Which markets stink that will eventually rise?

Answer: A quick 150 page read - "The Smartest Investment Book You'll Ever Read". Please read this before continuing to try to blindly guess at winners and losers. If you do this, you can thank me when you are an old man with money. Stop guessing and PLEASE stop watching the "Financial Pornography" on CNBC, Wall Street Journal, etc,etc,etc....

A 150 page read is the equivalent of "Cliff's Notes", however, I'll be nice and try to sum it up.

Major Points of the Book:

No one has "beaten the market" (Actively managed funds) over the long term. What does that mean to you? Why try to beat the market? Why not "be the market" (Passively managed funds)? It's returned 11.8% historically. Invest in Index Funds. Index funds simply "track a given index". Boring right? Wrong. If boring means making higher returns, then let my investments be boring as hell! Why index funds? Higher returns and lower expenses. Average "Actively managed mutual funds" charge 1.5% expense ratios as compared to the Average "Passively managed funds" which charged around .2%. What's that mean for you?
Example: $1,000,000 invested in an Active fund costs you $15K per year (Actively managed funds).
In comparison, my same $1,000,000 costs me a mere $2,000 per year (Passively manged funds). That's $13,000 less that I pay for funds that WILL outperform your "Professionally managed/Actively managed funds". I'm sure you can take a wild guess at what that extra $13,000 per year would grow to over 30 years @ 11.8%, right?

90% of your returns are predicated on Asset Allocation. Don't ever forget this...

If you choose low-cost index funds with a company like Vanguard like I do. You only need, for instance, 3 of these low-cost index funds to make up your entire Roth IRA portfolio - sample portfolio below.

Determine your Risk Profile. It's simply your "sleep factor". Need to read the book for specific help with this part (it's important).

Here are the funds for a High Risk Portfolio with their associated Asset Allocations. You could hold these 3 funds in a Roth IRA at Vanguard (I have no financial incentive to tell you this, whatsoever).

VTSMX - 56%
VGTSX - 24%
VBMFX - 20%

Here's a link so you can compare the 3. Take note of expense ratios, then go back and compare them with Actively managed funds. You'll see.

I tried to keep it brief, but the book is full of stellar information that really needs to be thoroughly read to gain a complete understanding.
Hope this helps.

mytigger,

I appreciate the reply. I did not suggest the "Index 500" fund. I am certainly OK with you choosing your own investment plan as I will choose my own. I do not plan on retiring in 5 years as you seemed to suggest. My annual rebalancing plan includes re-assessment of my risk profile as I reach retirement age. If you're saying your timeline is only 5 years, then you may want to consider a low-risk profile with the funds I mentioned earlier with a different asset allocation.
Finally, if your timeline for retirement is more than 5 years then you may want to discontinue looking at your retirement account like it's an E-Trade account. Trading stocks or ETF's and participating in "Actively Managed Funds" is much more detrimental to your total return than any advice I shared with you, for sure. Please go read the book before you take the snippets I gave you as Daniel R. Solin's entire explanation of why you should be in Index Funds. Don't let your emotions get in the way of a good solid investment plan. You're too impatient. I read the book and continue to read. I'm fairly sure that's not "a lazy man's investment plan" as you said. Good day...

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While I agree with everyone having the ability to manage their own fund and not pay someone else to do it,

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Do yourself a favor and sit down with a professional. If your on a message board asking for advice then you should probably get some real guidance as opposed to some generic "help" you get here. It would cost you nothing but your time, and if your really good enough to do it yourself, then you should be able to decipher whether the advice your getting is sound.

quote:

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Do yourself a favor and sit down with a professional. If your on a message board asking for advice then you should probably get some real guidance as opposed to some generic "help" you get here. It would cost you nothing but your time, and if your really good enough to do it yourself, then you should be able to decipher whether the advice your getting is sound.

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My job affords me the opportunity to access several professional investors to use for my planning at no cost. And FYI, I've met with them. While I agree that you can certainly glean useful information from them, most aren't worth paying my money to invest my money for me, they're not that good. And if you think they are - they'll be only too glad to help you with it.