Igy, take your meds.
Igy, take your meds.
POTO,
If my state had medical marijuana perhaps I could get a prescription. The stress of the bad market is getting to me.
Igy
Igy, you're stressed because you have a short term view. Instead of trying to micromanage things, turn your back on the day to day fluctuations. Take a longer view and you'll not only be less stressed, you'll be wealthier.
POTO,
But POTO I will be dead in 25 years, what happens if my account goes down 50% right before I retire?
Seriously, I have no quarrel with your view. My comments are all directed toward a balanced approach. The financial media is stocks always, all the time. I originally posted here some ten months ago to provide some balance to the conversation.
I like stocks, I like bonds, I like cash.
Igy
Igy, as you near retirement you change the allocations in your portfolio. Most are not in that position and should be open to more risk. I'm not telling you anything you don't already know.
POTO,
I am closer to your view than you think. But over the short run, valuations are stretched, and the market based on valuation models that are most linked to future performance, indicate a drop in the range of 30-55% from recent highs. So, it would be prudent for most to reduce the stock allocation and wait for more reasonable valuations. I have no quarrel with those that can maintain an allocation and are young enough to come out the other side in a good position. That is all.
Trading next week should be interesting. That is, referring to the short term direction of the market.
Igy
Ghost of Igloi wrote:
Rice,
My argument remains stocks are grossly overvalued as an asset class. We saw a small re-rating of high valuation stocks Friday, again, let me say clearly a small re-rating of high valuation stocks. I have no argument with the buy and hold investors that can maintain their discipline throughout a 50% market decline. If you think that the possibility of suck an outcome is small, think again.
Igy
Are you trying to put words into my mouth?
A big drop is not only possible, it is inevitable. Everyone knows that. What no one knows is when it will happen. That's why the best strategy for the average investor is to sit back and ride along. In the long run you'll end up ahead...well ahead.
By the way, if someone does tell you they know when the drop will occur, run away from them as fast as you can.
Rice,
No, I would not try to put words in your mouth.
Here is an interesting article from Bloomberg:
Igy
Thanks for the link, I guess, but it had nothing to do with what I was talking about.
Rice,
Perhaps this link can sober your view. If not that is fine.
Enjoy the week in the market, buying opportunities will abound.
http://www.hussmanfunds.com/wmc/wmc160208.htm
Igy
Have you read anything I've written? I'm not interested in a sober view. I'm in for the long haul, which is an optimistic view.
Pointing Out the Obvious wrote:
Igy, as you near retirement you change the allocations in your portfolio. Most are not in that position and should be open to more risk. I'm not telling you anything you don't already know.
Fount of the common wisdom. That makes no sense.
If you are nearing retirement and are say, age 62, you have a life expectancy approaching 25 years.
The common wisdom tells us that you should be in the market over the long run. It also tells us 25 years is the long run.
But then it contradicts itself by saying get more conservative as you near retirement.
And guys like POOV repeat it like it makes perfect sense.
Hi, K5! Can you point out where POOV said one should not be in the market over the long run? Thanks!
Where Else wrote:
Fount of the common wisdom. That makes no sense.
Oh, the irony!
Where,
In regards to retirement and investment allocation there is the concept of sequence of risk. In a nutshell, entering retirement in a down market dramatically alters both the withdrawal amount and increases the likelyhood that one will outlive their funds. So to assume you get back to where you were simply by the factor of time is just false. It is all in the math, the retiree is withdrawing money well beyond the negative rate of return. That is why high allocations to stock for a soon to be retiree is so foolish.
Igy
Where,
Mose Milesky has done some work in this area:
http://www.ifid.ca/pdf_newsletters/pfa_2006feb_sequencing.pdf
Igy
Don't feed the troll.
Who's POOV?
Is there a rule against attaching a helium balloon to yourself while running a road race?
Am I living in the twilight zone? The Boston Marathon weather was terrible!
How rare is it to run a sub 5 minute mile AND bench press 225?
Move over Mark Coogan, Rojo and John Kellogg share their 3 favorite mile workouts
Mark Coogan says that if you could only do 3 workouts as a 1500m runner you should do these
Red Bull (who sponsors Mondo) calls Mondo the pole vaulting Usain Bolt. Is that a fair comparison?