A diversified portfolio is one that is allocated in different segments of the market, as others have pointed out. The percentages are pretty much up to you -- if you do not tolerate high risk, then a balanced portfolio in equal percentages spread amongst 4-5 different asset classes (NOT different funds in the same asset class!) will give you, overall, a decent return in a good year, and less loss in a bad year. Should your current or any new employer offer a lifecycle option, you could use that to simplify your investment options. One thing you MUST remember is that over time, your portfolio will become 'unbalanced' due to one or more asset classes doing better than the others. You need to rebalance your EXISTING portfolio back to the original percentages, every 1-2 years. Many people forget to do this. This is your money, so treat it with the attention it deserves! We are very aggressive investors, so it doesn't bother us to be 80% invested in equities as we take the long-term view. Yes, it was nerve-wracking to lose 26% of the portfolio's value from 2000 - 2002. It was also great to have tripled the portfolio from YE 2002 through YE 2006. I'm not sure where qdognj gets his figures -- I'm guessing he seems to be a fairly conservative investor, based on his postings -- but in 2006 some of the PERS (largest pension fund in the world, the California state employees fund) results were: Large Cap US Equity (Dodge & Cox) - 18.55% International Equity (Templeton Foreign Equity) - 20.64% Real Estate Securities Option (DWS Fund) - 30.59% You can compare this to some of the common "benchmarks" 2006 performances: S&P Index: 15.80% Wilshire 5000 Index: 21.12% Wilshire 4500 Index: 16.07% MSCI EAFE (International) Index: 26.86% Russell 2000 Index: 18.35% Balanced Index (60% S&P 500, 40% Lehman Aggregate [bonds]): 11.12% You can do well enough with regular contributions and moderate compounding; you are still young enough to have enough time to "ride out" the hills and valleys of investment management. You are doing, frankly, much better than we did at your age, and are to be congratulated!

My wife and I are semi-retired, and we've done a lot of thinking about how much money we need. Much of that thinking has been guided by information gleaned from a website run by Paul Merriman, who is a fee-based financial adviser in the Seattle area. We are not clients of his, but we think his advice makes a lot of sense and are largely following it. The first observation is that if you withdraw a fixed percentage of your savings each year, you will never completely run out of money! The only question is whether you will be able to keep up with inflation. It should be clear for the long term that you will be able to keep up so long as your withdrawal rate + the inflation rate is no larger than the rate at which your investments grow. So what are those numbers? Well, according to Merriman, a reasonably balanced portfolio (which his website defines) can be expected to grow at 8-10% per year. No promises, of course, but the average growth rate over the past 30 years or so has been about 11%, so it's not an overly optimistic assumption. Inflation has been running about 4%, so that means that you can afford to withdraw about 4-6% per year. We tend to be financially conservative people, so we have set ourselves an annual withdrawal limit of 4%. If we can do that, then on average we hope that our savings will grow at 2-3% per year after inflation. Of course there will be some years when it does better and others when it does worse. We figure that we can weather a 20% drop in the inflation-adjusted value, in which case we will just tighten our belts and wait for the markets to turn around. We would have gotten through the 2000-2003 crunch just fine with this strategy. Please note: I'm not a financial advisor. I'm just telling you what we're doing with our own savings, and where we got the advice. Here is a link that might be useful: Paul Merriman's website

Maifleur - clearly passing on family assets was important to them. Requirements differ as each organization that creates senior housing has their own guidelines that they follow. I guess we could think of it as good that the family members got their inheritance early, perhaps. Calirose, I agree that calculators are only one tool needed. I've never found a Web calculator that was able to take into account every aspect of my own financial plnng. The WSJournal one came the closest to being comprehensive. I was able to do a workaround that came out quite accurately. DH and I have our schedules full in retirement, and the article's statement that early retirement can see a sizable increase in expenditures due to traveling, is totally 'right on target' with us. Sometimes I joke to DH that it's a good thing we live in CA, because if you had to add airfare to the restaurants and hotel expenses of visiting all our wonderful travel attractions, we'd really go broke, LOL. Our 2-week Wine Country trip cost as much as going to Europe. Our scheduled fall trip to drive up and back to the PNW for an Alaskan cruise, will take over a month and really pack a budget wallop. But both of us have our small health issues, so we want to do this traveling while we still have energy and mobility. In line with the article, I expect our traveling will drop off as we age - I see this already in our WWII generation friends/family who are in their mid-80's and really starting to slow down, even the ones who loved (and could afford) traveling anywhere they wished. We did a lot of planning and budgeting for healthcare expenditures. Prayer is good, but planning is what gives me confidence the odds are as much in our favor as we could make them.

Remember the old saying in the stock market, "Sell in May ...and go away!"?? Good advice again this year, it seems. Though October has brought bad news, on several occasions, over the years, one would have thought that to be an improbable scenario this year, what with a big election in the offing ... but it was true again this year. Anyone game for some financial shenanigans? You should have a five to ten year time horizon for such a project as this, but it could work out in as low as three years. Canadian dollar was at par a few months ago, now about 85 cents U.S. buys a Canadian dollar, as people whose money'd fled the U.S. earlier, returned after the recent govt. support: does "BBB" now stand for "Broke Bankers' Bailout"? A recent survey says Canadian banks are among the solidest of the industrialized world, and much of the Canadian market is based on resource stocks, which have taken a hit lately ... but does anyone think that petroleum stocks are going to stay down for the long term? Other resources, including gold, either. Have certificates for some of your mutual funds that you plan to hold for a long time issued, likely at no fee, or some individual stock certificates, usually at a fee here of $50. or so each. Use your certificates, and CDs (preferable, as their value stays constant) if available, as collateral for a fully-secured loan at your favourite (i.e. low-rate) lender. If your lender is willing to lend up to 50% of the value of the underlying asset, consider borrowing up to possibly $30.00 per $100.00 of equity (which means that if the value of those assets drops by 40% to $60.00, you will still be covered 2:1). When the amount of your loan goes to over 50% of the current value of the underlying asset, the bank comes to ask you for either more collateral (stock, mutual fund certifs., CD, etc.) ... or to pay off some of the loan to restore the 50% loan level, called a "margin call" - and that's today ... tomorrow at the latest. I don't want to get one of them, and never have. If you don't have extra collateral on hand, or cash to pay down some of the loan ... don't crowd the margin level! Such extra assets are more likely to be available to folks nearing retirement, as it's probable that they have various investments, and more of them, available to use as collateral if needed. As in gambling, the gal/guy with the good hand who has surplus assets can keep raising as s/he feels appropriate. Maybe buy some quality U.S. stocks whose price has been beaten down recently, plus some Canadian stocks ... oil and gas, pipeline, minerals, rail, possibly a bank ... and some gold? These are some representative Canadian stocks: I'm not saying that they're the best choice. Suncor (SU.TO) has a substantial position in the tar sands with Syncrude, share price 59, 60, 55 at mid year, 26 in early Oct., now about 25. Putting money into development of more cost-effective ways to pull the oil out of the sand, it pays 0.20, 0.75%. Petrocan (PCA.TO) was 54, 52, 48 at mid year ... 23.70 early Oct., now 25. Pays 0.59 - 2.29%. Nexen (NXY.TO) was 38, 36, 34 ... 14.01 early Oct., now 16.46, 19.14 ... 18.90 last Fri - now 17.95. Pays 0.15 - 0.84%. En Cana (ECA.TO) (one of largest suppliers of natural gas) was 89, 83, 78 ... now 55, 61, 58.15 (Fri) 56.94 (Tue). Pays 1.431 - 2.51%. ________________________ Some companies turned into unit trusts several years ago, agreeing to pay out about 85% of earnings, and avoid tax ... but when some big cos. (e.g. Canada's largest phone co.) planned to do that ... the gov't cut them off at the pass ... said they'd all have to turn into corporations by 2011.(1) Canadian Oil Sands (COS-un.TO) major player with Syncrude in the tar sands, containing more oil than in Saudi ... in 1st qtr. '08 was 32 - 46, in 2nd qtr. was 40 - 54, in 3rd qtr. 38 - 54, as low as intra-day 23 in early Oct., now 26.76. Pays $3.55, 12.6% ... possible revision downward? Pengrowth (PGF-un.TO) was 18.13, 17.93, 17.70 ... 9.62 early Oct., now 12.00 ... annual payout over $2.00 per unit - but don't count on that level being maintained. I own a few units ... thinking of buying more. Enerplus (ERF-un.TO) was 46, 44, 41 ... 25.50 in Oct. ... now 28.28 ... pays about $5 (about 18%) annually per unit - probably also due for adjustment downward, due to oil price drop. Their rep is to speak to an investment group in our city tonight, so I've been doing some checking. __________________________________ Potash (POT.TO) (potash fertilizer, in major ongoing international demand to increase agricultural yields) 213, 223, 211 in summer ... 102 in early Oct., now 95 - 97 ... payout about 0.421, about 0.43%. Check their multi-year chart. Teck Cominco (TCK-B.TO) (base metal miner-processor) I bought at 35 early Jan, was 50 in May, 45, 41 in summer, 16.36 early Oct., 11.28 last Fri (payout 1.00 - about 8.75%), 8.75 Tues. (payout over 10%): I've been thinkig of buying more ... watching it closely. Several of our major mining companies bought out, owned offshore, shares no longer avail. to us ... I figure that this one may be a candidate ... especially at low price per share. That usually causes share price rise of 10 - 25%, even 35% overnight. TD Canada Trust (TD.TO) (one of our 6 national banks) was 63, 58, 58, 60 in summer, 52 early Oct., now 55.86 maintained its value about the best during the U.S. sub-prime problems ... they run a smart ship ... paying about 4%. CN Rail, one of our two major national railroads, recently bought substantial U.S. trackage ... shares not avail. in Canada - cf. CNI on NYSE. Enbridge (ENB.TO) (major pipeline) 44, 44, 43 ... early Oct was 35, now is about 40 (I've owned it about 14 years, turned 75 to upwards of 480 during that period). Pays some over 3%. TransCan. Corp. (TRP.TO) (major pipeline, plus) was 38, 37, 38 ... 31 in Oct, now 35 ... payout about 4%. Check stocks' info at Yahoo-> Finance, near top left enter symbol in small dialogue box, "Get quotes" to get much current info ... or give company name to get symbol. Chart at lower right shows price movement today and clicking on letters under the chart allows viewing charts over several days, months and years. At some below top left, clicking on "Historical prices" allows one to view daily open, high, low and close prices, plus dividend payouts, back several years for some stocks. Also daily volume ... which is often quite a lot higher when stock price near a top or a bottom. When stocks are at bargain prices ... if I can borrow to invest, fully secured, at 4.75%, paying interest only monthy and deductible ... and earn 4% (taxed at very low rate) ... and I gain the value of inflation ... that looks like a worthwhile opportunity. So - prices drop some more, later? If they stay down for a while, I may whimper a bit, as I could have bought later and enjoyed the substantial runup over the next few years ... but suppose the market is near bottom now? Not much use showing up at the station after the train has pulled out! Best to buy on several occasions as one believes the market to be nearing bottom, as it's volatile, then, making several false starts back up. I hope that you're all enjoying fall. I was picking some mature peas and beans yesterday plus radish pods for seed, moving some squash into the barn, lifting some beets ... and my fingers were doing some complaining, as it was a few degrees above freezing. More beets, turnips and carrots to lift today. Broccoli seems to be minimally affected by frosts, still producing (mainly small sized) florets - but that'll soon be through. ole joyful P.S. Want a real gamble? Our major phone co., Bell Canada, covering 2/3 of total Canadian population in Ontario and Quebec, more or less widows' and orphans' stock, wanted to go unit trust, then gov't. changed rules to block them. Then BCE (BCE.TO) made a deal with a major pension plan and buyout artist, backed by billions of loans from several banks, to buy out shareholders at $42.75 and go private ... when stock price in low 30s ... stock price went to about $39., but somewhat below the offering price, and usually price jumps to right up near the offer price. That was just before the U.S. subprime mortgage barnyard byproduct hit the fan, which problem led to this issue's huffing and puffing, lawsuits by current bondholders, etc., and several delays in the time for the deal to be consummated. Stock price continued around 39 - 40 through the end of '07. I'd bought some at about 28 a couple of years ago,and felt that, with the deal to go through in a few months, to buy some more about 38 last Christmas looked like a good idea. Early in this year the stock price began slipping, and the date of completion was postponed ... plus the company decided to suspend paying dividends. Stock was just over 35 at the end of June, recovered to 40s in August, then down again to 33 in early Oct., recovered to about 37 now ... with deal to have been completed in early Nov. ... that's ... of this year. One of the backers is the Royal Bank of Scotland, which recently received an infusion of credits from the Bank of England ... so are they going to be willing/able/allowed to complete a substantial deal ... in the (former) colony ... any time soon? Price closed at 37.90 Tuesday Nov. 11 ... want to take a chance on the deal completing, at the originally agreed price of $42.75, any time soon? o j