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
New Report: All Stock Portfolio Beats Stock and Bond Mix Over Time (Originally From Bloomberg)
@Baseball_Fan - I don’t think you’ll get many affirmatives here on your annuity question. I’m sure they have a place for some people. But haven’t been mentioned much by board members. Dunno … Maybe …
@FD - I posted the advice of Buffett to his wife’s financial administrator to put 90% of her wealth upon his passing into a low cost S&P 500 index fund because that seemed closest to your “WTF” proposition. Indeed, she will likely need to withdraw less than the 3% annually you mention to afford a decent living standard. I think I get it. “WTF” means you’re so rich you can afford to take big chances. It really won’t affect you much if the S&P falls 50% or more. You’ll still be fine.
@hank- well, Baseball_Fan does make a good point regarding the desirability of having a reasonable amount of secure fixed income for a number of years immediately after retirement. That happened to us- immediately after our retirement the great events of 2009 did a real number on our investments generally. However our SS and pension income allowed us to ride that out without disaster.
We were really lucky, but I do have to say that my spreadsheet planning for some twenty years prior to retirement had included such a scenario. You might remember many exchanges between me and MJG regarding my approach and his vaunted Monte Carlo alternatives.
@Baseball_Fan, watch Pulp Fiction and any other Quentin Tarantino film when you get a chance. One of his earlier ones, Reservoir Dogs, comes to mind. Intense. Pulp Fiction is one of my all-time favorites. A bit weird maybe in that it seems like multiple stories in parallel, but so good.
Old_joe, You can invest as you wish, I never said that CD or TR are bad or I will never invest in them. I know 3 investors with millions, one has over 90% in Munis + 10% stocks, the second has over 90% in stocks, the third has 50% in MSFT, all have been doing it for decades and are very pleased. In the last 1.5 years I posted many times that ST CD didn't make sense because MM has been doing very well and similar. About several weeks ago I posted that 3-5 years CDs make more sense to me because inflation is coming down, rates are likely to come down and these CDs will still pay nicely and much better than MM. BTW, looks like several CDs had problems in the past.
Thanks a lot for the ideas for my next MFO article. It is better than the one that I had picked. I have written many articles on this topic, but see there is more life to it yet.
Comments
@FD - I posted the advice of Buffett to his wife’s financial administrator to put 90% of her wealth upon his passing into a low cost S&P 500 index fund because that seemed closest to your “WTF” proposition. Indeed, she will likely need to withdraw less than the 3% annually you mention to afford a decent living standard. I think I get it. “WTF” means you’re so rich you can afford to take big chances. It really won’t affect you much if the S&P falls 50% or more. You’ll still be fine.
We were really lucky, but I do have to say that my spreadsheet planning for some twenty years prior to retirement had included such a scenario. You might remember many exchanges between me and MJG regarding my approach and his vaunted Monte Carlo alternatives.
You can invest as you wish, I never said that CD or TR are bad or I will never invest in them.
I know 3 investors with millions, one has over 90% in Munis + 10% stocks, the second has over 90% in stocks, the third has 50% in MSFT, all have been doing it for decades and are very pleased.
In the last 1.5 years I posted many times that ST CD didn't make sense because MM has been doing very well and similar. About several weeks ago I posted that 3-5 years CDs make more sense to me because inflation is coming down, rates are likely to come down and these CDs will still pay nicely and much better than MM.
BTW, looks like several CDs had problems in the past.