Hi everyone, I'm pretty new to all this...but have managed to be pretty good at saving money and have a savings account that's built up over the years. I switched banks a few years ago so my CD's I take out would have a higher interest rate. Now and then, the bank reaches out to me about investing, with the most recent being a BlackRock 'Target Allocation model'. Essentially, you choose which type you want... 80/20, 90/10, etc... which determines the rate of risk, with a 0/100 model being the least risky. I've went over everything, and it seems like a good idea...* should * draw in more interest than a CD, even at the lowest risk plan... including the 1% free my bank charges (at least I believe they said 1%). As I am only in my mid 30's, it seems like it would be a good way to go long term as the CD rates have went down drastically over the last year or so. I guess what I'm wondering is there anything I'm overlooking? There seems to be little risk (at least with the lower risk models) in that I can pull the account at any time... but just seems "too easy" to me...
I'm not familiar with these Blackrock funds but I wish to point out that portfolio balancing is a philosophy that many people believe in while some do not. Personally, I do not balance my portfolio. “Selling your winners and holding your losers is like cutting the flowers and watering the weeds.” - Peter Lynch So, these ETFs are probably OK but I am extremely sceptical they would perform as well as holding $10,000 of bonds or high interest savings and the rest in VOO without ever balancing. The bonds being a fire extinguisher for anyone under 50 years of age. For people near retirement, the cash should go up to provide a buffer in case of a market down turn when the money is needed.
I do my own but recently liquidated. Blackrock has some good funds but I preferred the CEFs, most paid monthly dividends. DSU was a decent one. GLADSTONE has a couple decent ones also. Any type of investments carry a degree of risk.
