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Old 06-27-2008, 02:27 PM   #101
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...aaaaaa considering the bad news about the tanking market, perhaps this is not the time to give him this bad news.
Sure it is. Maybe it's good news -- that he doesn't have to stew over what he can't have any more.
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Old 06-27-2008, 02:29 PM   #102
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20 years in the submarine force
Sooner you than me, Nords! Hotbunking has never appealed to me.
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Old 06-27-2008, 04:10 PM   #103
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Just face it...you've been "outed"....nice try though...LOL. It's no biggy to me as I'm female(and straight)....but the thing is that on occassions my hubby sits with me and reads some of the posts and your avatar caught his eye(and more then once)...LOL....I hate to have to tell him that you are a guy!!!...aaaaaa considering the bad news about the tanking market, perhaps this is not the time to give him this bad news.
Just tell him your not sure about the market, but he may not want to look if the skirt flies up.
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Old 06-27-2008, 05:13 PM   #104
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Old 06-27-2008, 05:15 PM   #105
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Oh, I'm terribly sorry. I left the computer for just a few seconds and he did that. Very crude -- sorry.
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Old 06-27-2008, 05:56 PM   #106
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Made me wanna go buy some tech stocks.
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Old 06-27-2008, 07:09 PM   #107
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We're also not hearing a whole lot from the folks who like to arb a mortgage.

My house "bond" is holding its value, i'm improving its value on the cheap, I'm not suffering stock market losses on the mortgage amount,
So, is it safe to assume you own no stocks or stock funds at all?

Anyone arb'ing a mortgage is hoping that the long term returns on the market will be higher than their current mortgage interest rate. No one should expect those returns to be better each and every year.

So - the market is down. So are you saying you only want fixed investments, 'cause you are not going to look at the long term returns of the market? I fail how you can say one w/o saying the other. And we will just ignore the fact that someone arb'ing their mortgage with the S&P Index would have had average annual returns of 9.63%.


edit: forgot to mention - your house value and cheap improvements happen whether you have a mortgage or not.

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....and my withdrawal rate is so low by not having to make debt payments that I really could care less what the market levels are.
This of course, conveniently ignores the fact that if one does not put the money against the mortgage, there is a bigger pool of liquidity to draw from.

I don't think there is a big difference one way or the other - but I don't think those arguments hold water.

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Old 06-28-2008, 10:17 AM   #108
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Oh the mistake of clicking on 'show ignored post'. And its been so long.

I think the actual point was in response to ikubak noting that peoples opinions change greatly during times of strong up and down days/weeks. We're not as brave as we like to admit. My contribution was to note that a lot more people are excited with the idea of arbing debt in up markets than they are in down ones.

So dont let the exuberance make you do something you'll regret later.

As to your comments, no of course I dont own only fixed investments and no equities. In fact, my portfolio is packed with all sorts of investments and runs toward the higher risk/return level. The difference is that without any debt to pay and employing a 3 bucket strategy, I dont have to sell any equities when I dont want to...ever. So price movements are irrelevant to me. And while I have a smaller pool of liquidity than I would if I had a huge pile of debt to service, not needing to ever sell anything means down days and weeks dont make me feel bad.

I'm sure there are plenty of vulcans with 6" brass balls that like the idea of making an extra point or two over 30 year periods and dont reach for the pepto bismol when the market reels down a thousand points. I'm not one of them and this thread and its brethren suggest that most of the rest of us arent either.

As far as that 9.63% return goes, for the last 8 years you'd have had less than a zero return. We all already know that such a scenario happening early in a retirement equals failure. Maybe the next 8 years will be better. Maybe not.

There IS a big difference in the two scenarios. One is practically failure proof. The other trades significant emotional and financial issues for a little more return in some situations.

So hold your own water. Hold it between your knees.
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Old 06-28-2008, 10:44 AM   #109
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Stick with your plan

I think this time is no different. You need a plan and need to stick with it. I had decided more than a year ago that I would go for listed commercial real estate at the end of this great market cycle, when this bear episode will be finished. I'm now up to 32% in cash, as I keep piling up cash and as the rest of the portfolio slowly melts... When time will come I will load the ETFs and close end funds I've been looking at for so long. And a new cycle will begin. The more difficult part is to decide what you want to do (and in which conditions) and to do it !
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Old 06-28-2008, 10:50 AM   #110
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I think this time is no different. You need a plan and need to stick with it. I had decided more than a year ago that I would go for listed commercial real estate at the end of this great market cycle, when this bear episode will be finished. I'm now up to 32% in cash, as I keep piling up cash and as the rest of the portfolio slowly melts... When time will come I will load the ETFs and close end funds I've been looking at for so long. And a new cycle will begin. The more difficult part is to decide what you want to do (and in which conditions) and to do it !
Poyet, which closed ends are you watching?

Ha
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Old 06-28-2008, 10:50 AM   #111
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When time will come I will load the ETFs and close end funds I've been looking at for so long. And a new cycle will begin. The more difficult part is to decide what you want to do (and in which conditions) and to do it !
I have already started buying some closed end Bank Loan funds, REIT funds, Preferred funds, and higher yielding individual stocks like PFE and GE. Bought some in Feb and another batch last week. Too soon in your opinion? I decided what I wanted to do and did it.

I did get smacked around some in all of them last week.
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Old 06-28-2008, 10:58 AM   #112
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stay calm and ride it out...it WILL come back. Once it recovers, slowly rebalance and reduce your risk so that next time you won't be hurt.
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Old 06-28-2008, 11:07 AM   #113
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Take care, none of them is to buy yet

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Poyet, which closed ends are you watching?

Ha
Hi,

My favorite REITs CE income funds (with their current yields) are RIT (14,7%), IGR (9,8%), JRS (12,9%), NRO (19,4%).

I will NOT buy basically until (ROC(MM200) > 0 and Close > MM200). Doing this avoids to have an opinion and let you stick with a rule.

I also keep buying dollars since the euro passed 1,5$ for 1euro (early April). Each time I make a wire to a US account I obviously first buy USD.

I think we'll have a unique opportunity to generate income for Early Retirees while preserving capital from inflation with this bear episode.

I wish I had more cash. With 32% in cash not only I feel the pain but more importantly this limits my opportunities.
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Old 06-28-2008, 11:11 AM   #114
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The difference is that without any debt to pay and employing a 3 bucket strategy, I dont have to sell any equities when I dont want to...ever. So price movements are irrelevant to me.
Pretty bold statement, a SWR of 4% becomes highly risky 8% after a 50% portfolio decline. Look at the Japan index, there are no guarantees of what can happen in markets in the rest of one's life. Japan is down for around 18 years now and still about 65%, without even considering inflation even though there were some dividends. Prices movements are always relevant for me.
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Old 06-28-2008, 11:33 AM   #115
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The only timing I am doing right now is on my Prudent Bear Fund. As an insurance, I invested about 10% of our retirement accounts in BEARX last August when the DOW passed 13,000 on the way up. By last October, when the DOW topped 14,000 it looked like a BIG mistake. Off course in hindsight I am glad I did it but now comes the hard part: I have to decide when to sell it and reinvest the proceeds in VTSMX and VGTSX. I almost pulled the trigger in March (I had a 18% gain on it at the time), but the market recovered so quickly that by the time I felt comfortable letting go of it, it was already too late. So this time I am going to sell small chunks of it at a time to make sure I don't miss the next wave completely.
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Old 06-28-2008, 11:39 AM   #116
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Prices movements are always relevant for me.
Given that, how do you respond to price movement? For example, what have you done or will you do now?

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My favorite REITs CE income funds (with their current yields) are RIT (14,7%), IGR (9,8%), JRS (12,9%), NRO (19,4%).
Poyet- thanks for the symbols. I'll look them up today. BTW, I agree with your viewpoint- this fall is a good break for retirees who have some income or cash resources. The world will do what it does, but if we are going to be equity investors better to be in at lower average prices than higher.

Ha
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Old 06-28-2008, 12:10 PM   #117
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I'm sure there are plenty of vulcans with 6" brass balls that like the idea of making an extra point or two over 30 year periods and dont reach for the pepto bismol when the market reels down a thousand points. I'm not one of them and this thread and its brethren suggest that most of the rest of us arent either.

So hold your own water. Hold it between your knees.
It's a personal decision as to whether someone is comfortable with the risk/reward position or not. They can do as they see fit, I have no problem with that.

But I do have a problem with statements like - 'oh, the market is down, those mortgage arbs are hurting'. Seems you just have to feel superior with your decision - you are unlikely to post the opposite during a bull market. There isn't a yes/no answer, it will depend on the long term market. I think those taking the risk realize what it is, and accept it.

Insults don't help the discussion, in either case. Perhaps you need a refresher?

http://www.early-retirement.org/?page=rules

-ERD50
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Old 06-28-2008, 12:17 PM   #118
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stay calm and ride it out...it WILL come back. Once it recovers, slowly rebalance and reduce your risk so that next time you won't be hurt.
Perfect advice for me. Only I can't stay calm.
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Old 06-28-2008, 04:54 PM   #119
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Pretty bold statement, a SWR of 4% becomes highly risky 8% after a 50% portfolio decline. Look at the Japan index, there are no guarantees of what can happen in markets in the rest of one's life. Japan is down for around 18 years now and still about 65%, without even considering inflation even though there were some dividends. Prices movements are always relevant for me.
I am not sure you understand the real meaning of a Safe Withdrawal rate.
Remember FIRECalc and similar actually run a scenario when you retire in 1929 and watch the Dow drop from 381 to 44 in 1932 or retire in the 70s with a flat stock market like the 70s with double digit inflation. Now many withdrawal rates fail during those two periods part of the 95%, but some AA survive.

Right now we are in a garden variety bear market no where close to a 50% decline.
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Old 06-29-2008, 01:46 AM   #120
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Are these financial good times or financial bad times? We could have all converted our portfolios to cash and bough gold at around $620 back in october and then sold the gold when it reached $1000 a couple months back and invested in oil. Anybody here do exactly that? Anyone who did would be up over 100% for the last 9 months. Instead of doing that many of us stayed where we were and lost 10 to 20 percent of value in our porfolios. So did we lose 10 to 20% or did we really lose 110+%? We are here moaning about losing 10 to 20% and grousing about a bad economy while someone who followed the portfolio to cash to gold to oil scenario above would be as happy as a clam and would tell us that one mans bad economy is another man's chance to prosper. It is all relative. For some people this may be the first time they have seen big losses in their portfolio value. For many this is the first time in their lives that real estate did not appreciate. Granted that most of us made a giant financial mistake not following the above gold to oil scenario but our diversified portfolios will come back up eventually. The FIRECALC will continue to work though it never has said that even with a 100% probability of succes your portfolio will not go up and down with the rest of the market.
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