Re: Avoiding The Data Abyss Crutch!

[brewer12345]

?

What the hell are you talking about?

Its not that hard:

- don't spend too much money
- invest in low cost, long term vehicles
- do a little planning
- make sure you have a life/interests outside of saving and working
- retire early

Yep Brewer12345 may be oversimplifying a bit, but
overall that's about it. Oh yeah, except for having something to do when the damn dogs get you up at 3 in the morning

John Galt

[unclemick]

Heh, heh

Maybe it's the John Galt influence (got to blame someone ), but my thoughts this morning tend toward simplicity - ala the back part of YMORL book. Using the old no. 2 pencil and paper(I like engineering graph) plot your expense line and your investment income line. Forget all the other stuff - especially spreadsheets, SWR, retirement calc., the media buzz, etc.

Especially your portfolio value and SWR - a false path.

YOUR expenses and YOUR investment income(AND I DO MEAN INCOME) are what's important. Should you fall prey to the false god of portfolio value - keep a copy of the 4th ed of Ben Grahams The Intelligent Investor with a dollar bill as a book mark on page 108 and read/reread about 'Mr Market' as often over time as necessary to keep the disease in remission.

heh heh - a little tongue in cheek - but something to think about.

Goldang! Unclemick, you can real boil it down.
Couldn't have said it better myself and that's high praise
indeed. Must be why you are my favorite liberal
Good timing for your post also as I am considering
getting back into bank CDs now that rates are inching
back up.

John Galt

[Jarhead*]

UncleMick
"Stay with the horse I road in on". Clever phrase, and hard to argue with what's working for you.
My own belief is that the biggest problem that you can have with investments is the belief that you have to do something to justify being able to live off your investments. (The biggest mistakes I have made in the past is with that reasoning).
What I have done in the last 17 years since I retired, to keep from the temptation of having to "fix" my portfolio, is to keep about 10 years of livable income in conservative investments. (CD's, hedge fund, short term corporates, and not too long ago, Tips.
I keep the balance, about 40% in diversified mutual funds.
What that does for me is take the short-term market up and downs with a certain amount of detachment. If at the end of the year, I find that a fund has gotten ahead of itself, I'll either sell off part, or all of it and add to my chicken pile. (If that is market timing, so be it).
My own personal opinion is that the main thing about being a successful investor is to know yourself. If you can figure that out, and get a track to run on, you are ahead of about 90% of the "how to" books.
What I know about myself is that I would rather spend the time left on this planet to fly-fishing and playing golf.
I spend about 4 or 5 hours a year on my investments.
Of course, I'll never get rich, but hopefully, I'll be able to continue our simple life-style.

The broker talked me out of CDs, so I will hang with the bonds for now. One funny thing was he reminded me
that even with NAV fluctuations, I will get all of my investment back at maturity. I reminded him that I would likely be dead then

John Galt

[Brat]

As long as you brought up bonds... I just discovered that exercising the "survivor's option" (not uncommon on commercial paper) will trigger a short term capital gain for your heirs.

[charlie]

Brat

I may be wrong, but my understanding is that your
heirs' tax basis on stocks or bonds or anything else
for that matter is the market value on the day you die.

Please let me know if this is incorrect.

Regards,

Charlie

[brewer12345]

Quote:

The broker talked me out of CDs, so I will hang with the bonds for now. John Galt

Danger Will Robinson!

Yikes! Listening to a broker? C'mon, JG, you know those things are only motivated by one thing (and it ain't tail). Do you're own thinking, my friend. You can definately do it!

My argument for CDs in your case:

Yes, you can hang on till maturity and get your principal back with bonds. However, you might have to wait for a looonnnggg time to do so, depending on your portfolio's maturity characteristics. If you pick CDs with relatively small early withdrawal penlties (e.g. 6 months' worth of interest, for example), you can stick most of the downside to the bank if rates realy spike by withdrawing early and re-investing elsewhere at much higher rates. You cannot do that with bonds, and if you are worried about inflation or higher rates, this could be a valuable option.

You might consider putting at least a portion of your portfolio into, say, high yielding 5 year CDs with low surrender penalties.

Just a thought...

[Bob_Smith]

Quote:

Brat I may be wrong, but my understanding is that your heirs' tax basis on stocks or bonds or anything else for that matter is the market value on the day you die. * Please let me know if this is incorrect. Regards, Charlie

Charlie, we just went through this with my wife's parents' estate. Based upon our experience, you are correct.