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Old 06-08-2015, 05:20 AM   #21
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So, going 100% equities rules supreme for someone in a 30-year accumulation mode. I wish I knew this back when I started working. And I started making good money in 1980, the beginning of a historic market boom. Sigh....

But how does it look for someone in withdrawal phase?
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2015 stock market
Old 06-08-2015, 05:26 AM   #22
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2015 stock market

A week or two ago I reduced my position in my companies stock (huge bank) to a modest holding. It's been doing great and I sold at a nice number. I put it all in s & p index funds, and large cap international and domestic. Do I expect a correction? sure. When? I have no idea. I hated selling it but too much money in any firm can be a real bad idea. My friend worked at bear sterns and told me about his many older colleagues that were wiped out. College and retirement funds gone. Enron, bear sterns, Barron's bank, Citicorp. The list is endless.

My plan: I keep 5 years spending in cash like instruments - I figure if there is a correction I can continue to expect some dividends plus with the 4 years and ssi I should be good for quite a while. More if we are careful and we are always careful. I generally favor dividend stocks - there is nothing as calming as a nice dividend. Oh and I could sell the 'estate' and rent another 5 years there....

I don't try to time the market it usually just means you end up missing the run up on the other side. It also would require too much intervention on my side- I prefer 'set it and forget it investing' = buy diverse low cost mutual or et funds or solid long term dividend payers and let time do its magic. Let others stare at the ticker (watch the evening business report or Google your prices endlessly) life is way too short for that.


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Old 06-08-2015, 06:53 AM   #23
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You did good to diversify. Back in the Enron days the megacorp that owned my company was chasing Enron. Our CEO remarked once that he wanted to beat Enron at their own game. I looked over at a co worker and told him that was really bad. This was before everyone knew about the illegal stuff going on at Enron. Our company stock was splitting every few months and every time they would give each of us a $50 bill. Most everyone had all of their 401k invested in company stock. I preached against it but everyone thought I was nuts. One manager was constantly bragging how he had $900k in his 401k and as soon as it hits $1M he was outa there. When Enron collapsed it took us down with them. Stock went from over $70 to below $1. Of course most everyone dumped their stock including that manager. I bought more in an IRA. Again I was NUTS! But a few months later I was ahead of the game as our stock reached my break even point.
Oh and I ran into that manager last year. He's still working.
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Old 06-08-2015, 07:45 AM   #24
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....I wish I knew this back when I started working. And I started making good money in 1980, the beginning of a historic market boom. Sigh....
I guess that you didn't subscribe to Money magazine back in those days?
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Old 06-08-2015, 07:48 AM   #25
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No. But I did belong to several IEEE societies and got their transactions and proceedings.
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Old 06-08-2015, 11:50 AM   #26
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No. But I did belong to several IEEE societies and got their transactions and proceedings.
Were they helpful in your career?
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Old 06-08-2015, 09:58 PM   #27
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Indirectly, yes. Reading about other people's works kept me interested. In any profession or trade, one will do better if he keeps his passion.

There are other ways to achieve this, particularly with the Internet nowadays.
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Old 06-09-2015, 12:06 AM   #28
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Just wondering what the rooms thought of how the market has been reacting ?
Are you moving in or out or holding

Fear of a correction, I not sure what to think. I am holding firm and still buying bi monthly . Thought has crossed my mind to move to cash
If you are diversified into bonds then you don't worry about the next stock market crash. Anyone who does worry is not diversified.
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Old 06-09-2015, 02:49 AM   #29
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Don't really know how I'm doing. Just have a biweekly auto-deposit set-up to coincide with my paycheck to Vanguard Target Retirement 2040 VFORX (Roth IRA) and automatic payroll deduction to the Aggressive Profile Portfolio in our 457b plan. The Roth IRA, I'll only need to change if/when the contribution limits are increased. The 457b contributions, I'll change when I get my step increase.
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Old 06-09-2015, 03:31 AM   #30
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If you are diversified into bonds then you don't worry about the next stock market crash. Anyone who does worry is not diversified.
falling bond values may very well be the reason we have a down turn.
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Old 06-09-2015, 06:59 AM   #31
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Don't really know how I'm doing. Just have a biweekly auto-deposit set-up to coincide with my paycheck to Vanguard Target Retirement 2040 VFORX (Roth IRA) and automatic payroll deduction to the Aggressive Profile Portfolio in our 457b plan. The Roth IRA, I'll only need to change if/when the contribution limits are increased. The 457b contributions, I'll change when I get my step increase.
Your "system" worked great for us. When I was working I very seldom looked at what our portfolio was doing--maybe every couple of years. I just knew I was buying more shares every month, and that those shares would be churning out dividends and appreciating over the long haul. Obsessing over daily or monthly balances while you are years away from needing the money just doesn't seem very useful, though many people do it and apparently derive satisfaction from seeing the daily/monthly/yearly ups and downs.
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Old 06-09-2015, 10:00 AM   #32
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I hated selling it but too much money in any firm can be a real bad idea. My friend worked at bear sterns and told me about his many older colleagues that were wiped out. College and retirement funds gone. Enron, bear sterns, Barron's bank, Citicorp. The list is endless.
I was at Bear and that Friday afternoon all Top level executives held an emergency meeting to tell us not to worry and they've found an investor so we are good for a month…as a matter of fact, they instigated all of us to buy more shares that day as stock price had almost fallen more than 50% that week --- And I was one of those fools who bought 1000 shares @ $30/share a minute before closing on that Friday. It was sold to JPMC for $2/share two days later on Sunday…28K loss in a matter of a minute. And then I lost my job…terrible time of my life.
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Old 06-09-2015, 11:12 AM   #33
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I think Shiller tends to have called the market right the most in the past. He sees stocks and bonds in bubble territory. I don't know about housing everywhere but it is at tulip bulb mania levels here in Northern Cal -

Rate hike needed to pop bubbles: Robert Shiller

We keep stocks at under 20% and some of that is international. Fixed income investments are mainly short term, floating rate, international or laddered with set maturities and a rolling average of rates. We use matching strategies where we can.
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Old 06-09-2015, 03:23 PM   #34
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My investments also have a dividend payer tilt and ytd my portfolio is flat, fully invested in a balanced portfolio. Wish I had sold some in March and held cash for later in the year shopping.
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Old 06-09-2015, 03:42 PM   #35
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John Bogle's predictions -

http://finance.yahoo.com/news/exclus...163124461.html

“When you factor in the costs associated with index funds, inflation, and taxes, you are actually looking at real returns of nominal to zero,” Bogle explained.....Although Bogle believes that the stock market is currently fully valued, he assured that he does not feel that investors should be running for the hills. “I don’t think we’re at the edge of some great cataclysmic crash, but anyone that invests should be prepared for a 25 to 30 percent decline because they do come along from time to time.”

This is interesting as 30 years TIPS are currently at 1.18% real.
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Old 06-09-2015, 04:07 PM   #36
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Keep calm and carry on.
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Old 06-09-2015, 05:10 PM   #37
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John Bogle's predictions -

http://finance.yahoo.com/news/exclus...163124461.html

“When you factor in the costs associated with index funds, inflation, and taxes, you are actually looking at real returns of nominal to zero,” Bogle explained.....Although Bogle believes that the stock market is currently fully valued, he assured that he does not feel that investors should be running for the hills. “I don’t think we’re at the edge of some great cataclysmic crash, but anyone that invests should be prepared for a 25 to 30 percent decline because they do come along from time to time.”

This is interesting as 30 years TIPS are currently at 1.18% real.
Actually, Bogle said that stocks may return around 7% before inflation, but there's a potential for P/E reversion from 20 down to 15, and that may add a negative 3%, causing stock returns flat after inflation and taxes.

The P/E reversion has been talked about by other pundits for some time.

Yep, stock return lousy, bond also lousy. You will just spend down the principal, no matter where you put your money. Party on!
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Old 06-09-2015, 05:37 PM   #38
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Actually, Bogle said that stocks may return around 7% before inflation, but there's a potential for P/E reversion from 20 down to 15, and that may add a negative 3%, causing stock returns flat after inflation and taxes.

The P/E reversion has been talked about by other pundits for some time.

Yep, stock return lousy, bond also lousy. You will just spend down the principal, no matter where you put your money. Party on!
I agree 100%. Sure the market will drop at some point but the sun will still rise every morning and the birds will chirp. Just keep going on as usual and wait for the inevitable bull market to come back. It's never different this time, the market goes down and inevitably comes back up. relax.
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Old 06-09-2015, 06:04 PM   #39
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Well, I am a gloomy person...

The way I think is, the market may go down, and may not come up for a while. But then, I may not rise up from bed one of these days either. In that way, it all works out.
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Old 06-10-2015, 08:07 AM   #40
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Your asset allocation should be such that you are comfortable riding out any downturns. Equity investments should be for the long term, so if the market corrects tomorrow or next year or 5 years from now, you shouldn't care, because you shouldn't have to sell anything. You haven't lost until you sell.

If you are asking the question, then maybe your AA is too aggressive for your risk tolerance.

As I have for the past 20 years, we invest bi-weekly through my 401(k) and monthly in our Roths and taxable accounts.
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