With the stock market plunging. . .

[Icc5]

Both my wife and I have pensions from being Retail Clerks in the groceries business with 42 and 43 years in. We've always saved,with 401k's and Roth's. I had several stocks before we got married and most are dividend payers. The stock portfolio is a decent amount. Recently I inherited some money and decided to put it in bonds that are both state and federal tax exempt and I draw SS from retiring 7 years ago at 62.
Yes, luck has played a part as our pensions are much better then what people earn now. We did give up higher wages for years so more money went into the pension plan. Some of my stocks turned out way better then I could have ever dreamed. Because of the above we've been able to do whatever we want plus help our kids. It also helped that we paid off our house about 20 years ago.
We feel blessed and lucky we each bought our first houses right after college before Silicon Valley became what it is today. Hard savings and lots of overtime even while going to college full time has made a huge difference for today. I gave up my time and freedom then to have a better life today.
Don't so much feel it's bragging but I am proud of what we have accomplished. I only hope my kids realize the sacrifices to make life better for them too.
Bart

 

[CO skier]

I think we're about half-way through this roller-coaster.

Do you mean time-wise? No way will this market be setting new highs within the next few months.

Or do you mean percentage-wise? Then why hang on for the next 20% loss?

 

[cgeidl]

We did our own hedge awhile ago and moved some of our investments into rental property. None of them declined in value this week.



Do you know if Carnival is the only brand that offers OBC?

We also own rental property and it is effected by a dropping stock market as some buyers may have lost their down payment for purchasing a home.

 

[klpca]

We also own rental property and it is effected by a dropping stock market as some buyers may have lost their down payment for purchasing a home.

Sure there could be a short term cash flow issue for a buyer that could bust up a sale, or a long term loss of value if the whole economy tanks, but the day to day volatility just isn't there. At any rate the rentals are a buy and hold for us and we are comfortable and familiar with the general location so it's a nice hedge.

 

[Talent312]

[About being 'half-way thru the roller-coaster]...
Do you mean time-wise? No way will this market be setting new highs within the next few months.
Or do you mean percentage-wise? Then why hang on for the next 20% loss?

I mean volatility-wise... I think things will return to normal ups+downs in about two weeks.
Drop a stone in a pond and the waves emanating are largest at the center, less so on shore.
That is, absent more high winds... which I 'spose is possible. For now, I'm along for the ride.

.

 

[dagger1]

We also own rental property and it is effected by a dropping stock market as some buyers may have lost their down payment for purchasing a home.

And may lose their jobs as well....

 

[dagger1]

My annuities sure look good. They make a great hedge, and stability. Right now with the all-around instability and uncertainty of the future, I'm glad I have 'em. Sure, it's not the majority part of my holding, there's stocks, International, bonds, some gold and some real estate, but those checks that jut keep on coming every month are sure nice.

This market correction is making Kenneth Fisher (Fisher Investments), a major Annuity detractor look really bad right now. Folks with annuities (and/or pensions) plus Social Security are sleeping much better than those who rely on dividends/interest/stock sales to supplement their Social Security.

 

[geekette]

Both my wife and I have pensions from being Retail Clerks in the groceries business with 42 and 43 years in. ...

I was apparently early in the generation that didn't have much chance of complete career in one place. My dad did over 40 years all for one mega corp, wondered what was wrong with me early on. Well done! I am glad that you had a long run in a good place that is looking after your old age. I wish this anecdote weren't so rare.

 

[Fredflintstone]

I was apparently early in the generation that didn't have much chance of complete career in one place. My dad did over 40 years all for one mega corp, wondered what was wrong with me early on. Well done! I am glad that you had a long run in a good place that is looking after your old age. I wish this anecdote weren't so rare.

WYND down to 28 and change. Just bought some more up. They are caught in the travel downturn. However, what WYND has is locked in, paying owners who have to travel and spend if they don’t want to let their points or benefits evaporate. Plus, RCI is raking it in with higher fees.

Hmmm. I wonder if MFs are going up to offshoot the reduced rental revenues?

If we go much lower, we will be in a bear market. That’s the time I will sock in all excess cash. My FA did puts in early February so my losses are just 4.6 percent so far.


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[DancingWaters]

Passpartout,
May I ask how much money you had to invest to receive that much money every month? Also, who did,you get your annunity with? Unfortunately, I left my pension in the stock market because it I drew it I wouldn’t get much of my SS which I haven’t started drawing yet. I was letting it grow and wanted to start an annuity outside my pension so it didn’t affect my SS.

 

[Fredflintstone]

This market correction is making Kenneth Fisher (Fisher Investments), a major Annuity detractor look really bad right now. Folks with annuities (and/or pensions) plus Social Security are sleeping much better than those who rely on dividends/interest/stock sales to supplement their Social Security.

That’s why it’s good to have excess cash when markets are stable. That way, you can ride it out. Usually, the worst bear markets in history (except the depression) last 2 years max. Then you make it all back plus some if you are indexing.


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[Fredflintstone]

We also own rental property and it is effected by a dropping stock market as some buyers may have lost their down payment for purchasing a home.

Property values will be an interesting question. Although, mortgage rates are low and might get lower, the unemployment rate could climb (although right now unemployment is at record lows). This means possibly fewer folks able to buy and as a result, house prices drop.

Not sure how this will go. Could be either way.


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[klpca]

Property values will be an interesting question. Although, mortgage rates are low and might get lower, the unemployment rate could climb (although right now unemployment is at record lows). This means possibly fewer folks able to buy and as a result, house prices drop.

Not sure how this will go. Could be either way.


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Which is why there is nothing more important than knowing and understanding your market. Not all markets are created equal.

 

[Passepartout]

Passpartout,
May I ask how much money you had to invest to receive that much money every month? Also, who did,you get your annunity with?

It doesn't matter what I bought in with (you can extrapolate if you care to), Such payouts are no longer available. Suffice it to say it was money I didn't have other plans for or needs of at the time. I simply got lucky with the timing. It was through Prudential, and the product was called 'Highest Daily Income 7' as I recall. It was sold through a broker (financial advisor) who I suppose made a few shekels on the sale and maybe annually, though I don't know. I don't begrudge his working on a commission. I suppose that had I invested the same amounts into the 'right' mutual funds, or individual shares, I might have done better, but wouldn't be sleeping nearly as well with the roller-coaster ride the market is going through now.

 

[VacationForever]

Passpartout,
May I ask how much money you had to invest to receive that much money every month? Also, who did,you get your annunity with? Unfortunately, I left my pension in the stock market because it I drew it I wouldn’t get much of my SS which I haven’t started drawing yet. I was letting it grow and wanted to start an annuity outside my pension so it didn’t affect my SS.

Since interest rates have been very low, it has not been a good time to buy immediate annuities, i.e. payout immediately. You ought to look at deferred fixed income annuities, where it pays alot more due to the insurer having time to grow the investments and gains in mortality credits. Mortality credits is like good old tontine. The last person standing gets all the money when the rest die. Also the nature of fixed income annuities is that there is no backend commission paid each year out of the investment. The broker gets an initial 7% upon sale of fixed income annuity, which comes out of the investment, something which you don't see from the quotes. You don't pay it but the insurer pays the broker.

I have 2 term deferred fixed income annuities. One pays $2820 per month when I turn 60 and the other pays $3800 per month when I turn 70, running on until I am 85. I don't worry about what happens at 85, I have other money to live on. Also, if I die, my beneficiaries continue to get the payment for the rest of the 25 years.

 

[Fredflintstone]

Since interest rates have been very low, it has not been a good time to buy immediate annuities, i.e. payout immediately. You ought to look at deferred fixed income annuities, where it pays alot more due to the insurer having time to grow the investments and gains in mortality credits. Mortality credits is like good old tontine. The last person standing gets all the money when the rest die. Also the nature of fixed income annuities is that there is no backend commission paid each year out of the investment. The broker gets an initial 7% upon sale of fixed income annuity, which comes out of the investment, something which you don't see from the quotes. You don't pay it but the insurer pays the broker.

I have 2 term deferred fixed income annuities. One pays $2820 per month when I turn 60 and the other pays $3800 per month when I turn 70, running on until I am 85. I don't worry about what happens at 85, I have other money to live on. Also, if I die, my beneficiaries continue to get the payment for the rest of the 25 years.

I am up for adoption.


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[geekette]

Since interest rates have been very low, it has not been a good time to buy immediate annuities, i.e. payout immediately. You ought to look at deferred fixed income annuities, where it pays alot more due to the insurer having time to grow the investments and gains in mortality credits. Mortality credits is like good old tontine. The last person standing gets all the money when the rest die. Also the nature of fixed income annuities is that there is no backend commission paid each year out of the investment. The broker gets an initial 7% upon sale of fixed income annuity, which comes out of the investment, something which you don't see from the quotes. You don't pay it but the insurer pays the broker.

I have 2 term deferred fixed income annuities. One pays $2820 per month when I turn 60 and the other pays $3800 per month when I turn 70, running on until I am 85. I don't worry about what happens at 85, I have other money to live on. Also, if I die, my beneficiaries continue to get the payment for the rest of the 25 years.

I like the stagger start, and knowing at 85 you are still financially sound, and that none of it is "lost money" if you don't make length of payout. Nice planning!

 

[VacationForever]

I am up for adoption.


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I am up for adoption too - eyeing that CND 8.9M!

 

[Fredflintstone]

I am up for adoption too - eyeing that CND 8.9M!

8.35 after today....that’s ok. In for long haul.

I remember in 2008 and 2009, I was scraping to load up and boy did that pay off. This one is different. Unlike 2008 where there was fraud and mismanagement leading to the downturn, this one is virus related but the banking system is solid. Here’s a violatity sheet. Over the long haul in scenarios like we have now, things get stronger in the end (within a year or 2 at most).




View attachment market-volatility-sheet.pdf


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[Panina]

This market correction is making Kenneth Fisher (Fisher Investments), a major Annuity detractor look really bad right now. Folks with annuities (and/or pensions) plus Social Security are sleeping much better than those who rely on dividends/interest/stock sales to supplement their Social Security.

This isn’t a market correction due to normal conditions. This is because of a pandemic virus and fear that industries will not meet numbers because of lost business which just funnels down to the economy.

Unlike past market corrections that took a long time to go back up imo once everything goes back to normal, virus risk decreases and businesses get back to normal it will go back up.

 

[dagger1]

This isn’t a market correction due to normal conditions. This is because of a pandemic virus and fear that industries will not meet numbers because of lost business which just funnels down to the economy.

Unlike past market corrections that took a long time to go back up imo once everything goes back to normal, virus risk decreases and businesses get back to normal it will go back up.

I think you are right. At least I hope so. The point is that for those with SS plus pensions (annuities), they get “paychecks” every month. They sleep easier because they are not relying on stock dividends/sales to supplement their SS. They can wait months/years for the market to recover (which it will). If corporations continue to pay dividends, even better, they can just continue to reinvest these dividends at extremely low stock prices.

 

[dagger1]

That’s why it’s good to have excess cash when markets are stable. That way, you can ride it out. Usually, the worst bear markets in history (except the depression) last 2 years max. Then you make it all back plus some if you are indexing.


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Having cash on hand is definitely always a good idea. Annuities supplement Social Security (so this cash can be invested at near market lows) and you can enjoy long bear markets without being forced to liquidate positions (at market lows) for living expenses. I would never advocate annuities as a great investment strategy anymore than I would advocate Social Security as an investment strategy. But they provide great retirement security.

 

[Panina]

I think you are right. At least I hope so. The point is that for those with SS plus pensions (annuities), they get “paychecks” every month. They sleep easier because they are not relying on stock dividends/sales to supplement their SS. They can wait months/years for the market to recover (which it will). If corporations continue to pay dividends, even better, they can just continue to reinvest these dividends at extremely low stock prices.

Finance 101 is don’t keep your money invested in one type of investment. Unfortunately many do not pay attention to that. As you get closer to retirement or if retired most of your savings should not be in the stock markets imo.

 

[Fredflintstone]

Finance 101 is don’t keep your money invested in one type of investment. Unfortunately many do not pay attention to that. As you get closer to retirement or if retired most of your savings should not be in the stock markets imo.

I think you should be in stocks because the interest rates are so low. Actually, the interest rates are so low your money doesn’t keep up with inflation.

However, as you near retirement, liquidate some of your portfolio to meet 2 years into a cash account. That way, you aren’t stuck and have to sell in bad times.

Younger folks can have less cash and more investments. Cash though is nice for when stocks get cheap.

I certainly would say differently if rates were at the 20 percent level like they were in 1982. I loved those long gone days as I am a saver.

You are bang on about diversifying.


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[Brett]

I think you should be in stocks because the interest rates are so low. Actually, the interest rates are so low your money doesn’t keep up with inflation.

However, as you near retirement, liquidate some of your portfolio to meet 2 years into a cash account. That way, you aren’t stuck and have to sell in bad times.

Younger folks can have less cash and more investments. Cash though is nice for when stocks get cheap.

I certainly would say differently if rates were at the 20 percent level like they were in 1982. I loved those long gone days as I am a saver.

You are bang on about diversifying.


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I agree, in retirement still keep a sizable percentage of retirement assets in a diversified low cost index fund stock portfolio ... but keep some $$ in cash and bonds and CD's for those market "corrections"