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Re: As God is my witness, I will never be in
Old 06-19-2006, 01:03 PM   #81
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Re: As God is my witness, I will never be in

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Originally Posted by OldAgePensioner
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.
Nothing happened then the market sank. You forget the "frothy" run-up in the weeks preceding the great crash of May-June 2006. Just a blip on the chart (hopefully). Just a correction.

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Re: As God is my witness, I will never be in
Old 06-19-2006, 01:06 PM   #82
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Re: As God is my witness, I will never be in

OAP, You look like a perfect candidate for an RV. Buy the below baby and you can easily go live in any area of the country without leaving home. Live in Montana during the summers to stay nice and cool and move to Southern CA or Mexico during the winter months. You sound carefree enough for this to be a nice option. Waddaya say?

http://www.alpinerv.com/content.asp?id=3&iInvID=1839#
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Re: As God is my witness, I will never be in
Old 06-19-2006, 02:31 PM   #83
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Re: As God is my witness, I will never be in

Quote:
Originally Posted by OldAgePensioner
OK, a summary.
I suggest myself going to a risk free mode.

Responses:................

Thanks to all who responded it was very informative.
OAP, you sure do listen carefully! I am awed.

Ha
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Re: As God is my witness, I will never be in
Old 06-19-2006, 02:44 PM   #84
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Re: As God is my witness, I will never be in

DOG51,
the darn steering wheel is on the wrong side. I hate driving but if I could get a joung Japanese girl that could drive an RV, now we're talking.

Ha,
speaking of listening, my neighbor just introduced herself. Here's what came out of her mouth.

Her name is Maggie and she grew up in Oxforshire, England and attended Oxford University and moved here several years ago with her late husband.

Now, translated, here's what I heard. "My name is Maggie, I'm 48 with a tight body and when do we do it". Talk about being a good listener. I was speechless.

Most of that was true. Here apt. is 2 bedroom and probably goes for about $4,500 to $5,000 a month. Hmmmmm, maybe my money worries are over baby.
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Re: As God is my witness, I will never be in
Old 06-19-2006, 03:12 PM   #85
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Re: As God is my witness, I will never be in

I can help you with "what happened". I think.

Everyone thought the fed was done raising rates. Everyone was anticipating a market move higher when the fed was done raising rates. So when Bad Ben seemed to signal that he was done, everyone did what they thought they were supposed to do: buy and drive up the prices. Note the nice run up that we all enjoyed.

Then Bad Ben decided a week later that he had been misinterpreted, and somehow he didnt notice all of the media frenzy and market action for that whole week. He changed his tune. Well, if the fed's not done then all that fresh buying was ill timed, so SELL!!! Market goes down.

I hope that cleared everything up for you.

Get a book on group psychology. This group has a couple of hundred million people in it...
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Re: As God is my witness, I will never be in
Old 06-19-2006, 03:48 PM   #86
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Re: As God is my witness, I will never be in

Quote:
Originally Posted by OldAgePensioner
But nothing happened.* Just some bizzare frensy amongst the markets.
You will probably never find a satisfactory "explanation" - things don't seem to happen that way.

The "real" macro reasons often get underreported in the media because, frankly, it's over their (and most viewer's) heads.

I suspect the main issue this go around is that easy money is over, and the speculators finally decided to believe that given various central banks raising rates around the world PLUS Ben Bernancke letting the US markets know he would do the same.

yes, speculators had been expecting the Fed to stop raising rates and thus a ridiculous run up. They were caught leaning the wrong way. They've been speculating with easy money across the globe, and this easy money is being taken away.

When speculative positions are unwound, it often causes a lot of pain.

As long as there are speculators, there will always be volatility.

Audrey
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Re: As God is my witness, I will never be in
Old 06-19-2006, 03:53 PM   #87
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Re: As God is my witness, I will never be in

CnFB,
I love walking by the Chinese Food Stores in Stockton and looking at the glazed brown Ducks and wondering if they are spitting out pieces of their broken luck.

Ben seems shell-shocked. *We will be lucky if he lasts out the year.

I was all for Dr. Kroszner, give me a Harvard man over a Princeton man any day.

Any day.

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Re: As God is my witness, I will never be in
Old 06-19-2006, 04:10 PM   #88
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Re: As God is my witness, I will never be in

audrey,
that's the real issue, speculators and then no real way to see the issures. It would take an average investor like me all day to just get some idea of the fundamentals but the media reports some "media IQ" reason for why the market reacted.

But, I'm most afraid all the; I want a larger house to keep up with the Jonses, and the biggest/bestest SUV I can afford, we need 4 cause we have 2 teenagers, my credit card limit still has $200 dollars on it, I really need that pair of jeans with the fuzzy cuffs, honey let's get the $200 plan so everone has a phone, I can borrow $10,000 on my CitiBank card interest free honey, and damn, they all decide that consumerism must end and we are in big, big, trouble.
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Re: As God is my witness, I will never be in
Old 06-19-2006, 07:27 PM   #89
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Re: As God is my witness, I will never be in

Quote:
Alex - pokes OAP with the you're a lilly livered sissy stick
Seriously OAP, do whatever makes you feel comfortable. It's your money!
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Re: As God is my witness, I will never be in
Old 06-19-2006, 08:17 PM   #90
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Re: As God is my witness, I will never be in

and I LOVE the rates going up!!!!
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Re: As God is my witness, I will never be in
Old 06-19-2006, 09:54 PM   #91
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Re: As God is my witness, I will never be in

Quote:
Originally Posted by OldAgePensioner
CnFB,
I love walking by the Chinese Food Stores in Stockton and looking at the glazed brown Ducks and wondering if they are spitting out pieces of their broken luck.
Hey, Aqualung! (wasn't that a line from Jethro Tull?)

Re-Wahoo has it right. I used to work at a major wire service and the joke in the newsroom was to figure out 'reasons' to explain why things happened in the market. Market up? Ah yes, let's do a story about strong demand, optimism, improved sentiment or whatever facts supported a market run-up. Market Down? Find gloomy stuff to quote and report that 'explains' what is happening. All written by liberal arts grads with little money in the market, little understanding of economics and even less interest. Basically it is pandering to human's need to 'understand' something which is chaotic, complex, and essentially unfathomable in the short run. If you really understood, you'd be a macro hedge fund manager and you wouldn't be talking.

Far better for you to get to an asset allocation you like (60/40 bonds to equity perhaps in your case) get out of individual securities entirely (added volatility with the seductive kicker that you think you can understand why Company A's stock price is going to go up or down, without actually being on their Board of Directors), and then take a willful sit-on-your-hands approach to the inevitable market gyrations.

If you lost 80% of your net worth in 2000, you had a lot more than 40% equities, and you had a lot of individual (tech) stocks. Buy and Hold is not rational or recommendable until you've got the asset allocation and the diversification down first.

It's tough bringing an engineering mentality to investing -- you'll continually want reasons for everything. Lots of really smart people have bent their swords hacking at that particular stone. I say, give it a rest and concentrate you energies on your delightful English neighbor and the 40' cruiser in Tampa Bay. 8)
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Re: As God is my witness, I will never be in
Old 06-20-2006, 08:07 AM   #92
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Re: As God is my witness, I will never be in

OAP: yikes! what were you holding to be down 7.5% YTD?

That quote actually scared me at first, because I figure I'm actually down about 8-9%! But then I had to go back and re-read that. What I'm actually down is about 8-9% from a new, all-time high I hit back in early May. YTD, I'm at about zero. So basically this little hiccup washed out most of my run-ups for this year.
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Re: As God is my witness, I will never be in
Old 06-20-2006, 08:45 AM   #93
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Re: As God is my witness, I will never be in

Andre1969, yep
Exactly what happened to me.
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Re: As God is my witness, I will never be in
Old 06-20-2006, 09:06 AM   #94
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Re: As God is my witness, I will never be in

So you are flat for the year. BIG DEAL!

If you had gone on a 5 month vacation and not looked at your portfolio for all that time, you wouldn't know any better. It was a case of easy-come, easy-go.

It was far worse in 2000, 2001, and 2002 when people were looking at year over year losses - over several years!

I guess I don't understand people getting so upset because their portfolios are off from their ALL TIME HIGH. Just because a portfolio reaches a new high doesn't mean that's somehow it won't sell off from that. The market drawing back from new highs is very common - especially if a market run up is accelerated.

It's really better to look at your performance year-over-year and ignore anything shorter than that. If by May 15 of 2007, if your portfolio shows a year-over-year decline, THEN you can get upset - LOL!

Audrey
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Re: As God is my witness, I will never be in
Old 06-20-2006, 09:14 AM   #95
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Re: As God is my witness, I will never be in

audreyh1,
what worries me is that this may, could, might be the start of a sell off. Down again yesterday.

So I made nothing the last 12 months, with a very diverified portfolio and balanced to be a growth portfolio. hmmmmm, when does my money make me some money?
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Re: As God is my witness, I will never be in
Old 06-20-2006, 09:27 AM   #96
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Re: As God is my witness, I will never be in

Personally I'm not that worried about things, yet, but I'm also in a different boat, as I'm only 36, still working, still growing the portfolio, and not depending on it for income. I'm sure if I were older and either closer to retirement or retired, I'd be sweating it a bit more. Hang in there, OAP!
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Re: As God is my witness, I will never be in
Old 06-20-2006, 09:35 AM   #97
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Re: As God is my witness, I will never be in

Are you actually flat since May of last year? *2005 was a positive year for most people. *I think most of the gain came late in the year. *If you were up in 2005, and flat year to date, you are probably still "ahead".

The market has sell offs sometimes. *But the market doesn't sell off to then remain depressed for the rest of our lives. *It eventually recovers which is why we invest. *Otherwise we wouldn't bother investing.

Do you have X years of living expenses set aside in cash/ultra-short bonds? *If so, then why worry about the years past that? *If not, then that may be the root of your anxiety.

Investing in any equity market really requires at least a 5-year horizon. *If you need the money in less than five years, then don't put it in equities. *If you don't need the money within five years, then quit looking at it!!!

Even though I am retired, I am actually hoping the market will go down further. *Why? *I'd like to see at least a 10% correction. *We haven't had one in a while. *10% corrections help tame speculative excess. It's "healthy" for equities markets. *Investors need to have a little fear. *AND that would give me an opportunity to rebalance my portfolio and buy more equities at a good price. * Since my portfolio has to last several decades anyway, a down year here and there is an opportunity rather than a liability.

Of course I'd rather not see a repeat of 2000-2002 again. *That was a nasty bear. *And I expect I'll see another in my lifetime. *But many people with a diversified portfolio were made "whole" again by the end of 2003. *Four years.

Audrey
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Re: As God is my witness, I will never be in
Old 06-20-2006, 09:51 AM   #98
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Re: As God is my witness, I will never be in

Hmmm

My dates are fuzzy - but here goes: circa 1972 the 4th ed of Ben Graham's Intelligent Investor came out - followed by the 73/4 er ah market adjustment. Some people actually read the book. Also a lot of people began to study Norwegian as a second language.

That was good clean fun.

Amazingly - the market did not cease to fluctuate after I retired.

heh heh heh heh heh heh - go figure.

P.S. There's always one of the Target Retirement Series - if you don't like pssst - you know who.
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Re: As God is my witness, I will never be in
Old 06-20-2006, 09:52 AM   #99
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Re: As God is my witness, I will never be in

Here's yet another take on market volatility...

If your two million dollar portfolio can generate ~80k/year in pre-tax income using the 4% SWR,

Then don't look at a 7.5% market drop as a loss of $150k.

Just think that your new SWR income (depending on how you look at it) has now dropped to $74k/year. A $6k/year loss.

After paying your state and federal taxes maybe your income has dropped (depeding on your situation) by maybe $4500/year. Or around $86/week. That's a fair amount but nothing to lose sleep over.

That's less than you'll spend on gas for that Hummer.

By the way OAP, Now that you've been in "The City" for a few months how do you like it ? Is SF what you expected it to be ? How do you like that cold summer weather ?

Maybe Maggie (the 48 y.o. tight body) will help you stay warm. Perhaps you could post a picture of your neighbor for our continuing entertainment. After the picture more advice to you will then be forthcoming.
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Re: As God is my witness, I will never be in
Old 06-20-2006, 10:42 AM   #100
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Re: As God is my witness, I will never be in

Quote:
Originally Posted by unclemick2
Amazingly - the market did not cease to fluctuate after I retired.
Good one!

Audrey
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