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 11-03-2016, 06:12 PM
 
2,443 posts, read 2,069,466 times
Reputation: 5690

Advertisements

Quote:
Originally Posted by mathjak107 View Post
real return is more important than nominal return and cd's and cash spend a lot of times at a loss after inflation and taxes .

a loss in purchasing power over time is no different than a loss in any other investment .

1/3 of the last 45 years have been spent with cash and cd's returning negative real returns without figuring any taxes . more like 40% with taxes
Can you guarantee I will have a safe investment and positive return in 10 years that I can use anytime without taking a loss if I invest in a stocks and bonds?
Reply With Quote Quick reply to this message

 
Old 11-03-2016, 10:57 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,546 posts, read 39,924,861 times
Reputation: 23663
Quote:
Originally Posted by jasperhobbs View Post
Can you guarantee
I will have a safe investment and positive return in 10 years that I can use anytime without taking a loss if I invest in a stocks and bonds?
of course not.

Can you GUARANTEE you will awake tomorrow morning? (much less in 10 yrs).

'life' is a calculated risk, you play the odds, or live with your 'security' and reap the COSTS.

Millions do it and sleep very well at night.


Millions CAN"T sleep if their assets are SITTING / SLEEPING. +/-
Reply With Quote Quick reply to this message
 
Old 11-04-2016, 02:08 AM
 
71,511 posts, read 71,674,131 times
Reputation: 49088
Quote:
Originally Posted by jasperhobbs View Post
Can you guarantee I will have a safe investment and positive return in 10 years that I can use anytime without taking a loss if I invest in a stocks and bonds?
neither has any guarantees . if you lose purchasing power you lose just the same .

but i can guarantee you this , trying to pull 3-1/2 to 4% inflation adjusted income from cd's in retirement will have you running out of money before you run out of time , and that you can take to the bank

10 years is still a short term view for stocks . at one time before the shift in bond rates a 50/50 mix never lost money over any 10 or 20 year period in nominal terms but with rates rising that may not hold true .

so basically there really is nothing guaranteed . i use a very conservative mix (up 4.67%) ytd
Reply With Quote Quick reply to this message
 
Old 11-04-2016, 03:51 AM
 
Location: Durham NC
1,189 posts, read 1,295,771 times
Reputation: 921
I would choose to invest the money in an SP500 fund. There is really no other place for the big money to invest if you think about it and that will put upward pressure on stock prices in the mid to long term.
Reply With Quote Quick reply to this message
 
Old 11-04-2016, 03:58 AM
 
71,511 posts, read 71,674,131 times
Reputation: 49088
but keep in mind the s&p index is getting more and more over valued with every dollar coming in as the same stocks are bought .

if we look at the cape p/e's the p/e on the s&p 500 is pretty high because of indexing . it is around 27 .

but we look at the cape p/e for the entire market using after tax profits , p/e's are around 19 vs a 50 year history of 17 as an average . not very high at all. by comparison using the entire market the dot com and tech bust was in the high 30's around 39

Last edited by mathjak107; 11-04-2016 at 04:10 AM..
Reply With Quote Quick reply to this message
 
Old 11-04-2016, 04:09 AM
 
Location: Central Massachusetts
4,800 posts, read 4,844,519 times
Reputation: 6377
Quote:
Originally Posted by mathjak107 View Post
but keep in mind the s&p index is getting more and more over valued with every dollar coming in as the same stocks are bought .

if we look at p/e's the p/e on the s&p 500 is pretty high because of indexing .

if we look at the p/e for the entire market by the same criteria p/e's are around 19 vs a 50 year history of 17 as an average . not very high at all. by comparison using the entire market the dot com and tech bust was in the high 30's
Totally agree. The S&P 500 covers only 500 companies. There are more than 6k openly traded company securities (stock). The S&P cover some of what is commonly referred to as blue chips. Although their value in a portfolio is important. It is having a broader balanced portfolio that will bring in a better return in the long run. This also needs to include international stocks as well.

In investing in funds though the most important key is to not panic in market swings. Dollar cost averaging will help that. The second most important is to not leave free money on the table. If you are in a company that provides a 401k and also a match at minimum go to the level of the match. The last point I will make is the difference between a 401k and an IRA is huge. With a 401k you have a much larger contribution level of more than 3x. That is huge.
Reply With Quote Quick reply to this message
 
Old 11-04-2016, 04:13 AM
 
71,511 posts, read 71,674,131 times
Reputation: 49088
what scares me about the s&p 500 is dividends were rising at a frantic rate while profits were falling . that is a poor plan .

less and less money was going towards the future of these company's via improved equipment , buying market share , increasing efficiency ,etc . capital spending is way down while and more and more cash flow went in to propping up the share price by increasing payouts while earning were growing less and less .

Quarterly S&P 500 corporate earnings per share have been declining on a year-over-year basis since the fourth quarter of 2014 . over that time dividends went from 1.92% to 2.16% despite the big decline in earnings

Last edited by mathjak107; 11-04-2016 at 04:56 AM..
Reply With Quote Quick reply to this message
 
Old 11-04-2016, 06:01 AM
 
2,443 posts, read 2,069,466 times
Reputation: 5690
Everyone is different but for me personally, I do not want fluctuations with the account I am setting up. I will go with savings account and CD's so I see growth every year until goal is met. Conservative and low returns yes but peace of mind has a value too.

I really do appreciate the input everyone posted.
Reply With Quote Quick reply to this message
 
Old 11-04-2016, 06:42 AM
 
71,511 posts, read 71,674,131 times
Reputation: 49088
just realize you would be making the riskiest bet of all .

fully 1/3 of all time frames the last 45 years had cd's losing money in purchasing power . saving 100k and eventually being able to buy only 50k worth of stuff will be a loss . you need a balance of things working for you .
Reply With Quote Quick reply to this message
 
Old 11-04-2016, 07:35 AM
 
Location: Charleston, SC
1,362 posts, read 765,884 times
Reputation: 2428
The Russell 3000 (RUA) is a good benchmark index for the wider Stock Market. Back on 11/07/2014 it closed at 1206.

Last night it closed at 1231. 24 months and about 500 trading days to gain 25 points and a few bucks in dividends. Throw in a couple of serious downdrafts......and it's easy to see there's risk there too.
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
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