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Reilly
Mountain climber
The Other Monrovia- CA
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Succinctly put, Dave. It ain't rocket science or smoke and mirrors. My
father-in-law was a missionary in Africa for 40 years. He never earned
more per year than what the average yuppie makes per month yet he religiously
invested in quality stocks and held them. He retired a multi-millionaire.
Moosie, sold yer Tesla stock yet? Now's the time to unload it, while you can.
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blahblah
Gym climber
Boulder
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The great tragedy of our education system is that the concept compound interest is not taught and re-taught.
Yes, a good example is the compounding effect of inflation, so due to the US government's economic polices its fiat currency will lose something like 90-99% of its value over the typical person's lifespan.
(This isn't meant to say that the stocks are or aren't a good investment---I don't have any better ideas, except to at least have some investment in real estate.)
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Fritz
Trad climber
Choss Creek, ID
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Topic Author's Reply - Nov 2, 2015 - 03:00pm PT
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Reilly & all. Don't play if you can't pay, but my stock & bond gains of 9.23% average per year, over the last 19 years are very pleasing at this point in life. I made a lot of mistakes at first, but the road has been much smoother since the 2008 meltdown.
However, our mixture of about 40% Vanguard short term bond funds, & about 60% mostly Vanguard stock funds, & some individual stocks, has returned an annual average of 10.62% over the last 6 years & 10 months. That average annual return will almost certainly improve by the end of this year, or not.
And meanwhile our bank is paying 1/2% on CDs.
Maybe we will have some more of that Frenchie wine. Kinda developed a taste for it this fall.
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Moof
Big Wall climber
Orygun
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I love how those ranting about deficits are also the same crowd jumping up and down wanting lower taxes.
Taxes on those who matter (mathematically) are too low. Top income tax bracket should be 50-75% at least. The Laffer curve does not plateau until at least about 75-90% incremental taxation. Heck, just a 2% tax increase for social security deductions would "cure" the balance sheet for the SSA.
It is all fixable is not for the nut jobs keeping the sane folks form properly running the country.
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john hansen
climber
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Not quite as optimistic as Moose but I will keep my measly 100 shares of Tesla for another 20 years.. at least. I may even buy some more someday.
Was surprised to see Facebook was up to over $100 per share when they only had their thirty six dollar IPO only a few years back.
There are a lot of strong, innovative ,companies out there.
I bought 2000 dollars of Micro Soft in 1997. I just don't think companies like this will go away . So much potential for the rest of the world, China, India they all want technology .
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apogee
climber
Technically expert, safe belayer, can lead if easy
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"My father-in-law was a missionary in Africa for 40 years. He never earned
more per year than what the average yuppie makes per month yet he religiously
invested in quality stocks and held them. He retired a multi-millionaire."
Yeah, well, the economic and investment landscape is a helluva lot different now than it was during that period. The financial sector now games the system so heavily, and so quickly, and figures out every (barely) legal way to raid one's investments, that no-one sees the kinds of returns that your father-in-law did over the course of a current investment lifetime.
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Reilly
Mountain climber
The Other Monrovia- CA
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Moosie, that's why I give advice - so I can remain humble.
Ap, think what you want but smart investors will always do well if they
have the discipline and patience, qualities which are increasingly honored
only in the breach. My point was that putting something away every month,
and I don't mean in the mattress, will reward you nicely eventually, if you
have the patience.
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EdwardT
Trad climber
Retired
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The financial sector now games the system so heavily, and so quickly, and figures out every (barely) legal way to raid one's investments, that no-one sees the kinds of returns that your father-in-law did over the course of a current investment lifetime.
Bullsh#t. Buy and hold still produces solid returns.
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apogee
climber
Technically expert, safe belayer, can lead if easy
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Reilly, my ex-inlaws followed the traditional investment path in exactly the way you've described, and got killed in the Enron collapse- just a few years before they were about to retire. YMMV, it would seem.
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Reilly
Mountain climber
The Other Monrovia- CA
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Sorry to hear that, Ap, but it seems highly likely they ignored (or broke)
one of the cardinal commandments:
1. Thou shalt not invest more than 5% of yer available funds in one investment or:
1a. Thou shalt not invest more than thou canst afford to lose in one investment.
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yanqui
climber
Balcarce, Argentina
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Not that I think it's going to effect Wall Street much, but it looks like there's a pretty big collapse coming to Argentina in the very near future. The time frame I'm seeing is a matter of weeks to several months. In order to maintain a false sense of wealth during election year Cristina is over spending about 7% of the GDP (financed by a combination of printing money and high interest debt). To compensate for the inflationary effect of printing money and to make debt payments she has spent almost all of Argentina's remaining reserves. Right now, even with strong captial controls (the population's access to US dollars is strongly limited by the government) they are spending about 100 million dollars a day and estimates of liquidity in the Central Bank run around 3 billion dollars (30 business days before there is nothing). The other factor in this dangerous bubble is that, even with strong import controls, Argentina has completely lost its trade surplus and with grain prices way down and Brazil struggling, this won't be easy to change. Just to import the energy Argentina needs to keep moving, they are now spending reserves. The sad thing is that most people here don't seem to realize the gravity of the situation and I fear there will be a lot of pissed off people when the bubble pops. With luck there will just be a precipitous devaluation and things will settle down, but it looks complicated to me. I'm a bit skeered, but prepared. And it shouldn't be as bad as 2001.
Remember: you heard it here first!
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Fritz
Trad climber
Choss Creek, ID
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Topic Author's Reply - Nov 5, 2015 - 07:22am PT
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Reilly! RE your comment to Apogee.
1. Thou shalt not invest more than 5% of yer available funds in one investment or:
1a. Thou shalt not invest more than thou canst afford to lose in one investment.
Ye pretch the truth brother!
We lost some money on Enron, & lost some more when the Feds closed down Washington Mutual Bank & handed it over to J.P. Morgan.
Those losses and others I've enjoyed are yet another reason to diversify across sectors & a good reason for more cautious investors to invest in low fee Mutual Funds like Vanguard, that spread the risk around.
Heidi & I plugged our 2015 IRA contributions into the Vanguard Healthcare Fund this week. It is considered a "higher-risk" investment, but I love their performance over the last 29 years, and especially over the last 5 years.
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apogee
climber
Technically expert, safe belayer, can lead if easy
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Reilly, their investments were pretty diversified, but that collapse affected multiple related investments at the same time...just a couple of years before they were to retire.
I'd write that off as a one-off circumstance, except that a very similar (and much more broadly) thing happened to uncountable Americans who were near retirement just before 2008. It just doesn't seem that the old skool conventional wisdom around investment is nearly as effective as it was 40 years ago.
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EdwardT
Trad climber
Retired
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Forty years ago?
Back when the stock market went nowhere for over 15 years?
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Fritz
Trad climber
Choss Creek, ID
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Topic Author's Reply - Nov 5, 2015 - 08:42am PT
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Apogee: I will agree that 2008 was a pretty awfull year for those in the stock market. Despite our holding about 40% short-term bond funds to our 60% stock funds & individual stocks, we lost 30.65%, almost one-third of our investment's value in 2008. The only panic selling we did, was to dump Wells Fargo Bank stock after Washington Mutual Bank got closed.
Otherwise, we sucked up the losses and didn't sell.
After the 30.65% loss in 2008,
In 2009 we had a 20.31% gain &
in 2010 we had a 12.06% gain.
Two years to recover from "The Great Recession" seems reasonable for a couple of old Crankaloons that wanted to retire with adequate income.
We also started buying stocks again in July 2009, taking advantage of high-dividend paying bargains.
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blahblah
Gym climber
Boulder
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Reilly, their investments were pretty diversified, but that collapse affected multiple related investments at the same time...just a couple of years before they were to retire.
I'd write that off as a one-off circumstance, except that a very similar (and much more broadly) thing happened to uncountable Americans who were near retirement just before 2008. It just doesn't seem that the old skool conventional wisdom around investment is nearly as effective as it was 40 years ago.
People who were planning to retire in the early 00's who had been buying and holding a broadly diversified US stock portfolio had incredible investment gains, notwithstanding anything that happened to Enron.
Who knows how current investors will do in the coming decades, but saying that people who retired in the early 00's had bad investment returns over their working lives (if they bought and hold broadly diversified US equities) is ludicrously wrong.
I suppose if you're considering "investors" who did things like panic sell at every market downturn and then buy in at the highs, you could somehow get a portfolio that didn't do well over that time period. But remember we're talking about buy and hold.
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Fritz
Trad climber
Choss Creek, ID
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Topic Author's Reply - Nov 20, 2015 - 10:15am PT
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S&P 500 heads for best weekly gain in more than a year!
Today's headline on Bloomberg. http://www.msn.com/en-us/money/markets/sandp-500-eyes-best-weekly-gain-in-more-than-a-year/ar-BBneH9F
Wall Street has shrugged off the French terror attacks & instead remains focused on what's right in our economy.
Recent data has bolstered the case for raising borrowing costs for the first time since 2006, with the latest payroll report -- released after the Fed’s October meeting -- showing the biggest increase in hiring this year while claims for jobless benefits hover near four-decade lows. Traders are now pricing in a 68 percent probability that the Fed will raise rates next month.
The S&P 500 was up 3.4 percent this week, on track for the most since October 2014, amid a rebound from its worst weekly decline in almost three months. Minutes from the Fed’s last meeting released Wednesday stressed that the pace of any interest-rate increases will be gradual, reassuring investors that higher borrowing costs won’t derail economic growth.
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Reilly
Mountain climber
The Other Monrovia- CA
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Nov 20, 2015 - 10:55am PT
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Yes, it's been a gud week! I'd love to spray about how gud but I don't want
to have to hear about being a speculator, mental or otherwise.
Which brings me to my next point. Many talk about excessive valuations
or excessive exuberance, if you will. Here's an interesting article
explaining such in terms of the Tobin Q Ratio which is a more sophisticated
way of looking at such rather than the typical P/E ratio. Yes, valuations
are high but we're not talking 2008 high and when adjusted for a number of
variables and standard deviations then they don't really appear that far off!
http://www.advisorperspectives.com/dshort/updates/Q-Ratio-and-Market-Valuation.php
Let us eat cake!
I should post a link to an interesting article about Tesla's problems,
especially in view of today's recall of EVERY VEHICLE THEY'VE BUILT!
Here ya go, Moosedrool:
Is Tesla Doomed?
BTW, if you don't know the author, Bob Lutz, then Google him.
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Fritz
Social climber
Choss Creek, ID
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Topic Author's Reply - Jul 20, 2016 - 11:09am PT
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WOW!
U.S. stock market indexes are at, or near, all-time highs only 3 weeks after the panic over Britian voting to exit the European Union.
Per this Bloomberg report, things are looking pretty good.
http://www.msn.com/en-us/money/markets/stocks-resume-record-climb-as-more-big-earnings-roll-in/ar-BBuy8Gz
The S&P 500 is up 6.3 percent in 2016 after a rebound from the worst-ever start to a year sparked by worries that slowing growth in China would spread and oil plunged to a 12-year low. Anxiety over the U.K.’s Brexit vote briefly derailed stocks last month before assurances that major central banks would act to counter ill effects from Britain’s secession helped usher equities to all-time highs.
With stocks hovering at record levels, investor nervousness has cooled, sending the CBOE Volatility Index toward two-year lows. The measure of market turbulence known as the VIX fell 4.3 percent to 11.45 after closing Tuesday at a one-year low.
Of the S&P 500 firms that have released results so far this season, 78 percent beat earnings estimates and 61 percent topped sales projections.
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