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I just sold off a chunk of my stock market investments because I can't take the stress of these wild swings. I'm moving into laddered CDs for now, until the market has its "correction."
So when the market dropped, you sold stock. That is an emotional decision I try to avoid. It is likely now is the time to buy instead of selling. Laddered CDs will not keep up with inflation.
anything i can charge i charge . i have not paid interest in decades . we have thousands of dollars in rewards we use for trips
I have told this story before. Years ago we bought a $50K truck to haul our RV. We paid entirely on credit cards on a Sunday afternoon. We paid our daughter's tuition at Johns Hopkins with a credit card. We had years and years of free vacation travel. Since we paid off the cards immediately we had no additional expenses. Unfortunately it has become harder to make large CC purchases. I just bought a used car from a dealer. They would only allow a $1000 CC deposit. Then at the actually closing they took another CC payment of close to $2000 for an extended warranty, license plates and another cost. So at least we got to about $3K in points. Those "double" points from Cap One add up.
Lots of smart folks say that the market is overdue for a correction. I may *NEVER* get back in, if CD rates keep climbing. I'm almost 60. Time for me to go ENJOY life and stop worrying about the vagaries of the stock market!
by the same token cd's have failed to provide a safe secure income flow for retirees at anything but the lowest draw rates . that is true at all rate levels because the higher the rates the higher inflation at least 1/2 the time and they provide losses as negative real returns . .
on the other hand equities and balanced portfolio's have provided the higher draw rates and the most safety .
the idea is as a retiree to make EFFICIENT use of the money you worked hard to accumulate and not live on 25% less because you want to avoid equities .
do you know 50/50 has never lost money in any 10 or 20 year period ? .. --never .
at a 4% draw cd's have failed so often to last they are unsafe at anything but 3% or less . that is a 25% pay cut from the 4% a 50/50 has produced with 96% success ..
Last edited by mathjak107; 12-09-2018 at 07:30 AM..
let us all know when that is ....... apparently i never get the memo to get back in.
so whenever this magic moment is , you are going back in with the stress of the swings all over again ? and then what bail out and lose more money ?
It's easy. Can't give you a day or a week but when investor sentiment is at a low and everyone sees the market as hopeless, you will be somewhere near the bottom. You can't "time the market" to the precision of catching the absolute peak and bottom but if you can get within the top or bottom third of the cycles you will significantly outperform "buy n hold".
catching it at some random point you think is a good entry point can negate the effect of even trying to time things .
the biggest gains are way before there is any sign anything has changed .
University of Michigan Professor H. Nejat Seyhun analyzed 7,802 trading days for the 31 years from 1963 to 1993 and concluded that just 90 days generated 95% of all the years’ market gains — an average of just three days per year.
will you be in our out for them ?
that is why market timing fails over and over and riding the cycle wins over and over and over
OP, you live in a country that is run by keeping people in debt. They so much became used to it, by everpresent "it is better to be in debt" tune that they can't think outside that box. Add to this, that they can easily circle back to the same source, that put that idea into their minds, and sources will easily provide them with gymnastics and equlibristics of math and "examples" "proving" that it is good to be in debt. Also, literally all of "advisors" here ARE in debt and think accordingly. None of them became Mr Buffet or, they simply wouldn't bother with spending time on CD. So you get according advice.
Ocenagaia, thank you, has the best sober opinion. Are you investing genius? Do you KNOW how to invest, do you have any insider information that will GUARANTEE you not losing money? Do you feel lucky, or do you? I have been through enough financial crashes and money reforms to know better. In matter of one TV announcement all savings or investments may be gone in puff. And the word out there is - you are looking at just that.
So here's my very simple, non Buffet philosophy. Real estate is real estate. It historically grows in value 7% a year. Add to this that every penny, you put into principal, saves your interest rate amount. Say, it 4 - 5%. That adds up to 12% literally risk free money placement. Oh, and I KNOW what it feels like be debt free and own the property straight. Very fulfilling.
So sure, you may want to have debt to "free money" to buy a new toy. Basically, add debt to debt. But, should you be a frugal person that knows how to save and can tame buying cravings and has secure stable income - PAY OFF THE DARN MORTGAGE. Listen to no one, as they don't care about you and spend not your money. You want your money SAFELY invested, real estate it is. As a side dish, my "investments", what's left of them, as I sold basically all and keep cash in money market, keeping 2 stocks as gauge - lost 21% in the last 2 months and going down.
Remember one thing - NO ONE knows what will happen next. Not a single investment or a country is protected from disappearing. Out of such gloomy thoughts, as Mr Rogers said - put your money into dirt, they don't make it anymore.
Ukrkoz, your post above is quite an accomplishment. There is quite literally zero academic truth in any thing you wrote. One would think by random chance something in that post would be correct, but it isn't the case.
My post is NOT any form of personal attack on you, ukrkoz. I'm not saying anything about you or your belief system; I'm saying every word you wrote is factually incorrect.
Can you cite a single peer-reviewed scholarly academic source that supports any of your claims? If you can, then I'll retract my words.
battery park city in lower manhattan is testimony to that fact . the entire development sits where the water once was as landfill created more land where there was no land , just water ..
there certainly is a lot of mis-facts in that post , i agree with that for sure. this is a case of believing ones own bull to be true .
This is an old out of date myth. When mortgages were well under 4% it made sense to keep that debt and maintain your cash reserve and investments instead. The story changes when rates start to hit and exceed 5%.
It's o.k.
I'm just sitting in my paid off retirement home drinking a landshark laughing at a bunch of CD posters trying to convince everyone how great it is to owe a bank money when in fact it's just the opposite.
University of Michigan Professor H. Nejat Seyhun analyzed 7,802 trading days for the 31 years from 1963 to 1993 and concluded that just 90 days generated 95% of all the years’ market gains — an average of just three days per year.
will you be in our out for them ?
That is why Mr. Seyhun is a college professor and not a billionaire stock fund manager.
I've seen that hocus pocus statistical fiction before. 16 of the 20 biggest upside days have occurred in bear markets and 6 of them 2008-2009. However, the problem is that it presumes you miss *only* the big upside days, neglecting the fact that those upside days were surrounded by many more downside days. So yeah, if you sat out 2008 you might have missed some upside days but you would also have missed many more downside days.
As a recent example, we had a couple of days this last October where the market gained over 500 points in a day. That doesn't change the fact that you would have been better off to have missed October.
so you think timing works for the small investor ? ha ha ha produce one academic study supporting that theory.
while your at it compare morningstars small investor returns with the funds as they track investor money flow . there are near zero funds that have investors not only beating the funds they were in but they clearly under perform the funds they were in .
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