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Not all , but I've noticed that the overwhelming majority of financial blogs and articles on retirement and investing seem to always really harp on the dangers of stocks? Yes, there is inherent risk, but then if you pull back the curtain more on the bloggers they are usually financial advisors/planners that have a slant towards products like annuities, active management, etc I'm not saying to always have all your money in stocks, but just beware of the ongoing "look what happened in 2008" narrative that permeates these writings and plays on fear.
That the overwhelming majority of financial blogs and articles on retirement and investing seem to always really harp on the dangers of stocks?
No, I haven't noticed that. I must be reading different blogs and articles than you are. The ones I read stress the importance of a diversified portfolio which includes stocks (generally in the form of indexed funds).
You can have money in stocks.... but starting at about 15 years before you retire you need to start moving out. A serious down turn which destroys capital will not have enough time to come back.
I have friend who have not retired now, who are in their late 60’s because they were sitting pretty for a fab retirement but failed to follow that rule. When the market collapsed in the period of 2006-2010, they lost 1/2 to 2/3 of their nest egg. And so retiring at 62 became impossible. Retiring at even 70 is still impossible.
If when they were 50, they started moving into accounts, which though the income was much lower, but stable, they would be retiring now, or when I did at 62.
Its easy to say that the market will come back. Yes it will, but if you are needing the funds, then it may not come back FOR YOU in time.
The financial services industry is an industry - not a charity. It behooves the industry to exhort people to save more (a good thing), and then to hand their money over to a professional (not such a good thing).
After all, how would the roofing industry fare, if their message was for homeowners to clean their gutters (a good thing), but then to patch worn shingles themselves, instead of hiring professional roofers?
The ideal message from the industry's viewpoint is therefore "stocks are necessary, but scary". Thus, all the more necessity for professional management (and fees!).
Quote:
Originally Posted by slyfox2
You can have money in stocks.... but starting at about 15 years before you retire you need to start moving out. A serious down turn which destroys capital will not have enough time to come back.
I have friend who have not retired now, who are in their late 60’s because they were sitting pretty for a fab retirement but failed to follow that rule. When the market collapsed in the period of 2006-2010, they lost 1/2 to 2/3 of their nest egg. And so retiring at 62 became impossible. Retiring at even 70 is still impossible.
If these friends of yours simply did nothing, then by now their portfolios would have more than recovered. The "get out of stocks at the threshold of retirement" nostrum has been thoroughly debunked, by posters more experienced than me (and thus, there's no need to rehash the subject). What IS however definitely operative, is the psychology of the situation. When one has amassed a large portfolio, relative to one's income, then any decline is going to emotionally sting, and something like the 2007-2009 decline will be exasperating. The long-term harm isn't to one's portfolio, but to one's emotional well-being.
> the overwhelming majority of financial blogs and articles on retirement and investing seem to always really harp on the dangers of stocks
No, I haven't noticed this at all.
I HAVE noticed considerable discussion of the appropriate balance between stocks and bonds in a portfolio.
Maybe you have been reading stuff from people who want to sell variable annuities to "protect" you from fluctuations in the stock market? Consider avoiding these people.
Not all , but I've noticed that the overwhelming majority of financial blogs and articles on retirement and investing seem to always really harp on the dangers of stocks? Yes, there is inherent risk, but then if you pull back the curtain more on the bloggers they are usually financial advisors/planners that have a slant towards products like annuities, active management, etc I'm not saying to always have all your money in stocks, but just beware of the ongoing "look what happened in 2008" narrative that permeates these writings and plays on fear.
You are probably reading or hearing from folks with something to sell you something other than stocks
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