Warren Buffet has a net worth of $84.3 Billion. How much net worth do you have?Jim Rogers has a net worth of $300M. How much net worth do you have?
People has missed the point that the USA debt was $11 trillion 10 years ago and it is now $22 trillion and still climbing. The USA is getting close to Greece, Italy and Japan. IMO, this is not sustainable.
I just reallocate my portfolio to be more conservative
I already have tickets to go to Waikiki for an entire month and I want to have a good time surfing on a long board at age 68 without having too much of my money in the stock market. I will also be shopping for a vacation condo in Waikiki so I can covert some of my wealth into real estate. If the market do crash during my retirement, then I will be the one who has the last laugh.
Just a small pile-on for Jim Rogers. Googling "Jim Rodgers Bear Market" results in 13 MILLION hits...
Anyway, I know a bear market is coming and as an Early Retiree I am nowhere near 100% equities. Changing your asset allocation based on your stage of life is appropriate. But I have no idea when a bear market is coming and don't pretend to, so I count on my AA to handle it.
vchan2177, your 25/75 AA is actually in on the very conservative end of the "normal" range for a 68-year old. But early retirees are at huge risk of inflation over the long term (which many predict is the result of the debt problem) and need equities for growth.
I look where the dog takes a pee.
If she heads to the left, I know stocks are good. If off to the right I should be more conservative and buy bonds.
How long have you two shared these views?Originally Posted by vchan2177 View Post
Jim Rogers and I share the same bearish views
Again, I thought Jim Rogers was worth more than $300M. Maybe he lost some money.
Rogers was cofounder of Quantum and Soros Funds back in 1973, along with Soros. Rogers left the funds in 1980.
Soros is still worth $8 billion.
Just a small pile-on for Jim Rogers. Googling "Jim Rodgers Bear Market" results in 13 MILLION hits...
Anyway, I know a bear market is coming and as an Early Retiree I am nowhere near 100% equities. Changing your asset allocation based on your stage of life is appropriate. But I have no idea when a bear market is coming and don't pretend to, so I count on my AA to handle it.
vchan2177, your 25/75 AA is actually in on the very conservative end of the "normal" range for a 68-year old. But early retirees are at huge risk of inflation over the long term (which many predict is the result of the debt problem) and need equities for growth.
Everybody's financial situation is different. I have a federal pension (62% of salary), a California pension (27% of salary) and Social security (12% of salary) which all have a COLA adjustment every year. This means my IRA is not really needed for retirement income and therefore I was super aggressive during the last 10 years which I was rewarded from the bull market.
Now that I made enough money in my IRA and my retirement income exceeds my pre-retirement salary from my pensions alone, I decided to cash out my IRA slowly. This is because I get taxed so I ran several withdrawal situations on TurboTax to get the maximum yearly withdrawal amount with minimum tax consequences. I became very conservative simply because the higher federal debt alarms me and because a crash during withdrawing assets would be bad in my specific situation.
Portfolio models that you cite probably apply to people who are dependent on their IRA for "retirement income". Since my IRA is considered "disposable assets" and not retirement income, I went from super aggressive to super conservative. This is similar to gambling. I was "all-in" during the bull market and I will be nearly "all-out" during my withdrawals. I must have broken all the normal rules on AA simply because my situation is different.
I will be surfing in Hawaii next month and looking at the girls in bikinis and I rather not worry about the stock market while I am enjoying my retirement. 25% stock is a good number during my withdrawal phase since any stock market crash only affects 25% of my IRA assets.
I sincerely apoligize for mentioning Jim Rogers since I had no idea how many people hated this man for his incorrect predictions. I learned a good lesson from this.
You are fine.
There are many permabear forecasters out there and eventually they will be correct about a bear market.
Many of us just don't get alarmed by these false prophets on the markets, whether we hold 0% or 100% or anything in between in stocks.
I keep wanting to keep my new contributions as cash, as I feel there will be a market correction soon. It just feels like there has to be... But I'm resisting this urge and keep adding to my positions. Though I'm not super happy to have just bought more BRK.B at $214 a few days ago. Today it's at $206. Grrr. But I'll never notice a few years from now, and is a good argument not to track the stock markets every day.
I sincerely apoligize for mentioning Jim Rogers since I had no idea how many people hated this man for his incorrect predictions. I learned a good lesson from this.
Terrific!Everybody's financial situation is different. I have a federal pension (62% of salary), a California pension (27% of salary) and Social security (12% of salary) which all have a COLA adjustment every year. This means my IRA is not really needed for retirement income and therefore I was super aggressive during the last 10 years which I was rewarded from the bull market.
It makes perfect sense to become very conservative in your situation. But that has absolutely nothing to do with the federal debt.I became very conservative simply because the higher federal debt alarms me and because a crash during withdrawing assets would be bad in my specific situation.
There's probably no reason for you to have anything in the stock market at all, and certainly no reason for you to worry.I will be surfing in Hawaii next month and looking at the girls in bikinis and I rather not worry about the stock market while I am enjoying my retirement. 25% stock is a good number during my withdrawal phase since any stock market crash only affects 25% of my IRA assets.
Something perhaps to keep mind. If one resisted the urge to go all cash in let's say 2016 (random sample year), when the bear market does come, one should also calculate the extra market gains from 2016 onward combined with your bear market loss.
You will probably come out ahead.
Some folks just look at their losses at the moment.
Something to think about: When the SHTF in terms of too much debt, how will the US Treasury and Federal reserve handle it? Hint: The US Debt is denominated in US Currency, so they can pay it off. This is unlike Greece or most other countries whose debt is denominated in US $ or some other non-home currency. This is THE major difference.
If/When the US debt becomes unsustainable, the debt would be paid causing a massive increase in the money supply and likely a large dose of inflation.
Given that, how will your CD's, short term bonds, and cash look? Answer: Your buying power (in terms of goods and services and especially goods from other countries) will be negatively impacted.
What I am saying here is that hiding in fixed/cash/CD's will likely not be a safe place if the massive US debt goes critical.
I am one who does not hate Rogers. In fact, I kind of like some of the things he says, which often have some truths in it. But the problem is that things in life never unfold exactly as one expects.
Rogers apparently is right often enough, because he started from zero and still had a lot of money. But one cannot follow what these guys say verbatim, because they have the knack in trading to get themselves out of trouble.
Back to Rogers, he is a really interesting character to have made not one but two continuous multi-year road trips around the world. I read about his exploits in the following books. His observation about different cultures was insightful. It was during his travel through China that he made observation about how hard the Chinese worked, and that made him bet that China would become an economic powerhouse.
Here's a story told by Taleb (author of the Black Swan book) about Soros. In one encounter with Soros, Taleb and Soros had a disagreement on the movement of a certain market or commodity. Taleb proved to be right on this occasion. Some time later, Taleb asked Soros how the latter did, and Soros said he made good money. Not possible, Taleb said because Soros bet on the wrong side. Soros said that it was true, but he quickly recognized his mistake and took the other side.
And Soros is worth $8 billion, so he has to be more often right than wrong.
Terrific!
There's probably no reason for you to have anything in the stock market at all, and certainly no reason for you to worry.
Assuming you can live on "101% of salary" during retirement, and assuming you don't care about leaving a big legacy, you are good to go. Have fun.