10/25/2021: Weekly Newsletter
“I rolled by 401k over into a Traditional IRA Brokerage account and pretty much all my money is in Vanguard Target Retirement 2050 Fund. So, a lifecycle fund. I was reading a book and they say: "if you invest in a lifecycle fund, don't diversify by loading up your portfolio with a bunch of other funds, too."
Hmm. So, I shouldn't invest in an index fund or an ETF, which I feel like everyone tells me I should? Then I was reading this and they sort of seem to say, well, you should have other retirement income sources, too. Maybe I'm getting confused here...should I think of my finances as consisting of a) my retirement fund, which is my lifecycle fund and b) my other investments, which are meant to net me money during the present day?”
-Wallet Street reader
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My view here is that a retirement fund is one component of all investments. The retirement fund will manage the amount in it as if it were the only source of income for the future. It will likely put the investment into a mix of ETFs, bonds, and funds. Based on the retirement year you select, it will be allocated more or less risky. (In other words, a 2025 retirement fund is likely less indexed towards growth and more towards maintaining stability, since you wouldn’t want to jeopardize earnings when the payout will be so soon. Whereas a retirement fund farther out can pursue more growth investments, which might skew slighltly riskier.)
One could do 2 things here: 1) put additional savings as one accumulates them into this retirement fund 2) diversify additional savings into other ETFs, bonds, or investments that this retirment aren’t a part of these retirement fund.
I personally have invested in both retirement target year funds as well as other ETFs, funds, and alternative investments. This helps diversify risk and get exposure to other potential growth.
What would other readers say?
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Money & Crypto
How SWIFT is reacting to FinTechs in the cross border payments space (The Economist)
Facebook rebranding itself as ‘the Verge’ (CNN)
Recalling me back to one of my jobs many years ago, how trades settle and why it’s important (The Economist)
ProShares Bitcoin ETF under criticism (Wall Street Journal)
3M CoinMarketCap email addresses compromised (CoinDesk)
FTX raises $420M (The Block Crypto)
WeWork goes publich in SPAC ( Investopedia)
Tech & Science
Studying psychedelics to help with mental health disorders (Scientific American)
🎥 What is machine learning? (Scientific American)
Etc.
🎧 Billy Porter talks about growing up religious, moving to NY for broadway, and his work on Pose. (NPR) This led me down a rabbit hole to revist what I think is one of the most beautiful Oscar gowns ever, which was made by Christian Siriano and worn by Billy Porter. (Paper Magazine)
🎧 Cynthia Erivo releases a new album (her voice is exquisite) and talks about playing Aretha Franklin. (NPR)
📖 Such a Fun Age by Kiley Reid is a much a page turner as it is a novel that provokes a lasting shift in perspective
AQ Khan, who helped devlop Pakistan’s nuclear weapons program, passes away (Washington Post)
Colin Powell, four-star general and Secretary of State, passes away (CNN)
Disclaimer: All opinions are my own. The content on this site and on the podcast does not constitute financial, legal, accounting, tax, or investment advice.
