And BTW, your 401k manager makes money whether your 401k tanks or not. They don't have a fiduciary duty to you, only their shareholders.
So where do you suggest we build the poorhouses? Should we make the poor where P's on their chest, branding them for all the world to see what losers they are in an effort to make an example of these derelict's lack of self discipline and inability to save?
That was a blessed gift. I was buying stocks at a lower price until they gained value again. It increased my stock shares substantially!
So? Historical long term has stocks as the best investment around.
I guess you like the government teat, making tax payers pay more than the market bears.
I've been putting money in these for a pretty long time. I have no complaints.
My God...
When the market drops, that's when to buy more in them. If the market drops 33%, then when it recovers, your purchases are worth 50% more!
You see, people do things backward. They panic and sell on the slide. Then they buy on the recovery, and end up losing big. The rich people scaring you into this are laughing all the way to the bank, then paying capital gains. Not on the income tax charts.
Last edited by Wild Cobra; 08-03-2011 at 09:33 PM.
The first thing you need to understand is that your personal anecdotes are irrelevant when you can actually take a look at overall market performance.
I'm sure some people have done good in the market, even in the downturn. Doesn't mean that the market itself has done well or that the vast majority of people are still trying to catch up.
And historically you also have major market crashes that take a long time to recover. Historically investing in stocks had nothing to do with the way stocks are traded now either.
There was no online personal trading. There was no high speed trading. Algorithmic trading was a blimp in the radar, whereas now is almost 75% of all transactions.
The sheer amount of interactions of futures, events worldwide, economies crashing or rising overnight all have an impact that's very difficult to tract. Which IMO has a lot to do with the volatility in the market. The current performance dates back to 10+ years. It's a trend, not a hiccup.
There will be times where the Market will outperform other investments, no doubt about it. But it's a rollercoaster, and I frankly can't think it's a good idea to put your retirement money in that basket. It's just way too important. As I said, if you want to gamble with your money, open an account in ScottTrade and gamble away. I don't think that's the responsible thing to do for everybody though.
It seems to me Obama is the man from Neoliberal and therefore got exactly what he was after in the recent budget deal, but if you do subscribe to the "poor bargainer" construct, this one is pretty good:
"Barack Obama walks into a car dealership and says to the salesman, “I want to buy a car. Not having a car is not an option. I will definitely buy a car today. And I will definitely buy it from you; I will not buy one from the dealership down the street. I will be buying from you no matter what. But I will not pay a penny more than 50% the manufacturer’s suggested retail price.”
The salesman scratches his head. “So let me get this straight: You will be be buying a car from me no matter what I do or say?”
“Yes,” says Obama.
“Okay, then my offer is 100% of the MSRP.”
“I’ll tell you what,” Obama says, “I can see you understand the importance of a balanced approach. So I will meet you more than halfway. What do you say to 80%?”
The salesman shakes his head. “100%. And you’re a Kenyan Nazi Muslim Socialist baby killer.”
Obama nods thoughtfully. “Mm-hmm, mm-hmm. I see your point. How about 95%?”
“100%.”
“Deal!”
“Now it’s 120%,” says the salesman.
“Really?”
“Yes. I’ve been in this business a long time, and I know about cars. Trust me.”
“Well, I don’t know,” says Obama, “But I guess you’ve got me over a barrel. You have a deal. But NEXT time I’m really going to drive a hard bargain!”
I can’t wait, the salesman thinks."
How much your 401k dropped since 2006? Don't lie.
The average Joe doesn't want to micromanage. Period. They want to get the money they put in with a modi adjustment for inflation.
People that like to gamble go to Vegas, play lotto, or own stock. Good for them.
I'm not scared at all, I have full understanding of the risk involved.
The rich people are actually laughing at fools like you that think they're smarter than the rest and have a system to 'win' in the market.
The rich people make their money by charging you for every trade you make, regardless if the trade ends up being good or not. Laughing all the way to the bank.
It's only gone up. before that time, I had a rather balanced mix. In my new job, I left it all in the government securities. I missed the bottom by a couple days, I think March of 2009. When that happened, I moved most my holdings into stocks, and all my new investments into stocks. I did quite well. I have left it alone since then, though I'm thinking of moving more of the small cap stock fund into the overseas fund. I don't even remember exactly how I set it up. These things are often best managed by not trying to manage them. They aren't single stocks, but each fund is a basket of stocks.
There are funds for that.
401 K's are not that risky, unless you work for a sorry ass company that leaves you limited choices to include their own company stock.
Believe as you wish. I will retain most my money in stock funds and as I get closer to retirement, filter more and more into bond funds.
At least I plan for my retirement instead of being someone expecting the nanny State to care care of me.
Let me clarify. In the end, it's only gone up. I did a little digging around:
3/11/09 17:23
No.
We are close to the bottom, but the bottom is still illusive. Some day, the markets will return. If I recall, it's about 6800, rebounded a bit. Consider if you invested $1,000 into the market. If they follow the market and go back to say Dow of 14000, these stocks are now worth over $2,000. Buy low. If you wait for the recovery, you wont make the profit. Now of course, this is for long term investing. Not short term.
Since I changed jobs, my old 401k funds have lost about 40% or more and my new investments have been in Security Investments, which have made just under 1%. I'm simply letting the stocks I already have ride it out because I know they will recover. At some point soon, I will roll all those security investments into stocks, and make all my biweekly contributions go to stocks as well. I just haven't decided when is the right time yet. I'm expecting to see below a 6000 on the Dow, but I could be wrong. I actually expect it to drop as low as 5000, but I will place it in at 6000 if it goes that low, so I don't miss a good buying point. If it breaks 7000 however, maybe I'm wrong, and I'll consider putting it in then. It's just hard to say. The market responds fast to democrat policies in the negative, and slow to positive signs. I really think it will still go lower with this congress and president.
3/11/09 17:29
3/11/09 17:47Should I give them credit for this one day uptick before I see how far it drops again?
The markets have been falling since after the democrats took over congress in 2007 and started ins uting their policies. I don't expect to see a recovery until either they see how bad they ed up, or until the people are fed up with democrats and elect republicans again in 2010. I see a good two years or more of buying stocks at low prices. I just have to figure out when to start buying in.
If by some miracle, the democrats do turn this market around. Yes, I will be dumbfounded and give them credit. I just don't expect it to happen unless they change the approach they have. Their approach is disastrous.
10/21/09 10:08It's not any particular policy, but the at ude the democrats bring about. Talk of increasing taxes and regulations especially. It has to do with market confidence, and how investors think the laws will change.
That's a load of ignorance stuffed in three paragraphs.
Tell us all what specific policies in 2007 started the decline in stocks.
I wasn't against the government taking some action, I was only against bailing out those who had bad business practices.
Reward bad behavior, and you get more.
If you go back to the earliest of my posts on the subject, I said the government should guarantee loans by smaller banks who did it right, to cover borrowing as needed.
No, it just didn't drop as far as 6,000. It bottomed at 6547.04, I wasn't too far off percentage wise. I made a miscalculation, and if I was correct, I would have bought back into stocks even sooner, before they started going up again. March 9, the Dow hit 6547.04. While I was waiting for lower, I missed the bottom, by about a week. I got in at about 7,600 if I remember right. I don't remember my password for my on-line account and I'm not going to find it to accurately find my gains. I know they are there. I only get an annual report in the mail.
I'm glad you luckied out (even though government securities didn't outpace inflation, IIRC, so you might only have gotten even). Most people didn't and it's rather well do ented. Baby boomers, now heading for retirement, have on average 40% of their 401K in stocks. People that realize that they're not going to have enough to retire will gamble, and, as seen, for the most part, will lose on that gamble.
A lot of people are still nostalgic with the big dotcom stock bubble of the 90's. That people need to realize that was an exception, and it's far from the rule.
What kind? Hedge funds are way too aggressive. They will gamble way harder than Mutual funds, and if they go under, tough luck. Mutual funds are less aggressive, but still risky. There's really nothing as secure as government backed, even if it isn't that profitable.
401k's are an instrument that will do as well as the investments you have on it, and the market conditions surrounding any given time. There's also nothing preventing you from having a 401k (nor I'm advocating doing away with them). The market itself has turned into a way too volatile medium though. And if you're just going to invest in government instruments only, then paying your 401k manager just becomes overhead.
It's not a matter of 'believe'. In it's current state, the market is a matter of having both significant volume and a nearly unmeasurable amount of luck or inside info. I spend $2 a week on two tickets for Mega Millions and Power Ball, and I'm willing to bet I have as many odds of becoming a millionaire through that medium that you do into becoming a millionaire playing with your stocks.
Nothing wrong with planning for retirement. Plenty of people do all the time and some of them still don't have enough. A fairly familiar situation on the current crop of retirees.
I personally don't expect anybody to take care of me. There are other investments that are not tied to the market or bonds that might not perform as well as stocks in a bubble, but are good enough to relatively offset inflation. We were just talking about that with SnakeBoy the other day.
This is BS though. The markets have been performing poorly since 2000, basically after the bubble. Inflation since then has been around 31%. No market index has been able to offset that.
Sure, if you micromanaged, juggled your stocks at the right time, picked up some hot steaming stock like Apple or Google and luckied out, you could probably outperform the index. But that's the exception, not the rule.
LOL...
I'm not looking to be a millionaire, but I have done worse case to best case serious in the past that tells me my usable annual income from my 401K will range, in 2002 dollars, anywhere from $26k to almost $800k. Now since we took this hit, the best case of $800k is no longer real, but it's still at least $500k I bet if I recalculate. the bottom will also now be higher that $26k, probably about $28k to 30k. I figure I will have realistically have about $100k annual in 2002 dollars to retire on.
Compound interest is a wonderful thing.
Believe as you wish.
Good luck with that. Just FYI, the inflation rate between 2002 to 2011 is 25.5%. You can chomp off a quarter of whatever number you have there. It's only getting worse too, with the QE4, QE5, QE6, etc. Not to mention that it's much more likely you'll see another market crash than a bubble. You're gambling your money away. But hey, it's your money.
I'll take that as a "yes, the market isn't for everyone". After all, your argument is that you've done what you think is good, not that the markets have.
Last edited by ElNono; 08-04-2011 at 01:00 AM.
LaRouche! Paranoia BUSINESS! Paranoia CELEBRITY! BE VERY AFRAID!
I haven't seen LaRouche mentioned in a long time.
All of his paranoia, for decades(he's 89), has always turned out to be TRUE!
I hoped to get a chuckle out of that.
Oh god. Now its WC, financial market genius. Is there anything he cannot do?
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