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Comment by tmorton | Hacker News Reader

I think you're looking at this the wrong way. Decide the level of risk first. That dictates your stock/bond mix. After that, you get whatever the market gives you.

If you're looking for a guaranteed 5%, it doesn't exist right now, and it won't be back unless inflation spikes close to 5%.

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Agreed - a well diversified portfolio of stocks and bonds across sectors and geographies is the right approach to maximise return versus risk.

I'd keep a little aside for investing where you have an unfair advantage versus Wall St. That might be getting into a tech stock early, or investing in an early stage company through friends. For the latter don't expect to get your money back soon, if ever.

AT&T pays a 5.3% dividend. Given they're still effectively splitting a monopoly with Verizon, that's pretty close to guaranteed. You'd want to track the company's quarterlies, the competition (risk of a combined Spring + T-Mobile hurting them), and any big business moves, but otherwise it's predictable. The stock itself - and your principle - would get compressed in any market down turn though. The nice thing about holding T, is that you can liquidate your entire principle at any time easily.

The last big bond issue by AT&T paid 1.4%

http://www.bloomberg.com/news/2013-11-20/at-t-said-to-plan-o...

I'd not call the NPV of any tech stock predictable.

Even if they pay a 5.3% dividend every year, if it ends up going down even 3% in a year, suddenly you're getting effectively a 2% dividend since you've lost capital (rough numbers, no inflation, you get my point).

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