I have most of my money in I have most of my money in European, Asian and Emerging markets stocks. Debt problems in Europe is almost as bad as the US and Asian and Emerging market will drop with US and EU. I lost more than 10% so far in the last three weeks and afraid that there will be more to come. Too bad, I don’t have an option of buying precious metals or I would be up at least 30% in the last two years. Frankly, I have no idea what to do now.
GoUSC
August 8, 2011 @
10:33 AM
That is a difficult question That is a difficult question to answer as it all depends on where you are in your life and the status of your 401k. For me, I am 34 so I don’t need my 401k/IRA for a long time. Short term corrections don’t affect me. In the last big correct back in 08/09 I pulled my entire retirement into a mutual fund and bought back in after a lot of the turmoil was over. This time I am buying into the fall. In fact I bought into the market big on Friday and am buying big into the market today.
And you can buy precious metals by proxy. Do some research on it.
Mark
SmellsFeeshy
August 8, 2011 @
12:48 PM
GoUSC wrote:
And you can buy [quote=GoUSC]
And you can buy precious metals by proxy. Do some research on it.[/quote]
There are plenty of ETFs that track the price of precious metals like gold and silver. See GLD or SLV.
There are also funds/ETFs that track companies involved in the production of gold/silver like TGLDX.
Arraya
August 8, 2011 @
12:50 PM
Curl up in fetal position and Curl up in fetal position and pee your pants. After that, don’t forget to PANIC!
jimmyle
August 8, 2011 @
1:06 PM
I can’t buy any of those I can’t buy any of those ETFs. My Fidelity accounts only allows us to buy about 15 various mutual funds with some domestics, foreign funds, bond funds and mixed funds.
I guess I will do nothing now.
[quote=SmellsFeeshy][quote=GoUSC]
And you can buy precious metals by proxy. Do some research on it.[/quote]
There are plenty of ETFs that track the price of precious metals like gold and silver. See GLD or SLV.
There are also funds/ETFs that track companies involved in the production of gold/silver like TGLDX.[/quote]
SmellsFeeshy
August 8, 2011 @
12:51 PM
GoUSC wrote:This time I am [quote=GoUSC]This time I am buying into the fall. In fact I bought into the market big on Friday and am buying big into the market today.[/quote]
I bought some longs on Friday as well. I think this dip is all fear/media hype related. Our economy is really not that much worse off now than it was a few months ago (in fact it may even be better). Housing prices have bottomed. As soon as people forget about this “debt crisis” and credit down grades the market will be off and running again.
carlsbadworker
August 10, 2011 @
11:23 AM
SmellsFeeshy: The reason that SmellsFeeshy: The reason that it is now worse than a few months ago is that all the numbers that you look at (economy, housing, job) are lagging indicator. The forward indicator that there is strong political resistance for the government to provide new stimulus and the most developed countries in the world have hard-to-solve debt problems. So the recovery that we saw is nothing more than shifting the debt from private sector (banks) to public sector. And that is ending because the public sector can’t take it anyway…part of it by fiscal reality and part of it by political games.
flu: To your question “at this point, what’s the point?” The point that it is still now low enough. Long-term fair value for S&P 500 is still probably below 1000. Yes, I don’t know why most people don’t become risk-averse when it is over 1350 (I was). So the fact it dropped 200 points on S&P 500 actually might mean nothing…unless you assume it was fair value or close to fair value to begin with. Otherwise, I have a civic to sell you that I have reduced its price from $100K to $50K.
earlyretirement: I don’t really buy into the theory that you should move into cash when you are close to retirement. Sure, stock is more volatile and it wasn’t even true that market always goes up over the long run(if one looks beyond US as an example of equity market return). But equity does have premium return over bond and cash in the long run. So my theory is that one should have enough cash to last for a few years (I have not yet studied how many years that need to be, because I am still far from retirement), but leave the rest in the equity market. Yes, you might get screwed, but you will get screwed more if you hold cash/bond. Perhaps rental property is a better solution because it provides somewhat fixed return, but you probably have more experience on these than I do.
earlyretirement
August 11, 2011 @
9:14 PM
carlsbadworker [quote=carlsbadworker]
earlyretirement: I don’t really buy into the theory that you should move into cash when you are close to retirement. Sure, stock is more volatile and it wasn’t even true that market always goes up over the long run(if one looks beyond US as an example of equity market return). But equity does have premium return over bond and cash in the long run. So my theory is that one should have enough cash to last for a few years (I have not yet studied how many years that need to be, because I am still far from retirement), but leave the rest in the equity market. Yes, you might get screwed, but you will get screwed more if you hold cash/bond. Perhaps rental property is a better solution because it provides somewhat fixed return, but you probably have more experience on these than I do.[/quote]
Hey Carlsbadworker,
No, I didn’t mean convert all to cash. But I do think when you are close to retirement that the bulk of your portfolio should NOT be in the stock market. But definitely I’m not saying it should be all cash either.
Of course much also depends how many more years you have in your retirement. Obviously someone that is retiring younger could withstand more risk and volatility vs. someone that is older.
I like exactly what you said rather than going with lots of cash/bonds to hold rental properties that spin off income each month. The ROI is MUCH higher.
Renting out properties and owning a real estate portfolio has it’s own headaches. Trust me on that one! But if you have a good and ethical property manager then you lose a lot less sleep. But still it can be frustrating and being a “landlord” is not for everyone.
But I think here heading into the future, it’s going to be a really great strategy vs. being in a volatile stock market and also an environment where cash isn’t paying much.
For me the key is being in the best locations of the city you buy in. Those areas typically will always be desirable in good times and bad and no matter how bad the economy is, I’ve found there are always people that want to rent and be in those areas.
bearishgurl
August 12, 2011 @
10:11 AM
earlyretirement wrote:…I [quote=earlyretirement]…I like exactly what you said rather than going with lots of cash/bonds to hold rental properties that spin off income each month. The ROI is MUCH higher.
Renting out properties and owning a real estate portfolio has it’s own headaches. Trust me on that one! But if you have a good and ethical property manager then you lose a lot less sleep. But still it can be frustrating and being a “landlord” is not for everyone.
But I think here heading into the future, it’s going to be a really great strategy vs. being in a volatile stock market and also an environment where cash isn’t paying much.
For me the key is being in the best locations of the city you buy in. Those areas typically will always be desirable in good times and bad and no matter how bad the economy is, I’ve found there are always people that want to rent and be in those areas.[/quote]
ER, I agree that there are a LOT of current retirees living off primarily rental income. But you have to take into account that (the retirees in SD County) likely purchased all these properties for between $30K and $80K each. Buying a rental in the “best locations” doesn’t make financial sense anymore. Properties in “best locations” usually have a negative cash flow unless they are bought with at least a 40% downpayment. That’s a LOT of cash to sink into each investment.
Frankly, I think rentals in “blue-collar” areas are more profitable and these lower-income tenants can also be stable. As a landlord, you can always turn your unit/SFR over to the Section 8 program (guaranteed rent). As for damages in between tenants, just take an adequate damage deposit to account for that. It can be very difficult to recover your excess property damages from a former tenant on a small claims judgment.
You are correct in that “landlording” isn’t for everyone. In order to make an adequate income on the property, a retiree would need to manage it themselves. I tried it for 9 years here in SD and have had my fill of tenants and their “issues.”
Correct me if I’m wrong, but you previously stated your properties in the “best locations” were used for day/week/month rentals and were listed as VBRO. The zoning in the vast majority of zip codes and communities in San Diego County doesn’t provide for this type of property use. Obviously, you don’t have the management headaches yourself on your vacation rentals in other locales.
earlyretirement
August 12, 2011 @
6:36 PM
bearishgurl [quote=bearishgurl][quote=earlyretirement]…I like exactly what you said rather than going with lots of cash/bonds to hold rental properties that spin off income each month. The ROI is MUCH higher.
Renting out properties and owning a real estate portfolio has it’s own headaches. Trust me on that one! But if you have a good and ethical property manager then you lose a lot less sleep. But still it can be frustrating and being a “landlord” is not for everyone.
But I think here heading into the future, it’s going to be a really great strategy vs. being in a volatile stock market and also an environment where cash isn’t paying much.
For me the key is being in the best locations of the city you buy in. Those areas typically will always be desirable in good times and bad and no matter how bad the economy is, I’ve found there are always people that want to rent and be in those areas.[/quote]
ER, I agree that there are a LOT of current retirees living off primarily rental income. But you have to take into account that (the retirees in SD County) likely purchased all these properties for between $30K and $80K each. Buying a rental in the “best locations” doesn’t make financial sense anymore. Properties in “best locations” usually have a negative cash flow unless they are bought with at least a 40% downpayment. That’s a LOT of cash to sink into each investment.
Frankly, I think rentals in “blue-collar” areas are more profitable and these lower-income tenants can also be stable. As a landlord, you can always turn your unit/SFR over to the Section 8 program (guaranteed rent). As for damages in between tenants, just take an adequate damage deposit to account for that. It can be very difficult to recover your excess property damages from a former tenant on a small claims judgment.
You are correct in that “landlording” isn’t for everyone. In order to make an adequate income on the property, a retiree would need to manage it themselves. I tried it for 9 years here in SD and have had my fill of tenants and their “issues.”
Correct me if I’m wrong, but you previously stated your properties in the “best locations” were used for day/week/month rentals and were listed as VBRO. The zoning in the vast majority of zip codes and communities in San Diego County doesn’t provide for this type of property use. Obviously, you don’t have the management headaches yourself on your vacation rentals in other locales.[/quote]
Hey BG,
Yeah, I agree with you that many people most likely bought their real estate when it was much cheaper. I haven’t looked at the numbers deep enough if it makes sense to do this in San Diego. You are correct that I don’t own any of my properties in San Diego. They are all in other areas which made more financial sense.
I’m not sure how neighborhoods are zoned in San Diego but it’s very difficult to control what private owners do. Even in cities that supposedly ban short-term rentals like New York City and Paris I know many friends/clients that successfully rent there.
Also, even in areas in San Diego like Santaluz I was surprised to see high end houses on the short-term market on VRBO.com as well. When I asked my realtor to check with the HOA board she said as long as the rentals were 7 days or longer they were acceptable which surprised me.
You are correct that there are MUCH better cities around the world vs. San Diego to do rental properties. Yeah, rental properties can be a pain. I used to manage my own so I know first hand all the hassles involved.
Zeitgeist
August 15, 2011 @
11:29 AM
Bump Bump
Coronita
August 8, 2011 @
12:40 PM
How about do nothing? How about do nothing?
sdduuuude
August 8, 2011 @
12:49 PM
flu wrote:How about do [quote=flu]How about do nothing?[/quote]
+1
UCGal
August 8, 2011 @
12:57 PM
sdduuuude wrote:flu wrote:How [quote=sdduuuude][quote=flu]How about do nothing?[/quote]
+1[/quote]
+2
I was looking for the “stay the course” option – it wasn’t included in the poll.
And depending on your 401k, you may not have a lot of options to choose. I work for a large employer with an incredibly craptastic 401k fund selection.
(That said – I’m glad I moved 80% of my 401k to the money market fund a few weeks ago, anticipating debt ceiling/deficit political crap disrupting the market. It’s ONE time I made a good move.)
Coronita
August 9, 2011 @
5:40 PM
UCGal wrote:sdduuuude [quote=UCGal][quote=sdduuuude][quote=flu]How about do nothing?[/quote]
+1[/quote]
+2
I was looking for the “stay the course” option – it wasn’t included in the poll.
And depending on your 401k, you may not have a lot of options to choose. I work for a large employer with an incredibly craptastic 401k fund selection.
(That said – I’m glad I moved 80% of my 401k to the money market fund a few weeks ago, anticipating debt ceiling/deficit political crap disrupting the market. It’s ONE time I made a good move.)[/quote]
Told ya!…I don’t understand the herd mentality of people cashing out AFTER seeing a 600+ drop following a 500+ drop the previous week and moving into cash. If you were out, you were fine. But at this point, what’s the point?
bearishgurl
August 9, 2011 @
5:56 PM
flu wrote: … Told ya!…I [quote=flu] … Told ya!…I don’t understand the herd mentality of people cashing out AFTER seeing a 600+ drop following a 500+ drop the previous week and moving into cash. If you were out, you were fine. But at this point, what’s the point?[/quote]
Actually, my biggest account was not officially “moved into cash” until the ringing of the bell today, so I (unwittingly) benefited from today’s gain 🙂 My request apparently wasn’t finalized until 1:04 p.m. yesterday, lol.
I don’t care what it does now. I can’t handle any more “wild rides” and no longer feel optimistic about the overall direction of the market.
Herding mentality or call it what you will, if I sustain any more losses such as the ones in fall 2008, I seriously don’t see how I will be able to recover from that. I’m tired and stressed about the mess our country is in. I’m also concerned that I’ll be shafted from SS (after paying into the “system” all my life) and Medicare benefits, just as I become eligible. For me, this $$ represents the difference between a modest survival (and taking a road trip here and there) and turning into a “bag lady.” 🙁
earlyretirement
August 9, 2011 @
7:13 PM
bearishgurl][quote=flu wrote: [quote=bearishgurl][quote=flu] I’m also concerned that I’ll be shafted from SS (after paying into the “system” all my life) and Medicare benefits, just as I become eligible. For me, this $$ represents the difference between a modest survival (and taking a road trip here and there) and turning into a “bag lady.” :([/quote]
Bearishgurl,
So right about being shafted from SS. It’s frustrating being forced to pay into it and probably never seeing anything from it. Me personally I’m budgeting and planning so that I assume I’ll never see a penny from it or that they increase the benefit age so much that I’ll probably be dead before I see any of it. Sad.
I’m not sure how close to retirement you are but I agree those that are a few years from retirement should not be in the stock market due to it’s volatility. The catch 22 is that CD’s/savings are paying next to nothing so many people that shouldn’t be so heavily invested in the market are forced into it. Then when they see the kind of volatility that we’ve been experienced they panic sell.
It’s a shame what is happening to the USA….
DomoArigato
August 10, 2011 @
8:37 AM
earlyretirement wrote:
It’s a [quote=earlyretirement]
It’s a shame what is happening to the USA….
[/quote]
You got that right. Child poverty rates are up to 22.5%:
We are dead last (by a good margin) among all industrialized countries.
Thank God our government and the elites are focused on deficits and tax cuts for the super-rich instead of job creation and poverty elimination.
CAwireman
August 8, 2011 @
4:32 PM
My cash out vote doesn’t mean My cash out vote doesn’t mean to liquidate my 401K, take the penalty, and put it in the bank. It means – find the least volatile investment in my 401K portfolio, and move everything there. Maybe that’s a bond option, or maybe there’s a money market option. Depends on the option’s each person’s 401K investment company offers.
scaredyclassic
August 8, 2011 @
8:10 PM
When the Dow equals price one When the Dow equals price one oz gold buy the Dow.
patb
August 8, 2011 @
9:10 PM
Assume the position Assume the position
moneymaker
August 8, 2011 @
10:03 PM
As much as I “dislike” As much as I “dislike” BofA(BAC) I would buy in now, by the end of the year I predict it will be worth twice as much. Hold it a couple of years and it will be worth 10 times as much, just my 2¢.
earlyretirement
August 9, 2011 @
8:34 AM
threadkiller wrote:As much as [quote=threadkiller]As much as I “dislike” BofA(BAC) I would buy in now, by the end of the year I predict it will be worth twice as much. Hold it a couple of years and it will be worth 10 times as much, just my 2¢.[/quote]
I agree. BAC has a lot of toxic waste still on their books. Lawsuits and other problems. But over the long haul I feel comfortable at these levels. I bought a bunch yesterday in my kids “college fund” account. Bought in the low $6’s yesterday and it’s doing well today.
I’m not sure as 10 X as much. But this should be an easy triple in a few years.
outtamojo
August 9, 2011 @
8:46 AM
Markets are oversold but imo Markets are oversold but imo it is hoping/anticipating a bone from the FOMC meeting. Short termers look out below if it doesn’t get it.
outtamojo
August 9, 2011 @
11:46 AM
And so we settle into And so we settle into despair, animal spirits broken, and grind down into …the next election? S&P 900?
svelte
August 9, 2011 @
7:31 AM
Here’s what I do. I keep Here’s what I do. I keep 10-20% (depending on how I feel) in mm account. When the stock market tanks and I think it is at the bottom, I move it into stocks. When I think prices are at a peak again, I move 10-20% back to mm.
Not sure how much good it actually does me, but it makes me feel like I’m at least doing something productive and not letting a bunch of lemmings who buy and sell based on the rumor of the day dictate my future.
sreeb
August 9, 2011 @
8:34 AM
Be careful about MM funds. Be careful about MM funds. They tend to have significant holdings in European bank paper. It isn’t clear how solvent those banks are.
svelte
August 10, 2011 @
7:28 AM
sreeb wrote:Be careful about [quote=sreeb]Be careful about MM funds. They tend to have significant holdings in European bank paper. It isn’t clear how solvent those banks are.[/quote]
Thanks for the heads-up sreeb, I will definitely take a look…
scaredyclassic
August 10, 2011 @
7:38 AM
Your actual appetite for Your actual appetite for volatility is often quite a bit less than what you believe your tolerance is
an
August 10, 2011 @
8:28 AM
So, who sold at the close So, who sold at the close yesterday? -427 so far.
bearishgurl
August 10, 2011 @
11:35 AM
AN wrote:So, who sold at the [quote=AN]So, who sold at the close yesterday? -427 so far.[/quote]
Me…..a 401a turned to cash 🙂
IRA(s) the day before, but they weren’t seriously affected by last weeks rumblings.
an
August 10, 2011 @
1:45 PM
bearishgurl wrote:AN [quote=bearishgurl][quote=AN]So, who sold at the close yesterday? -427 so far.[/quote]
Me…..a 401a turned to cash 🙂
IRA(s) the day before, but they weren’t seriously affected by last weeks rumblings.[/quote]
Closed today at -519.83. Lower than the close of 2 days ago. A sale two days ago didn’t look good yesterday but looks great today 😀
GH
August 12, 2011 @
10:15 AM
After being told my 401k After being told my 401k would not allow precious metals in 2005 I cashed out took the 10% tax hit and purchased gold (real coins). I would guess my 401k is doing better than most.
The problem is I have had to lean on that money over the past few years to make up the shortfall on my income. See war on savers!
Coronita
August 15, 2011 @
2:41 PM
Got rollercoaster?
Any other Got rollercoaster?
Any other predictions? I’m sure things will be much clearer when we look back 4 months from now on what we should/shouldn’t have done exactly at this moment…
I think the only difference folks should be considering are
1) How old are you right now?
and
2) How soon do you need the money?
moneymaker
March 14, 2012 @
7:33 AM
Like I’ve said in previous Like I’ve said in previous posts my timing is terrible. Luckily my wife took my advice and still holds BAC, up 40% for her now.
earlyretirement
March 15, 2012 @
3:52 PM
moneymaker wrote:Like I’ve [quote=moneymaker]Like I’ve said in previous posts my timing is terrible. Luckily my wife took my advice and still holds BAC, up 40% for her now.[/quote]
Yeah, as I mentioned in my previous posts, BAC was a great investment if you got in the $6’s. I bought a boatload in the $6 range and today it hit $9.25. I still feel confident holding for the long-term at these levels.
Longer term, Bank of America should do well as more of the toxic waste comes off it’s books. I’ll hold it for the long term and still expect it to triple from the $6 I paid in the long term.
Coronita
March 14, 2012 @
8:29 AM
Well the markets have pretty Well the markets have pretty much rebounded…The first 3 months of this year has seen really good gains if you weren’t in cash….. I’m taking money out now and “doing something else with it”…..
August 8, 2011 @ 8:14 AM
I have most of my money in
I have most of my money in European, Asian and Emerging markets stocks. Debt problems in Europe is almost as bad as the US and Asian and Emerging market will drop with US and EU. I lost more than 10% so far in the last three weeks and afraid that there will be more to come. Too bad, I don’t have an option of buying precious metals or I would be up at least 30% in the last two years. Frankly, I have no idea what to do now.
August 8, 2011 @ 10:33 AM
That is a difficult question
That is a difficult question to answer as it all depends on where you are in your life and the status of your 401k. For me, I am 34 so I don’t need my 401k/IRA for a long time. Short term corrections don’t affect me. In the last big correct back in 08/09 I pulled my entire retirement into a mutual fund and bought back in after a lot of the turmoil was over. This time I am buying into the fall. In fact I bought into the market big on Friday and am buying big into the market today.
And you can buy precious metals by proxy. Do some research on it.
Mark
August 8, 2011 @ 12:48 PM
GoUSC wrote:
And you can buy
[quote=GoUSC]
And you can buy precious metals by proxy. Do some research on it.[/quote]
There are plenty of ETFs that track the price of precious metals like gold and silver. See GLD or SLV.
There are also funds/ETFs that track companies involved in the production of gold/silver like TGLDX.
August 8, 2011 @ 12:50 PM
Curl up in fetal position and
Curl up in fetal position and pee your pants. After that, don’t forget to PANIC!
August 8, 2011 @ 1:06 PM
I can’t buy any of those
I can’t buy any of those ETFs. My Fidelity accounts only allows us to buy about 15 various mutual funds with some domestics, foreign funds, bond funds and mixed funds.
I guess I will do nothing now.
[quote=SmellsFeeshy][quote=GoUSC]
And you can buy precious metals by proxy. Do some research on it.[/quote]
There are plenty of ETFs that track the price of precious metals like gold and silver. See GLD or SLV.
There are also funds/ETFs that track companies involved in the production of gold/silver like TGLDX.[/quote]
August 8, 2011 @ 12:51 PM
GoUSC wrote:This time I am
[quote=GoUSC]This time I am buying into the fall. In fact I bought into the market big on Friday and am buying big into the market today.[/quote]
I bought some longs on Friday as well. I think this dip is all fear/media hype related. Our economy is really not that much worse off now than it was a few months ago (in fact it may even be better). Housing prices have bottomed. As soon as people forget about this “debt crisis” and credit down grades the market will be off and running again.
August 10, 2011 @ 11:23 AM
SmellsFeeshy: The reason that
SmellsFeeshy: The reason that it is now worse than a few months ago is that all the numbers that you look at (economy, housing, job) are lagging indicator. The forward indicator that there is strong political resistance for the government to provide new stimulus and the most developed countries in the world have hard-to-solve debt problems. So the recovery that we saw is nothing more than shifting the debt from private sector (banks) to public sector. And that is ending because the public sector can’t take it anyway…part of it by fiscal reality and part of it by political games.
flu: To your question “at this point, what’s the point?” The point that it is still now low enough. Long-term fair value for S&P 500 is still probably below 1000. Yes, I don’t know why most people don’t become risk-averse when it is over 1350 (I was). So the fact it dropped 200 points on S&P 500 actually might mean nothing…unless you assume it was fair value or close to fair value to begin with. Otherwise, I have a civic to sell you that I have reduced its price from $100K to $50K.
earlyretirement: I don’t really buy into the theory that you should move into cash when you are close to retirement. Sure, stock is more volatile and it wasn’t even true that market always goes up over the long run(if one looks beyond US as an example of equity market return). But equity does have premium return over bond and cash in the long run. So my theory is that one should have enough cash to last for a few years (I have not yet studied how many years that need to be, because I am still far from retirement), but leave the rest in the equity market. Yes, you might get screwed, but you will get screwed more if you hold cash/bond. Perhaps rental property is a better solution because it provides somewhat fixed return, but you probably have more experience on these than I do.
August 11, 2011 @ 9:14 PM
carlsbadworker
[quote=carlsbadworker]
earlyretirement: I don’t really buy into the theory that you should move into cash when you are close to retirement. Sure, stock is more volatile and it wasn’t even true that market always goes up over the long run(if one looks beyond US as an example of equity market return). But equity does have premium return over bond and cash in the long run. So my theory is that one should have enough cash to last for a few years (I have not yet studied how many years that need to be, because I am still far from retirement), but leave the rest in the equity market. Yes, you might get screwed, but you will get screwed more if you hold cash/bond. Perhaps rental property is a better solution because it provides somewhat fixed return, but you probably have more experience on these than I do.[/quote]
Hey Carlsbadworker,
No, I didn’t mean convert all to cash. But I do think when you are close to retirement that the bulk of your portfolio should NOT be in the stock market. But definitely I’m not saying it should be all cash either.
Of course much also depends how many more years you have in your retirement. Obviously someone that is retiring younger could withstand more risk and volatility vs. someone that is older.
I like exactly what you said rather than going with lots of cash/bonds to hold rental properties that spin off income each month. The ROI is MUCH higher.
Renting out properties and owning a real estate portfolio has it’s own headaches. Trust me on that one! But if you have a good and ethical property manager then you lose a lot less sleep. But still it can be frustrating and being a “landlord” is not for everyone.
But I think here heading into the future, it’s going to be a really great strategy vs. being in a volatile stock market and also an environment where cash isn’t paying much.
For me the key is being in the best locations of the city you buy in. Those areas typically will always be desirable in good times and bad and no matter how bad the economy is, I’ve found there are always people that want to rent and be in those areas.
August 12, 2011 @ 10:11 AM
earlyretirement wrote:…I
[quote=earlyretirement]…I like exactly what you said rather than going with lots of cash/bonds to hold rental properties that spin off income each month. The ROI is MUCH higher.
Renting out properties and owning a real estate portfolio has it’s own headaches. Trust me on that one! But if you have a good and ethical property manager then you lose a lot less sleep. But still it can be frustrating and being a “landlord” is not for everyone.
But I think here heading into the future, it’s going to be a really great strategy vs. being in a volatile stock market and also an environment where cash isn’t paying much.
For me the key is being in the best locations of the city you buy in. Those areas typically will always be desirable in good times and bad and no matter how bad the economy is, I’ve found there are always people that want to rent and be in those areas.[/quote]
ER, I agree that there are a LOT of current retirees living off primarily rental income. But you have to take into account that (the retirees in SD County) likely purchased all these properties for between $30K and $80K each. Buying a rental in the “best locations” doesn’t make financial sense anymore. Properties in “best locations” usually have a negative cash flow unless they are bought with at least a 40% downpayment. That’s a LOT of cash to sink into each investment.
Frankly, I think rentals in “blue-collar” areas are more profitable and these lower-income tenants can also be stable. As a landlord, you can always turn your unit/SFR over to the Section 8 program (guaranteed rent). As for damages in between tenants, just take an adequate damage deposit to account for that. It can be very difficult to recover your excess property damages from a former tenant on a small claims judgment.
You are correct in that “landlording” isn’t for everyone. In order to make an adequate income on the property, a retiree would need to manage it themselves. I tried it for 9 years here in SD and have had my fill of tenants and their “issues.”
Correct me if I’m wrong, but you previously stated your properties in the “best locations” were used for day/week/month rentals and were listed as VBRO. The zoning in the vast majority of zip codes and communities in San Diego County doesn’t provide for this type of property use. Obviously, you don’t have the management headaches yourself on your vacation rentals in other locales.
August 12, 2011 @ 6:36 PM
bearishgurl
[quote=bearishgurl][quote=earlyretirement]…I like exactly what you said rather than going with lots of cash/bonds to hold rental properties that spin off income each month. The ROI is MUCH higher.
Renting out properties and owning a real estate portfolio has it’s own headaches. Trust me on that one! But if you have a good and ethical property manager then you lose a lot less sleep. But still it can be frustrating and being a “landlord” is not for everyone.
But I think here heading into the future, it’s going to be a really great strategy vs. being in a volatile stock market and also an environment where cash isn’t paying much.
For me the key is being in the best locations of the city you buy in. Those areas typically will always be desirable in good times and bad and no matter how bad the economy is, I’ve found there are always people that want to rent and be in those areas.[/quote]
ER, I agree that there are a LOT of current retirees living off primarily rental income. But you have to take into account that (the retirees in SD County) likely purchased all these properties for between $30K and $80K each. Buying a rental in the “best locations” doesn’t make financial sense anymore. Properties in “best locations” usually have a negative cash flow unless they are bought with at least a 40% downpayment. That’s a LOT of cash to sink into each investment.
Frankly, I think rentals in “blue-collar” areas are more profitable and these lower-income tenants can also be stable. As a landlord, you can always turn your unit/SFR over to the Section 8 program (guaranteed rent). As for damages in between tenants, just take an adequate damage deposit to account for that. It can be very difficult to recover your excess property damages from a former tenant on a small claims judgment.
You are correct in that “landlording” isn’t for everyone. In order to make an adequate income on the property, a retiree would need to manage it themselves. I tried it for 9 years here in SD and have had my fill of tenants and their “issues.”
Correct me if I’m wrong, but you previously stated your properties in the “best locations” were used for day/week/month rentals and were listed as VBRO. The zoning in the vast majority of zip codes and communities in San Diego County doesn’t provide for this type of property use. Obviously, you don’t have the management headaches yourself on your vacation rentals in other locales.[/quote]
Hey BG,
Yeah, I agree with you that many people most likely bought their real estate when it was much cheaper. I haven’t looked at the numbers deep enough if it makes sense to do this in San Diego. You are correct that I don’t own any of my properties in San Diego. They are all in other areas which made more financial sense.
I’m not sure how neighborhoods are zoned in San Diego but it’s very difficult to control what private owners do. Even in cities that supposedly ban short-term rentals like New York City and Paris I know many friends/clients that successfully rent there.
Also, even in areas in San Diego like Santaluz I was surprised to see high end houses on the short-term market on VRBO.com as well. When I asked my realtor to check with the HOA board she said as long as the rentals were 7 days or longer they were acceptable which surprised me.
You are correct that there are MUCH better cities around the world vs. San Diego to do rental properties. Yeah, rental properties can be a pain. I used to manage my own so I know first hand all the hassles involved.
August 15, 2011 @ 11:29 AM
Bump
Bump
August 8, 2011 @ 12:40 PM
How about do nothing?
How about do nothing?
August 8, 2011 @ 12:49 PM
flu wrote:How about do
[quote=flu]How about do nothing?[/quote]
+1
August 8, 2011 @ 12:57 PM
sdduuuude wrote:flu wrote:How
[quote=sdduuuude][quote=flu]How about do nothing?[/quote]
+1[/quote]
+2
I was looking for the “stay the course” option – it wasn’t included in the poll.
And depending on your 401k, you may not have a lot of options to choose. I work for a large employer with an incredibly craptastic 401k fund selection.
(That said – I’m glad I moved 80% of my 401k to the money market fund a few weeks ago, anticipating debt ceiling/deficit political crap disrupting the market. It’s ONE time I made a good move.)
August 9, 2011 @ 5:40 PM
UCGal wrote:sdduuuude
[quote=UCGal][quote=sdduuuude][quote=flu]How about do nothing?[/quote]
+1[/quote]
+2
I was looking for the “stay the course” option – it wasn’t included in the poll.
And depending on your 401k, you may not have a lot of options to choose. I work for a large employer with an incredibly craptastic 401k fund selection.
(That said – I’m glad I moved 80% of my 401k to the money market fund a few weeks ago, anticipating debt ceiling/deficit political crap disrupting the market. It’s ONE time I made a good move.)[/quote]
Told ya!…I don’t understand the herd mentality of people cashing out AFTER seeing a 600+ drop following a 500+ drop the previous week and moving into cash. If you were out, you were fine. But at this point, what’s the point?
August 9, 2011 @ 5:56 PM
flu wrote: … Told ya!…I
[quote=flu] … Told ya!…I don’t understand the herd mentality of people cashing out AFTER seeing a 600+ drop following a 500+ drop the previous week and moving into cash. If you were out, you were fine. But at this point, what’s the point?[/quote]
Actually, my biggest account was not officially “moved into cash” until the ringing of the bell today, so I (unwittingly) benefited from today’s gain 🙂 My request apparently wasn’t finalized until 1:04 p.m. yesterday, lol.
I don’t care what it does now. I can’t handle any more “wild rides” and no longer feel optimistic about the overall direction of the market.
Herding mentality or call it what you will, if I sustain any more losses such as the ones in fall 2008, I seriously don’t see how I will be able to recover from that. I’m tired and stressed about the mess our country is in. I’m also concerned that I’ll be shafted from SS (after paying into the “system” all my life) and Medicare benefits, just as I become eligible. For me, this $$ represents the difference between a modest survival (and taking a road trip here and there) and turning into a “bag lady.” 🙁
August 9, 2011 @ 7:13 PM
bearishgurl][quote=flu wrote:
[quote=bearishgurl][quote=flu] I’m also concerned that I’ll be shafted from SS (after paying into the “system” all my life) and Medicare benefits, just as I become eligible. For me, this $$ represents the difference between a modest survival (and taking a road trip here and there) and turning into a “bag lady.” :([/quote]
Bearishgurl,
So right about being shafted from SS. It’s frustrating being forced to pay into it and probably never seeing anything from it. Me personally I’m budgeting and planning so that I assume I’ll never see a penny from it or that they increase the benefit age so much that I’ll probably be dead before I see any of it. Sad.
I’m not sure how close to retirement you are but I agree those that are a few years from retirement should not be in the stock market due to it’s volatility. The catch 22 is that CD’s/savings are paying next to nothing so many people that shouldn’t be so heavily invested in the market are forced into it. Then when they see the kind of volatility that we’ve been experienced they panic sell.
It’s a shame what is happening to the USA….
August 10, 2011 @ 8:37 AM
earlyretirement wrote:
It’s a
[quote=earlyretirement]
It’s a shame what is happening to the USA….
[/quote]
You got that right. Child poverty rates are up to 22.5%:
http://wallstreetpit.com/81352-poverty-joblessness-and-the-job-guarantee
We are dead last (by a good margin) among all industrialized countries.
Thank God our government and the elites are focused on deficits and tax cuts for the super-rich instead of job creation and poverty elimination.
August 8, 2011 @ 4:32 PM
My cash out vote doesn’t mean
My cash out vote doesn’t mean to liquidate my 401K, take the penalty, and put it in the bank. It means – find the least volatile investment in my 401K portfolio, and move everything there. Maybe that’s a bond option, or maybe there’s a money market option. Depends on the option’s each person’s 401K investment company offers.
August 8, 2011 @ 8:10 PM
When the Dow equals price one
When the Dow equals price one oz gold buy the Dow.
August 8, 2011 @ 9:10 PM
Assume the position
Assume the position
August 8, 2011 @ 10:03 PM
As much as I “dislike”
As much as I “dislike” BofA(BAC) I would buy in now, by the end of the year I predict it will be worth twice as much. Hold it a couple of years and it will be worth 10 times as much, just my 2¢.
August 9, 2011 @ 8:34 AM
threadkiller wrote:As much as
[quote=threadkiller]As much as I “dislike” BofA(BAC) I would buy in now, by the end of the year I predict it will be worth twice as much. Hold it a couple of years and it will be worth 10 times as much, just my 2¢.[/quote]
I agree. BAC has a lot of toxic waste still on their books. Lawsuits and other problems. But over the long haul I feel comfortable at these levels. I bought a bunch yesterday in my kids “college fund” account. Bought in the low $6’s yesterday and it’s doing well today.
I’m not sure as 10 X as much. But this should be an easy triple in a few years.
August 9, 2011 @ 8:46 AM
Markets are oversold but imo
Markets are oversold but imo it is hoping/anticipating a bone from the FOMC meeting. Short termers look out below if it doesn’t get it.
August 9, 2011 @ 11:46 AM
And so we settle into
And so we settle into despair, animal spirits broken, and grind down into …the next election? S&P 900?
August 9, 2011 @ 7:31 AM
Here’s what I do. I keep
Here’s what I do. I keep 10-20% (depending on how I feel) in mm account. When the stock market tanks and I think it is at the bottom, I move it into stocks. When I think prices are at a peak again, I move 10-20% back to mm.
Not sure how much good it actually does me, but it makes me feel like I’m at least doing something productive and not letting a bunch of lemmings who buy and sell based on the rumor of the day dictate my future.
August 9, 2011 @ 8:34 AM
Be careful about MM funds.
Be careful about MM funds. They tend to have significant holdings in European bank paper. It isn’t clear how solvent those banks are.
August 10, 2011 @ 7:28 AM
sreeb wrote:Be careful about
[quote=sreeb]Be careful about MM funds. They tend to have significant holdings in European bank paper. It isn’t clear how solvent those banks are.[/quote]
Thanks for the heads-up sreeb, I will definitely take a look…
August 10, 2011 @ 7:38 AM
Your actual appetite for
Your actual appetite for volatility is often quite a bit less than what you believe your tolerance is
August 10, 2011 @ 8:28 AM
So, who sold at the close
So, who sold at the close yesterday? -427 so far.
August 10, 2011 @ 11:35 AM
AN wrote:So, who sold at the
[quote=AN]So, who sold at the close yesterday? -427 so far.[/quote]
Me…..a 401a turned to cash 🙂
IRA(s) the day before, but they weren’t seriously affected by last weeks rumblings.
August 10, 2011 @ 1:45 PM
bearishgurl wrote:AN
[quote=bearishgurl][quote=AN]So, who sold at the close yesterday? -427 so far.[/quote]
Me…..a 401a turned to cash 🙂
IRA(s) the day before, but they weren’t seriously affected by last weeks rumblings.[/quote]
Closed today at -519.83. Lower than the close of 2 days ago. A sale two days ago didn’t look good yesterday but looks great today 😀
August 12, 2011 @ 10:15 AM
After being told my 401k
After being told my 401k would not allow precious metals in 2005 I cashed out took the 10% tax hit and purchased gold (real coins). I would guess my 401k is doing better than most.
The problem is I have had to lean on that money over the past few years to make up the shortfall on my income. See war on savers!
August 15, 2011 @ 2:41 PM
Got rollercoaster?
Any other
Got rollercoaster?
Any other predictions? I’m sure things will be much clearer when we look back 4 months from now on what we should/shouldn’t have done exactly at this moment…
I think the only difference folks should be considering are
1) How old are you right now?
and
2) How soon do you need the money?
March 14, 2012 @ 7:33 AM
Like I’ve said in previous
Like I’ve said in previous posts my timing is terrible. Luckily my wife took my advice and still holds BAC, up 40% for her now.
March 15, 2012 @ 3:52 PM
moneymaker wrote:Like I’ve
[quote=moneymaker]Like I’ve said in previous posts my timing is terrible. Luckily my wife took my advice and still holds BAC, up 40% for her now.[/quote]
Yeah, as I mentioned in my previous posts, BAC was a great investment if you got in the $6’s. I bought a boatload in the $6 range and today it hit $9.25. I still feel confident holding for the long-term at these levels.
Longer term, Bank of America should do well as more of the toxic waste comes off it’s books. I’ll hold it for the long term and still expect it to triple from the $6 I paid in the long term.
March 14, 2012 @ 8:29 AM
Well the markets have pretty
Well the markets have pretty much rebounded…The first 3 months of this year has seen really good gains if you weren’t in cash….. I’m taking money out now and “doing something else with it”…..
March 15, 2012 @ 10:44 PM
Buy more.
Buy low sell high.
Buy more.
Buy low sell high.