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Old 11-14-2009, 06:35 AM
 
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people look at ira and 401k money in a strange way. what i mean is because we are dollar cost averaging in over decades we have newer money and older money.... the older money i myself invested from the 80's is up as much as 1100 % since then . it was up as as much as a whopping 1300% before the drop. that was using a tyipical mix of diversified middle of the road funds, no hot managers or the hottest funds. it could even have been bettered by just using totaly un-managed index funds as well.. the pont is those were just typical long term gains for the last 20 years using diversified funds covering different asset classes .


the newer money i put in hasnt paid its dues yet. it still has years left to the point where market cycles let it grow too... im sure the money i contributed over the last decade will have lots of growth to it in another 5 years or so but it still needs time before i can really see what its doing.


if you just take the entire 401k and ira totals i have the growth looks puny, but most of that consists of newer money since i started maxing out my 401k the last few years so it dilutes the gains of the more mature money at this stage.


the newer money will have its day in the sun too but needs about 12-15 year cycles as well to guarantee those nice juicy gains, hopefully.

equities are a long term investment and as such need long periods of time to go thru market cycles, while 10 years used to be my min time frame 15 years is even better.

any money devoted to equities should not be put in if you need that money sooner.

dont forget even at 62 years old there is money that wont be used to eat until 30 years later and thats still long term money suitable for equities.

im 57 so money i contributed this year into my 401k is money im planning on using 30 years from now even though im retiring in 1-1/2 years..


i have other money set up already in shorter term investments and less riskier for eating right from day 1 of retirement..

its important that you plan accordingly as thats why many retirees got caught up in the drop with money they need to eat with just in the next few years.. thats poor planning

retirements are rarly killed by bad markets, just bad planning.



the other thing is as an example of how we think ; people will buy google at 88 bucks, sell it at 300 and talk about how well they did with google even though it went on after that to 800.00. but if the same person bought it at 88 bucks, held it to 800 and it fell to 300 they would talk about how poorly they did in google. for some reason we all think our bench mark is always the high of something even though its like trying to catch market tops and bottoms something we can never do reliably or even at all.


its very complex to figure out exactly what your 401k or ira's are actually doing. its not just about the statement when figuring long term investments, especially if it has new money in it (less then 12-15 years) that hasnt gone thru a few market cycles.


markets are usually higher highs and higher lows and its these cycles that make things grow for us.

Last edited by mathjak107; 11-14-2009 at 07:00 AM..
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Old 11-14-2009, 08:26 AM
 
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What effect would/will a collapsing dollar have on all that?
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Old 11-14-2009, 10:15 AM
 
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could be good , could be bad... i never predict..... the companies that make up just the s&p 500 get 1/2 their income from sales abroad... weak doller good for them.. 1/3 . ... our bonds and debt become attractive to foreigners... they can get an extra nice boost if they catch their buys and sells right.

Last edited by mathjak107; 11-14-2009 at 10:24 AM..
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Old 11-14-2009, 10:45 AM
 
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Quote:
Originally Posted by mathjak107 View Post
could be good , could be bad... i never predict..... the companies that make up just the s&p 500 get 1/2 their income from sales abroad... weak doller good for them.. 1/3 . ... our bonds and debt become attractive to foreigners... they can get an extra nice boost if they catch their buys and sells right.
Makes no sense, what good are worthless assets and whats good for the S&P is bad for me.
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Old 11-14-2009, 10:49 AM
 
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tell you what you can plan for the sky is falling ,,, the rest of us will take our chances with good ole worthless assets.......
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Old 11-14-2009, 02:59 PM
 
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I am not sure I have the same confidence in the economy, stock market or investing that I had a few years ago. When I look back 5 years or so I see almost no gains except for the money I kept putting in the pot. Clearly the past few months have appeared better than last year, but I still don't see any security or predictability in our economy. Right now I am at about 2/3 equities and 1/3 bonds and cash. I guess I will sit tight for a while. Any substantial drops and I will move towards more equity. Otherwise, I will try to ride it until the DJI reaches about 12000 and then I plan to start rebalancing away from equities.
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Old 11-14-2009, 03:45 PM
 
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its interesting but you can pull any 15 years out at random from most market indexes , either in order or randomly.. no matter what the world events... its spooky how a decade can go buy and theres no gains but go out 14-15 years and the results all average out to within 1% of each other...

its pretty spooky how you really got to work hard to come up with exceptions.... im hoping 100 years of history still plays out the same,,, will it? beats me

I WOULD NEVER ADVOCATE 100% EQUITY


For myself i run 2 different portfolios.

one of them is the 4 asset classes i call my permenant portfolio, the other is the capital preservation and income portfolio from the fidelity insight newsletter. thats about 30-35% equities,,, the rest is extremely diversified including tips, commodities, reits , corporate bonds, floating rate loans and a bunch of other stuff.

but thats why i say be diversified , cover all the asset classes ... there is always a bull market in something. the problem is what was called being diversified was only diversified until it was counted on...then everything crapped out together. werent bonds and stocks supposed to protect us?


as the last 2 years showed us diversification is not buying US stocks, foreign stocks and corporate bonds. what ever was bad for one was bad for them all.


real diversification is placing assets together that work opposite under extreme conditions and can be counted on to do so.

with only 4 asset classes out of the hundreds used by wall st you could be protected under any turnout,.

but most folks dont want something going down in a bull market. they want everything going up so the end result is everything goes down together too

just a total market fund, long term treasuries, cash and a gold bullion fund or gold eagles protect under any condition we can have.

last year while equities plunged 40% that simple mix was up 5%...

over the last 35 years that mix returned an average of 11.2% vs 100% equities which were up 11.8% annual return. but they did it with 75% less swings in value over the course of the years....


as a pre-retiree or a retiree the days of 100% equities are all gone and is not a good idea we would all agree... now its not about growing richer, its about not growing poorer or being devasted by what ever the future brings us.



banks and cd's are a guaranteed loss after taxes and inflation so they by themselves suck as far as allowing us all to take inflation adjusted withdrawls over a life time. so you have to give serious thought about putting together your own diversified portfolio to protect you .... like anything in life do your homework, count on no one, take the time to learn

with most planners and brokers your not a client your a customer. most have their lively hood as their main interest. how you do is not 1st. my own wife before i married her was sold all dot com stocks by the planner at the local bank here. she got devasted... she was a widow for christ sake........

Last edited by mathjak107; 11-14-2009 at 04:34 PM..
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Old 11-15-2009, 09:43 AM
 
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I keep my 403b mostly in stocks because it's not my primary retirement asset- I have an old-fashioned pension that grows at a fixed rate and it getting to a good size (I'm 56). I do put some amount in the 403b every week, because at least I need the tax deduction at present. I haven't maxed it out because I have other debts that matter more, plus I have the pension perking away
The pension is currently 6.5% annually fixed. I heard one younger co-worker scoffing at the piddling interest and talking about stocks getting 30% (not in the last couple of years!)
He also considered an adjustable mortgage "because I can always refinance later." Are people always doomed to repeat the same mistakes? Is it that people really want to believe there's a free lunch?
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Old 11-15-2009, 01:12 PM
 
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they are mosly just ill informed and run on bad info they hear other clueless people spew.
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Old 11-17-2009, 06:54 PM
 
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The one thng to0 remmeebr always is that investment maney means nothing until you actually take it out. Its like so many looked at the value increases of their homes;until you sell it; the value means only that you can borrow against it as assets. But the laons terms stay and the value as seen can go down. That is exactly why so many retiurement plans have forumlas for their pay out.Before the housing collapse there were alot of millionaires on paper with the value of their home as a asset.What the old saying about a dove or bird in hand?
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