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Old 09-02-2010, 07:17 PM
 
442 posts, read 739,463 times
Reputation: 258

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There is definitely a bubble in Bonds and I'm willing to bet that most of our portfolios are out of balance with too much bond allocation. I recommend Rebalancing if your bond portion increased 5% or more. In other words take the profits and redistribute them else where.

Another Bubble is Gold. Everyone is flocking there as well. Be weary of this one. You know it's time to sell when G. Gordon Liddy is doing Gold commercials on T.V.

and yet another bubble which will not burst but continue to inflate is the cost of College. 10% increase in tuition here in VA...ouch. You might to consider using a prepaid plan vs. dollar cost averaging on this baby.
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Old 09-03-2010, 02:30 AM
 
106,062 posts, read 108,035,793 times
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we like to think of things that went up a lot a bubble but the truth is markets have no memory of what they once were. everyday is a new day with new valuations.

twenty years ago when oil was under 10 bucks and went to 30 bucks we all said what a bubble waiting to burst, boy were we wrong.

gold is up 400% in the last 10 years. we all said gold was a bubble waiting to burst and that was at 475.00 i remember.

the truth is gold may be undervalued at under 2,000 perhaps..

if deflation sets in long term bonds at almost 5% now have plenty of gains left.

the fact is no one knows ...................
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Old 09-03-2010, 02:32 AM
 
106,062 posts, read 108,035,793 times
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i remember saying the same thing when google went from 88.00 bucks to 200... it then went on hundreds of dollars higher....its those that try to time and out guess asset class moves that end up getting those poor small investor returns morningstar tracks..
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Old 09-03-2010, 06:30 PM
 
442 posts, read 739,463 times
Reputation: 258
Default bubble

I define a bubble as when the masses flock to a certain sector. In this case it would be bonds and gold. Some flock out of fear of the stock market and others flock because they are trying to make a quick buck on the way up. Others gravitate toward these asset classes because they are just simply following the herd.

The key to investing is not to get greedy. Sell when the masses are buying and buy when the masses are selling. Easier said then done for the emotionally weak, but if you have made huge profits in these categories pat yourself on the back and take the money off the table.
Rebalancing is key, buy and hold is dead.

Wait somebody just sneezed in China, I better go check my portfolio to see if I need to keep working (ridiculous!). Have a great weekend everyone!!!
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Old 09-03-2010, 06:46 PM
 
1,679 posts, read 3,008,082 times
Reputation: 1296
To the OP's question are we all screwed?

I think in general the old people are the ones with all the money, all the gov't entitlement spending. So as a group they are in the best shape of any demographic.

Right now I wouldn't want to be one of the recent college grads, thousands of debt, little job prospects, no money saved. Please start a thread about how the people in their 20's are screwed.

What we constantly hear, the drum beat of "were doomed" is the crap you see on Inside edition, or the early show. Propaganda to get viewership.

On the early show they had a piece about the chinese taxies that would shuttle people around in NYC, and how DANGEROUS they were. Great reporting folk, like the most important thing is being aware of the dangers of getting shuttled around in a two wheeled cart!

Anything the media can get their hands on they try to scare you with. Retirement is not different. The facts spead much differently.
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Old 09-03-2010, 07:48 PM
 
442 posts, read 739,463 times
Reputation: 258
Default The young are screwed

Good point on the younger generation. I think our kids will have it a lot tougher than previous generations. Tuition just went up 10% in the state of VA. Talk about future debt!!!
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Old 09-04-2010, 06:36 AM
 
2,714 posts, read 5,344,566 times
Reputation: 6213
Quote:
Originally Posted by mathjak107 View Post
its amazing how many folks just have a thing about not wanting to learn or have no interest in learning about investing ,then they loose money and forever sour on the markets and complain how they cant save enough to retire.
I don't think it's a question of not wanting to learn or lack of interest. There are many, many people for whom the stock market consists of rich men in suits wheeling and dealing and making money. Many regular working joes/janes don't view themselves in that sphere.

This is probably a bad analogy but I work in technology. There are certain things that regular non-tech people could do like install RAM and replace a hard drive that fails or even a laptop keyboard.

You can show a person how easy it is to do, demonstrate it in front of them but the operation of their mind says they are unable to do that, they will break it, they don't understand, etc. Do they like paying Staples or Best Buy $150. to do it for them? No, but they do not have it in their head to do it themselves.

Some people do. Some will try a riskier procedure to fix their machine to save the cost of a repair and will deal with the consequences later if they mess up. Others don't have the stomach for it or the comprehension skills to understand how things work. And yes, some are too lazy to exert the effort.

Now, it would be easy for me to say "Oh come on, you're being ridiculous. This is not complicated, you just don't want to know how to do this," but I don't think that's it at all. I've done this before. It's very easy for me. I cannot put myself in the shoes of the person who thinks I am speaking Chinese to them. To suggest they are too lazy or disinterested to understand I just don't think that covers it.

People who have had exposure to the markets and investing through family/friends have something of a leg up as those people will share what they know and the receiver of the information will see the markets as less threatening because after all, their friend Tom the hotel desk guy invests.

I'm not suggesting that people should be lemmings and do everything that Tom does, but if they are in the dark about investing, it's only natural for them to think "Well, Tom knows about investing so I'm going to do exactly what he's doing...." They don't know of another path to take so they follow Tom.

The people earning just enough to pay their monthly bills and put a few dollars away are afraid to part with those few dollars because what if they lose them? Most people that I know don't have a few thousand that they can play with and accept it if they lose it. If someone calls some financial services company and say "I'm new to this and want to invest my piddling amount in the markets" does the person tasked with managing my meager savings really care about me? He's not making anything on me so why would s/he exert much effort when they can try to catch bigger fish?

That leaves the people to manage their own investments and saying that those people are disinterested or lazy for not doing so, to me, is simply not accurate. I've read investing 101 type books and find investing a very complicated maze that if one goes in not knowing where all the corridors lead you could lose your shirt. A lot of people don't have many shirts; losing one of them would be devastating.

Am I sorry that I never invested? I really don't know having never been in, I've never gained or lost so there's nothing to compare. I do know that what little I've managed to save is something I cannot afford to put at risk and be able to sleep at night.
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Old 09-04-2010, 07:29 AM
 
Location: Victoria TX
42,579 posts, read 86,702,293 times
Reputation: 36642
Quote:
Originally Posted by hartford_renter View Post
To the OP's question are we all screwed?

I think in general the old people are the ones with all the money, all the gov't entitlement spending.
Right now I wouldn't want to be one of the recent college grads, thousands of debt, little job prospects, no money saved. Please start a thread about how the people in their 20's are screwed..
Don't you people ever get it? Old people have money because the government took it out of their paychecks and made them save it, and is now giving it back to them. If the government hadn't made them save it, most of them wouldn't have. And then they'd be poor, which is apparently what you want them to be, and think they deserve to be.

Poor young people? You mean the ones who got married and had kids at 19 and have two new cars and a nothing-down mortgage on a nicer house than their parents ever had, and need two dogs and a 54 inch TV and order delivered pizza twice a week, and just don't know how they will ever pay off the student loan that will make it possible to get a job that will pay their entire education costs in no time?

Let's do the math. The average cost of an education at a 4-year in-state public college is $56K. The average income of a worker with a college degree is $49K, and for a worker with HS diploma is $29K. If a college graduate lives like a HS graduate for 3 years, he can pay off his entire cost of education with the differential, and then it's gravy train. Stop crying tears for them.

Last edited by jtur88; 09-04-2010 at 07:59 AM..
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Old 09-04-2010, 07:41 AM
 
106,062 posts, read 108,035,793 times
Reputation: 79633
sorry my friend but everything i got we got on our own.... in fact i wont see a social security check for many years......
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Old 09-04-2010, 07:45 AM
 
106,062 posts, read 108,035,793 times
Reputation: 79633
Quote:
Originally Posted by cleasach View Post
I don't think it's a question of not wanting to learn or lack of interest. There are many, many people for whom the stock market consists of rich men in suits wheeling and dealing and making money. Many regular working joes/janes don't view themselves in that sphere.

This is probably a bad analogy but I work in technology. There are certain things that regular non-tech people could do like install RAM and replace a hard drive that fails or even a laptop keyboard.

You can show a person how easy it is to do, demonstrate it in front of them but the operation of their mind says they are unable to do that, they will break it, they don't understand, etc. Do they like paying Staples or Best Buy $150. to do it for them? No, but they do not have it in their head to do it themselves.

Some people do. Some will try a riskier procedure to fix their machine to save the cost of a repair and will deal with the consequences later if they mess up. Others don't have the stomach for it or the comprehension skills to understand how things work. And yes, some are too lazy to exert the effort.

Now, it would be easy for me to say "Oh come on, you're being ridiculous. This is not complicated, you just don't want to know how to do this," but I don't think that's it at all. I've done this before. It's very easy for me. I cannot put myself in the shoes of the person who thinks I am speaking Chinese to them. To suggest they are too lazy or disinterested to understand I just don't think that covers it.

People who have had exposure to the markets and investing through family/friends have something of a leg up as those people will share what they know and the receiver of the information will see the markets as less threatening because after all, their friend Tom the hotel desk guy invests.

I'm not suggesting that people should be lemmings and do everything that Tom does, but if they are in the dark about investing, it's only natural for them to think "Well, Tom knows about investing so I'm going to do exactly what he's doing...." They don't know of another path to take so they follow Tom.

The people earning just enough to pay their monthly bills and put a few dollars away are afraid to part with those few dollars because what if they lose them? Most people that I know don't have a few thousand that they can play with and accept it if they lose it. If someone calls some financial services company and say "I'm new to this and want to invest my piddling amount in the markets" does the person tasked with managing my meager savings really care about me? He's not making anything on me so why would s/he exert much effort when they can try to catch bigger fish?

That leaves the people to manage their own investments and saying that those people are disinterested or lazy for not doing so, to me, is simply not accurate. I've read investing 101 type books and find investing a very complicated maze that if one goes in not knowing where all the corridors lead you could lose your shirt. A lot of people don't have many shirts; losing one of them would be devastating.

Am I sorry that I never invested? I really don't know having never been in, I've never gained or lost so there's nothing to compare. I do know that what little I've managed to save is something I cannot afford to put at risk and be able to sleep at night.
for 99 bucks i year i subscribed to a news letter devoted to fidelity funds.. they put together some very nice model portfolios you can pick from based on your goals and risk level.

every friday there is a market update and every so ofton a change in a fund and i got to say nothing could be easier and we grew alot of money from it over the decades.

thru crashes,wars and economic disasters since 1987 its grown 1200%.

as much as i learned thru the decades i still utilize them .


investing is as simple or as complex as you want to make it. before i met my wife she knew nothing about anything financial and was put into dot com funds by a guy at the bank...she got killed......

just from us talking and bits and pieces of things i would give her to read she became quite knowledgable.. no one will take advantage of her anymore and she is capable of making all our decions as an equal partner today.
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