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Old 04-04-2014, 10:59 PM   #61
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It is always possible you are right.
However, I heard very similar ideas from various posters last year, 2 years ago, 3 years ago, and 4 years ago.
One was dead certain that we would see S&P at 750 within months (as I recall).

This is why good diversification is so important. No one can know for certain what will or won't happen.
+1!

Beware conventional wisdom - a.k.a. the market seeks to confound the most participants.
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Old 04-05-2014, 01:48 AM   #62
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Just to share, AAII is fully bullish (bear single) the public is all in now & insiders are dumping stock options. Little guy will get hit again I fear. This game I think is over for now. Could supply reams of stats, a lot from USG, but overall this is going to be a tough year esp. after elections are over. Until then keep pumping Fed, just delays inevitable and makes correction worse, history shows that. But their pols, they have status & enough $.
Huh? I don't understand any of this and if I did I wouldn't act on it. I get the feeling that the OP is making things far harder than they need to be. I'm relieved no stats were supplied.......
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Old 04-05-2014, 03:49 AM   #63
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I think history though tells a different story. Let's just say that in 2012 the US total stock market index (fund) was up more than 16% and in 2012 it was up more than 33%. Great returns without any difficulty at all. I would not be surprised if it was one of the top ten 2-year-returns of all time.

But I think one has to get past one's own biases and wishful thinking and become completely unemotional about investing in order to get rid of any perceived difficulty.
Well obviously with the benefit of hindsight 2012, and 2013 were fantastic years.

I guess the point is that most of the time I've been investing their has always been an investment which looked good on an absolute basis. Since 2012, stocks have only been cheap on relative basis to bonds.

Back in 1996,97 I was true believer that internet was going to change everything and so tech stock looked cheap.
By 2000,2001 TIPs bonds had real interest rate near 4% and they looked inexpensive (pretty easy to fund a 4% SWR with 4% TIPs bonds) on absolute basis, much less on relative basis to crazy expensive stocks when even GE had P/E of 40..
In 2006 stocks looked cheap, and you had Pen Fed 6% CD
By the end 2008, and 2009 lots of assets looked cheap on absolute basis, stocks, junk bonds, real estate in most markets. I had no doubt they would all be much higher in 5 to 10 years.
In 2011, there was the PenFed 5% 10 years CD.

Starting the middle of the 2012, nothing has looked cheap on an absolute basis.
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Old 04-05-2014, 06:08 AM   #64
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It was never easier. We see the great opportunities of the past after they have become history and do not recall that at the time it was not so easy to tell the nuggets from the pyrite.
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Old 04-05-2014, 06:31 AM   #65
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It was never easier. We see the great opportunities of the past after they have become history and do not recall that at the time it was not so easy to tell the nuggets from the pyrite.
Yep. We may think back to the days of the 30-year Treasury bond yielding 12% (or whatever it was) and think it could never be easier.

But we forget that in the climate of the time, there was so much widespread fear of long-term runaway inflation that a lot of people didn't jump on that deal, fearing inflation (and interest rates) would only keep going higher...

With the benefit of hindsight, of course, that looked like the deal of the century, as did the depressed stock market valuations at the same time (right before the massive bull market that began in 1982). Similarly, the I-bonds I purchased in 2000 with a fixed yield of 3.4% turned out to be a pretty darned good buy, too, but at the time few people saw the "war on savers" coming up a few years later, or the rotten stock market of the next nine years -- or else everyone would have been plowing money into them, and the yields would have crashed as the Treasury wouldn't need to pay that much to attract investment.

And then there was the market in early 2009. Many people were afraid and convinced that a global depression and utter and complete implosion of the economic system was coming. Those who stuck their necks out at the bottom saw their investments double over the space of about 3.5 years.
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Old 04-05-2014, 06:48 AM   #66
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Just fyi, was reading CNN Money on-line this am. Here's some headlines (More Jobs): Growth not strong enough


Private sector jobs back to 2008 peak



Economy is sluggish

What market history will show is that most people, not people on this site, although it can get rancorous here . But hey were just sharing ideas, experiences, etc., to help each other. I can't in good conscious say that we're not headed for another downturn. No jobs to be had, falling demand, not anywhere close to a typical recovery. QE has pumped a bubble market and it will deflate. I do not believe now that diversification will help. Every upturn/downturn is always slightly different. The difference now? Why not like 1983-2000? This recovery is really pathetic except for people making money in the bubble market, for now. Take care.
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Old 04-05-2014, 06:54 AM   #67
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Morning Nun, just to clarify: I was listing some contrary indicators: 1) when the American Assoc. of Individual Investors AAII is extremely bullish, it has never ended well; 2) Insiders sell for many reasons. One reason they do not sell is if they think the stock is going up and 3) the USG and others have a history of making things worse by delaying the inevitable correction cycle. Hope that makes easier to understand. Let me know.
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Old 04-05-2014, 10:15 AM   #68
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@Wave3 - you're making your investing life a lot harder than it needs to be. Read Berstein, Malkiel and others about the futility of consistently predicting market returns correctly. Stay away from financial porn.

As others have said, we are lucky to be living in a time that investments are convenient and inexpensive. Pick an AA and stick to it using low cost, low turnover active or passive mutual funds and rebalance regularly. What can be harder than that?

We've lived on our investments for 6 years now and despite a rocky start (2008-09) we stuck to our plan (more or less) and feel a lot more confident now. Of course, we keep a close watch and are flexible in our spending.
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Old 04-05-2014, 10:37 AM   #69
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@Wave3 - you're making your investing life a lot harder than it needs to be.
+1. The prognostications and reports in the media hinder rather than help when investing. There's a lot of numerology in stock market/economic
analysis and I laugh at all the people who put any store in it.
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Old 04-05-2014, 11:02 AM   #70
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@Wave3 - you're making your investing life a lot harder than it needs to be. Read Berstein, Malkiel and others about the futility of consistently predicting market returns correctly. Stay away from financial porn.

As others have said, we are lucky to be living in a time that investments are convenient and inexpensive. Pick an AA and stick to it using low cost, low turnover active or passive mutual funds and rebalance regularly. What can be harder than that?

We've lived on our investments for 6 years now and despite a rocky start (2008-09) we stuck to our plan (more or less) and feel a lot more confident now. Of course, we keep a close watch and are flexible in our spending.
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Old 04-05-2014, 11:42 AM   #71
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@Wave3 - you're making your investing life a lot harder than it needs to be. Read Berstein, Malkiel and others about the futility of consistently predicting market returns correctly. Stay away from financial porn.

As others have said, we are lucky to be living in a time that investments are convenient and inexpensive. Pick an AA and stick to it using low cost, low turnover active or passive mutual funds and rebalance regularly. What can be harder than that?

We've lived on our investments for 6 years now and despite a rocky start (2008-09) we stuck to our plan (more or less) and feel a lot more confident now. Of course, we keep a close watch and are flexible in our spending.
+3. I retired at the end of 2002 at age 52 and have been living comfortably on a diversified 50/50 portfolio of mostly Vanguard funds. Net worth has more than doubled since I retired. I turned off the financial porn a long time ago. Life much better as a result.
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Old 04-05-2014, 11:57 AM   #72
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Wanted to switch topics: Has Investing Become Harder?

Question please: Can ER's get a decent return at low risk somewhere? Something more than 1% saving account. How about buy the markets with EFT's? Annuities while appealing have custodial risk which concerns me.
There was a window when it appeared a conservative investor could get a "decent" return on a post-retirement portfolio.

For the first four years that TIPS were available, both the 10 and 30 year bonds had coupons over 3%. I was in my 50's in those days, and could reasonably say that I would eventually retire with laddered TIPS that would have no inflation or market risk. If we kept our spending down to around 3% of initial (or current) portfolio, we'd never spend principal.

Of course, that's not possible today. So investing has gotten harder from that perspective.
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Old 04-05-2014, 12:39 PM   #73
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From walkinwood through Independant. Thank you all for the advise I will certainly take it under advisement, because it's a struggle for me, because that's what I made it, it seems.

Thanks All
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Old 04-05-2014, 12:59 PM   #74
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> Unfortunately, many people usually through no fault of their own, don't have a clue about finances.

It's true many folks don't have a clue, but in most cases it IS their own fault.

If someone is going to invest in equities, it's irresponsible to not take a little time and learn about them first. Reading a book or two or even just reading some good articles can get anyone started.

My father lost a modest fortune during his life. And yes, it was his own fault for not taking the time to learn about investing before doing so. Now he lives on social security and the remains of a small inheritance.

My in-laws on the other hand also knew nothing about investing. So they saved - in a bank. And paid off their house. And never ran up big debts. And they had plenty of money to support themselves in their later years.

I just get annoyed when people who should take responsibility for their own actions don't.
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Old 04-05-2014, 01:19 PM   #75
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Hi MPierce, yes, people need to educate themselves, or bye-bye money. Little different for me, probably overkill, BA Fin, MBA, Intl. Fin. Plus researching and reading since 1986 got myself into what seems to be risk paralysis. How I don't know. Maybe too much info.

Think Personal Finance Lite should be required in HS & College for non-business majors.

Like: "My in-laws on the other hand also knew nothing about investing. So they saved - in a bank. And paid off their house. And never ran up big debts. And they had plenty of money to support themselves in their later years"

Last: Never used an investment advisor, just does not make me comfortable based on what they have said when was looking for one.

Thanks
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Old 04-05-2014, 01:59 PM   #76
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Harder? How could it be harder? Bond interest is at extreme lows, cash and CDs yield close to nothing, and stocks are priced to give unusually low returns with unusually high risk.

What's not to like? Just stay the course! Renew your vows to Lord Bogle!

Ha
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Old 04-05-2014, 03:16 PM   #77
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Hi Haha, +2, said it all.
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Old 04-05-2014, 03:34 PM   #78
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One thing to keep in mind is that inflation is ultralow, and nothing on the visible horizon appears likely to change that real soon, IMO.

All of the valuation metrics people tend to use were designed in a world with 4%+ inflation, so they all look worse than they actually are.

When inflation is running at 1.5%, those big cap stocks yielding 3-4% don't look like a bad deal to me.

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Harder? How could it be harder? Bond interest is at extreme lows, cash and CDs yield close to nothing, and stocks are priced to give unusually low returns with unusually high risk.

What's not to like? Just stay the course! Renew your vows to Lord Bogle!

Ha
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Old 04-05-2014, 03:38 PM   #79
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Some times are easier, some tougher. Expected returns may be lower in the future, but all a person can do is make an educated choice and proceed.
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Old 04-05-2014, 04:03 PM   #80
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Hi Foxfirev5, I just want easy now. Yes, know that is not realistic. But darn, I want to other things than watch money.
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