As God is my witness, I will never be in

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? :D

Anyway, thanks and thanks to everyone who has sought to settle me down.
 
OldAgePensioner said:
So more of my anxiety is associated with a major dip not volatility.
Click to expand...

Look at worse cases; even if your portfolio dropped 50%, you should still have enough to manage, right?
 
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...
 
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.
 
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.
 
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!
 
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.
 
[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.
 
I’m not qualified to comment on your MF holdings because I’m nearly 90% in stocks. But, I can see where your holding of CSCO might make you distrustful of the ups and downs in the market. Looking at the company today at 19 and change, I could be tempted to put some money there but I know of many better candidates. Which makes me ask why are you still hanging on to it?

OldAgePensioner said:
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.
Click to expand...

I have accepted the fact that markets, sectors and individual issues go up and down all the time, but those daily fluctuations don’t mean squat to me unless I’m looking to buy or sell. If I freaked out every time I lost a bundle of value, or threw a party every time I made a bundle in value, the constant oscillation in mood would drive me crazy. That’s why people who are a lot smarter than I am say stay out of the market if your timeline is short.

Besides, until you cash out it’s only a number on a piece of paper.

The kind of thing that you cited in your example above used to really drive me crazy. Then I started learning about why prices can rise in anticipation of good earnings numbers and fall when the numbers are in fact good. One book I read called it the Earnings Announcement Trap.
 
OldAgePensioner said:
edit your post quick and hide the fact that you have an advisor. I got flayed on the board for mentioning a financial advisor.
Click to expand...
:LOL:
I've come clean here before. Actually, in large part because of this forum and some serious reading in the last 6 months, I've gained the confidence to go it on my own in the near future. For the record, I compared him last year to what I'd have done on my own, and he actually beat me by .8% net of fees. Not a great improvement, but good enough to let him ride one more year - he has the stocks, I have the bonds and cash. I'm pretty busy and it's nice to have him doing it. Come FIRE, I'm flying solo.

Re: "I'd have a 40' power boat in Tampa Bay."

We'd have had some stories to tell. "Local Doctor and Vagrant Rescued from Bay: 6 Women Survive Ordeal - Suspicious Circumstances Cited" ;).
 
Rich,
this may be one of my last posts here for a while, so I'll keep it short. Do use the "extra" time you get as you get out of your current job to learn investing. I've not done a good job, but many here have. You own your assets and you can best manage them I suspect.


That rescue would read, several you Asian ladies were thrown from the deck of a 40 ft'er when OAP mistakenly hit the gas pedal instead of the sun tan lotion pedal. :D See you guys in a few.
 
OldAgePensioner said:
LOL,
Can't you only use $3000 per year?
Click to expand...
Any gains during a given tax year, are deducted from your accumulated capital losses. If you still have losses, you get to deduct the additional $3k. If you had no gains for the tax year then you still get to deduct the $3k. I will be taking advantage of my 6 figure capital losses against the large capital gains from the house I just sold. Before selling my house, I too would have had several lifetime of losses to sloooowwwly use up.
 
OAP status: paid off home+new car+major appliances
Bond/cash ladder covering base expenses: $400k
Additional investments: 900k in IRA.(and SS in the future)

AOP; based the above I see little reason for you too take on too much risk anyway. $1.3M and house/car paid seems like a dream too most. How much do you need per month? Cheers!
 
OldAgePensioner said:
67% chance or 67% possibility of a chance.? :D
Click to expand...

67% of the time stocks move up and 1/3 down..thats good enough odds for me
 
Ben,
That was my hypothetical scenario. I agree, if I were to put myself in the paid-off house/expenses covered position that I proposed, I would need to take almost no risk. I could take that $900k and put it in TIPS or CDs.

Then I could just turn off the TV and computer cause nothing can go wrong, right :D


mathjak107, I'm not a math genius but what if 67% of the time it goes up 1% and 33% of the time it goes down 25%, is that still good? :confused:
 
OldAgePensioner said:
I would need to take almost no risk.
Click to expand...

On the flip side, with no significant need for the income, you could take all the (volatility) risk in the world and it would equally not matter. The only thing that could "go wrong" is that during some short term periods, the investments and their value that you dont need might be worth less, but that doesnt matter because you dont need the money.

Eh?

On the other hand, you seem to take paper losses pretty seriously, so this angle probably isnt for you. But it is the other side of the low debt/flexible covered budget scenario.
 
OldAgePensioner said:
mathjak107, I'm not a math genius but what if 67% of the time it goes up 1% and 33% of the time it goes down 25%, is that still good?  :confused:
Click to expand...

No but the dow is roughly 11,000 at the moment and 15-20 years ago the dow was around 2,500.........so based on history looks like stocks have been the way to go. But I do understand your fear of the future. I plan to have enough to cover my expenses for the next 6 years and then invest the rest in a balanced mix of funds. (50/50) You just have to find the balance that you can sleep with.
 
OAP,

You probably don't realize it, but your plan to liquidate the ~1.2 million in your taxable account and keeping the ~$900k in IRA in mostly stocks is essentially shifting your overall allocation to ~40% stocks, 60% bonds/cash.

In Bernstein's 4 pillars, he says to take your risks in the stock allocation and to control risk/volatility with the short term bonds/cash allocation. If 60% bonds/cash is what you need to sleep at night, then I'd say go with it.
 
Well, I'm back sooner I thought.  A freind wanted to borrow my laptop his died but he got one from a coworker in Palo Alto, so I can still seek help from my cringing fear of market crashitis.

DOG51, I can sit and watch your animated gif golfer for minutes, he's got a good swing and follow thru.

DOG51,
I have some steep rent ($3000) but other than that I live pretty cheap.  I have $220k-ish in cash and could easily live for 10 years by moving to cheaper digs in a cheaper town.

But, looking at my plan in a reverse direction.  If your just built home were paid for and it's where you like living, and you had a brand new Lexus, and all your bill were covered by a pension plan for the rest of your life.  Would you sell all of it and put it in the market right now?
 
justin,
that's an interesting way to look at it.

I've sort of forgotten the area a bit but couldn't a person still find a nice home say 15 minutes drive to the SW of you for $300-400K on a lake?

Justin, just found a candidate http://www.carolinalakesrealestate.com/template24/nextpage.asp?lnv=1484756
Check out the one at 75 Carolina Way. I even like that address.

And I'll bet I could find even cheaper and better if I spent a week down there.

I plunk down cash, go buy the Hummer, and if the home is only $280K, I still got near $1 million in my after tax port to buy an annuity.  Let's say I get to net $750k after capital gains.

That will provide an annuity income of $4341 single lifetime for paying insurance, taxes, food, utilities.

Not much risk left in life, seeing as how I still have $900k in IRA and SS of $1,600 a month at 62.5.

Sweet deal if ya ask me.
 
OldAgePensioner said:
Well, I'm back sooner I thought.  A freind wanted to borrow my laptop his died but he got one from a coworker in Palo Alto, so I can still seek help from my cringing fear of market cra****is.

DOG51, I can sit and watch your animated gif golfer for minutes, he's got a good swing and follow thru.

DOG51,
I have some steep rent ($3000) but other than that I live pretty cheap.  I have $220k-ish in cash and could easily live for 10 years by moving to cheaper digs in a cheaper town.

But, looking at my plan in a reverse direction.  If your just built home were paid for and it's where you like living, and you had a brand new Lexus, and all your bill were covered by a pension plan for the rest of your life.  Would you sell all of it and put it in the market right now?
Click to expand...

I understand your point. My parents were pretty much in your shoes and no they didn't invest in stocks. They were in cd's only and my Mother still has nice sum of money.  :)

Me, with hopefully 30+ years to go, I feel I need to have some in stocks for long term growth. My IRA/401k makes up about 25% of my overall portfolio so I plan to keep all that in stock funds. I don't plan to touch that for 15+ years anyway so I think I can ride out the ups and downs without too much stress. My taxable account will be much more conservative.

And to answer your last question, no I wouldn't dump everything into stocks right now if I just sold off all my assets. BTW, too bad Phil didn't have my animated swing yesterday on the last hole of the U.S. Open.
 
OldAgePensioner said:
I've sort of forgotten the area a bit but couldn't a person still find a nice home say 15 minutes drive to the SW of you for $300-400K on a lake?

Justin, just found a candidate http://www.carolinalakesrealestate.com/template24/nextpage.asp?lnv=1484756
Check out the one at 75 Carolina Way. I even like that address.
Click to expand...

The "75 Carolina Way" property looks like it is 45 minutes from Fayetteville and at least an hour from Raleigh. You'd be driving a good bit for just about anything.

I'm sure you could find waterfront property in that price range closer in. Falls Lake maybe?

Heck, my house is waterfront on a small lake and it's probably 5-7 minutes from downtown Raleigh. Bought it a 2 yrs ago for ~$100k - 4 BR, 2.5 BA 1800 square feet. There's others for sale on the same lake all of which are ~$130-$170k. Plus, there's lots of "cultural diversity" here.

There's also a ton of new residential mid-rise condos coming on the market right now and in the next few months/years. They are located in the "Glenwood South" area (the hip night spot) or in downtown. The first one that came to mind was The Dawson (thedawson.com). Their website says $221,000 and up for a 1 BR, 863 s.f. But those places are SWEET! Very high end. I figure these might be more your style than "lake house out in rural, N.C." ;)

Point is, yes, affordable houses can be found here.
 
You must log in or register to reply here.

Latest posts

Back
Top Bottom