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Volatility at age 26

Posted on 4/3/14 at 9:21 am
Posted by tdavi48
NA
Member since Mar 2012
606 posts
Posted on 4/3/14 at 9:21 am
At the age of 26 should I be predominantly in "Growth" funds or "Aggressive" funds? I am pretty diverse in my fund options, just wanted to know which way should I lean more now and at what age should I change?
Posted by 632627
LA
Member since Dec 2011
12722 posts
Posted on 4/3/14 at 9:31 am to
as long as the money invested is not money that you may need in case of an emergency, than growth and aggressive funds have a significant place in your portfolio. As you get closer to retirement, or the possible need of liquidating the assets, than you will want to significantly lower the risk.
Posted by GoCrazyAuburn
Member since Feb 2010
34869 posts
Posted on 4/3/14 at 9:33 am to
quote:

At the age of 26 should I be predominantly in "Growth" funds or "Aggressive" funds? I am pretty diverse in my fund options, just wanted to know which way should I lean more now and at what age should I change?



Depends on what your risk tolerance is. You've got a long time horizon to be invested, but that doesn't mean you "should" be in aggressive holdings. Take an investor risk profile. That will tell you how to allocate your holdings.
Posted by Cold Cous Cous
Bucktown, La.
Member since Oct 2003
15043 posts
Posted on 4/3/14 at 10:45 am to
quote:

At the age of 26 should I be predominantly in "Growth" funds or "Aggressive" funds?

Names are just names, focus more on what's actually in the fund.

That being said, does anyone know whether there are regulations on securities names? In other words, if I started a fund that was 100% invested in T-Bills and called it "Cous Investors Aggressive Growth Fund" would I get slammed for having a misleading fund title?
Posted by GoCrazyAuburn
Member since Feb 2010
34869 posts
Posted on 4/3/14 at 10:48 am to
quote:

That being said, does anyone know whether there are regulations on securities names? In other words, if I started a fund that was 100% invested in T-Bills and called it "Cous Investors Aggressive Growth Fund" would I get slammed for having a misleading fund title?


I don't know for sure, but just off the top of my head I would assume so

As many regulations as there are with regards to investing, that seems like something that would be regulated.
Posted by Ace Midnight
Between sanity and madness
Member since Dec 2006
89483 posts
Posted on 4/3/14 at 11:26 am to
quote:

At the age of 26 should I be predominantly in "Growth" funds or "Aggressive" funds? I am pretty diverse in my fund options, just wanted to know which way should I lean more now and at what age should I change?


You have approximately 40 years exposure to the market. I would pick a strategy that maximizes growth, within your comfort zone of volatility - and understand, if you set up steady contributions, dollar cost averaging will eliminate a significant portion of your volatility curve (in other words, the volatility will be on paper only - if you're comfortable with that - it CANNOT hurt you) - so, at that point, you're only trying to protect yourself from a sustained bear market immediately prior to your retirement.

Therefore, I would plan on shifting from a Growth/Aggressive heavy portfolio to things with less volatility at about the 5 to 7 years prior to retirement year - pick a window and plan, and shift a portion every year until with about a year or two to go, you're pretty much 100% in income producing, low-to-no risk funds, bonds, etc. - but I wouldn't even worry about making that plan for 25 to 30 years, much less executing it before age 60.
This post was edited on 4/3/14 at 11:28 am
Posted by Joshjrn
Baton Rouge
Member since Dec 2008
26985 posts
Posted on 4/3/14 at 11:30 am to
Make sure you keep an eye on costs and fees. Many "aggressive growth" funds aren't worth it compared to a market index fund once you factor in fees.
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