Your mortgage rate is 3.75%. The stock market returns 7-10% on average (depending on who you ask). You'd have to be an idiot to pay extra on your mortgage when you can make so much more in the stock market.
Right?
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There have been many statistics published in the news about how more and more millennial adults are still living with their parents. More so than previous generations. As this is an investing and personal finance blog, I would like to focus on the merits (or not) of this strategy in order to save money early on in your career.
Is this a smart financial move? Or does it turn you into a loser?
Do you subscribe to any of these beliefs? When it comes to portfolio allocation, the conventional advice is to move more of your portfolio into bonds the closer you get to retirement. "Bonds are safer than stocks" goes the mantra. After all, what makes bonds "safe" is that you receive a guaranteed rate of interest and you get paid before the stockholders do if the company goes belly-up. And for those that prefer bond mutual funds, they supposedly fluctuate less than equity (stock) funds. Bonds and bond funds are therefore supposed to cushion the risk of stock market crash.
In this article, I will talk about how blindly following this advice can be dangerous to your portfolio. |
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An alternative minded Investing and Personal Finance blog Archives
February 2019
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