Here’s a quick recap of some topics from The Forum this week, I’ve been trying to build some detailed posts there, and hope you will come by and join the conversation, starting your own threads and sharing your ideas or questions.
529 Plans and Saving for College Education (by imjoe)
I have a son who will be turning 3 in a month and I’ve been starting to think about saving for his education. I’ve only briefly looked into 529 savings plans. Do we have any experts who could point out what factors are the most important when choosing a 529? Is a 529 the best route to go or are there better options?
Fixed Income/Bonds (by PaulNYC)
Hi, to the extent anyone has any questions about this part of their portfolios feel free to ask. I’m not going to tell you what to do but will let you know the risks / benefits of whatever investments you have or are thinking of investing (or shorting). As way of background I’ve been an analyst and trader within the investment field for over 10 years now. Currently, I’m a partner at a fixed income hedge fund in New York.
Dollar Cost Averaging – The Basics, the Advanced, and Where it breaks down (Matt)
Dollar Cost Averaging is a quite well known method of investing that avoids the problems of trying to time the market. The basic premise is to add funds into an investment over a period of time.
Frequently the term is used to describe a long term savings plan, such as contributions to a company 401(k) plan that are taken from your paycheck on a monthly basis. An example 401(k) might have funds split into a basic 2 class structure of stocks and bonds, 80/20 between them. If you were to have a $1400 monthly payment going into the funds, each month they would buy:
- $1120 of Stock funds
- $280 of Bond funds
The Asset Allocation Thread (Matt)
In preparation for starting this thread I just wrote something about Asset Allocation and Asset Location. It is a little more ‘esoteric’ of a post, as I ask you to forget Stocks and Bonds for a moment and take time to think about the underlying principles of Asset Allocation. The thread is called Pirates and Hippies, Lessons on Asset Allocation and Location.
Ultimately, such a strategy is for diversification. And diversification is to reduce risk of loss. People without a lot of wealth will say that diversification is a bad thing, because they can’t get rich from it, my argument to that is that you probably shouldn’t be leaning on your investments quite so heavily. The solution here is to be earning and saving more until the size of your overall wealth is high enough to support a diversified strategy.
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Buying Gold Coins with a Credit Card (by depplif, I think it’s madness)
I have had some experience in buying and re-selling gold coins. This is just like Loyal3/Kiva etc as their is risk. This is a great way to create some MS. I recommend you use buy the:
$20 Saint-Gaudens Gold Double Eagle – MS-65
I hope to see you around the personal finance side of the forum, there are lots of great ideas sparking there now, and I’d love you to be a part of that.
Cheers,
Matt
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