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MJ - did you hear or read Icahn today? I posted upthread on that. As you've been saying, it's all about leverage - and Icahn thinks the levered ETF's are the next CDO's. What a horrible thought.
MJ - did you hear or read Icahn today? I posted upthread on that. As you've been saying, it's all about leverage - and Icahn thinks the levered ETF's are the next CDO's. What a horrible thought.
i have been stating the over leverage as my biggest worry for quite a while here . everyone is debating valuations and i am like you are looking at the wrong thing .
this excessive leverage from non volatile markets had to shake out at the first spook as soon as someone sneezed .
you had all these here debating whether markets were high or not . you had those who told me i was chicken for sliding down to 40% from 50% and leaving money on the table . but it was so obvious what had to happen .
you had those who swore they could always see signs first and they would have time to reap more gains and get out .
to them i said good luck . but this leverage thing spooked me , i would never play the game of all in or all out but i did see cutting back to what is still an adequate equity level but a bit more prudent , because it was going to be fast and furious as selling breeded more selling .
now i got to put a few hundred k back in and am actually a head of where i would have been had i tried to grab every penny by over staying what i felt was prudent
Last edited by mathjak107; 02-06-2018 at 02:37 PM..
Wild ride indeed. I missed out. As I mentioned earlier, way back when I transferred jobs (and my 401k) I took some financial advice and got an IRA annuity. It was bad advice, especially at my age. I trusted the planner because he advises a few people in my family and they seem to trust him.
Anyway, I want out of the annuity, but there is a 10% penalty for doing so. If I liquidate, I am going to lose $7k. Luckily, it I transfer it in to my IRA mutual fund, I pay no tax since it's going from one retirement account to another. The market has done nothing but gone up and I've been waiting for a correction or such before liquidating. I've kind of been kicking myself too because if I liquidated it a year and a half ago when I first wanted to, I would have "made up" the losses in the market. But I couldn't predict what the future held, it had been a bull market for years, and I decided I didn't want to act emotionally at the time and would wait for a "good time" (correction) to liquidate.
I have the paperwork filled out and am ready to send it to my broker today. I am just wondering if this is a long-term thing or a little hiccup. I've pulled non-penalty money out of the annuity before to put in my IRA brokerage account and I know it takes a few days for the whole thing to get processed. So even if I send the paperwork at the brokerage today, I won't be able to buy until next week. So if this is short term and things continue to recover, I lost out.
But even if it does recover and I miss out, maybe it's better to lose that $7k now than to lose more future gains. Maybe trying to wait for a correction is a mistake too.
I hate this stupid annuity and I hate myself for being so stupid as to get it. I will never, ever use a financial adviser again without fully understanding everything (I have a distrust of advisors in general now). And if I don't understand something, I won't invest in it. My mistake was trusting the guy blindly and not being educated enough (that's on me, I made that decision). But I am still mad and think he's just as at fault for purposely misleading me to profit himself (that's on him).
Maybe I don't really belong on this thread (as I am not really an investor; I made my $ by the old-fashioned method of earning $ by working), but I am very much an annuity person, and am wondering why are people so anti-annuity. I am close to 58, have a number of annuities of various kinds (mostly fixed deferred, limited-term or life, but all of them fixed, ie, not variable inflation-adjusted). All of them are from insurance companies that have been around for three generations at least, and never defaulted on annuity payments. Some of them are paying out already (I get $3,400 from annuities per month, although I still work part time). I have paid roughly $900,000 in premiums over the years for the annuities that will pay out roughly $1,600,000 over 25 years, between my age of 55 and 79. After that, two deferred annuities kick in (for which I paid less than $200,000 total in premiums), such that (along with two small life annuities that start earlier), I will get $8,000 per month for life starting at 80, increased to $10,000 per month for life starting at 85. One side of my family routinely lives into late 90s. Considering that I do not have to do anything about these funds (they are paying predictably and never fluctuating), which frees up my time to either earn other money or do whatever else I want, these annuities seem to me like a totally decent financial deal. I do have other assets (very little in stock market,though), ie, annuities are only about half of my assets, but annuities provide my ordinary daily spending money, and I have been very happy with them (the very first one actually started paying $900 per month when I was 45, for small regular monthly expenses), ie, has been paying out for 13 years already, every month without fail, and will continue doing so until I die. It is a great feeling to have that, and I don't get it why would anyone of retirement age want to sell an annuity in order to go into stock market. I should say that I don't have any heirs that I care much about; maybe it would be different if I had to leave an estate.
"The termination risk for XIV appears to be limited to market crashes worse than the Flash crash. Two examples that come to mind are the 2009 crash and the October 1987 crash."
Ponder that.
non factor. My gut says we are not out of the woods yet though. The volatility will continue for a week or so.
MJ - did you hear or read Icahn today? I posted upthread on that. As you've been saying, it's all about leverage - and Icahn thinks the levered ETF's are the next CDO's. What a horrible thought.
Part of the CDO issue both CDOs and synthetic cdos was counterparty risk that same issue doesn’t exist within the leveraged ETF space
Maybe I don't really belong on this thread (as I am not really an investor; I made my $ by the old-fashioned method of earning $ by working), but I am very much an annuity person, and am wondering why are people so anti-annuity. I am close to 58, have a number of annuities of various kinds (mostly fixed deferred, limited-term or life, but all of them fixed, ie, not variable inflation-adjusted). All of them are from insurance companies that have been around for three generations at least, and never defaulted on annuity payments. Some of them are paying out already (I get $3,400 from annuities per month, although I still work part time). I have paid roughly $900,000 in premiums over the years for the annuities that will pay out roughly $1,600,000 over 25 years, between my age of 55 and 79. After that, two deferred annuities kick in (for which I paid less than $200,000 total in premiums), such that (along with two small life annuities that start earlier), I will get $8,000 per month for life starting at 80, increased to $10,000 per month for life starting at 85. One side of my family routinely lives into late 90s. Considering that I do not have to do anything about these funds (they are paying predictably and never fluctuating), which frees up my time to either earn other money or do whatever else I want, these annuities seem to me like a totally decent financial deal. I do have other assets (very little in stock market,though), ie, annuities are only about half of my assets, but annuities provide my ordinary daily spending money, and I have been very happy with them (the very first one actually started paying $900 per month when I was 45, for small regular monthly expenses), ie, has been paying out for 13 years already, every month without fail, and will continue doing so until I die. It is a great feeling to have that, and I don't get it why would anyone of retirement age want to sell an annuity in order to go into stock market. I should say that I don't have any heirs that I care much about; maybe it would be different if I had to leave an estate.
Immediate fixed annuities will play a huge role in our retirement plan. We want to annuitize 50-75% of our retirement assets, enough to cover our living expenses and provide a cushion. It is a wonderful feeling not having to worry about where the market is going. We currently have 74% of our pre-retirement porfolio in fixed accounts (through our employer) paying 3-4%. At this rate, we will have more income than needed when we retire in 3-5 years. So no need to take extra risks. When I was younger, I made substantial money by investing in the market. Now, the time has come when we no longer have to take unnecessary risk.
In all honesty I was expecting a correction of 10% or higher due to how swiftly things have been going up. It could still happen. For the sake of those who are heavily invested in the stock market, hopefully this is the worse. Stay tuned.
What a wild ride today. After hours are looking good. Let’s see what tomorrow brings.
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