U.S. retirees try to keep cool...

[ColdNoMore]

...as stocks tumble.


An interesting article...applicable to a lot of us.


Stock Market Volatility (poke Here) (http://finance.yahoo.com/news/u-retirees-try-keep-cool-stocks-tumble-173730543--sector.html)

"I have not looked at my numbers. I'm afraid to do it," said Farrington, who recently moved to Charleston, South Carolina, from Boston. "We've been conditioned to stand pat and not panic. I sure hope my advisers are doing the same."

Retirees are worrying about their nest eggs as this month's sell-off rounds out the worst year for stocks in a decade, and some fear they are headed for a day of reckoning like the 2008 market meltdown or dot-com crash of the early 2000's.

[Kenswing]

I would hope as one ages that they align their portfolios so they're not so exposed to this type of market volatility.

[rustyp]

...as stocks tumble.


An interesting article...applicable to a lot of us.


Stock Market Volatility (poke Here) (http://finance.yahoo.com/news/u-retirees-try-keep-cool-stocks-tumble-173730543--sector.html)

From the same article - "Retirees have less time to recover from bad investment moves than younger workers. Their portfolio could be even more at risk if they hold on too long in a prolonged decline.s. "

A 50% drop in the market takes a 100% rise to make it back to breakeven. For most seniors it takes more than 100% due to the fact they are making monthly withdrawals to live thus the base is smaller than when the market went down. Sleep tight.

[billethkid]

I would hope as one ages that they align their portfolios so they're not so exposed to this type of market volatility.

And oh so easy to do!!

[thetruth]

From the same article - "Retirees have less time to recover from bad investment moves than younger workers. Their portfolio could be even more at risk if they hold on too long in a prolonged decline.s. "

A 50% drop in the market takes a 100% rise to make it back to breakeven. For most seniors it takes more than 100% due to the fact they are making monthly withdrawals to live thus the base is smaller than when the market went down. Sleep tight.

Many people do not understand math.

If, you invest 10,000 and the first year you make 10%. The next year you loose 10% many people THINK they have now 10,000
10,000+10%=11,000 11,000-10%=9900. To get the claimed LONG TERM gain of 8% per year you would have to get 10,000+8%=10,800+8%=11664 11664+8%=12597.12.
Since your second year, you lost $100 you only have 9900 you need to make 27% the third year to be getting the quoted 8% per year.

Most of the information WE read is written by people SELLING investments. We read about the magic of compounding. MY POINT is to remind ourselves that it cuts both ways.

[tcxr750]

I’ve gone through the “tech bubble”, Fed raising rates, Fed lowering rates, The Great Recession, inappropriate investments and downright “investment advisor” incompetence. (Barron’s Top 100). My IRA had its greatest steady gains when I was getting %6.5 per year in an American Skandia variable annuity for five years. The good news, if I live long enough and never make a withdrawal I could become a millionaire someday.
That never a withdrawal is overridden by the mandatory RMD. My current “advisor” gets 1% per year and I don’t even get a free client dinner.
Anybody happy with a Vanguard designed portfolio.

[Bucco]

And oh so easy to do!!

Hoping you are correct, because I fear we have not seen the worst of it.

[Kenswing]

Hoping you are correct, because I fear we have not seen the worst of it.

That was my point. If you're concerned that the market is going to get worse, get your money out of the market and into something safer.

[Bucco]

That was my point. If you're concerned that the market is going to get worse, get your money out of the market and into something safer.

Agreeing totally...lots to do with stability, and our country is very unstable at present.

[Kenswing]

Agreeing totally...lots to do with stability, and our country is very unstable at present.I'm not going to bite except to say markets go up. Markets go down. Adjust your portfolio according to your perceived risk.

[tophcfa]

Has anyone read the book "The Aftershock Investor" by Wiedemer and Spitzer? A very good book to read if you are concerned about your investments. As a retired investment professional, I can only find very little with the author's premises to argue with. Since the latest version of the book was written, their theories have only been enforced, and the bubbles have grown much larger and more dangerous. Our growing national debt is the most toxic bubble imaginable, and in my opinion will ultimately be the downfall of our great nation as we know it (see Greece). Our personal financial position is fortunate as we project that we can live a modest life until we are very old on our savings without any investment income besides modest interest. Therefore, we do not own any stocks and are insulated from the possible future market meltdown. We have our money in safe money market accounts, tax free municipal bonds bought a long time ago with good interest rates, and gold. I feel very compassionate for those who rely on future stock market growth as their primary source of retirement security as there is no security in hoping an inflated market will bail them out. I sincerely hope that I am wrong, but I would not bet our retirement security on it!

[Bucco]

I'm not going to bite except to say markets go up. Markets go down. Adjust your portfolio according to your perceived risk.

Sorry you mentioned "biting" and I do understand what you meant, but I also assure that it was not a "lead in"

My limited experience tells me that stability in all areas is vital to a strong market.

I see no stability in our future.

[dewilson58]

chilout


Future looks great, history was great.




If you can't handle the heat, get out.

[ColdNoMore]

Future looks great, history was great.


Absent something spectacular happening on Monday (in either direction), the DOW will be down almost 10%...for the entire year of 2018.


Since it will be my children who will ultimately reap the benefits, I think they will appreciate me being a believer...of the Oracle of Omaha.

[manaboutown]

World wide markets are softening. After all it has been a record breaking bull market. It may or may not be time for a cool down.

[retiredguy123]

If you are worried about the stock market now, you have not been adequately conservative or diversitified. 30 percent stocks, 30 percent bonds, 40 percent cash, regardless of your age. If you have done that forever, you would be way ahead and not be worried at all.

[Down Sized]

Rocking chair quarterbacks!! OOPS wrong chair.
Rocking chair Financial Advisors.

[Topspinmo]

No worry for me, I got out of the Ponzi scheme long ago. Wall Streeter’s inside trader’s will use any excuse to cause market to drop, then they can buy low and all us suckers caught in down side.

[Topspinmo]

Absent something spectacular happening on Monday (in either direction), the DOW will be down almost 10%...for the entire year of 2018.


Since it will be my children who will ultimately reap the benefits, I think they will appreciate me being a believer...of the Oracle of Omaha.

You mean the tax cheat that pays less taxes than his secretary

[ColdNoMore]

You mean the tax cheat that pays less taxes than his secretary.

Not only is your statement false (he pays a LOT more money in taxes), methinks you need to educate yourself on the difference between a tax "cheat/evasion"...and tax "avoidance." :oops:

Hint: One is illegal...the other very legal. :ohdear:

Buffett has stated for years, that he doesn't think it's right that his tax rate (NOT taxes paid, as in your statement)...is lower than his secretary's.

In fact...

Warren Buffett on Tax Reform -- The Motley Fool (https://www.fool.com/investing/2018/01/14/warren-buffett-on-tax-reform.aspx)

But don't expect the tax cuts to benefit everyday Americans

While Buffett acknowledges that Berkshire's bottom line will be helped by the new tax law, and he predicts the stock market is likely to rise, that doesn't mean he thinks the GOP's tax-reform bill is in the best interest of the American public.

Buffett recently wrote an article for Time magazine in which he explained why trickle-down economics doesn't really work.

However, Buffett points out that historically, trickle-down economics hasn't had the promised effect.

It may surprise you to learn that Buffett thinks the rich, for the most part, don't pay enough taxes.

[Bucco]

Not only is your statement false (he pays a LOT more money in taxes), methinks you need to educate yourself on the difference between a tax "cheat/evasion"...and tax "avoidance." :oops:

Hint: One is illegal...the other very legal. :ohdear:

Buffett has stated for years, that he doesn't think it's right that his tax rate (NOT taxes paid, as in your statement)...is lower than his secretary's.

In fact...

Warren Buffett on Tax Reform -- The Motley Fool (https://www.fool.com/investing/2018/01/14/warren-buffett-on-tax-reform.aspx)

You keep insisting on TRUTH, you will ruin a lot of people's 2019. Then you probably don't use for reference what some do.

[Moderator]

Reminder...please stay on topic..."stock market volatility"

Moderator

[Bucco]

Reminder...please stay on topic..."stock market volatility"

Moderator

I think the last two posts were in reply to post 18, which appears to have passed muster, but was untrue.

You are correct that post took this thread off subject.

[Chi-Town]

If you are worried about the stock market now, you have not been adequately conservative or diversitified. 30 percent stocks, 30 percent bonds, 40 percent cash, regardless of your age. If you have done that forever, you would be way ahead and not be worried at all.Just curious, how has that 40% cash position worked out over the last 10 years?

Sent from my SM-N960U using Tapatalk

[rustyp]

Just curious, how has that 40% cash position worked out over the last 10 years?

Sent from my SM-N960U using Tapatalk

Without a cash position how does one buy when it is a "buying opportunity"?

I love that saying "buying opportunity". Wall Street jargon for lipstick on a pig.

[Chi-Town]

I had a nice positions in good yielding corporate bonds and preferreds. Slowly but surely they were all called. New bonds were so far over par that the yield was like a CD. That forced me more into equities which have paid off 8 out of 10 years.

Sold an amount a few months ago that that I figured was equal to the Trump bump. Put that recently into a one year 2.75 % CD. Wii be anxious to hear what my financial advisor has to say about 2019 during my upcoming review.




Sent from my SM-N960U using Tapatalk

[tcxr750]

The market losses are reminiscent of the Great Recession only faster. Stay fully invested and make no withdrawals and in a few years your account should be back to normal. For those of us taking mandatory RMDs from our IRAs the value losses will be even greater.
Hope you youngsters get the message on the downside of conventional IRA vs Roth.

[Bucco]

The market losses are reminiscent of the Great Recession only faster. Stay fully invested and make no withdrawals and in a few years your account should be back to normal. For those of us taking mandatory RMDs from our IRAs the value losses will be even greater.
Hope you youngsters get the message on the downside of conventional IRA vs Roth.

Just a "glitch"

[dewilson58]

I had a nice positions in good yielding corporate bonds and preferreds. Slowly but surely they were all called. New bonds were so far over par that the yield was like a CD. That forced me more into equities which have paid off 8 out of 10 years.

Sold an amount a few months ago that that I figured was equal to the Trump bump. Put that recently into a one year 2.75 % CD. Wii be anxious to hear what my financial advisor has to say about 2019 during my upcoming review.




Sent from my SM-N960U using Tapatalk




The Bigger the dip, The Bigger the bounce.

[rustyp]

The Bigger the dip, The Bigger the bounce.

Love it - providing you were not in for the dip. Amazingly I do not have an acquaintance that lost money on the way down. BUT I never had an advisor that told be to get out. This is no more than a giant legalized game of musical chairs. When the music stops and you are not in a chair you will be the ultimate loser.

[dewilson58]

I wish the markets were like ice cream.


I always get only one dip.......two dips are way too much.


But, there are more emotions than mine.

[tcxr750]

The good news is that despite the dips if you make no withdrawals your heirs will become millionaires.

[dewilson58]

The Bigger the dip, The Bigger the bounce.




Yep

[thetruth]

Has anyone read the book "The Aftershock Investor" by Wiedemer and Spitzer? A very good book to read if you are concerned about your investments. As a retired investment professional, I can only find very little with the author's premises to argue with. Since the latest version of the book was written, their theories have only been enforced, and the bubbles have grown much larger and more dangerous. Our growing national debt is the most toxic bubble imaginable, and in my opinion will ultimately be the downfall of our great nation as we know it (see Greece). Our personal financial position is fortunate as we project that we can live a modest life until we are very old on our savings without any investment income besides modest interest. Therefore, we do not own any stocks and are insulated from the possible future market meltdown. We have our money in safe money market accounts, tax free municipal bonds bought a long time ago with good interest rates, and gold. I feel very compassionate for those who rely on future stock market growth as their primary source of retirement security as there is no security in hoping an inflated market will bail them out. I sincerely hope that I am wrong, but I would not bet our retirement security on it!

Like you I am uncomfortable about it.

Last time I collected my courage to look, it is posted on the internet the national debt. The number was 22 Trillion dollars.
The number is the classic BIG LIE. You say it often enough and people THINK it makes sense. My personal comprehension is 14 million-the largest order I ever wrote. Twenty-two trillion is several large freight trains full of 100 dollar bills. I read somewhere it is 85,000 dollars for every man woman, child and puppy dog in the United States. Far as a national debt, relative to our gross domestic product, our claimed ability to pay the debt, Japan's debt is twice ours.

Who do we owe this incomprehensible sum to? Yet another issue, big lie, that people think they know. Most people would guess China. They would be wrong. Our largest creditor NATION is actually Japan-see above-their debt is higher than ours compared to GDP. More interesting, shocking, to me,
is that both Japan and China TOGETHER hold about 20% of the national debt. SOCIAL SECURITY holds over 40% of the national debt. HUH? We are borrowing from ourselves.

I have a pile of German Deutschmarks that belonged to my grandparents before WWII. Each bill is in denominations of millions of DM. They are worthless. You will find them list on ebay for like thirty five cents each. Even the current German government will not redeem them for anything.

Re: rate of return
Years ago I read that the US is one of only two or three countries that TAXES interest on savings. The Fed says their target for inflation is 2%. Based on history the chance of them reaching 2% inflation and holding it is zero. Assuming they do the impossible- at current treasury interest rate of about 2%,
you are actually LOOSING MONEY by buying them. That 2% interest? is taxable at the highest tax rate you pay. So you are getting 2% less ?????? 30%=1.4% net. You are in reality loosing .6% on your money.

Solution? I do not have one. Economic system that has been installed. Since a far greater number of people owe rahter than save, our system takes form those who save and gives to those who owe. Simple explanation as to why the US has one of the lowest savings rates in the world.

[Bucco]

Like you I am uncomfortable about it.

Last time I collected my courage to look, it is posted on the internet the national debt. The number was 22 Trillion dollars.
The number is the classic BIG LIE. You say it often enough and people THINK it makes sense. My personal comprehension is 14 million-the largest order I ever wrote. Twenty-two trillion is several large freight trains full of 100 dollar bills. I read somewhere it is 85,000 dollars for every man woman, child and puppy dog in the United States. Far as a national debt, relative to our gross domestic product, our claimed ability to pay the debt, Japan's debt is twice ours.

Who do we owe this incomprehensible sum to? Yet another issue, big lie, that people think they know. Most people would guess China. They would be wrong. Our largest creditor NATION is actually Japan-see above-their debt is higher than ours compared to GDP. More interesting, shocking, to me,
is that both Japan and China TOGETHER hold about 20% of the national debt. SOCIAL SECURITY holds over 40% of the national debt. HUH? We are borrowing from ourselves.

I have a pile of German Deutschmarks that belonged to my grandparents before WWII. Each bill is in denominations of millions of DM. They are worthless. You will find them list on ebay for like thirty five cents each. Even the current German government will not redeem them for anything.

Re: rate of return
Years ago I read that the US is one of only two or three countries that TAXES interest on savings. The Fed says their target for inflation is 2%. Based on history the chance of them reaching 2% inflation and holding it is zero. Assuming they do the impossible- at current treasury interest rate of about 2%,
you are actually LOOSING MONEY by buying them. That 2% interest? is taxable at the highest tax rate you pay. So you are getting 2% less ?????? 30%=1.4% net. You are in reality loosing .6% on your money.

Solution? I do not have one. Economic system that has been installed. Since a far greater number of people owe rahter than save, our system takes form those who save and gives to those who owe. Simple explanation as to why the US has one of the lowest savings rates in the world.

I believe the national debt/deficit to be te single largest threat to our country.

[manaboutown]

I believe the national debt/deficit to be te single largest threat to our country.

No doubt about it. The national debt doubled from $10T to $20T from 2008 to 2016!

Government - Historical Debt Outstanding - Annual 2000 - 2018 (https://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm)

[Chi-Town]

No doubt about it. The national debt doubled from $10T to $20T from 2008 to 2016!

Government - Historical Debt Outstanding - Annual 2000 - 2018 (https://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm)It is now $22T and rising fast.


Sent from my SM-N960U using Tapatalk

[Bucco]

No doubt about it. The national debt doubled from $10T to $20T from 2008 to 2016!

Government - Historical Debt Outstanding - Annual 2000 - 2018 (https://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm)

AND NOW exceeds 22 trillion AND growing faster than ever in history

Grew over a TRILLION just last year...one year

Note slow growth from 2012 thru 2015....pretty much the same as the last 12 months

[JimJohnson]

Don’t worry, the vast majority of Americans do not have enough money to invest in any Ponzi scheme like the stock market.

[600th Photo Sq]

...as stocks tumble.


An interesting article...applicable to a lot of us.


Stock Market Volatility (poke Here) (http://finance.yahoo.com/news/u-retirees-try-keep-cool-stocks-tumble-173730543--sector.html)

Free stuff might be on the way in 2020, or actually January 2021, somebody has to pay for it.

[Polar Bear]

Don’t worry, the vast majority of Americans do not have enough money to invest in any Ponzi scheme like the stock market.
The stock market may be many things, some good and some bad. But one thing it is not...a Ponzi scheme.

[Bucco]

Free stuff might be on the way in 2020, or actually January 2021, somebody has to pay for it.

Not sure where you came up with that date/dates. CBO and all I have read, project deficits and such to increase substantially well before those dates, thus it's already too late.

I assume your remarks are P, and had anyone listened to almost 100% of economists, we would not have cut taxes so severely for the rich.. since then, deficit/spending has skyrocketed probably more than ever.

I do agree, we need ofiicialsto pay attention NOW. We need public officials who really care, and not simply give lip service. Used to be able to have one group that spoke of these problems, and now they have been hijacked, and frankly the future looks depressing because, listening..nobody seems to care, and don't even discuss it anymore. Tea Party used to care, but no more. So not sure of our future.

This fantasy land of talk has to end

[retiredguy123]

I think that trying to control spending and debt is never going to happen because that is not where the votes are for either party. The current plan is to just borrow and spend as much money as we can to get the votes. No one knows how much debt our country can withstand before the whole thing comes crashing down and we become like Greece or worse. But, hopefully, we will all be dead by then.

[Bucco]

I think that trying to control spending and debt is never going to happen because that is not where the votes are for either party. The current plan is to just borrow and spend as much money as we can to get the votes. No one knows how much debt our country can withstand before the whole thing comes crashing down and we become like Greece or worse. But, hopefully, we will all be dead by then.

I understand your feeling, and embarrassingly share your pesssimism.

While I used to cringe at much of the Tea Party antics, I did think, in general, the reduction of the deficit and decreasing spending was a priority.

No body speaks that language any longer....I am afraid based on what we can read from economists, not politicians, the complete crash is closer than we think.

It is humorous that nobody speaks of it, as if the problem doesn't exist. This is not like a business,where you simply claim bankruptcy and start over.

[ColdNoMore]

Not sure where you came up with that date/dates. CBO and all I have read, project deficits and such to increase substantially well before those dates, thus it's already too late.

I assume your remarks are P, and had anyone listened to almost 100% of economists, we would not have cut taxes so severely for the rich.. since then, deficit/spending has skyrocketed probably more than ever.

I do agree, we need ofiicialsto pay attention NOW. We need public officials who really care, and not simply give lip service. Used to be able to have one group that spoke of these problems, and now they have been hijacked, and frankly the future looks depressing because, listening..nobody seems to care, and don't even discuss it anymore. Tea Party used to care, but no more. So not sure of our future.

This fantasy land of talk has to end

As has been proved over and over, 'trickle down' works in actually only one situation...i.e; urination. :ohdear:

[Bucco]

As has been proved over and over, 'trickle down' works in actually only one situation...i.e; urination. :ohdear:

Thing is, the deficit and the spending go up no matter the party in power.

Difference, to me, anyway, it appearsit is now not even considered a problem.

Better get out of this fantasy land soon and face facts.

[Bucco]

Sadly, this thread has gone POLITICAL! Moderator!

I completely and totally disagree.

I see no bias in any post....I see no lies or political positioning in any post, and in fact...a number of posts relate to a two party problem.

Diiscussing our nations deficit, and spending is part and parcel of any financial discussion.

This WILL affect your life and the life of your children and grand children.

It is a problem that requires our elected leaders to recognize it and address it, no matter the political leanings.

I sure hope that anything comfortable isniw not going to be called political, or we are really stifling everyone.

[TheWarriors]

Why is it older people become so darn pessimistic? A Hershey bar used to cost a nickel, guess we should all jump off a cliff now since it’s now a buck. The stock market goes up and down and is proven over time to be a good investment. If you are really worried about the market, the only precious metals you should invest in are brass and lead. Where do you think you’ll spend that gold and silver if chaos ever ensues? Be optimistic, you’ll live happier and I bet longer ;)

[Bucco]

To all you market gurus, what effect will this cause, if any..


"As of Saturday, the US has officially hit the debt ceiling, capping the national debt at just over $22 trillion. And while the deadline to raise the ceiling is still a few months away, analysts are already worried about a fight that could get ugly.

Congress suspended the debt ceiling for a year in February 2018, which allowed the US to rack up new debt until the limit was reimposed on March 2.

While the country can't add to the debt load until the ceiling is either raised or suspended by Congress, the Treasury Department can use its "extraordinary measures" to move funds around and prevent a breach of the ceiling for a few more months."

Debt ceiling hit, Trump, Congress have until fall deadline to raise it - Business Insider (https://www.businessinsider.com/debt-ceiling-hit-national-debt-22-trillion-trump-congress-fall-deadline-2019-3)

[retiredguy123]

The debt ceiling is a joke. It has never prevented the Government from spending money. Another joke is the Social Security "trust fund". In order to have a trust fund, you need 2 things, trust and funds. Our country doesn't have either one.

[valuemkt]

The original thesis of the post seemed to me to be a discussion of seniors reactions to the December correction. The deficit and other discussions are distractions to that subject. Stocks and Bonds and returns on investment will go up and down regardless of that. If you spend your day worrying about the deficit, you are probably equally paralyzed by global warming, the seas rising and a number of things you have no control over. You are also probably spending nearly 100% of your remaining life hiding in your home, afraid to go out or get blinded by the sun.

Regarding corrections and the impact on nest eggs, retirement savings etc. The general psyche of most people is not sell as the market is rising, for fear of Missing out (FOMO), and then panic sell when there is a correction. Often times, that correction comes at a time when capital is needed, compounding the problem. Historically speaking, stocks have been outstanding investments over the long run. At the same time, we all know that in the long run we're all dead - and statistically retirees are closer to that eventuality than the general population. So, retirees have less time to react, or make up for corrections.

So what to do ? You can elect to hide all your money under a mattress, afraid that banks will fail and markets will eventually crash to the ground. Sounds like the early 1930s to me. Regardless of the size of your nest-egg, portfolio, bank account or whatever you call it, deciding what to do at this stage in your (our) life boils down to one thing. What level of risk can you tolerate to Sleep Well at Night (SWAN) ? If the December (again referring to the subject of the article) made you extremely uncomfortable, then perhaps you need to lower your FOMO and increase your SWAN investments. WARNING: When you do this, you (and your advisor professional - if you have one) WILL NOT achieve stock market returns - don;t be surprised if , when the market goes up 10%, your return is a fraction of that. Likewise, when the market corrects 5, 10 or 20%, your total portfolio value should go down a smaller percentage, or perhaps still show a small positive gain. Thats the FOMO vs SWAN tradeoff.

How can you buffer the two ? Many theories .. but if you do believe that history repeats itself, and in the long run stocks are a good investment, you can consider putting two or three years of needed money into cash and cash equivalents, a couple more years into shorter term investments (eg short maturity bonds etc), and then the rest into equities (eg stocks) that have time to weather the ups and downs that you have no control over. The key is to sleep well, because agonizing over it just accelerates the inevitability of the terminus of your long run.

[Bucco]

The original thesis of the post seemed to me to be a discussion of seniors reactions to the December correction. The deficit and other discussions are distractions to that subject. Stocks and Bonds and returns on investment will go up and down regardless of that. If you spend your day worrying about the deficit, you are probably equally paralyzed by global warming, the seas rising and a number of things you have no control over. You are also probably spending nearly 100% of your remaining life hiding in your home, afraid to go out or get blinded by the sun.

Regarding corrections and the impact on nest eggs, retirement savings etc. The general psyche of most people is not sell as the market is rising, for fear of Missing out (FOMO), and then panic sell when there is a correction. Often times, that correction comes at a time when capital is needed, compounding the problem. Historically speaking, stocks have been outstanding investments over the long run. At the same time, we all know that in the long run we're all dead - and statistically retirees are closer to that eventuality than the general population. So, retirees have less time to react, or make up for corrections.

So what to do ? You can elect to hide all your money under a mattress, afraid that banks will fail and markets will eventually crash to the ground. Sounds like the early 1930s to me. Regardless of the size of your nest-egg, portfolio, bank account or whatever you call it, deciding what to do at this stage in your (our) life boils down to one thing. What level of risk can you tolerate to Sleep Well at Night (SWAN) ? If the December (again referring to the subject of the article) made you extremely uncomfortable, then perhaps you need to lower your FOMO and increase your SWAN investments. WARNING: When you do this, you (and your advisor professional - if you have one) WILL NOT achieve stock market returns - don;t be surprised if , when the market goes up 10%, your return is a fraction of that. Likewise, when the market corrects 5, 10 or 20%, your total portfolio value should go down a smaller percentage, or perhaps still show a small positive gain. Thats the FOMO vs SWAN tradeoff.

How can you buffer the two ? Many theories .. but if you do believe that history repeats itself, and in the long run stocks are a good investment, you can consider putting two or three years of needed money into cash and cash equivalents, a couple more years into shorter term investments (eg short maturity bonds etc), and then the rest into equities (eg stocks) that have time to weather the ups and downs that you have no control over. The key is to sleep well, because agonizing over it just accelerates the inevitability of the terminus of your long run.

Very well structured post with many good points.

I was one and still am of those who fear our over spending and the deficit (Also concerned about global warming). I know I am supposed to ignore all of this, but...

Anyway, I always learn from a reasoned logical opinion based on facts and not calling names.

Thanks for a great post

By the way, I do not "spend my day" worrying about any of what you alluded to and feel is minor, but I think our deficit and over spending is a threat to national security. The Chairman of the JCS (Mike Mullen) , a few years ago opined that he considered our debt the largest threat to our National Security.

[dewilson58]

To all you market gurus, what effect will this cause, if any..


"As of Saturday, the US has officially hit the debt ceiling, capping the national debt at just over $22 trillion. And while the deadline to raise the ceiling is still a few months away, analysts are already worried about a fight that could get ugly.

Congress suspended the debt ceiling for a year in February 2018, which allowed the US to rack up new debt until the limit was reimposed on March 2.

While the country can't add to the debt load until the ceiling is either raised or suspended by Congress, the Treasury Department can use its "extraordinary measures" to move funds around and prevent a breach of the ceiling for a few more months."

Debt ceiling hit, Trump, Congress have until fall deadline to raise it - Business Insider (https://www.businessinsider.com/debt-ceiling-hit-national-debt-22-trillion-trump-congress-fall-deadline-2019-3)


The effect: The market will go up and down.

[BK001]

The effect: The market will go up and down.

So true! I'm a FOMO, my husband is a SWAN. So whatever the market does, one of us will be happy and the other unhappy and vice versa. So I guess you can say we have a balanced portfolio! LOL

[valuemkt]

:bigbow:So true! I'm a FOMO, my husband is a SWAN. So whatever the market does, one of us will be happy and the other unhappy and vice versa. So I guess you can say we have a balanced portfolio! LOL

[Bucco]

Please...I am not inviting political discussion, but I am not a financial guru, thus I just do not understand all the positive talk...

Trade deficit at 10 yr high.
Tax cut will add $1.5 trillion to deficit.
Deficit grew 77% in ONE YEAR last year.

How does this convert to a positive outlook, except for those who already have money ?

Hoping my pessimism is wrong and hoping someone can explain why most financial indicators are heading the wrong way, but we still talk as if everything is just fine.

[My Post]

Buy land, A.J. God ain't making anymore of it.

[retiredguy123]

Please...I am not inviting political discussion, but I am not a financial guru, thus I just do not understand all the positive talk...

Trade deficit at 10 yr high.
Tax cut will add $1.5 trillion to deficit.
Deficit grew 77% in ONE YEAR last year.

How does this convert to a positive outlook, except for those who already have money ?

Hoping my pessimism is wrong and hoping someone can explain why most financial indicators are heading the wrong way, but we still talk as if everything is just fine.
You are correct. Anyone who can do math can figure out that the National debt alone is $73,000 per person, with no capability or plans to ever pay it off or deal with it until the country can no longer borrow money.

[manaboutown]

Turning the economy is like turning an aircraft carrier. It does not turn on a dime. I am very, very happy with the direction things are now starting to turn and am looking forward to further prosperity for our great country.

Unemployment has been brought down. New jobs have been created. Better foreign trade deals are ahead. We have been supporting much of the rest of the world, (many of whom are envious and resentful of us and actually hate us for our prosperity) for many years and being screwed by high tariffs on our exports. China, just as an example, has always ignored our intellectual property laws, infringing patents, trademarks and copyrights right and left. Hopefully those days are coming to an end.

[Bucco]

Turning the economy is like turning an aircraft carrier. It does not turn on a dime. I am very, very happy with the direction things are now starting to turn and am looking forward to further prosperity for our great country.

Unemployment has been brought down. New jobs have been created. Better foreign trade deals are ahead. We have been supporting much of the rest of the world, (many of whom are envious and resentful of us and actually hate us for our prosperity) for many years and being screwed by high tariffs on our exports. China, just as an example, has always ignored our intellectual property laws, infringing patents, trademarks and copyrights right and left. Hopefully those days are coming to an end.

GOOD FOR YOU.....AGAIN....this

Trade deficit at 10 yr high.
Tax cut will add $1.5 trillion to deficit.
Deficit grew 77% in ONE YEAR last year.

Now I come upon this...

"Americans' net worth fell at the highest level since the financial crisis in the fourth quarter of 2018 as sliding stock market prices ate into the household balance sheet.

Net worth dropped to $104.3 trillion as the year came to an end, a decrease of $3.73 trillion, according to figures released Thursday by the Federal Reserve. The fall amounted to a drop of 3.4 percent."

US households see biggest decline in net worth since the financial crisis (https://www.cnbc.com/2019/03/07/us-households-see-biggest-decline-in-net-worth-since-the-financial-crisis.html)

I am not market guy at all, and do not understand much, but all of this is government supplied numbers.....something does not make sense to me, but as I say, I am the dummy here.

Hope you are correct and everyone gains but boy, the official news just sounds gray to me. Not black but surely gray

[tcxr750]

Way back in 1999 I received sales pitches from a half dozen investment advisors with charts that showed my initial investment would grow at 8% per year until social security kicked in. The portfolio would be valued at $1,000,000 by then. Surprise! It never reached that valuation with the biggest hit during the Great Recession. Actually the best performance longer term was the 6 1/2% per year return for five years when my retirement money was in an American Skandia variable annuity. American Skandia was one of many investment scandals over the past twenty years.
I’m thinking the best chance at becoming a millionaire is buying a half million dollar starter home in California. Once the valuation reaches a million, cash out and retire to The Villages.

[manaboutown]

I’m thinking the best chance at becoming a millionaire is buying a half million dollar starter home in California. Once the valuation reaches a million, cash out and retire to The Villages.

Buying and holding coastal residential real estate in SoCal has worked for me. The home I purchased there in 1996 is currently worth about five times what I paid for it in 1996. Although I have used it as a personal residence I could have rented it out and bought other properties I suppose.

The best story I have heard is about an Air Force Academy grad who as a first lieutenant back in the late 1960's - early 1970's was stationed at SAMSO (now known as SMC). He bought a home for about $40k, refinanced it the next year to buy another house to rent out as it was then worth $70K. He kept going in this manner until he owned 21 rental homes in the Torrance/Palos Verdes area. He retired after 12 years seeing no point in continuing to work anymore. Those homes today have to be worth at least $1.5M each. I don't know if he still owns them...