Flagpole - Do you think the market will ALWAYS go up in the long term? I don't. I actually think we will see the market hit a peak sometime in our lifetimes (depending on how old you are).
Flagpole - Do you think the market will ALWAYS go up in the long term? I don't. I actually think we will see the market hit a peak sometime in our lifetimes (depending on how old you are).
I would not invest in the stock market for a paltry 5.88% return over 25 years. Why don't i just invest in some relatively safe bonds and avoid the roller coaster.
UsedToBeKnowItAll wrote:
Flagpole - Do you think the market will ALWAYS go up in the long term? I don't. I actually think we will see the market hit a peak sometime in our lifetimes (depending on how old you are).
Yes I do. When you look at the market from 1928-2007 and of 76 5-year periods, 71 of them were positive, there just isn't anything else that is like that. Of course the past doesn't dictate for sure what will happen in the future, but there just is no compelling reason to believe it's the end of equities. Stocks were supposed to be dead in 1978, and then again in 1987 and 1992 and 2002 and then now of course. I just don't believe it.
Come To Papa wrote:
I would not invest in the stock market for a paltry 5.88% return over 25 years. Why don't i just invest in some relatively safe bonds and avoid the roller coaster.
That was a worst-case scenario, and 5.88% annually is still better than you'd get with bonds over that time period.
The roller coaster though isn't for the faint hearted or for people who NEED big gains to fund their lavish lifestyles. If you can't handle the ups and downs then maybe bonds are for you. Not me. I can stomach some risk.
There is room for plenty more runners in the game.
You can trade stocks, and also mutual funds.
http://vse.marketwatch.com/Game/GameOverview.aspx?id=gains4runners
Sweet - I look forward to losing fake money instead of real money in the market.
Hey flagpole, can you give me some investment advice? My current plan is to wait for you to retire and then rob you.
I was listening to a fund manager this morning on CNBC and he said at 6% returns in 10 years we still wouldn't be back to even. In 10 years I'll be 65. I've been reading alot about the depression and there similarities that are hard to ignore. I hung on to some cash and for now I'm staying pat simply because I'm very unsure.
retirer wrote:
Hey flagpole, can you give me some investment advice? My current plan is to wait for you to retire and then rob you.
That's a really bad strategy:
1) I don't carry cash. I use a debit card or credit card.
2) My house isn't filled with expensive things and never will be. I'll use my money in the future for living expenses and travel -- not things that can be "robbed".
3) I have a large dog and likely always will.
4) I have huge biceps and likely always will.
Top Cat wrote:
I was listening to a fund manager this morning on CNBC and he said at 6% returns in 10 years we still wouldn't be back to even. In 10 years I'll be 65. I've been reading alot about the depression and there similarities that are hard to ignore. I hung on to some cash and for now I'm staying pat simply because I'm very unsure.
Let's see...
Now - 7182
Year 1 - 7612.92
Year 2 - 8069.69
Year 3 - 8553.87
Year 4 - 9067.10
Year 5 - 9611.13
Year 6 - 10187.79
Year 7 - 10799.065
Year 8 - 11447.00
Year 9 - 12133.83
Year 10 - 12861.85
Well, that fund manager is correct that we won't be back up to a DOW of 14,100, but is that really even? I didn't buy all my stock with the DOW at 14,100, and in fact with the way the purchases went I never bought anything when it was above 14,000. Since October 2007 when the DOW hit 14,100, it has AVERAGED 10,350 (and that average just drops the longer the DOW stays low). So, if you were in the whole time, you only need for the DOW to get back to 10,350 in order for the DOW to break even during this bad time. If you bought stock for years before it SPIKED up to 14,100, then you are already ahead of the game. I'm WAY above even compared to what I've put in -- you likely are too since you are older than me (unless you started investing much later).
Some points:
1) Since you are 55, you have more immediate decisions to make than I do. Do you go with mostly safer investments now or not? Depends on how much you have, how much you're willing to risk, and how much you think you'll need in 10 more years when you want to retire. I'm just 42 and don't need to make teh decisions you need to make now.
2) It is highly unlikely that this bad time will continue for 10 years -- probably half that or even less than half. Typically after recessions the market recovers a LOT initially (29%+ in 2003 for example). A big year or two or even more is very possible following this horrible economic time, and likely well within the next 10 years. Jeremy Grantham has predicted the next 5-7 years will be a big up time for stocks. I think he's got a good chance at being right about that.
Just things to consider. I'm not telling you to stay in stocks or even hoping you do. Good luck brother.
Your wealth is in the digital world. Hack, hack, hack.
Live the day flagpole.
Yes. I'm probably above what I put in but it is distressing to see it drop so much so fast. I mostly have mutual funds but 1 bank stock that I have been buying for 15 years is now less than $1 and I lost alot there and it isn't coming back. It's gone. I'm pissed about that one.
Top Cat wrote:
Yes. I'm probably above what I put in but it is distressing to see it drop so much so fast. I mostly have mutual funds but 1 bank stock that I have been buying for 15 years is now less than $1 and I lost alot there and it isn't coming back. It's gone. I'm pissed about that one.
Hang in there brother! You've still got 10 years to go until retirement. Lots of things could happen between now and then, both good and bad.
Most people have lost a ton on a single stock somewhere along the line. In a former company I worked for, they matched our 401k in company stock (no other option), so eventually I had quite a stash of company stock. Well, that was during the Dot Com bust, and it was a tech company -- the stock went from 32 to under a dollar and then the company was sold. I got a big bunch of nothing -- one of the reasons I will never own a single stock (if under my power) again.
More bad new today:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJsot7dyr5kQ&refer=home
Futures are down over 2% on this news.
FP, I still say cash is king.
PaavoNW wrote:
"If professional mutual fund managers, say, with 40 years of experience and a near infinate amount of information more than you aren't able to beat the market on a consistent basis, how are you planning to?"
They may have more money than I do, but that their greatest asset is also one of their greatest weaknesses. It is much easier to score outsized returns on a small, personal portfolio than with a multi-billion dollar hedge fund.
I would recommend that you read Peter Lynch's "Beating the Street". He has a chapter (it might even be the first one) called The Miracle of St. Agnes. He describes how a group of 7th grade inner city children ran a portfolio as part of a learning experiment. They invested in simple things that they knew about (Nike, McDonalds, etc.). They ended up beating professional equity fund managers by a large margin. Not only that, but they replicated this strategy for years on end, just to prove it was not fluke.
Also, I didn't say that I was aiming to beat equity fund managers at their own game, though I am confident that I could. I simply stated that I was planning on beating the major stock market indices (DJIA, S&P, etc.)
Well, if you beat the market indices, you easily beat equity fund managers, as the vast majority don't even come close to beating the indices on a regular basis.
Good luck kid, I think you have a lot more learning to do.
Looks like sub-7k today.
My heavy plays in GM and BAC not looking so good today!
Well then Flagpole can rest easy that we have not missed the bottom of the market
I'm not saying try to time the market. I'm saying read the writing on the wall and step aside.
People like you have been conditioned by wall street to think that it's ok to lose money because everyone else is. Well it isn't ok to lose money and it is going to take a LONG time to get back to where you were in 2007. I don't know what your holdings are but I bet that if you just held them you wouldn't see your 2007 account high water mark in the next decade.
Cash is a position too.
Cash is the only position, unless you are short. The market multiple is still way too high given the confluence of events, including a further erosion in earnings and a president and Congress who utterly fail to realize that US paper is sub-prime and the country is going to suffer the same fate as Pelosi's California. We needed to elect a real fiscal conservative in the wake of Bush, not a redistributionist, economically illiterate, huge spending liberal. Of course, the market is and will continue to poignantly let you know this.