As God is my witness, I will never be in

[Leonidas]

I’m not qualified to comment on your MF holdings because I’m nearly 90% in stocks. But, I can see where your holding of CSCO might make you distrustful of the ups and downs in the market. Looking at the company today at 19 and change, I could be tempted to put some money there but I know of many better candidates. Which makes me ask why are you still hanging on to it?

Quote:

Originally Posted by OldAgePensioner Every time some financial news comes out the excuses for the market reaction are laughable. Let's see: "Analysts were dissapointed that althought profits exceeded predictions they only exceeded by 10%", boom market tanks.

I have accepted the fact that markets, sectors and individual issues go up and down all the time, but those daily fluctuations don’t mean squat to me unless I’m looking to buy or sell. If I freaked out every time I lost a bundle of value, or threw a party every time I made a bundle in value, the constant oscillation in mood would drive me crazy. That’s why people who are a lot smarter than I am say stay out of the market if your timeline is short.

Besides, until you cash out it’s only a number on a piece of paper.

The kind of thing that you cited in your example above used to really drive me crazy. Then I started learning about why prices can rise in anticipation of good earnings numbers and fall when the numbers are in fact good. One book I read called it the Earnings Announcement Trap.

[Rich_by_the_Bay]

Quote:

Originally Posted by OldAgePensioner edit your post quick and hide the fact that you have an advisor. I got flayed on the board for mentioning a financial advisor.

I've come clean here before. Actually, in large part because of this forum and some serious reading in the last 6 months, I've gained the confidence to go it on my own in the near future. For the record, I compared him last year to what I'd have done on my own, and he actually beat me by .8% net of fees. Not a great improvement, but good enough to let him ride one more year - he has the stocks, I have the bonds and cash. I'm pretty busy and it's nice to have him doing it. Come FIRE, I'm flying solo.

Re: "I'd have a 40' power boat in Tampa Bay."

We'd have had some stories to tell. "Local Doctor and Vagrant Rescued from Bay: 6 Women Survive Ordeal - Suspicious Circumstances Cited" .

[OldAgePensioner]

Rich,
this may be one of my last posts here for a while, so I'll keep it short. Do use the "extra" time you get as you get out of your current job to learn investing. I've not done a good job, but many here have. You own your assets and you can best manage them I suspect.


That rescue would read, several you Asian ladies were thrown from the deck of a 40 ft'er when OAP mistakenly hit the gas pedal instead of the sun tan lotion pedal. See you guys in a few.

[MJ]

Quote:

Originally Posted by OldAgePensioner LOL, Can't you only use $3000 per year?

Any gains during a given tax year, are deducted from your accumulated capital losses. If you still have losses, you get to deduct the additional $3k. If you had no gains for the tax year then you still get to deduct the $3k. I will be taking advantage of my 6 figure capital losses against the large capital gains from the house I just sold. Before selling my house, I too would have had several lifetime of losses to sloooowwwly use up.

[preben]

OAP status: paid off home+new car+major appliances
Bond/cash ladder covering base expenses: $400k
Additional investments: 900k in IRA.(and SS in the future)

AOP; based the above I see little reason for you too take on too much risk anyway. $1.3M and house/car paid seems like a dream too most. How much do you need per month? Cheers!

[mathjak107]

Quote:

Originally Posted by OldAgePensioner 67% chance or 67% possibility of a chance.?

67% of the time stocks move up and 1/3 down..thats good enough odds for me

[OldAgePensioner]

Ben,
That was my hypothetical scenario. I agree, if I were to put myself in the paid-off house/expenses covered position that I proposed, I would need to take almost no risk. I could take that $900k and put it in TIPS or CDs.

Then I could just turn off the TV and computer cause nothing can go wrong, right


mathjak107, I'm not a math genius but what if 67% of the time it goes up 1% and 33% of the time it goes down 25%, is that still good?

[d]

Quote:

cause nothing can go wrong, right

that's dangerous thinking!

[cute fuzzy bunny]

Quote:

Originally Posted by OldAgePensioner I would need to take almost no risk.

On the flip side, with no significant need for the income, you could take all the (volatility) risk in the world and it would equally not matter. The only thing that could "go wrong" is that during some short term periods, the investments and their value that you dont need might be worth less, but that doesnt matter because you dont need the money.

Eh?

On the other hand, you seem to take paper losses pretty seriously, so this angle probably isnt for you. But it is the other side of the low debt/flexible covered budget scenario.

[Dawg52]

Quote:

Originally Posted by OldAgePensioner mathjak107, I'm not a math genius but what if 67% of the time it goes up 1% and 33% of the time it goes down 25%, is that still good?*

No but the dow is roughly 11,000 at the moment and 15-20 years ago the dow was around 2,500.........so based on history looks like stocks have been the way to go. But I do understand your fear of the future. I plan to have enough to cover my expenses for the next 6 years and then invest the rest in a balanced mix of funds. (50/50) You just have to find the balance that you can sleep with.

[justin]

OAP,

You probably don't realize it, but your plan to liquidate the ~1.2 million in your taxable account and keeping the ~$900k in IRA in mostly stocks is essentially shifting your overall allocation to ~40% stocks, 60% bonds/cash.

In Bernstein's 4 pillars, he says to take your risks in the stock allocation and to control risk/volatility with the short term bonds/cash allocation. If 60% bonds/cash is what you need to sleep at night, then I'd say go with it.

[OldAgePensioner]

Well, I'm back sooner I thought. *A freind wanted to borrow my laptop his died but he got one from a coworker in Palo Alto, so I can still seek help from my cringing fear of market crashitis.

DOG51, I can sit and watch your animated gif golfer for minutes, he's got a good swing and follow thru.

DOG51,
I have some steep rent ($3000) but other than that I live pretty cheap. *I have $220k-ish in cash and could easily live for 10 years by moving to cheaper digs in a cheaper town.

But, looking at my plan in a reverse direction. *If your just built home were paid for and it's where you like living, and you had a brand new Lexus, and all your bill were covered by a pension plan for the rest of your life. *Would you sell all of it and put it in the market right now?

[OldAgePensioner]

justin,
that's an interesting way to look at it.

I've sort of forgotten the area a bit but couldn't a person still find a nice home say 15 minutes drive to the SW of you for $300-400K on a lake?

Justin, just found a candidate http://www.carolinalakesrealestate.c...sp?lnv=1484756
Check out the one at 75 Carolina Way. I even like that address.

And I'll bet I could find even cheaper and better if I spent a week down there.

I plunk down cash, go buy the Hummer, and if the home is only $280K, I still got near $1 million in my after tax port to buy an annuity.* Let's say I get to net $750k after capital gains.

That will provide an annuity income of $4341 single lifetime for paying insurance, taxes, food, utilities.

Not much risk left in life, seeing as how I still have $900k in IRA and SS of $1,600 a month at 62.5.

Sweet deal if ya ask me.

[Dawg52]

Quote:

Originally Posted by OldAgePensioner Well, I'm back sooner I thought. *A freind wanted to borrow my laptop his died but he got one from a coworker in Palo Alto, so I can still seek help from my cringing fear of market cra****is. DOG51, I can sit and watch your animated gif golfer for minutes, he's got a good swing and follow thru. DOG51, I have some steep rent ($3000) but other than that I live pretty cheap. *I have $220k-ish in cash and could easily live for 10 years by moving to cheaper digs in a cheaper town. But, looking at my plan in a reverse direction. *If your just built home were paid for and it's where you like living, and you had a brand new Lexus, and all your bill were covered by a pension plan for the rest of your life. *Would you sell all of it and put it in the market right now?

I understand your point. My parents were pretty much in your shoes and no they didn't invest in stocks. They were in cd's only and my Mother still has nice sum of money.*

Me, with hopefully 30+ years to go, I feel I need to have some in stocks for long term growth. My IRA/401k makes up about 25% of my overall portfolio so I plan to keep all that in stock funds. I don't plan to touch that for 15+ years anyway so I think I can ride out the ups and downs without too much stress. My taxable account will be much more conservative.

And to answer your last question, no I wouldn't dump everything into stocks right now if I just sold off all my assets. BTW, too bad Phil didn't have my animated swing yesterday on the last hole of the U.S. Open.

[justin]

Quote:

Originally Posted by OldAgePensioner I've sort of forgotten the area a bit but couldn't a person still find a nice home say 15 minutes drive to the SW of you for $300-400K on a lake? Justin, just found a candidate http://www.carolinalakesrealestate.c...sp?lnv=1484756 Check out the one at 75 Carolina Way. I even like that address.

The "75 Carolina Way" property looks like it is 45 minutes from Fayetteville and at least an hour from Raleigh. You'd be driving a good bit for just about anything.

I'm sure you could find waterfront property in that price range closer in. Falls Lake maybe?

Heck, my house is waterfront on a small lake and it's probably 5-7 minutes from downtown Raleigh. Bought it a 2 yrs ago for ~$100k - 4 BR, 2.5 BA 1800 square feet. There's others for sale on the same lake all of which are ~$130-$170k. Plus, there's lots of "cultural diversity" here.

There's also a ton of new residential mid-rise condos coming on the market right now and in the next few months/years. They are located in the "Glenwood South" area (the hip night spot) or in downtown. The first one that came to mind was The Dawson (thedawson.com). Their website says $221,000 and up for a 1 BR, 863 s.f. But those places are SWEET! Very high end. I figure these might be more your style than "lake house out in rural, N.C."

Point is, yes, affordable houses can be found here.

[OldAgePensioner]

OK, a summary.
I suggest myself going to a risk free mode.

Responses:
Hydroman - Likes the back to basics approach. *Self reliance.
Leonidas - Offers Nopalitos recipes but no H2
HaHa - warns of lack of Japanese girls and gays chaps.
mathjak107 - Aarons CD collection worth 195k but Joe's stocks 1.2mil
LOL - reminds me of same angst last year but points out 4-10% earnings
2B - remembers 1987 and 2000 as do I but points out he is only down 6%
mathjak107 - is also down 6% from high
Charles - reveals the Microhouse and touts nice areas of RAriz
DOG51 - remembers my portfolio amounts but no, it's nearly all in stock funds
Alex - pokes OAP with the you're a lilly livered sissy stick
CnFB- thinks God has more gold in store for us
Unclemick2 - Encourages buying Hummer and see Arizona, buy Wellesley
crazy connie - offers house for sale with beans and rice thrown in
Indexter - points out that I'm a 6 Sigma case for financial needs
brewer12345 - suggests equity-indexed annuity. *Wish I had his energy/saavy.
spideyrdpd - points out the lack of logic in my thinking
brewer12345 - suggest TIPS, inflation-linked bonds and Inflation is no worry
Gerald - likes brewer12345's idea above. *I'm intriqued also.
d - wonders what I'm holding to be down %7.5 YTD
HaHa- notes my faults, suggests stay put, rent, avoid car, TIPS, and short t-bills
ESRBob - suggests don't look but stay the course, don't trade volatility away
markr33 - points out some of my gripes can be the cause of inflation
REWahoo - points out you need some cash on hand in orde to ignore market
dex - points to article that is what really scares me. *I believe the article.
Jarhead - says not to worry about thing you can't control
LL - suggests viewing assets classes as a means of risk assessment, also worries.
Zathras - suggests it may be a buying opportunity
Zathras - comments on reducing stress may be worth the effort
bpp - says worst case of 50% drop still leaves me a living
mathjak107 - points out the stock market goes up 67% of time
Rich-in_Tampa - hits it on the head that I had individual stocks vs funds
LOL - suggests getting rid of losers and buying new potential winners
Leonidas - also suggests getting rid of INTC
Ben - Points out that he see's low risk if I get into my proposed new lifestyle
CnFB - Points out that once I'm safe, risk is meaningless so let it ride.
DOG51 - says keep 6 years of cash equivs and invest the rest
justin - points out that my plan puts me 40% market /60% cash/bond allocation
DOG51 - says he plans to hold IRA/401K for 15+ years. *Hey, me too.


There's the summary and if I put it into a few sentences the way I interpret it is.

OAP worries too much about the volatility of the market making him his money.
If it makes him feel safer, then it might be the right move.
Both brewer and Ha suggest TIPS and inflation-pegged bonds as good safe income source keeping up with inflation.
HaHa says stay put, unclemick2 says go for it, Momtwo welcomes me and Leonidas has some cactus recipes (Peyote?)
ESRBob says stay away from the TV and dex shares article that is what really scares me.

So what am I gonna do.
I'm going to enjoy another 11 months in SF and will continue to move to interesting pedestrian cities for at least another 3 years. *Take some of the advice above and sell some losers, take equal profits and get started moving to a less volatile portfolio. *I'll learn what I need to know to set up the TIPS and inflation-lined bond income scheme. *Then at the age of 60, Ill probably choose a place to settle down, buy that home for cash, get the long-life car, set back and set back taking ESRBob's advice and unclmick2's advice;Bon Temps Rolliere and take my 40' power boat to Tampa and give Rich and the 6 ladies a good time.

Thanks to all who responded it was very informative.

[cute fuzzy bunny]

There is still meaningful volatility risk, but in the case of not having a lot of expenses to pay out, volatility has significantly lower gravity. Unless you give it some.

It seems like you have a lot of trouble with the volatility; the last couple of mini-drops we've had in the last couple of years seem to have really hit you hard. With that in mind, going in the direction of lower volatilty at the expense of long term growth and inheritable portfolio size seems to make sense for you.

TIPS and other such stuff is one way to do it, and in times of high inflation, would be a good choice. Something like Wellesley or Target Retirement Income would provide a dividend equal to or higher than the SWR, with very little volatility...

[OldAgePensioner]

CnFB,
It's really strange because I want to die broke and I want to be clear that I don't mind volatility if I can understand the reason for it.

So, I tried really hard the last to weeks to understand what caused the 200+ days of drops and the flimsy excuses in the news made me wretch.

If there had been news like, high unemployment figures, sales down, bad earnings, etc., well fine I'm OK with that.

But nothing happened. Just some bizzare frensy amongst the markets.

[REWahoo]

Quote:

Originally Posted by OldAgePensioner It's really strange because I want to die broke and I want to be clear that I don't mind volatility if I can understand the reason for it.

Ahhh! Grasshopper, problem very obvious. You try to comprehend the incomprehensible. You SOL...
Better you get on with living and fugghetaboudit...

[Leonidas]

Quote:

Originally Posted by REWahoo! Ahhh! Grasshopper, problem very obvious. You try to comprehend the incomprehensible. You SOL... Better you get on with living and fugghetaboudit...

You got that right. I was reading some studies on the 1987 Black Monday, which next to the great depression has to be about the most studied stock market movement, and all the experts still cannot agree on just why the market dropped that day.