Quotations by J L Collins

If your interest rate is... (1) Less than 3%, pay if off slowly and route the money to your investments instead. (2) Between 3-5%, do whatever feels most comfortable: Either put the money to debt payment or investments. (3) More than 5%, pay it off ASAP. [2016] - J L Collins

Even slightly beating the index year after year is incredibly difficult. Only a handful of investors have been able to modestly beat it over time. Doing so makes them superstars. That's why Warren Buffett, Michael Price and Peter Lynch are household names. [2016] - J L Collins

When you buy stock you are buying a part ownership in a company. When you buy bonds you are loaning money to a company or government agency. If you are going to hold bonds, holding them in an index fund is the way to go. Very few individual investors opt to buy individual bonds, with U.S. treasuries being the main exception, along with bank CDs witch act like bonds. [2016] - J L Collins

When interest rates rise, bond prices fall. When interest rates fall, bond prices rise. In either case, if you hold a bond to the end of its term you will, barring default, get exactly what you paid for. Generally speaking, short-term bonds pay less interest as they are seen as having less risk since your money is tied up for a shorter period of time. Accordingly, long-term bonds are seen as having higher risk and pay more. [2016] - J L Collins

There are studies that indicate holding a 10-25% position in bonds with 75-90% stocks will actually very slightly outperform a position holding 100% stocks. Adding much beyond 25% bonds begins to hurt results. A portfolio comprised of 100% stocks--even in the broadly diversified VTSAX--is considered very aggressive. High short-term risk rewarded with top long-term results. Perfect for those who can handle the ride, are adding new money to their investments and who take the long view. [2016] - J L Collins

I recommend two specific mutual funds: (1) VTSAX (Vanguard Total Stock Market Index Fund). (2) VBTLX (Vanguard Total Bond Market Index Fund). They have rock bottom expense ratios, but also require a minimum investment of $10,000. Vanguard is growing rapidly and is now available in many countries outside the U.S. You can check out the list at www.global.vanguard.com. I tend to avoid ETFs (exchange traded funds) because of the possibility of sales commissions and/or spreads. [2016] - J L Collins

The advisor is paid each time you buy or sell an investment. These commissions in the investment world are called "loads". There is no "load" charged to buy a Vanguard Fund. But American Funds, among others, charge a princely load. Typically it is around 5.75% and it goes directly into the pocket of the advisor. Some funds offer a 1% recurring management fee to the advisors who sell them. that means you get to pay a commission not only once, but every year for as long as you hold the fund. Insurance investments are some of the highest commission payers. Annuities and whole/universal life insurance carry commissions as high as 10%. [2016] - J L Collins