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Old 03-05-2009, 10:19 PM   #41
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You're such a ball buster.
My take on it was more along the lines of whistling past the graveyard...
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Old 03-05-2009, 10:21 PM   #42
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I like the concept. Can I have two names, one for the good days, one for the dark ones?
No. But I think "bipolar" might be available.
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Old 03-06-2009, 05:33 AM   #43
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Just did the calculations today. The S&P 500 has returned 9% (with reinvested dividends) for the 100 years from Feb 1909 to today. So even with the current 50%+ sell off, the long run average is still 9%.

I'll be back with more to say on future return expectations in a little while, but suffice it to say, they're higher than the long-run average.
Those 100 year spans of 9% averages are good but, it is those every 10 year or so "dips" that will get you WAY below 9%. Besides, unless you plan to have an adult, investing life, that long those 100 year spans are meaningless IMO.
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Old 03-06-2009, 09:00 AM   #44
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Those 100 year spans of 9% averages are good but, it is those every 10 year or so "dips" that will get you WAY below 9%. Besides, unless you plan to have an adult, investing life, that long those 100 year spans are meaningless IMO.
Good point for no matter what measurement is being discussed - withdrawal rate, growth rate, inflation rates, etc. A person should be able to prepare a spread sheet for their individual circumstances and project them forward. If they can't they need to find someone who can. It is an excellent tool for learning and planning.
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Old 03-06-2009, 09:37 AM   #45
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In retrospect, I should have had more respect for those who were "afraid" of the market, not because they were right (atleast it appears so now), but because it showed me I did not have enough repsect for the risks involved with investing. The fact that something is 90% certain, does not make it certain. I should have been more understanding of their concerns, perceptions of risk, and not assumed that "my" way was the best way.
I was "afraid" of the market way back in November 2007, and in January 2008 I sold all my stocks and put everything in money market funds. I have been in money market funds since then.

Sounds like you bought the "buy and hold" mantra hook, line, and sinker. Sometimes it pays to be afraid of the market. This market gave plenty of warnings to those paying attention.

"Buy and hold" is OK during good times. These aren't good times. A year ago wasn't good times. There were plenty of warnings 18 months ago. Pay attention next time.
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Old 03-06-2009, 11:37 AM   #46
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.

"Buy and hold" is OK during good times. These aren't good times. A year ago wasn't good times. There were plenty of warnings 18 months ago. Pay attention next time.
Will you post when its time to buy? Oh, and could you do it before the market has already gone up.
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Old 03-06-2009, 05:33 PM   #47
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I was "afraid" of the market way back in November 2007, and in January 2008 I sold all my stocks and put everything in money market funds. I have been in money market funds since then.

Sounds like you bought the "buy and hold" mantra hook, line, and sinker. Sometimes it pays to be afraid of the market. This market gave plenty of warnings to those paying attention.

"Buy and hold" is OK during good times. These aren't good times. A year ago wasn't good times. There were plenty of warnings 18 months ago. Pay attention next time.
Two things---first, I wish I had your perspective and insight into the market's movements. You've done very well, and managed to avoid significant losses. Hats off to you! Second, telling me to "pay attention" is contrary to everything I have ever learned or been told about investing. In fact, I've always operated under the premise of not caring about what the market is doing during my asset accumulation phase of life. Obviously, as I remarked before, in this instance, this did not turn out to be a great decision. The problem I still have with this sort of advice, is that, as I see it, you have to be right twice. You have to know when to get out, and when to get back in. I can't imagine myself being that insightful or that lucky.
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Old 03-06-2009, 06:14 PM   #48
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Don't be to hard on yourself. OP. Actually, your invest style is 100% accurate. According to all of the experts, ie. allocate, diversify,etc.

Even retired folks were told to hold a high percentage of equities by the experts. Because of inflation.

However, I've learned that the experts, no matter how logical their explanations are, can and will be wrong eventually.

If the experts (financial planners) cannot predict and avoid these market crashes, why trust them with your life savings.

My philosophy is to use "common sense", don't be do greedy, listen to the experts, (for entertainment), and talk to older "wiser" people who are wealthy (and are not selling anything), just friendship.
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Old 03-07-2009, 03:48 AM   #49
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you have to be right twice. You have to know when to get out, and when to get back in. I can't imagine myself being that insightful or that lucky.
Actually it's not even that easy. You have to know what to get out of, when, how much, where to stash it, then what to put it back into, when, and how much. If you are one of the small percentage of people who gets this right, then congratulations. Most smart informed people fail to beat buy and hold.


I do feel the OP's sentiments though. No matter how much I studied FIREcalc results and foresaw years where the portfolios were on the verge of collapse, it's simply scarier now that is my reality.

But even with the drop I'm still way ahead of where I would have been if I never got into the stock market. And perhaps most importantly I'm not having to spend any time worrying whether I'll miss out on the market rebound.
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Old 03-07-2009, 11:13 AM   #50
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Would anyone consider converting a percentage of their portfolio into a fixed annuity at the next top of the market? Convert just enough to cover your living expenses for somewhere really cheap, and manage the rest yourself?
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Old 03-07-2009, 11:19 AM   #51
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Would anyone consider converting a percentage of their portfolio into a fixed annuity at the next top of the market? Convert just enough to cover your living expenses for somewhere really cheap, and manage the rest yourself?
I think it would depend in part as to why the market was near a top (or at least when it's already very richly valued). If it was due to factors that had a good chance of causing a systemic meltdown, then no way. If it was just a garden-variety overvaluation such as in the tech stocks in 1999, then perhaps so.

I'd also want to see which (if any) repealed Depression-era laws that firewalled community banks and investment banks and brokerages and insurance companies may be restored. I'd feel more comfortable with a strong insurer if there was less chance for cross-contamination with all the other financials. Right now if any one of these sneeze, all of them catch a cold together. Even strong insurers who have done everything right aren't immune.

Having said that, I could see myself possibly taking out an SPIA at or near retirement if interest rates go higher -- assuming the cross-contamination risks aren't there any more. Right now these are a terrible deal as their payout is typically based on very low long-term Treasury yields.
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Old 03-07-2009, 11:20 AM   #52
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Would anyone consider converting a percentage of their portfolio into a fixed annuity at the next top of the market? Convert just enough to cover your living expenses for somewhere really cheap, and manage the rest yourself?
I had tentatively planned to get a fixed immediate lifetime annuity with 25% of my nestegg back when I was working towards a bare bones retirement plan, in 2007 and before. I changed my mind when I unexpectedly came into some money last year, since now I won't need to do it.

Right now, I think that depending on an annuity for would be pretty hair-raising, given the problems some insurance companies have been having in this recession.
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Old 03-07-2009, 11:29 AM   #53
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Would anyone consider converting a percentage of their portfolio into a fixed annuity at the next top of the market? Convert just enough to cover your living expenses for somewhere really cheap, and manage the rest yourself?
If I knew it was the top of the market, and knew the a crash is imminent, why of course. Convert all to annuity with TIAA or Vanguard.

But unlikely that I'll ever know.
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Old 03-07-2009, 11:30 AM   #54
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I was "afraid" of the market way back in November 2007, and in January 2008 I sold all my stocks and put everything in money market funds. I have been in money market funds since then.

Sounds like you bought the "buy and hold" mantra hook, line, and sinker. Sometimes it pays to be afraid of the market. This market gave plenty of warnings to those paying attention.

"Buy and hold" is OK during good times. These aren't good times. A year ago wasn't good times. There were plenty of warnings 18 months ago. Pay attention next time.
I thoroughly disagree with the advice, “pay attention next time.” Not only does it disregard the diversity and extreme awareness of people on this forum but IMO it is very bad advice. How am I to recognize “next time” before it decimates my PF?

My suggestion is to look at now, after all, it’s all we have. The equities in my PF may go to zero, but at the moment their percentage in the PF is low. My simplistic hope is that if enough people put in their play money, or more if it suits their overall financial situation, pretty soon it might look like there is a return to investor confidence.
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Old 03-07-2009, 11:33 AM   #55
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If I knew it was the top of the market, and knew the a crash is imminent, why of course. Convert all to annuity with TIAA or Vanguard.
You know that the Vanguard "lifetime income" annuities are issued by AIG, right?

I might add USAA to this list for those who are eligible.
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Old 03-07-2009, 11:34 AM   #56
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You know that the Vanguard "lifetime income" annuities are issued by AIG, right?

I might add USAA to this list for those who are eligible.
Now I know.
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Old 03-07-2009, 11:36 AM   #57
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Now I know.
See what happens when you pay attention?
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