I hope that I will have a real job soon. I was talking to my step-dad in the car after moving my brother back into College. He said that I should invest 15% of income into some sort of mutual fund. The question I had is if I did, are there particular mutual funds that invest in science and technology that still perform well. Any takers on this?
Also, I had a question about returns. Over a long period, what is a good rate for returns?
For several years, I used AIG/Valic and ING. They both had science/tech funds, and I allocated something like 20% of overall investment in those sectors. I also used their "emerging markets" fund, allocating another 20% of my portfolio therein. My rate of return for the period 2004-07 was about 9 or 10% per year with both of them.
Now, my only option with my employer is TIAA/CREF. They do not have the third world option, unfortunately, but they do have some technology funds. They way they operate, you can choose one of the standard "life cycle" funds. E.g., Life Cycle 2030 or Life Cycle 2040, where the number is the year you expect to retire. A Life Cycle 2030 fund is somewhat conservative, whereas a 2040 is moderately aggressive, and the 2050 would be even more aggressive. The funds are then allocated in a set menu. Or, you can go a la carte, if you prefer, allocating, say, 20% in green technology, 20% in utilities, etc. I haven't done that with TIAA/CREF though. My average over the past two years has been rather low, netting about 2%.
On balance, over the past five years, a weighted average of 9% for 3 years and 2% for 2 years is just under 6%. In better times, I'd expect between 6 and 8 percent per year for a moderately allocated portfolio. I wish I'd started long ago, instead of waiting till I was 37 to get started, that's for sure. Companies I worked for always offered 403(b) or 401(k) plans, but until 2004 I'd never taken them up on it. As opebo says, I'd lived for the moment. My current employer matches my ten percent of my income. It's a sweet deal and nowadays I'd say Carpe diem, sieze the day, don't just live for it. I'd encourage you to start investing as soon as possible. Look at ING if you're interested in a wide range of a la carte options, including green technologies. I've been told that Franklin Templeton has some nice options as well.
