RE: The Stock Market Has Officially Entered Crazytown Territory

What other profession can you name that, on average, produces worse results than you could get on your own?

.

to answer this: newspaper delivery, maid, teacher, garbage man, factory worker, middle manager...any number of jobs.

I'm a smart, hard working guy - I am confident that I could be a much better teacher of my child than his public school teachers. But I don't have the time, energy or will to do it.

I could probably change my oil myself really well. Not interested though.

If someone wants to spend the time and energy to learn to be a money manager - they can do my job well. THEY DON'T WANT TO.

false economy wrote:

I would laugh my *ss off if the stock market completely collapsed.

All those stock traders, insurance agents, bankers, etc who don't do any real work, looking down upon me when I come home from a 12 hour day at the factory.

That would wipeout the life savings of the majority of their Americans and cause many to lose their jobs and homes.

The California Public Employees' Retirement System lost $22 billion when the Nasdaq bubble burst.

Bankers themselves WOULD NOT lose significant money if the stock market tanks, as they hedge against the market falling and most investment bank profit comes from program, and commission based trading.

The more volatility there is, in either direction, the more they make.

Goldman made $4 billion in profits from the sub-prime market collapse.

I don't invest in stocks directly. I'm not after short-term profits. I put 14% of my salary in to a 401K and 20% goes to pay off my mortgage.

Would you really be happy for me and millions of other Americans to spend our retirements fighting poverty.

false economy wrote:

I would laugh my *ss off if the stock market completely collapsed.

All those stock traders, insurance agents, bankers, etc who don't do any real work, looking down upon me when I come home from a 12 hour day at the factory.

I could survive in the wild for years.

They couldn't survive without their TV remote.

That's a really short-sighted way to look at this. It's easy to laugh at the Goldman employee who didn't get a huge bonus or something- but a good chunk of the money in the market comes from people like you who are trying to save for retirement.

If the stock market "completely collapsed," a lot of decent, hardworking, thrifty Americans would suffer poverty in their old ages. I don't feel so strongly about "sticking it" to bankers that I want my mother's 401k to be worthless.

I think that what he meant to say was that he really enjoys saying stupid things.

People are far better off managing their own funds than allowing an investment "advisor" to stick his hand in their pockets.

K5 wrote:

People are far better off managing their own funds than allowing an investment "advisor" to stick his hand in their pockets.

If you mean that all people, including the majority who do not have the time or inclination to devote to financial matters, would be better off without an investment advisor then you are willfully ignorant. Not an attractive characteristic.

History has shown that to be false. Yes the basics of investing for pretty much anyone can be drawn on a cocktail napkin (something like 50% s&p 500, 25% bonds, 25% global index fund is pretty close) but if you look at historical results of how people manage things like their 401(k), they screw up majorly. The errors run from keeping it all in cash (only losing 2-3% per year) to being reckless (gold went from 250 to 1600 and is going to 4k. Time to invest all my money) to just being stupid (Hey a 2.7% annual fee and 5% sales load isn't that much money right?). Maybe a trip to a fee only planner makes sense a lot of people

K5 wrote:

People are far better off managing their own funds than allowing an investment "advisor" to stick his hand in their pockets.

Taynt Chodeberg wrote:

Agip, here is a challenge for you...

1) go to your local precious metals dealer and ask them about demand for physical metal.

2) return to letsrun.com and post about your revelations.

......

here's some actual data about demand for gold - and it indicates demand is very soft in key Indian markets. However, it does suggest sovereign fund selling may be adding to supply, which would likely be temporary.

SPDR Gold Trust — the world’s largest gold ETF has seen its holdings reduce by 546 tonnes — down 40 per cent. Jewellery demand too took a knock. In the September quarter, the World Gold Council reported that global jewellery demand fell 3 per cent to 474.9 tonnes. This followed a 23 per cent drop in demand from India — the world’s largest gold consumer till recently.

Gold prices dropped further in March as the Cyprus government announced sale of gold from its reserves to finance its bail out. The country’s gold holding was not significant enough to rattle global gold market but it set-off fears of other struggling Euro Zone countries too selling their gold. With the EU nations’ total gold holding exceeding 3,000 tonnes, even a third of it could have triggered a crash in gold prices.

Gold prices can edge little higher in 2014, if there is renewed demand from emerging markets and gold import curbs are lifted in India. But, in the first half, prices may mostly remain weak and see a range-bound movement unless there is a surprise from inflation numbers. If outflows from gold ETFs continue, and physical demand for the metal remains weak, it will be negative for gold and prices can move further down.

adsadfsfas wrote:

History has shown that to be false. Yes the basics of investing for pretty much anyone can be drawn on a cocktail napkin (something like 50% s&p 500, 25% bonds, 25% global index fund is pretty close) but if you look at historical results of how people manage things like their 401(k), they screw up majorly. The errors run from keeping it all in cash (only losing 2-3% per year) to being reckless (gold went from 250 to 1600 and is going to 4k. Time to invest all my money) to just being stupid (Hey a 2.7% annual fee and 5% sales load isn't that much money right?). Maybe a trip to a fee only planner makes sense a lot of people

K5 wrote:

People are far better off managing their own funds than allowing an investment "advisor" to stick his hand in their pockets.

Interest rates are going up, and those who are heavily invested in bond funds are going to be losing money.

Market timing has consistently proven to be almost impossible. People said the same stuff about treasures in 1990 (rates down to 8% on the 10 year note from the 15% of 1980), 2000 when rates fell to 6% and 2010 when rates fell to 4%. I have to imagine that rates are going up but the hard part is are they going up to 4% or up to 8%+?

Typical Washington response wrote:

adsadfsfas wrote:

History has shown that to be false. Yes the basics of investing for pretty much anyone can be drawn on a cocktail napkin (something like 50% s&p 500, 25% bonds, 25% global index fund is pretty close) but if you look at historical results of how people manage things like their 401(k), they screw up majorly. The errors run from keeping it all in cash (only losing 2-3% per year) to being reckless (gold went from 250 to 1600 and is going to 4k. Time to invest all my money) to just being stupid (Hey a 2.7% annual fee and 5% sales load isn't that much money right?). Maybe a trip to a fee only planner makes sense a lot of people

Interest rates are going up, and those who are heavily invested in bond funds are going to be losing money.

false economy wrote:

I would laugh my *ss off if the stock market completely collapsed.

All those stock traders, insurance agents, bankers, etc who don't do any real work, looking down upon me when I come home from a 12 hour day at the factory.

I could survive in the wild for years.

They couldn't survive without their TV remote.

people in finance work more hours than 99% of the population (bankers = 100+ hrs/week @ junior level)

adsadfsfas wrote:

History has shown that to be false. Yes the basics of investing for pretty much anyone can be drawn on a cocktail napkin (something like 50% s&p 500, 25% bonds, 25% global index fund is pretty close) but if you look at historical results of how people manage things like their 401(k), they screw up majorly. The errors run from keeping it all in cash (only losing 2-3% per year) to being reckless (gold went from 250 to 1600 and is going to 4k. Time to invest all my money) to just being stupid (Hey a 2.7% annual fee and 5% sales load isn't that much money right?). Maybe a trip to a fee only planner/ makes sense a lot of people

K5 wrote:

People are far better off managing their own funds than allowing an investment "advisor" to stick his hand in their pockets.

The key phrase is bolded & underlined.

Pointing Out the Obvious wrote:

Flagpole wrote:

2) I reject your analysis anyway. Dow in 1964 was 834.05. Dow in 1984 was 1178.48, and yes, while I understand you said "real terms", I still reject. If you are working toward retirement, you can greatly affect "real terms" so that a Dow increase still means a lot to you (retire with a paid for house and ZERO debt), ESPECIALLY if you were reinvesting dividends the whole time. People who invoke the "real terms" thing are either doomsdayers or permabears or just pessimistic.

Good point. I REJECT inflation. Does NOT exist. I still buy milk for 59 cents a gallon and I REJECT these pessimistic, doomsaying price setters at the grocery store.!

That's hilarious. Could you possibly believe the things you write? I have my doubts.

Pointing Out the Obvious...Yes, I believe what I wrote, because it is true. Of course inflation exists, but those who constantly bring up "real returns" do so because they are arguing AGAINST investing, or they just want to spread doom about the investing that others have done...to make themselves feel good for not doing it.

Bottom line is that if you retire with ZERO debt your investments will take you far if you invested as much and as long as you should have. The zero debt should include a paid for home, so that means you won't be buying a home, so you don't have to pay the current home price...you could sell yours and buy another with the proceeds though. A home is a BIG issue. You limit your outgo in retirement by being 100% debt free, then the inflation won't kill you...besides, your investments should have beaten inflation anyway.

Flagpole wrote:

Pointing Out the Obvious wrote:

Good point. I REJECT inflation. Does NOT exist. I still buy milk for 59 cents a gallon and I REJECT these pessimistic, doomsaying price setters at the grocery store.!

That's hilarious. Could you possibly believe the things you write? I have my doubts.

Pointing Out the Obvious...Yes, I believe what I wrote, because it is true. Of course inflation exists, but those who constantly bring up "real returns" do so because they are arguing AGAINST investing, or they just want to spread doom about the investing that others have done...to make themselves feel good for not doing it.

INCORRECT!

It is frankly idiotic to try to dismiss those who look at things accurately (and focusing on real returns is more realistic than focusing on nominal returns) by assigning them a position that is not theirs (anti-investing).

Ever heard of a straw man?

The simple truth is that most good financial advisors will talk about and focus on real returns as opposed to nominal returns. And most people who focus on real returns are investors. So your straw man is truly moronic.

The irony of it is that focusing on real returns will tend to push folks more toward the need to invest in equities (which I think you pretty consistently advocate) since the difference between what equities have provided vs cash is greater in real terms than in nominal terms. 10% nominal for equities is better than 4% nominal for cash, sure. But 6.5% real for equities is monumentally better than 0.5% real for cash.

1) No strawman here. People on this site argue against investing all the time, and they use "real returns" as a means to do so.

2) I agree that good financial advisors will mention real returns, because it IS a real thing (and they need to be thorough), but it's not as important as most people make it out to be. Some investors get all tied up in that, when really they could easily take care of it and more by simply investing just a little bit more.

3) Good point about focusing on real returns to get people to invest more. I'll take that at face value. The counter to that though is that I almost NEVER hear anyone come to that conclusion (that real returns reality would make someone invest MORE). Again though, a good point by you, and people SHOULD view it that way.

4) The main thing with investing though is to just do it. Too many people try to consider when to get in, when to get out, convince themselves that real returns will make their investing almost worthless or that they love working and will want to work until they die. Best to just limit debt as fast as possible, invest regularly without a break from it, plan to retire 100% debt free, and live off investments, Social Security, and a pension too if you have one. Real returns doesn't need to be a part of that discussion, because inflation should be considered a built in...a given. You invest money today that you don't need so that you'll have money when you need it, and you invest with the idea that you will have inflation to deal with.

5) Finally, many retired people who do what I suggest (retire 100% debt free with a paid for house, no dependents living at home, and are fortunate enough to have few medical expenses) find that they have MORE spending money in retirement that they did while working with kids at home. That will be the case for me for sure.

This is a moronic thread. Trying to compare buying an ounce of gold in the 1970s and its return with stocks bought at the same time is pointless. Someone MAY have bought an ounce of gold and held it that long, if they did, they lost out on a ton of potential earnings. Whatever the return was...$1200 or something, over 40+ years? What a great return....not. People buy stocks, sell stocks, re-invest the money, get dividends, re-invest those...you're way better off in the market than you ever would be in gold, at least over a timeline like that.

Buy low sell high. Invest in good companies with good practices.

I've doubled the money in my Roth IRA using this simple strategy. Used to have my Roth in Cd's. Put it in a Vanguard Roth account after the stock market crash in 2008.

The stock market is a strange place, when you see Twitter get to almost 80.00, and at the same time Apple stock is dropping, despite the huge growth in profits they'll be seeing in the next year, and Twitter probably won't make any profit at all.

Sounds good MingeeMong, but the question is do you think it's gone high enough that now is the time to sell high? And if the answer is yes, where do you put your money now?

Pointing Out the Obvious wrote:

K5 wrote:

People are far better off managing their own funds than allowing an investment "advisor" to stick his hand in their pockets.

If you mean that all people, including the majority who do not have the time or inclination to devote to financial matters, would be better off without an investment advisor then you are willfully ignorant. Not an attractive characteristic.

Of course people are better off without the investment industry picking their pockets. Hard to believe anyone would fall for their BS and so internalize it that he would attack anyone posting this obvious truth.

Don't be a sucker your whole life. The uber rich did not become so because they are wonderful and to great things for society and poor people who have no power and no say in the decisions made in Washington DC are not the problem. And paying the investment industry is dumber than hell