Holy cr@p, the sky is falling...

[HFWR]

That used to be true. Now?

McCoy: Won't we change history by giving him the formula for transparent aluminum?

Scotty: How do we know he didn't invent the thing...

 

[CompoundInterestFan]

This is a retirement forum... some people don't have the luxury to wait five years
to recoup a big loss.

Well, that depends on how you look at it. In a sense, retirement, especially early retirement, is somewhat of a luxury. As ziggy pointed out in another thread, retirement is a fairly recent societal construct, and definitely not something we're entitled to. No one is ever guaranteed an early retirement, no matter how much they plan for it.

But that's just semantics. Your post implied that because the market is going down, that "buy and hold" is no longer a viable strategy. This makes no sense. Any basic primer on stock market investing will tell you that you need to expect large swings in the market; that's the risk part of "risk/reward." Just b/c we have an enormous drop doesn't suddenly change that. Any basic primer will also tell you not to put money in the market that you'll need (approx) in the next 5 years.

 

[CompoundInterestFan]

What do you think is going to drive the economy up in the long term?

I'm guessing that alternative energy R&D/implementation is going to be a big industry in the near future.

 

[Leonidas]

Any basic primer will also tell you not to put money in the market that you'll need (approx) in the next 5 years.

Even Cramer figured it out. A little late to do his viewers much good, but he still got there.

YouTube - Cramer: Why I Said You Should Sell Now

 

[Helena]

Your post implied that because the market is going down,
that "buy and hold" is no longer a viable strategy.

I did not mean to give that impression.
In my opinion "buy and hold" was never
a viable strategy.


~

 

[Zathras]

I did not mean to give that impression.
In my opinion "buy and hold" was never
a viable strategy.

Heh, well hope that works out well for you.
Buy and hold is working out extremely well for me and should only improve over the next few years.
My income stream from my buy and hold portfolio has increased and continues to increase. So yes, I would have to say that is working great for me, thanks for asking

 

[cute fuzzy bunny]

That buy and hold thing really hasnt worked for Buffet either, has it?

 

[retire@40]

If we have Creativity, Research and Development, Intelligence, Hard Work, etc. why are we in such a mess? It seems what has driven this economy for the last few decades is debt. We may have lost our advantage.

Maybe a little too much on the "creativity" too: Interest-only loans, 40 year mortgages, etc.

 

[retire@40]

This is a retirement forum... some people don't have the luxury to wait five years
to recoup a big loss.~

To the contrary. This is an EARLY retirement forum. The one luxury people have here is time. Sometimes, too much time.

 

[CompoundInterestFan]

I did not mean to give that impression.
In my opinion "buy and hold" was never
a viable strategy.

Well, in that case it seems as if your posts were to taunt/mock those who adhere to a buy and hold strategy ("How's that working for you now ?"). You seem to think buy and hold proponents expect 1) the market to always go up, or 2) the market to rebound in a few weeks. This indicates you don't really understand how buy and hold works.

In any case, yeah, good luck with that.

 

[Marquette]

I did not mean to give that impression.
In my opinion "buy and hold" was never
a viable strategy.


~

Since you're one of the ones that made it, care to give some concrete advice to those of us still in the accumulation stage? Were you 100% cash all the way through your accumulation years? If not, what was your strategy? At a high level at least.

If you weren't 100% cash until recently, what was your approach to the market correction in 2001?

 

[Razor]

To the contrary. This is an EARLY retirement forum. The one luxury people have here is time. Sometimes, too much time.

Aren't people close to retirement running out of time to make up their losses. They are going to need income generated by all the assets they have accumulated in their lifetime. They don't have time to start over if they are retiring soon.

 

[Gotadimple]

Aren't people close to retirement running out of time to make up their losses. They are going to need income generated by all the assets they have accumulated in their lifetime. They don't have time to start over if they are retiring soon.

You're assuming people close to retirement have an asset allocation that is mostly equities, without any dividend income?

-- Rita

 

[Marquette]

Aren't people close to retirement running out of time to make up their losses. They are going to need income generated by all the assets they have accumulated in their lifetime. They don't have time to start over if they are retiring soon.

If you were planning to retire at 55 but haven't put anything in motion, then you have 10 years to make up your losses and still be a normal-aged retiree...

 

[Leonidas]

A former co-worker is a 100% cash only guy. He lives significantly below his means and works his tail off to make extra income. The local newspaper ran a story about city & county employees salaries a few months ago, mostly showing how some people doubled their salaries through overtime, and this guy was number 5 on the list, and the 20th highest paid employee in the city.

Anyway, last I heard he had well over a million in CDs, although at some point in the past some of his friends talked him into testing the waters with a small investment in a mutual fund. That was a disaster, because he watched the balance like a hawk and at the first fluctuation downward he freaked out and pulled everything back into a CD. "I lost $800!"

So I can understand Helena's thought process, although I can see why some might have an issue with the "How's that working for you now?" comment.

But I have cash on hand (should have been more, but I was being greedy) and the mother of all ER jackpots - a DB partly COLA'ed pension with health care benefits. That takes a lot of the edge off. Yet when I look at the ugly red number in the YTD return column my stomach does feel a little funny. Then I look at the annualized returns over 26 years of investing and see 10.3% as of the close on Friday and I chill out.

The answer is it's working out for me just fine. Thanks for asking.

 

[ERD50]

I did not mean to give that impression.
In my opinion "buy and hold" was never
a viable strategy.


~

Since you're one of the ones that made it, care to give some concrete advice to those of us still in the accumulation stage?

This is what I would like to know also.

Saying that "buy and hold" is not viable, implies you have a startegy that is better. If that is not the case, please let us know.

If it *is* the case - please share your strategy. We are all eyes/ears.

-ERD50

 

[Helena]

Since you're one of the ones that made it, care to give some concrete advice to those of us still in the accumulation stage? Were you 100% cash all the way through your accumulation years? If not, what was your strategy? At a high level at least.

If you weren't 100% cash until recently, what was your approach to the market correction in 2001?

When did "buy and hold" replace "buy low, sell high" ?

What money I had in stocks was sold [high] before I retired...
as was much of my real estate holdings.

Now I am in a liquid cash position and completely debt free.
I am not waiting at the mercy of a more and more controlled
and corrupt market to recoup lost money... my money is still
growing... slowly but surely... As it turns out, this was a good
strategy.

 

[ziggy29]

Well, in that case it seems as if your posts were to taunt/mock those who adhere to a buy and hold strategy ("How's that working for you now ?"). You seem to think buy and hold proponents expect 1) the market to always go up, or 2) the market to rebound in a few weeks. This indicates you don't really understand how buy and hold works.

Agreed. Had I been fortunate enough to listen to the voices telling me to bail out last October 31, one thing I would *not* be doing now is rubbing everyone's noses into a pile of dog crap about their losses.

 

[Marquette]

A former co-worker is a 100% cash only guy.

Yes, I fully understand the mindset of the people that are 100% cash people. If you live cheap enough, save long enough, etc, then you might be able to do ok on living just off of the interest.

However, then you're also at risk for inflation sitting on them, but they might have a short enough life span or small enough withdrawal rate that it won't matter. And, even if it does, you can't have a meaningful discussion until after they've been at it for 20 years and start to wonder why things are harder to afford.

But, this comment earlier in the thread:

Because my stocks were all in retirement accounts,
I was able to switch from stocks to other investments
when stock values were high without the tax consequences.

~

leads me to think that Helena wasn't always a 100% cash advocate.

 

[Helena]

Well, in that case it seems as if your posts were to taunt/mock those who adhere to a buy and hold strategy ("How's that working for you now ?").

If you will read the posts on this topic in context, you will discover
that I was the one who was first taunted and mocked for not following
the "buy and hold" philosophy. That usually happens here when I post
something that refers to deflation. "Buy and hold" adherents do not like
discussions about deflation.

 

[Marquette]

When did "buy and hold" replace "buy low, sell high" ?

I agree that buying low and selling high are good ideas. So what were your triggers for buying and selling? Suppose you bought a stock for $10 in 1994. When did you sell it? When it reached $11, $100, $200? When it hit $200 and then receded back to $100?

And, suppose you sold it at $100, when did you buy the next stock? and how did you know to sell it?

Lastly, with the market valued as it is now, are you picking up new stocks since they're now "low" and likely, eventually, will go "high"?

Now I am in a liquid cash position and completely debt free.
I am not waiting at the mercy of a more and more controlled
and corrupt market to recoup lost money... my money is still
growing... slowly but surely... As it turns out, this was a good
strategy.

Frankly, if your plan is to live off of interest, then you're still at the mercy of a controlled and corrupt market.

 

[Helena]

Lots of assumptions being made...
lots of people will lose lots of money
because some ideas are more equal
than others.

But, don't worry, be happy.

The above was posted here on 9-11.
Read this topic in context.

 

[Marquette]

The above was posted here on 9-11.
Read this topic in context.

Can you clarify and expand a bit on the point you're trying to make? Trust me, I've read the whole thread a few times.

 

[unclemick]

In contrast to: -26.42% YTD roday Target Retirement 2015 continuosly rebalanced, 3.41% SEC yield.

15th yr distribution phase, Takeout 5% variable 2006, 4% 2007, 4% 2008, maybe just the yield in 2009.

chewy - but I will stay the course.

Were I only young again knowing what I learned since 1966 - I'd be dollar cost averaging say the Target Retirement series suitible for may age/financial aituation and not overwatching the market - if a had a day job or chance to watch football.

heh heh heh - Let's hope this one doesn't take as long as the 1966-1982 period to sort out.

 

[Helena]

Can you clarify and expand a bit on the point you're trying to make?
Trust me, I've read the whole thread a few times.

I don't post here that often, but when I do...
if I post something about deflation or question
the "buy and hold" philosophy [which depends
upon ongoing inflation]... posters here seem
to gang up on me. I have seen the same thing
happen to other posters here who attempted
to discuss deflation.

That's fine... I can hold my own in a debate.
But when I do, I'm the one who is accused of
taunting/mocking.

As I said in my 9-11 post... a lot of people
have lost a lot of money because some ideas
are more equal than others [ala, Animal Farm]