I was hoping for an answer that values a well functioning society for themselves and their nearest higher than any extra returns on stocks. That's patriotism.
..
I spoke at Dartmouth once, and a woman stood up after I spoke, I write in my book, and she said to me, "Professor, you've convinced me this is hopeless. Hopeless. There's nothing we can do." When she said that, I scrambled. I tried to think, "How do I respond to that hopelessness? What is that sense of hopelessness?" And what hit me was an image of my six-year-old son. And I imagined a doctor coming to me and saying, "Your son has terminal brain cancer, and there's nothing you can do. Nothing you can do."
So would I do nothing? Would I just sit there? Accept it? Okay, nothing I can do? I'm going off to build Google Glass. Of course not. I would do everything I could, and I would do everything I could because this is what love means, that the odds are irrelevant and that you do whatever the hell you can, the odds be damned. And then I saw the obvious link, because even we liberals love this country.
And so when the pundits and the politicians say that change is impossible, what this love of country says back is, "That's just irrelevant." We lose something dear, something everyone in this room loves and cherishes, if we lose this republic, and so we act with everything we can to prove these pundits wrong.
I think Trump will go down in history as one of the worst presidents ever elected. Still happy that my retirement account is doing well, though. The two facts are almost totally independent.
>I would disagree. My portfolio of index funds is up almost 20%. The last 4 months have been fantastic returns.
Well I suppose it all depends on what you consider fantastic. We talking 6 figures or 7? It's still chump change compared to what that 10% made.
The DJIA gained 3000 points in 3-4 months. It took 3 years for the previous 3000 points up to Nov 8 2016. Just a PSA, in 08 it went from 14k to 6k in about a year.
When I retire? I've always had a buy and hold mentality.
When the market crashed in 2009, I lost almost 33% of my portfolio value. However, I had no intention of using that money for decades.
As a result, I was 100% in the market when things picked up a few years later. When the market was going up 20-30% a year, I made up the lose within 2 years. Overall the market is up 3.5x since the bottom. Annualized return even pre-crash have been 7%+.
I retired early and have stocks, real estate, and cash. I'll reduce holdings when my cash runs low. Until then, I'm making no changes come hell or high water. I'm not financially savvy and would probably sell at the wrong time anyway. I have more cash than I need (3 - 4 years worth), but I'm fiscally conservative and the extra buffer eliminates stress.
There is no optimal point at which to sell...there is no evidence the market exhibits any sort of path dependency whereby selling could consistently yield an optimal outcome. Going as far back as the inception of the S&P 500, it has returned 9% a year (including the dividends)...when plotted logarithmicaly, it appeals like an almost strait line.
Timing the market doesn't mean pin point, cracker jack timing. Just not bay of pigs timing. I pulled 25% my 401k out in 2008 into bonds and a money market. Saved a good 15%. Then re-invested towards the bottom. Not perfect bottom to get back in. Not perfect top to get out. But 15%.
False. Timing the market means trying to make investment decisions because you think the market is "high" or "low" or that it will move up or down in a certain time-frame. The only remedy for that is dollar-cost averaging over a long period of time.
I've been able to make sizable returns by not buying when things were overpriced and then buying when they are under priced. This doesn't mean all of my money, but enough that it's worth the time.
The Brexit was a fantastic opportunity, I got in way late and still bought in at a 10% discount.
Historically when the market looks like this there's going to be a correction in the near term. With the pace of this bubble I'll be able to buy good companies at a massive discount.
The whole point of "timing the market" being bad is that you can't know what the future holds, so while you can try to model things to determine whether they are under or overpriced, unless you pick stocks like Warren Buffet, you are best off dollar cost averaging into index funds because you will net net come out ahead when you factor in fees.
>"Historically when the market looks like this there's going to be a correction in the near term. With the pace of this bubble I'll be able to buy good companies at a massive discount."
Past performance is not an indicator of future results.
My tolerance for volatility and loss is higher than the traditional investor. Beyond Burton Malkiel's random walk there's Modern Portfolio Theory.
There are three pools of asset-classes that I consider:
Bonds - Historic low rates, soon to increase and drive down the price of existing bonds on the market. Bonds should cheapen 3-4 times this year thanks to Yellen.
Equity Market - Market PE and PEG values are above the level that historically precedes a correction. Two dynamics may be contributing: The first, domestic corporate equity investment is up due to the low T-Bill rates (a risky return in equity looks a lot better when government bond rates are effectively nothing). The second, foreign investors (specifically Chinese/Russian) trying to diversify away from government corruption. This phenomenon is well-documented in desirable housing markets (Toronto, SF Bay Area, NY, London, etc.) but harder/impossible to identify in the stock markets.
The second phenomenon does make the argument for a regime change, but only so long as the US Dollar remains strong relative to the rest to their home countries. Guess what the White House policy is going to do?
Cash/Cash Equivalents - A near zero interest rate with low volatility. Cash, from what I can tell, is the only thing priced normally from a discount perspective. I can afford to accumulate more cash at a -3% effective rate while letting the rest of my holdings appreciate. When everyone else is bleeding I'll be there with my liquidity.
I mean I say this in joke form but I mean it in all seriousness. Using stop loss orders is a sign of someone who doesn't know what they are doing.
They just aren't suitable for markets anymore. Well they haven't really been suitable for the past 10 years but atleast now the major markets are finally no longer allowing retail investors to use that order type.
I'm not buying your conclusion that stop-loss orders don't work and a sign of somebody who doesn't know what they are doing.
Sure, assuming there is a flash crash your stop-loss will convert to a market order and if you are using a big name brokerage you order will get filled (maybe delayed, and most likely at a lower price than institutions, but it will get filled).
What is your background if you don't mind me asking? Do you work in finance or in the market?
Ridiculous. I was living in Midtown Atlanta making $70k and reliably maxing out my Roth, plus contributing to an HSA and 401(k).
Saving money doesn't require you to be in the top 10%. It certainly does require disposable income above and beyond what can buy the bare necessities, but as you pass that level it increasingly requires restraint and discipline.
I don't understand. Anyone can invest in the market. There's no minimum income barrier. In fact, the bottom 90% should be investing in the market for the long term through 401k and IRA plans. Putting your savings into a relatively safe index fund is a responsible way to save for retirement.
The problem arises when you don't have any money to save. Also there is often a barrier to getting an account for an IRA. Scottrade is $500. That's a lot of money for a welfare recipient. Also at least in the US, we test total assets for access to social programs (http://www.heritage.org/welfare/commentary/passing-the-asset...). If you have too much money, the state expects you to deplete those retirement funds, with the various fees and taxes, before you're eligible. If all of your savings is in the IRA, well, I guess starve or steal?
The comment I replied to specifically referred to the top 10%. The bottom 90% definitely aren't all receiving welfare. A $500 minimum for a Scottrade IRA account should be easily achievable for most in the bottom 90%.
By income or by wealth? If you make more than six figures you are in the upper income bracket regardless of how much you save or what your regional cost of living bracket is.
I would disagree. My portfolio of index funds is up almost 20%. The last 4 months have been fantastic returns.