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Ah, the ubiquitous "this time is different" syndrome, which somehow has never been seen in the 202 years the stock market has existed.
Please refer to the last part, 'lifetime retirement time horizon'. Over lengthy time horizons, market returns are more likely to resemble historical market returns, but actual retirement time horizons may well not turn out to being that lengthy, thus a shorter actual time horizon. As noted in other posts, there have been periods where returns were marginal for a decade or so. It is only prudent to prepare for this type scenario.
...I have not seen one soothsayer here bet on their own advice by shorting or buying inverse products
Well, there is one gentleman who frequently posts on this site, who disavows index funds as being "boring", and who advocates inverse-products (such as SDOW or HDGE). I wonder about his long-term investment results.
Quote:
Originally Posted by Lizap
...we need to prepare our portfolios for the possibility that the future may not resemble the past, in our retirement life time horizon.
I'm more worried about the possibility that the future will resemble the comparatively distant past, rather than trace some new pattern. By this I mean, broadly, the latter fourth of the 19th century, and the first fourth of the 20th... basically a lifetime for an investor who started just before the crash of 1873, and concluded his/her investing career during the depression (as it was then styled) of 1921.
so somethings never change ... the above is not from december 2018 , some of the above is from 2014 and some from june 2016
the dow ended 2016 at around 19,600 ...we are now at 25,000 after the lows of what was a bear market . ...
gold is about the same as it was in june 2016 ..
so much for soothsayer predictions and short term noise... every market slide brings out the amateur market experts and their predictions of gloom only to have their "i told you so " fade off in to the bad prediction graveyard while they end up poorer for it .
Gold greatly outperformed equities in the 1970s and 2000s. Equities greatly outperformed Gold in the 1980s, 1990s, and 2010s. So will the 2020s be a Gold decade or equities decade?
Location: Was Midvalley Oregon; Now Eastside Seattle area
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Quote:
Originally Posted by leastprime
Bought 100 of QID, Thurs. I am moderately bullish.
I may buy SDOW next week. We'll have a 3 day weekend after Valentines and potential Gov shutdown. Both are very nicely negatively correlated to SP500 and to Dow30.
[It's all in my play trading account. About 90% of current and future Income is already protected. Leaving the 10% as discretionary and of that, only 60% is actively traded by me, 69/72. ]
Gold greatly outperformed equities in the 1970s and 2000s. Equities greatly outperformed Gold in the 1980s, 1990s, and 2010s. So will the 2020s be a Gold decade or equities decade?
Gold was flawed in the 1970’s .. it was artificially constrained and fell in to a situation that will never duplicate so you you can’t really use gold in the 1970’s as a benchmark anymore then you can use the dot coms to represent broad stock market performance .
So gold is more about timing the markets then time in the markets .
But Gold has uses in portfolios where it takes on a different quality ..98% of all down turns gold has held a positive realcreturn while other assets tanked ... that has made portfolio recovery easier and portfolios with gold tend to actually do better over a full cycle ...
Many more defensive portfolios like the golden butterfly,the desert portfolio , the permanent portfolio , the pin wheel portfolio, have actually had better returns and less volatility over far wider ranges of outcomes then a conventional 60/40 has.
I may buy SDOW next week. We'll have a 3 day weekend after Valentines and potential Gov shutdown. Both are very nicely negatively correlated to SP500 and to Dow30.
[It's all in my play trading account. About 90% of current and future Income is already protected. Leaving the 10% as discretionary and of that, only 60% is actively traded by me, 69/72. ]
I added back my gold and tilt positions Friday ... once again I want to hold my equity positions but have fighter cover ... I bounced back a few hundred thousand dollars and I want to protect as much as I can again .. so went to the lower range of my equity holding and traded some conventional bonds and cash holdings for more defensive support assets like gold and long term treasuries .... these are my go to assets when I dont like the smell .... I still have plenty of growth potential but the volatility is tempered..
Last edited by mathjak107; 02-10-2019 at 03:57 AM..
Well, there is one gentleman who frequently posts on this site, who disavows index funds as being "boring", and who advocates inverse-products (such as SDOW or HDGE). I wonder about his long-term investment results.
I'm more worried about the possibility that the future will resemble the comparatively distant past, rather than trace some new pattern. By this I mean, broadly, the latter fourth of the 19th century, and the first fourth of the 20th... basically a lifetime for an investor who started just before the crash of 1873, and concluded his/her investing career during the depression (as it was then styled) of 1921.
The worst groups for retiring going back to 1871 were , 1907 ,1929 , 1937 , 1965 ,1966 ..
Those are the dates the safe withdrawal rate was based on . So we would actually have to do a lot worse and I mean a lot worse to run out of money before our time frame selected .
the reason I say that is even though depending if you used corporate bonds or govt bonds there were 5 failures or so ,in life they would not have actually failed ..
Study after study shows as we age we don’t need as much inflation adjusting every year as these studies assume .. they figure an inflation raise every year .. this is going into our 4th year of retirement and we still have not needed a raise ... as we age we tend to enter the slow go years and we tend to spend less and less doing many things or buying a lot of stuff so what we don’t buy helps cover increases in what we do continue to spend on ..
Then we hit the no go years when we are in our 80’s and healthcare costs kick up so spending rises ..
The combined effect has shown that we actually don’t need inflation adjusting yearly ,plus most of us will not live 30 years in retirement.. so that kicks up success rates even in the worst of times to 100% ...
People don’t spend like robots either .. we have a natural tendency not to spend so freely in down turns like we do when the dough is rolling in .
Could your balance left be less if we have the worst of times vs the best of times ? Sure it can ,, and it can vary greatly but the income you live on should be little effected just as if you had a govt pension..
Last edited by mathjak107; 02-10-2019 at 04:08 AM..
Study after study shows as we age we don’t need as much inflation adjusting every year as these studies assume .. they figure an inflation raise every year .. this is going into our 4th year of retirement and we still have not needed a raise ... as we age we tend to enter the slow go years and we tend to spend less and less doing many things or buying a lot of stuff so what we don’t buy helps cover increases in what we do continue to spend on ............
I have my concerns and doubts about this. I am spending more and more and see nothing but increasing expenses. Perhaps part of it is due to very low expenses my first couple of years of retirement. We sold the house and traveled inexpensively in an RV. We bought a house in 2013 and our expenses jumped: mortgage, taxes, utilities, remodeling, tree removal, new roof. Last year expenses were especially high. Someone hit my truck and totaled it. I cannot complain about the insurance reimbursement but replacing an 8 year old truck was still expensive. The second car died and I replaced that a certified used car coming off lease so that was another major expense. Out of pocket medical and dental continue to increase.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,070 posts, read 7,502,913 times
Reputation: 9796
Guess I am on the wrong side of the statistics
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