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"safe" investments

Looking for advice, opinions. Any thoughts are appreciated.

Given the expectation of more interest rate increases, messy world events, stock market volatility, inflation, what investment categories would best preserve money. I have enough for retirement but I don't want to lose any more (year to date -15% in dollars, -3% inflation).

Which of these would you choose?

dividend stocks VHYAX
60/40 funds VBIAX
40/60 funds VWINX
intermediate bonds DODIX
short term bonds FNSOX
cds (3%, 3 years?)

Other suggestions?

gold (in what form?)
real estate (in what form?)

Thanks.

Comments

  • edited May 17
    Hi sirs nothing extremely safe
    We have so much bonds and 2015 TDF in mama portfolio T/ thought was save for retirement but not doing good

    -8% haircuts ( she was down -9% covid crash but bounces up slowly after)

    You Can do us treasury /ibonds but yields dismal since lots folks run toward it last couple months


    You can argue stocks-usa extremely cheap now and may slow heads up from here
  • edited May 16
    Thanks for the question - Difficult to answer unless you want to go to cash or short term investment grade debt, and not likely to provide inflation protection.

    I’m not the one to comment on dividend paying stock funds. I do know enough to be extremely leery. Some are subject to severe ups and downs. DFND is one I watched as it soared to ever greater heights last year - and I almost bought it. Than it plunged 15-20% in a matter of weeks. I’d rather own a few dividend paying stocks than to trust a fund. I’m sure there are some good (conservative) ones. But be careful.

    Safer investments

    There’s been a lot of positive commentary here and in the press about Inflation Protected Treasuries (I-Bonds). Here’s one discussion: https://www.mutualfundobserver.com/discuss/discussion/59440/i-bond-question/p2

    Here’s one story re I-Bonds https://www.thebalance.com/i-bonds-best-safe-investment-you-can-make-2388902

    Two caveats: (1) The maximum investment (with minor exception) is $10,000. (2) The money cannot be withdrawn for at least 12 months.


    VWINX is an excellent fund. I don’t think you can go wrong with it.

    DODIX has been an excellent fund in the past. Slumped badly earlier this year along with bonds. Probably reasonably safe now - though I’d prefer to be a bit more aggressive with most of my money. I do like the bunch at D&C. They’ll stumble occasionally, but usually manage to right the ship and turn out superb longer term returns.

    Short term bond funds won’t hurt you. If short-intermediate corporate rates stabilize or fall slightly they will outperform cash by quite a bit. I don’t have a favorite. At one time PRWBX was a good one.


    Riskier investments (Mentioned in OP)

    Real estate can be extremely volatile. I’d not consider a REIT fund to be “safe” in the sense of preserving capital. That said, the ones I track appear to have come down to earth this year and so they may be a good longer term bet.

    Gold - I think a diversified portfolio should have some exposure. But it is even more volatile than real estate - easy to lose 30% in a year in a mining fund. I think for most people 3-5% + - is an appropriate allocation. I’m currently overweight on precious metals (5-7%). Just my best guess that they have a lot of room to run. I own OPGSX (mining fund), WPM (a company with significant silver exposure) and most recently GLTR (invests directly in gold, silver and other precious metals thru futures). Of the 3, I’d say GLTR is the safest - but by no means “safe.”

    Have you looked at PRPFX? I’ve long owned it. It commits about 30% to precious metals and also invests in growth stocks, bonds and other assets, It’s a better way for most people to get exposure to the metals than by investing directly in them. Down 7% this year - slightly better than VWINX.

    If you want to diversify a bit, consider: 1/3 VWINX, 1/3 PRPFX, and 1/3 PRWBX (or other investment grade short term bond fund). About as safe as you’re going to get and still keep up with inflation. This combination is down about 6% YTD. I do think their combined return for all of 2022 will look somewhat better. A lot of moving parts there. (But, for amounts of up to $10,000 I-Bonds currently represent one of the best ways to keep pace with inflation.)
  • If I could only buy one fund it would be VWINX followed closely by RHS, an ETF. In fact, I think RHS is the single greatest ETF of all time, would be happy owning just that if need be. So simple, so effective.
  • @wxman23: interesting idea in RHS. Food, beverages, and TP will be bought regardless of what tech stocks are doing.
  • There are no "safe" investments beyond CDs, I-Bonds, Treasuries (held to maturity), stable-value funds (in 401k/403b), m-mkt funds, etc, and even those may lose in real terms.

    Stick with your investments that are suitable for your risk comfort level. Your YTD loss is consistent with moderate-allocatiin.
  • "Safe." That's a very relative term re: investing. In the current climate, I might be tempted to go with some military defense stocks. Northrop, Lockheed, others. Goddam that stinking war. In a different direction, I've just lately started to buy shares in a regional bank. BHB. Bar Harbor, Maine. Offices in NH and VT, too. Among regional banks, I've also discovered OCFC (NJ, NY, Philly, Balto-Wash.) And CCBG out of Tallahassee. ...Just because my timing is ALWAYS perfect, I poured some money at the New Year into the TRP Financials fund: PRISX. Now it's down YTD by -13%. Someone here urged me to stick with it. They're the ones with the dough. They'll always land on their feet. Looking into a different corner of the Market: RGR.Sturm, Ruger. Gun manufacturer in Connecticut. Doing very well. "Break a leg!"
  • edited May 17
    Concur with @yogibb on “safe” investment. Made many of these changes late last year to build up cash position. Except for I bond, the trade-off is that these safe investments are losing to 7+% inflation. We are okay being in “red” this year in our moderate allocation. Having a large cash position allow us to trade up on positions if and when the rate hike is done for this year.
  • @YBB. +100. So many are searching for that “safe” investment. With predictable results.
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