Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 08-10-2011, 10:32 AM   #41
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,068
Quote:
Originally Posted by TromboneAl View Post
Yes, but maybe something that goes down just a little will be looking pretty good if equities go down a lot.
+1
__________________

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-10-2011, 11:54 AM   #42
Thinks s/he gets paid by the post
 
Join Date: Jun 2003
Location: Historic Florida
Posts: 1,642
This subject is near and dear to my heart. I am adverse to any form of stock market investing at this time.

Up until recently I could not give a rats. But I have recently had some very BIG CDs mature that were paying between 6 - 10% for the last 10 years, been living quite well of them. Even at 6% withdrawall I was fine.

I am also extremely adverse to using my capital although at the moment I do not have a choice. I am doing some work (which I do not like) to compensate but I prefer that to losing any capital.

What is one to do in this anti saver climate. Australia is paying up to 6% and Canada is not much better than here.

SWR
__________________

__________________
"Arguing with an Engineer is like rolling in the mud with a pig. Just remember that the pig likes it."
ShokWaveRider is offline   Reply With Quote
Old 08-10-2011, 12:50 PM   #43
Recycles dryer sheets
IBWino's Avatar
 
Join Date: May 2006
Posts: 423
Quote:
Originally Posted by harley View Post
I need to buy bonds to get my AA in order. All my fixed income is in cash. I know it makes me a DMT, but I can't bring myself to buy bonds in this environment. If there was more potential upside, I'd go for it. But buying something that is pretty much guaranteed to go down permanently doesn't appeal.
Ditto. I'm still in accumulation mode and have been putting most of our fixed allocation in MM fund. It's allowed me to rebalance into stocks over the past ten days to take advantage of the downturn. However, with the Fed's announcement, I'm now thinking of moving some of the cash into a short-term investment grade bond fund.
__________________
IBWino is offline   Reply With Quote
Old 08-10-2011, 01:28 PM   #44
Full time employment: Posting here.
 
Join Date: Mar 2010
Location: Chicago
Posts: 863
Quote:
Originally Posted by ShokWaveRider View Post
This subject is near and dear to my heart. I am adverse to any form of stock market investing at this time.

Up until recently I could not give a rats. But I have recently had some very BIG CDs mature that were paying between 6 - 10% for the last 10 years, been living quite well of them. Even at 6% withdrawall I was fine.

I am also extremely adverse to using my capital although at the moment I do not have a choice. I am doing some work (which I do not like) to compensate but I prefer that to losing any capital.

What is one to do in this anti saver climate. Australia is paying up to 6% and Canada is not much better than here.

SWR
Where and how long ago did you find CDs yielding 6 - 10%
__________________
ripper1 is offline   Reply With Quote
Old 08-10-2011, 01:33 PM   #45
Thinks s/he gets paid by the post
 
Join Date: Jun 2003
Location: Historic Florida
Posts: 1,642
Quote:
Originally Posted by ripper1 View Post
Where and how long ago did you find CDs yielding 6 - 10%
I looked around at the time and used Pentagon Federal, Some Florida Credit unions. 10 year CDS were returning good dividends if you looked around. I do not use a bank, credit unions "used" to give a substantial return premium. I do not know why any person would use a bank unless it was their only option.

Regards,
__________________
"Arguing with an Engineer is like rolling in the mud with a pig. Just remember that the pig likes it."
ShokWaveRider is offline   Reply With Quote
Old 08-10-2011, 01:40 PM   #46
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
Heh, my CU is paying a whopping 1.5% for a 5-yr. CD.

Quick, back up the truck!
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 08-10-2011, 01:43 PM   #47
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 746
Quote:
Originally Posted by ShokWaveRider View Post
This subject is near and dear to my heart. I am adverse to any form of stock market investing at this time.

Up until recently I could not give a rats. But I have recently had some very BIG CDs mature that were paying between 6 - 10% for the last 10 years, been living quite well of them. Even at 6% withdrawall I was fine.

I am also extremely adverse to using my capital although at the moment I do not have a choice. I am doing some work (which I do not like) to compensate but I prefer that to losing any capital.

What is one to do in this anti saver climate. Australia is paying up to 6% and Canada is not much better than here.

SWR
+1
__________________
East Texas is offline   Reply With Quote
Old 08-10-2011, 02:48 PM   #48
Thinks s/he gets paid by the post
DFW_M5's Avatar
 
Join Date: Sep 2003
Posts: 4,980
We're not in Kansas any more, Toto!
__________________
DFW_M5 is offline   Reply With Quote
Old 08-10-2011, 03:20 PM   #49
Thinks s/he gets paid by the post
 
Join Date: Oct 2008
Location: Naples
Posts: 2,161
Quote:
Originally Posted by Dawg52 View Post
Tough situation for conservative investors. I have a high percentage in CD's but do keep 17-20% in blue chip dividend stocks. And I do own a sprinkle of closed end funds with good yields. So the mix has given me decent income up to this point with an overall conservative AA. But like you, CD's are maturing so what's a scaredy cat to do?

The obvious answer........
Been doing that!
__________________
JOHNNIE36 is offline   Reply With Quote
Old 08-10-2011, 03:21 PM   #50
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 746
My concern is my savings and investments being taxed out the wazoo. When we're young the doctrine of the day was to put as much as possible in "pre-tax" because our tax liability would be significantly lower in retirement. Had I known then what I know now I would have had everything taxed.

It's not just pre-tax monies that are at risk. I think the government will find additional ways to increase their revenue using savings of any kind. They'll refer to it as a "passive tax" because it really doesn't impact anyone except the ants who scrimped and saved and did the right thing. I guess those of us on this board will be in such a painful minority.
__________________
East Texas is offline   Reply With Quote
Old 08-10-2011, 04:20 PM   #51
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Quote:
Originally Posted by haha View Post
I see that many forumites have 50% or more of their port in fixed assets. How does that support a 4% withdrawal rate?

It doesn't, but it sure is sweet for the banks and Wall Street.

Ha
Unless you bought the 2.25% 30-yr TIPS I just sold today for a 37% 18 month gain.

Other than that, it's going to be hard.
__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Old 08-10-2011, 04:30 PM   #52
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Quote:
Originally Posted by ziggy29 View Post
Translation: The War on Savers rages on. Anyone who is retired and living partially on interest income may have thought they could weather a short storm of pathetic interest rates, but for this long? Will some of them be forced to move in with their kids and such?
I guess the 10-yr market is also in on the war on savers, driving rates down to 2.11%. Long-term investors obviously don't have much regard for themselves, waging war on themselves and all.

If there is a 'war' it is being waged by those of us who have an excess demand for safe assets. The Fed doesn't control long rates. And if the Fed's zero rate policy were wrong, we'd be seeing inflation raging and the bond vigilantees driving rates ever higher.

Unfortunately our problems aren't so easy to fix as a too low Fed funds rate. Zero rates aren't the problem, they're a symptom of bigger, harder to remedy, problems.
__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Old 08-10-2011, 04:35 PM   #53
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 424
Quote:
Originally Posted by HFWR View Post
Heh, my CU is paying a whopping 1.5% for a 5-yr. CD.

Quick, back up the truck!
That's what my CU is paying on my MM.
__________________
JohnDoe is offline   Reply With Quote
Old 08-10-2011, 04:41 PM   #54
Recycles dryer sheets
IBWino's Avatar
 
Join Date: May 2006
Posts: 423
Quote:
Originally Posted by JohnDoe View Post
That's what my CU is paying on my MM.
Really!? Which CU is that? Our CU is currently paying 0.5% on MM funds.
__________________
IBWino is offline   Reply With Quote
Old 08-10-2011, 05:18 PM   #55
Full time employment: Posting here.
 
Join Date: Mar 2008
Posts: 698
One option is to extend your maturity out in order to get a higher yield. For instance, there is a 15 year callable FNMA step coupon bond that has a 4.12% yield to maturity. It starts as a 3% coupon that eventually rises to 6%. The step coupon offers some protection to rising rates and chances are it will get called prior to the first step increase, providing at minimum a 3% return. While 3% is nothing to shout about, it is close to what most here would like to use as a SWR.

Likewise, using long maturity callables is a good way to get higher short-term yields, assuming they get called. I've been able to get 2-3% over the past year on bonds that I assumed would get called. Of course, there is always the chance that they might not be called, so you have to be satisfied with the yield if it goes to maturity.
__________________
akck is offline   Reply With Quote
Old 08-10-2011, 06:55 PM   #56
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,255
Quote:
Originally Posted by ShokWaveRider View Post
This subject is near and dear to my heart. I am adverse to any form of stock market investing at this time.

Up until recently I could not give a rats. But I have recently had some very BIG CDs mature that were paying between 6 - 10% for the last 10 years, been living quite well of them. Even at 6% withdrawall I was fine.

I am also extremely adverse to using my capital although at the moment I do not have a choice. I am doing some work (which I do not like) to compensate but I prefer that to losing any capital.

What is one to do in this anti saver climate. Australia is paying up to 6% and Canada is not much better than here.

SWR
Everything has its risk. Even CDs.

-ERD50
__________________
ERD50 is offline   Reply With Quote
Old 08-10-2011, 08:11 PM   #57
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,380
Quote:
Originally Posted by cloud View Post
Low yield has no effect on retired people. They no longer need to purchase additional bond. If yield drops then bond price appreciates and retiree can use capital gain to offset the yield drop.
So what do these lucky retired people do when they have sold off much of their bonds for cash flow? Everyone is entitled to their opinion, but I hope people reading this idea will think it over carefully befroe adopting it.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 08-10-2011, 08:29 PM   #58
Thinks s/he gets paid by the post
 
Join Date: Sep 2009
Location: Hong Kong
Posts: 1,571
I don't think that the Fed (i) had much choice or (ii) has actually changed its stance that significantly - the economic data is pointing to, at best, a slow recovery and the previous stance was (IIRC) for 0-0.25% for "and extended period". From both a policy and a practical perspective, keeping interest rates very low is better than rasing them - encouraging spending and investment and reducing stress on borrowers are more important right now than looking after conservative savers.
__________________
Budgeting is a skill practised by people who are bad at politics.
traineeinvestor is offline   Reply With Quote
Old 08-10-2011, 09:49 PM   #59
Thinks s/he gets paid by the post
Free To Canoe's Avatar
 
Join Date: May 2008
Location: Cooksburg,PA
Posts: 1,738
Quote:
Originally Posted by Ed_The_Gypsy View Post
I am not worried about inflation. I am worried about deflation. Keynes showed that depressions happen when people stop spending money and low demand makes prices drop. They continue to not spend because things will be cheaper tomorrow or they are afraid (Japan) or they don't have any money (coming soon to a Homeland near you!). Then low demand kills jobs because no one is buying anything.

In the middle of all this, the government cuts spending because of pressure. Exactly the wrong thing to do. Then there is the ongoing attack on business, mostly small business. The only good thing to come out of this may be reducing the number of government employees. I suggest starting with the elected ones.

It looks like a perfect storm of stupidity, incompetence and greed to me, in all elected officials north of dog catcher.

Has anyone figured out that Greenspan caused more damage to the US than Bin Laden?
+1
__________________
Free to canoe
Free To Canoe is offline   Reply With Quote
Old 08-11-2011, 06:46 AM   #60
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 746
Quote:
Originally Posted by cloud View Post
Low yield has no effect on retired people.
It certainly has an impact because the treasuries influence the rates for annuities. If a retiree wanted to convert some money to an annuity, they would be up the proverbial creek right now with the low rates.

The whole "let's keep rates exceptionally low until mid-2013" hurts anyone who is not already in a stable financial vehicle with a guaranteed return.
__________________

__________________
East Texas is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 03:53 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.