Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
Just noticing such tremendous VOLATILITY in the Markets, "that is all."
With all this talk about extreme volatility, step back for a second and look at how you've faired the past 6 mo or even year to date. My guess is your investments are likely positive. At least it's nice to know you are weathering the storm.
Thanks for the replies, everyone. We can put this thread to bed, I suppose--- even if the volatility continues apace. Personally, I'm as covered as covered can be, and loving it. The whipsaw effect cannot be denied, is all.
Was a lot easier at 60 to “bite the bullet” and buy down in 2008 than at 75 today. Nonetheless, I’ve added a bit of risk over past week, perhaps illustrating Franklin’s proverb - “Experience keeps a dear school …”
Diversification paid off Friday from what I can see. Bonds of almost every color held their own or gained. Precious metals surged. Some foreign markets fared far better than domestic. DODEX, for example, was unchanged.
Hank is correct about diversification. My OEF bonds were down by just a penny. But my junk ETF was down -0.62%. TIPs were up. NHYDY was up, barely. (Norway is home for that company.)
Most people agree that the worst negative impact is to have to sell equities at the bottom because you need the money to live on. So you should not have money in the market that you will need to live on for the foreseeable future.
The question is always "how long is the foreseeable future". A very long time it turns out.
I looked at DJA and SP500 worse case losses over last 100 years and how long it took to get back to peak and stay there.
Pundits usually say five years of expenses is enough to keep you from selling at the bottom, but this ignores the two "double bottoms " ie in the 1930s and 1970s when stocks crashed again and the "lost decade" of the 2000s
It took 10 years for DJA to get past it's peak in 1973. It took 13 years for SP500 to get past 2000 peak.
Our good buddy John Hussman believes we could be in for a 60% decline from here.
So I try to ensure I have enough cash and bonds ( after accounting for Social Security and dividends etc ) to live on for at least ten years. I am retired without a pension, so what I got is all I am going to get!
I am retired without a pension, so what I got is all I am going to get!
I see you're factoring in Social Security and, hopefully, Medicare to help pay your bills, which, although not enough for many people, is nothing to be sneezed at. That stability of Social Security, which voters if they're smart should defend, is one of the reasons Social Security should never be privatized, reduced or tied to the stock market in any way. Having it be separate from the market's whims is invaluable for retirees.
I think the social chaos and bankrupt hospital system that would ensue with cuts in Social Security and Medicare will prevent the benefits from being cut. It is likely that they will be taxed more heavily and the charges will go up. My wife and I spent $8000 out of pocket on health insurance premiums last year, about half of what we paid for private insurance when we were working. I am sure someone can calculate the current dollar value of Medicare premiums we paid into the system.
The cry to privatize social security always is the loudest just before a massive bear market when all of the "free enterprisers" claim they don't want to support people who couldn't make enough money to fund their own retirements
As soon as the market drops 20 or 30% these cries disappear. Very similar to the Silicon Valley "Libertarians" who campaigned and lobbied ( successfully) for the Government to "Get out of my business" until their money disappeared in SVB and then they demanded to be made whole because they are entitled to a "Systemic risk exemption"
I think using your personal rate of inflation helps to eliminate some of the angst about real vs nominal interest rates.
If you don't buy a car, and you own your house, health care, taxes and food and energy inflation are the biggest problem that can't be controlled with lifestyle changes for retirees.
It helps a lot to live in a state (MA) where health care institutions and MDs have a hard time refusing to take Medicare. It is not illegal but there are so many retirees on the Cape no physician or hospital could survive refusing Medicare, except maybe plastic surgeons.
Of course we pay for it in other ways, ie taxes. 5% state income tax, and our real estate taxes have increased 10% YOY
@sma3. People love to talk about California being expensive but our property tax just went up 1.9% year over year. Wasn’t planning on buying a car ever again but our perfect retirement car recently was totaled in an accident. Shit happens.
@sma3. People love to talk about California being expensive but our property tax just went up 1.9% year over year. Wasn’t planning on buying a car ever again but our perfect retirement car recently was totaled in an accident. Shit happens.
Damn. That sucks. Sorry to hear, and I do hope there were no injuries. Will you let us know?
Here's a weird one: I loved our old Jeep Patriot. White. Then we had a fire under the hood. The firemen found green boughs in there. THAT'S what ignited. Some damn animal made a NEST in there. I was less happy with the replacement we bought: a Jeep Cherokee. I think it was the first year the company resurrected that brand. With the crazy looking headlights.
@crash. Thank you for your concern. I was sore and the airbag cut my hand but no great harm. We liked the car so much that we bought the same car,,, three years newer. Big out of pocket. It was a CPO car but I figured out it had never been inspected. Had it checked out and it had low compression. The dealer took the car back. The next day it was back on the lot as a CPO car. Buyer beware.
@crash. Thank you for your concern. I was sore and the airbag cut my hand but no great harm. We liked the car so much that we bought the same car,,, three years newer. Big out of pocket. It was a CPO car but I figured out it had never been inspected. Had it checked out and it had low compression. The dealer took the car back. The next day it was back on the lot as a CPO car. Buyer beware.
CPO. might be marketing BS or highly inspected and checked out late model car with an extensive warranty. The one I bought had a half a dozen items checks as perfect that weren’t on the car at all. And it was certified in writing the the engine was carefully inspected but in reality had a bone dry coolant tank. The brake pads had much less remaining than the certification reported. This was a manufacture’s program through a new car dealership. As a famous asshole once said” trust but verify”
The car that was totaled was a CPO that was flawless for three years. That’s why we went back to the same dealership and bought a 3 year newer version of the same car, even the same color. Shit happened. But we were lucky we caught the non inspection and demanded our own inspections
I like to sleep well at night. 10 years in bucket #1 is the best sleeping aid.
My allocation model is so fragmented & complicated that I fall asleep at night just trying to figure it all out. Great sleep inducer.
I’ve been burned more than once on used cars, Usually buy new. Then I know what I’m getting. There’s an old expression that when you buy used you’re “Buying somebody else’s problems.”
@Old_Joe. My car style is to buy minimalistic cars and keep them forever. We sail a 1999 boat as well. So my habit is to check fluids every time we take her out and the cars on Sunday. Just an old habit. So when we got the car to replace the totaled one I checked it on the next Sunday. The coolant tank was dry and the oil didn’t look clean. I escalated my concern with the manufacturer and at the dealership and documented the empty tank with pix. Eventually the owner said they would run a whole new certification and three engine tests. The compression was low and I said I wanted a refund. By this time we had the car for a month. The owner immediately said yes,,,, I think to avoid bad publicity. But I really had to grind to get the tests.
@larryB- thanks much. Like you, minimalist on vehicles/keep forever. Years ago AAA had an inspection service that would certify a vehicle for a buyer or seller, and you could trust them. Haven't heard about anything like that in a long time.
We have been happy buying sedans just off of three year leases, but only look at ones that have had all the required maintenance done at a dealer on time.
if you put the VIN number into google the records pop up.
The only info that "popped up" was various search companies similar to the generic info that you get if you look up a person by name. Just like those very "iffy" websites, vehicle history "Additional Reports" cost additional amounts, with no guarantee of what kind of info that you might actually get. Caveat Emptor definitely applies to this stuff, as it also does to any "preowned" vehicle.
Since those types of "reports" are simply skimmed from any information that happens to be on the internet someplace, they are of very limited value. Unless some entity has deliberately placed information specific to your vehicle's VIN on the internet, you're not going to find much other than general generic information pertaining to your vehicle type.
Comments
The question is always "how long is the foreseeable future". A very long time it turns out.
I looked at DJA and SP500 worse case losses over last 100 years and how long it took to get back to peak and stay there.
Pundits usually say five years of expenses is enough to keep you from selling at the bottom, but this ignores the two "double bottoms " ie in the 1930s and 1970s when stocks crashed again and the "lost decade" of the 2000s
It took 10 years for DJA to get past it's peak in 1973. It took 13 years for SP500 to get past 2000 peak.
Our good buddy John Hussman believes we could be in for a 60% decline from here.
https://www.hussmanfunds.com/comment/mc230319/
So I try to ensure I have enough cash and bonds ( after accounting for Social Security and dividends etc ) to live on for at least ten years. I am retired without a pension, so what I got is all I am going to get!
I think the social chaos and bankrupt hospital system that would ensue with cuts in Social Security and Medicare will prevent the benefits from being cut. It is likely that they will be taxed more heavily and the charges will go up. My wife and I spent $8000 out of pocket on health insurance premiums last year, about half of what we paid for private insurance when we were working. I am sure someone can calculate the current dollar value of Medicare premiums we paid into the system.
The cry to privatize social security always is the loudest just before a massive bear market when all of the "free enterprisers" claim they don't want to support people who couldn't make enough money to fund their own retirements
As soon as the market drops 20 or 30% these cries disappear. Very similar to the Silicon Valley "Libertarians" who campaigned and lobbied ( successfully) for the Government to "Get out of my business" until their money disappeared in SVB and then they demanded to be made whole because they are entitled to a "Systemic risk exemption"
I think using your personal rate of inflation helps to eliminate some of the angst about real vs nominal interest rates.
If you don't buy a car, and you own your house, health care, taxes and food and energy inflation are the biggest problem that can't be controlled with lifestyle changes for retirees.
It helps a lot to live in a state (MA) where health care institutions and MDs have a hard time refusing to take Medicare. It is not illegal but there are so many retirees on the Cape no physician or hospital could survive refusing Medicare, except maybe plastic surgeons.
Of course we pay for it in other ways, ie taxes. 5% state income tax, and our real estate taxes have increased 10% YOY
Here's a weird one: I loved our old Jeep Patriot. White. Then we had a fire under the hood. The firemen found green boughs in there. THAT'S what ignited. Some damn animal made a NEST in there. I was less happy with the replacement we bought: a Jeep Cherokee. I think it was the first year the company resurrected that brand. With the crazy looking headlights.
Glad you're pretty much ok, physically.
I suspect the "C" mostly guarantees that the vehicle is used, rather than guaranteeing that it's in decent shape.
FWIW I'm "CPU"- Certified Previously Used.
Yes, about our Cherokee, the loan agent said, in effect, we paid too much. i'm accustomed to getting screwed at dealerships. Just bend over.
Great sleep inducer.
I’ve been burned more than once on used cars, Usually buy new. Then I know what I’m getting. There’s an old expression that when you buy used you’re “Buying somebody else’s problems.”
if you put the VIN number into google the records pop up.
Since those types of "reports" are simply skimmed from any information that happens to be on the internet someplace, they are of very limited value. Unless some entity has deliberately placed information specific to your vehicle's VIN on the internet, you're not going to find much other than general generic information pertaining to your vehicle type.