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I will be 59 in June and looking at my stock portfolio. I have most of my money here. I was down 48% at one time, but it has struggled back to down 27% I was down just 23% before the banks took another tumble this week.
My thought is this. We may have a temporary bounce-back as a result of the government stimulus, but then a serious bout of inflation will once again drag things down. I am optimistic shorter term and pessimistic longer term. I am thinking of just bailing out of the stocks if I get to between 10-15% loss. That is achievable if the banks improve--I have alot of financial stocks. I just don't have the stomach for another ride like this one. I would rather take the loss and lick my wounds while lowering my standard of living in retirement a bit by going into safer investments.
How many of you are in my boat? Willing to take a loss but waiting for that bump up in the next year or two? Am I being greedy in waiting for the 10-15 loss? How many of you would bail out of stocks if you were down let us say 20% I have 80% of my money in stocks. Way too much for a man my age. I know, I was stupid, but my broker convinced me that only stock would offer me the returns I needed in retirement. Maybe he is right, but I can't stand another major bust like this one. I got acid reflux and facial numbness out of this--but I am slightly on the mend, now. Enough said. Any observations and advice? I would put this in the finance forum, but I want to hear from those in or close to retirement. Thanks and God Bless.
Just wanted to say I have had a complete scan of my head-brain and my numbness is not related to any tumors or anything. But I have had stress and grind my teeth sometimes. Doctor said I had massive jaw muscles from clenching my teeth when nervous over the years. Anyways, do help me with the decision as when to sell those stocks.
Best time? 18 mos. ago m/l depending on the individual stock.
At this point, sell on the rallies - but they can be very short lived.
Invest in tangibles.
If you can find them.
Retirement? I am just planning on working less when I have to.
I can see no time that I will not have to produce income.
I am at 52, and have NO faith that the stock market will
recover. I also have NO faith that real estate will improve.
We should also expect a cutback in all human services due
to the decession, and not depend on government help.
It will be tough soon if it is not already.
Then it will get Much Tougher.
I manage my money myself with Vanguard. I moved money from heavy stock to money market and bonds (GNMA) and some stock in all in one life strategy funds. Through all this I did lose money 10% but some has come back. I'm 61 so I had to get a little more conservative to protect what I had.
Just by the seat of my pants, I made money (alot) between 2004-2006 being in a REIT, but it scared me (good thing) and I closed it out and put it in this life strategy fund! I can't tell you why I got out of the REIT but oh my gosh good thing I did. Vanguard's REIT is down alot!
I guess I consider myself lucky to be down less than 10% and I'm just staying put with what I have.
Why would you want to get out of stock at or near the bottom unless you thnik their going down further. That time IMO has passed.At your age having much more than 20% in stock is alot.No one can tell you the future or how long before they go back up on a real rally;so its your call.If you do you need to look at the stocks on that day yopu own and then call and sell.Then know waht you want to chnge to. Don't rely on some report from the broker in this market that rises and falls.Good luck.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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If you are only down 27% and holding lots of financials, you are in pretty good shape (If you have quality holdings). While they got hammered, I have this sneaking hunch they will come out rosy, especially while they are borrowing at 0.5% and lending at 6-8%. They also have friends in high places. I would hang tough, sell on strength if you need some spending money. I too don't think we've seen the bottom, but quality financials may have scraped theirs. Many were down well over 50%. I will guess big oil stands to come out rosy too. They are banking some serious green by building inventory at low prices and still selling for plenty of profit. (Have you seen petro products decline by anywhere near the amount crude did?) We are in 'ratchet mode' (Increasing costs for same products), but... we certainly haven't even seen the beginning of that.
its not the holding or percentage of stocks thats the problem,. its bad planning... i had wrote this once before in a previous discussion but it bears repeating:
i find it interesting about all the comments about how the downturn destroyed alot of retirement plans and it seems to me most were destroyed by not the down turn but a lack of having a fully functional plan..
by that i mean down cycles are always part of the business cycle and yet we forget that good planning allows for these downturns and having a plan dosnt mean just throwing all kinds of money into a mix of funds in our 401k and keeping our fingers crossed.
as we get closer to retirement the rules of the game are changing. no longer is it about getting richer but its now about not getting poorer. not poorer by inflation,not by over-withdrawing more money then we can afford to in retirement or by selling stock to live on in down markets
i use a nifty little system based on ray lucias buckets,... although im 56 and my wife is 58 we started our planning 2 years ago for the final decent into retirement land hoping to retire early in 2 to 3 years.
we pretend we are retired , we set up a 3 bucket system that protects our plans for a good 15 years out. why 15 years? because the odds of being down in any 15 year period are about 3% or less
bucket 1 gets 7 years worth of withdrawls in safe money, banks,cd,money markets
bucket 2 gets 7 years worth of withdrawls in relatively safe money .
bonds,bond funds,un-traded reits
bucket 3 is still invested like we are 30... equity funds,stocks,reits,commodities etc...this is our growing bucket..
we can go 15 years before selling or worrying what the markets are doing..15 years ago we crossed 4,000 ...today we all are freaking at 8-9,000.
of course you dont have to wait to refill your buckets, anytime the markets are up refill 1 &2.. its not timing the markets that make money, its time in the markets ... the buckets are rebalanced not on what the markets are doing but rather on how you are doing and whether buckets 1 and 2 need money when the markets are up.
thanks to some careful planning although we are down 6 figures we can still sleep at night and all our plans remain unscathed....
please, everyone , review your plans early and dont try to rule out bad markets, plan and allow for them... it takes alot more creativity then just throwing money into funds to have your plans stay on track. you should put as much thought into your planning as you do buying a refrigerator or a car.
no matter what age you are there is always money thats long term, its not going to be used to eat for 15-30 years out, thats true even if your retired..that money needs to grow long term the same as if your 20 years old even if your 65.... the percentage of stock is really based on your withdrawls.... i hold 15 years of safe withdrawls in buckets 1 and 2 , that still leaves almost 45% in equities.
again we are talking years of with drawls not years of money to live on. its all based on your own nest eggs.... its based on the amount you would pull from your own savings... alot of people get confused because they see 15 years of money and go who has that kind of dough?... again its 15 years of withdrawls from your own nest egg amounts.
Last edited by mathjak107; 04-23-2009 at 02:39 AM..
You are very wise. To plan for stock market downturns is the wise thing to do.
I do something similar. I will be retiring on June 1st. This is my strategy:
1- Go into retirement with as little debts as possible. I only owe money in my mortgage.
2- Move to a state friendly with taxes and seniors. We will be moving out of NJ to SC.
3- Sell the house in NJ and buy cash in SC.
4- Live on SS (mine and my wife's) and pension (I was lucky to get one).
5- Work part time to keep sanity and to make sure my wife does not divorce me, which will happen if I stay home.
6- Do not plan to take out from 401k or IRAs unless I have to; maybe a little to travel or to pay for nursing home insurance.
7- If I need additional (beyond SS and pension), do it the following way:
a- From Cash (CDs) first,
b- From Bonds next,
c- From Roth IRAs third,
d- From Regula IRAs and 401k when I am forced to do it at 70 1/2; I am 66 now,
e- What little I have in plain stocks will leave them there 'til the time the market recovers or else leave them for my grandchildren's college.
Hopefully this strategy should provide to the time they burry me and my wife.
I take it that item b is the equivalent of you 1st. bucket with item c your second and items c and d your third.
its not the holding or percentage of stocks thats the problem,. its bad planning... i had wrote this once before in a previous discussion but it bears repeating:
i find it interesting about all the comments about how the downturn destroyed alot of retirement plans and it seems to me most were destroyed by not the down turn but a lack of having a fully functional plan..
by that i mean down cycles are always part of the business cycle and yet we forget that good planning allows for these downturns and having a plan dosnt mean just throwing all kinds of money into a mix of funds in our 401k and keeping our fingers crossed.
as we get closer to retirement the rules of the game are changing. no longer is it about getting richer but its now about not getting poorer. not poorer by inflation,not by over-withdrawing more money then we can afford to in retirement or by selling stock to live on in down markets
i use a nifty little system based on ray lucias buckets,... although im 56 and my wife is 58 we started our planning 2 years ago for the final decent into retirement land hoping to retire early in 2 to 3 years.
we pretend we are retired , we set up a 3 bucket system that protects our plans for a good 15 years out. why 15 years? because the odds of being down in any 15 year period are about 3% or less
bucket 1 gets 7 years worth of withdrawls in safe money, banks,cd,money markets
bucket 2 gets 7 years worth of withdrawls in relatively safe money .
bonds,bond funds,un-traded reits
bucket 3 is still invested like we are 30... equity funds,stocks,reits,commodities etc...this is our growing bucket..
we can go 15 years before selling or worrying what the markets are doing..15 years ago we crossed 4,000 ...today we all are freaking at 8-9,000.
of course you dont have to wait to refill your buckets, anytime the markets are up refill 1 &2.. its not timing the markets that make money, its time in the markets ... the buckets are rebalanced not on what the markets are doing but rather on how you are doing and whether buckets 1 and 2 need money when the markets are up.
thanks to some careful planning although we are down 6 figures we can still sleep at night and all our plans remain unscathed....
please, everyone , review your plans early and dont try to rule out bad markets, plan and allow for them... it takes alot more creativity then just throwing money into funds to have your plans stay on track. you should put as much thought into your planning as you do buying a refrigerator or a car.
no matter what age you are there is always money thats long term, its not going to be used to eat for 15-30 years out, thats true even if your retired..that money needs to grow long term the same as if your 20 years old even if your 65.... the percentage of stock is really based on your withdrawls.... i hold 15 years of safe withdrawls in buckets 1 and 2 , that still leaves almost 45% in equities.
again we are talking years of with drawls not years of money to live on. its all based on your own nest eggs.... its based on the amount you would pull from your own savings... alot of people get confused because they see 15 years of money and go who has that kind of dough?... again its 15 years of withdrawls from your own nest egg amounts.
Yeah, yeah, yeah you have written it before and I have agreed before. I have written it before and others have agreed before. Remember the horse and the water. Our bucket one hasn't lost a cent and we have 10 years before we need buckets two and three and will need to begin drawing it down then. When you hit the magical age that you have to begin drawing down you should still have three buckets to drawn down from. Having a balanced fund is not the same as your assets are mixed and you can't selectively draw down. Keep posting I am sure many are listening but I can tell you that people want to do it the wrong way some times.
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No need to comment medical condition.
