U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 12-26-2015, 01:16 PM
 
29,906 posts, read 34,965,886 times
Reputation: 11807

Advertisements

Quote:
Originally Posted by ohio_peasant View Post
The influence of the S&P 500 can not be overestimated!

The S&P 500 is effectively the benchmark for the totality of all investment, whether we're talking about equities (foreign or domestic, large or small,...), real-estate, pork bellies, gold, fine art or carved seashells. When we think of our cumulative annual return, of how we're doing, of whether we're accumulating sufficient funds for retirement and so forth, the immediate question to ask ourselves, is whether or not we've beaten the S&P 500. If we've done so, then we're heroes. If not, then we're fools. Any investor who systematically beats the S&P500 is doing something right. He/she becomes a precious resource for advice. Any investor who loses to the S&P 500 feels necessity to reevaluate, to assess what's wrong and how to improve.
What about the bond and cash part of our portfolio and year over year. Don't we in down S&P years want a buffer from matching that?
Reply With Quote Quick reply to this message

 
Old 12-26-2015, 02:08 PM
 
Location: Texas
1,976 posts, read 1,383,754 times
Reputation: 6775
Quote:
Originally Posted by ohio_peasant View Post
Most attempts at being svelte and agile are a "loser's game, long-term". A few people on a few occasions will profit handsomely. Most will not. Almost always, whenever we attempt something rapid-fire, which depends on quick reaction and outfoxing the other guy, well, we're the ones who will get outfoxed.

However, there's a large difference between indulging in minor games around the edges, and basing one's entire portfolio on such speculations. Day-trading in $1K increments is no sin, if you're backed by a $4M portfolio in more disciplined investments.

Few here are deprecating gold as a fun and unorthodox vehicle for minor indulgence, or a small portion of one's portfolio that's just sitting there for good measure. But this is very different from betting the preponderance of one's future on gold.

I like gold coins. They're pretty. I wouldn't mind owning a few more. But I wouldn't use them to replace my participation in an S&P500 index fund.




I agree with you that gold coins such as the American Eagle or the Gold Buffalo are beautiful. I like to hold them, feel the weight in my hands and admire the workmanship. They are much like a precision weapon that feels good in your hands. I never look at either of them as an investment, more just the joy of ownership. My wife says I remind her of the character from the Lord of the Rings, the one that says 'My Precious' over and over again.
Reply With Quote Quick reply to this message
 
Old 12-26-2015, 02:08 PM
 
72,186 posts, read 72,150,380 times
Reputation: 49693
bonds and stocks at times move together not opposite . like now , you have both stocks and bond total returns pretty poor . stocks are barely positive and most bond funds are negative or pretty much near zero including interest . . all 4 asset classes , cash , gold ,stocks and bonds stink this year .
Reply With Quote Quick reply to this message
 
Old 12-26-2015, 04:24 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,983,779 times
Reputation: 6724
Quote:
Originally Posted by ohio_peasant View Post
The influence of the S&P 500 can not be overestimated!

The S&P 500 is effectively the benchmark for the totality of all investment, whether we're talking about equities (foreign or domestic, large or small,...), real-estate, pork bellies, gold, fine art or carved seashells. When we think of our cumulative annual return, of how we're doing, of whether we're accumulating sufficient funds for retirement and so forth, the immediate question to ask ourselves, is whether or not we've beaten the S&P 500. If we've done so, then we're heroes. If not, then we're fools. Any investor who systematically beats the S&P500 is doing something right. He/she becomes a precious resource for advice. Any investor who loses to the S&P 500 feels necessity to reevaluate, to assess what's wrong and how to improve.
Not true. Especially when retired and trying to live for the most part on the income from one's portfolio - whether from interest or dividends or both. And not cashing in even modest chunks of principal annually. Which - as we can see from this thread - can be a very difficult thing to calibrate.

Moreover - don't believe everything you read in the papers . A great many people who are talking about doing great with this - or outperforming that - especially on chat boards - are dealing with very small amounts of money. Like what Mathjak107 says he's doing. I suspect his "play portfolio" is in very low 5 figures. Mine is too (to the extent I have one at any point in time). But the returns from that small portion of my portfolio won't even pay my water and power bills - much less everything else - at best.

The new normal today is perhaps 2-4% year returns over the long run - even before taking taxes and inflation in account. Just something a lot of us will have to get used to. Robyn
Reply With Quote Quick reply to this message
 
Old 12-26-2015, 04:33 PM
 
72,186 posts, read 72,150,380 times
Reputation: 49693
Yes my play money is low 5 figures . Ytd i have been up about 40% .

My goal was really just to hope to cover my medical insurance but it panned out a lot better. But this to will come to an end once volatility levels out on the issues i use.

That is about 20x more then my real portfolio was up this year.
Reply With Quote Quick reply to this message
 
Old 12-26-2015, 04:54 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,983,779 times
Reputation: 6724
Quote:
Originally Posted by mathjak107 View Post
bonds and stocks at times move together not opposite . like now , you have both stocks and bond total returns pretty poor . stocks are barely positive and most bond funds are negative or pretty much near zero including interest . . all 4 asset classes , cash , gold ,stocks and bonds stink this year .
Agreed - at least in part. I once developed a multi-variable equities trading system based - in part - on moves in the bond market. It worked for a while - when bonds were going up and stocks were going up - together. Then it stopped working. IOW - sometimes both markets go up together at the same time. At other times they move in opposite directions. And sometimes they just don't have anything to do with one another. Note that I've been looking at these correlations for perhaps 30 years now. Can't say they change day to day - week to week - or month to month - but they do change.

It hasn't been a swell year for most asset classes. But - since my bonds are almost 100% individual issues as opposed to bond mutual funds or ETFs - I have been quite happy.

Just a little FWIW opinions I have. Fidelity - because it has such a vested interest in its mutual funds - offerings - trading fees - and similar - is far from the best when it comes to individual bond offerings - including things like high quality munis and brokered CDs. (OTOH - it does have some good original muni bond offerings - it does some underwriting stuff).

There is no reason IMO that a person with a fair amount of money should have only one brokerage firm. Especially because **** only covers $500k in any brokerage account. If you have over $500k - diversify. I have 3 firms - multiple accounts with multiple layers of SIPC coverage - and learn something from all of them over the course of time. I enjoy seeing what the different trading platforms are like - especially when it comes to fixed income offerings. Robyn
Reply With Quote Quick reply to this message
 
Old 12-26-2015, 05:02 PM
 
72,186 posts, read 72,150,380 times
Reputation: 49693
Fidelity has extended account protection which goes beyond sipc limits. There is no limit on the account balance that is protected.

I would think vanguard does the same .

If fideltity or vanguard failed we would have a lot more then our accounts to worry about.
Reply With Quote Quick reply to this message
 
Old 12-27-2015, 07:21 AM
 
72,186 posts, read 72,150,380 times
Reputation: 49693
to further expand on the coverage at fidelity here are the details :



The SIPC will cover up to $500,000 in securities, including a $250,000 limit for cash held in a brokerage account.
What Fidelity accounts are covered?
All Fidelity brokerage accounts are covered by SIPC. This includes money market funds held in a brokerage account since they are considered securities. Learn more about SIPC coverage at www.sipc.orgOpens in a new window..

Excess of SIPC

In addition to SIPC protection, Fidelity provides its brokerage customers with additional "excess of SIPC" coverage. The excess coverage would only be used when SIPC coverage is exhausted. Like SIPC, excess protection does not cover investment losses in customer accounts due to market fluctuation. It also does not cover other claims for losses incurred while broker-dealers remain in business. For example, fraud claims would not be covered if the brokerage firm was still in operation. Total aggregate excess of SIPC coverage available through Fidelity's excess of SIPC policy is $1 billion. Within Fidelity's excess of SIPC coverage, there is no per customer dollar limit on coverage of securities, but there is a per customer limit of $1.9 million on coverage of cash awaiting investment. This is the maximum excess of SIPC protection currently available in the brokerage industry.
Both SIPC and excess of SIPC coverage is limited to securities held in brokerage positions, including mutual funds if held in your brokerage account and securities held in book entry form.
Investment assets not covered by SIPC
Certain assets are not eligible for SIPC protection. Among the assets typically not eligible for SIPC protection are commodity futures contracts, precious metals, as well as investment contracts (such as limited partnerships), and fixed annuity contracts that are not registered with the U.S. Securities and Exchange Commission under the Securities Act of 1933.
Reply With Quote Quick reply to this message
 
Old 12-27-2015, 02:27 PM
 
8,003 posts, read 5,084,075 times
Reputation: 13702
Quote:
Originally Posted by Robyn55 View Post
The new normal today is perhaps 2-4% year returns over the long run - even before taking taxes and inflation in account. Just something a lot of us will have to get used to. Robyn
This is unnecessarily pessimistic. "Normalcy" over say a 5-year period can indeed be so dour. But over longer times, something has to change. Otherwise the basic model of society and economics would break down, and that would imply greater problems than just our investment returns.

I am reminded (though then I was only a child) of the 1970s' malaise, and predictions of perpetual gloom. Those turned out to be no more prescient than the late-1990s fond belief in perpetual prosperity.

Rather, it seems to me that our present morass is the result of too much nearly uninterrupted prosperity in the 1980s and 1990s. That hangover has to dissipate before we can confidently resume progress. We've had spectacular crashes and booms over the past 15 years, but the secular tendency was stagnation. That may indeed persist for some number of additional years. But it can't persist indefinitely.

Quote:
Originally Posted by Robyn55 View Post
I once developed a multi-variable equities trading system based - in part - on moves in the bond market. It worked for a while - when bonds were going up and stocks were going up - together. Then it stopped working.
The upshot is that it's very difficult to craft an active investment-model that's truly robust. Some models, tuned to the recent past, work spectacularly well as near-term predictors. Then they fail just as spectacularly. Thus the rationale for bovine buy-and-hold.

The alternative is fundamentals-based security analysis. Clearly this works; see for example the darling of the investment-world, Warren Buffett. But it's awfully difficult to do systematically.

Quote:
Originally Posted by Robyn55 View Post
There is no reason IMO that a person with a fair amount of money should have only one brokerage firm.
It's true that none of the retail brokerage firms are good with individual fixed-income holdings, be they bonds or T-bills or whatnot. Every firm of which I'm aware is geared toward mutual funds, index-funds, or some other manner of aggregate of investments. Vanguard can't sell me an individual municipal bond, not because Vanguard can't turn a profit from such an investment, but because they're just not set up to do it.

Nevertheless, there is an advantage to putting all (or most) of one's eggs in one proverbial basket. This allows one to attain a threshold of nominal affluence, at which various perks kick in. It's easier for accounting-purposes. But it does constrain and corral us.... a big disadvantage.

Building on Robyn's comments, I would argue that the biggest problem with the retail investment world today, is not hidden fees or dishonesty or subpar performance, but the steering towards funds vs individual holdings. Bond funds are necessarily volatile, while individual holdings need not be. As customers of retail investment firms, we're completely blind to the latter.
Reply With Quote Quick reply to this message
 
Old 12-27-2015, 02:43 PM
Status: "0-0-2 Game On!" (set 18 days ago)
 
Location: The beautiful Rogue Valley, Oregon
7,339 posts, read 15,405,086 times
Reputation: 9557
Lol, sometimes it is personal. Both my inlaws had accounts with TD Ameritrade and American Century and both firms have been extremely difficult to deal with, as far as paperwork required and medallion signatures, etc. Fidelity, Everbank, Vanguard, Oppenheimer - we're done with the paperwork and accounts have been transferred. TDA and Am Cent we aren't even done with paperwork yet. You'd think no one that held an account there had ever died, given how complicated they make the paperwork - and there is no real differences in how the funds are held at any of the brokerages or the type of investments, it is just TDA and Am Cent being difficult.

So, as a consequence, I am not opening accounts as TDA or American Century (Vanguard, either, but that has more to do with my convenience than anything else).

I really liked the way we just went into the Cherry Creek (Denver, CO) Fidelity office, told them what we wanted, showed them our end of the paperwork and THEIR rep sat on hold with their main office while we sat in the conference room, drank coffee and read the newspapers. The paperwork was done in a day.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top