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Old 03-22-2011, 01:20 PM   #61
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Just as a reminder, you can put someone on ignore with two clicks. Left click their screen name, then go to the bottom of the box and click on Add ______ to your ignore list.

With a troll, where is the fun in that?
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Old 03-22-2011, 01:45 PM   #62
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My husband and I have a decent amount of cash and he's currently out of a job - looking but who knows. This is the situation - we've been burnt by the market. He was too invested in stocks and I freaked out when things started going south and we pulled out of the market at about DOW 7,000 and I don't want to go back in. Luckily he got a lot of cash when he was downsized after that. Everything else looks risky too - bonds, municipal bonds, real estate. If you took our nest egg and divided it by 30 - we probably would have enough to live. Should we invest it or just keep it in cash? I don't trust any financial planners either. I'm worried about inflation too.
A lot of people panicked when the Dow hit 10,000. That's part of the reason why the Dow went to 7000.

What's done is done. If you're not comfortable putting money into securities, then you'll have to consider bonds and cash. Unfortunately, neither one will keep pace with inflation, and inflation seems inevitable - and rather high inflation, too.

I realize you're not interested in stock funds, but there are some low-cost index funds made up of large-cap stocks (Exxon, Walmart, etc.) that provide an dividend income rate comparable to bond rates, and you could enjoy capital appreciation as well. There are some utilities funds that provide income, as well. These are considered the safest way to invest in the stock market, and I recommend that you consider putting even just a small portion of your money into one of these vehicles.

We have two savings accounts holding cash because of insured amount limits. We also have an another account that holds 2 and 3 year CDs.

We have a small - in proportion to our other assets - variable annuity that is our "insurance policy" for our old, old age in the admittedly unlikely event that we outlive our money. If we don't need it, we'll leave it to our kids. (to other members: YES! I said ANNUITY! I know it's nearly a profanity on this forum ). It's a comfort measure.

How much income do you need to generate from your savings? Compare that to how much interest income you'll make from a diversified bond fund.

The numbers will tell you what you need to do.

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Old 03-22-2011, 01:52 PM   #63
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With a troll, where is the fun in that?
Sorry, what was I thinking?
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Old 03-22-2011, 02:03 PM   #64
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My husband and I have a decent amount of cash and he's currently out of a job - looking but who knows. This is the situation - we've been burnt by the market. He was too invested in stocks and I freaked out when things started going south and we pulled out of the market at about DOW 7,000 and I don't want to go back in. Luckily he got a lot of cash when he was downsized after that. Everything else looks risky too - bonds, municipal bonds, real estate. If you took our nest egg and divided it by 30 - we probably would have enough to live. Should we invest it or just keep it in cash? I don't trust any financial planners either. I'm worried about inflation too.
IMHO,

If you totally risk adverse and have oodles and oodles of cash and can take a big hit and not worry about it, then I don't see anything wrong with just "running out the clock" on your cash.

But that isn't the majority the people here. So, we find ways to take calculated risks knowing that the investment climate isn't perfect. This surely beats handing everything over to a financial advisor or badgering the spouse, as that is ripe for plenty of "I told you so's" one way or another.
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Old 03-22-2011, 02:33 PM   #65
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I guess I just have too much faith in America. After 9-11, when the market tanked, I bought bought bought (and felt guilty, thinking I was taking advantage of such bad times, but then rationalized that I was investing in America). When the market dove 2 years ago, I bought bought bought. Ive only been investing for about 10 years, and Im way above what Ive invested. I can't understand people who wait until the market is diving to bail out. Does that make any sense? Has the market ever not returned to normal? Its like shopping, buy when things are on sale. Dont buy retail. I buy only dividend paying stocks, so it really makes no difference if the stock prices drop, as long as the dividend stays Im good.

If you plan on just keeping cash, dividing by 30, and and living on that each year, you can be assured that by the time you are at about year 15, your money won't go anywhere near as far as it will go at year 1. So you are at risk even keeping your money in cash.
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Old 03-22-2011, 03:24 PM   #66
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And here is our shill, right on schedule...

What is next? MMND?
Was this directed at me? If so, I joined today after finding some answers to a question I had regarding HSAs. Just another person interested, in my case, in staying retired. I'm not shilling for anyone.

By the way what is MMND?
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Old 03-22-2011, 03:30 PM   #67
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Could it be possible Brewer? Pure chance that a guy with 2 posts joins in with a line like that? Wonders never cease.
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Old 03-22-2011, 03:39 PM   #68
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Was this directed at me? If so, I joined today after finding some answers to a question I had regarding HSAs. Just another person interested, in my case, in staying retired. I'm not shilling for anyone.

By the way what is MMND?
MMND was an infamous poster from yesteryear...

Btw, welcome.
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Old 03-22-2011, 03:59 PM   #69
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By the way what is MMND?
Millionaire Mommy Next Door-She ran a blog you can still find FWIW. She was much like March. In like a lion, out like a lamb.
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Old 03-22-2011, 03:59 PM   #70
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Could it be possible Brewer? Pure chance that a guy with 2 posts joins in with a line like that? Wonders never cease.
Oh, I see. Apparently, when you are new to this forum one should sit back and say nothing for some period of time for fear of being branded a troll. Of course, I am not familiar with the history of the rest of you folks so for all I know this is how you respond to new members.

The problem is that I am not sure what I have said that makes me a troll. Perhaps you could enlighten me so I don't make the mistake again.
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Old 03-22-2011, 04:07 PM   #71
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Oh, I see. Apparently, when you are new to this forum one should sit back and say nothing for some period of time for fear of being branded a troll. Of course, I am not familiar with the history of the rest of you folks so for all I know this is how you respond to new members.

The problem is that I am not sure what I have said that makes me a troll. Perhaps you could enlighten me so I don't make the mistake again.
Most legitimate new posters start with a "Hi, I am..." post introducing themselves.
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Old 03-22-2011, 04:28 PM   #72
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Most legitimate new posters start with a "Hi, I am..." post introducing themselves.
So that was my error. Thanks. I am a member of numerous forums and had not run into that before.

Well, I retired early in 2008. Started investing in 1984. Maintained the buy and hold plan through all of the bubbles until this last debacle. Didn't totally get out of equities but fortunately got out of most soon enough.

As I said earlier I found this site through researching HSAs. There is a shortage of reliable info on them, at least what I needed to know. Hope what I read here is correct, it sounded credible.

Since this is off topic will wrap it up with that. Hope that is enough. Most of the time I sit back and watch in forums that are new to me. Apparently, should have done that here as well.

You are a tough bunch.
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Old 03-22-2011, 04:48 PM   #73
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You are a tough bunch.
This group can be. We've had lots of folks try to use this forum as advertising for their financial gain. The afore-mentioned MMND comes to mind. A good thread to read when you need a laugh.
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Old 03-22-2011, 04:49 PM   #74
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So that was my error. Thanks. I am a member of numerous forums and had not run into that before....

You are a tough bunch.
Not so much - you had the misfortune to chime in behind someone who was singing doom, asking for answers, claiming knowledge, pretty much dismissing suggestions.... just unfortunate timing.
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Old 03-22-2011, 04:49 PM   #75
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I think I'm pretty informed. I have an MA in Economics for one thing and read the Times and WSJ daily and have read quite a few current books on the economic situation.
While you may consider yourself informed (and I wouldn't disagree with that opinion) you also appear to be uneducated on the subjects of asset allocation and long-term investing. You asked the question, so don't kvetch about the answers until you've tried them out. You have an opportunity here to educate yourself, but you're continuing to dig a deeper hole argue about it with the other posters.

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Before interest rates went this low (very recently), many, many retirees were in risk-free CDs. I think this is a worthy topic of discussion.
For example, there's your use of the word "risk". Most investors use the word "risk-free" to apply to Treasuries. You may be using it to imply that a CD has zero volatility. But American CDs are generally considered to be insured, and CDs from international banks are not always insured, and not even the FDIC is risk-free.

Maybe you have nothing to lose by abandoning the arguments and reading a book. I'd suggest William Bernstein's "Four Pillars" or the Boglehead's Wiki on asset allocation.
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Old 03-22-2011, 05:47 PM   #76
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This may give a new perspective. I spent some time on Firecalc, running different simulations. The interesting part came when I did a series of 100% allocations to each of the sectors, and followed the trends. The results were unexpected!
According to FC's data, treasuries and bonds are the safe way to guarantee that I will run out of money. However, in the small cap value sector, there were surprising returns. I knew generally what the results would be, but not to such an extent. My pillars may get some that are bigger than others.
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Old 03-22-2011, 05:55 PM   #77
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This may give a new perspective. I spent some time on Firecalc, running different simulations. The interesting part came when I did a series of 100% allocations to each of the sectors, and followed the trends. The results were unexpected!
According to FC's data, treasuries and bonds are the safe way to guarantee that I will run out of money. However, in the small cap value sector, there were surprising returns. I knew generally what the results would be, but not to such an extent. My pillars may get some that are bigger than others.
This is a piece of history that is fairly likely to be of purely historical interest. IOW, I would be careful about generalizing this to the future.

Ha
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Old 03-22-2011, 06:02 PM   #78
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Life is risk. Check Berstein figuring in a bit of history: "Thus, any estimate of long-term financial success greater than about 80% is meaningless". The Retirement Calculator from Hell, Part III

A one in 5 chance that things go flooey w/in the next 40 years with the best planning you can implement? Sounds like maybe you do the best you can, hope, roll the dice, and get on with living.
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Old 03-22-2011, 06:34 PM   #79
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This is a piece of history that is fairly likely to be of purely historical interest. IOW, I would be careful about generalizing this to the future.

Ha
But will it? A history of 45 years is a trend that has to be pointing to underlying advantages of size and levels of capitalization. Other studies have "proved" this. As I remember it the arguments were similar to the proof of the PPP of the "Dogs of the Dow". The rational was lowest, under capitalized can get hammered out of existence by a downturn, but higher up the food chain are the lean and mean companies with the new ideas that capture the niches of the markets. "Dogs" has been shown to be wrong, but the idea of a system advantage can still be true. I won't bet the farm on any one sector, nor one idea but I will plant an extra pillar of the high value stuff.

"There's an old saying about those who forget history. I don't remember it, but it's good."
— Stephen Colbert
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Old 03-22-2011, 06:46 PM   #80
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Corporate profits are good because they've laid-off so many people. The 80% of people who still have jobs have gone back to spending like they have nothing to worry about. I don't really know if this "recovery" has legs. When states and municipalities start laying off teachers, etc. en masse, we could have a double dip.
So a corporation has less workers and makes more money. Sounds like a great business model.
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