[svelte]

[quote=carlsbadworker]
However, which asset class is risky free? You have to put money somewhere. Diversification would certainly help.[/quote]

Exactly.

[svelte]

[quote=scaredyclassic]what if the future is nothing like the past?[/quote]

This worries me quite a bit, but really all we have to go on is how things behaved in the past.

I’ve been looking at this chart a lot:

http://www.macrotrends.net/2324/sp-500-historical-chart-data

ltsdd talked about the period of time it takes for the market to recover lost ground – I would call this a “bathtub” period…things go down (to the bottom of the bathtub) then recover.

If you look at the microtrends data in the last 50+ years, there were the following bathtubs and pure growth (not in a bathtub) periods:

Bathtub: 12/1961 – 1/1964 (2 yrs 1 mo)
Pure Growth: 1/1964 – 1/1966 (2 yrs)

Bathtub: 1/1966 – 8/1967 (1 yr 8 mo)
Pure G: 8/1967 – 1/1969 (1 yr 4 mo)

Bathtub: 1/1969 – 4/1971 (2 yr 3 mo)
Pure G: 4/1971 – 12/1972 (1 yr 8 mo)

Bathtub: 12/1972 – 6/1980 (7 yr 7 mo)
Pure G: 6/1980 – 11/1980 (5 mo)

Bathtub: 11/1980 – 1/1983 (2 yr 2 mo)
Pure G: 1/1983 – 11/1983 (11 mo)

Bathtub: 11/1983 – 8/1984 (10 mo)
Pure G: 8/1984 – 9/1987 (3 yr 10 mo) (hit Black Friday)

Bathtub: 9/1987 – 5/1989 (1 yr 8 mo)
Pure G: 5/1989 – 8/2000 (11 yr 3 mo) (hit tech bubble)

Bathtub: 8/2000 – 10/2007 (7 yr 2 mo)
Pure G: 10/2007 – 10/2007 (1 mo) (hit housing bubble)

Bathtub: 10/2007 – 4/2013 (5 yr 5 mo)
Pure G: 4/2013 – present (4 yr 9 mo and growing)

So technically ltsdd is right – no bathtub over 10 years. BUT the last two bathtubs had only 1 month in between so they felt like one big 12 year bathtub!

That is why this has been a no joy recovery.

Another thing that appears to be happening: since they instituted the circuit breakers (after 1987) to keep the market from tanking from panic, the cycles appear to have lengthened by a considerable amount. Not sure if I have the cause and effect right, but it sure appears that way.

[svelte]

[quote=moneymaker]I believe the required 4% withdrawal doesn’t start until age 70 1/2, please correct me if I’m wrong. [/quote]

It is my understanding you are correct.

[quote=moneymaker]
Taking out 4% a year would never get you to zero, but by age 100 you would only have 30% left assuming gains=inflation.[/quote]

What ratio of bonds/equities are you factoring in here?

Even considering a 50/50 mix, since the S&P 500 averages a 9% return a year, if you have 50% of your portfolio in stocks you should return 4.5% just on stocks, which beats the 4% withdrawal, so you should have 100% of your principle remaining…less inflation.

When you say 30% left, I take it you think inflation will take you from 100% to 30%?

[svelte]

Thank you ltsdd.

I just ordered the book – it is dirt cheap even on Amazon. 5 bucks hard cover new shipping included.

Just found and read Galeno’s Mechanical Retirement Strategy and it is actually more in line with what I was thinking than other strategies I’ve been reading. Thanks for mentioning it.

[svelte]

Carlsbadworker,

I’ve read your post just above several times, and appreciate the thought that went into it and the insight it gives.

This is exactly the type of post that makes me visit this site.

Thank you.

[svelte]

I regret titling this thread the way I did. I do think, unfortunately, he’ll make it four years.

It is painful to realize we’re only 25% through that…and there is always the possibility it could get extended another four.

Oh the humanity.

[svelte]

[img_assist|nid=26513|title=Jan 2018 SP500|desc=|link=node|align=left|width=500|height=283]

[svelte]

[quote=ltsdd]

As for the market as a whole, it’s getting scary. I am seriously considering taking some $$ off of the table at the end of this month. Other than a little hiccup (-0.04%) in March 2017, the S&P500 has been up every month since Nov 2016.
[/quote]

You said it man.

These two graphs should give anybody pause

[img_assist|nid=26512|title=Jan 2018 DJIA|desc=|link=node|align=left|width=500|height=275]

[svelte]

Nobody’s even talked about the Sessions cancelation of Cole memo.

Sure puts things in a state of flux.

As the Oregon senator said, this may be the event that finally drives Congressional action to protect states rights on the topic.

Nothing angers the public more than Washington telling them what to do.

I’m all for each state deciding how to handle the topic. Deep south doesn’t want MJ? Fine, keep it illegal. But for the west coast, we should be able to decide our own destiny. It’s a big country, room enough for differing opinions as long as they are all respected.

My two cents.

(PS – this is a very risky move by Sessions…could really bite the Republicans hard in the midterms. But then, what do I know? I’m just a pleb)

[svelte]

[quote=kev374]I put in my buy order today, VOO @ 251.25 for 1094 shares, total value ~$275,000. I am going to take a bet that the market will be higher end 2018. Even though it’s crazy I think the market has solid momentum.[/quote]

I’m with you man. Rooting for you. You must have your pants tailor made cuz your balls must be HUGE. 🙂

[svelte]

[quote=Balboa]We have a couple of checking accounts at Lake Michigan Credit Union. There are some hoops to jump through, but they pay 3% on up to $15,000. Every month I have to log in four times, have $5 direct deposited from work, and reload my Amazon account with ten 50 cent purchases. A little annoying, but generally worth it.[/quote]

Man is that tempting. I’m mulling it over, but not sure I have the rigor to do all those steps each month.

But it sure is tempting…

[svelte]

[quote=livinincali][quote=svelte]Thinking of opening an online account.

Anyone on here use Barclays or Ally? If so what are your thoughts?[/quote]

Ally is formerly GMAC which had to be bailed out by the federal government during the last crash. While FDIC insures money up to $100K it would be nice if consumers actual shunned companies that make stupid decisions with their money. You certainly wouldn’t want to invest with Ally if you didn’t have FDIC insurance.[/quote]

Actually I think its 250K. And yes I checked on FDIC first. 🙂

[svelte]

It’s so unclear right now it’s driving me crazy.

I was ready to drop quite a bit into the market last week, but took awhile for me to move money around and it has went up so much I’m spooked now. Usually a normal acting market will drop right after it crosses a threshold – like 25K – but this one didn’t…it kept rising like crazy. To me that borders on mania.

Too afraid to drop my cash in right now and look the fool when things tank. Will probably keep it position to drop in should a tank occur, but day after day of rising without pause sure looks like the end of a long run.

I’m losing sleep over this. Luckily I have a patient wife.

[svelte]

Ally also offers a no-penalty CD (can withdraw principle and interest at any time), 1 year at 1.6%. Not a bad way to go either.

Catch is it is for $25K and up, or get a lower interest rate for lesser amounts.

[svelte]

Thanks guys.

I had a bit o cash I was going to spend – decided to postpone that for a year or so. Needed a safe place to park it.

Ally offers a 1 yr CD at 2% – appears to be the best deal going, though offer expires today. And there is only a 60 day interest penalty should I mis-guess and need the money earlier.

[Author]

Posts