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Thread: what should old folks invest in

  1. #21
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    remember that interest rates will never rise! yes I know that sound odd.
    major changes happened some years ago. first in Japan and now the west and china.
    growth wont happen- can't happen.
    the reasons for growth and high interest rates have all gone.
    read fred vettese book at least chapter 6.
    the essential retirement guide. for a starter of this new understanding.
    high paying jobs are being replace with low pay jobs etc. etc

    as always the past does not necessarily forecast the future as many mutual funds say - surely ETFs are better now?
    also according to Bloomberg the main or only reason that shares have increased is company buybacks which just mean the CEO gets more pay. no more is put into investment.

    thank for everyone's ideas
    I took a while to reply cos of that password chaos

    Last edited by anon125; 2016-07-20 at 07:07 PM.

  2. #22
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    The reason for asset allocation, and sticking to allocations, is that you never know how assets will do.

    The end of the bond bubble was called many years ago, possibly as far back as 2007 when global debt levels were sky high. Well guess what ... treasury bonds have performed incredibly well since 2007. They've attained prices (and low yields) that nobody ever guessed.

    In Europe, there are negative interest rates. My guess is still that Canadian treasury yields will approach zero, and I think our short end of the curve will go to negative yield, same as US and Europe. Global growth is grinding to a halt and yields will go negative.

    But why speculate on this? Just stick to your asset allocation. You do the same for stocks after all. Just maintain the target levels of exposure, rebalance once a year (maybe even less), and do this long-term. None of us can predict interest rates or the stock market

  3. #23
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    Quote Originally Posted by Jaberwock View Post
    My RRIF is invested 100% in dividend stocks and REIT's. I take out the dividends and leave the capital intact, except for an amount that I withdraw to top up our TFSAs every year. I firmly believe that this approach will minimize any risk of running out of money before I die.
    Exactly my approach as I get older.
    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

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  5. #24
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    What should old folks invest in?

    It's a good question but if one asking by the time one turns 71, than it's not realistic to worry about investments, but rather how much money does the person(s) need to meet their expenses. Do they have work pensions, other sources of income, have they accumulated a reasonable amount of savings, do they need to draw from their saving to meet expenses?

    Knowing the above one can determine where or what one might invest in.

  6. #25
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    What should old folks invest in?

    Depends how much money you have, and how much you need, to cover expenses.

    If you're 70, need $40k per year, and have millions, and a pension - you can invest in GICs (or whatever you want) to meet your needs because you don't need growth or income, you can draw down your capital as you please.

    If you're 70, need $40k per year, and have $100k, and no pension but do have government programs to rely on - you need to think about growth and some safety.

    Personally, I think as you get older, you need to focus on income from your portfolio and not the capital. You need to think this way because a) old folks only have so many good years left to enjoy income and b) you need income to live from; you can't depend on capital gains to get you through.

    Just my take of course.
    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

  7. #26
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    Quote Originally Posted by My Own Advisor View Post
    What should old folks invest in?

    Depends how much money you have, and how much you need, to cover expenses.

    If you're 70, need $40k per year, and have millions, and a pension - you can invest in GICs (or whatever you want) to meet your needs because you don't need growth or income, you can draw down your capital as you please.

    If you're 70, need $40k per year, and have $100k, and no pension but do have government programs to rely on - you need to think about growth and some safety.

    Personally, I think as you get older, you need to focus on income from your portfolio and not the capital. You need to think this way because a) old folks only have so many good years left to enjoy income and b) you need income to live from; you can't depend on capital gains to get you through.
    We do think alike, but I believe all investors should be focusing on "Income", even during their accumulation phase. Then by the time one is ready to retire they will know what their income from their investments will be. Invested wisely the income will be a growing amount rather than fixed.

  8. #27
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    Quote Originally Posted by james4beach View Post
    I will share I'm not a retiree, but I prepared a good portfolio for my parents and they've been in this since 2007. The allocations are: 32% XIC, 26% cash/XSB, 18% BRK.B, 13% CEF.A, 11% XSP

    2014: +11%
    2015: -0.1%
    2016 to date: +5.0%

    This is not a balanced portfolio though.
    Will share too
    2012 8.2%
    2013 15.3%
    2014 12.9%
    2015 4.5%
    so far 2016 10%
    Current allocation: FI 8.7%, US$ 40.3%, CDN 47.5%, Rest of the World 3.5% (US$ portion significantly increased because CAD$ was going down the tube).
    Core holdings: Canadian banks, Telecoms, Utilities, US$ dividends aristocrats, and low cost index ETFs

  9. #28
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    another thing to consider - old folks don't have the time left to recoup a 30% loss in the stock market!
    thanks everyone

  10. #29
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    Quote Originally Posted by anon125 View Post
    another thing to consider - old folks don't have the time left to recoup a 30% loss in the stock market!
    thanks everyone
    And my stock returns:
    2012 12%
    2013 15.5%
    2014 22%
    2015 -2%
    2016 12% (ytd)

    equities are 100% Canadian with about 50% in banks, 25% utilities, and 25% sundry. No ETF's but may go there. 70 yrs old and 24% in market, 50% in GIC's, and 25% in sundry (loans, MIC's, gold). Have small co pension as well.
    Last edited by frase; 2016-07-22 at 04:11 PM.

  11. #30
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    Quote Originally Posted by anon125 View Post
    another thing to consider - old folks don't have the time left to recoup a 30% loss in the stock market!
    thanks everyone
    I assume you are a ~71 year 'old folk' based on your comment about needing to start a RRIF. Not sure of your health or outlook for longevity but you could easily be around for another 10, 15 or 20 years or more. I'd consider that enough 'time left' to keep some portion of your portfolio in equities (individual, etf, mf, etc.) to stay ahead of inflation. Another portion in crappy GIC's or similar (you did have strip bonds) would provide a cash wedge to preclude needing to sell your equity portion in a down market, given that your RRIF will have annual minimum withdrawl amounts.
    You never did say how dependent you are on this RRIF income to meet your retirement expenses. A high dependency might cause you be more comfortable with a higher FI component, but having no equities at all could bite you.


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