conservative estimate on the yield mutual funds?

Question

once again for my spread sheet...I have invested in moderate aggressive mutual funds. I want to have an answer that reflect the market building but not going crazy, and maybe even having a period of stagnation...Currently, I have 30% in guaranteed money market with 5.5% growth. the amount I'm using per year in my spread sheet is 6% growth per year...what would you guess the growth would be conservatively? I'm using this to plan what I need to save

Answer 1

It would depend on the time frame. You should be out of the market if you need the money within 5 years. For a longer term, 10 or more years, I would use 8 percent.

Answer 2

totally depends on your adversion to risk. i have about 20 years in front of me so i typically use 12 to 15 (since i started investing for retirement about 9 years ago, i've averaged about that (even with the bad years of 200-2002) with an all stock, well diversified aggressive allocation (about 30% overseas, 10% in REITs, 20% in small value, 20% large cap, 20% large value). not sure how many years you have until your goal, and that's the real question.

further, you should definitely look into index funds or ETFs. better long term results than mutual funds through lower fees and a more managable risk outlook, ie. no active management. check out www.ifa.com as a starting point. they have tons of info on the efficient frontier and the famma-french 3 factor model. also look at vangaurd.com and ishares.com. happy investing!