Does Marriott negotiate?

[m61376]

There is a benefit for the opportunity to be able to trade for points (regardless of it makes financial sense or not). If not, why are resales much cheaper than retail? A major discussing point in favor of TS is its flexibility. Without the ability to trade points, it is less flexible. The opportunity cost to trade for points needs to be deducted when discussing the financials of trading a TS week for points. This opportunity cost is subjective and will differ for each person.

I would agree that there is some benefit to being able to trade for points; whether or not it makes financial sense to do so is something else. As you state, the more flexibility and options the better. However, I don't think the price difference between resales and buying from the developer can be attributed to the ability to trade for points, as your post seems to suggest. The vast majority of buyers do not know that there is a resale market, most of those that have heard of resales are convinced that there is a difference between buying on the "second hand" market (and salespeople embellish the significance to those few educated consumers that inquire about resales) and, most importantly (IMHO) is most developer purchases are made on a whim, especially by first-time buyers. Salespeople have a knack for taking advantage of that vacation "high" which puts people in the mood and susceptable to the sales pitch of creating family memories.... I am not saying that informed people don't buy from the developer; as Dave posted, there are good resons for doing so. What I am saying is that most developer purchases are not made by people who have really taken the time to learn the market and fully assess the different options.

 

[PerryM]

If I had been investing since 1933, then yes, I would have averaged 13% per year. HOWEVER, Perry, as you know, we have had two major "trading range "markets the last 75 years that have lasted at least 20 years each, where the market only moved up on an average of 2.5% per year.Therefore, if someone has only 20-25 years left to invest, and we hit one of these "trading range" markets, then 13% per year simply is not going to happen. These markets lasted 20-40 years, and over that period one only averages only about 2.5% apreciation, per year. Just some food for thought, in case some of you get excited about the prospect of "earning 13% per year for the rest of your life."

My apologies. there have been 2 major trading ranges in the DJIA since 1900. The first lasted 41 years, 1900-1941, with the Dow advancing only 1.8% per year. The second, occurred from 1963-1982, with the Dow advancing 2.5% per year. I know this is a discussion of the merits of buying new vs. resale, but we need to understand the history of the DJIA. If you invest in the DJIA for the next 40 years(the rest of your life for most people) and the Dow is in a trading range, as it has been for 60 of its 107 year existence, you can expect a 1-3% ROI per year. If you are fortunate enough to be invested in the DJIA during the good years, 1941-1963, and 1982-2000, then you can expect returns such as the 13.6% per year Perry speaks of. If you are invested during a period when the DJIA goes through a trading range, and enters a bull market, then you returns are PROBABLY going to be somewhere in between. How succesful you are in succeeding in investing for the long term is going to be determined by how the market did in the time period in which you invested, not the 107 year history of the DJIA.

True, but that goes for any investment - there are standard deviations but I know of no other investment with a 13% return over 70+ years that has withstood World War II, the Cold War, Korea, Vietnam, Desert Storms, Internet bubbles, you name the crisis and it has happened. All in all a 70+ year average is a 70+ year average.

No one knows the future, you can only look at the past to make an educated guess. Since the money needs to be put somewhere I can't think of a better way to invest.

Now one can take this average and build a simple system that will allow 4% to be removed and withstand the longest lackluster periods of the DJIA. This is about as good as it gets in retirement systems.

 

[PerryM]

Good news!

I just spent 5 minutes reviewing my DJIA historical numbers (hard to get, believe it or not-the dividends are proprietary numbers of Forbs magazine) here is what you should be aware of on the down side since 1933*:

1973 & 1974 had you losing 39.59%
1975 had you making 44.4%**

2000 – 2002 (Internet bubble) has you losing 27.45%
2003 had you making 28.28%**

That’s it since 1933 – the rest of the time has you smiling each quarter when you collected your fat 1% dividend check (4.3% dividend average for the year- 73 year average) These losses are nothing to poo-poo, however if you never sell your stocks but pull out 4% a year you will weather these storms just fine.

Find another investment that will let you base your retirement – how long will you live on retirement – 30 years, 40 years? You need historical data that is at least twice that long to plan that far ahead.

*Before 1933 the stock market was really a futures market – needed just 5% cash and leverage 95%. The crash of 1929 – 1932 lost 80% of the value of the stocks – just about the amount leveraged with nothing but paper. The banking reforms of 1933 fixed all that. You can't fool mother nature too long.

**Doesn't mean you get back your original amount - however psychologically the percentage gain keeps you hanging in there. And investing is a one person (family) race where psychological factors mean everything.

 

[JimC]

...Having said all of that, I definitely believe there are occasionally some good reasons for buying directly from Marriott. An example might be where you have the opportunity to purchase at initial pre-construction prices and feel a need to own at and use a particular resort when it first opens, since there are no resales available.....

Or when you want to buy a high demand fixed week where there may not be many resales and the resale price is unlikely to offer much advantage.

 

[jwq387]

DJIA History

I just spent 5 minutes reviewing my DJIA historical numbers (hard to get, believe it or not-the dividends are proprietary numbers of Forbs magazine) here is what you should be aware of on the down side since 1933*:

1973 & 1974 had you losing 39.59%
1975 had you making 44.4%**

2000 – 2002 (Internet bubble) has you losing 27.45%
2003 had you making 28.28%**

That’s it since 1933 – the rest of the time has you smiling each quarter when you collected your fat 1% dividend check (4.3% dividend average for the year- 73 year average) These losses are nothing to poo-poo, however if you never sell your stocks but pull out 4% a year you will weather these storms just fine.

Find another investment that will let you base your retirement – how long will you live on retirement – 30 years, 40 years? You need historical data that is at least twice that long to plan that far ahead.

*Before 1933 the stock market was really a futures market – needed just 5% cash and leverage 95%. The crash of 1929 – 1932 lost 80% of the value of the stocks – just about the amount leveraged with nothing but paper. The banking reforms of 1933 fixed all that. You can't fool mother nature too long.

**Doesn't mean you get back your original amount - however psychologically the percentage gain keeps you hanging in there. And investing is a one person (family) race where psychological factors mean everything.

Sounds great. Make no mistake, I totally agree with you on the investment vehicle. Even if retirees lost 40% of their 401K value in 2000,(which many did) they still recoup it over the next six years if they "stay the course."