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Which retirement funds are doing ok this time around? They typically switch to bonds which thanks to inflation are down something like 20 percent in the last ye
by JamesianP 4y ago
Which retirement funds are doing ok this time around? They typically switch to bonds which thanks to inflation are down something like 20 percent in the last year (some more like 30), despite yielding far less than stocks in the best of times.
- jrockway 4y agoIt's the right strategy in general, not a strategy guaranteed to never lose money. Your savings account is down 20% year over year in terms of purchasing power because what $1 is changed dramatically. Rare event, and sometimes you're just screwed. If I had a time machine, I would definitely use it to time the market!
- JamesianP 4y agoPeople who are retired, and have absolutely no way to bounce back if the market is unkind, should absolutely invest in places that never lose money. I'm not talking about inflation. I can go out and buy actual guaranteed bonds that pay me an actual guaranteed positive interest rate. Yeah they don't keep up with inflation, but it only a small trickle in lost earning power at that point, not a loss of 1/5 of the number of years I can stay retired which the funds are delivering. My savings account is not what I'm talking about. Inflation or not, it is still a number I can describe as "positive". I'm referring to bonds that retirement and wealth management add to funds use to supposedly counter volatility. These are investments that at best will only pay single digits. They have suffered the worst year since 1931 or something. And we're just getting going. The frustrating part is as I said, the underlying bonds themselves still pay that 4% or so which would be much better than the funds are achieving. But for some reason they have to sell the bonds at a loss.