Talk of The Villages Florida - Thinking you are sitting pretty with your equity investment totals?

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My goal for my traditional IRA is to keep at least 2 years worth of RMD in cash the remainder is invested in conservative mutual funds - emphasis on value and dividends. I have done this by reverse dollar cost averaging. In other words within my iRA I convert enough from my equity mutual funds to cash to keep the 2 year RMD balance in cash.. I withdraw my RMD in January. In reality this really gives me at least 3 years to weather a bear market even if I stop converting during the down period. Just another way to approach this potential problem.

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Originally Posted by CoachKandSportsguy (Post 2055234)

The comment is not a reflection of the economy, this is a valuation issue. The economy will still run between 1-3% long term. My comment is that the valuation is very, very extended relative to the economy. kind of like a 350K house going for 700K 12 months later. . . when nothing changed other than very low interest rates and high equity prices to assume a great retirement forever. . its called recency bias, versus the historical view which i displayed in the graphs. . that is the point, the recent market is not historically normal, but truly abnormal.

When I sold, the SPX was 4520, today its 4431, not sure how you can state that I have lost a lot of appreciation.

I was out of the stock market, 100% in cash in June 2007 prior to the housing market crash . . . the key is to avoid big market drawdowns, which has a potential to happen right now

But also relate the current valuation to the historical market highs, and realize that the Federal Reserve has had a lot to do with the stock market returns because of the deflationary effects of technology. . . ie, they didn't have to worry about consumption inflation, which is starting to move up and then flatten, depending upon the price of energy, and minimum wage. . .

The ultra best scenario is to have the Dec year end equity prices as low as possible for minimum RMDs but that goes against performance marketing of investment management.
The worst scenario is to have the market at yearly highs in Dec and then be down when you decide to take the RMD. . just something else to think about when to take the RMDs

I can only speak for myself and my investing habits.

To me it is impossible to time the market and going in and out is a great way to lose in the long run. I would rather stick with my collection of mutual funds and monitor their performance.

When not happy with performance make a change.

BTW my portfolio was up over the last half of 2021 so again speaking for myself would have lost some appreciation by getting out. Not to mention not easy to judge when to go back in.

Too many people buy high and sell low. As a former President has said better to stay the course.

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Originally Posted by Waltdisney4life (Post 2055435)

Peter Lynch said more money is lost trying not to lose money!!

Absolutely correct!

I'm heavily invested and my net worth is 25% higher than when I retired 10 years ago.

Stick to sports, coach.

I'm wondering how the national debt, the interest payments on that debt, and the debts percentage of the GDP factors into the stock market?

Sticking it under the mattress is not an option.

agree and have lightened up about 20% as this market is only driven by a few stocks

Quote:

Originally Posted by CoachKandSportsguy (Post 2055234)

The broad market is down. This is way overvalued. I have run several trust funds and agree that people should move some into cash and gold. Not sure of the negative response as you are trying to help give people a warning. Their's to take or not.

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Originally Posted by skyking (Post 2055458)

I'm heavily invested and my net worth is 25% higher than when I retired 10 years ago. Stick to sports, coach.

:what:

Quote:

Originally Posted by skyking (Post 2055458)

I'm heavily invested and my net worth is 25% higher than when I retired 10 years ago.

Stick to sports, coach.

Is 25% a typo?

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Originally Posted by manaboutown (Post 2055526)

Is 25% a typo?

My first thought as well, but maybe..............up 2.5% per year after withdrawing living expenses.

:shrug:

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Originally Posted by dewilson58 (Post 2055527)

My first thought as well, but maybe..............up 2.5% per year after withdrawing living expenses.

:shrug:

The S&P500 has more than tripled, from a little over 1,300 to more than 4,400 today I believe, and housing prices are up at least 60% nationwide over the last ten years. All-Transactions House Price Index for the United States (USSTHPI) | FRED | St. Louis Fed

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Originally Posted by manaboutown (Post 2055535)

Without knowing what was drawn out no way of knowing how well or poorly someone has done.

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Originally Posted by Stu from NYC (Post 2055565)

Without knowing what was drawn out no way of knowing how well or poorly someone has done.

True that!

People's circumstances differ.

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Originally Posted by Travelhunter123 (Post 2055389)

Timing the markets is difficult at best. If you are “lucky enough” to sell at the height of the market, when do you buy back in? There is a scenario where you sell low and buy high
If you are investing your funds at 1% waiting for the market to bottom; you are losing money to inflation

One easy way to time the market in a 2 or 4th year election year that works about 80% of the time is to sell stocks in April and use the cash to buy back in about October - because there is a tendency for the market to go up after a national election (no matter who wins). The idea is that the market likes stability and AFTER an election, there are fewer unknowns. Then hold on to those stocks because Dec with Xmas and later January tend to be UP months.
........Some sort of war somewhere in the world could cause this year to have BIG market fluctuations and overpower that "buy after election" strategy.

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Originally Posted by jimjamuser (Post 2055584)

Please provide supporting data since you are presenting this as fact. :ohdear:

Here are some facts:

In 2016, Charles Schwab analyzed market data going back to 1950 and found that, in general, the third year of the presidency overlapped with the strongest market gains. The S&P 500, a fairly broad index of stocks, exhibited the following average returns in each year of the presidential cycle:

Year after the election: +6.5%
Second-year: +7.0%
Third-year: +16.4%
Fourth-year: +6.6%

Overall, the predictive power of the presidential election cycle theory has been mixed. While average market returns in years one and two have been slightly sluggish overall, the direction of stock prices hasn’t been consistent from one cycle to the next. The bullish trend in year three has proven more reliable, with average gains far exceeding those of other years. What’s more, roughly 90% of all cycles since 1950 experienced a market gain in the year after the midterm elections.