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.
As I read the survey questions and their interpretation, one thing kept coming to mind: "Market research is done for the purpose of marketing one's products; it is released only when it advances that goal."
The "conservatism" conclude is drawn from a question that asks them to think "about all their accounts" and report on what percentage is in what asset class. "Cash" is the number one answer.
The question is, what does that tell us? We don't know, for example, the size of those accounts. If you've got $2000 in your savings account and $1995 in your investment account, should we conclude that you're too conservative? Or perhaps too aggressive since the $2,000 isn't enough to function as an emergency fund? Or making steady, modest progress (if last year you were $2000 in savings, $1000 in investing)? Or that you're simply not saving (not able to save) enough?
lol at that clip and those accents. "Socca is supposed to be fun, aaaight?" It's like the real "Real Housewives of New Jersey". Watch at about 1:31 for one to trip stepping off a sidewalk and then she looks back like, "Who put that sidewalk there?"
Living at home longer because we're younger, longer. First of all, a confession: the basic manner in which that blonde expert responds to the questioner makes me want to scream and blow my brains out. Finishing statements with an upward inflection, as if it were a question... the nifty choice of vocabulary, by which she is dissembling, using euphemisms. She emphatically affirms the idea of giving a grown child at home a hard deadline for leaving--- then makes the rest of her answer wishy-washy and NON-specific. Ugh. I dunno. I just find it all loathsome. It seems to me to be a symptom of our societal malaise in general. Don't be direct. Don't just SAY something, talk your way around it forever.... Like Robt. McNamara said in "Fog of War:" Don't answer the question you were asked. Answer the question you WISH you were asked. And you're not allowed to have a sense of humor, either. ... Remember FDR responding to the question about where the Doolittle raiders took off from in their B-25 Mitchell bombers after they hit Tokyo? FDR giggled and told them the planes had left for Tokyo from "our secret base in Shangri-La."
Reporters today would be all over that. What do you MEAN? Why aren't you taking that question seriously?" Accchhh.
***********************************
My son is in that crowd, that age group. He'll be 21 in October. I am quite honestly not pushing him, not pressuring him. Actually, I try to be as reassuring as I can be, urging him to be patient and not get downhearted: this is a "brave new world" out there, today. You can have all the ambition in the world, but the deck is stacked against you these days. There has been AT LEAST one gigantic sea-change since the days of my own summer jobs. I saved my money and the amount actually was big enough to matter-in yesterday's dollars- to put a dent into what I would otherwise owe in loans... And believe it or not, when I was eligible for "work-study" jobs, I was told that the school was literally too small of an institution. They had no job for me. How do ya like DEM apples? ... So, ya... the generation that's coming of age right now is coming of age in a society in which everything is a crap-shoot. Get lucky and do well, or, like almost everyone, struggle just to pay the basic bills. And forget about buying a house. Totally out of reach. If you managed to get a mortgage, it would be an albatross around your neck.
But at the same time, it is absolutely true that standards HAVE been dumbed-down. Expectations EVERYWHERE are lower, not as demanding as it used to be. And it used to be that it MATTERED to have stuff make sense and be logical. With the machines in charge today, people don't care. Update our records? What, are you nuts? It's easier and cheaper for us to just keep sending useless junk to you in the mail.
There are no easy answers. There never are, when it comes to important stuff.
Reply to @Crash: Nice response, I was lucky with my son, the day he graduated from college he moved out of the house with job in hand , and we've been empty nesters ever since.
Reply to @Crash: "And forget about buying a house. Totally out of reach. If you managed to get a mortgage, it would be an albatross around your neck. "
I think the thing also becomes college debt. You have people who are graduating with so much college debt that they could practically have bought a basic apartment in some cities with the amount of student loans. I'm not saying don't go to college, just that there are people who are graduating with an amount of student loans that could have bought a decent apartment outright. If they have a house worth of student loan debt, most are not going to be able to go buy a house on top of it.
You have young people who then have to rent and then get slammed at the end of the year when rents go up 10%-15%+.
Rents are just insane in major cities (and elsewhere for that matter) and people thought that rents would get to a point where tables turned and those people would buy. It just hasn't happened and if anything, rents have gone much higher - rents are at record levels in many areas.
People don't have the credit, don't have the down payment or any number of reasons. The people who want to buy in many cases can't (and it's still likely at the point where buying is cheaper than renting in many areas) and the people who can probably in many cases don't want or need to.
Maybe this will be more of a situation down the road then it is now, but - and I say this broadly - I don't think the younger generations are going to be there to buy the housing stock in this country en masse (and to the price expected) from the older generations who want to sell.
People are buying, but I think a large amount of the people who have been buying aren't long-term renters, but probably a lot of investors - I mean, look at the amount of home sales that are cash and look at the amount of first time buyers as a %.
@ Scott: Agree with much of what you pointed out. Would add another comment: My generation (pre-WW2 babies) were all about into buying houses. While I believe that the present situation of saddling college grads with ridiculous amounts of debt is both scandalous and ultimately unsustainable, there is one advantage: if you don't own (whether underwater or no), you can pick up and move at any time. Once into homeownership, individuals are much more tied to the spot, whether by need or by emotional investment. Folks who can't move because they are underwater on a mortgage they never should have signed up for are in a dilemma if the job opportunities are all elsewhere -- a situation that I think will become increasingly common as the economy restructures itself. While college debt will follow you forever, at least it follows rather than tying you to one location.
And yes, what I see here locally is loads of $$$ going into housing as either flips (becoming less frequent) and longer-term RE Investment Corps (spruce them up minimally & rent them out). Are you wasting money on rent??? That depends -- and make sure you calculations are right. My youngest son, mid forties, a free-lance TV pro, just last year bought his first-ever real-estate -- a condo in Denver. For the previous 12-15 years he lived in a very nice rent-controlled apt in Santa Monica (the landlord loved him & allowed his pet cats because he not only was a good tenant but he even invested in some improvements on his own nickel -- and in return the landlord did him a couple of real favors.)
All of this is to say that mobility is going to be the key for a lot of the current generation, and I see that as bringing on a sea changed that I don't think is fully realized.
Comments
The "conservatism" conclude is drawn from a question that asks them to think "about all their accounts" and report on what percentage is in what asset class. "Cash" is the number one answer.
The question is, what does that tell us? We don't know, for example, the size of those accounts. If you've got $2000 in your savings account and $1995 in your investment account, should we conclude that you're too conservative? Or perhaps too aggressive since the $2,000 isn't enough to function as an emergency fund? Or making steady, modest progress (if last year you were $2000 in savings, $1000 in investing)? Or that you're simply not saving (not able to save) enough?
I don't know.
David
Reporters today would be all over that. What do you MEAN? Why aren't you taking that question seriously?" Accchhh.
***********************************
My son is in that crowd, that age group. He'll be 21 in October. I am quite honestly not pushing him, not pressuring him. Actually, I try to be as reassuring as I can be, urging him to be patient and not get downhearted: this is a "brave new world" out there, today. You can have all the ambition in the world, but the deck is stacked against you these days. There has been AT LEAST one gigantic sea-change since the days of my own summer jobs. I saved my money and the amount actually was big enough to matter-in yesterday's dollars- to put a dent into what I would otherwise owe in loans... And believe it or not, when I was eligible for "work-study" jobs, I was told that the school was literally too small of an institution. They had no job for me. How do ya like DEM apples? ... So, ya... the generation that's coming of age right now is coming of age in a society in which everything is a crap-shoot. Get lucky and do well, or, like almost everyone, struggle just to pay the basic bills. And forget about buying a house. Totally out of reach. If you managed to get a mortgage, it would be an albatross around your neck.
But at the same time, it is absolutely true that standards HAVE been dumbed-down. Expectations EVERYWHERE are lower, not as demanding as it used to be. And it used to be that it MATTERED to have stuff make sense and be logical. With the machines in charge today, people don't care. Update our records? What, are you nuts? It's easier and cheaper for us to just keep sending useless junk to you in the mail.
There are no easy answers. There never are, when it comes to important stuff.
...On the other hand, there are those for whom everything magically falls into place, even when we're playing hooky. Laugh!
I think the thing also becomes college debt. You have people who are graduating with so much college debt that they could practically have bought a basic apartment in some cities with the amount of student loans. I'm not saying don't go to college, just that there are people who are graduating with an amount of student loans that could have bought a decent apartment outright. If they have a house worth of student loan debt, most are not going to be able to go buy a house on top of it.
You have young people who then have to rent and then get slammed at the end of the year when rents go up 10%-15%+.
Rents are just insane in major cities (and elsewhere for that matter) and people thought that rents would get to a point where tables turned and those people would buy. It just hasn't happened and if anything, rents have gone much higher - rents are at record levels in many areas.
People don't have the credit, don't have the down payment or any number of reasons. The people who want to buy in many cases can't (and it's still likely at the point where buying is cheaper than renting in many areas) and the people who can probably in many cases don't want or need to.
Maybe this will be more of a situation down the road then it is now, but - and I say this broadly - I don't think the younger generations are going to be there to buy the housing stock in this country en masse (and to the price expected) from the older generations who want to sell.
People are buying, but I think a large amount of the people who have been buying aren't long-term renters, but probably a lot of investors - I mean, look at the amount of home sales that are cash and look at the amount of first time buyers as a %.
Regards,
Ted
Regards,
Ted
http://www.realtor.com/news/john-hughes-lake-forest-home-on-the-market-photos/#.UvPeePldUud
Regards,
Ted
The Bull:
And yes, what I see here locally is loads of $$$ going into housing as either flips (becoming less frequent) and longer-term RE Investment Corps (spruce them up minimally & rent them out). Are you wasting money on rent??? That depends -- and make sure you calculations are right. My youngest son, mid forties, a free-lance TV pro, just last year bought his first-ever real-estate -- a condo in Denver. For the previous 12-15 years he lived in a very nice rent-controlled apt in Santa Monica (the landlord loved him & allowed his pet cats because he not only was a good tenant but he even invested in some improvements on his own nickel -- and in return the landlord did him a couple of real favors.)
All of this is to say that mobility is going to be the key for a lot of the current generation, and I see that as bringing on a sea changed that I don't think is fully realized.