Dow 8000?

[RockOn]

But I really don't know where it is proven that the only way for a retired person to invest is to buy and hold a random assortment of stocks.

Why should it be so? It may work, and it may not. Your statement about today being better than the 70s or the early 30s is true-so far.

BTW, see my post from yesterday:

http://www.early-retirement.org/forums/f28/current-dow-industrials-technical-position-36173.html

Great points and great call. I sure didn't see this one coming.

 

[RockOn]

Bingo. Screw stocks.

I mostly feel the same way until valuations are reasonable which may or may not happen. The CPI fudging plunge protection team is working hard to see that it doesn't . Feeling that way I'm always looking for alternatives, let us know if you come across any new ideas.

 

[cashflo2u2]

The stock market sucks and SPIA's ROCK! I am getting seasick and sick of the whole schelmeel.

 

[RockOn]

The stock market sucks and SPIA's ROCK! I am getting seasick and sick of the whole schelmeel.

SPIA's do not Rock. They are marginal alternative investments (somewhat interesting) as I see it. The stock market at PE's over 20 includes significant (historically based) risk, that doesn't look too hot either. I do not like to lose money, but that's just me.

 

[Notmuchlonger]

Heh. Its one down day in the past how many years of positive gains. Maybe some people need to rethink their AA.

 

[W2R]

The stock market sucks and SPIA's ROCK! I am getting seasick and sick of the whole schelmeel.

It's not like they're going to be down FOREVER, y'know.... and besides, the main function of stocks (for me, anyway) is just to combat the effects of inflation on my portfolio, not to live on.

 

[RockOn]

.... and besides, the main function of stocks (for me, anyway) is just to combat the effects of inflation on my portfolio, not to live on.

Now that's an interesting view, I appreciate the concept. I doubt that view is shared by many on this Forum though.

 

[Lsbcal]

deleted -- see my post further on

 

[unclemick]

Pssst - Wellesley = current yield 4.24% or a tad higher than the mighty mighty 4% rule.

heh heh heh - just thought I'd mention it. And I can still get by on my Target retirement 2015 at 3.05% in a hard times mode.

And and those Vanguard computers rebalance away - whether I laugh or cry. . Carry on!

 

[RockOn]

Pssst - Wellesley = current yield 4.24% or a tad higher than the mighty mighty 4% rule.

heh heh heh - just thought I'd mention it. And I can still get by on my Target retirement 2015 at 3.05% in a hard times mode.

And and those Vanguard computers rebalance away - whether I laugh or cry. . Carry on!

Can't argue with that. I always enjoy your bits of wisdom. I haven't been around long but it always sounds like you actually walk the talk.

 

[Lsbcal]

Just for perspective here are some year-to-date results for some Vanguard Lifecycle Retirement funds which are fairly well diversified:

retire_date    YTD   stock/bond allocation
 
2005          -1.00   42/58
2010          -1.95   54/46
2015          -2.68   63/37

My own portfolio is down slightly and compares favorably to the 2010 results (I have the same AA) although I've been FIRE'd for 5 years. So far this has been a pretty mild bear market but no predictions for what's coming next. I could imagine a vicious set of declines or that we will be up and partying at the end of this year.

 

[W2R]

Can't argue with that. I always enjoy your bits of wisdom. I haven't been around long but it always sounds like you actually walk the talk.

That's exactly my plan - - to live on my substantial chunk of Wellesley (which doesn't do too much of the rollercoaster, being primarily bonds) and to rely on my equity funds to combat inflation. So why would that view not be shared by many on this forum?

 

[RockOn]

That's exactly my plan - - to live on my substantial chunk of Wellesley (which doesn't do too much of the rollercoaster) and to rely on my equity funds to combat inflation. So why would that view not be shared by many on this forum?

It seems to me many think they will be living on their 10% returns (sure thing) from stocks. You said you only hold stocks to combat inflation, I might not have read you correctly.

 

[haha]

That's exactly my plan - - to live on my substantial chunk of Wellesley (which doesn't do too much of the rollercoaster) and to rely on my equity funds to combat inflation. So why would that view not be shared by many on this forum?

Well golly gee, who would know?

Ha

 

[Notmuchlonger]

It seems to me many think they will be living on their 10% returns (sure thing) from stocks. You said you only hold stocks to combat inflation, I might not have read you correctly.

Ive never seen a single person here claim they will be living on 10% returns.

 

[RockOn]

Ive never seen a single person here claim they will be living on 10% returns.

Come on now, awhile ago I asked what return would be an acceptable return to give up on stocks. Only a few said anything less than 8%, many said 10-12%, some even more.

 

[W2R]

It seems to me many think they will be living on their 10% returns (sure thing) from stocks. You said you only hold stocks to combat inflation, I might not have read you correctly.

Right - - what I wrote was:

It's not like they're going to be down FOREVER, y'know.... and besides, the main function of stocks (for me, anyway) is just to combat the effects of inflation on my portfolio, not to live on.

to which you replied

Now that's an interesting view, I appreciate the concept. I doubt that view is shared by many on this Forum though.

And no, I don't think so many of us will be relying on 10% returns from their stocks to live on. Bonds (such as the majority of Wellesley) have a big function in the portfolios of many here.

 

[RockOn]

Right - - what I wrote was:

And no, I don't think so many of us will be relying on 10% returns from their stocks to live on. Bonds (such as the majority of Wellesley) have a big function in the portfolios of many here.

I stand corrected. Sorry.

 

[Lsbcal]

Stocks are going to do great in the future -- just don't ask me when . I tried to get you guys to look at Primecap last year and its up +1.19% YTD: http://www.early-retirement.org/forums/f28/time-shift-towards-large-growth-31631.html

P.S. Don't take this too seriously, it's just money.

 

[W2R]

I stand corrected. Sorry.

Well, you haven't been around long yet but I found it humorous that you apparently thought that what I was saying was in such contradiction with what UncleMick was saying.

 

[W2R]

Stocks are going to do great in the future -- just don't ask me when .

They always seem to turn around, don't they!

 

[RockOn]

Two peas in a pod, huh?

 

[W2R]

Two peas in a pod, huh?

Wellesley is Wellesley and I guess I should have specified (though most here know I have a big chunk of it).

 

[RockOn]

I do think the 4% plus yield is great. I wouldn't argue with your approach, it has a reasonably good chance of working out well over the long run.

 

[W2R]

I do think the 4% plus yield is great. I wouldn't argue with your approach, it has a reasonably good chance of working out well over the long run.

That was my opinion as well... it's a very common approach. Many combine Wellesley with Wellington, for example.