U.S. retirees try to keep cool...
 

...as stocks tumble.


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


Stock Market Volatility (poke Here)

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

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.

And oh so easy to do!!

Simple
 

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.

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.

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.

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.

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!

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.

chilout


Future looks great, history was great.




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

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.

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.

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.

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

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.

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

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.

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.

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

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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.

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.




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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"

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.

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.

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

Yep

Re: National debt
 

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.

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

Government - Historical Debt Outstanding - Annual 2000 - 2018

It is now $22T and rising fast.


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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

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