 10 years
Prudential 10 Year:
Conservative Balanced Portfolio 4.55% $15,608
Diversified Bond Portfolio 6.77% 19,261
Equity Portfolio 3.59% $14230
Flexbible Managed Portfolio 4.59% 15,666
Global Portfolio 2.87% 13372
Government Income Portfolio 5.58% 17214
High Yield Bond Portfolio 8.43% 22455
Jennison Portfolio 2.64% 12,971
Money Market Portfolio 1.90%
Natural Resource Portfolio 17.56% 50418
Small Cap Porfolio 6.74% 19202
Stock Index Portfolio 2.65 12,987
Value Portfolo 3.98% 14778
So if you are running a balanced portfolio it would have been better to have a 10 year cd that would have beaten 8 out of 13 of these investments.
For those of you that think that 6% is great money , has your cost of living gone up more than 6% in the last 10 years?
Something that the bankers and wall street will never tell you!