As God is my witness, I will never be in

[Jarhead*]

Quote:

Originally Posted by ESRBob OAP, I have a simple solution to dealing with falling markets in a well-diversified portfolio:* *just don't look at your brokerage balances.* Ignorance is bliss. How would you know if they were up or down if you didn't look?* Think about something else, go for a walk, make a new friend, cook a new dish, plant a new garden and promise yourself you'll check them again, say, at the end of the summer or maybe in the Fall.

ESRBob: Maybe you should consider writing a book.

If I have learned anything in life it's that spending time worrying or fretting about things you are not in control of is time wasted, and taken to extreme will make you "bad company" (Stock Mkt. performance, property values, adult children making goofy decisions, etc. etc.).

My adult children are going to spend the day with me today. I expect a "stress-free" get together. (It took a while for me to get there, but discovered that worrying and fretting, and giving unsolicited advice to them wasn't working. (We're going to play golf).

Oh, and "Happy fathers Day", to you and all the
other "gluttons for punishment" on the board.

Regards, Jarhead

[AltaRed]

Quote:

Originally Posted by Jarhead* My adult children are going to spend the day with me today.* I expect a "stress-free" get together.* (It took a while for me to get there, but discovered that worrying and fretting, and giving unsolicited advice to them wasn't working. * (We're going to play golf).

Sound advice. I am not there yet (but should have been years ago).

[Lazarus]

Quote:

Originally Posted by AltaRed Crossthreading, are we?

The post I responded to is in this thread.

[OldAgePensioner]

Here are my 2 portfolios and I cannot for the life of me see why they are volatile. Every time some financial news comes out the excuses for the market reaction are laughable. Let's see: "Analysts were dissapointed that althought profits exceeded predictions they only exceeded by 10%", boom market tanks.

Can anyone see why these portfolios lost so much money in the last 2 weeks.

This portfolio is my after-tax portfolio. $1.24 mil

FTEXX FIDELITY MUNICIPAL MONEY MARKET
CSCO CISCO SYS INC
ELOS SYNERON MEDICAL LTD ORD SHS
FBGRX FIDELITY BLUE CHIP GROWTH
INTC INTEL CORP
NAESX VANGUARD SMALL CAP STOCK INDEX TRUST
PHH PHH CORP COM NEW
TBGVX TWEEDY BROWNE GLOBAL VALUE FUND
UNH UNITEDHEALTH GROUP
VBINX VANGUARD BALANCED INDEX
VEURX VANGUARD EUROPEAN STOCK INDEX
VGSIX VANGUARD REIT INDEX FUND
VIVAX VANGUARD VALUE INDEX
VPACX VANGUARD PACIFIC STOCK INDEX
VTOVX VANGUARD TARGET RET 2005 FD INVESTOR CL


This is my IRA (410k was rolled into this account) $920K
FDRXX* FIDELITY CASH RESERVES
FEMKX FIDELITY EMERGING MARKETS
FHKCX FIDELITY CHINA REGION
FICDX FIDELITY CANADA
FLATX FIDELITY LATIN AMERICA
ISM SLM CORP PFD SER A CP
VB VANGUARD INDEX FDS VANGUARD SMALL CAP VIPERS FORMERLY VANGUA
VDE VANGUARD SECTOR INDEX FDS VANGUARD ENERGY VIPERS
VGPMX VANGUARD PRECIOUS METALS & MINING FUND
VGTSX VANGUARD TOTAL INTL STOCK INDEX FUND
VNQ VANGUARD INDEX FDS FORMERLY VANGUARD INDEX TR TO 05/24/01 RE
VO VANGUARD INDEX FDS VANGUARD MID CAP VIPERS FORMERLY VANGUARD
VTI VANGUARD INDEX TR VANGUARD TOTAL STK MKT VIPERS
VTRIX VANGUARD INTERNATL VALUE PORTFOLIO
VWO VANGUARD INTL EQUITY INDEX FD INC VANGUARD EMERGING MKTS VIP

[OldAgePensioner]

PS: I made quite a bit of money in the last 12 months. It's not that the market is volatile that bums me out.

It's the petty little things that cause the market to tank.

1. Two hostages are kidnapped in Iraq. Boom, out go the lights.
2. Bernacke says , blah, blah . Boom, out go the lights.
3. Analysts expect next quarter to, blah. (there never right but hey, boom...
4. Economy is growing to fast, why the hell is that bad? Boom out go the lights.

And, really it's the herd mentality that scares me the most. Why was Cisco, JDSUniphase, Microsoft, Intel, EMC, etc all worth $100 or more a share one day and by the end of week 2 they were in the teens? Herd mentality.

[LovesLife]

OAP,
Looking at your stocks and funds you seem to be represented in most, if not all, asset classes. But what % do you hold? In other words, what % in equities, bonds, cash? When I organize my funds this way then I can get a better sense of lining up my risk tolerance to my exposure to the markets.

My own port, like most everyone else, has taken a hit, too. I am down 4.5% from my high point. I've also noticed the same nuttiness with the markets but I figure I just have to wait it out. I also wonder if the herd mentality will actually put us into a bear market. It helps me to read the responses from the other posters here. You should read the stuff posted on some other financial discussion boards. It would scare the heck out of you (not recommending you do this.)

LL

[Zathras]

OAP,

It sounds to me as if this has been building stress for a very long time for you. You mentioned Cisco and Microsoft at $100 plus. That hasn't been the case in years (2 at least).

As others have said, do you best not to look at your stocks every day. If your portfolio is balanced with cash, bonds and stocks you shouldn't need to keep an eye on it every day. It just causes stress (I know, it took me a while).

Some cash is good if you are currently drawing, but all cash is not so good if you need your portfolio to last you a long time.

This may just be a great opportunity to buy

[OldAgePensioner]

LL,
I'm at $200k in the MM portion of my after-tax.

My only bond exposure is within a few of the funds. *Not much at all.

My hypothetical "safe" life setup. (Not that I'm gonna do it)

1. Paid for brand new "small" home built to my specs. *$350k
2. Brand new Lexus or some other long living car. *$40k
3. All brand new major consumer goods,furniture, TV, VCR, fridge, stove, dishwasher, etc. $60k
4. All brand new clothes, shoes, coats, etc. $3k
5. Set up bond ladder or annuity to pay food, lights, water, taxes, insurance, etc. $400k

That is roughly $850K and since $200k of the port. is cash, I could probably net that much cashing out the $1.24m portfolio.

I could do the 5 things above and still have a $900k "reserve" IRA portfolio and SS coming in at 62 1/2.

So even if the market takes a big correction due to all this war spending and all-out printing press money manufacturing. *I'm affected very little.

Even inflation can't hurt me much. *I've already bought everything.

[OldAgePensioner]

Zathras,
In the beginning of the year 2000, Cisco Systems was $90 and as you see in my portfolio I owned 8000 shares, by the end of 2000 it was roughly $10 for a loss of $640k and it has only recovered to $20 for a loss of $560k.

At the beginning of 2000, I was a moderately wealthy man, just by holding firm in the market, I became roughly 20% of a moderately wealthy man.

6 long years later, I'm back to roughly half where I was. In 2000, I almost sold everything very early when the market got shaky but all my advice was hang in there the market will come back.

Well, maybe by some time in 15 years I will be back to where I was 6 years ago. I do trust that a well diversified portfolio over a long period is the best investment. It's just I'm leary that we are in for a 500-800 point correction any day now. And a long slow recovery. We'll see.

[Zathras]

OAP,

Yeah, 2000 hit a lot of people really hard.

If the daily swings cause too much anxiety (I can certainly understand that with 2000 in your background) cash may be the way to go.

The reduction of stress is definately worth quite a bit. Sounds like you have a well laid out plan which is always important.

I'm just saying that if you have the time and money to cover you during the dip in the market, weekly fluxuations shouldn't cause the destruction of your portfolio.

Again though, if it causes stress for you, you have to decide if that stress and risk is worth it.

[OldAgePensioner]

Zathras,
Last couple of weeks took a lot of money from me but I'm more worried that it's a harbinger of things to come. We will be mired in Iraq for a decade I suspect at some level.

And just one more major terror event will be a real test for the market.

So more of my anxiety is associated with a major dip not volatility. Cause volatility could be up, right?

Anyway, thanks and thanks to everyone who has sought to settle me down.

[bpp]

Quote:

Originally Posted by OldAgePensioner So more of my anxiety is associated with a major dip not volatility.

Look at worse cases; even if your portfolio dropped 50%, you should still have enough to manage, right?

[mathjak107]

well lets see a guaranteed loss in cash or money markets after taxes and inflation,or a 67% chance of making lots more?...hmmmmmmmmmmmm lets see ,what would you do?...i know its a no brainer for me...

[OldAgePensioner]

67% chance or 67% possibility of a chance.?

[Rich_by_the_Bay]

OAP,

Looks like you owned a fair amount of single company equities. In retrospect would you have skipped individual stocks altogether, and stuck with mutuals, or do you feel that these individual equities paid off in the long haul?

I wasn't planning on owning any individual stocks once I get to FIRE. I have an advisor (Bernstein-Alliance) for part of my money, and they have me in so many individual stocks ($2k-3k per company is all) that it is virtually a mutual fund to me. BTW, he will also be out of the picture once I get to that point, in all probability.

[OldAgePensioner]

Rich,
edit your post quick and hide the fact that you have an advisor. I got flayed on the board for mentioning a financial advisor. Charles Freidlander of LA Wachovia office even though he has probably 15-20 former aerospace VP's as customers.

Seems on this board you either worship Bernstein or else.

Rich, actually I parlayed about 500K of my own money into a lot of "paper" money by buying MSFT, CSCO, INTL, EMC, JDSU, and a few real small hi-techs during 88-98. Year 2000 took all that back.

I now stick with Fidelity and Vanguard Funds mostly with a couple of individual stocks. Had year 2000 not happened, I'd be a $10mil man. I'd have a 40' power boat in Tampa Bay.

[LOL!]

OAP,

you seem to have a severe case of loss-aversion-itis.* You have not sold CSCO and INTC even though they are big losers and will not come back in your lifetime.* To help you overcome this LA-itis, may I respectfully suggest you read Why Smart People Make Big Money Mistakes?

A thing that has helped me is to automatically sell losers at either (a) just before I have owned them one year, so they stay as short-term losers, or (b) if they have already been held for more than a year, then in November of December for the year-end tax-loss.* The tax-loss gives me an instant 15% "gain" because I don't have to pay taxes on a gain or future gain.

Not only does selling my losers hide the red in my portfolio tracker (which shows only current holdings), but is has saved my butt in the spring2000 to fall2002 debacle. Even though I like to stay fully invested, I have to think about where to redeploy the cash raised and I've made better decisions after learning from my losses.

Best of luck!

[OldAgePensioner]

LOL,
Due to owning techs in 2000, I already have tax write-offs of $3000 per year till Angelina Jolie's kid reaches 100 years old.

I used to be a rich man, I stayed the course in 2000 and now look at me.

[LOL!]

[Edit:] I've got a 6-figure tax loss carryover as well.* It allows me to trade with tax-impugnity.

So use the write-offs and sell things at a profit!

The idea is to sell losers and invest in better things, not just book a tax-loss.* Stop looking at red in your portfolio, sell those dogs.

To show others the nature of the problem, INTC was above 26 this year and below 17 last week.

[OldAgePensioner]

LOL,
Can't you only use $3000 per year?