# Stock Market



## pedro47 (Jan 20, 2016)

I feel that this a stock market correction.


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## DeniseM (Jan 20, 2016)

A friendly suggestion:  I know the two topics are inter-related, but let's please avoid going down the political path with this thread.  Thank you kindly!


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## ace2000 (Jan 20, 2016)

Oil and China seem to be driving this downturn.


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## johnrsrq (Jan 20, 2016)

*lower for longer*

correction indeed, bear market in many sectors.  opportunities in bear exist.

sharp reversals are dramatic, pain for some shorts, but not to get fooled. The tidal change is slow.

corporate profits are negatively sloped. compression. but not all companies.


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## joewillie12 (Jan 20, 2016)

pedro47 said:


> I feel that this a stock market correction.


Market been correcting itself for the last six months plus. Its a scary place to be with oil, China, and interest rate increase pummeling it.


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## artringwald (Jan 20, 2016)

I feel that stocks are on sale. I'm buying more.


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## Jason245 (Jan 20, 2016)

I think the valuation numbers speak for themselves. 

http://www.gurufocus.com/stock-market-valuations.php
http://www.gurufocus.com/shiller-PE.php


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## lizap (Jan 20, 2016)

This is NOT a repeat of the Great Recession in 2008.  Low oil prices should have a stimulative effect on the economy, plus all this turmoil in the markets will keep the Fed on hold.  We were overdue for a correction, but I predict the market will return before the end of the year. Oil stocks are a great buy here.


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## lizap (Jan 20, 2016)

We are in a stockpicker's market and not buy the index phase.




Jason245 said:


> I think the valuation numbers speak for themselves.
> 
> http://www.gurufocus.com/stock-market-valuations.php
> http://www.gurufocus.com/shiller-PE.php


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## Jason245 (Jan 20, 2016)

lizap said:


> We are in a stockpicker's market and not buy the index phase.



I forgot this link

http://www.businessinsider.com/baltic-dry-index-falls-to-lowest-level-in-history-2016-1?r=UK&IR=T

Hint - If shipping rates are low = noone is shipping anything = TRADE IS WAY DOWN.

This is lower then it has ever been (and there is no index for inflation on this thing but I can tell you that $1 in 1986 was worth a ton more than $1 now...)....

In fact, according tho this site

http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=350&year1=2015&year2=1986

If the index were "indexed" to inflation, we are talking about the equivilant of a rate in 1986 of $162...

Think about that.


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## geekette (Jan 20, 2016)

Looks like 2016 is off to a great start for deploying my Roth contribution.  I like blue chips, I love blue chips on sale.  I probably have 10 years until retirement so this is really good timing for me.

For those retired, don't panic.  What goes down generally goes up.


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## Bailey#1 (Jan 20, 2016)

My advice is to go on vacation and don"t look at the stock market!


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## Jason245 (Jan 20, 2016)

geekette said:


> For those retired, don't panic.  What goes down generally goes up.



Look at the net outflow of money from 401ks and retirment funds... Hint, boomers are retiring, funds are having to liquidate assets, retirees get scared and pull out more assets causing more fear and panic, people expecting to retire do the same....more panic more fear...

I hope you are averaging down cause DOW will probably hit somewhere in range of 12-13k by my estimate.


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## pedro47 (Jan 20, 2016)

Jason245 said:


> Look at the net outflow of money from 401ks and retirment funds... Hint, boomers are retiring, funds are having to liquidate assets, retirees get scared and pull out more assets causing more fear and panic, people expecting to retire do the same....more panic more fear...
> 
> I hope you are averaging down cause DOW will probably hit somewhere in range of 12-13k by my estimate.



I hope your low estimates are wrong.


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## Jason245 (Jan 20, 2016)

pedro47 said:


> I hope your low estimates are wrong.


You think I am estimating to high and it will be lower? 

Sent from my SAMSUNG-SM-N910A using Tapatalk


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## WinniWoman (Jan 20, 2016)

lizap said:


> This is NOT a repeat of the Great Recession in 2008.  Low oil prices should have a stimulative effect on the economy, plus all this turmoil in the markets will keep the Fed on hold.  We were overdue for a correction, but I predict the market will return before the end of the year. Oil stocks are a great buy here.


''

Won't the low oil prices affect the business dealing in oil, though? For example, this is a big part of Texas's economy.


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## artringwald (Jan 20, 2016)

Bailey#1 said:


> My advice is to go on vacation and don"t look at the stock market!



Best stock advice I've seen in a long time.


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## WinniWoman (Jan 20, 2016)

geekette said:


> Looks like 2016 is off to a great start for deploying my Roth contribution.  I like blue chips, I love blue chips on sale.  I probably have 10 years until retirement so this is really good timing for me.
> 
> For those retired, don't panic.  What goes down generally goes up.



I am doing monthly contributions to a blue chip fund since last year in my Roth, I have 5 years until I retire.


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## WinniWoman (Jan 20, 2016)

Bailey#1 said:


> My advice is to go on vacation and don"t look at the stock market!



That's what I'm talkin' about! We can't do anything about the market. We have to just hope for the best. Make sure we have a cash stash.


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## Sugarcubesea (Jan 20, 2016)

mpumilia said:


> I am doing monthly contributions to a blue chip fund since last year in my Roth, I have 5 years until I retire.



What's a good Blue Chip Fund that all of you have been picking for your Roth. I'm 13 years from retirement.


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## Bailey#1 (Jan 20, 2016)

Sugarcubesea said:


> What's a good Blue Chip Fund that all of you have been picking for your Roth. I'm 13 years from retirement.


You are on vacation what are you looking at the stock market for? lol


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## DavidnRobin (Jan 20, 2016)

something with low management fees (Vanguard funds) - fees are killer to returns in long term


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## dioxide45 (Jan 20, 2016)

I suppose if you are close to retirement this would be a concern, though you really shouldn't have so much in the stock market if that is the case. Being properly diversified would insulate one from big downturns like this when so close to needing the money. What wiped out a lot of peoples retirement funds in 2008 was that they had too much invested in stock or even too much in their own company that went belly up. 

If you are relatively young and dollar cost averaging, I say keep doing it and don't look at it. I haven't even had the time to look at my 401K balance in a long time and didn't know the market was down until I saw something about it yesterday.


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## lizap (Jan 20, 2016)

Completely agree. Diversification is key.  If you have a 3-5 year time horizon, you should have at least some portion of your portfolio in stocks/mutual funds.   Even the financial gurus advise to NOT try to time the market.




dioxide45 said:


> I suppose if you are close to retirement this would be a concern, though you really shouldn't have so much in the stock market if that is the case. Being properly diversified would insulate one from big downturns like this when so close to needing the money. What wiped out a lot of peoples retirement funds in 2008 was that they had too much invested in stock or even too much in their own company that went belly up.
> 
> If you are relatively young and dollar cost averaging, I say keep doing it and don't look at it. I haven't even had the time to look at my 401K balance in a long time and didn't know the market was down until I saw something about it yesterday.


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## johnrsrq (Jan 20, 2016)

Jason245 said:


> I think the valuation numbers speak for themselves.
> 
> http://www.gurufocus.com/stock-market-valuations.php
> http://www.gurufocus.com/shiller-PE.php



that is a great source of info, thank you.

oh, sellers exhaustion might be near and large programs might give the present worst start to a year in memory a pause, let's just wait for the next batch of earnings and downward revisions, then the continuation of the trend. buy the dippers are absent as they should be or stunned. timing is always tough-imo.  Long term dollar cost averaging is good for many.  keep powder dry.

lower limits mentioned are not unreasonable in the next 18 months.

good luck all.


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## joewillie12 (Jan 20, 2016)

lizap said:


> This is NOT a repeat of the Great Recession in 2008.  Low oil prices should have a stimulative effect on the economy, plus all this turmoil in the markets will keep the Fed on hold.  We were overdue for a correction, but I predict the market will return before the end of the year. Oil stocks are a great buy here.


 Not sure if oil is a great buy yet? BE CAREFUL! Iran has just joined the party of selling cheap oil. Their embargo was just lifted and they have alot of oil to peddle. I'm no expert by any means but do follow the market daily. There are predictions that oil could drop much lower. Its amazing to fathom that after paying over $4gal not to long ago.


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## Talent312 (Jan 20, 2016)

There's definitely a fear-factor, over-reaction at work here.
But I'm 55% invested in bonds, so at least I sleep at night. :zzz:
.


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## dioxide45 (Jan 20, 2016)

joewillie12 said:


> Not sure if oil is a great buy yet? BE CAREFUL! Iran has just joined the party of selling cheap oil. Their embargo was just lifted and they have alot of oil to peddle. I'm no expert by any means but do follow the market daily. There are predictions that oil could drop much lower. Its amazing to fathom that after paying over $4gal not to long ago.



I would agree. Also, with US companies now able to export oil on the global market, it will add additional pressure on a downward trend in oil prices.


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## lizap (Jan 20, 2016)

*Pp*

If your holding period for oil stocks is 3-5 years and you're not a short-term trader, I'm quite confident you will do well.  I believe Warren Buffet has been a buyer lately..




joewillie12 said:


> Not sure if oil is a great buy yet? BE CAREFUL! Iran has just joined the party of selling cheap oil. Their embargo was just lifted and they have alot of oil to peddle. I'm no expert by any means but do follow the market daily. There are predictions that oil could drop much lower. Its amazing to fathom that after paying over $4gal not to long ago.


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## ace2000 (Jan 20, 2016)

lizap said:


> If your holding period for oil stocks is 3-5 years and you're not a short-term trader, I'm quite confident you will do well.  I believe Warren Buffet has been a buyer lately..



I've been switching a few things into oil lately, and possibly more.  Any recommendations?


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## John Cummings (Jan 20, 2016)

The market passed well into correction territory defined as a 10% drop. I am retired and not doing any buying or selling right now but I am considering diversifying a couple of my high dividend stocks.

I wouldn't be switching anything into oil yet because I believe oil prices will continue to fall this year. I am not a big fan of oil stocks.


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## Bailey#1 (Jan 20, 2016)

Just three months ago the experts were predicting gold to fall under $700.00 an oz, when at that time it was in the upper $900. What is it now $1100.00? Point is if you start selling now you may get hurt. Twelve months ago the Chinese market prices were a little less than today. Then they zoomed 20%+ higher, now they zoomed 20% lower (there was a bubble there). I may be wrong but 
for the average investor just stay tight!


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## lizap (Jan 20, 2016)

It's easily possible oil price have further to go, but it will be difficult to precisely predict the bottom..




John Cummings said:


> The market passed well into correction territory defined as a 10% drop. I am retired and not doing any buying or selling right now but I am considering diversifying a couple of my high dividend stocks.
> 
> I wouldn't be switching anything into oil yet because I believe oil prices will continue to fall this year. I am not a big fan of oil stocks.


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## johnrsrq (Jan 20, 2016)

Bailey#1 said:


> Just three months ago the experts were predicting gold to fall under $700.00 an oz, when at that time it was in the upper $900. What is it now $1100.00? Point is if you start selling now you may get hurt. Twelve months ago the Chinese market prices were a little less than today. Then they zoomed 20%+ higher, now they zoomed 20% lower (there was a bubble there). I may be wrong but
> for the average investor just stay tight!





$gold spot gold lowest intraday 1045.40 on 12/3/15  hasn't gotten there yet


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## joewillie12 (Jan 20, 2016)

lizap said:


> If your holding period for oil stocks is 3-5 years and you're not a short-term trader, I'm quite confident you will do well.  I believe Warren Buffet has been a buyer lately..


 I sure hope your right. Still not going into oil on the down tick. I've read it could reach a buck a gallon. Maybe we'll start getting glasses with a fill up again.


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## John Cummings (Jan 20, 2016)

lizap said:


> It's easily possible oil price have further to go, but it will be difficult to precisely predict the bottom..



Absolutely which is why there are so many diverse opinions among the pundits.

One should never try to time the market.


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## John Cummings (Jan 20, 2016)

joewillie12 said:


> I sure hope your right. Still not going into oil on the down tick. I've read it could reach a buck a gallon. Maybe we'll start getting glasses with a fill up again.



I remember the good old days when you got a 6 pack of coke and green/blue stamps with every fill up.


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## joewillie12 (Jan 20, 2016)

John Cummings said:


> I remember the good old days when you got a 6 pack of coke and green/blue stamps with every fill up.


 Yup, and they pumped your gas and cleaned your windshield too. My mom had a collection of dishes from the gas station also.....makes me laugh to say that.


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## artringwald (Jan 20, 2016)

We still have a couple of our plastic handle gas station steak knives. They last forever.


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## x3 skier (Jan 21, 2016)

I just got the statement for last year for my 401k. Since I've had to be taking my Required Minimum Distributions for a few years, each year I've wound up with more in the 401k than when the year started.

Looks like this year it will be different. The funds are 60/40 or so stocks vs bonds. Maybe I should get some part time work so I can add to the funds to keep my record going.

Cheers


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## pedro47 (Jan 21, 2016)

x3 skier said:


> I just got the statement for last year for my 401k. Since I've had to be taking my Required Minimum Distributions for a few years, each year I've wound up with more in the 401k than when the year started.
> 
> Looks like this year it will be different. The funds are 60/40 or so stocks vs bonds. Maybe I should get some part time work so I can add to the funds to keep my record going.
> 
> Cheers



Next year I will start my Required Minimum Distribution and this is my concern & reason for asking the question about the stock market.


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## WinniWoman (Jan 21, 2016)

Sugarcubesea said:


> What's a good Blue Chip Fund that all of you have been picking for your Roth. I'm 13 years from retirement.




I use T Rowe Price, but there is also Vanguard and Fidelity.


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## WinniWoman (Jan 21, 2016)

dioxide45 said:


> I suppose if you are close to retirement this would be a concern, though you really shouldn't have so much in the stock market if that is the case. Being properly diversified would insulate one from big downturns like this when so close to needing the money. What wiped out a lot of peoples retirement funds in 2008 was that they had too much invested in stock or even too much in their own company that went belly up.
> 
> If you are relatively young and dollar cost averaging, I say keep doing it and don't look at it. I haven't even had the time to look at my 401K balance in a long time and didn't know the market was down until I saw something about it yesterday.



I am diversified, but I just don't get it. Everything ends up going down- bond mutual funds as well.


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## Talent312 (Jan 21, 2016)

mpumilia said:


> I am diversified, but I just don't get it. Everything ends up going down- bond mutual funds as well.



It's the cycle of life...  Ride it out, and you'll be fine.
Cash out now and you'll lock in your losses. Bad idea.

I like a 55-45 bond-to-stock ratio (near retirement) and individual bonds:
With individual bonds, you at least get face value returned at maturity.
Bond funds are subject to interest rate risk but they won't see major losses.
.


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## pedro47 (Jan 21, 2016)

I have Vanguard and I am going to ride this out just like in 2008.


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## bogey21 (Jan 21, 2016)

John Cummings said:


> One should never try to time the market.



I manage my kids IRAs and my Daughters 529s (because I am the one who put the money in them).  Sometime in late 2014 I took them out of stocks and put 100% of their money in a Low Duration Bond Fund.  I am now slowly going back into stocks at prices lower than when I sold.  As this market continues to deteriorate I will  increase their investment in stocks.

George


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## artringwald (Jan 21, 2016)

With less than 4 years before my Required Minimum Distribution starts, I've been selling some of my mutual funds when they're up and keeping the profits in money market funds. That way when I need to take money out, I don't have to worry if the market is down.


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## johnrsrq (Jan 21, 2016)

ace2000 said:


> I've been switching a few things into oil lately, and possibly more.  Any recommendations?




will core labs, clb, keep assisting co's extract more from their producing wells and will it's above average free cash flow continue. I think so, bwdik.

clb, helping US exporters be competitive at lower cost.  I now nothing but I like this company.

this is not a recommendation as all should seek their own professional in such matters.


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## Kal (Jan 21, 2016)

With the significantly lower fuel prices, should we hold our breath until we see SUBSTANTIAL changes in airline ticket prices??


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## Sugarcubesea (Jan 21, 2016)

mpumilia said:


> I use T Rowe Price, but there is also Vanguard and Fidelity.



Thanks, this is who my my 401K is with through my company.  I will look to see what they have.


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## Passepartout (Jan 21, 2016)

Kal said:


> With the significantly lower fuel prices, should we hold our breath until we see SUBSTANTIAL changes in airline ticket prices??



DREAMER!!! They are profit driven. The more the better! :rofl::rofl::rofl:


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## WinniWoman (Jan 21, 2016)

Talent312 said:


> It's the cycle of life...  Ride it out, and you'll be fine.
> Cash out now and you'll lock in your losses. Bad idea.
> 
> I like a 55-45 bond-to-stock ratio (near retirement) and individual bonds:
> ...



We won't cash out. Learned my lesson the hard way last time.

We buy I Bonds every month. Don't understand the other types of bonds buying so I stay away from individual bonds. Same with stocks- we use mutual funds.

We are putting money in cash, blue ship mutual fund, investment grade bond fund, stable value fund, and an S & P 500 index fund (Vanguard). All within Roth IRA's and 401 k's except the cash.

Our overall mix is like 38Stocks/38Bonds/24Cash/Other(like foreign currency/gold/silver- ETFs, mutual funds and physical). I am about 5 or 6 years from retirement, hubby is about 4 years, if not sooner depending on life.

Gosh I  wish it were sooner!


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## SmithOp (Jan 21, 2016)

Sugarcubesea said:


> Thanks, this is who my my 401K is with through my company.  I will look to see what they have.




Mine is with Fidelity in a Target Date fund, I picked 2025 when I'll be starting RMDs.  It automatically adjusts the balance as it gets closer to the target date so you can set it and forget it.


Sent from my iPad Mini 4 using Tapatalk


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## WinniWoman (Jan 21, 2016)

bogey21 said:


> I manage my kids IRAs and my Daughters 529s (because I am the one who put the money in them).  Sometime in late 2014 I took them out of stocks and put 100% of their money in a Low Duration Bond Fund.  I am now slowly going back into stocks at prices lower than when I sold.  As this market continues to deteriorate I will  increase their investment in stocks.
> 
> George



I handed my son's over to him last year, as I used to do the same. But he is 28years old and I told him to start taking responsibility. I would give him MONEY and Kiplingers magazines and he would throw them out. I don't think he has ever gone on the website or tried to learn about investing. 

This is killing me as I started the Roth IRA for him - mostly his money- not mine. He hasn't been able to put any money in it since I handed it over to him because he is trying to save up to buy a car cash. (He can't afford a loan and he doesn't make enough money to do both).

But he can't depend on mommy to take care of his finances forever. Heck- I might need him to handle mine someday!


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## WinniWoman (Jan 21, 2016)

SmithOp said:


> Mine is with Fidelity in a Target Date fund, I picked 2025 when I'll be starting RMDs.  It automatically adjusts the balance as it gets closer to the target date so you can set it and forget it.
> 
> 
> Sent from my iPad Mini 4 using Tapatalk




T Rowe Price does this as well. I have an inherited IRA I have to take distributions from.

But I like making my own decisions as to what to liquidate when the time comes. So, I told them I will make the choice and put the money in my money market fund prior to their taking out the RMD. They let me know how much I have to put into the money market.

I then take that RMD money and reinvest it in a taxable account.

BTW- I only leave like $100 in my money market account because there are new SEC rules that takes affect this year.


http://www.wsj.com/articles/sec-to-vote-on-final-money-market-mutual-fund-rules-1406124323

http://www.marketwatch.com/story/get-ready-for-new-money-fund-rules-2015-03-11


The money market  interest rates stink anyway and I get better rates in traditional savings accounts at online savings banks.


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## Carol C (Jan 21, 2016)

What's with Walmart announcing it's downsizing and going to close lots of stores? What a lousy time to make an announcement like that since the market's been sliding downward since first week of Jan! Walmart once again proves itself to be un-American and a poor corporate citizen. I really feel for those who'll be laid off, though most of them were paid so poorly they had to get foodstamps they may as well just be on welfare. I say SELL WALMART to show them how you feel about their market move...and don't buy anymore Chinese goods from them (90 pct of their merchandise...not the grocery part of their biz model.)


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## ace2000 (Jan 21, 2016)

Carol C said:


> What's with Walmart announcing it's downsizing and going to close lots of stores? What a lousy time to make an announcement like that since the market's been sliding downward since first week of Jan! Walmart once again proves itself to be un-American and a poor corporate citizen. I really feel for those who'll be laid off, though most of them were paid so poorly they had to get foodstamps they may as well just be on welfare. I say SELL WALMART to show them how you feel about their market move...and don't buy anymore Chinese goods from them (90 pct of their merchandise...not the grocery part of their biz model.)



LOL - seriously?  When should they have made their announcement?


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## Conan (Jan 21, 2016)

This CNN Money article makes a good point - - the stock market is now nearly 100% tied to the price of oil. Sovereign debt that in other circumstances would enter the market as a big equity buyer remains on the sidelines, because those would-be buyers are nations that get their wealth from oil.
http://money.cnn.com/2016/01/20/investing/stocks-market-oil-drop/index.html

So markets will fall until the price of oil stabilizes. If you think today's $28-to-$30 oil price is the bottom, now's the time to buy.


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## PigsDad (Jan 21, 2016)

Carol C said:


> What's with Walmart announcing it's downsizing and going to close lots of stores? What a lousy time to make an announcement like that since the market's been sliding downward since first week of Jan!


You seriously think a company should time announcements in their business based on the performance of the stock market?  :hysterical: 



> Walmart once again proves itself to be un-American and a poor corporate citizen. I really feel for those who'll be laid off, though most of them were paid so poorly they had to get foodstamps they may as well just be on welfare.


Just last year Walmart announced they were raising their minimum wage to $10/hour.  The closing of these stores is a direct result of that move.  Just remember this when you advocate for raising the national minimum wage.

Higher minimum wage == fewer entry-level / non-skilled jobs.

Kurt


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## VacationForever (Jan 21, 2016)

PigsDad said:


> You seriously think a company should time announcements in their business based on the performance of the stock market?  :hysterical:
> 
> 
> Just last year Walmart announced they were raising their minimum wage to $10/hour.  The closing of these stores is a direct result of that move.  Just remember this when you advocate for raising the national minimum wage.
> ...



I couldn't have said it better myself.  Every company has to stay afloat and do what it has got to do.  As an employee I was always grateful for a job.  As an employer, I want to be an employee again.  Folks who have not owned a company and have employees should sit on the other side and realize that employers are not the bad guys.


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## Conan (Jan 21, 2016)

You're both right.  

Walmart should pay at least $10/hour to its lowest-paid employees, and Walmart should close its unprofitable stores. Especially since we taxpayers are subsidizing the Walmart payroll via food stamps and other tax subsidies.


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## SMHarman (Jan 21, 2016)

mpumilia said:


> I am diversified, but I just don't get it. Everything ends up going down- bond mutual funds as well.


They do not hold to maturity.


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## SMHarman (Jan 21, 2016)

Kal said:


> With the significantly lower fuel prices, should we hold our breath until we see SUBSTANTIAL changes in airline ticket prices??


Pah, check out those BA fuel surcharges!


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## DavidnRobin (Jan 21, 2016)

Isn't the post on Min wage above a political comment? Or is it just the Mod agrees so not deleted?


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## SmithOp (Jan 21, 2016)

Carol C said:


> What's with Walmart announcing it's downsizing and going to close lots of stores? What a lousy time to make an announcement like that since the market's been sliding downward since first week of Jan! Walmart once again proves itself to be un-American and a poor corporate citizen. I really feel for those who'll be laid off, though most of them were paid so poorly they had to get foodstamps they may as well just be on welfare. I say SELL WALMART to show them how you feel about their market move...and don't buy anymore Chinese goods from them (90 pct of their merchandise...not the grocery part of their biz model.)




Lots of retailers are closing brick and mortar stores and ramping up online sales, future min wage jobs will be in large shipping warehouses or delivery drivers.  Macys, Penneys, Kmart, Kohls all announced store closings recently.  Millenials prefer shopping with two clicks rather than two hours in a store. Face it, our age group doesnt spend much at all in stores, we arent the demographic the retailers are after any more.


Sent from my iPad Mini 4 using Tapatalk


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## geekette (Jan 21, 2016)

Jason245 said:


> Look at the net outflow of money from 401ks and retirment funds... Hint, boomers are retiring, funds are having to liquidate assets, retirees get scared and pull out more assets causing more fear and panic, people expecting to retire do the same....more panic more fear...
> 
> I hope you are averaging down cause DOW will probably hit somewhere in range of 12-13k by my estimate.



I am unconcerned and contribute to 401k, Roth and taxable throughout the year.  I don't own the DOW but some of my companies I've had for over 20 years at prices much lower than we are likely to see, wherever the bottom is.  Even some I've only held 5-6 years are still showing their triple digit return numbers.  Besides, I'm a dividend investor, price volatility isn't a big issue for me.  This is bargain shopping time.  

People panic.  Nothing I can do about that.  I manage my own affairs and panic is never part of that.  Not sure why someone that needs the money today had it in the stock market.


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## geekette (Jan 21, 2016)

mpumilia said:


> I am doing monthly contributions to a blue chip fund since last year in my Roth, I have 5 years until I retire.



Awesome!  This is a good move, especially during times of volatility.  Pretty exciting, only 5 more years!!


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## Kal (Jan 21, 2016)

PigsDad said:


> ...Just last year Walmart announced they were raising their minimum wage to $10/hour. The closing of these stores is a direct result of that move. Just remember this when you advocate for raising the national minimum wage.
> 
> Higher minimum wage == fewer entry-level / non-skilled jobs.
> 
> Kurt


 
 Do you have a citation from Walmart on this notion or is it a guess?


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## PigsDad (Jan 21, 2016)

Kal said:


> Do you have a citation from Walmart on this notion or is it a guess?


The wage increase is costing Walmart about $2.7 billion.  If you read any amount of articles from analysts you will see they have come to the same conclusion:  this amount of investment in wages has pushed many stores that were marginally profitable to unprofitable, and has made stores that were unprofitable even more unprofitable.  Closing stores to cut the losses was the next logical step.

I think it is a good thing that Walmart is stepping up and paying their employees better.  But with that comes some amount of lost jobs -- that is just a fact.  With our current low unemployment, hopefully those that are cut will find other (perhaps better) jobs quickly.

Kurt


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## Ironwood (Jan 21, 2016)

ace2000 said:


> I've been switching a few things into oil lately, and possibly more.  Any recommendations?



We may not have seen the bottom in oil, but if your look at the charts over the last 20 years or so, each time oil has endured a significant sell-off like we are experiencing, the recovery when it starts has been swift.  It could always be different, but historically the recovery has been fairly quick!

And, that is one of the reasons airlines have held up fares and fuel surcharges in some instances.  Not only are they making hay when fuel cost is near an all time low, but they are afraid if they lower air fares significantly, then try to raise them back to former levels, they will encounter more scorn than they are now getting.


----------



## geekette (Jan 21, 2016)

ace2000 said:


> I've been switching a few things into oil lately, and possibly more.  Any recommendations?



Exxon.  No better than big daddy in the space.


----------



## ace2000 (Jan 21, 2016)

Ironwood said:


> We may not have seen the bottom in oil, but if your look at the charts over the last 20 years or so, each time oil has endured a significant sell-off like we are experiencing, the recovery when it starts has been swift.  It could always be different, but historically the recovery has been fairly quick!



Yep.  And that is why now may be the time to average in!  I've been buying incrementally into an energy mutual fund since mid-December.


----------



## ace2000 (Jan 21, 2016)

johnrsrq said:


> will core labs, clb, keep assisting co's extract more from their producing wells and will it's above average free cash flow continue. I think so, bwdik.





geekette said:


> Exxon.  No better than big daddy in the space.



Thank you for the suggestions!


----------



## DeniseM (Jan 21, 2016)

DavidnRobin said:


> Isn't the post on Min wage above a political comment? *Or is it just the Mod agrees so not deleted?*



-I am pretty much apolitical - just not interested.

-I don't read every post on TUG, and I haven't been following this thread since my first post.

-No posts in this thread have been reported.

-If you think a post violates the posting rules, please click on the red triangle in the bottom left corner of the post, and a report will be sent to all staff members, and a number of different people will take a look at it.


----------



## pedro47 (Jan 21, 2016)

JP Morgan CEO rec'd a 35% increase in salary in 2015.  New salary  was only  $27 millions dollars per year according USA Today.

Sound liked the stock market is doing OK.


----------



## WinniWoman (Jan 21, 2016)

geekette said:


> Awesome!  This is a good move, especially during times of volatility.  Pretty exciting, only 5 more years!!



LOL! ONLY! 5 feels like 50 to me! Ha! Ha!:rofl:


----------



## WinniWoman (Jan 21, 2016)

ace2000 said:


> Yep.  And that is why now may be the time to average in!  I've been buying incrementally into an energy mutual fund since mid-December.



My energy ETF is taking a big hit.


----------



## John Cummings (Jan 21, 2016)

Carol C said:


> What's with Walmart announcing it's downsizing and going to close lots of stores? What a lousy time to make an announcement like that since the market's been sliding downward since first week of Jan! Walmart once again proves itself to be un-American and a poor corporate citizen. I really feel for those who'll be laid off, though most of them were paid so poorly they had to get foodstamps they may as well just be on welfare. I say SELL WALMART to show them how you feel about their market move...and don't buy anymore Chinese goods from them (90 pct of their merchandise...not the grocery part of their biz model.)



Walmart is a business not a charitable organization. Like any business their goal is to make a profit for their owners ( AKA shareholders ). They are closing their smaller Express stores. Macy's is closing several stores, should we boycott them also?

Walmart pays their employees what they have to in order to hire and retain the employees they want. That is how the free market system works. It is none of my concern what their employees get paid. That is between them and Walmart. My concern is getting the best value for my consumer dollar.


----------



## Kal (Jan 21, 2016)

PigsDad said:


> The wage increase is costing Walmart about $2.7 billion...
> Kurt



$2.7 B would be 1.9% of the $141 B proceeds.  I would think there are other factors driving a closure decision, specially when half of the closures are outside the US.


----------



## John Cummings (Jan 21, 2016)

Kal said:


> $2.7 B would be 1.9% of the $141 B proceeds.  I would think there are other factors driving a closure decision, specially when half of the closures are outside the US.



The Walmart Express stores that are being closed are smaller stores that are often quite near regular or super Walmarts. They aren't performing well enough to warrant keeping them open.

Yes, online retailing is definitely affecting brick and mortar stores. I haven't been in a brick and mortar store for several years. I do all my shopping online, mainly Amazon. Amazon is a great place to shop with a great web site and excellent customer service, not to mention their usual lower prices.


----------



## bogey21 (Jan 21, 2016)

John Cummings said:


> The Walmart Express stores that are being closed are smaller stores that are often quite near regular or super Walmarts. They aren't performing well enough to warrant keeping them open.



I prefer shopping at Dollar General to the Walmart Express stores.  Their prices are lower and they have learned over the years what products to stock.

George


----------



## PigsDad (Jan 21, 2016)

never mind


----------



## geekette (Jan 21, 2016)

mpumilia said:


> LOL! ONLY! 5 feels like 50 to me! Ha! Ha!:rofl:



yeah, every time the alarm goes off, I long for full time vacation.  at least most days I am busy and it goes fast.  Paydays help, too, remind me why I leave the house in single digits plus snow and ice, but my dividend raises are much higher.  As soon as I can run the household off dividends, I'm outa there.   5-10 years.   I'd rather grow my own veggies, work part time and take off for the beach or mountains whenever I feel like it.


----------



## WinniWoman (Jan 22, 2016)

geekette said:


> yeah, every time the alarm goes off, I long for full time vacation.  at least most days I am busy and it goes fast.  Paydays help, too, remind me why I leave the house in single digits plus snow and ice, but my dividend raises are much higher.  As soon as I can run the household off dividends, I'm outa there.   5-10 years.   I'd rather grow my own veggies, work part time and take off for the beach or mountains whenever I feel like it.



I'm with you! When I am home (which love being home) and when I am away on vacation in our timeshares and elsewhere) it is then that I appreciate that paycheck! 

Not to mention when I am at the supermarket buying food and when paying our bills.

When I get in the warm shower every morning before work I thank God for the warm water and everything I have. That helps a lot.Then I suck it up and head on out once again..........

Just hope I make it to a nice retirement....


----------



## Tia (Jan 22, 2016)

pedro47 said:


> JP Morgan CEO rec'd a 35% increase in salary in 2015.  New salary  was only  $27 millions dollars per year according USA Today.
> 
> Sound liked the stock market is doing OK.



 ya sure


----------



## lizap (Jan 22, 2016)

Market way up today.  Oil prices up over 9%...


----------



## PigsDad (Jan 22, 2016)

lizap said:


> Market way up today.  Oil prices up over 9%...


I pulled the trigger and picked up a block of COP yesterday.  Happy today!  If it takes more dips, I will buy more.  ~8% dividend at its current price -- hopefully the dividend will hold through he rough patch we are in.  They have a good long-term record of increasing dividends.

Kurt


----------



## VacationForever (Jan 22, 2016)

PigsDad said:


> I pulled the trigger and picked up a block of COP yesterday.  Happy today!  If it takes more dips, I will buy more.  ~8% dividend at its current price -- hopefully the dividend will hold through he rough patch we are in.  They have a good long-term record of increasing dividends.
> 
> Kurt



What is COP?


----------



## Ironwood (Jan 22, 2016)

lizap said:


> Market way up today.  Oil prices up over 9%...



Oil's comeback over the last two days may just be a dead cat bounce.  If the comeback holds the first couple of days of next week the bottom could be in!


----------



## lizap (Jan 22, 2016)

Could be, but still the lows on Wednesday were a great buying opportunity if you have at least a 3-5 year investment time horizon. 




Ironwood said:


> Oil's comeback over the last two days may just be a dead cat bounce.  If the comeback holds the first couple of days of next week the bottom could be in!


----------



## PigsDad (Jan 22, 2016)

sptung said:


> What is COP?



NYSE:COP (ConocoPhillips)

Kurt


----------



## PigsDad (Jan 22, 2016)

lizap said:


> Could be, but still the lows on Wednesday were a great buying opportunity if you have at least a 3-5 year investment time horizon.



I agree.  I am looking long term (5-10 years), so when big blue chip oil stocks go on sale like this, I'm not worried if they go down another 20-30% -- I'll keep on buying on the dips and most likely will be an excellent investment long term.  BTW, some other oil stocks I like are CVX, XOM and VLO.  All on sale now except VLO -- it has been holding steady.

Kurt


----------



## VacationForever (Jan 22, 2016)

PigsDad said:


> NYSE:COP (ConocoPhillips)
> 
> Kurt



Thanks. DUH!


----------



## tompalm (Jan 22, 2016)

If anyone is interested in technical analysis, here is a good website on stockcharts.  They have about 10 technicians that write articles and most of them agree the trend is down. The bounce might have another few days remaining and another 2-3 percent up, but after that, expect the market to go lower.  Nobody really knows how low, maybe just back to SPX 1810 where it was a few days ago, but most of the technicians think the market is headed for SPX 1600.  If you are close to retirement, maybe consider checking your allocations to ensure you have a good mix of bonds or cash and not all into aggressive stocks.  I do a lot of trading and 90 percent out of the market right now, but plan to short the market when it rolls over that I think will happen around SPX 1950, plus or minus a little.  Maybe it will get higher, but the bounce is not a change in the trend and most technicians expect the market to go at least another 10 percent lower.   

Regarding the oil stocks, I agree that they should hold this level.  I have a few and collecting a 5 percent dividend and selling calls against the stock.  I think oil should stabilize in this area, but who knows.  

http://stockcharts.com/articles/


----------



## John Cummings (Jan 22, 2016)

lizap said:


> Market way up today.  Oil prices up over 9%...



The reports say that the oil prices are up due to short covering and is not indicative of any long term trend.


----------



## dioxide45 (Jan 22, 2016)

Bond funds may not be the right way to diversify right now. If the fed continues to up fed funds rate, bond prices will fall. Investing in individual bonds held to maturity is fine, but bond funds are priced based on the underlying value of the bonds on the market. When rates rise, the value of a bonds drop. Still perhaps more stable than the stock market, but not immune to loss.


----------



## tompalm (Jan 22, 2016)

dioxide45 said:


> Bond funds may not be the right way to diversify right now. If the fed continues to up fed funds rate, bond prices will fall. Investing in individual bonds held to maturity is fine, but bond funds are priced based on the underlying value of the bonds on the market. When rates rise, the value of a bonds drop. Still perhaps more stable than the stock market, but not immune to loss.



You are right. Buy a 3-5 year bond and hold it to maturity. Schwab is selling 5 year CDs paying 2.5 percent right now. One thing about rising interest rates, the Fed might increase the rate one more time this year.  But multiple rate hikes are unlikely.


----------



## lizap (Jan 23, 2016)

I agree- no way is the Fed going to raise rates more than 1 more time this year, if that.  We will not have 'normal' rates for a very long time..




tompalm said:


> You are right. Buy a 3-5 year bond and hold it to maturity. Schwab is selling 5 year CDs paying 2.5 percent right now. One thing about rising interest rates, the Fed might increase the rate one more time this year.  But multiple rate hikes are unlikely.


----------



## CO skier (Jan 23, 2016)

PigsDad said:


> I pulled the trigger and picked up a block of COP yesterday.  Happy today!  If it takes more dips, I will buy more.  ~8% dividend at its current price -- hopefully the dividend will hold through he rough patch we are in.  They have a good long-term record of increasing dividends.
> 
> Kurt



I bought some Philip Morris about 15 years ago at a similar yield.  The price doubled within 3 years.  I thought I was on to something, so among other purchases in 2008, I bought a load of US Bank at about 7.2% yield based on a 75 year history of dividend increases.

I got my head handed to me on that one.  I cut my losses before the worst of the brutality (the annual dividend was cut from $1.20 to $0.20 and the price went from $19 to about $7), but it was a hard lesson in "past performance is no guarantee of future results".  Oh sure, the Fed bailed out the banks and avoided financial Armageddon, and USB stock price recovered after years of patience, but the dividend is still only about two-thirds of what it was in 2008.

I think the energy stocks are closer to the Philip Morris situation than the USB disaster, but I learned patience from that USB experience (and I am not too hopeful any of the big oil players will double over the next 3 years).  Too many pundits are saying, "The bottom is in" in energy stocks for the bottom to be in.  I will be watching and waiting a few more months, at least. YMMV.


----------



## Ironwood (Jan 23, 2016)

lizap said:


> Could be, but still the lows on Wednesday were a great buying opportunity if you have at least a 3-5 year investment time horizon.



Yes, I put in orders to reacquire a couple of light oil stocks I had shed before Christmas, but didn't get filled.  Didn't want to chase them but in hindsight I would have done well had I.  If oil opens up on Monday I'll be in there


----------



## lizap (Jan 23, 2016)

Would be surprised if oil doesn't give back some of Friday's big gains on Monday.  




Ironwood said:


> Yes, I put in orders to reacquire a couple of light oil stocks I had shed before Christmas, but didn't get filled.  Didn't want to chase them but in hindsight I would have done well had I.  If oil opens up on Monday I'll be in there


----------



## tompalm (Jan 23, 2016)

lizap said:


> Would be surprised if oil doesn't give back some of Friday's big gains on Monday.



Agree that the price will stay in this range for a while and anywhere between $25-$35 a barrel. I don't think jumping in right now because the price goes up one day will work out well.  The smart plan is to buy a good company that pays a good dividend and hold it long term. It should be higher at the end of the year and you get to collect a dividend while waiting. The risk is that some companies are cutting dividends and if that happens, the stock price will crash. Don't buy a lot of any one company because there is risk. Phillips 66 is a refiner and should do well, Chevron and Exron are intragraded and should be fine if they don't cut dividends, avoid drillers or frackers.  The commodity is based on futures and should be a short term play when the price of oil starts going up.


----------



## John Cummings (Jan 23, 2016)

There are other stocks that pay good dividends like telecoms. Verizon is paying 5% and has increased each year. Frontier Communications is paying about 9%.


----------



## geekette (Jan 25, 2016)

John Cummings said:


> There are other stocks that pay good dividends like telecoms. Verizon is paying 5% and has increased each year. Frontier Communications is paying about 9%.



Yes, I consider utilities to be pretty durable, and I include telecom in my utility definition.  I have ATT vs VZ but also plenty of gas, elec, water utes.  These can all be slow growth as far as dividend, and maybe no growth in price, but I consider them to be cash cows.   CenturyLink (CTL) slightly more speculative but current high yielder.  It cut the dividend a few years back but I kept it and it continues to pay well as I'm almost back to same payment in $ as pre-cut.   

I recently switched to DirecTV and it's nice to already own its parent (ATT), while I never wanted to own Comcast....


----------



## WinniWoman (Jan 25, 2016)

I use a utility ETF.


----------



## pedro47 (Jan 25, 2016)

mpumilia said:


> I use a utility ETF.



Thanks for the information. I am going to check Vanguard.


----------



## lizap (Jan 25, 2016)

If only I would back up my beliefs with $...





lizap said:


> Would be surprised if oil doesn't give back some of Friday's big gains on Monday.


----------



## joewillie12 (Jan 25, 2016)

geekette said:


> Yes, I consider utilities to be pretty durable, and I include telecom in my utility definition.  I have ATT vs VZ but also plenty of gas, elec, water utes.  These can all be slow growth as far as dividend, and maybe no growth in price, but I consider them to be cash cows.   CenturyLink (CTL) slightly more speculative but current high yielder.  It cut the dividend a few years back but I kept it and it continues to pay well as I'm almost back to same payment in $ as pre-cut.
> 
> I recently switched to DirecTV and it's nice to already own its parent (ATT), while I never wanted to own Comcast....


 Check out Duke Energy [DUK] for a utility stock. Its been a nice earner for the last 10 years for me. Of course its down now but what isn't.


----------



## geekette (Jan 26, 2016)

joewillie12 said:


> Check out Duke Energy [DUK] for a utility stock. Its been a nice earner for the last 10 years for me. Of course its down now but what isn't.



Down is good, I like bargains!  

I already have Duke (my grandfather worked for them; no legacy shs tho), and have owned PNY longer (they used to give a discount on reinvested shares thru DRIP plan).  I need to spend a bit more time with the merger documents.  Regardless of details, I don't plan to sell PNY before merger concludes.  

It took too long for me to find Southern (SO), a very solid company that I started buying in 2014.   I have yet to perform due diligence on Dominion (D) or find a spot in a portfolio for it, but another titan I'd like to have on my team.


----------



## Ironwood (Jan 26, 2016)

A better day today!


----------



## ace2000 (Jan 27, 2016)

Thought I would share this deal since someone mentioned Kiplingers earlier in this thread.  Up to two years of Kiplingers magazine for just $5.99/yr (less than .50c an issue).  I signed up for the deal myself so I can vouch that it works.

http://slickdeals.net/f/8462959-kiplinger-s-personal-finance-5-99-per-year


----------



## geekette (Jan 27, 2016)

ace2000 said:


> Thought I would share this deal since someone mentioned Kiplingers earlier in this thread.  Up to two years of Kiplingers magazine for just $5.99/yr (less than .50c an issue).  I signed up for the deal myself so I can vouch that it works.
> 
> http://slickdeals.net/f/8462959-kiplinger-s-personal-finance-5-99-per-year



Nice!  I subscribed to Kiplinger for most of the 90s and learned a ton.  I would recommend it for anyone wanting more well rounded financial savvy as they cover pretty much Everything.  For the mutual fund investors among us, Kiplinger is forever ranking them, you can see how yours stack up.  Probably they still do the annual roundup and may have by now included ETFs.  

Awesome share, that's a ton of easily-digestible knowledge for a small price.


----------



## WinniWoman (Jan 27, 2016)

ace2000 said:


> Thought I would share this deal since someone mentioned Kiplingers earlier in this thread.  Up to two years of Kiplingers magazine for just $5.99/yr (less than .50c an issue).  I signed up for the deal myself so I can vouch that it works.
> 
> http://slickdeals.net/f/8462959-kiplinger-s-personal-finance-5-99-per-year



Thanks. Mine is coming up for renewal so I won't renew and try this.


----------



## ace2000 (Jan 27, 2016)

mpumilia said:


> Thanks. Mine is coming up for renewal so I won't renew and try this.



Actually when you go through the sign up process, there is a check box for the renewal option.  I would guess it would append to your current subscription, but I've never tried it.  If anyone does sign up, make sure you get the promo code, or else you won't get the same deal.


----------



## pedro47 (Jan 27, 2016)

ace2000 said:


> Thought I would share this deal since someone mentioned Kiplingers earlier in this thread.  Up to two years of Kiplingers magazine for just $5.99/yr (less than .50c an issue).  I signed up for the deal myself so I can vouch that it works.
> 
> http://slickdeals.net/f/8462959-kiplinger-s-personal-finance-5-99-per-year



Thanks, I'm buying this.


----------



## IngridN (Jan 27, 2016)

ace2000 said:


> Thought I would share this deal since someone mentioned Kiplingers earlier in this thread.  Up to two years of Kiplingers magazine for just $5.99/yr (less than .50c an issue).  I signed up for the deal myself so I can vouch that it works.
> 
> http://slickdeals.net/f/8462959-kiplinger-s-personal-finance-5-99-per-year



Interesting...they want $12/yr from me and can subscribe for up to 3 years.

Ingrid


----------



## joewillie12 (Jan 27, 2016)

geekette said:


> Down is good, I like bargains!
> 
> I already have Duke (my grandfather worked for them; no legacy shs tho), and have owned PNY longer (they used to give a discount on reinvested shares thru DRIP plan).  I need to spend a bit more time with the merger documents.  Regardless of details, I don't plan to sell PNY before merger concludes.
> 
> It took too long for me to find Southern (SO), a very solid company that I started buying in 2014.   I have yet to perform due diligence on Dominion (D) or find a spot in a portfolio for it, but another titan I'd like to have on my team.


 I think that's a smart move since PNY shareholders have approved the sale to Duke for $60 per share. Of course things could still happen with the merger but when the NC Utilities Commission approves the sale its as good as done imo. Southern has been a wonderful stock as well. Those two will be with me until the end.......hopefully. Dominion is a solid stock. I need to look into grabbing some if I can find some more money to invest.


----------



## ace2000 (Jan 27, 2016)

IngridN said:


> Interesting...they want $12/yr from me and can subscribe for up to 3 years.



I just tried it again and it still works.  Be sure and apply the coupon code during checkout - 15424.  I think the discount only applies for a max of two years.


----------



## Ironwood (Jan 27, 2016)

Ironwood said:


> A better day today!



.....and we are giving it all back today and then some!  Just can't seem to find any consistent upward traction!


----------



## IngridN (Jan 27, 2016)

ace2000 said:


> I just tried it again and it still works.  Be sure and apply the coupon code during checkout - 15424.  I think the discount only applies for a max of two years.



Duh......forgot the coupon code! Just ordered it, thanks.

Ingrid


----------



## WinniWoman (Jan 27, 2016)

I ordered it as a new subscriber because when I checked the renewal box at payment it didn't have a box for the coupon code.

My subscription ends with the April issue, and it usually takes 2 months or so for new subscriptions to begin anyway, so I assume it will work out.


----------



## geekette (Jan 27, 2016)

joewillie12 said:


> I think that's a smart move since PNY shareholders have approved the sale to Duke for $60 per share. Of course things could still happen with the merger but when the NC Utilities Commission approves the sale its as good as done imo. Southern has been a wonderful stock as well. Those two will be with me until the end.......hopefully. Dominion is a solid stock. I need to look into grabbing some if I can find some more money to invest.



Yes, to the end, and hopefully long after that for my lucky beneficiaries!  Utilities can be such cash cows that I expect to simply skim off the dividends and let the rest ride.  I will wait on D until I've built up some of the others, and probably buy some water before that.  The crisis in Flint drives home the necessity of water but I haven't looked into anything yet.  

I also think the merger is a done deal when regs sign off.  I can't think of any other hurdles.


----------



## vacationhopeful (Jan 27, 2016)

geekette said:


> ... The crisis in Flint drives home the necessity of water but I haven't looked into anything yet.
> 
> ....



American Water Company has spent the last 10-15 years buying up water companies.


----------



## joewillie12 (Jan 27, 2016)

vacationhopeful said:


> American Water Company has spent the last 10-15 years buying up water companies.


 Nice steady rise over the last 6 years also. I remember my dad saying many many years ago and way before the bottling craze that water will be more valuable than oil someday. Thanks for the info.


----------



## lizap (Jan 27, 2016)

Interesting open to Asia trading.. most indicies are flat to up, so no follow through from the U.S.  U.S. futures are up.  Also, very interesting reaction to Fed announcement today.  With Fed becoming less likely to raise rates more than once more this year, you would have expected a very strong finish today.  Oil prices were up today.  I suspect we've reached a bottom in stocks for a while, at least..







Ironwood said:


> .....and we are giving it all back today and then some!  Just can't seem to find any consistent upward traction!


----------



## bogey21 (Jan 28, 2016)

lizap said:


> I suspect we've reached a bottom in stocks for a while, at least..



Hope you are right but I think there is close to 20% more to go on the downside.  

George


----------



## WinniWoman (Jan 28, 2016)

geekette said:


> Yes, to the end, and hopefully long after that for my lucky beneficiaries!  Utilities can be such cash cows that I expect to simply skim off the dividends and let the rest ride.  I will wait on D until I've built up some of the others, and probably buy some water before that.  The crisis in Flint drives home the necessity of water but I haven't looked into anything yet.
> 
> I also think the merger is a done deal when regs sign off.  I can't think of any other hurdles.



I used to have a Water ETF, but I stupidly sold it- along with almost everything else- in 2009. Ugh!


----------



## geekette (Jan 28, 2016)

vacationhopeful said:


> American Water Company has spent the last 10-15 years buying up water companies.



Nice tip!  The Dividend Champions spreadsheet shows many water utilities paying increasing dividends uninterrupted.  Choose Excel or PDF.

http://www.dripinvesting.org/tools/tools.asp


----------



## tompalm (Jan 31, 2016)

bogey21 said:


> Hope you are right but I think there is close to 20% more to go on the downside.
> 
> George



Agree. The next stop is 1600 SPX. We will get a bounce there for sure. It might not go lower than that, but right now is a good time to unload some stocks if anyone is still holding them, because the market might go a lot lower than 1600. Never know where the bottom is.


----------



## ace2000 (Jan 31, 2016)

At this point, I'd be holding, if not buying - actually as I said earlier, I've been investing my monthly contributions into energy funds for the last three months.  

I'm more optimistic than you guys are.  However, if either of you are recommending this style of investing (trying to predict the market high points and low points), you're both crazy.  One thing I've noticed on these TUG posts is that several always mention that they're currently on the sidelines - especially after the market is down - but they never seem to tell us when they have decided to get back in.


----------



## geekette (Jan 31, 2016)

ace2000 said:


> At this point, I'd be holding, if not buying - actually as I said earlier, I've been investing my monthly contributions into energy funds for the last three months.
> 
> I'm more optimistic than you guys are.  However, if either of you are recommending this style of investing (trying to predict the market high points and low points), you're both crazy.  One thing I've noticed on these TUG posts is that several always mention that they're currently on the sidelines - especially after the market is down - but they never seem to tell us when they have decided to get back in.



Agree here.  Much has to do with strategy and view point.  There is no advance notice on where the tops and bottoms are.  I keep my money in.

I am a buyer in this market as a long haul dividend investor.  Lower is fine, I contribute to my Roth all year long and enjoy bargains.  I don't find a lot of bargains yet.  

For those on the buy low/sell high plan, good luck.  While I have no crystal ball, I think 2016 is going to be extremely volatile.


----------



## Sugarcubesea (Jan 31, 2016)

I've got 13 years till I retire, I just hope that when I retire my 401K will be in an Up swing...


----------



## PigsDad (Jan 31, 2016)

Sugarcubesea said:


> I've got 13 years till I retire, I just hope that when I retire my 401K will be in an Up swing...


So when you retire you are planning to cash out all of your holdings?  When I retire I see myself needing my investments for 20-30 more years, so I don't see myself changing my portfolio mix that much.

Kurt


----------



## lizap (Jan 31, 2016)

The problem is that for at least the next 10 years, the rate of return for stocks and bonds is likely to be quite lower by historical standards.  We are within 5-7 years of retirement.  I recently did a forecast of our retirement expenses and compared that to our income expected to be generated from our retirement assets.  What I discovered is that we were taking unnecessary risks with our portfolio.  We decided to de-risk a large portion of our portfolio and place the remaining portion in balanced funds.  What I didn't want was to want to retire in 5 years and not be able to because the market was down 40% or so. 



PigsDad said:


> So when you retire you are planning to cash out all of your holdings?  When I retire I see myself needing my investments for 20-30 more years, so I don't see myself changing my portfolio mix that much.
> 
> Kurt


----------



## vacation.memories (Jan 31, 2016)

lizap said:


> The problem is that for at least the next 10 years, the rate of return for stocks and bonds is likely to be quite lower by historical standards.  We are within 5-7 years of retirement.


Any chance you can share exactly why you believe the next 10 years will be poor??


----------



## vacationhopeful (Jan 31, 2016)

vacation.memories said:


> Any chance you can share exactly why you believe the next 10 years will be poor??



You see a recovery going on, as China crashes? Or is it the unstable Middle East? Or perhaps the 'oil' boom that has died in the middle part of US? Or up north in Canada ... where they get 60 cents US for each $1.00 Canadian?

In other words, WHAT recovery have you been living in?


----------



## tompalm (Jan 31, 2016)

ace2000 said:


> One thing I've noticed on these TUG posts is that several always mention that they're currently on the sidelines - especially after the market is down - but they never seem to tell us when they have decided to get back in.



For the record, there is a computer program called Sector Surfer that I use that is based on technical analysis. It uses trend lines with the priority being on the 50 day line below the 200 day line and how long it is there to determine when to sell or go to cash.  Once the 50 day line turns up, it will send an email to buy your best performing mutual fund or stock. It is actually more complex with a lot of other data it uses, but if you are familiar with charts and trend lines, you can understand how it works. Yesterday, I received an email to go to cash, so that means to make the trade tomorrow on Feburay 1st and to get out of the market. You can go there and set up an account for free if you want. But to make it more applicable to your holdings, you need to input which funds your 401k has. If you work for Google, Apple, IBM, or a lot of other large companies, someone has already done that for you. The cost is $10 per month per strategy. Here is the web site. 

http://www.sumgrowth.com/InfoPages/HallOfFame.aspx

I am more active and was out of the market since May 2015, but bought back in during October, only to sell out the first week of January 2016. I actually loss about 2 percent on those trades, but my fear is taking a loss like 2008 or 50 percent. I am holding 10 percent in oil stocks and selling calls against those positions, the rest is in cash. So selling now means taking a loss of 7 percent from the top, but nobody has a crystal ball and hits the top perfectly every time. The risk of going long is riding out the market should it drop 50 percent and waiting 3-5 years to get back to even. 

I plan to enter several short positions as soon as the market rolls over and buy a little each day.  The ETFs to do that with are SH, SDS, DOG and others. If the market sells off and drops below SPX 1800, the drop will be hard and fast. Once that happens, expect it to drop to 1600. If 1800 holds, it is possible the market will go back up and hit new highs. But, that is a long shot and it is only a matter of time before the Debt from QE being used all over the world catches up with us.


----------



## lizap (Jan 31, 2016)

First, no one really knows what the market is going to do, myself included.  Something is wrong when Japan goes to negative interest rates.  At some point, there will be a price to pay for all this free money. I do a lot of financial reading; most noted financial gurus expect muted returns over the next 7 years or so.  This is currently one of the longest bull markets in U.S. market history - bull markets do not last forever.  IMO, the current data indicate that the downside risk of this market outweighs the potential returns.  For us, this risk is too great; a significant drop could mean we might not be able to retire when we want to..




vacation.memories said:


> Any chance you can share exactly why you believe the next 10 years will be poor??


----------



## lizap (Jan 31, 2016)

I agree - that is my fear as well (a drop that would be difficult for us to recover from in 5-7 years)..




tompalm said:


> For the record, there is a computer program called Sector Surfer that I use that is based on technical analysis. It uses trend lines with the priority being on the 50 day line below the 200 day line and how long it is there to determine when to sell or go to cash.  Once the 50 day line turns up, it will send an email to buy your best performing mutual fund or stock. It is actually more complex with a lot of other data it uses, but if you are familiar with charts and trend lines, you can understand how it works. Yesterday, I received an email to go to cash, so that means to make the trade tomorrow on Feburay 1st and to get out of the market. You can go there and set up an account for free if you want. But to make it more applicable to your holdings, you need to input which funds your 401k has. If you work for Google, Apple, IBM, or a lot of other large companies, someone has already done that for you. The cost is $10 per month per strategy. Here is the web site.
> 
> http://www.sumgrowth.com/InfoPages/HallOfFame.aspx
> 
> ...


----------



## John Cummings (Feb 1, 2016)

PigsDad said:


> So when you retire you are planning to cash out all of your holdings?  When I retire I see myself needing my investments for 20-30 more years, so I don't see myself changing my portfolio mix that much.
> 
> Kurt



When I retired totally 9 years ago I started to become less aggressive moving more to income producing investments. The worst thing you can do is get out of the market when it is down. That just locks in your losses. I am surprised by how many people actually do that.


----------



## lizap (Feb 1, 2016)

It's important to determine how much income you will need to cover your expected expenses in retirement.  Every person/couples case is different, but should not take any more risk than you have to, IMO.  As you draw closer to retirement, capital preservation becomes relatively more important than growth; however, I am a firm believer that at least some portion of your assets should be invested in a conservative stock/bond portfolio even in retirement.



John Cummings said:


> When I retired totally 9 years ago I started to become less aggressive moving more to income producing investments. The worst thing you can do is get out of the market when it is down. That just locks in your losses. I am surprised by how many people actually do that.


----------



## tompalm (Feb 1, 2016)

John Cummings said:


> When I retired totally 9 years ago I started to become less aggressive moving more to income producing investments. The worst thing you can do is get out of the market when it is down. That just locks in your losses. I am surprised by how many people actually do that.



What is the definition of being down. Some people see the market top in May 2015 and later in the year it is down 3 percent from that high and they say the market is down, so I am not getting out.  Later it is down 7 percent and they say I am not getting out now. Few people can call the top at the right time and will always be down a little from the top. So when is the right time to get out. 

The same can be said for buying in. In 2010, the market was goi g up and lots of people were afraid to buy in after the crash one year earlier. Nobody calls the bottom perfectly every time. 

If fully invested and close to retirement don't be all in right now.  It is good to be less aggressive in retirement, but for the people that are 100 percent in stocks, it is time to think about raising some cash.


----------



## pedro47 (Feb 1, 2016)

Question when  you turn 70 1/2 years old and you starting taking  the RMD from your variois IRA accounts., does this put you in a whole new tax bracket and how can you offset this situation?


----------



## Conan (Feb 1, 2016)

pedro47 said:


> Question when  you turn 70 1/2 years old and you starting taking  the RMD from your variois IRA accounts., does this put you in a whole new tax bracket and how can you offset this situation?



If you're still working, you can continue to make IRA, 401k and similar retirement contributions. Self-employed people can contribute and deduct up to 20% of what they earn. In effect you're taking money out via RMD and putting it back in via new contributions.

Of course, those additional deferrals will lead to larger RMD distributions in later years, but maybe by then you'll no longer be working.


----------



## pedro47 (Feb 1, 2016)

Conan said:


> If you're working, you can continue to make IRA, 401k and similar retirement contributions. Self-employed people can contribute and deduct up to 20% of what they earn. Of course, those additional deferrals will lead to larger RMD distributions in later years.



I retired over ten year's ago.


----------



## geekette (Feb 1, 2016)

pedro47 said:


> Question when  you turn 70 1/2 years old and you starting taking  the RMD from your variois IRA accounts., does this put you in a whole new tax bracket and how can you offset this situation?



It can put you into a new tax bracket but keep in mind it's a progressive tax, only those dollars above last bracket will receive higher taxation, not your entire income.  

One thing you can do is convert some IRA to Roth, paying the tax at that time.   With market down, find a beaten up holding to move.  You will pay tax on Market Value at time of transfer, then once in a Roth, no more taxes.  

If you don't already have a Roth, it should be simple to establish one.  Super Simple is to set it up same place as existing IRA.   Note that converting from IRA to Roth is not an issue, but contributing to Roth in the normal way still requires earned income (ie a job or other wages).  I don't think there is a problem creating a Roth past age 70, but check on that, there could be a rule on that.


----------



## geekette (Feb 1, 2016)

PigsDad said:


> So when you retire you are planning to cash out all of your holdings?  When I retire I see myself needing my investments for 20-30 more years, so I don't see myself changing my portfolio mix that much.
> 
> Kurt



I read it as "get it out of the 401k" which I will do at soonest opportunity in order to invest in what I want vs confines of 401k plan.  

Just a rollover.

I also plan to stay the course with 90%+ equities indefinitely, but it's different for div investors vs selling off to create income.  I will retire on schedule no matter what the market is doing at the time.   I will simply collect dividends to mm attached to portfolio for a year before retiring, in addition to sufficient funds in normal "non-investment cash" (ie checking, savings, emergency).

I am targeting April 2025 retirement as that is when I am 59.5.  I'll retire earlier if I can.


----------



## tompalm (Feb 1, 2016)

pedro47 said:


> Question when  you turn 70 1/2 years old and you starting taking  the RMD from your variois IRA accounts., does this put you in a whole new tax bracket and how can you offset this situation?



The more money you are required to take out, the more it increases your taxes and it can change your tax bracket as it hits different levels of income. As far as off setting that, there are investments you can make to defer taxes, like depreciating business property, or real estate, but those are not always the best plans. Brokers will sell you a Limited Partnership, but those are usually terrible investments.


----------



## pedro47 (Feb 1, 2016)

Thanks Tompalm and geekette for the suggestions.


----------



## Ironwood (Feb 1, 2016)

Buy and hold is dead, and don't let brokers convince you otherwise.  It's a crapshoot where markets will be 5, 10 or 15 years from now, and you could find yourself in a multi year down cycle just when your need to start accessing your money.  Many institutions, brokers and advisors want you to stay invested or at the other end of the scale...turn your portfolio regularly, as that's how they make money.   If you are in cash or bonds, there is little in it for them. 
There is plenty of sound rationale out there that for the next several years you need to be nimble.  Be invested, but be prepared to go to cash or near cash for all or part of your portfolio quickly.   If we see the kind of volatility we've seen in January, you don't want to sit eyes closed, while the Dow is down 500 points on successive days.  So, don't get locked into anything you can't get out of quickly (at least by the end of the business day) and don't invest in illiquid securities.  If you have a broker, discuss with him/her your need to be looked after when you make the call to sell.  In an '08 meltdown, the biggest clients got looked after first.
I know....I'm a retired retail broker.


----------



## VacationForever (Feb 1, 2016)

pedro47 said:


> Question when  you turn 70 1/2 years old and you starting taking  the RMD from your variois IRA accounts., does this put you in a whole new tax bracket and how can you offset this situation?



Nice problem to have.


----------



## SMHarman (Feb 1, 2016)

pedro47 said:


> Question when  you turn 70 1/2 years old and you starting taking  the RMD from your variois IRA accounts., does this put you in a whole new tax bracket and how can you offset this situation?


At 70.5 you should be spending it on stuff like travels.  

You can save state tax if you want to put it in a 529 for kids / grandkids. 

If you get a job you can use it to contribute to a new 401k.


----------



## pedro47 (Feb 1, 2016)

SMHarman said:


> At 70.5 you should be spending it on stuff like travels.
> 
> You can save state tax if you want to put it in a 529 for kids / grandkids.
> 
> If you get a job you can use it to contribute to a new 401k.


Answers....
We try to do seven (7) weeks per year using our various timeshares; plus one or two cruises per year every other year.

I gave and I'm still giving to my grandkids up front. One will be finishing college this May and the second one will be entering college in September. I'm giving to the grandkids. OK!!!!

I'm finishing working on a job 9 to 5 over ten years ago. HOWEVER, I'm working around the house 8 to 10 hours per day,  six days per week for The Commander In Chief (my wife) for free. Have about that job for a retire old man.

Plus,  I'm on call by my others family's members under something called other duties as assigned because you are retired with nothing to do. RIGHT. 
Life is good. Because I have my health and I still enjoy people and traveling.


----------



## SMHarman (Feb 1, 2016)

pedro47 said:


> Answers....
> We try to do seven (7) weeks per year using our various timeshares; plus one or two cruises per year every other year.
> 
> I gave and I'm still giving to my grandkids up front. One will be finishing college this May and the second one will be entering college in September. I'm giving to the grandkids. OK!!!!
> ...


You asked the question, I offered an answer. It is a nice problem to have. 

I hope to enjoy my retirement in a similar way but 3 kids with 2020+ college bills and NYC cost of living make an over commitment to retirement saving tough. 

Thankfully, serendipitously a 401k roll over cashed me out at the end of the year. I hope that helps long term, but saving for retirement when fed funds is <1% and other countries are experimenting with negative interest rates and I am now directing $6500 of my pay to the New deductible on my healthcare plan is Grrr.


----------



## MULTIZ321 (Feb 1, 2016)

pedro47 said:


> Question when  you turn 70 1/2 years old and you starting taking  the RMD from your variois IRA accounts., does this put you in a whole new tax bracket and how can you offset this situation?



Hi Pedro,

Here's the 2016 breakdown for the different tax brackets for a single person:

10% – $0 to $9,275
15% – $9,275 to $37,650
25% – $37,650 to $91,150
28% – $91,150 to $190,150
33% – $190,150 to $413,350
35% – $413,350 to $415,050
39.6% – $415,050+



Richard


----------



## pedro47 (Feb 1, 2016)

MULTIZ321 said:


> Hi Pedro,
> 
> Here's the 2016 breakdown for the different tax brackets for a single person:
> 
> ...


Thanks Richard from another R.


----------



## John Cummings (Feb 1, 2016)

MULTIZ321 said:


> Hi Pedro,
> 
> Here's the 2016 breakdown for the different tax brackets for a single person:
> 
> ...



Remember to double the size of the brackets if you are filing a joint return which most couples do.


----------



## geekette (Feb 2, 2016)

Ironwood said:


> Buy and hold is dead, and don't let brokers convince you otherwise.  It's a crapshoot where markets will be 5, 10 or 15 years from now, and you could find yourself in a multi year down cycle just when your need to start accessing your money.  Many institutions, brokers and advisors want you to stay invested or at the other end of the scale...turn your portfolio regularly, as that's how they make money.   If you are in cash or bonds, there is little in it for them.
> There is plenty of sound rationale out there that for the next several years you need to be nimble.  Be invested, but be prepared to go to cash or near cash for all or part of your portfolio quickly.   If we see the kind of volatility we've seen in January, you don't want to sit eyes closed, while the Dow is down 500 points on successive days.  *So, don't get locked into anything you can't get out of quickly (at least by the end of the business day)* and don't invest in illiquid securities.  If you have a broker, discuss with him/her your need to be looked after when you make the call to sell.  In an '08 meltdown, the biggest clients got looked after first.
> I know....I'm a retired retail broker.


I disagree that buy and hold is dead, but people make their own decisions.  The stock market is volatile always, just some times more than others.  Hard to imagine what hell will unleash on a long term holder of P&G, for example.  I won't be selling companies I've held for over 20 years but will instead hold them for decades more, until I'm dead.  I would be surprised if a broker recommended buy and hold since it is against their interests.

What caught my eye here was the bolded part, seems geared to the day traders vs long term investors.  I don't ever buy something with the expectation of dumping it same day and would imagine most people on this thread are not jumping in and out of the market on a daily basis.  Nothing wrong with it, I'm just not sure that's this audience.  

Two extremes, buy and hold over time vs buy and sell same day.  I think most folks here are somewhere in the middle.

Retired broker, what stories you must have ....!


----------



## "Roger" (Feb 2, 2016)

John Cummings said:


> Remember to double the size of the brackets if you are filing a joint return which most couples do.


I believe that you only double the lower brackets. As income goes up, you increase the amounts by smaller and smaller percentages.

Chart


----------



## lizap (Feb 2, 2016)

Tom, you called it.  The global market rally has stalled...  




tompalm said:


> For the record, there is a computer program called Sector Surfer that I use that is based on technical analysis. It uses trend lines with the priority being on the 50 day line below the 200 day line and how long it is there to determine when to sell or go to cash.  Once the 50 day line turns up, it will send an email to buy your best performing mutual fund or stock. It is actually more complex with a lot of other data it uses, but if you are familiar with charts and trend lines, you can understand how it works. Yesterday, I received an email to go to cash, so that means to make the trade tomorrow on Feburay 1st and to get out of the market. You can go there and set up an account for free if you want. But to make it more applicable to your holdings, you need to input which funds your 401k has. If you work for Google, Apple, IBM, or a lot of other large companies, someone has already done that for you. The cost is $10 per month per strategy. Here is the web site.
> 
> http://www.sumgrowth.com/InfoPages/HallOfFame.aspx
> 
> ...


----------



## tompalm (Feb 3, 2016)

lizap said:


> Tom, you called it.  The global market rally has stalled...



It is technical analysis using trend lines, momentum and probability. There are a couple websites or companies that I subscribe to that state the trend is down and the bounce off of support would only go to 1940 - 1950 and turn down after that. The market might stay in the 1800-1950 range for a while and then break down or possibly go higher. But the trend is down, the sentiment is down and the probability is that the market will go lower to SPX 1800 and maybe to 1600 after that. But the news can change everything and it is an election year, so the Fed will be doing what it can to save the market. Standby for lots of volatility, it could go higher. Nothing is for sure.


----------



## John Cummings (Feb 3, 2016)

"Roger" said:


> I believe that you only double the lower brackets. As income goes up, you increase the amounts by smaller and smaller percentages.
> 
> Chart



You are correct. They used to be double but apparently they have changed. I haven't looked at the tax tables for a few years until just now.


----------



## Ironwood (Feb 3, 2016)

geekette said:


> I disagree that buy and hold is dead, but people make their own decisions.  The stock market is volatile always, just some times more than others.  Hard to imagine what hell will unleash on a long term holder of P&G, for example.  I won't be selling companies I've held for over 20 years but will instead hold them for decades more, until I'm dead.  I would be surprised if a broker recommended buy and hold since it is against their interests.
> 
> What caught my eye here was the bolded part, seems geared to the day traders vs long term investors.  I don't ever buy something with the expectation of dumping it same day and would imagine most people on this thread are not jumping in and out of the market on a daily basis.  Nothing wrong with it, I'm just not sure that's this audience.
> 
> ...



Geekette...I didn't bold any comments.  Your 'quote' click must have somehow done that...go back a page and look at my response.  But, you miss read me, I'm not advocating day trading or anything of the sort.  Just suggesting that one not close their eyes on their portfolio for a long period.  I could name you many good companies that are no longer around or trading at a fraction of their former value with little hope of recovery.  Have a look at the 10 year chart for the insurer AIG to see a fall from former grace.  I use it as an example as I sold it back in November for $61 and change and bought back in this morning for $52.80 when it fell 5% with the financial sell off early morning.  I don't day trade...that's my first activity this week. 
Stories I have to tell....I came to the business late in my working life having been downsized from a banking career when my firm was acquired by a larger competitor.  I saw there were two sides to the business....the 'Billions' side and the quiet money management side I was involved in.  I'm sure most Tugers are somewhere in the middle of managing their affairs, where I am.  My only advice was don't close your eyes with the hope it will be better down the road.  Stay on top of things.


----------



## geekette (Feb 3, 2016)

Ironwood said:


> Geekette...I didn't bold any comments.  Your 'quote' click must have somehow done that...go back a page and look at my response.  But, you miss read me, I'm not advocating day trading or anything of the sort.  Just suggesting that one not close their eyes on their portfolio for a long period.  I could name you many good companies that are no longer around or trading at a fraction of their former value with little hope of recovery.  Have a look at the 10 year chart for the insurer AIG to see a fall from former grace.  I use it as an example as I sold it back in November for $61 and change and bought back in this morning for $52.80 when it fell 5% with the financial sell off early morning.  I don't day trade...that's my first activity this week.
> Stories I have to tell....I came to the business late in my working life having been downsized from a banking career when my firm was acquired by a larger competitor.  I saw there were two sides to the business....the 'Billions' side and the quiet money management side I was involved in.  I'm sure most Tugers are somewhere in the middle of managing their affairs, where I am.  My only advice was don't close your eyes with the hope it will be better down the road.  Stay on top of things.



Yes, it was my bolding to call out a sentence. Sorry I did not fully attribute the bolding to my reply vs your original. 

Of course a person should monitor their investments.  I just found it curious that you say buy and hold is dead and don't let any broker tell you otherwise.  I guess I would be shocked if a broker urged me to buy and stand pat as that wouldn't make them any money unless they held my assets and took annual fee from it.  Are you serious that there are brokers trying to tell people to do buy and hold??

I agree, most of us are somewhere in the middle and I know I'm an oddity doing buy and hold over 2 decades now, but it works great for me.  Quality counts as does track record of weathering varying economic climates.  Yes, not every company makes it over the long haul but monitoring can prevent holding a bk company.  I haven't had a reason to sell yet and no vaporized companies, but life changes and I will adapt as need be.  

People have been calling IBM dead for a long time but they were one of my companies providing double digit dividend raise.   They have also managed to reinvent themselves numerous times as the world changed.  Some see the price as scary low, I see it as bargain.  It's fine with me if it trades low forever more since I am not dependent on stock price for retirement.  

AIG isn't something I would have held for the simple reason that I distrust insurance and wouldn't own it.   I won't own airlines or car companies, either, and have a mere sliver in retail.

Thanks for the dialogue.  I had thought if ever I needed a career change I might go into something financial.    I think it's very cool you were able to do so "late" as some industries are not welcoming to the second career set and now that I'm past 50 ...


----------



## Ironwood (Feb 3, 2016)

Another bounce back today on NA markets, thank goodness.  What a roller coaster ride we've had the first five weeks of 2016!  I hope we've seen the lows of the year but there are so many variables not behaving as they should that it's anybody's guess where we go from here.


----------



## CO skier (Feb 4, 2016)

PigsDad said:


> I pulled the trigger and picked up a block of COP yesterday.  Happy today!  If it takes more dips, I will buy more.  ~8% dividend at its current price -- hopefully the dividend will hold through he rough patch we are in.  They have a good long-term record of increasing dividends.
> 
> Kurt



ConocoPhillips cut its dividend by 66%.

It looks like the US Bank story all over again.


----------



## PigsDad (Feb 4, 2016)

CO skier said:


> ConocoPhillips cut its dividend by 66%.
> 
> It looks like the US Bank story all over again.


Saw that this morning.  Kind of surprised the stock is only down ~1.5% (and still higher than when I purchased a couple weeks ago).  The analysts were talking about the possibility of a dividend cut earlier, so I guess most of that was priced into the stock already.

Kurt


----------



## CO skier (Feb 4, 2016)

PigsDad said:


> Kind of surprised the stock is only down ~1.5%



The stock is currently down 8.5-9% on the day and falling.  No telling where it will end.  That is how volatile stocks can get on dividend cut announcements.

All the talk in this thread about dividends has me looking to put some funds to work.  My opinion, and definitely not investment advice, is that Cisco Systems shows more promise as a swing trade now and dividend investment over the next few years versus energy stocks.


----------



## johnrsrq (Feb 4, 2016)

*looks like another sale for eager beaver buyers*

keeping powder dry as I do not like this feeble bear market rally.

not investment advice seek professional for yourself.

timberrrr  $spx- current 1911.


long termers like those in IBM at 180 not to worry..... I think.


----------



## ace2000 (Feb 5, 2016)

Interesting comments about the global economy by Citibank today...   

*Citi: World economy seems trapped in ‘death spiral’*

http://www.cnbc.com/2016/02/05/citi-world-economy-trapped-in-death-spiral.html


----------



## ace2000 (Feb 5, 2016)

Personally, those previous comments would probably make me want to invest more into the market, but I know it reinforces some of the thoughts of some on here.


----------



## geekette (Feb 5, 2016)

CO skier said:


> The stock is currently down 8.5-9% on the day and falling.  No telling where it will end.  That is how volatile stocks can get on dividend cut announcements.
> 
> All the talk in this thread about dividends has me looking to put some funds to work.  My opinion, and definitely not investment advice, is that Cisco Systems shows more promise as a swing trade now and dividend investment over the next few years versus energy stocks.



Folks interested in dividend investing might like a look at dripinvesting.org  -- some of the stuff is really dated, but under Info/Tools/Forms is a spreadsheet updated monthly that contains companies that have paid increasing dividends for at least 5 years, some have many decades (Champions tab is >= 25 year history).   If you want ideas on solid companies to invest in, not a bad place to start.  

Of the companies I own that are on this spreadsheet, 24 of them gave me double digit dividend increases in 2015.  Someone mentioned IBM - yes, dbl digit increase in 2015.  

Of course, past performance in no way guarantees future ... buyer beware... this is not a recommendation to buy...  please perform your own due diligence ...  etc


----------



## lizap (Feb 5, 2016)

At this stage of my life (pre-retirement), I'm not interested in keeping up with things like dividend distributions and cost basis. I want simplicity.  When we retire, we plan to annuitize (immediate annuity) half of our portfolio and place all but enough for an emergency fund in a balanced portfolio of mutual funds (all retirement funds), withdrawing 4% a year. I'll never forget, about 10 years ago, I helped a friend with her taxes who had worked at AT&T and had bought stock (there were countless stock splits) and had the dividends reinvested.  It was the biggest nightmare.  Never did get the cost basis right; surprised she never got audited by the IRS.  Not for me, in my latter years...




geekette said:


> Folks interested in dividend investing might like a look at dripinvesting.org  -- some of the stuff is really dated, but under Info/Tools/Forms is a spreadsheet updated monthly that contains companies that have paid increasing dividends for at least 5 years, some have many decades (Champions tab is >= 25 year history).   If you want ideas on solid companies to invest in, not a bad place to start.
> 
> Of the companies I own that are on this spreadsheet, 24 of them gave me double digit dividend increases in 2015.  Someone mentioned IBM - yes, dbl digit increase in 2015.
> 
> Of course, past performance in no way guarantees future ... buyer beware... this is not a recommendation to buy...  please perform your own due diligence ...  etc


----------



## pedro47 (Feb 5, 2016)

Today's market drop went show to South America.


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## lizap (Feb 5, 2016)

This is a dangerous market. The downside risk currently exceeds the upside potential, IMO.  Everyone says invest for the long-term, but when the long-term isn't that long, reality begins to set in...




pedro47 said:


> Today's market drop went show to South America.


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## tompalm (Feb 6, 2016)

Mary Ann Bartels, Cheif Investment Officer from Merrill Lynch was on CNBC today saying this is a bull market that will continue and to stay the course.  She is known as a technical analysis expert and asked about where the market is going. She replied that SPX 1600 looks like it will happen and that is normal for the market to go down that much and go up again to continue the long term trend. If she is right, that is a 20 percent sell off from the top and we are about half way there right now. Most experts agree a recession is not in the near future, so SPX 1600 and up again is realistic.  What matters is how you want to be invested. Most big brokerage firms say to use proper asset allocation and stay the course. However, Morgan Stanley just sent out an email to to consider your investment and to reduce risk by ensuring you are holding less volatile stocks and to consider Consumer Staples stocks or companies that pay solid dividends.  It seems like more companies think the market will go lower.  The thing that bothers me is that nobody knows the bottom. There is long term support at SPX 1600. I just hope it doesn't go any lower than that.


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## lizap (Feb 6, 2016)

The major indicies have held up reasonably well relative to some stocks.  Index investing has been widely touted in recent years.  I read recently where some market experts believe this will be a stock pickers market and the indices will take a beating... I hope SPX 1600 holds, but as I noted earlier, this market is very risky right now, negative interest rates in Japan, slowing in China, uncertainty in U.S, plus one of the longest bull markets ever.. all bull markets eventually end.



tompalm said:


> Mary Ann Bartels, Cheif Investment Officer from Merrill Lynch was on CNBC today saying this is a bull market that will continue and to stay the course.  She is known as a technical analysis expert and asked about where the market is going. She replied that SPX 1600 looks like it will happen and that is normal for the market to go down that much and go up again to continue the long term trend. If she is right, that is a 20 percent sell off from the top and we are about half way there right now. Most experts agree a recession is not in the near future, so SPX 1600 and up again is realistic.  What matters is how you want to be invested. Most big brokerage firms say to use proper asset allocation and stay the course. However, Morgan Stanley just sent out an email to to consider your investment and to reduce risk by ensuring you are holding less volatile stocks and to consider consider Consumer Staples stocks or companies that pay solid dividends.  It seems like more companies think the market will go lower.  The thing that bothers me is that nobody knows the bottom. There is long term support at SPX 1600. I just hope it doesn't go any lower than that.


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## bogey21 (Feb 6, 2016)

I manage my kids IRAs as I am the one who funded them.  I got them 100% out of the stock market in October 2014 and moved them into a low duration bond fund.  The fund I use when they are in stocks is a Small Cap Growth Fund.  On January 8th I moved 10% of their money into it.  On February 5th I moved another 10%.  When the market drops another 10% or so I will move another 10% back into stocks.  So far, so good!

George


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## tompalm (Feb 6, 2016)

lizap said:


> The major indicies have held up reasonably well relative to some stocks.  Index investing has been widely touted in recent years.  I read recently where some market experts believe this will be a stock pickers market and the indices will take a beating... I hope SPX 1600 holds, but as I noted earlier, this market is very risky right now, negative interest rates in Japan, slowing in China, uncertainty in U.S, plus one of the longest bull markets ever.. all bull markets eventually end.



Agree, and I don't want to run around saying the sky is falling because news can change everything and all the Fed has to do is say no more interest rate hikes and the market will rally. But long term indicators like monthly candles or monthly MACD, or monthly PMO crossovers just happened earlier this year around June and that has only happened twice in the last 20 years that was in 2000 and 2008. Both of those times, the index sold off 50 percent. So if history repeats itself, the selloff will be worse than SPX 1600.  But, nobody knows the bottom.


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## PigsDad (Feb 6, 2016)

lizap said:


> I'll never forget, about 10 years ago, I helped a friend with her taxes who had worked at AT&T and had bought stock (there were countless stock splits) and had the dividends reinvested.  It was the biggest nightmare.  Never did get the cost basis right; surprised she never got audited by the IRS.  Not for me, in my latter years...


You do realize that brokerages are now required to track and report (via 1099s) all cost basis information, right?  This does not cover older purchases, but for any new purchases within the last couple years the burden falls on the brokerage company, not the individual to report cost basis (and that cost basis is reported to the IRS, so less "fudging").

Kurt


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## CO skier (Feb 6, 2016)

tompalm said:


> Agree, and I don't want to run around saying the sky is falling because news can change everything and all the Fed has to do is say no more interest rate hikes and the market will rally. But long term indicators like monthly candles or monthly MACD, or monthly PMO crossovers just happened earlier this year around June and that has only happened twice in the last 20 years that was in 2000 and 2008. Both of those times, the index sold off 50 percent. So if history repeats itself, the selloff will be worse than SPX 1600.  But, nobody knows the bottom.


Somehow, the corporate bond world figures it out first.  By the middle of last year, it was looking like corporate bonds had peaked, and it was obvious by the fall.  I will continue watching corporate bonds, because they turned up in December 2008 -- a few months before the stock market did.

Meanwhile, there are bear market rallies, and this market is looking short-term oversold, so I am looking for some bargains to hold short-term.  I followed-up the Cisco Systems idea with a tactical purchase yesterday and will be watching the daily Moving Average Convergence Divergence to determine when to sell it.  My mental stop loss for any stock purchase is usually in the 11-13% range.  If the market continues to head south and takes Cisco with it, I will sell it, because I was wrong.  If the market stair steps down from these oversold conditions, I might give a little more leeway to 15%, because then I wasn't wrong, just early.

I would not attempt this trading strategy in a taxable account, because the government skim is too high.

The most important idea in any investment plan is to know and manage the risk, not manage the return.  There is no question the market is riskier now than for the past few years, but the volatility is creating some compensatory rewards.


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## Sugarcubesea (Feb 6, 2016)

I'm retiring in 12 to 13 years and I'm trying to figure out what to put my 401K in, so far over the past 8 months I've lost 10%…I think I need to be more in bonds then stock at this point….How do you decide its so darn confusing to me


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## Sugarcubesea (Feb 6, 2016)

mpumilia said:


> I am doing monthly contributions to a blue chip fund since last year in my Roth, I have 5 years until I retire.



What is a good blue chip fund


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## tompalm (Feb 6, 2016)

Sugarcubesea said:


> I'm retiring in 12 to 13 years and I'm trying to figure out what to put my 401K in, so far over the past 8 months I've lost 10%…I think I need to be more in bonds then stock at this point….How do you decide its so darn confusing to me



I like target funds if you want to take less risk. If your 401k doesn't offer any, put about 40 percent into a short term bond fund that has an average term of five years. Your other fund should be something with low risk like equity income fund. I like ARYIX if that is available to you. 

A better option is to look at Sector Surfer and follow the recommendations from that. They just went to cash a few days ago. So if you don't mind trading a couple times each year, set up a strategy in Sector Surfer using the different funds in your 401k. Here is a link. 


http://www.sumgrowth.com/MyPages/Strategies2.aspx


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## tompalm (Feb 6, 2016)

Sugarcubesea said:


> What is a good blue chip fund



TWEIX should do well. It is a five star fund.


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## Sugarcubesea (Feb 6, 2016)

tompalm said:


> I like target funds if you want to take less risk. If your 401k doesn't offer any, put about 40 percent into a short term bond fund that has an average term of five years. Your other fund should be something with low risk like equity income fund. I like ARYIX if that is available to you.
> 
> A better option is to look at Sector Surfer and follow the recommendations from that. They just went to cash a few days ago. So if you don't mind trading a couple times each year, set up a strategy in Sector Surfer using the different funds in your 401k. Here is a link.
> 
> ...




Thank you, they do offer a retirement target fund, I put an allocation in the 2025 and the 2030… Thanks for the link


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## Sugarcubesea (Feb 6, 2016)

I went to Morningstar, an this one PRWCX-CAPITAL APPRECIATION FUND is rated Gold, I'm going to put about 20% of my 401K in this one


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## lizap (Feb 6, 2016)

A large portion of our pre-retirement portfolio is in PRWCX, unfortunately it is closed to new investors.  I would go with something like Vanguard Wellington.


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## bogey21 (Feb 6, 2016)

Sugarcubesea said:


> I'm retiring in 12 to 13 years and I'm trying to figure out what to put my 401K in, so far over the past 8 months I've lost 10%…I think I need to be more in bonds then stock at this point….How do you decide its so darn confusing to me



I haven't looked into these in any great detail as I am already retired and living on my pension and Social Security (both annuities) but one of the things I would look at with a portion of your 401k are deferred annuities, those kicking in at ages like 75, 80 or 85.  I see potential in having these to protect against depleting one's portfolio.

George


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## WinniWoman (Feb 6, 2016)

Sugarcubesea said:


> What is a good blue chip fund



I am doing Price Blue Chip. I also have Price Capital Appreciation.


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## lizap (Feb 8, 2016)

Market down almost 400 pts.  I think we're headed much lower...


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## johnrsrq (Feb 8, 2016)

*looking for support area- keep looking*

no exhaustion in selling. further weakness,where's all that sideline cash  

For those that appear to like "sales" in stock prices, there's discounts from retail value abound.  Investco's Aristocat's UIT's have companies that increase dividends for each year of the last 25 yrs-  without, of course ongoing mgmt. fee, as it is a unit investment trust (UIT) for those liking diversified quality dividend portfolio's.  I can mention this as a retail person at this point. 
*[/B]Not investment advice, seek professional who can but also get educated in filed corp. cash flow and earning statements.

IBM approaching 52 week low and going back just 5 yrs- flat including dividends. 10 yrs a bit better. BRK-A takes private- lol. like BRK-A more now.*


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## lizap (Feb 8, 2016)

Bank and oil stocks down significantly.  World markets pricing in a global slowdown/recession. Think any more interest rate increases can probably be ruled out anytime soon..




johnrsrq said:


> no exhaustion in selling. further weakness,where's all that sideline cash
> 
> For those that appear to like "sales" in stock prices, there's discounts from retail value abound.  Investco's Aristocat's UIT's have companies that increase dividends for each year of the last 25 yrs-  without, of course ongoing mgmt. fee, as it is a unit investment trust (UIT) for those liking diversified quality dividend portfolio's.  I can mention this as a retail person at this point.
> *[/B]Not investment advice, seek professional who can but also get educated in filed corp. cash flow and earning statements.
> ...


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## geekette (Feb 8, 2016)

lizap said:


> At this stage of my life (pre-retirement), I'm not interested in keeping up with things like dividend distributions and cost basis. I want simplicity.  When we retire, we plan to annuitize (immediate annuity) half of our portfolio and place all but enough for an emergency fund in a balanced portfolio of mutual funds (all retirement funds), withdrawing 4% a year. I'll never forget, about 10 years ago, I helped a friend with her taxes who had worked at AT&T and had bought stock (there were countless stock splits) and had the dividends reinvested.  It was the biggest nightmare.  Never did get the cost basis right; surprised she never got audited by the IRS.  Not for me, in my latter years...



While I never found the math to be daunting (but note that I make my career in oceans of data), brokers are now required to report cost basis.

Besides, from taxable portfolio, I don't sell, just collect dividends.  1099 shows up.  easy.  

Even if I owned a company taxable for 40 years, it's only 4 records a year, not unmanageable math and Excel will do it for you.  I find it advantageous to have many lots to choose from in case I ever do want to sell since I can somewhat control my gain/loss by which lots I elect to sell.

Divs from a tax shelter have no basis that IRS cares about.  Having those sent directly to my checking account makes it even easier and still no sell decisions, just collect.


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## Talent312 (Feb 8, 2016)

Sugarcubesea said:


> …I think I need to be more in bonds then stock at this point….How do you decide its so darn confusing to me



For a bonds/stock ratio, I use this formula: "age" - 10 = '_x_' % in bonds.
So that means, if I'm 60, I should be 50% in bonds (and I am).

But what bonds?
In rising rate eras, old bonds lose value as new higher-rate bonds are issued.
So, your bond funds will suffer -- longer term funds suffer the most.
I prefer individual bonds. At least they pay you their face value at maturity.
The trick is to get a decent yield-to-maturity for safer bonds. Not easy to do.
.
.


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## CO skier (Feb 8, 2016)

johnrsrq said:


> no exhaustion in selling. further weakness,where's all that sideline cash



Quite a number of quality, beaten down stocks closed in the green today while "the markets" closed off more than 1%.  There are a few bargain hunters returning to the market who may be enough to create a short term bounce.

There is no way I would tie up any money in a mutual fund at this point, but multi-month volatility is a trader's bread and butter -- trading in both directions.


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## johnrsrq (Feb 8, 2016)

CO skier said:


> Quite a number of quality, beaten down stocks closed in the green today while "the markets" closed off more than 1%.  There are a few bargain hunters returning to the market who may be enough to create a short term bounce.
> 
> *There is no way I would tie up any money in a mutual fund at this poin*t, but multi-month volatility is a trader's bread and butter -- trading in both directions.



It's is not a mutual fund, UIT, subject to inflows/outflows (effects and expenses) and managerial portfolio roll and other actions but if those quality stocks that increased dividends for each of at *least* the last 25 yrs. with an instant diversification is worse than picking winners yourself, then go for that. But I was speaking of dividend structure of a retirement portfolio. 

The larger the purchase the lower, if any, the small fee. Cheaper than buying them all and getting involved with emotions. Long track records at cost. No guarantees though. Past performance no guarantee of future results.

Maybe AAPL is worth nibbling with overweighting.


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## CO skier (Feb 8, 2016)

johnrsrq said:


> It's is not a mutual fund, UIT, subject to inflows/outflows (effects and expenses) and managerial portfolio roll and other actions but if those quality stocks that increased dividends for each of at *least* the last 25 yrs. with an instant diversification is worse than picking winners yourself, then go for that. But I was speaking of dividend structure of a retirement portfolio.
> 
> The larger the purchase the lower, if any, the small fee. Cheaper than buying them all and getting involved with emotions. Long track records at cost. No guarantees though. Past performance no guarantee of future results.
> 
> Maybe AAPL is worth nibbling with overweighting.



The "I wouldn't invest money in a mutual fund at this point" was directed at other posts where people were considering investing in a mutual fund during this sell-off.  Sorry, I probably should have posted that separately or at least quoted one of the mutual fund posts.

AAPL will probably be setting new highs two years from now, but if "the market" keeps heading downward, AAPL will suffer undo amounts of selling, but then it will really be a screaming bargain.  It just depends on how much of a roller coaster ride investors can tolerate if large investors (hedge funds and mutual funds portfolio managers) decide to bail and send the markets indiscriminately lower ala 2008.


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## CO skier (Feb 10, 2016)

Akami Technologies was up over 20% today with an earnings report that surprised to the upside.

Cisco Systems traded up 5-8% during after hours due to an earnings report that met reduced expectations.  It will be interesting to see what kind of gains it can hold during the regular session tomorrow.

Stock futures are currently down 3/4%.

For mutual fund investors it is a "stock market."  For self directed investors, it is a market of individual stocks.


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## johnrsrq (Feb 11, 2016)

*rough day implied*

futures looking very weak yet exhaustion still not at hand.  still complacent.

T is holding well with it's fat dividend and subscriber prepaid addon with its cricket unit, the metrics appear solid  but the revenue per sub. will be declining. I don't like tmus as such.

IBM a teenager again. again  "on sale" looking for support or reaction low. dividend review possible.

good luck all.

glad my annuity offerings are safe.


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## geekette (Feb 11, 2016)

CO skier said:


> For mutual fund investors it is a "stock market."  For self directed investors, it is a market of individual stocks.



Yes, exactly.  Level of the Dow or any index has nothing to do with what I paid for Union Pacific or Boeing recently.


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## johnrsrq (Feb 11, 2016)

geekette said:


> Yes, exactly.  Level of the Dow or any index has nothing to do with what I paid for Union Pacific or Boeing recently.



so yesterdays individual "pick" is todays pan. I agree.

http://finance.yahoo.com/q?s=ba

sec inquiry BA just today

yesterday areas of support are today's resistance areas .


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## bogey21 (Feb 11, 2016)

CO skier said:


> There is no way I would tie up any money in a mutual fund at this point, but multi-month volatility is a trader's bread and butter -- trading in both directions.



Disagree.  I took my kids IRAs from their mutual fund (a Small Cap Growth Fund) into a Low Duration Bond Fund in October 2014.  Very slowly I am putting them back into the Small Cap Growth Fund at prices well below where I sold.  If the Dow and Russell 2000 crater today, I may move a little more back into their stock fund today.

George


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## CO skier (Feb 11, 2016)

johnrsrq said:


> so yesterdays individual "pick" is todays pan. I agree.
> 
> http://finance.yahoo.com/q?s=ba
> 
> ...



Usually, I let the winners run, but in the current macro market environment, I don't want to be holding any stocks over the long weekend.

Sold the CSCO stock at $24.57 for a 6% gain over one week, because only the buy price and the sell price counts; everything in between is just noise.

If Cisco fills the gap in the next week or two, maybe I will double up and buy back in.

The current markets have a certain casino feel, so profit taking when random chance offers a favorable outcome seems the prudent thing to do.


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## lizap (Feb 11, 2016)

Annuity rates are based on the 10 yr treasury bond.  My guess is that if interest rates go negative and stocks suffer a significant decline and I suspect they will, many annuity companies and states will have trouble paying their annuities/pensions.  Most states do have guaranty associations that protect annuities up to a certain amount, from 100-300k.




johnrsrq said:


> futures looking very weak yet exhaustion still not at hand.  still complacent.
> 
> T is holding well with it's fat dividend and subscriber prepaid addon with its cricket unit, the metrics appear solid  but the revenue per sub. will be declining. I don't like tmus as such.
> 
> ...


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## lizap (Feb 11, 2016)

I'm afraid we might be in for a major stock market decline (possibly more than 2008), that has only just begun.  The Fed has propped up our economy with free money for too long; they have very little ammunition left.  Negative interest rates may work in the short-term, but if stocks go up, I would use this as a selling opportunity, if you are a trader. If you are a longer-term investor, you might use this as an opportunity to adjust your portfolio to be in line with your risk tolerance. We are in uncharted water, and I'm afraid the end result will not be good. The risk in this market far outweighs the potential return.


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## johnrsrq (Feb 11, 2016)

lizap said:


> Annuity rates are based on the 10 yr treasury bond.  My guess is that if interest rates go negative and stocks suffer a significant *decline and I suspect they will, many annuity companies and states will have trouble paying their annuities/pensions*.  Most states do have guaranty associations that protect annuities up to a certain amount, from 100-300k.




There is much too much an answer to that other than it is untrue. it truly depends upon what is specifically guaranteed and what measures carrier's have and receivers have to protect policyholders. The portfolio's are comprised of existing assets or in this case liabilities. The NAIC model classification requires high quality components like the 10 yr Notes/Bonds of the USA, also agency paper etc.  like a bond fund, even if rate go negative, the portfolio could very well be quite positive. Excess or surplus capital might even yield more to the portfolio's.

I have had carriers both weak B- and strong A+, go into receivership and eventually absorbed by others during the last  30 years. No one lost money but some inconvenience or limitations to access for a period of time. At no time were immediate annuity payments interrupted or any delays in death benefit processing. 

The current imputed rates of return for immediate annuities are under 1%.
Carriers I use have weathered the Depression and model carefully their offerings which also have to be approved by government required models.

Rates are low and guarantee formula's that state something like 1-1.5% guarantee minimum (if the other strategies didn't exceed this) over a period of years usually relating to a surrender schedule @ .87 or .91 of amount of premium- this is in effect , to me, a guarantee protecting against negative rates. In addition, as all investors remain invested the stress or lack thereof is remarkable. And lastly, there are other profit components in the insurance carrier services.

That all being said, low rates suck for everyone, even agents.


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## lizap (Feb 11, 2016)

Not going to get into a lengthy debate here but will say...many annuities are paying out more than the rate you cite (I can get an immediate annuity right now paying 5.54% for the rest of my life) - if rates of return from financial assets decrease significantly, it will place considerable stress on these companies and states' ability to pay annuities/pensions ; most people would not be comfortable knowing that the company they have their retirement pension with is in receivership. Again, most states have guaranty associations that provide annuity protection from 100-300k.




johnrsrq said:


> There is much too much an answer to that other than it is untrue. it truly depends upon what is specifically guaranteed and what measures carrier's have and receivers have to protect policyholders. The portfolio's are comprised of existing assets or in this case liabilities. The NAIC model classification requires high quality components like the 10 yr Notes/Bonds of the USA, also agency paper etc.  like a bond fund, even if rate go negative, the portfolio could very well be quite positive. Excess or surplus capital might even yield more to the portfolio's.
> 
> I have had carriers both weak B- and strong A+, go into receivership and eventually absorbed by others during the last  30 years. No one lost money but some inconvenience or limitations to access for a period of time. At no time were immediate annuity payments interrupted or any delays in death benefit processing.
> 
> ...


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## johnrsrq (Feb 11, 2016)

lizap said:


> Not going to get into a lengthy debate here but will say...many annuities are paying out more than the rate you cite (I can get an immediate annuity right now paying 5.54% for the rest of my life) - if rates of return from financial assets decrease significantly, it will place considerable stress on these companies and states' ability to pay annuities/pensions ; most people would not be comfortable knowing that the company they have their retirement pension with is in receivership. Again, most states have guaranty associations that provide annuity protection from 100-300k.




that's not a interest rate. 5.5% is a distribution rate based on your mortality. also people confuse income rider distribution rates and the accompanying income base credits.

the only true interest rates are myga's ranging from 1.75% for my 3 yr or a juicy 3.3% for a ten yr.  or one year rates near 1%


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## geekette (Feb 11, 2016)

johnrsrq said:


> so yesterdays individual "pick" is todays pan. I agree.
> 
> http://finance.yahoo.com/q?s=ba
> 
> ...



Exactly.  Over the lifetime of a company, crap happens.  SEC may find no malfeasance or may end up charging a big fee.  Boeing will meanwhile keep doing what Boeing does and charging for it.  The worst that could happen if I am wrong is that BA goes BK and I find that unlikely enough to stay the course.


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## johnrsrq (Feb 11, 2016)

geekette said:


> Exactly.  Over the lifetime of a company, crap happens.  SEC may find no malfeasance or may end up charging a big fee.  Boeing will meanwhile keep doing what Boeing does and charging for it.  The worst that could happen if I am wrong is that BA goes BK and I find that unlikely enough to stay the course.



I love BA long term. Best...


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## lizap (Feb 11, 2016)

I'm a big advocate of dividend investing, but potential investors should keep this in mind: the price of the stock could and likely will vary over time; if you need to sell, you could take a loss on your original investment.  Second, companies do not guarantee dividends indefinitely.  There is always the possibility that a company could cut or eliminate a dividend, some of which we are currently seeing.




geekette said:


> Exactly.  Over the lifetime of a company, crap happens.  SEC may find no malfeasance or may end up charging a big fee.  Boeing will meanwhile keep doing what Boeing does and charging for it.  The worst that could happen if I am wrong is that BA goes BK and I find that unlikely enough to stay the course.


----------



## geekette (Feb 11, 2016)

lizap said:


> I'm a big advocate of dividend investing, but potential investors should keep this in mind: the price of the stock could and likely will vary over time; if you need to sell, you could take a loss on your original investment.  Second, companies do not guarantee dividends indefinitely.  There is always the possibility that a company could cut or eliminate a dividend, some of which we are currently seeing.



Sure, complete truth in what you wrote.  There is no static price.  It moves around even in the course of one second of time.  That's not COULD, it's WILL.

I will be living off the dividends, stock price is not a big issue for me because sale isn't planned, ever.  It's merely an option vs the only way to pay expenses in retirement.  That said, when a company is held over the long term, there is generally capital appreciation whether you engage it or not.  Looking at 10 - 50 year charts of many blue chips will show this.

Nothing is certain in life, including dividends.  I do my best to evaluate the financials of a company and its forward operational outlook, and look for companies with a stated dividend policy.  Maybe I am bolder than many, but owning a company that has been paying increasing dividends longer than the life of my parents seems like it probably has a pretty decent likelihood of surviving and even thriving because it has navigated so many rough seas over time.  

I also own some companies that have in fact cut dividends.  I would strongly prefer a company cut the payout than harm operations.  Smart management does what needs to be done for the good of the company first, shareholders are secondary to the life of the business.  If earnings are falling, divs may need to be cut to preserve cash.  The question to me is, why are earnings falling, and is this temporary or a permanent issue for the company?  

Nothing in life is guaranteed.  The price next year of the ETF bought yesterday, an 80th birthday or a smile from the gas station cashier.  Crapshoots, all of them.  I like probabilities, that is what I look for.  

What non-oil blue chips are you seeing with chopped or stopped dividends recently?


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## lizap (Feb 11, 2016)

Primarily referring to the oil sector.  I do think we are a critical juncture in the U.S. and global economy.  If the U.S. economy heads into a deflationary environment with no growth/inflation, we may see things we've never seen before.  I DO like your idea of calculated risks and investing in solid blue chip dividend paying companies certainly fits.  The Fed is very, very limited on monetary policy - we need fiscal policy to help stimulate growth.




geekette said:


> Sure, complete truth in what you wrote.  There is no static price.  It moves around even in the course of one second of time.  That's not COULD, it's WILL.
> 
> I will be living off the dividends, stock price is not a big issue for me because sale isn't planned, ever.  It's merely an option vs the only way to pay expenses in retirement.  That said, when a company is held over the long term, there is generally capital appreciation whether you engage it or not.  Looking at 10 - 50 year charts of many blue chips will show this.
> 
> ...


----------



## tompalm (Feb 11, 2016)

lizap said:


> I'm afraid we might be in for a major stock market decline (possibly more than 2008), that has only just begun.  The Fed has propped up our economy with free money for too long; they have very little ammunition left.  Negative interest rates may work in the short-term, but if stocks go up, I would use this as a selling opportunity, if you are a trader. If you are a longer-term investor, you might use this as an opportunity to adjust your portfolio to be in line with your risk tolerance. We are in uncharted water, and I'm afraid the end result will not be good. The risk in this market far outweighs the potential return.



Agree. I am long SH and SDS until the trend changes or SPX hits 1600. We will get a bounce there for sure.  If the price crosses above the 50 day line and stays there with the line turning up, it will be time to exit the short positions.  The average bear market goes down 32 percent and that will be a lot lower than SPX 1600, so the path to the bottom will be volatile. In the 2003 recession there were  three bull markets that rallied 20 percent up within the downtrend and 2009 was very similar. So if this turns into a real recession, the down trend is not over should the market rally for a couple months. Counter trend rallies normally retrace 40-70 percent of the sell off and after that the selling starts again. All this data is on Stockcharts and a lot of studies have been done for past history. Of course, past history doesn't mean it will repeat itself, but there is a high probability it will, because a lot of it is based on human emotion, fear and greed. 

When a market or stock sells off 10 percent, it has to go up 20 percent to recover. So the path down in 2008 was down 20-25 percent down and to recover half of that sell off that took the price back up about 20 percent or halfway up and then the selling started again. If it is a recession, it will not be over until the price crosses and the 50 day line crosses above the 200 day line. 

I don't want to run around yelling the sky is falling, but deep inside, I think it is. We should get a bounce off of today's level, but when the price drops below SPX 1800, that might be an ugly day.


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## Blues (Feb 11, 2016)

tompalm said:


> In the 2003 recession there were  three bull markets that rallied 20 percent up within the downtrend and 2009 was very similar.



Huh?
http://finance.yahoo.com/echarts?s=^GSPC+Interactive#{%22range%22:%22max%22,%22allowChartStacking%22:true}

I see nearly a straight line up from Jan '03 to Jun '07.  Then we had the 2008 mega-recession.




> When a market or stock sells off 10 percent, it has to go up 20 percent to recover.



OK, so while I'm no stock guru, I *do *know my math.  When the market goes down 10% it must go up *11%* to recover.  Not 20%.

1/0.9 = 1.11


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## tompalm (Feb 11, 2016)

Blues said:


> Huh?
> http://finance.yahoo.com/echarts?s=^GSPC+Interactive#{%22range%22:%22max%22,%22allowChartStacking%22:true}
> 
> I see nearly a straight line up from Jan '03 to Jun '07.  Then we had the 2008 mega-recession.
> ...



You are right about 2003. The recession started in 2000 and ended in 2003. I was looking at a chart with the end date in 2003. So the period is from 2000 - 2003. I can look up the exact dates if it makes a difference to you. 

Regarding your math, think about it again. If the index is at 2000 and goes to 1000, it went down 50 percent. Now when it is at 1000, how much does it need to go up to get back to 2000. If it goes up 50 percent, it will be at 1050. To get back to 2000, it needs to go up 100 percent. 

All this data is documented. You don't have to believe it and make fun of it if you want, but it is highly probable the past will repeat itself. The retracement is based on Fibonacci retracement patterns that occur at 38, 50, and 61 percent and that happens time and time again. Google that or read info at this link if you want. 


http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:fibonacci_retracemen


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## dioxide45 (Feb 11, 2016)

tompalm said:


> Regarding your math, think about it again. If the index is at 2000 and goes to 1000, it went down 50 percent. Now when it is at 1000, how much does it need to go up to get back to 2000. If it goes up 50 percent, it will be at 1050. To get back to 2000, it needs to go up 100 percent.



That only works at 50% drop, the amount isn't always double. If the market goes down 20%, it doesn't need a 40% increase to get back to where it was.

Blues was right, with a 10% drop, you then need an 11% return from there to get back whole, not 20%. If you drop from 100 to 90, going back up 20% would take you to 108.

_ETA: If the market drops 75% you don't need a 150% return to get back whole, you actually need a 300% increase._


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## John Cummings (Feb 11, 2016)

tompalm said:


> You are right about 2003. The recession started in 2000 and ended in 2003. I was looking at a chart with the end date in 2003. So the period is from 2000 - 2003. I can look up the exact dates if it makes a difference to you.
> 
> Regarding your math, think about it again. If the index is at 2000 and goes to 1000, it went down 50 percent. Now when it is at 1000, how much does it need to go up to get back to 2000. If it goes up 50 percent, it will be at 1050. To get back to 2000, it needs to go up 100 percent.
> 
> ...



Blues math is 100% correct. If the market is at 2000 and then drops by 10% is a loss of 200 which means the market is at 1800. A market increase of 200 from 1800 back to 2000 is an increase of 200/1800 =  11%.


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## tompalm (Feb 12, 2016)

John Cummings said:


> Blues math is 100% correct. If the market is at 2000 and then drops by 10% is a loss of 200 which means the market is at 1800. A market increase of 200 from 1800 back to 2000 is an increase of 200/1800 =  11%.



The point is that there were three periods between 2000-2003 that the market rallied 20 percent after three big declines.  During the 2008 -2009 recession, the retracement up was 50 percent of the last sell off and similar to 2002. There are charts on Stockcharts.com that show that. My math might have been off on the lower 20 percent numbers because the down cycle was bigger than that, but Fibonacci retracement works.


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## lizap (Feb 12, 2016)

Just glad our expected retirement is not within the next 5 years..


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## Zac495 (Feb 14, 2016)

I just hold on and say: Don't sell low! Hold it. It will come back. I hope.


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## ace2000 (Mar 22, 2016)

Zac495 said:


> I just hold on and say: Don't sell low! Hold it. It will come back. I hope.



Which turned out to be the best advice...  Plenty of doom and gloom in this thread turned out to be completely wrong!!!  Don't worry, I'm sure they'll all be back during the next downturn.  

*Stock rebound erases bad start to 2016, proves point to investors*

http://www.usatoday.com/story/money...d-start-2016-proves-point-investors/81914668/



> The first week of trading this year was literally the worst in Wall Street’s history, and by February the S&P 500 had lost about 18% from its highs last summer.
> 
> What a difference a few weeks make.
> 
> The S&P has rallied strongly since February’s lows and now is back in the black.


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## Talent312 (Mar 23, 2016)

We, humans are frequently driven by herd-like behavior which tells us to buy-buy-buy when it seems headed for the mountain-top and sell-sell-sell when it seems to be circling the drain.  When faced with these impulses, it sure is tuff not to join the crowd.

.


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## klpca (Mar 23, 2016)

Talent312 said:


> We, humans are frequently driven by herd-like behavior which tells us to buy-buy-buy when it seems headed for the mountain-top and sell-sell-sell when seems to be circling the drain.  When faced with these impulses, it sure is tuff not to join the crowd.
> 
> .



I have a friend who tries to time the market all the time. I feel sorry for all of the money they have lost sitting on the sidelines. They generally (unintentionally) buy high and sell low. 

When the market gets volatile, I don't look at my portfolio. We drew up a plan when the market was steadier and we're staying the plan. It's easier to trust the plan if I don't see the paper losses.


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## geekette (Mar 23, 2016)

Practice.  I've been doing this a while and haven't lost any money in the market.  Market timing is certainly one way to fritter away funds but I am buy and hold (so far).  I can't tell you that I always buy at the bottom because I don't, I have no crystal ball.  Ignore anyone calling the tops or bottoms because they have no crystal ball either.  Nobody Knows.  

Dollar Cost Averaging is a good way to buy, and if you are on the other side of the equation, not a bad way to liquidate, especially if in a fund.

It is very easy for me to tune out the noise as I find it unlikely that all the blue chips are going to fail overnight due to the Brussells bombing or whatever next thing lowers the market.  I have over 70 companies at this point, some up, some down on any given day or period of measurement, but all trending upward over the long haul, and I am a long haul investor.   I invest in companies vs The Market, which also helps tune out the doom and gloom or irrational exuberance.

Keep in mind that it is in the best interest of the brokers that you buy and sell frequently as that generates money for them.  The media doesn't really know anything except to put on sad face if Dow is down.  Down in One Day!  Really, what's that mean to my retirement at age 80?  Nothing, it means nothing.  The 30 companies of the Dow are not for me an indication of anything but investor sentiment towards those 30 companies.

The best thing a person can do is educate themselves about the stock market.  Information is powerful protection against herdthink.  Having the confidence to make your own mind up about what any given piece of info means is very liberating and removes you from relying on what anyone else thinks, let alone the biased financial community that needs you to churn your account.  Analysts are really just people, as fallible as we are, and you can see this based on the wide variety of opinions since they all interpret known facts differently.  Really, who knows how much Company X is going to earn over the next 3 months?  It's guesswork, largely based on the past.  "An Earnings Miss" is hardly a sell signal for me as 3 months barely registers over the investing lifetime.  Look at the actual numbers and not someone's interpretation.  If you see a trend of declining earnings, then you may need to dig deeper to see what's going on.  Earnings Miss could also happen with a company whose earnings are trending up.  The point is, look behind the headline.

I think that time and education are all that an individual needs to confidently invest in the stock market and sleep well at night.  Buy quality, tune out the noise.  And next time you hear SELL SELL SELL, consider what/why they think you should do that.  Look into the matter and make up your own mind.  For me, sitting in cash on the sidelines is simply never going to happen because I am never Getting Out.  I believe that time in the market is superior to timing the market.  

My retirement does not depend on my liquidating as I expect to replace my salary with dividend payments and I am on course to do that within 10 years.  I'm no financial genius, just someone that educated themselves young so that I don't buy the hype.


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## Kal (Mar 23, 2016)

One day I sat in a financial advisor's office discussing ideas.  He said ".._.well it's like throwing a spitball up against the wall and see if it sticks_".

 The next day I transferred my portfolio out of his hands.  That was probably 10 years ago but it gave me an insight into the world of investing.  Who knows?  Maybe he had it right.


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## ace2000 (Mar 23, 2016)

I think the lesson learned here is - don't buy in, or get out of the market, based on the advice of a Timeshare User Group thread.   There was a lot of doom and gloom around here a month ago, but at some point they will be right - there is probably  a major downturn coming.  Trying to nail that down though, will be virtually impossible.  Hopefully nobody around here made the very wrong choice to get out or to pull back a month ago!


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## PigsDad (Mar 23, 2016)

geekette said:


> I believe that time in the market is superior to timing the market.



That is a great little nugget.  Thanks, Geekette!

Kurt


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## easyrider (Mar 23, 2016)

Invariably, past market crashes and corrections did occur while someone was funding their retirement. I know plenty of people that were to retire around  2007 and 2008 that are now almost 70 and still working because of losses suffered in their portfolios. 

In 2002 , Robert Kyosaki wrote a timeline for the biggest market crash that would ever happen. His general prediction is sometime in 2016 and it seems that it is somewhat based on the first wave of ira retirement accounts of baby boomers being utilized. 

http://www.marketwatch.com/story/ri...lapse-he-foresaw-in-2002-is-coming-2016-03-23


Bill


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## lizap (Mar 23, 2016)

The key is to decide how much risk you are comfortable with.  After taking a look at our portfolio and desired budget post retirement, we discovered we were taking on more risk than we had to and thus de-risked our portfolio somewhat.




ace2000 said:


> I think the lesson learned here is - don't buy in, or get out of the market, based on the advice of a Timeshare User Group thread.   There was a lot of doom and gloom around here a month ago, but at some point they will be right - there is probably  a major downturn coming.  Trying to nail that down though, will be virtually impossible.  Hopefully nobody around here made the very wrong choice to get out or to pull back a month ago!


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## johnrsrq (Mar 23, 2016)

ace2000 said:


> Which turned out to be the best advice...  Plenty of doom and gloom in this thread turned out to be completely wrong!!!  Don't worry, I'm sure they'll all be back during the next downturn.
> 
> *Stock rebound erases bad start to 2016, proves point to investors*
> 
> http://www.usatoday.com/story/money...d-start-2016-proves-point-investors/81914668/



Just a push of a few keys beyond 3-4% and off to the races on the downside. Plenty of air in many floating balloons - richly priced.  quite a move in IBM- guess buffet & co.  brk.a and buyback took it up and caught some napping.

works both ways.  it's coming. patience.


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## lizap (Mar 23, 2016)

Significant losses just prior to retirement or just after can be particularly devastating.




easyrider said:


> Invariably, past market crashes and corrections did occur while someone was funding their retirement. I know plenty of people that were to retire around  2007 and 2008 that are now almost 70 and still working because of losses suffered in their portfolios.
> 
> In 2002 , Robert Kyosaki wrote a timeline for the biggest market crash that would ever happen. His general prediction is sometime in 2016 and it seems that it is somewhat based on the first wave of ira retirement accounts of baby boomers being utilized.
> 
> ...


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## geekette (Mar 23, 2016)

easyrider said:


> Invariably, past market crashes and corrections did occur while someone was funding their retirement. I know plenty of people that were to retire around  2007 and 2008 that are now almost 70 and still working because of losses suffered in their portfolios.



If they haven't recovered by now, it indicates to me that they panic-sold at lows and stayed out of the market.  I stayed in and more than made up for that downturn several years ago.

One can always turn to the old rule of thumb about not having money in the market that you need within 5 years.  Consider these non-retirees a cautionary tale if you might be susceptible to panic selling.


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## Elan (Mar 23, 2016)

lizap said:


> The key is to decide how much risk you are comfortable with.  After taking a look at our portfolio and desired budget post retirement, we discovered we were taking on more risk than we had to and thus de-risked our portfolio somewhat.



  This is exactly right.  There's no "one size fits all" when it comes to the stock market and retirement planning.  I was too exposed to risk, which I knew, but couldn't really quantify my exposure until the market dropped in Dec and Jan.  Once it bounced back, I re-allocated into a more conservative balance.  If I was 35, I wouldn't have bothered.  But I'm not.......


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## Ironwood (Mar 23, 2016)

PigsDad said:


> That is a great little nugget.  Thanks, Geekette!
> 
> Kurt



"Time in the market" is an oft quoted bit of supposed wise advice that can be fool hardy unless you are under 30 and have a very long horizon. Investment firms only make money when you are invested or actively trading.  There are times you should be in the market and times you should be out or lighten up.  There is no simple answer, but it is true that most long term gains are derived from the gains of a very few really big days in the market which are almost impossible to predetermine and you don't want to miss them.  But if markets are heading for a prolonged sell off don't just close your eyes and hope for the best... get some proper advice and lighten up until better times.  Strategic timing is a better approach.


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## PigsDad (Mar 23, 2016)

Ironwood said:


> But if markets are heading for a prolonged sell off don't just close your eyes and hope for the best... get some proper advice and lighten up until better times.  Strategic timing is a better approach.



Only if the people you get your "proper advice" from are accurate.  

How do you find such sages that _know_ where the markets are heading?  The so-called "experts" can just as easily be wrong and cost you *a lot* in lost opportunity gains.  In the long term, it is hard to beat the broad stock market in terms of return and risk -- and it is readily available to the common investor, large and small.

Kurt


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## Talent312 (Mar 23, 2016)

I do think it's possible to sense when the market is getting overheated or "toppy." It's usually when I start crowing to my friends and family about how well my investments are doing.

Its at that moment that I should lighten up and take some profits. Unfortunately, its too much of a blast to just ride the wave.
.


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## PigsDad (Mar 23, 2016)

Talent312 said:


> I do think it's possible to sense when the market is getting overheated or "toppy." It's usually when I start crowing to my friends and family about how well my investments are doing.



There were a lot of people saying the market was getting overheated all throughout the *5+ year bull market *we had after the end of the crash in 2009.  Those that pulled out early lost a ton compared to those who stayed in.  Hindsight is 20/20; I would bet that close to 50% of the "experts" are dead wrong at any given point in time.



> Its at that moment that I should lighten up and take some profits. Unfortunately, its too much of a blast to just ride the wave.



That has probably given you better returns vs. trying to time the market.

Kurt


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## lizap (Mar 23, 2016)

If anyone can predict/time the stock market, then kudos to them.  I cannot.




PigsDad said:


> There were a lot of people saying the market was getting overheated all throughout the *5+ year bull market *we had after the end of the crash in 2009.  Those that pulled out early lost a ton compared to those who stayed in.  Hindsight is 20/20; I would bet that close to 50% of the "experts" are dead wrong at any given point in time.
> 
> 
> 
> ...


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## bogey21 (Mar 23, 2016)

I had a choice to make in late 2000, take a lump sum or take an annuity.  I opted for the annuity.  Had I taken the lump sum I would have had a mental breakdown and ulcer in 2008 when the stock market cratered.  IMO taking the annuity added years to my life.

George


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## geekette (Mar 24, 2016)

Ironwood said:


> "Time in the market" is an oft quoted bit of supposed wise advice that can be fool hardy unless you are under 30 and have a very long horizon. Investment firms only make money when you are invested or actively trading.  There are times you should be in the market and times you should be out or lighten up.  There is no simple answer, but it is true that most long term gains are derived from the gains of a very few really big days in the market which are almost impossible to predetermine and you don't want to miss them.  But if markets are heading for a prolonged sell off don't just close your eyes and hope for the best... get some proper advice and lighten up until better times.  Strategic timing is a better approach.



Close my eyes and hope??  Nice condescension showing you have no idea how I manage my holdings.  Seems you talk about broad market but I invest in individual companies.

We will have to agree to disagree as to strategy.  Mine works for me and I am certainly past 30 and still a very long time frame, 50 more years if I am lucky.  Buying quality companies and holding them over the long haul hasn't lost me a cent.  When exactly is a bad time to own Kimberly Clark or General Mills?   Why would I dump them to buy them back later at higher prices when I can buy them at bargain prices on a market downer?  

Thanks, I'll skip on the "proper advice" you seem to absorb as "strategic timing" is not workable and generates fees for those brokers at every buy and sell.  Churning my own account is not in my best interest.

Good investing to all, no matter how you do it.


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## geekette (Mar 24, 2016)

PigsDad said:


> There were a lot of people saying the market was getting overheated all throughout the *5+ year bull market *we had after the end of the crash in 2009.  Those that pulled out early lost a ton compared to those who stayed in.  Hindsight is 20/20; I would bet that close to 50% of the "experts" are dead wrong at any given point in time.
> 
> 
> 
> ...



Yeah, I was lucky to have started my Roth in 2010 and rolled over my 401k to IRA in 2011.  Fantastic run, many triple baggers in my stable.  It's not always that way, but I'm happy to have been fully invested.  

By the time I rolled over my 401k it had already more than made up for the 2007-2008 slide, because I stayed invested and kept contributing.

It takes more than a standard correction (like January, if we made it to official correction) for me to see more red in my portfolios than green.  That is value of time in the market.  Last week those 2 retirement portfolios hit all time highs, and the rollover gets no new money so it's not cash infusion doing it.

Hang tough, div pal, the best is yet to come.  Tuning out the fear mongering is a skill best learned early.


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## Ironwood (Mar 24, 2016)

geekette said:


> Close my eyes and hope??  Nice condescension showing you have no idea how I manage my holdings.  Seems you talk about broad market but I invest in individual companies.
> 
> We will have to agree to disagree as to strategy.  Mine works for me and I am certainly past 30 and still a very long time frame, 50 more years if I am lucky.  Buying quality companies and holding them over the long haul hasn't lost me a cent.  When exactly is a bad time to own Kimberly Clark or General Mills?   Why would I dump them to buy them back later at higher prices when I can buy them at bargain prices on a market downer?
> 
> ...



Gekette...my comment wasn't directed at you, but as a cautionary counter to the general statement, that time in the market is better than timing the market!  I was coming at it from the standpoint that most Tuggers like me in my 60's don't have long time horizons for individual securities or portfolio holdings to come back over time.  Like you I invest in individual securities and ETF's, but I'm not married to any investment.  I don't wish to ride something down only to have to wait 5 to 10 years or longer for it to come back.  Your GIS and MKB have been good investments over the past 5 years at least, but to give you a couple of examples of waiting forever, if you had invested in Citigroup (C) 20 years ago, you would be underwater today, AIG has been an unmitigated disaster over that time frame.   Many others like Microsoft (MSFT) have essentially had no gains over the same time frame.  I have friends who are middle class folks like us, who only receive portfolio statements quarterly, and have told me they only look at them once a year when they sit down with their advisor.  They are good friends, but I think that approach to managing their retirement portfolio is foolhardy and I've as much told them so.  I could go on, but I'll just leave it....to each their own!


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## Elan (Mar 24, 2016)

I have an ex-coworker who "retired" around age 40 to day trade.  I seldom see him, but I know he sold his used Porsche to another friend so he could buy a new one.  Some folks can time the market, others can't.  As I said, there's no "one size fits all".


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## geekette (Mar 24, 2016)

Ironwood said:


> Gekette...my comment wasn't directed at you, but as a cautionary counter to the general statement, that time in the market is better than timing the market!  I was coming at it from the standpoint that most Tuggers like me in my 60's don't have long time horizons for individual securities or portfolio holdings to come back over time.  Like you I invest in individual securities and ETF's, but I'm not married to any investment.  I don't wish to ride something down only to have to wait 5 to 10 years or longer for it to come back.  Your GIS and MKB have been good investments over the past 5 years at least, but to give you a couple of examples of waiting forever, if you had invested in Citigroup (C) 20 years ago, you would be underwater today, AIG has been an unmitigated disaster over that time frame.   Many others like Microsoft (MSFT) have essentially had no gains over the same time frame.  I have friends who are middle class folks like us, who only receive portfolio statements quarterly, and have told me they only look at them once a year when they sit down with their advisor.  They are good friends, but I think that approach to managing their retirement portfolio is foolhardy and I've as much told them so.  I could go on, but I'll just leave it....to each their own!



Thank you, as it sure read as a personal attack.

Certainly, to each their own, but the notion of "come back" is not part of my strategy since price has little to do with it.   I buy div payers and let them pay me.  GIS has paid dividends for over 100 years.   What does the retiree need to wait on price for?  Ride down?  Ride back up?  If you own 100 shares, you're getting paid a div on those 100 shares and the div rate has nothing to do with price.  Many companies have a long history of increasing that div rate annually so next year, regardless of market price, those 100 shares can pay you more.   Folks are free to avoid getting paid to own a company and jump in and out of the market playing price game exclusively.  

Sure, anyone that went big into financials got creamed.  This is what diversification is for, and buying quality over some hot stock tip or throwing all in on FANG.  If people quit buying TP or food, I'm in trouble as I am very deep in consumer staples, preferring the recession-proof products.  Short of that, I'll retire within 10 years with dividend income replacing my salary, wherever the market is.  Price has pretty much nothing to do with that, except choosing my buy points.

I completely agree that it takes time to get the compounding to show exponential results, but some of the companies I bought in 2011 have already returned to me over 20% of what I originally put in, just for standing pat and reinvesting dividends.  These are not results I can count on occurring with any frequency, there was no way of projecting that and it is only about 3 companies out of 20 in that portfolio:   the ones that gave multiple double digit dividend raises.  I cannot say if I am more lucky or smart, but I can say you don't need to be a professional investor or financial analyst to have great results.   Added plus, the volatility of dividends is far less than volatility of stock price.  

At the end of the day, if people are saving and investing, that's a good thing, whatever the strategy or vehicle.  Perform your due diligence and many happy returns!


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## easyrider (Mar 24, 2016)

geekette said:


> Thank you, as it sure read as a personal attack.
> 
> Certainly, to each their own, but the notion of "come back" is not part of my strategy since price has little to do with it.   I buy div payers and let them pay me.  GIS has paid dividends for over 100 years.   What does the retiree need to wait on price for?  Ride down?  Ride back up?  If you own 100 shares, you're getting paid a div on those 100 shares and the div rate has nothing to do with price.  Many companies have a long history of increasing that div rate annually so next year, regardless of market price, those 100 shares can pay you more.   Folks are free to avoid getting paid to own a company and jump in and out of the market playing price game exclusively.
> 
> ...



Geekeete, your understanding of investing is way above that of most investors. I am thinking this of Kurt as well. While anyone could adopt these investment strategies, most use advice from an employer selected fund manager whose job is to keep their money safe more than creating profit. 

The most popular market investments are employer sponsered ira's and 401k's. The return on these products in the last two decades has averaged between 3% - 4% before taxes. Inflation is another factor that hurts the value of these investments. 

So if a person had accumulated $1,000,000 in their portfolio by age 65 and decided to draw 3% out each month they might have $2,500 a month before taxes. Most people that followed their employer retirement plans have less than $500,000 in their ira or 401k at age 65 and still have a house payment. 

What happened was in 2008 for many people wanting to retire was these accounts lost about 30% or more. For many investors it has taken 8 years to get back to where they were because of their contributions to their account. These accounts didn't just even out by themselves for the most part.  

I guess I kind of disagree with your statement on panic selling as most of these people I know with retirement accounts find their accounts not liquid friendly and didn't sell off. Once a person is this close to retirement they are somewhat committed because the 3% - 4% they are now earning is a better return than what a savings account yields. 

As a result of not making enough money over twenty years because of corrections and crashes, I had to pull the plug on my mutual funds. I ended up purchasing more real estate. 

Bill


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## PigsDad (Mar 24, 2016)

easyrider said:


> What happened was in 2008 for many people wanting to retire was these accounts lost about 30% or more. For many investors it has taken 8 years to get back to where they were because of their contributions to their account. These accounts didn't just even out by themselves for the most part.



I don't know what to say Bill, as those numbers don't match up to anything I have seen.  Most places I have read has stated those who stayed invested through the 2008 crash have fully recovered, plus a good margin.  Are you sure your friends didn't have actively managed accounts?  

Personally, my 401k is now about double in value from the 2008 peak before the crash.  Yes, I have made contributions through that period, but the total contributions count for about 20% of my gain.  My 401k has limited fund options, but my mix has been about 50% large cap, 25% small cap, 10% real estate and 15% foreign equity (all funds, no individual stocks).  It lost about 40% of its value after the crash, but I know I was back to even less than 3 years after (dollar cost averaging really helped here, as I my regular contributions were buying funds at a huge discount).  It was very hard to not panic, but I am much better off now vs. if I had tried to time the market.  I know my strengths, and market prediction is not one of them.

Outside of my 401k, I am on Team Geekette -- I look for blue chip, solid companies that have a good history of dividend payments, and buy shares of individual companies.  Of course I review the companies every once in a while to see if they are still solid companies.  It is rare, but I have divested in a couple of companies when their long-term outlook radically changed.

That works for me.  I find it low stress (don't have to check portfolio every day / hour / minute) and diverse enough so that I am comfortable with the risk level.  If I were 20 years younger, the only change I would make would be to diversify a bit more into real estate.  I think that takes more research / knowledge base than stocks and involves more stress but when done well, the returns are definitely there.

Kurt


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## geekette (Mar 24, 2016)

<<The most popular market investments are employer sponsered ira's and 401k's. The return on these products in the last two decades has averaged between 3% - 4% before taxes. Inflation is another factor that hurts the value of these investments. >>

These are the numbers I'm having trouble with.  I've had a 401k since mid 90s and I have had way more than 4%, especially in the 90s!   I mean the funds themselves on offer were in the 20 and 30% annual gain territory.  I don't know, but I would guess I was probably matching the rough over time return of 10-12% annual average as I have always been most everything in stocks, and some international (adds volatility to the up and down sides).

Any 401k or IRA is limited to what you can invest in (no special deals for me), tho IRAs are much more open.  Any of us can make a bad call here and there, but to settle for 3-4% over 20 years is ...  ludicrous.  What are people choosing in their 401ks that they would have this rate of return over 20 years?  I certainly had some lower or negative return years (indeed my 401k plunged like everyone elses in 2007/2008) but those were offset by the dbl digit gain years.  

The only way I can see to have had such low returns is if these investors choose the Guaranteed Interest thing that is offered in most any 401k and is generally a low-ish rate, but, Guaranteed.  Not branching out from that would indeed provide low yet steady growth.  Two decades of that is stifling.

I don't ever consider taxes in a tax shelter, that won't matter until I withdraw, so there is no net of tax when there is no tax liability.  Inflation hasn't hurt anything in my tax shelters.  I'm confused as to how it could?

Anyone thinking maybe dividends are worth a look, check out the old book The Single Best Investment by Lowell Miller.  I read it way back, the data is very old but the concepts still hold true.  It's an easy read, thoroughly digestible.  

Real estate is not for me, I admire those that want to work that hard, but one property to live in is more than plenty for me.  I think I would most dislike finding tenants with top yuck being having to evict if I got it wrong.  People do make a lot of money in real estate, but it's not going to be me.  I don't want to work that hard ; )


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## geekette (Mar 24, 2016)

PigsDad said:


> I don't know what to say Bill, as those numbers don't match up to anything I have seen.  Most places I have read has stated those who stayed invested through the 2008 crash have fully recovered, plus a good margin.  Are you sure your friends didn't have actively managed accounts?



If the people can identify the tickers of the funds invested in, it can be easily looked up on Yahoo finance or the like.  I agree, they would have had to be doing themselves other damage to have not more than fully recovered by now.

Agree, active management can eat away many percentage points per year, muting the gains.


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## rickandcindy23 (Mar 24, 2016)

> If I were 20 years younger, the only change I would make would be to diversify a bit more into real estate. I think that takes more research / knowledge base than stocks and involves more stress but when done well, the returns are definitely there.



Colorado real estate values are insane!

I agree with this statement because our townhouse [we rent out] went from a value of $149K in 1999 to $105K in 2009, and now it's worth $257K.  I wish we purchased the ones that were foreclosed and selling for $105K in the same complex back then.  One of our son's friends let his townhouse go for back to the bank for a paltry $149K mortgage, and about five years later, the newest buyers paid $300K for the same unit.  Maybe the foreclose buyer did some work on it, I don't know.  I thought it was already pretty nice, but I would have added granite and some better bathrooms.

Rent was a paltry $900/ month a few years ago to $1,450 now.  The place is nice, but I am sure thinking of selling while the market is hot.


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## PigsDad (Mar 24, 2016)

johnrsrq said:


> Just a push of a few keys beyond 3-4% and off to the races on the downside. Plenty of air in many floating balloons - richly priced.  *quite a move in IBM*- guess buffet & co.  brk.a and buyback took it up and caught some napping.
> 
> works both ways.  it's coming. patience.



Funny you should mention IBM.  That is one of my long-term stocks and about a month ago I picked up some more shares at $132 when it was "on sale".  The price goes up, the price goes down, but the dividend is the golden egg.

10 years ago, a share of IBM paid $1.20/year in dividends.  Today that same share now pays me $5.20/year.  *4.3X in 10 years *-- I'll take that!  When I buy stocks, I like to see a history of good dividend growth because in the long run, I think that is a very good indicator of a good long-term stock to hold.

This also illustrates the power of a dividend-driven retirement portfolio -- it has automatic "pay raises" built in.  

Kurt


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## John Cummings (Mar 24, 2016)

rickandcindy23 said:


> Colorado real estate values are insane!




I don't think that is any more insane than California, Arizona, Nevada, etc. Our home value went from $300k in 2002 to $625k in 2006 to $245k in 2010. Now it is back up to $440k. The good thing when it dropped a way down is our property tax also went down by the same percentage.


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## PigsDad (Mar 24, 2016)

John Cummings said:


> I don't think that is any more insane than California, Arizona, Nevada, etc. Our home value went from $300k in 2002 to $625k in 2006 to $245k in 2010. Now it is back up to $440k. *The good thing when it dropped a way down is our property tax also went down by the same percentage.*



That's very different than here.  Property taxes here are based on a mill levy targeting a total amount of tax revenue.  The only way our taxes go up or down (given the same mill levy) is if our property value increases or decreases *relative to *other properties.  If everyone's property increased 10% for example, everyone's taxes would remain the same.  However if my property increased 20% and the average across the county /  tax district increased 10%, my taxes would go up.  Conversely, if my property value increased 5% and the average was 10%, my property taxes would go down.

Kurt


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## John Cummings (Mar 24, 2016)

PigsDad said:


> That's very different than here.  Property taxes here are based on a mill levy targeting a total amount of tax revenue.  The only way our taxes go up or down (given the same mill levy) is if our property value increases or decreases *relative to *other properties.  If everyone's property increased 10% for example, everyone's taxes would remain the same.  However if my property increased 20% and the average across the county /  tax district increased 10%, my taxes would go up.  Conversely, if my property value increased 5% and the average was 10%, my property taxes would go down.
> 
> Kurt



Our property tax rate is fixed at 1% of assessed value. The assessed value is the purchase price of the property. The assessed value is capped so it cannot appreciate more than 2% a year however it can decrease with no downside limit. I have friends living in million dollar homes that pay less than $1,000 /yr property tax because they have been in their homes for a long time. This is the infamous Prop 13 enacted in 1978.


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## PigsDad (Mar 25, 2016)

John Cummings said:


> Our property tax rate is fixed at 1% of assessed value. The assessed value is the purchase price of the property. The assessed value is capped so it cannot appreciate more than 2% a year however it can decrease with no downside limit. I have friends living in million dollar homes that pay less than $1,000 /yr property tax because they have been in their homes for a long time. This is the infamous Prop 13 enacted in 1978.



That must wreak havoc on municipalities, etc.!  Just because real estate prices go down, their operating revenue needed to provide the same services at the previous year goes down as well?  Glad I'm not in CA!

Kurt


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## John Cummings (Mar 25, 2016)

PigsDad said:


> Glad I'm not in CA!
> 
> Kurt



That is your choice. I wouldn't live anywhere else.


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## klpca (Mar 25, 2016)

PigsDad said:


> If I were 20 years younger, the only change I would make would be to diversify a bit more into real estate.  I think that takes more research / knowledge base than stocks and involves more stress but when done well, the returns are definitely there.
> 
> Kurt



Back in 2010 we decided to diversify our portfolio and bought a condo in downtown San Diego. That has greatly outperformed our other investments. We use a property manager (money well spent if you ask me) so it's been an easy investment. I'm on the fence about buying more because prices are high but still looking for the right property.



PigsDad said:


> That must wreak havoc on municipalities, etc.!  Just because real estate prices go down, their operating revenue needed to provide the same services at the previous year goes down as well?  Glad I'm not in CA!
> 
> Kurt


For the most part our real estate prices only go in one direction, and it's not down. That's was part of the allure of prop 13 all those years ago. It put a reasonable lid on tax increases. Properties get reassessed upon sale - so the taxes are brought up to market at that time. My in-laws live less than a mile from the beach near LA in a small house. They have lived there since 1964. Their taxes are under $1,000 per year. Their neighbors are paying over $8,000. We've lived in our house since 1987 - and we're not moving. I would rather travel than pay more taxes.


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## SmithOp (Mar 25, 2016)

klpca said:


> We've lived in our house since 1987 - and we're not moving. I would rather travel than pay more taxes.




Dont let that stop you from moving, props 60/90 allow you to transfer your property tax base for an equal or lesser value property.

http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm


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## WinniWoman (Mar 25, 2016)

klpca said:


> Back in 2010 we decided to diversify our portfolio and bought a condo in downtown San Diego. That has greatly outperformed our other investments. We use a property manager (money well spent if you ask me) so it's been an easy investment. I'm on the fence about buying more because prices are high but still looking for the right property.
> 
> 
> For the most part our real estate prices only go in one direction, and it's not down. That's was part of the allure of prop 13 all those years ago. It put a reasonable lid on tax increases. Properties get reassessed upon sale - so the taxes are brought up to market at that time. My in-laws live less than a mile from the beach near LA in a small house. They have lived there since 1964. Their taxes are under $1,000 per year. Their neighbors are paying over $8,000. We've lived in our house since 1987 - and we're not moving. I would rather travel than pay more taxes.




That is great! Here in Hudson Valley NY our house, which we purchased newly built in 1987 for $208,000, is now assessed at $247,000, market value (according to the town and realtors, not Zillow, which has it assessed at $300,000) and $179,900 tax assessed value and we pay $9000 in school and property taxes total each billed separately. We have since put a couple of hundred thousand into it and it doesn't matter. It is on 10.5 acres but only assessed on like 5 acres because the rest is considered forestland an is not sub dividable.

I might add that we get no services whatsoever except snow plowing. No sewers, no road maintenance- they are all crumbling. No garbage or junk pick up. No water. Nothing....All our money goes to Medicaid and supposedly the highway dept, (yet we don't see much of the benefit of that anywhere).

It's pathetic. And it is about to get worse for reasons I can't write about here for political reasons. Suffice it to say our community is being taken over by a religious group.

In fact, there was just an article out yesterday that said NY - in particular the county I live in- has had the most exodus of any. This is why my husband and I keep getting called for jury duty every 5 years. No one living here anymore. And the religious group people don't have to serve.

Homes aren't selling. We are worried we will be trapped when we retire.


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## wilma (Mar 25, 2016)

mpumilia said:


> I might add that we get *no services whatsoever *except snow plowing. No sewers, no road maintenance- they are all crumbling. No garbage or junk pick up. No water. Nothing....All our money goes to Medicaid and supposedly the highway dept, (yet we don't see much of the benefit of that anywhere).
> 
> Homes aren't selling. We are worried we will be trapped when we retire.



Really, you don't have any police, firefighting services, first responders, libraries, or schools in your area?


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## geekette (Mar 25, 2016)

PigsDad said:


> Funny you should mention IBM.  That is one of my long-term stocks and about a month ago I picked up some more shares at $132 when it was "on sale".  The price goes up, the price goes down, but the dividend is the golden egg.
> 
> 10 years ago, a share of IBM paid $1.20/year in dividends.  Today that same share now pays me $5.20/year.  *4.3X in 10 years *-- I'll take that!  When I buy stocks, I like to see a history of good dividend growth because in the long run, I think that is a very good indicator of a good long-term stock to hold.
> 
> ...



IBM has been giving Double Digit Div Raises.  I don't get that on the job!  Also long Big Blue.    This is how I will be able to quit work and not worry about taxes and inflation - the growth in dividend dollars received.

 dripinvesting DOT org   Tools section has a Dividend Champions spreadsheet available free, updated monthly, that shows companies with long div Increase histories.  Note that failure to increase the dividend, or cut it, removes a company from the list.  The compiler, David Fish, does keep a changes tab so you can see when/why a company of interest came off the list.


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## klpca (Mar 25, 2016)

SmithOp said:


> Dont let that stop you from moving, props 60/90 allow you to transfer your property tax base for an equal or lesser value property.
> 
> http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm



Thanks for the reminder. We're keeping that in our back pocket.  Since that's a one time deal, we won't use it until we think that we are making our last move to a smaller, easier to maintain house. Truth is that we love our home - mostly the memories of raising our kids here. We may move someday, we may not. I'm grateful that we won't have to make that decision based upon the property tax liability.


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## John Cummings (Mar 25, 2016)

SmithOp said:


> Dont let that stop you from moving, props 60/90 allow you to transfer your property tax base for an equal or lesser value property.
> 
> http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm




That depends on the county you move to. Not all counties allow you to transfer your tax base in.


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## WinniWoman (Mar 25, 2016)

wilma said:


> Really, you don't have any police, firefighting services, first responders, libraries, or schools in your area?



We have volunteer fire dept. In fact, our homeowners insurance dropped us because they said the fire dept. was too far away- 10 miles.

Yes- there is a school- that is half the taxes. That school is in another county that serves 3 counties. I had one kid.

There is a tiny library that always sends out requests for donations. The public school has a library of course. 

The EMT's come 25 miles from another county.

We have no police. We have to utilize state troopers who's barracks are about 10 miles away. When my burglar alarm went off last summer it took 40 minutes for them to send someone out.

In fact, when they send out our tax bill they send a memo that shows where the taxes go and # 1 is Medicaid. # 2 Highway.

It's the Twilight Zone here.


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## John Cummings (Mar 25, 2016)

mpumilia said:


> Yes- there is a school- that is half the taxes. That school is in another country that serves 3 counties. I had one kid.



In another country?


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## WinniWoman (Mar 25, 2016)

John Cummings said:


> In another country?




Of course, I meant county. I corrected the spelling.


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## IngridN (Mar 25, 2016)

SmithOp said:


> Dont let that stop you from moving, props 60/90 allow you to transfer your property tax base for an equal or lesser value property.
> 
> http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm



Unfortunately, the counties still participating are not the ones you want to live in. DH is retiring next year and none of the counties we would like to move to participate so we're staying put and if we downsize, it will be in the same county. My dream of a cottage on the beach is not to be .

Ingrid


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## IngridN (Mar 25, 2016)

klpca said:


> Thanks for the reminder. We're keeping that in our back pocket.  Since that's a one time deal, we won't use it until we think that we are making our last move to a smaller, easier to maintain house... ...



Google participating counties. I think you'll be very disappointed.

Ingrid


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## John Cummings (Mar 26, 2016)

mpumilia said:


> Of course, I meant county. I corrected the spelling.


I didn't mean to offend you by being the spelling police. It just struck me as being rather funny.


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## klpca (Mar 26, 2016)

IngridN said:


> Unfortunately, the counties still participating are not the ones you want to live in. DH is retiring next year and none of the counties we would like to move to participate so we're staying put and if we downsize, it will be in the same county. My dream of a cottage on the beach is not to be .
> 
> Ingrid



You could probably do that in San Diego. Our home prices are crazy, but not as crazy as the Bay area. But I imagine that you are staying put for the same reason that we are - friends and family. It's the main reason that we won't move. That and the weather.


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## SmithOp (Mar 26, 2016)

IngridN said:


> Unfortunately, the counties still participating are not the ones you want to live in. DH is retiring next year and none of the counties we would like to move to participate so we're staying put and if we downsize, it will be in the same county. My dream of a cottage on the beach is not to be .
> 
> 
> 
> Ingrid





Completely disagree with you on this, San Diego, Orange, LA, and Ventura are on the list, IMO where the best beaches are located.  We sold in Sacramento county last year and moved to Orange, 15 minutes to the beach, dont miss the cloudy, rainy days at all.


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## IngridN (Mar 26, 2016)

I should have added that we want to stay in Northern California. We were hoping to move to Monterey or thereabouts...not too far south.

Ingrid


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## John Cummings (Mar 26, 2016)

IngridN said:


> I should have added that we want to stay in Northern California. We were hoping to move to Monterey or thereabouts...not too far south.
> 
> Ingrid



When we bought our new house in the Bay area we wanted to transfer our tax base from San Diego county but discovered that it wasn't allowed. When we bought our new home here in Southern California it was allowed but we wouldn't gain anything because our tax base on our NorCal home was a lot higher than the purchase price of our new home in Socal.

Our son and his family live in Monterey. It is a beautiful area but much too cool for us.


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## WinniWoman (Mar 27, 2016)

I was telling my husband about the low property taxes in California and he was shocked! We always here about how expensive California is. 

I guess it's the real estate prices then? The income taxes? Sales taxes?


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## dioxide45 (Mar 27, 2016)

mpumilia said:


> I was telling my hudband about the low property taxes in California and he was shocked! We always here about how expensive California is.
> 
> I guess it's the real estate prices then? The income taxes? Sales taxes?



I believe of all places, the state with the highest property taxes is actually New Jersey.


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## wilma (Mar 27, 2016)

mpumilia said:


> I was telling my hudband about the low property taxes in California and he was shocked! We always here about how expensive California is.
> 
> I guess it's the real estate prices then? The income taxes? Sales taxes?



Property taxes are low only if you bought your house years ago. My parents bought their house in the 1950s and paid less than $1000/yr in property tax. When they sold it for more than $1.5 million (in the heart of Silicon valley) the new owners then are paying more than $15,000 in property taxes. The new buyers of homes in Calif are paying the bulk of the property taxes. My neighbors bought their house in the 1970s and pay around $1000, they both are in their 70s, still work, and make around $400,000. The people next door just bought their house last year and pay about $16,000. It's crazy.


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## Icc5 (Mar 27, 2016)

*Property Tax*



wilma said:


> Property taxes are low only if you bought your house years ago. My parents bought their house in the 1950s and paid less than $1000/yr in property tax. When they sold it for more than $1.5 million (in the heart of Silicon valley) the new owners then are paying more than $15,000 in property taxes. The new buyers of homes in Calif are paying the bulk of the property taxes. My neighbors bought their house in the 1970s and pay around $1000, they both are in their 70s, still work, and make around $400,000. The people next door just bought their house last year and pay about $16,000. It's crazy.



My Mom in Santa Clara,Ca. pays right around $800 a year in property tax for the house they bought in 1948 and is covered under prop. 13.  I live nearby in Cupertino and my next door neighbor who bought his house about 15 years ago for one million pays over 17,000 a year.  They get the same benefits for their property taxes.  
We bought our house out of my wife's families trust mainly for keeping prop 13 on the house.  We pay $2600 a year instead of over 19,000 a year.  We had a house down the street that cost us 400,000 in 1970 and when we sold it we were at almost 9,000 for property tax because we weren't under prop 13.
By moving we went from 1650 sq. ft. to 3200 sq. ft. and save $6400 a year just in property tax alone.


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## John Cummings (Mar 27, 2016)

mpumilia said:


> I was telling my hudband about the low property taxes in California and he was shocked! We always here about how expensive California is.
> 
> I guess it's the real estate prices then? The income taxes? Sales taxes?




Property taxes are not really low compared to other states. It all depends on when and where you purchase your home. There can also be additional fees, like Mello-Roos, depending on the  neighborhood. We have never had to pay these additional fees on  our 5 homes we have owned in Southern and Northern California.


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## WinniWoman (Mar 27, 2016)

Icc5 said:


> My Mom in Santa Clara,Ca. pays right around $800 a year in property tax for the house they bought in 1948 and is covered under prop. 13.  I live nearby in Cupertino and my next door neighbor who bought his house about 15 years ago for one million pays over 17,000 a year.  They get the same benefits for their property taxes.
> We bought our house out of my wife's families trust mainly for keeping prop 13 on the house.  We pay $2600 a year instead of over 19,000 a year.  We had a house down the street that cost us 400,000 in 1970 and when we sold it we were at almost 9,000 for property tax because we weren't under prop 13.
> By moving we went from 1650 sq. ft. to 3200 sq. ft. and save $6400 a year just in property tax alone.



Still. $17,000 on a one million dollar house is nothing. The county right below mine- people are paying $25,000 and up for homes in the $300,000 - $400,000 range. I am talking nice big MacMansion type homes in developments in a good school district.


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## WinniWoman (Mar 27, 2016)

John Cummings said:


> Property taxes are not really low compared to other states. It all depends on when and where you purchase your home. There can also be additional fees, like Mello-Roos, depending on the  neighborhood. We have never had to pay these additional fees on  our 5 homes we have owned in Southern and Northern California.




What is Mello-Roos?


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## John Cummings (Mar 27, 2016)

mpumilia said:


> Wjat is Mello-Roos?



"A Mello-Roos tax is a species of parcel tax that circumvents Proposition 13 (which limits property taxes based on the assessed value of real property) because it is not levied on the assessed value of real property."

Basically it is a bond that pays for the infrastructure in new developments. 

Not all new developments have it as it depends whether the builder paid for the infrastructure or not. I never have nor ever will buy a home which has the Mello-Roos tax.

http://www.californiataxdata.com/pdf/Mello-Roos2.pdf

Note: "A Mello-Roos CFD cannot be formed without a two-thirds majority vote of residents living within the proposed boundaries."


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## klpca (Mar 28, 2016)

mpumilia said:


> Still. $17,000 on a one million dollar house is nothing. The county right below mine- people are paying $25,000 and up for homes in the $300,000 - $400,000 range. I am talking nice big MacMansion type homes in developments in a good school district.



Wow. That is just shocking.  The property tax rate in CA is roughly 1% of the original purchase price and can go up a maximum of 2% (of the tax, not the home value) per year. We also live in a neighborhood without Mello Roos. In some areas Mello Roos adds another $5k to their annual bill, but still nothing compared to what you are paying.


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## VacationForever (Mar 28, 2016)

klpca said:


> Wow. That is just shocking.  The property tax rate in CA is roughly 1% of the original purchase price and can go up a maximum of 2% (of the tax, not the home value) per year. We also live in a neighborhood without Mello Roos. In some areas Mello Roos adds another $5k to their annual bill, but still nothing compared to what you are paying.



Mello-Roos allows adding an additional 1% tax on property value.  For most part it is a fixed value and the smaller and less expensive home pay as much mello roos as the more expensive homes - it includes bond for schools, payment to get fire department and police services, roads etc.  My current home in CA has Mello-Roos and it can add up very quickly.  I did pay down on the most expensive component of the mello roos (pay ahead) which was one of the school district bonds when I first bought my home and Mello-Roos was discounted based on net present value, plus it avoided the built-in inflation that got added into the bill each year.  My neighbors are crying "bloody murder" when they get their property tax bill each year.  While I have a more expensive home, my annual property tax ends up less than my neighbors'.


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