How Wall Street Wrecked Your Retirement.
Harry Hope
http://www.alternet.org/workplace/92658
July 25, 2008
How Wall Street Wrecked Your Retirement
By Nicholas von Hoffman
People are discovering they have been forced into a system in which
others have gambled with their retirement savings and lost it.
Our disfunctional financial system hit a new low last week when
Citigroup, the hopeless wreck of Wall Street, announced it had lost
$2.5 billion in the past three months -- a cheer went up, and so did
the Dow.
http://online.wsj.com/article/SB121636319957764985.html?mod=%20todays_us_page_one
Only $2.5 billion; people were afraid the losses would be much higher.
Happy days are here again.
There are no happy days for the millions of Americans who have been
trying to put away some money for their retirement in tax-sheltered
entities like IRAs, Roth Accounts and 401(k)s.
For them, the market's downward slope has been harrowing and
frightening.
When will the steady erosion of their savings end?
And when it does, what will be left of their future financial
security?
Many of the millions suffering through these worrisome months didn't
buy a house they could not afford, didn't speculate on their homes,
didn't let greedy impulses lead them to the edge of foreclosure or
bankruptcy.
Nevertheless, the excesses of their neighbors and the criminal folly
of American finance is destroying their plans for retirement.
It is dragging down much of the value of their homes, on which they
have never missed a payment, homes on which they were counting on
selling at retirement to help finance their last years in comfort.
For years, the privatization propagandists have been telling people
that when the time comes, Social Security will not be there for them.
Now many are learning that it's their private savings that may not be
there.
They are discovering they have been forced into a system in which
other people have, in effect, been allowed to gamble with their
retirement savings and have lost it.
The way the private, you're-on-your-own retirement system was supposed
to work had individuals, during their younger, working years,
investing in stock through tax-sheltered accounts.
Almost nobody who is not breaking the law can choose among individual
stocks and make money, so future retirees have been encouraged to buy
mutual funds run by professional managers, who are supposed to be able
to pick the winners.
Most of them aren't much better at doing that than are their
customers, but in a rising market, a chicken pecking at stock tables
can pick winners.
In boom times, it doesn't matter that the future retiree must choose
among thousands of mutual funds, many of which carry ruinously high
fees.
The damage to people's savings goes unnoticed until the market begins
to go down.
Even as the market falls, future retirees are told not to panic, to
keep their money where it is, because in the long run the value of
their accounts will go up and they will have many a happy sunset year
traveling the globe and showering their grandchildren with presents.
As the retirement date comes near, they are advised to begin selling
stocks and buying fixed-income securities -- as bonds are sometimes
called -- because these pay the interest they earn on a fixed
schedule, providing a regular income.
For this to work, stock prices must be high when the holdings are sold
and the bonds purchased must pay high rates of interest.
But what happens when the stock market is in a nosedive and interest
rates are half of the inflation rate, as is the case right now?
Panic and worry, no golden years of travel, no presents for the
grandchildren.
The energy that was to be expended on leisure activities is spent
instead trying to figure out how to make ends meet.
The bright spot is Social Security.
That check does come with the regularity of the calendar, whether the
market is up or down, whether interest rates be high or low and if, as
is the case now, the Greenspan-Bush inflation is destroying family
budgets.
Social Security adjusts for the rising prices.
But Social Security is too narrow a ledge to stand on through the
years between retirement and death.
It was designed as the base on which other retirement savings were to
be built.
Those savings -- the house and the tax-sheltered retirement accounts
-- are shriveling up and blowing away.
The persons for whom Americans' savings have been a reliable source of
income are the brokers, the lawyers, the account administrators, the
whole tribe of Wall Street fee farmers.
They get other people's retirement money regardless of the direction
the market may be moving in.
You can't call it a broken system because it was a bad one from the
start.
It is failing, just as its critics said it would.
And what lies ahead for those whose retirement savings are gone may be
a very unpleasant old age.
__________________________________________________
"I shall not know until the end what I have lost or won in this place,
in this vast gambling den...."
Denis Diderot
Harry
Vid...@tcq.net
> http://www.alternet.org/workplace/92658
>
> July 25, 2008
>
> How Wall Street Wrecked Your Retirement
>
> By Nicholas von Hoffman
>
> People are discovering they have been forced into a system in which
> others have gambled with their retirement savings and lost it.
>
> Our disfunctional financial system hit a new low last week when
> Citigroup, the hopeless wreck of Wall Street, announced it had lost
> $2.5 billion in the past three months -- a cheer went up, and so did
Rod Speed
>> http://www.alternet.org/workplace/92658
>> July 25, 2008
>> How Wall Street Wrecked Your Retirement
Didnt wreck mine.
>> By Nicholas von Hoffman
>> People are discovering they have been forced into a system in
>> which others have gambled with their retirement savings and lost it.
Didnt happen with mine.
<reams of mindless shit flushed where it belongs>
Vid...@tcq.net
as long as you are ok, then all is well. typical.
Rod Speed
>> Didnt wreck mine.
>> Didnt happen with mine.
Never ever said anything like that. JUST rubbed your stupid
nose in the FACT that that article you stole is full of shit.
> typical.
Yep, your shit is just that.
Vid...@tcq.net
typical.
Kevin Cunningham
Actually toad boui, the fulla shit smell emanates from you. The stock
market index has gone no were in years. Bond prices have stayed
constant at best. The dollar has been going steadily down versus the
Euro. Our national debt is the highest in history.
However since a repug can't use statistics a repug uses lies. Your
vapid response is typical for repug responses. You can, at best, only
talk about yourself. To talk about the society would be hiddeous for
you,
why you'd have to admit that our economy is in a recession brought on
by repug policies.
Rod Speed
> Rod Speed <rod.speed....@gmail.com> wrote
>> Vide...@tcq.net wrote
>>> Rod Speed <rod.speed....@gmail.com> wrote
>>>> Vide...@tcq.net wrote
>>>>> Harry Hope <riv...@ix.netcom.com> wrote
>>>>>> http://www.alternet.org/workplace/92658
>>>>>> July 25, 2008
>>>>>> How Wall Street Wrecked Your Retirement
>>>> Didnt wreck mine.
>>>>>> By Nicholas von Hoffman
>>>>>> People are discovering they have been forced into a system in
>>>>>> which others have gambled with their retirement savings and lost it.
>>>> Didnt happen with mine.
>>>> <reams of mindless shit flushed where it belongs>
>>> as long as you are ok, then all is well.
>> Never ever said anything like that. JUST rubbed your stupid
>> nose in the FACT that that article you stole is full of shit.
>>> typical.
>> Yep, your shit is just that.
> Actually toad boui, the fulla shit smell emanates from you.
We'll see...
> The stock market index has gone no were in years.
Bare faced pig ignorant lie. And I JUST said that it hadnt wrecked my retirement, fool.
> Bond prices have stayed constant at best.
Pity that fool claimed that someone gambled with my retirement savings and LOST IT, fool
> The dollar has been going steadily down versus the Euro.
My dollar hasnt, fool.
And even with your dollar, who cares when most of the goods you lot buy
come from China and your dollar hasnt gone down much against the rembuyan.
> Our national debt is the highest in history.
Yours might well be. Mine is the lowest in history, fool.
> However since a repug can't use statistics a repug uses lies.
And fools like you use pathetic excuse for mindless bullshit.
> Your vapid response is typical for repug responses.
Yours in spades, fool.
> You can, at best, only talk about yourself.
Lying, as always.
> To talk about the society would be hiddeous for you,
Lying, as always.
> why you'd have to admit that our economy is
> in a recession brought on by repug policies.
Because it aint my economy, fuckwit.
Vid...@tcq.net
can't you read, this is what the header says,
How Wall Street Wrecked Your Retirement.
we are speaking of the american economy. if you are responding from
another country. you are a idiot, this does not concern you stupid.
Rod Speed
I read it fine.
> How Wall Street Wrecked Your Retirement.
> we are speaking of the american economy.
You're lying, as always.
And it didnt wreck every USians retirement either.
> if you are responding from another country. you are a idiot, this does not concern you stupid.
Never ever could bullshit its way out of a wet paper bag.
Heywood Jablowmi
<Vid...@tcq.net> wrote in message
news:392a82ce-6138-49f3...@t54g2000hsg.googlegroups.com...
Actually most folks invested in 401k plans have the option to change how
their money gets
invested, you are alowed to make daily changes on what percentages of
your investment you
want to invest in stocks or bonds or whatever... If people are to lazy
to get online and to do
make the nessary changes to their 401k that would do the least amount of
damage. If the stock
market is doing poorly take you 401k and invest in bonds or market funds
or whatever is the
safest best in rough times... So I could kind of agree... If it did not
happen with him, maybe
he was smart enough to take 5 minutes and move his investment to safer
grounds... So yeah
as long as he is ok, that should be all that matters.... If you leave
yourself at the mercy of the
banks and leave it where it is, well then you are setting yourself up to
get screwed... Heck I
would not be surprised if this whole system was set up just so a
majority of Americans that
are invested in such retirement deals get taken to the bank...
If you dont control what is yours... or do the best to control it
someone is going to take your
money.... The whole stock market is a bad system to start with...
Les Cargill
If he wasn't OK, then things would be better?
--
Les Cargill
Vid...@tcq.net
snicker, you are from another country, which means you were mis-
representing yourself.
Vid...@tcq.net
wrote:
> <Vide...@tcq.net> wrote in message
>
> news:392a82ce-6138-49f3...@t54g2000hsg.googlegroups.com...
> On Jul 25, 1:16 pm, "Rod Speed" <rod.speed....@gmail.com> wrote:
>
>
>
> > Vide...@tcq.net wrote:
> > > Harry Hope <riv...@ix.netcom.com> wrote
> > >>http://www.alternet.org/workplace/92658
> > >> July 25, 2008
> > >> How Wall Street Wrecked Your Retirement
>
> > Didnt wreck mine.
>
> > >> By Nicholas von Hoffman
> > >> People are discovering they have been forced into a system in
> > >> which others have gambled with their retirement savings and lost it.
>
> > Didnt happen with mine.
>
> > <reams of mindless shit flushed where it belongs>
> > as long as you are ok, then all is well. typical.
>
> Actually most folks invested in 401k plans have the option to change how
> their money gets
> invested, you are alowed to make daily changes on what percentages of
> your investment you
> want to invest in stocks or bonds or whatever...
but, if all of the markets are going down, bonds are not
appreciating, interest rates are low, then as the articles suggests,
you are losing, not gaining. which means lots of people will never
attain what they need to retire. the articles are correct.
If people are to lazy
> to get online and to do
> make the nessary changes to their 401k that would do the least amount of
> damage.
the least amount of damage!!!!!!! ROTFLOL. damage is the word.
sometimes you have to be perfect, to get parity back, let alone any
gains in a bear market that may last for a decade or more after a
crash.
If the stock
> market is doing poorly take you 401k and invest in bonds or market funds
> or whatever is the
> safest best in rough times...
but, everything is going down, not up.
So I could kind of agree... If it did not
> happen with him, maybe
> he was smart enough to take 5 minutes and move his investment to safer
> grounds...
he does not live in america. you are simply thinking that everyone
gets screwed, the articles plainly say millions, not everyone.
blinders on to tight:)
So yeah
> as long as he is ok, that should be all that matters....
typical.
If you leave
> yourself at the mercy of the
> banks and leave it where it is, well then you are setting yourself up to
> get screwed...
not many avoided a good screwing in 1929, and neither will they this
time
Heck I
> would not be surprised if this whole system was set up just so a
> majority of Americans that
> are invested in such retirement deals get taken to the bank...
>
BINGO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! now that did not
hurt to much did it:)
> If you dont control what is yours... or do the best to control it
> someone is going to take your
> money.... The whole stock market is a bad system to start with...
BINGO!!!!!!!!! you made excellent progress towards the end, from where
you started.
Vid...@tcq.net
i can see that coming from you. you still do not understand modern
economics. its demand, as demand wanes, so will most everyone's
investments. we are watching this right now in slow motion. the
markets going down, are a direct result of deflation setting in, in a
lot of assets. it affects almost everyone sooner or later. so just
care about yourself, it will not take you very far.
Rod Speed
Rod Speed
If you are in bonds, your retirement wont be getting WRECKED, fool.
> which means lots of people will never attain what they need to retire.
Thats not what the article was mindlessly hyperventilating about, fool.
> the articles are correct.
Never ever could bullshit its way out of a wet paper bag.
>> If people are to lazy to get online and to do make the nessary
>> changes to their 401k that would do the least amount of damage.
> the least amount of damage!!!!!!! ROTFLOL. damage is the word.
Not if you have your retirement money where it cant get WRECKED, fool.
> sometimes you have to be perfect, to get parity back,
Not if you were in bonds all along, fool.
> let alone any gains in a bear market that may last for a decade or more after a crash.
Not if you were in bonds all along, fool.
>> If the stock market is doing poorly take you 401k and invest in bonds
>> or market funds or whatever is the safest best in rough times...
> but, everything is going down, not up.
Thanks for that completely superfluous proof that you have never ever had a clue.
>> So I could kind of agree... If it did not happen with him, maybe he was
>> smart enough to take 5 minutes and move his investment to safer grounds...
Or always did have it in the safer stuff.
> he does not live in america. you are simply thinking that everyone gets screwed,
No he didnt. He ACTUALLY said that even a USian can choose to have
its retirement money where it cant get WRECKED BY WALL ST, fool.
> the articles plainly say millions, not everyone. blinders on to tight:)
Never ever could bullshit its way out of a wet paper bag.
>> So yeah as long as he is ok, that should be all that matters....
> typical.
Nope, it proves that the article is just mindless shit.
>> If you leave yourself at the mercy of the banks and leave it
>> where it is, well then you are setting yourself up to get screwed...
Or have your retirement money where the banks can do that in the first place.
> not many avoided a good screwing in 1929, and neither will they this time
Plenty wont have their retirement WRECKED, fool.
>> Heck I would not be surprised if this whole system was set up just so a majority
>> of Americans that are invested in such retirement deals get taken to the bank...
> BINGO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! now that did not hurt to much did it:)
Never ever could bullshit its way out of a wet paper bag.
>> If you dont control what is yours... or do the best to control it someone is going
>> to take your money.... The whole stock market is a bad system to start with...
> BINGO!!!!!!!!! you made excellent progress towards the end, from where you started.
Never ever could bullshit its way out of a wet paper bag.
George Grapman
>
> Never ever could bullshit its way out of a wet paper bag.
>
>
Rod Speed had infested alt.consumers.free-stuff for years. Whenever
he is questioned he posts auto responses such as the one above or
another one about toilets.
When links are posted that are contrary to his claims his defenses
are "irrelevant" or "bullshit". If you happen to mention your job he
will demean that type of work. From postings of others it appears that
he has spent his adult life on the dole in Australia.
It is best to kill file and/or ignore him.
Les Cargill
> On Jul 25, 8:37 pm, Les Cargill <lcarg...@cfl.rr.com> wrote:
>> Vide...@tcq.net wrote:
>>> On Jul 25, 1:16 pm, "Rod Speed" <rod.speed....@gmail.com> wrote:
>>>> Vide...@tcq.net wrote:
>>>>> Harry Hope <riv...@ix.netcom.com> wrote
>>>>>> http://www.alternet.org/workplace/92658
>>>>>> July 25, 2008
>>>>>> How Wall Street Wrecked Your Retirement
>>>> Didnt wreck mine.
>>>>>> By Nicholas von Hoffman
>>>>>> People are discovering they have been forced into a system in
>>>>>> which others have gambled with their retirement savings and lost it.
>>>> Didnt happen with mine.
>>>> <reams of mindless shit flushed where it belongs>
>>> as long as you are ok, then all is well. typical.
>> If he wasn't OK, then things would be better?
>>
>> --
>> Les Cargill
>
> i can see that coming from you. you still do not understand modern
> economics.
Probably not. I have *an* understanding, and it's gotten
considerably better in the last few years. But
enough about me...
> its demand, as demand wanes, so will most everyone's
> investments.
I actually have exactly the same concern. But it's probably
because we're old farts. I am very serious - where does
the new demand come from? I have access to young people,
they don't seem to need much.
I am in no way being trivial or silly when I say this - we
had Daffy Duck, and they did not. With my own children, I
have failed to communicate this. Even the biologist doesn't
get it, and she pretty much has mastery of population dynamics.
She just doesn't think it is about *her*.
> we are watching this right now in slow motion. the
> markets going down, are a direct result of deflation setting in,
So you see that, too? It's like our great white whale, isn't it?
FDR as Captain Ahab - how does that work? I am actually
quite happy to hear this - I fear the deflation most
of all, too.
No, I take this statement very seriously, and I fully agree. We
chase the deflation to the corner, and it comes back at us.
But FDR had it *right*. It's fear. The most Lincolnian thing
he ever uttered was that. That's the amygdala. What do
we do about the amygdala? It is who we are. It makes us fear.
It is not greed that drives it. it is fear. As long as I have
known you, I understand - the fear an' greed lead and lag each other;
no, they're independent. The greed is... like pheremones; in
the air. The fear is architectural.
Because understanding drives away fear. It never drives away greed.
I dunno; go rent (or buy) "Cinderella Man" and get back to
me. Very few movies exhibit that sort of power and embed that
much knowledge of who we are within them. *Every*body did what
that guy did; Russel Crowe's portrayal of Jim Braddock.
> in a
> lot of assets. it affects almost everyone sooner or later. so just
> care about yourself, it will not take you very far.
A really good philosopher whose records I once bought said it this
way:
So keep yourself to yourself.
Keep your bedroll dry.
Because you never can tell.
What the shadows hide.
Keep your eyes on the ground.
Pick up whatever you find.
'Cause there's no place to fall
When you're back's to the wall. -- "Back to the Wall", Steve Earle.
And to be honest with you.... this scenario has completely
failed to materialize. I am sure that Steve, as very serious
Woody Guthrie scholar, is disappointed.
I used to work for Depression people. We ain't like them. We're a
hell of a lot more civilized. They were Farking Awesome in
their way, but... we ain't like 'em. No matter how much I wish we
were.
It's a river, and you cannot stick your hand in the same river
twice.
And thank you for your response. *Now* I understand what you mean.
--
Les Cargill
Rod Speed
George Crapman <sfge...@paccbell.net> wrote just the
bare faced lies you'd expect from a fuckwit salesfool.
No surprise that its never ever been able to manage a real job.
Rod Speed
> Vid...@tcq.net wrote
>>>>> Vide...@tcq.net wrote
>>>>>> Harry Hope <riv...@ix.netcom.com> wrote
>>>>>>> http://www.alternet.org/workplace/92658
>>>>>>> July 25, 2008
>>>>>>> How Wall Street Wrecked Your Retirement
>>>>> Didnt wreck mine.
>>>>>>> By Nicholas von Hoffman
>>>>>>> People are discovering they have been forced into a system in which others have gambled with their retirement
>>>>>>> savings and lost it.
>>>>> Didnt happen with mine.
>>>>> <reams of mindless shit flushed where it belongs>
>>>> as long as you are ok, then all is well. typical.
>>> If he wasn't OK, then things would be better?
>> i can see that coming from you. you still do not understand modern economics.
> Probably not. I have *an* understanding, and it's gotten considerably better in the last few years. But enough about
> me...
>> its demand, as demand wanes, so will most everyone's investments.
> I actually have exactly the same concern.
Demand wont wane for long, you watch.
> But it's probably because we're old farts. I am very serious - where does the new demand come from?
From the existing consumers.
> I have access to young people, they don't seem to need much.
Have a look at the sales of ipods and iphones sometime.
Even you should have noticed the demand for housing too.
> I am in no way being trivial or silly when I say this - we had Daffy Duck, and they did not.
They had other stuff like Harry Potter.
> With my own children, I have failed to communicate this. Even the biologist doesn't get it, and she pretty much has
> mastery of population dynamics.
But clearly not of basic economics.
> She just doesn't think it is about *her*.
>> we are watching this right now in slow motion. the markets going down, are a direct result of deflation setting in,
> So you see that, too? It's like our great white whale, isn't it?
> FDR as Captain Ahab - how does that work? I am actually
> quite happy to hear this - I fear the deflation most of all, too.
> No, I take this statement very seriously, and I fully agree. We chase the deflation to the corner, and it comes back
> at us.
It wouldnt have if the fools at the controls hadnt been stupid enough to
have been asleep at the wheel when the sub prime fiasco was brewing.
> But FDR had it *right*. It's fear. The most Lincolnian thing
> he ever uttered was that. That's the amygdala. What do we do about the amygdala? It is who we are. It makes us fear.
We evolved that way basically.
Its compounded in the US by the fragility of so many people's jobs
and the massive mortgages so many have chosen to sign up for.
Add to that the spike in the price of gasoline and you have a problem.
> It is not greed that drives it. it is fear.
Correct.
> As long as I have known you, I understand - the fear an' greed lead and lag each other; no, they're independent. The
> greed is... like pheremones; in the air. The fear is architectural.
Yep, we evolved that way.
Thats why so many of us are stupid enough to believe in gods etc.
> Because understanding drives away fear.
Not with many.
> It never drives away greed.
Yep, we evolved that way too.
> I dunno; go rent (or buy) "Cinderella Man" and get back to me. Very few movies exhibit that sort of power and embed
> that
> much knowledge of who we are within them. *Every*body did what that guy did; Russel Crowe's portrayal of Jim Braddock.
It isnt real life for most of us.
>> in a lot of assets. it affects almost everyone sooner or later. so just care about yourself, it will not take you
>> very far.
> A really good philosopher whose records I once bought said it this way:
> So keep yourself to yourself.
> Keep your bedroll dry.
> Because you never can tell.
> What the shadows hide.
> Keep your eyes on the ground.
> Pick up whatever you find.
> 'Cause there's no place to fall
> When you're back's to the wall. -- "Back to the Wall", Steve Earle.
And then the world moved on. Very few of us have our backs to the wall any longer.
Vid...@tcq.net
but you are on the wrong side of history.
> > its demand, as demand wanes, so will most everyone's
> > investments.
>
> I actually have exactly the same concern. But it's probably
> because we're old farts. I am very serious - where does
> the new demand come from? I have access to young people,
> they don't seem to need much.
>
you live a sheltered life then. americas youth no longer buys the
lies of free market economics. they are reeling in poverty and debt.
> I am in no way being trivial or silly when I say this - we
> had Daffy Duck, and they did not.
they have their icons also.
With my own children, I
> have failed to communicate this. Even the biologist doesn't
> get it, and she pretty much has mastery of population dynamics.
>
> She just doesn't think it is about *her*.
>
americas youth is so far into debt, trying to live on crummy wages
and part time jobs, they cannot consume much.
> > we are watching this right now in slow motion. the
> > markets going down, are a direct result of deflation setting in,
>
> So you see that, too? It's like our great white whale, isn't it?
> FDR as Captain Ahab - how does that work? I am actually
> quite happy to hear this - I fear the deflation most
> of all, too.
>
then you better understand the real economic issues.
> No, I take this statement very seriously, and I fully agree. We
> chase the deflation to the corner, and it comes back at us.
>
yep, gutting the demand side has consequences.
> But FDR had it *right*. It's fear. The most Lincolnian thing
> he ever uttered was that. That's the amygdala. What do
> we do about the amygdala? It is who we are. It makes us fear.
>
when he spoke of fear, i think he meant conservative fear mongering.
wedge issues, trivial things of no importance, except to distract the
gullible voters.
> It is not greed that drives it. it is fear. As long as I have
> known you, I understand - the fear an' greed lead and lag each other;
> no, they're independent. The greed is... like pheremones; in
> the air. The fear is architectural.
>
then you missed the part of the sub prime mortgage, greed driven
feeding frenzy.
> Because understanding drives away fear. It never drives away greed.
>
you must be reading the same kool aid freddiz is.
> I dunno; go rent (or buy) "Cinderella Man" and get back to
> me. Very few movies exhibit that sort of power and embed that
> much knowledge of who we are within them. *Every*body did what
> that guy did; Russel Crowe's portrayal of Jim Braddock.
>
a wonderful life is better.
> > in a
> > lot of assets. it affects almost everyone sooner or later. so just
> > care about yourself, it will not take you very far.
>
> A really good philosopher whose records I once bought said it this
> way:
>
> So keep yourself to yourself.
> Keep your bedroll dry.
> Because you never can tell.
> What the shadows hide.
> Keep your eyes on the ground.
> Pick up whatever you find.
> 'Cause there's no place to fall
> When you're back's to the wall. -- "Back to the Wall", Steve Earle.
>
he is a liberal you know. anti free market.
> And to be honest with you.... this scenario has completely
> failed to materialize. I am sure that Steve, as very serious
> Woody Guthrie scholar, is disappointed.
>
yet.
> I used to work for Depression people. We ain't like them. We're a
> hell of a lot more civilized. They were Farking Awesome in
> their way, but... we ain't like 'em. No matter how much I wish we
> were.
>
for many that is true. but they got their training the hard way.
before the depression many were like today. true believers in the
magic of the markets. they elected three free market cranks,
congress's from 1920-1932, that gave the supreme court to them also.
> It's a river, and you cannot stick your hand in the same river
> twice.
>
we have been doing that since 1981.
> And thank you for your response. *Now* I understand what you mean.
>
hey, ok.
Mr Bungle 34
http://www.youtube.com/watch?v=9KVTfcAyYGg
People really need to wake up.
Vid...@tcq.net
that is correct. i wonder if carlin went out on his own, or was he
pushed a little. someone who has the public's ear, needs to be shut up.
Heywood Jablowmi
<Vid...@tcq.net> wrote in message
news:5a461ce5-d1bc-422f...@p25g2000hsf.googlegroups.com...
typical.
The system the way it is set up using the markets is not bad as long as
the markets are doing well... long term you will probably do ok... it is the
short term people that are getting killed right
now... I never said that it was a great way to save for your retirement.
Anything that involves the
markets is a risky bet at best. There are better ways of saving for those
golden years, 401k's are
just the favorite, and right now you can see why... someone is making good
off of all those retirement dollars...
But you can control the investment options of your plan most folks dont
bother or dont know
this... and you can pull your funds out of the markets altogether and just
use it as a savings plan.
You can stop the bleeding if you manage your account... most americans
well...dont.
> If you dont control what is yours... or do the best to control it
> someone is going to take your
> money.... The whole stock market is a bad system to start with...
>BINGO!!!!!!!!! you made excellent progress towards the end, from where
>you started.
I dont belive in the stock markets... I feel they do more harm than they do
good nor do I trust
government in any way shape or form to do what is best for me. The whole
basis of my post
was to inform unknowing people with 401ks that they can control their
accounts and pull their
savings out of the market before they suffer big loses.. Personally I'd
rather stuff my mattress
with cash than use the markets, they were designed to take your money...
Sorry if I did not
express myself as clearly as I should have... :)
znuybv
znuybv
If he's OK I take it a lot of other people are. How are you doing?
Rod Speed
But your retirement hasnt been WRECKED and your retirement savings havent been LOST.
> which means lots of people will never attain what they need to retire.
Wrong again, because those conditions dont last forever.
> the articles are correct.
Nope.
> If people are to lazy
>> to get online and to do
>> make the nessary changes to their 401k that would do the least
>> amount of damage.
> the least amount of damage!!!!!!! ROTFLOL. damage is the word.
Nope.
> sometimes you have to be perfect, to get parity back,
Nope.
> let alone any gains in a bear market that may last for a decade or more after a crash.
Hardly ever.
> If the stock
>> market is doing poorly take you 401k and invest in bonds or market
>> funds or whatever is the
>> safest best in rough times...
> but, everything is going down, not up.
Wrong again.
> So I could kind of agree... If it did not
>> happen with him, maybe
>> he was smart enough to take 5 minutes and move his investment to
>> safer grounds...
> he does not live in america. you are simply thinking that everyone
> gets screwed, the articles plainly say millions, not everyone.
The article clearly implied that every has their retirement WRECKED.
That is a bare faced lie.
> blinders on to tight:)
Yours in spades.
> So yeah
>> as long as he is ok, that should be all that matters....
> typical.
Nope, just rubbing your clowns noses in the fact that the article is grossly overstating what is happening.
> If you leave
>> yourself at the mercy of the
>> banks and leave it where it is, well then you are setting yourself
>> up to get screwed...
> not many avoided a good screwing in 1929,
Thanks for that completely superfluous proof that you have never ever had a clue.
> and neither will they this time
Thanks for that completely superfluous proof that you have never ever had a clue.
>
> Heck I
>> would not be surprised if this whole system was set up just so a
>> majority of Americans that
>> are invested in such retirement deals get taken to the bank...
>>
>
>
>> BINGO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! now that did not
>> hurt to much did it:)
> The system the way it is set up using the markets is not bad as
> long as the markets are doing well... long term you will probably do
> ok... it is the short term people that are getting killed right now...
Only some of them are.
> I never said that it was a great way to save for your retirement. Anything that involves the markets is a risky bet at
> best.
Depends entirely on which market you are talking about.
> There are better ways of saving for those golden years, 401k's are just the favorite, and right now you can see why...
> someone is making good off of all those retirement dollars...
No one is holding a gun to your head and forcing you to use those.
> But you can control the investment options of your plan
Some can, some cant.
> most folks dont bother or dont know this...
Most arent even capable of doing that.
> and you can pull your funds out of the markets altogether and just use it as a savings plan.
> You can stop the bleeding if you manage your account... most americans well...dont.
Most americans dont know enough to be able to do it.
>> If you dont control what is yours... or do the best to control it
>> someone is going to take your
>> money.... The whole stock market is a bad system to start with...
>
>
>> BINGO!!!!!!!!! you made excellent progress towards the end, from
>> where you started.
> I dont belive in the stock markets...
More fool you.
> I feel they do more harm than they do good
You're wrong.
> nor do I trust government in any way shape or form to do what is best for me.
Your problem.
> The whole basis of my post was to inform unknowing people with 401ks that they can control their accounts and pull
> their savings out of the market before they suffer big loses..
> Personally I'd rather stuff my mattress with cash than use the markets, they were designed to take your money...
Thanks for that completely superfluous proof that you have never ever had a clue.
> Sorry if I did not express myself as clearly as I should have... :)
A Jap would at least have the decency to disembowel itself.
Vid...@tcq.net
hey, no problems, some of what you say i agree with.
Vid...@tcq.net
i am doing fine, millions of others are not. otherwise why are
millions draining their 401k plans right now? of course, i do not wear
blinders:)
jane....@gmail.com
wrote:
> <Vide...@tcq.net> wrote in message
>
> news:5a461ce5-d1bc-422f...@p25g2000hsf.googlegroups.com...
> On Jul 25, 9:17 pm, "Heywood Jablowmi" <hsqui...@optonline.net>
> wrote:
>
>
>
> > <Vide...@tcq.net> wrote in message
>
> >news:392a82ce-6138-49f3...@t54g2000hsg.googlegroups.com...
> > On Jul 25, 1:16 pm, "Rod Speed" <rod.speed....@gmail.com> wrote:
>
> > > Vide...@tcq.net wrote:
> > > > Harry Hope <riv...@ix.netcom.com> wrote
> > > >>http://www.alternet.org/workplace/92658
> > > >> July 25, 2008
> > > >> How Wall Street Wrecked YourRetirement
>
> > > Didnt wreck mine.
>
> > > >> By Nicholas von Hoffman
> > > >> People are discovering they have been forced into a system in
>
> > BINGO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! now that did not
> >hurt to much did it:)
>
> The system the way it is set up using the markets is not bad as long as
> the markets are doing well... long term you will probably do ok... it is the
> short term people that are getting killed right
> now... I never said that it was a great way to save for yourretirement.
> Anything that involves the
> markets is a risky bet at best. There are better ways of saving for those
> golden years, 401k's are
> just the favorite, and right now you can see why... someone is making good
> off of all thoseretirementdollars...
>
> But you can control the investment options of your plan most folks dont
> bother or dont know
> this... and you can pull your funds out of the markets altogether and just
> use it as a savings plan.
> You can stop the bleeding if you manage your account... most americans
> well...dont.
>
> > If you dont control what is yours... or do the best to control it
> > someone is going to take your
> > money.... The whole stock market is a bad system to start with...
> >BINGO!!!!!!!!! you made excellent progress towards the end, from where
> >you started.
>
> I dont belive in the stock markets... I feel they do more harm than they do
> good nor do I trust
I' not sure if I should even waste my time. You seem to have your
mind made up without any basis for your opinion. Markets go up and
markets go down. We have had a market crash in 87, a recession in
91, a surge in the 90s, a crash in 2000.
What is important is the annualized rate of return. I have a
portfolio that consists of 3 index funds. I have left it alone and
haven't touched it. Through the market crashes, and recessions, the
annualized rate of return is 8.96%. If you invest in Social Security
Special Issue Government bonds, your rate is 1.8%
Today, it is so easy to look at the short term and write scare
articles like the one at the beginning of the thread.
Even considering the short term, take a look at the Fidelity 500 index
fund. It represents the S&P500. Even though it has a YTD -11.94%,
the 5 year annualized rate of return is 7.49%. This is still far
superior to the Federal 1.8%
You stated a fear of bear markets: " ...let alone any gains in a bear
market that may last for a decade or more after a crash." History
does not substantiate your fears. The crash of 87 was a huge crash.
In 2000, the NASDAQ fell 58%. Even with these crashes, my three index
funds posted an annualized return of 8.96%
If you don't invest in stock ownership, you are a fool. Even at the
day of retirement, you still need long term investments for when you
are in your 80s and possibly 90s.
Jane
Vid...@tcq.net
although you may be doing well, as a few others will always, that is
not the case if you have to retire before you get parity back after a
crash, or a long bear market. but stock market hucksters use averages,
and to attain averages many have to lose, and a few win big time to
attain those averages. if you invested pre 1929, and had to retire or
died, or needed money for who knows what before 1954, chances are you
never regained your parity, on top of making up for all of the lost
years with no gains at all. so using averages is a fraud.
http://en.wikipedia.org/wiki/Image:Bank_of_the_United_States_failure_...
http://en.wikipedia.org/wiki/Dead_cat_bounce
http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929
At 1 p.m. on Friday, October 25, several leading Wall Street bankers
met to find a solution to the panic and chaos on the trading floor.
The meeting included Thomas W. Lamont, acting head of Morgan Bank;
Albert Wiggin, head of the Chase National Bank; and Charles E.
Mitchell, president of the National City Bank. They chose Richard
Whitney, vice president of the Exchange, to act on their behalf. With
the bankers' financial resources behind him, Whitney placed a bid to
purchase a large block of shares in U.S. Steel at a price well above
the current market. As amazed traders watched, Whitney then placed
similar bids on other "blue chip" stocks. This tactic was similar to a
tactic that ended the Panic of 1907, and succeeded in halting the
slide that day. In this case, however, the respite was only temporary.
Over the weekend, the events were dramatized by the newspapers across
the United States. On Monday, October 28, more investors decided to
get out of the market, and the slide continued with a then record loss
in the Dow for the day of 13%. The next day, "Black Tuesday", October
29, 1929, 16.4 million shares were traded, a number that broke the
record set five days earlier and that was not exceeded until 1969.
Author Richard M. Salsman wrote that on October 29--amid rumors that
U.S. President Herbert Hoover would not veto the pending Smoot-Hawley
Tariff bill--stock prices crashed even further."[4] William C. Durant
joined with members of the Rockefeller family and other financial
giants to buy large quantities of stocks in order to demonstrate to
the public their confidence in the market, but their efforts failed to
stop the slide. The DJIA lost another 12% that day. The ticker did not
stop running until about 7:45 that evening. The market lost $14
billion in value that day, bringing the loss for the week to $30
billion, ten times more than the annual budget of the federal
government, far more than the U.S. had spent in all of World War I.[5]
An interim bottom occurred on November 13, with the Dow closing at
198.6 that day. The market recovered for several months from that
point, with the Dow reaching a secondary peak at 294.0 in April 1930.
The market embarked on a steady slide in April 1931 that did not end
until 1932 when the Dow closed at 41.22 on July 8, concluding a
shattering 89% decline from the peak. This was the lowest the stock
market had been since the 19th century.[6]
Salsman observed that "As late as April 1942, U.S. stock prices were
still 75% below their 1929 peak and would not revisit that level until
November 1954--almost a quarter of a century later."[4]
Rod Speed
> jane.pla...@gmail.com wrote
> although you may be doing well, as a few others will
> always, that is not the case if you have to retire before
> you get parity back after a crash, or a long bear market.
You dont necessarily have to get a wad of cash when you retire.
> but stock market hucksters use averages,
> and to attain averages many have to lose,
> and a few win big time to attain those averages.
Utterly mangled all over again.
> if you invested pre 1929, and had to retire or died, or needed money for
> who knows what before 1954, chances are you never regained your parity,
Pig ignorant lie.
> on top of making up for all of the lost years with no gains at all. so using averages is a fraud.
Another pig ignorant lie.
<reams of your pig ignorant shit flushed where it belongs>
jane....@gmail.com
> On Jul 29, 5:15 pm, jane.pla...@gmail.com wrote:
>
> although you may be doing well, as a few others will always, that is
> not the case if you have to retire before you get parity back after a
> crash, or a long bear market. but stock market hucksters use averages,
> and to attain averages many have to lose, and a few win big time to
> attain those averages. if you invested pre 1929, and had to retire or
> died, or needed money for who knows what before 1954, chances are you
> never regained your parity, on top of making up for all of the lost
I will post a reply tomorrow morning.
Jane.
maxw...@my-deja.com
> Vide...@tcq.net wrote
Wow! I guess you really told him. How can factual information stand
up to name calling and insults?
alexy
>On Jul 29, 5:15 pm, jane.pla...@gmail.com wrote:
>
> although you may be doing well, as a few others will always,
And historically anyone who has consistently invested in the stock
market has done well.
>that is
>not the case if you have to retire before you get parity back after a
>crash, or a long bear market. but stock market hucksters use averages,
Actually, anyone with enough sense to invest over time will average
out their costs and gains.
>and to attain averages many have to lose, and a few win big time to
>attain those averages.
False.
Anyone can invest in an S&P 500 Index fund and get the advantage of
diversification.
> if you invested pre 1929, and had to retire or
>died, or needed money for who knows what before 1954, chances are you
>never regained your parity
This is true, although you omitted a few conditions. For this to be
true, you had to make all of your investments at the top of the market
in '29, and you had to throw away all of your dividend checks. Few,
other than you, would do either of those things.
--
Alex -- Replace "nospam" with "mail" to reply by email. Checked infrequently.
alexy
>On Jul 28, 3:18 pm, "Heywood Jablowmi" <hsqui...@optonline.net>
>wrote:
>> <Vide...@tcq.net> wrote in message
>I' not sure if I should even waste my time. You seem to have your
>mind made up without any basis for your opinion.
You'd be wrong. Ignorance is the basis.
> Markets go up and
>markets go down. We have had a market crash in 87, a recession in
>91, a surge in the 90s, a crash in 2000.
>
>What is important is the annualized rate of return. I have a
>portfolio that consists of 3 index funds. I have left it alone and
>haven't touched it.
But that's cheating. According to the nay-sayers, what normal people
do is invest everything at the very top of any bubble, and throw away
all their dividend checks. Investing over a period of time and
reinvesting your dividend checks is clearly unfair.
> Through the market crashes, and recessions, the
>annualized rate of return is 8.96%. If you invest in Social Security
>Special Issue Government bonds, your rate is 1.8%
What are Social Security Special Issue Government bonds? Presumably
something you've made up to act like Social Security is an investment
program? No need to do that. The stock market beats actual investment
in Treasuries or other fixed income investments.
>Today, it is so easy to look at the short term and write scare
>articles like the one at the beginning of the thread.
>You stated a fear of bear markets: " ...let alone any gains in a bear
>market that may last for a decade or more after a crash." History
>does not substantiate your fears.
Of course not. But you have to realize that one of the wackos here has
a unique definition of a bear market. To him, it includes any periods
in which indices are below their previous high, even periods that the
rest of the world would call bull markets.
Vid...@tcq.net
> Vide...@tcq.net wrote
check the rod speed faq.
Vid...@tcq.net
that is correct. its all he has.
Vid...@tcq.net
> Vide...@tcq.net wrote:
> >On Jul 29, 5:15 pm, jane.pla...@gmail.com wrote:
>
> > although you may be doing well, as a few others will always,
>
> And historically anyone who has consistently invested in the stock
> market has done well.
>
you can back that statement up with facts, anyone? no losers, only
winners?
> >that is
> >not the case if you have to retire before you get parity back after a
> >crash, or a long bear market. but stock market hucksters use averages,
>
> Actually, anyone with enough sense to invest over time will average
> out their costs and gains.>and to attain averages many have to lose, and a few win big time to
> >attain those averages.
>
> False.
> Anyone can invest in an S&P 500 Index fund and get the advantage of
> diversification.
>
that still does not mean that you will be successful. its your
opinion.
> > if you invested pre 1929, and had to retire or
> >died, or needed money for who knows what before 1954, chances are you
> >never regained your parity
>
> This is true, although you omitted a few conditions. For this to be
> true, you had to make all of your investments at the top of the market
> in '29, and you had to throw away all of your dividend checks. Few,
> other than you, would do either of those things.
>
we are making progress, at least you admit to part of it. and as i
have said, not all stocks pay dividends, not all investor invest for
dividends, and not all people invest as you do.
Rod Speed
>> Pig ignorant lie.
>> Another pig ignorant lie.
He didnt provide a shred of that.
> stand up to name calling and insults?
Your shit in spades.
Rod Speed
Never ever could bullshit its way out of a wet paper bag.
Vid...@tcq.net
> jane.pla...@gmail.com wrote:
> >On Jul 28, 3:18 pm, "Heywood Jablowmi" <hsqui...@optonline.net>
> >wrote:
> >> <Vide...@tcq.net> wrote in message
> >I' not sure if I should even waste my time. You seem to have your
> >mind made up without any basis for your opinion.
>
> You'd be wrong. Ignorance is the basis.
>
snicker. everyone invests according to your gospel.
> > Markets go up and
> >markets go down. We have had a market crash in 87, a recession in
> >91, a surge in the 90s, a crash in 2000.
>
> >What is important is the annualized rate of return. I have a
> >portfolio that consists of 3 index funds. I have left it alone and
> >haven't touched it.
>
> But that's cheating. According to the nay-sayers, what normal people
> do is invest everything at the very top of any bubble,
never said that, quite putting words into my mouth again. what we
said is that market hucksters bray averages over long periods of time.
that insinuates all will attain the averages. i and others have merely
pointed out they are lying with statistics.
and throw away
> all their dividend checks. Investing over a period of time and
> reinvesting your dividend checks is clearly unfair.
>
> > Through the market crashes, and recessions, the
> >annualized rate of return is 8.96%. If you invest in Social Security
> >Special Issue Government bonds, your rate is 1.8%
>
> What are Social Security Special Issue Government bonds? Presumably
> something you've made up to act like Social Security is an investment
> program? No need to do that. The stock market beats actual investment
> in Treasuries or other fixed income investments.
>
> >Today, it is so easy to look at the short term and write scare
> >articles like the one at the beginning of the thread.
> >You stated a fear of bear markets: " ...let alone any gains in a bear
> >market that may last for a decade or more after a crash." History
> >does not substantiate your fears.
>
> Of course not. But you have to realize that one of the wackos here has
> a unique definition of a bear market. To him, it includes any periods
> in which indices are below their previous high, even periods that the
> rest of the world would call bull markets.
>
of course again you twist. what i and others have pointed out to you,
is that if we were to invest before a crash, or a long term bear
market, and if we need cash now for any reason, or retirement, and the
market did not regain parity before you needed the cash, then you did
not attain those averages, and most likely a loss. of course we have
been thru this before.
Vid...@tcq.net
alexy
>On Jul 29, 10:02 pm, alexy <nos...@asbry.net> wrote:
>> Vide...@tcq.net wrote:
>> >On Jul 29, 5:15 pm, jane.pla...@gmail.com wrote:
>>
>> > although you may be doing well, as a few others will always,
>>
>> And historically anyone who has consistently invested in the stock
>> market has done well.
>>
>
> you can back that statement up with facts, anyone? no losers, only
>winners?
Okay, you caught me in a mild overstatement there. I should have said
anyone who invested in a diverse stock portfolio like the S&P 500, and
invested consistently over time rather than trying to buy at the peak
of the market, and reinvested there dividends has done well.
>
>> >that is
>> >not the case if you have to retire before you get parity back after a
>> >crash, or a long bear market. but stock market hucksters use averages,
>>
>> Actually, anyone with enough sense to invest over time will average
>> out their costs and gains.>and to attain averages many have to lose, and a few win big time to
>> >attain those averages.
>>
>> False.
>> Anyone can invest in an S&P 500 Index fund and get the advantage of
>> diversification.
>>
>
> that still does not mean that you will be successful. its your
>opinion.
It's also history. You may learn from history or choose to ignore it.
But of course, it is no guarantee.
>
>> > if you invested pre 1929, and had to retire or
>> >died, or needed money for who knows what before 1954, chances are you
>> >never regained your parity
>>
>> This is true, although you omitted a few conditions. For this to be
>> true, you had to make all of your investments at the top of the market
>> in '29, and you had to throw away all of your dividend checks. Few,
>> other than you, would do either of those things.
>>
>
> we are making progress, at least you admit to part of it. and as i
>have said, not all stocks pay dividends,
No, but the ones in the DJIA that you are citing for the climb back
taking until 1954 did. There may have been non-dividend paying stocks
that had faster price growth.
> not all investor invest for
>dividends,
No, just as not all people invest their interest earnings on fixed
income investments. But the only rational way to compare investments
is with interest and dividends compounded.
> and not all people invest as you do.
No. Some fools may well invest everything at the top of the market. No
argument with the fact that fools like that will lose. I am only
stating that historically, anyone investing consistently in a
diversified stock portfolio has done well.
Can you come up with a 40-year period when you think that someone
investing consistently in stocks has not done well?
alexy
>of the market, and reinvested there dividends has done well.
^^^^^
Too much usenet. Hopefully this won't carry over to the real world!
<g>
Rod Speed
You cant even manage any shit of your own, you have to respew other's shit.
Vid...@tcq.net
> Vide...@tcq.net wrote:
> >On Jul 29, 10:02 pm, alexy <nos...@asbry.net> wrote:
> >> Vide...@tcq.net wrote:
> >> >On Jul 29, 5:15 pm, jane.pla...@gmail.com wrote:
>
> >> > although you may be doing well, as a few others will always,
>
> >> And historically anyone who has consistently invested in the stock
> >> market has done well.
>
> > you can back that statement up with facts, anyone? no losers, only
> >winners?
>
> Okay, you caught me in a mild overstatement there. I should have said
> anyone who invested in a diverse stock portfolio like the S&P 500, and
> invested consistently over time rather than trying to buy at the peak
> of the market, and reinvested there dividends has done well.
>
>
well, i am not so sure it was a mild overstatement, its what you have
said in another thread, but, i will give you this, you have backed off
that assumption somewhat. we are making progress.
maybe they will, maybe not. here is a article from a well known
company about diversification, i chose this one because its pretty
conservative,
http://personal.fidelity.com/products/fixedincome/howbondsfit.shtml
Diversify Your Portfolio
Asset allocation is a time-tested strategy that can help you reduce
risk by spreading your money among many different kinds of
investments, such as stocks, bonds, and short-term investments.
Diversified portfolios tend to provide less volatile returns over the
long term and can help minimize downside risk.
they say it can help, but its not written in stone.
In addition to balancing your overall portfolio, it is important to
diversify within each investment asset class. In the case of fixed
income, bond funds (or money market funds, for short term needs)
invest in multiple individual securities that can provide asset class
diversification. By diversifying within an asset class, you can
mitigate your risk and are less likely to be affected by the
performance of one single investment.
again, less likely is not a for sure thing. they state it the way
they do, because many have lost doing it the way they say. they are
simply covering their butts. so if they need to cover their butts, it
means its not a sure fire way, and many may well lose.
Source: Ibbotson, June, 2002
Note: Tech Heavy = 50% S&P 500/50% S&P Information Technology Sector;
Equity=S&P 500; Diversified=60% S&P 500/40% Lehman Brothers Government/
Credit Index; Bond=Lehman Brothers Government/Credit Index
Past performance is no guarantee of future results. Performance of an
index is not illustrative of any particular investment and an
investment cannot be made in an index.
Diversification does not insure a profit or guarantee against loss in
declining markets.
the above statement is a towering statement, and its what i have been
saying.
The diversified portfolio had a smoother ride than the tech-heavy and
equity portfolios. Note: Under certain unique economic conditions a
portfolio of 100% bonds may outperform both a diversified and equity
portfolio. However, performance of any one asset class cannot be
predicted over an extended period of time.
there is a lot of what ifs, and buts in this article, and its their
for a reason.
A diversified portfolio often has its investments divided over three
asset classes:
Stocks represent the most aggressive portion of your portfolio. Stocks
provide the opportunity for higher growth over the long-term. But this
greater potential reward carries a greater risk, particularly in the
short-term, because market volatility may mean your investment is
worth less when you sell it.
correct, there goes the averages theory.
Bonds provide regular income and lower volatility (relative to stocks)
and can act as a cushion against the unpredictable ups and downs of
the stock market. Often, bonds do not move in the same direction as
stocks. Investors who are more concerned about safety rather than
growth often allocate more of their portfolio toward US Government or
insured bond investments rather than stocks.
Short-term investments include money market funds* and short-term
certificates of deposit. Money market funds provide you easy access to
your money. They are considered conservative investments and offer
stability of principal, but they usually have lower returns compared
to bond funds or individual bonds.
* An investment in a money market fund is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government
agency. Although the fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by
investing in the fund.
they are simply stating what i have been stating. there is no sure
fire anything. and if the markets are declining, as peter lynch says,
your initial investment may not be worth as much as it was in the
beginning.
Plan Your Portfolio
Deciding how to allocate your investments across the three asset
classes – stocks, bonds, and short-term investments – will depend on
your investment goals.
In general, the amount of time you have until you need the money you
are investing will help determine your asset allocation and your risk
tolerance. The graphics to the right depict several examples of asset
allocation models. Each of the four target asset mixes has a different
mix of investments, so each will strike a different balance between
risk and return potential.
they are saying not all will do the same, as i have stated.
For an investor who has a longer time horizon and is willing to take
on additional risk in pursuit of long-term growth, a higher weighting
in stocks may be appropriate (i.e., growth portfolio). Keep in mind
that even the most aggressive asset allocation model has a fixed
income component to help reduce the overall volatility of the
portfolio.
As you get closer to your goal, you may want to shift your investments
into more conservative securities, like fixed income mutual funds or
certain individual bonds such as Treasury bonds. Adding more
conservative fixed income investments to a portfolio can help to
modulate potential ups and downs found in equity investments.
In retirement, a good portion of your portfolio should be in stable,
income-producing investments, but you should also continue to invest
for appreciation to combat inflation.
Regardless of the asset allocation model that you choose, a
diversified portfolio can help ensure success in meeting your future
goals. A well thought-out plan is critical: your money is too
important to invest without a plan.
they say can help, that does not insure success.
and they say your plan is critical.
that means that your plan will never vary.
in the real world, that does not work.
and they have stated it in a way that covers their butts.
Source: Ibbotson, June, 2002
Note: Tech Heavy = 50% S&P 500/50% S&P Information Technology Sector;
Equity=S&P 500; Diversified=60% S&P 500/40% Lehman Brothers Government/
Credit Index; Bond=Lehman Brothers Government/Credit Index
>
> >> >that is
> >> >not the case if you have to retire before you get parity back after a
> >> >crash, or a long bear market. but stock market hucksters use averages,
>
> >> Actually, anyone with enough sense to invest over time will average
> >> out their costs and gains.>and to attain averages many have to lose, and a few win big time to
> >> >attain those averages.
>
> >> False.
> >> Anyone can invest in an S&P 500 Index fund and get the advantage of
> >> diversification.
>
> > that still does not mean that you will be successful. its your
> >opinion.
>
> It's also history. You may learn from history or choose to ignore it.
> But of course, it is no guarantee.
>
then its not history if you need to add, its no guarantee. that means
many have lost.
> >> > if you invested pre 1929, and had to retire or
> >> >died, or needed money for who knows what before 1954, chances are you
> >> >never regained your parity
>
> >> This is true, although you omitted a few conditions. For this to be
> >> true, you had to make all of your investments at the top of the market
> >> in '29, and you had to throw away all of your dividend checks. Few,
> >> other than you, would do either of those things.
>
> > we are making progress, at least you admit to part of it. and as i
> >have said, not all stocks pay dividends,
>
> No, but the ones in the DJIA that you are citing for the climb back
> taking until 1954 did. There may have been non-dividend paying stocks
> that had faster price growth.
>
maybe, maybe not. we were, and are speaking of averages. something
the hucksters bray often.
> > not all investor invest for
> >dividends,
>
> No, just as not all people invest their interest earnings on fixed
> income investments. But the only rational way to compare investments
> is with interest and dividends compounded.
>
we have been speaking of averages. and i have proven the averages
assumption, to be just that, propaganda.
> > and not all people invest as you do.
>
> No. Some fools may well invest everything at the top of the market. No
> argument with the fact that fools like that will lose. I am only
> stating that historically, anyone investing consistently in a
> diversified stock portfolio has done well.
>
that is not what fidelity says.
> Can you come up with a 40-year period when you think that someone
> investing consistently in stocks has not done well?
> --
i cannot say for sure either way. i only know that averages mean
nothing when you need the money at the bottom. or you never regain
parity, let alone any gains for the lost years.
jane....@gmail.com
>
> although you may be doing well, as a few others will always, that is
> not the case if you have to retire before you get parity back after a
> crash, or a long bear market. but stock market hucksters use averages,
> and to attain averages many have to lose, and a few win big time to
> attain those averages. if you invested pre 1929, and had to retire or
> died, or needed money for who knows what before 1954, chances are you
> never regained your parity, on top of making up for all of the lost
You are so focused on, and paranoid of, a stock market crash that you
fail to look at the total picture. I will now make a statement that
is so outlandish that you will think I am a complete fool or have lost
it completely:
"It doesn't matter if there is a market crash the day before, the day
of, or the day after your retirement"
If you are still with me, let's follow the reality. In the last 21
years, we have had two stock market crashes and two recessions. If
you retire at age 60 and live to 85, there is a very real chance that,
during your retirement, you will see two market crashes and two
recessions.
SO! If you are going to see two crashes during retirement, what
difference does it make when they occur? What matters is ANNUALIZED
RATE of RETURN!
Let's look at four guys who retire at the same time: Mr C invested
in CDs, Mr G invested in Government Bonds, Mr M put his money in the
mattress, and Mr S invested in Stocks.
The day of the market crash, there was only one guy lamenting about
how much money he lost, Mr. S. All of the others were quit smug in
that they did not loose any of their principle.
However if they compared portfolios, they would discover that Mr. S
actually has more money, even after the crash!... because of
ANNUALIZED RATE of RETURN.
How can I possibly make such an outlandish statement? After all,
everyone knows that the NASDAQ fell 58% in 2000. Any time I defend
the private sector, and especially the stock market, opponents always
ask, "Yes, but what if they retired in 2001?" Well. Let's look at
that scenario. Presume that all four guys in our example started
saving at age 28 and retired at age 60 on Jan 1, 2001. Mr G
(government bonds) would have an annualized rate of return of 1.8%.
Mr. M's rate of rate of return is 0%, and Mr S had an ANNUALIZED RATE
OF RETURN OF 9.01%!
An ANNUALIZED RATE OF RETURN of 9.01% right after a market crash!
Jane
znuybv
Who told you that millions of others are draining their 401k's?
Vid...@tcq.net
but that is the history of the markets. you are telling me that it
does not matter if i lose, the averages disprove it. or, night is day,
and day is night.
so if i lose, its ok, the averages will be the same. tell that to
someone who loses, all of part of their investment. don't worry, it
does not affect the averages. pure propaganda.
> "It doesn't matter if there is a market crash the day before, the day
> of, or the day after your retirement"
>
> If you are still with me, let's follow the reality. In the last 21
> years, we have had two stock market crashes and two recessions. If
> you retire at age 60 and live to 85, there is a very real chance that,
> during your retirement, you will see two market crashes and two
> recessions.
>
this era is different in one big way. the fed has bailed you out
consistently. that approach appears to be losing its punch.
> SO! If you are going to see two crashes during retirement, what
> difference does it make when they occur? What matters is ANNUALIZED
> RATE of RETURN!
>
baloney, you are simply lying with statistics, which is my initial
point.
> Let's look at four guys who retire at the same time: Mr C invested
> in CDs, Mr G invested in Government Bonds, Mr M put his money in the
> mattress, and Mr S invested in Stocks.
>
that is some pretty simple assumptions, which other market cultists
have already thrown at me. here is reality.
http://www.finfacts.ie/stockperf.htm
Source: Ibbotson Associates
Source: University of Michigan
In the 1990's the New York Stock Exchange-where the stocks of about
3,000 companies are traded among investors each day- had its longest
"bull market" (a period of rising stock prices) in its history. The
NASDAQ-where the stocks of approximately 3,300 companies are traded-
also experienced record performance. Following a sustained period of
rapid stocks/shares value growth, it takes time during the downturn
for memories of disappearing paper profits and high profile corporate
failures, to fade. So the scenario for the foreseeable future is
unspectacular average equity returns growth compared with successive
years in the 1990’s of double-digit growth. However, some sectors and
regions will continue to outperform others. In a long period down/bear
market, there are always periods of growth. So the timing of stock
market investment is important. The last protracted bear market
(period of falling prices) in US equities started in February 1966 and
lasted until August 1982. The Dow Jones index value in February 1966
was 995 and 16 years later it stood at 777. So any investor who stayed
fully invested in an average portfolio of shares in this period lost
22%. Yet over this time span there were four periods in which equities
experienced strong rallies which boosted the Dow by 32%, 66%, 76% and
38% respectively.
According to Stocks, Bonds, Bills and Inflation 2000 Yearbook, © 2000
Ibbotson Associates, Inc., while returns grew by an 11% average in the
period 1926-1999, in the 5 year period 1972-1977, the stock market
lost an average of 0.2% per annum.
According to a University of Michigan study, an investor who stayed in
the US stock market during the entire 30-year period from 1963 to
1993-7,802 trading days-would have had an average annual return of
11.83 %. However, if the investor missed the 90 best days while trying
to time the market, the average return would have fallen to 3.28% per
annum.
According to Dr. Bryan Taylor of Global Financial Data, analysis of
US bull and bear markets in the past has always used the S&P Composite
Price Index, not the Total Return Index. Since most investors have
their money in funds that reinvest their dividends, using a price
index to determine the movement of markets does not reflect the
results that investors receive. Over time, price indices produce
dramatically different results from return indices. The 1920s bull
market peaked on September 7, 1929. If someone had invested their
money in the stock market on September 7, 1929, it would have taken
until September 1954 to break even using the price index benchmark but
on a total return basis (allowing for dividends), the investor would
have broken even nine years earlier, in 1945. Total returns reduce the
size of the falls in a bear market and increase the returns in a bull
market.
some bear markets have lasted 25 years. some 18 years. yet if you
retire or need cash when you invested before a crash or a bear, and
had to take all or part of your diminished investment after the crash
oo bear market, take solace, even if you lost, the averages are safe.
reality is not one of your stronger suits is it.
> The day of the market crash, there was only one guy lamenting about
> how much money he lost, Mr. S. All of the others were quit smug in
> that they did not loose any of their principle.
>
propaganda not backed up anything real.
> However if they compared portfolios, they would discover that Mr. S
> actually has more money, even after the crash!... because of
> ANNUALIZED RATE of RETURN.
>
lying with statistics. mr. s. still may have a diminished, or wiped
out portfolio. its just that the averages remain intact.
> How can I possibly make such an outlandish statement? After all,
> everyone knows that the NASDAQ fell 58% in 2000. Any time I defend
> the private sector, and especially the stock market, opponents always
> ask, "Yes, but what if they retired in 2001?" Well. Let's look at
> that scenario. Presume that all four guys in our example started
> saving at age 28 and retired at age 60 on Jan 1, 2001. Mr G
> (government bonds) would have an annualized rate of return of 1.8%.
> Mr. M's rate of rate of return is 0%, and Mr S had an ANNUALIZED RATE
> OF RETURN OF 9.01%!
>
again, pure lying with statistics, pure hucksterism. if you lose, you
lose. even if the averages say different.
> An ANNUALIZED RATE OF RETURN of 9.01% right after a market crash!
>
if you ignore the fact that many did not live long enough after the
depression to regain parity, let alone making up for the lost years of
no gains. then the averages mean nothing, which is my contention, and
a fact. you are simply lying with statistics. someone who gets wiped
out need not worry, they have the averafge statistics to take with
them to the poor house. sheesh, are you for real?
> Jane
Vid...@tcq.net
gee, i hope that i am not raining on your parade.
http://www.usatoday.com/money/perfi/retirement/2008-03-10-401k-withdrawals_N.htm
http://retirementrevised.com/column/facing-financial-stress-resist-the-urge-to-raid-your-401k
alexy
>On Jul 30, 9:21 am, jane.pla...@gmail.com wrote:
>> You are so focused on, and paranoid of, a stock market crash that you
>> fail to look at the total picture. I will now make a statement that
>> is so outlandish that you will think I am a complete fool or have lost
>> it completely:
>>
>
>
> but that is the history of the markets. you are telling me that it
>does not matter if i lose, the averages disprove it.
No. That's not what she is saying. Try reading it again and see if you
can catch on.
> so if i lose, its ok, the averages will be the same.
Nope. Not what she is saying.
>> SO! If you are going to see two crashes during retirement, what
>> difference does it make when they occur? What matters is ANNUALIZED
>> RATE of RETURN!
>>
>
> baloney, you are simply lying with statistics, which is my initial
>point.
No. She is pointing out a fact that you are uncomfortable with. You
want to measure Peak to trough and expect others to be ignorant enough
to accept that. Some are. My solution is testing to keep anyone like
that out of the market. Do you have any problem with those who
understand the point Jane is making being able to invest in the
market?
>
>> Let's look at four guys who retire at the same time: Mr C invested
>> in CDs, Mr G invested in Government Bonds, Mr M put his money in the
>> mattress, and Mr S invested in Stocks.
>>
>
> that is some pretty simple assumptions, which other market cultists
>have already thrown at me. here is reality.
It's an illustration. What "assumptions" is she making there?
>http://www.finfacts.ie/stockperf.htm
>Source: Ibbotson Associates
>Source: University of Michigan
>According to Stocks, Bonds, Bills and Inflation 2000 Yearbook, © 2000
>Ibbotson Associates, Inc., while returns grew by an 11% average in the
>period 1926-1999, in the 5 year period 1972-1977, the stock market
>lost an average of 0.2% per annum.
Good point. It is always possible to find a period during which there
were declines. But no one has yet been able to show me a 40-year
period when consistent regular investment in stocks did not outperform
the same consistent investment in fixed interest accounts.
>According to a University of Michigan study, an investor who stayed in
>the US stock market during the entire 30-year period from 1963 to
>1993-7,802 trading days-would have had an average annual return of
>11.83 %.
Another good point. and other similar length periods give similar
results.
>However, if the investor missed the 90 best days while trying
>to time the market, the average return would have fallen to 3.28% per
>annum.
An other good point. And making sure people understood the futility of
market timing (although you would have to be pretty prescient to miss
exactly those 90 days) would be part of my proposed "no-idiots" rule
for stock investing eligibility.
>
>According to Dr. Bryan Taylor of Global Financial Data, analysis of
>US bull and bear markets in the past has always used the S&P Composite
>Price Index, not the Total Return Index. Since most investors have
>their money in funds that reinvest their dividends, using a price
>index to determine the movement of markets does not reflect the
>results that investors receive. Over time, price indices produce
>dramatically different results from return indices. The 1920s bull
>market peaked on September 7, 1929. If someone had invested their
>money in the stock market on September 7, 1929, it would have taken
>until September 1954 to break even using the price index benchmark but
>on a total return basis (allowing for dividends), the investor would
>have broken even nine years earlier, in 1945. Total returns reduce the
>size of the falls in a bear market and increase the returns in a bull
>market.
Another point that some of us have been trying to hammer home, and
which a person would have to understand to be allowed to buy stocks.
> some bear markets have lasted 25 years. some 18 years.
The way you define them, yes. No bear market, as the term is
understood by anyone familiar with investments, has lasted that long.
>> The day of the market crash, there was only one guy lamenting about
>> how much money he lost, Mr. S. All of the others were quit smug in
>> that they did not loose any of their principle.
>>
>
> propaganda not backed up anything real.
Very reasonable. Do you think that the others would have lost their
principle? Or maybe that the stock investor was happy about his lower
values?
>> However if they compared portfolios, they would discover that Mr. S
>> actually has more money, even after the crash!... because of
>> ANNUALIZED RATE of RETURN.
>>
>
> lying with statistics. mr. s. still may have a diminished, or wiped
>out portfolio. its just that the averages remain intact.
No. The example I ran based on Retrogrouch's hypothetical gives an
example. Two people investing similar amounts in the 1900's and 1910's
were about even at the beginning of the 20's. At the peak in 1929, the
stock investor had 4.5 times as much. Yes, he lost MUCH more in the
crash, but that just wiped out the windfall gains he got in the
run-up, bringing the two to parity. Everything else (in the 30's and
40's, when you claim that the market was not growing, was pure gravy
for the stock investor.
>> How can I possibly make such an outlandish statement? After all,
>> everyone knows that the NASDAQ fell 58% in 2000. Any time I defend
>> the private sector, and especially the stock market, opponents always
>> ask, "Yes, but what if they retired in 2001?" Well. Let's look at
>> that scenario. Presume that all four guys in our example started
>> saving at age 28 and retired at age 60 on Jan 1, 2001. Mr G
>> (government bonds) would have an annualized rate of return of 1.8%.
>> Mr. M's rate of rate of return is 0%, and Mr S had an ANNUALIZED RATE
>> OF RETURN OF 9.01%!
>>
>
> again, pure lying with statistics, pure hucksterism.
No. Looking at real numbers. And not what I would call sophisticated
analysis in any other company, but compared to your understanding,
this is really powerful analysis she is presenting.
>if you lose, you
>lose. even if the averages say different.
Yes, but I'd rather loose 60% of $400,000 than retain 100% of
$100,000. And that is not averages.
>> An ANNUALIZED RATE OF RETURN of 9.01% right after a market crash!
>>
>
> if you ignore the fact that many did not live long enough after the
>depression to regain parity, let alone making up for the lost years of
>no gains. then the averages mean nothing, which is my contention, and
>a fact. you are simply lying with statistics. someone who gets wiped
>out need not worry, they have the averafge statistics to take with
>them to the poor house. sheesh, are you for real?
She is. I think you have provided sufficient evidence that you should
not be investing in the markets. Do you have any problem with those
who understand her points investing in the market?
--
jane....@gmail.com
>
> read more »
I will respond tomorrow morning... With facts, figures, charts and
pretty pictures.
Jane.
Vid...@tcq.net
> Vide...@tcq.net wrote:
> >On Jul 30, 9:21 am, jane.pla...@gmail.com wrote:
> >> You are so focused on, and paranoid of, a stock market crash that you
> >> fail to look at the total picture. I will now make a statement that
> >> is so outlandish that you will think I am a complete fool or have lost
> >> it completely:
>
> > but that is the history of the markets. you are telling me that it
> >does not matter if i lose, the averages disprove it.
>
> No. That's not what she is saying. Try reading it again and see if you
> can catch on.
>
she is saying not to worry, you got the annualized averages over the
years, yada yada yada. so did you. and my statements that stands is,
if you retire after the blowout, as fidelity also says, your
investment may not be what it was in the beginning. so that is
comforting to know your diminished or wiped out investment will still
get the average annualized return, pure gibberish.
its that simple, if your investment has diminished, or is wiped put,
you still get the annualized rate of return on your diminished or
wiped out investment. sheesh, how many ways are you guys attempting to
disguise a loss. that is what we are speaking of. a loss over time,
not a gain. and if you get a annualized return on your diminished
investment, wow, what a deal.
> > so if i lose, its ok, the averages will be the same.
>
> Nope. Not what she is saying.
>
i know what she is saying. what she does not say is if your
investment was seriously diminished, or wiped out like in 1929. but be
happy, you still get the annualized average return, wow, great logic.
> >> SO! If you are going to see two crashes during retirement, what
> >> difference does it make when they occur? What matters is ANNUALIZED
> >> RATE of RETURN!
>
> > baloney, you are simply lying with statistics, which is my initial
> >point.
>
> No. She is pointing out a fact that you are uncomfortable with. You
> want to measure Peak to trough and expect others to be ignorant enough
> to accept that.
we have been thru this before. you will not accept the reality that
people do invest during a peak, and do retire during a trough. that is
where the big lie comes in, the averages, which really only apply to
the lucky few.
Some are. My solution is testing to keep anyone like
> that out of the market. Do you have any problem with those who
> understand the point Jane is making being able to invest in the
> market?
>
i am simply exposing the propaganda for what it is. it makes furious
that i do. when you admit that people have, are now, and will in the
future invest in a bubble, and retire in a bear market. its happened
to millions.
>
>
> >> Let's look at four guys who retire at the same time: Mr C invested
> >> in CDs, Mr G invested in Government Bonds, Mr M put his money in the
> >> mattress, and Mr S invested in Stocks.
>
> > that is some pretty simple assumptions, which other market cultists
> >have already thrown at me. here is reality.
>
> It's an illustration. What "assumptions" is she making there?
>
its the averages thing again.
> >http://www.finfacts.ie/stockperf.htm
> >Source: Ibbotson Associates
> >Source: University of Michigan
> >According to Stocks, Bonds, Bills and Inflation 2000 Yearbook, © 2000
> >Ibbotson Associates, Inc., while returns grew by an 11% average in the
> >period 1926-1999, in the 5 year period 1972-1977, the stock market
> >lost an average of 0.2% per annum.
>
> Good point. It is always possible to find a period during which there
> were declines. But no one has yet been able to show me a 40-year
> period when consistent regular investment in stocks did not outperform
> the same consistent investment in fixed interest accounts.
>
sure, if you use averages that do not apply to many. there is the
lying with statistics. you insinuate that all will attain it. and as i
have proven, many will not. how do you think they come up with
averages if everyone is on the upside:)
> >According to a University of Michigan study, an investor who stayed in
> >the US stock market during the entire 30-year period from 1963 to
> >1993-7,802 trading days-would have had an average annual return of
> >11.83 %.
>
> Another good point. and other similar length periods give similar
> results.
>
look below.
> >However, if the investor missed the 90 best days while trying
> >to time the market, the average return would have fallen to 3.28% per
> >annum.
>
> An other good point. And making sure people understood the futility of
> market timing (although you would have to be pretty prescient to miss
> exactly those 90 days) would be part of my proposed "no-idiots" rule
> for stock investing eligibility.
>
i am sure in alexs world, everything is perfect, no mistakes, he is
by his mouse button all day long. he has all of the inside information
at his fingertips to take advantage of those 90 days spread over a 30
year period, perfect health, perfect timing, no family or job
problems, every investment perfect. if that is the case, bully for
you. only a idiot would believe that scenario. most people never hit
perfection, and have the ability to do it 90 times over a 30 year
period. and let me add, what if you were to retire, or need some money
in that 30 year period, but all well, we have been thru this before.
we will simply ignore the reality of that, and lie with statistics.
> >According to Dr. Bryan Taylor of Global Financial Data, analysis of
> >US bull and bear markets in the past has always used the S&P Composite
> >Price Index, not the Total Return Index. Since most investors have
> >their money in funds that reinvest their dividends, using a price
> >index to determine the movement of markets does not reflect the
> >results that investors receive. Over time, price indices produce
> >dramatically different results from return indices. The 1920s bull
> >market peaked on September 7, 1929. If someone had invested their
> >money in the stock market on September 7, 1929, it would have taken
> >until September 1954 to break even using the price index benchmark but
> >on a total return basis (allowing for dividends), the investor would
> >have broken even nine years earlier, in 1945. Total returns reduce the
> >size of the falls in a bear market and increase the returns in a bull
> >market.
>
> Another point that some of us have been trying to hammer home, and
> which a person would have to understand to be allowed to buy stocks.
>
what, that all corporations pay dividends, or that all investors pick
dividend paying stocks? i sure hope we are not going thru that again
are we?
or reality is that millions never attained parity till 1954, let
alone made up for the lack of gains in that period, its history.
distortions, distractions, propaganda will not hide the fact that
perhaps millions retired, or were wiped out from a period of
1929-1954.
> > some bear markets have lasted 25 years. some 18 years.
>
> The way you define them, yes. No bear market, as the term is
> understood by anyone familiar with investments, has lasted that long.
>
then refute, go to the sources i posted, point out their mistakes to
them, take them on, alex can beat them, i am sure of it.
> >> The day of the market crash, there was only one guy lamenting about
> >> how much money he lost, Mr. S. All of the others were quit smug in
> >> that they did not loose any of their principle.
>
> > propaganda not backed up anything real.
>
> Very reasonable. Do you think that the others would have lost their
> principle? Or maybe that the stock investor was happy about his lower
> values?
>
beware, tricky trap. we are speaking of averages, averages that few
attain.
> >> However if they compared portfolios, they would discover that Mr. S
> >> actually has more money, even after the crash!... because of
> >> ANNUALIZED RATE of RETURN.
>
> > lying with statistics. mr. s. still may have a diminished, or wiped
> >out portfolio. its just that the averages remain intact.
>
> No. The example I ran based on Retrogrouch's hypothetical gives an
> example. Two people investing similar amounts in the 1900's and 1910's
> were about even at the beginning of the 20's. At the peak in 1929, the
> stock investor had 4.5 times as much. Yes, he lost MUCH more in the
> crash, but that just wiped out the windfall gains he got in the
> run-up, bringing the two to parity. Everything else (in the 30's and
> 40's, when you claim that the market was not growing, was pure gravy
> for the stock investor.
>
you picked the timeline, as retro said. nice try. if i pick the
timeline, then out comes the averages, and out comes the distortion of
what a gain is.
> >> How can I possibly make such an outlandish statement? After all,
> >> everyone knows that the NASDAQ fell 58% in 2000. Any time I defend
> >> the private sector, and especially the stock market, opponents always
> >> ask, "Yes, but what if they retired in 2001?" Well. Let's look at
> >> that scenario. Presume that all four guys in our example started
> >> saving at age 28 and retired at age 60 on Jan 1, 2001. Mr G
> >> (government bonds) would have an annualized rate of return of 1.8%.
> >> Mr. M's rate of rate of return is 0%, and Mr S had an ANNUALIZED RATE
> >> OF RETURN OF 9.01%!
>
> > again, pure lying with statistics, pure hucksterism.
>
> No. Looking at real numbers. And not what I would call sophisticated
> analysis in any other company, but compared to your understanding,
> this is really powerful analysis she is presenting.
>
it uses averages, that many will never attain, to get a average,
their has to be lots of losses, otherwise the averages would be 100
percent.
its sophisticated, i will give you that. till you point out a few
simple facts. then it melts rather quickly. she almost sounds like
you, in fact, its almost a prefect repeat of a couple of other
threads. i wonder if i am onto something here, a new tact perhaps?
> >if you lose, you
> >lose. even if the averages say different.
>
> Yes, but I'd rather loose 60% of $400,000 than retain 100% of
> $100,000. And that is not averages.
>
in your world, its the only scenario. in the real world, its not
black and white.
> >> An ANNUALIZED RATE OF RETURN of 9.01% right after a market crash!
>
> > if you ignore the fact that many did not live long enough after the
> >depression to regain parity, let alone making up for the lost years of
> >no gains. then the averages mean nothing, which is my contention, and
> >a fact. you are simply lying with statistics. someone who gets wiped
> >out need not worry, they have the averafge statistics to take with
> >them to the poor house. sheesh, are you for real?
>
> She is. I think you have provided sufficient evidence that you should
> not be investing in the markets. Do you have any problem with those
> who understand her points investing in the market?
>
you mean, if i am perfect in those 90 trading days spread over a 30
year period, man, you got it bad. you are laughable, at best. the way
you bend things, its amazing.
alexy
>On Jul 30, 2:43 pm, alexy <nos...@asbry.net> wrote:
>> Vide...@tcq.net wrote:
>> >On Jul 30, 9:21 am, jane.pla...@gmail.com wrote:
>> >> You are so focused on, and paranoid of, a stock market crash that you
>> >> fail to look at the total picture. I will now make a statement that
>> >> is so outlandish that you will think I am a complete fool or have lost
>> >> it completely:
>>
>> > but that is the history of the markets. you are telling me that it
>> >does not matter if i lose, the averages disprove it.
>>
>> No. That's not what she is saying. Try reading it again and see if you
>> can catch on.
>>
>
>
> she is saying not to worry, you got the annualized averages over the
>years, yada yada yada. so did you. and my statements that stands is,
>if you retire after the blowout, as fidelity also says, your
>investment may not be what it was in the beginning. so that is
>comforting to know your diminished or wiped out investment will still
>get the average annualized return, pure gibberish.
> its that simple, if your investment has diminished, or is wiped put,
>you still get the annualized rate of return on your diminished or
>wiped out investment.
No. I understand the point she was making. That was not it.
> sheesh, how many ways are you guys attempting to
>disguise a loss.
Nobody is attempting to disguise a loss
> that is what we are speaking of. a loss over time,
>not a gain. and if you get a annualized return on your diminished
>investment, wow, what a deal.
>
>> > so if i lose, its ok, the averages will be the same.
>>
>> Nope. Not what she is saying.
>>
>
> i know what she is saying. what she does not say is if your
>investment was seriously diminished, or wiped out like in 1929. but be
>happy, you still get the annualized average return, wow, great logic.
No. That is not what she is saying.
>
>
>> >> SO! If you are going to see two crashes during retirement, what
>> >> difference does it make when they occur? What matters is ANNUALIZED
>> >> RATE of RETURN!
>>
>> > baloney, you are simply lying with statistics, which is my initial
>> >point.
>>
>> No. She is pointing out a fact that you are uncomfortable with. You
>> want to measure Peak to trough and expect others to be ignorant enough
>> to accept that.
>
> we have been thru this before. you will not accept the reality that
>people do invest during a peak, and do retire during a trough. that is
>where the big lie comes in, the averages, which really only apply to
>the lucky few.
No. I dare say only the dumbest of dumb invest only at peaks and draw
money out only at bottoms.
>
> Some are. My solution is testing to keep anyone like
>> that out of the market. Do you have any problem with those who
>> understand the point Jane is making being able to invest in the
>> market?
>>
>
> i am simply exposing the propaganda for what it is. it makes furious
>that i do. when you admit that people have, are now, and will in the
>future invest in a bubble, and retire in a bear market. its happened
>to millions.
So are you saying that you don't have any problem with others having
the freedom to invest?
>> >> Let's look at four guys who retire at the same time: Mr C invested
>> >> in CDs, Mr G invested in Government Bonds, Mr M put his money in the
>> >> mattress, and Mr S invested in Stocks.
>>
>> > that is some pretty simple assumptions, which other market cultists
>> >have already thrown at me. here is reality.
>>
>> It's an illustration. What "assumptions" is she making there?
>>
>
> its the averages thing again.
No, it's an illustration of four hypothetical investors.
>
>> >http://www.finfacts.ie/stockperf.htm
>> >Source: Ibbotson Associates
>> >Source: University of Michigan
>> >According to Stocks, Bonds, Bills and Inflation 2000 Yearbook, © 2000
>> >Ibbotson Associates, Inc., while returns grew by an 11% average in the
>> >period 1926-1999, in the 5 year period 1972-1977, the stock market
>> >lost an average of 0.2% per annum.
>>
>> Good point. It is always possible to find a period during which there
>> were declines. But no one has yet been able to show me a 40-year
>> period when consistent regular investment in stocks did not outperform
>> the same consistent investment in fixed interest accounts.
>>
>
> sure, if you use averages that do not apply to many. there is the
>lying with statistics. you insinuate that all will attain it.
No, only those who invest consistently and regularly in a broad-based
stock portfolio like the S&P 500. It certainly is possible for someone
to put all of his life savings in the next pets.com and lose it all.
>have proven, many will not. how do you think they come up with
>averages if everyone is on the upside:)
Anyone can invest in an S&P500 index fund and get the average.
>
>> >According to a University of Michigan study, an investor who stayed in
>> >the US stock market during the entire 30-year period from 1963 to
>> >1993-7,802 trading days-would have had an average annual return of
>> >11.83 %.
>>
>> Another good point. and other similar length periods give similar
>> results.
>>
>
>look below.
>
>> >However, if the investor missed the 90 best days while trying
>> >to time the market, the average return would have fallen to 3.28% per
>> >annum.
>>
>> An other good point. And making sure people understood the futility of
>> market timing (although you would have to be pretty prescient to miss
>> exactly those 90 days) would be part of my proposed "no-idiots" rule
>> for stock investing eligibility.
>>
>
> i am sure in alexs world, everything is perfect, no mistakes,
Not at all. That's why I suggest regular small investments rather than
trying to time the market. I know that I WILL make some purchases at
the top of a bubble, and WILL make some sales at the bottom of a
trough. But I know better than trying to time the market precisely
BECAUSE everything is not perfect in my world, and mistakes can and do
happen.
> he is
>by his mouse button all day long. he has all of the inside information
>at his fingertips to take advantage of those 90 days spread over a 30
>year period, perfect health, perfect timing, no family or job
>problems, every investment perfect. if that is the case, bully for
>you. only a idiot would believe that scenario. most people never hit
>perfection, and have the ability to do it 90 times over a 30 year
>period.
You missed the point of the UofM study. You'd have to be OUT of the
market for those days to have the performance drop that far. Why in
the world would you try to do that?
> and let me add, what if you were to retire, or need some money
>in that 30 year period, but all well, we have been thru this before.
>we will simply ignore the reality of that, and lie with statistics.
No. That's why you don't invest it all in stocks.
>
>
>> >According to Dr. Bryan Taylor of Global Financial Data, analysis of
>> >US bull and bear markets in the past has always used the S&P Composite
>> >Price Index, not the Total Return Index. Since most investors have
>> >their money in funds that reinvest their dividends, using a price
>> >index to determine the movement of markets does not reflect the
>> >results that investors receive. Over time, price indices produce
>> >dramatically different results from return indices. The 1920s bull
>> >market peaked on September 7, 1929. If someone had invested their
>> >money in the stock market on September 7, 1929, it would have taken
>> >until September 1954 to break even using the price index benchmark but
>> >on a total return basis (allowing for dividends), the investor would
>> >have broken even nine years earlier, in 1945. Total returns reduce the
>> >size of the falls in a bear market and increase the returns in a bull
>> >market.
>>
>> Another point that some of us have been trying to hammer home, and
>> which a person would have to understand to be allowed to buy stocks.
>>
>
> what, that all corporations pay dividends, or that all investors pick
>dividend paying stocks? i sure hope we are not going thru that again
>are we?
No, just that if you invest in a broad selection of stocks like the
S&P 500 that it would pay dividends, and it is fraudulent to look at
their returns while ignoring a portion of that return.
> or reality is that millions never attained parity till 1954, let
>alone made up for the lack of gains in that period, its history.
>distortions, distractions, propaganda will not hide the fact that
>perhaps millions retired, or were wiped out from a period of
>1929-1954.
>
>> > some bear markets have lasted 25 years. some 18 years.
>>
>> The way you define them, yes. No bear market, as the term is
>> understood by anyone familiar with investments, has lasted that long.
>>
>
> then refute, go to the sources i posted, point out their mistakes to
>them, take them on, alex can beat them, i am sure of it.
Show me one that talks of a bear market that lasts 25 or 18 years.
>
>> >> The day of the market crash, there was only one guy lamenting about
>> >> how much money he lost, Mr. S. All of the others were quit smug in
>> >> that they did not loose any of their principle.
>>
>> > propaganda not backed up anything real.
>>
>> Very reasonable. Do you think that the others would have lost their
>> principle? Or maybe that the stock investor was happy about his lower
>> values?
>>
>
> beware, tricky trap. we are speaking of averages, averages that few
>attain.
>
>> >> However if they compared portfolios, they would discover that Mr. S
>> >> actually has more money, even after the crash!... because of
>> >> ANNUALIZED RATE of RETURN.
>>
>> > lying with statistics. mr. s. still may have a diminished, or wiped
>> >out portfolio. its just that the averages remain intact.
>>
>> No. The example I ran based on Retrogrouch's hypothetical gives an
>> example. Two people investing similar amounts in the 1900's and 1910's
>> were about even at the beginning of the 20's. At the peak in 1929, the
>> stock investor had 4.5 times as much. Yes, he lost MUCH more in the
>> crash, but that just wiped out the windfall gains he got in the
>> run-up, bringing the two to parity. Everything else (in the 30's and
>> 40's, when you claim that the market was not growing, was pure gravy
>> for the stock investor.
>>
>
> you picked the timeline, as retro said.
No that was his timeline.
> nice try. if i pick the
>timeline, then out comes the averages, and out comes the distortion of
>what a gain is.
>
>
>> >> How can I possibly make such an outlandish statement? After all,
>> >> everyone knows that the NASDAQ fell 58% in 2000. Any time I defend
>> >> the private sector, and especially the stock market, opponents always
>> >> ask, "Yes, but what if they retired in 2001?" Well. Let's look at
>> >> that scenario. Presume that all four guys in our example started
>> >> saving at age 28 and retired at age 60 on Jan 1, 2001. Mr G
>> >> (government bonds) would have an annualized rate of return of 1.8%.
>> >> Mr. M's rate of rate of return is 0%, and Mr S had an ANNUALIZED RATE
>> >> OF RETURN OF 9.01%!
>>
>> > again, pure lying with statistics, pure hucksterism.
>>
>> No. Looking at real numbers. And not what I would call sophisticated
>> analysis in any other company, but compared to your understanding,
>> this is really powerful analysis she is presenting.
>>
>
> it uses averages, that many will never attain, to get a average,
>their has to be lots of losses, otherwise the averages would be 100
>percent.
No, the only averages is using the S&P or DJIA, which is readily
available to any investor. Others may do better or worse, but that
average is reliably achievable.
> its sophisticated, i will give you that.
I'm sure it must appear that way to you.
> till you point out a few simple facts.
Which you imagine you have done. You haven't.
>> She is. I think you have provided sufficient evidence that you should
>> not be investing in the markets. Do you have any problem with those
>> who understand her points investing in the market?
> you mean, if i am perfect in those 90 trading days spread over a 30
>year period, man, you got it bad.
1) Learn to read.
2) Learn to think.
The article said the your returns would be lower if you were out of
the market for those days. If you are in the market for the whole
time, how perfect do you have to be to be in the market those 90 days
as well as the other 10,867 days?
>you are laughable, at best. the way
>you bend things, its amazing.
Right. But the question. Do you have a problem with others who don't
buy into your view of the market having the freedom to invest,
particularly if the SEC, through a testing regimen, keeps people who
think your points are valid from being able to invest in the stock
market?
alexy
>Source: Ibbotson, June, 2002
>Note: Tech Heavy = 50% S&P 500/50% S&P Information Technology Sector;
>Equity=S&P 500; Diversified=60% S&P 500/40% Lehman Brothers Government/
>Credit Index; Bond=Lehman Brothers Government/Credit Index
>
>Past performance is no guarantee of future results. Performance of an
>index is not illustrative of any particular investment and an
>investment cannot be made in an index.
>
>Diversification does not insure a profit or guarantee against loss in
>declining markets.
>
>
> the above statement is a towering statement,
Actually, it is a rather trivial, even to the point of being trite,
statement. The fact that you see something so trivial as a "towering
statement" speaks volumes.
>and its what i have been
>saying.
Good for you. Soon you'll graduate to saying that buying high and
selling low is not good.
<snip>
>> >> Anyone can invest in an S&P 500 Index fund and get the advantage of
>> >> diversification.
>>
>> > that still does not mean that you will be successful. its your
>> >opinion.
>>
>> It's also history. You may learn from history or choose to ignore it.
>> But of course, it is no guarantee.
>>
>
> then its not history if you need to add, its no guarantee.
That makes no sense.
<snip>
>
>> > and not all people invest as you do.
>>
>> No. Some fools may well invest everything at the top of the market. No
>> argument with the fact that fools like that will lose. I am only
>> stating that historically, anyone investing consistently in a
>> diversified stock portfolio has done well.
>>
>
> that is not what fidelity says.
Where have they contradicted that?
>
>> Can you come up with a 40-year period when you think that someone
>> investing consistently in stocks has not done well?
>> --
>
> i cannot say for sure either way
I suspected not.
--
Vid...@tcq.net
> Vide...@tcq.net wrote:
> >On Jul 30, 2:43 pm, alexy <nos...@asbry.net> wrote:
> >> Vide...@tcq.net wrote:
> >> >On Jul 30, 9:21 am, jane.pla...@gmail.com wrote:
> >> >> You are so focused on, and paranoid of, a stock market crash that you
> >> >> fail to look at the total picture. I will now make a statement that
> >> >> is so outlandish that you will think I am a complete fool or have lost
> >> >> it completely:
>
> >> > but that is the history of the markets. you are telling me that it
> >> >does not matter if i lose, the averages disprove it.
>
> >> No. That's not what she is saying. Try reading it again and see if you
> >> can catch on.
>
> > she is saying not to worry, you got the annualized averages over the
> >years, yada yada yada. so did you. and my statements that stands is,
> >if you retire after the blowout, as fidelity also says, your
> >investment may not be what it was in the beginning. so that is
> >comforting to know your diminished or wiped out investment will still
> >get the average annualized return, pure gibberish.
> > its that simple, if your investment has diminished, or is wiped put,
> >you still get the annualized rate of return on your diminished or
> >wiped out investment.
>
> No. I understand the point she was making. That was not it.
>
of course you do. you speak the same double talk.
> > sheesh, how many ways are you guys attempting to
> >disguise a loss.
>
> Nobody is attempting to disguise a loss
>
right. of course you never answer me if i invested before a crash,
then was forced to take money out after the crash, did i lose.
> > that is what we are speaking of. a loss over time,
> >not a gain. and if you get a annualized return on your diminished
> >investment, wow, what a deal.
>
> >> > so if i lose, its ok, the averages will be the same.
>
> >> Nope. Not what she is saying.
>
> > i know what she is saying. what she does not say is if your
> >investment was seriously diminished, or wiped out like in 1929. but be
> >happy, you still get the annualized average return, wow, great logic.
>
> No. That is not what she is saying.
>
of course not.
> >> >> SO! If you are going to see two crashes during retirement, what
> >> >> difference does it make when they occur? What matters is ANNUALIZED
> >> >> RATE of RETURN!
>
> >> > baloney, you are simply lying with statistics, which is my initial
> >> >point.
>
> >> No. She is pointing out a fact that you are uncomfortable with. You
> >> want to measure Peak to trough and expect others to be ignorant enough
> >> to accept that.
>
> > we have been thru this before. you will not accept the reality that
> >people do invest during a peak, and do retire during a trough. that is
> >where the big lie comes in, the averages, which really only apply to
> >the lucky few.
>
> No. I dare say only the dumbest of dumb invest only at peaks and draw
> money out only at bottoms.
>
>
here is where you again, lose it. people for all sorts of reasons,
including a young age, get into the markets during a bubble. after
all, they need to be there for 30-40 years. so its not their fault.
its also not their fault for having to withdraw at the bottom, or even
3/4's of the way up for various reasons already explained, ones you
ignore because you are attempting to wear me down. you judge others by
your own life experiences, truly stupid, and parochial. libertarian in
nature.
>
> > Some are. My solution is testing to keep anyone like
> >> that out of the market. Do you have any problem with those who
> >> understand the point Jane is making being able to invest in the
> >> market?
>
> > i am simply exposing the propaganda for what it is. it makes furious
> >that i do. when you admit that people have, are now, and will in the
> >future invest in a bubble, and retire in a bear market. its happened
> >to millions.
>
> So are you saying that you don't have any problem with others having
> the freedom to invest?
>
are you on drugs. i never said people cannot invest. i simply
exposing propaganda. by the way, you skirted the question again.
> >> >> Let's look at four guys who retire at the same time: Mr C invested
> >> >> in CDs, Mr G invested in Government Bonds, Mr M put his money in the
> >> >> mattress, and Mr S invested in Stocks.
>
> >> > that is some pretty simple assumptions, which other market cultists
> >> >have already thrown at me. here is reality.
>
> >> It's an illustration. What "assumptions" is she making there?
>
> > its the averages thing again.
>
> No, it's an illustration of four hypothetical investor.
>
>
here is the words that speaks volumes "hypothetical investor ", in a
hypothetical scenario. of course, math models are fine, and in theory
should work if done properly. of course math models are subject to
reality, and that is where many fall apart.
>
> >> >http://www.finfacts.ie/stockperf.htm
> >> >Source: Ibbotson Associates
> >> >Source: University of Michigan
> >> >According to Stocks, Bonds, Bills and Inflation 2000 Yearbook, © 2000
> >> >Ibbotson Associates, Inc., while returns grew by an 11% average in the
> >> >period 1926-1999, in the 5 year period 1972-1977, the stock market
> >> >lost an average of 0.2% per annum.
>
> >> Good point. It is always possible to find a period during which there
> >> were declines. But no one has yet been able to show me a 40-year
> >> period when consistent regular investment in stocks did not outperform
> >> the same consistent investment in fixed interest accounts.
>
> > sure, if you use averages that do not apply to many. there is the
> >lying with statistics. you insinuate that all will attain it.
>
> No, only those who invest consistently and regularly in a broad-based
> stock portfolio like the S&P 500. It certainly is possible for someone
> to put all of his life savings in the next pets.com and lose it all.
>
again, some may win in that scenario, some may lose. if their was no
one who lost, fidelity would not have to say this is no guarantee,
plus, your investment may not be what it was when you invested(means a
loss). of course, you ignore what fidelity has said also. plus,
averages means their are losses, so if they all won according to you(>
> sure, if you use averages that do not apply to many. there is the
> >lying with statistics. you insinuate that all will attain it.
>
> No, only those who invest consistently and regularly in a broad-based
> stock portfolio like the S&P 500. It certainly is possible for someone
> to put all of his life savings in the next pets.com and lose it all.
> ), then the averages would be 100 percent. and the whole argument has been the averages crap. its lying with statistics. the dot.com bubble also affected many good companies.
> >have proven, many will not. how do you think they come up with
> >averages if everyone is on the upside:)
>
> Anyone can invest in an S&P500 index fund and get the average.
>
the above response is one of your best. it totally ignores my
question to you, and answers with orwellian double speak.
how do you think averages are arrived at? there are winners, there
are losers. so if they all won, your average would be 100 percent,
but, if many lose, then the average drops. the drop looks huge if you
understand that there are millions of losers that lose more than they
gain.
> >> >According to a University of Michigan study, an investor who stayed in
> >> >the US stock market during the entire 30-year period from 1963 to
> >> >1993-7,802 trading days-would have had an average annual return of
> >> >11.83 %.
>
> >> Another good point. and other similar length periods give similar
> >> results.
>
> >look below.
>
> >> >However, if the investor missed the 90 best days while trying
> >> >to time the market, the average return would have fallen to 3.28% per
> >> >annum.
>
> >> An other good point. And making sure people understood the futility of
> >> market timing (although you would have to be pretty prescient to miss
> >> exactly those 90 days) would be part of my proposed "no-idiots" rule
> >> for stock investing eligibility.
>
> > i am sure in alexs world, everything is perfect, no mistakes,
>
> Not at all. That's why I suggest regular small investments rather than
> trying to time the market.
snicker, tell someone who is 69 right now, that lost a good portion
of their pre 2001 investment, and has not regained parity, let alone
made up for the lost years, that they should not time the market. you
are beating a dead horse, plus ignoring reality, shame on you. you
look foolish.
I know that I WILL make some purchases at
> the top of a bubble, and WILL make some sales at the bottom of a
> trough. But I know better than trying to time the market precisely
> BECAUSE everything is not perfect in my world, and mistakes can and do
> happen.
>
good, come back to me when you are ready to retire. i am always
amazed to meet people who can see into the future.
> > he is
> >by his mouse button all day long. he has all of the inside information
> >at his fingertips to take advantage of those 90 days spread over a 30
> >year period, perfect health, perfect timing, no family or job
> >problems, every investment perfect. if that is the case, bully for
> >you. only a idiot would believe that scenario. most people never hit
> >perfection, and have the ability to do it 90 times over a 30 year
> >period.
>
> You missed the point of the UofM study. You'd have to be OUT of the
> market for those days to have the performance drop that far. Why in
> the world would you try to do that?
>
what if they had cancer, and needed money, what if they had a family
emergency, what if the world, acts like the world, lots of what
ifs(murphys law), and the scenario is rather shaky, you need to be in
the market for a certain 90 days, over a 30 year period. that's pretty
thin ice in a long life. i would have to say, a almost perfect life.
you are furious that your cults propaganda is being exposed. i bet
lots of these conversations happened after 1929.
> > and let me add, what if you were to retire, or need some money
> >in that 30 year period, but all well, we have been thru this before.
> >we will simply ignore the reality of that, and lie with statistics.
>
> No. That's why you don't invest it all in stocks.
>
of course, alex wants everyone who invests never to have life's
problems. we are alexbots.
> >> >According to Dr. Bryan Taylor of Global Financial Data, analysis of
> >> >US bull and bear markets in the past has always used the S&P Composite
> >> >Price Index, not the Total Return Index. Since most investors have
> >> >their money in funds that reinvest their dividends, using a price
> >> >index to determine the movement of markets does not reflect the
> >> >results that investors receive. Over time, price indices produce
> >> >dramatically different results from return indices. The 1920s bull
> >> >market peaked on September 7, 1929. If someone had invested their
> >> >money in the stock market on September 7, 1929, it would have taken
> >> >until September 1954 to break even using the price index benchmark but
> >> >on a total return basis (allowing for dividends), the investor would
> >> >have broken even nine years earlier, in 1945. Total returns reduce the
> >> >size of the falls in a bear market and increase the returns in a bull
> >> >market.
>
> >> Another point that some of us have been trying to hammer home, and
> >> which a person would have to understand to be allowed to buy stocks.
>
> > what, that all corporations pay dividends, or that all investors pick
> >dividend paying stocks? i sure hope we are not going thru that again
> >are we?
>
> No, just that if you invest in a broad selection of stocks like the
> S&P 500 that it would pay dividends, and it is fraudulent to look at
> their returns while ignoring a portion of that return.
>
not really. unless of course the majority of stocks pay dividends,
hey alex my boy:) you are clinging to a tiny scenario that few can do.
we of course are speaking of averages of the markets. that includes
lots of companies that do not pay dividends.
> > or reality is that millions never attained parity till 1954, let
> >alone made up for the lack of gains in that period, its history.
> >distortions, distractions, propaganda will not hide the fact that
> >perhaps millions retired, or were wiped out from a period of
> >1929-1954.
>
snicker, crickets.
> >> > some bear markets have lasted 25 years. some 18 years.
>
> >> The way you define them, yes. No bear market, as the term is
> >> understood by anyone familiar with investments, has lasted that long.
>
> > then refute, go to the sources i posted, point out their mistakes to
> >them, take them on, alex can beat them, i am sure of it.
>
> Show me one that talks of a bear market that lasts 25 or 18 years.
>
>
i posted a nice article on the bear market from 1966-1982. it might
even be the u of m article you have used, that i posted. also includes
1929-1954.
>
> >> >> The day of the market crash, there was only one guy lamenting about
> >> >> how much money he lost, Mr. S. All of the others were quit smug in
> >> >> that they did not loose any of their principle.
>
> >> > propaganda not backed up anything real.
>
> >> Very reasonable. Do you think that the others would have lost their
> >> principle? Or maybe that the stock investor was happy about his lower
> >> values?
>
> > beware, tricky trap. we are speaking of averages, averages that few
> >attain.
>
snicker, crickets.
> >> >> However if they compared portfolios, they would discover that Mr. S
> >> >> actually has more money, even after the crash!... because of
> >> >> ANNUALIZED RATE of RETURN.
>
> >> > lying with statistics. mr. s. still may have a diminished, or wiped
> >> >out portfolio. its just that the averages remain intact.
>
> >> No. The example I ran based on Retrogrouch's hypothetical gives an
> >> example. Two people investing similar amounts in the 1900's and 1910's
> >> were about even at the beginning of the 20's. At the peak in 1929, the
> >> stock investor had 4.5 times as much. Yes, he lost MUCH more in the
> >> crash, but that just wiped out the windfall gains he got in the
> >> run-up, bringing the two to parity. Everything else (in the 30's and
> >> 40's, when you claim that the market was not growing, was pure gravy
> >> for the stock investor.
>
> > you picked the timeline, as retro said.
>
> No that was his timeline.
>
i was watching your exchange with him.
> > nice try. if i pick the
> >timeline, then out comes the averages, and out comes the distortion of
> >what a gain is.
>
> >> >> How can I possibly make such an outlandish statement? After all,
> >> >> everyone knows that the NASDAQ fell 58% in 2000. Any time I defend
> >> >> the private sector, and especially the stock market, opponents always
> >> >> ask, "Yes, but what if they retired in 2001?" Well. Let's look at
> >> >> that scenario. Presume that all four guys in our example started
> >> >> saving at age 28 and retired at age 60 on Jan 1, 2001. Mr G
> >> >> (government bonds) would have an annualized rate of return of 1.8%.
> >> >> Mr. M's rate of rate of return is 0%, and Mr S had an ANNUALIZED RATE
> >> >> OF RETURN OF 9.01%!
>
> >> > again, pure lying with statistics, pure hucksterism.
>
> >> No. Looking at real numbers. And not what I would call sophisticated
> >> analysis in any other company, but compared to your understanding,
> >> this is really powerful analysis she is presenting.
>
> > it uses averages, that many will never attain, to get a average,
> >their has to be lots of losses, otherwise the averages would be 100
> >percent.
>
> No, the only averages is using the S&P or DJIA, which is readily
> available to any investor. Others may do better or worse, but that
> average is reliably achievable.
>
snicker, another giant response that ignored what i asked. how are
averages figured? and yes, in a perfect world, anyone can.
> > its sophisticated, i will give you that.
>
> I'm sure it must appear that way to you.
>
snicker.
> > till you point out a few simple facts.
>
> Which you imagine you have done. You haven't.
>
you sidestep many of my questions.
> >> She is. I think you have provided sufficient evidence that you should
> >> not be investing in the markets. Do you have any problem with those
> >> who understand her points investing in the market?
> > you mean, if i am perfect in those 90 trading days spread over a 30
> >year period, man, you got it bad.
>
> 1) Learn to read.
> 2) Learn to think.
>
anyone can do that. but, using logic that beats hucksterism, now
that is something powerful.
> The article said the your returns would be lower if you were out of
> the market for those days. If you are in the market for the whole
> time, how perfect do you have to be to be in the market those 90 days
> as well as the other 10,867 days?
>
life has problems.
> >you are laughable, at best. the way
> >you bend things, its amazing.
>
> Right. But the question. Do you have a problem with others who don't
> buy into your view of the market having the freedom to invest,
never said that, again, are you on drugs, or are you trying to
distort, or distract, of both.
> particularly if the SEC, through a testing regimen, keeps people who
> think your points are valid from being able to invest in the stock
> market?
> --
never said that either. it would be illegal i bet.
alexy
>On Jul 30, 10:12 pm, alexy <nos...@asbry.net> wrote:
>> >have proven, many will not. how do you think they come up with
>> >averages if everyone is on the upside:)
>>
>> Anyone can invest in an S&P500 index fund and get the average.
>>
>
>
> the above response is one of your best.
No, it's just a simple statement of fact, probably not even needed by
most.
> it totally ignores my
>question to you, and answers with orwellian double speak.
> how do you think averages are arrived at?
There are some technical differences in the approaches to the two main
ones, but to take DJIA for simplicity. There are 30 stocks. The
average is composed of a certain number of shares of each of those
thirty stocks. An investor in any one of those stocks will almost
certainly do better or worse than the average. Anyone investing in
those same stock in the same proportion (most probably through an
index fund) will have his performance be exactly the average. They
will NOT be a winner or loser relative to the average.
>>
>> No. That's why you don't invest it all in stocks.
>>
>
> of course, alex wants everyone who invests never to have life's
>problems.
No, that's why you don't invest it all in stocks.
>> >> >According to Dr. Bryan Taylor of Global Financial Data, analysis of
>> >> >US bull and bear markets in the past has always used the S&P Composite
>> >> >Price Index, not the Total Return Index. Since most investors have
>> >> >their money in funds that reinvest their dividends, using a price
>> >> >index to determine the movement of markets does not reflect the
>> >> >results that investors receive. Over time, price indices produce
>> >> >dramatically different results from return indices. The 1920s bull
>> >> >market peaked on September 7, 1929. If someone had invested their
>> >> >money in the stock market on September 7, 1929, it would have taken
>> >> >until September 1954 to break even using the price index benchmark but
>> >> >on a total return basis (allowing for dividends), the investor would
>> >> >have broken even nine years earlier, in 1945. Total returns reduce the
>> >> >size of the falls in a bear market and increase the returns in a bull
>> >> >market.
>>
>> >> Another point that some of us have been trying to hammer home, and
>> >> which a person would have to understand to be allowed to buy stocks.
>>
>> > what, that all corporations pay dividends, or that all investors pick
>> >dividend paying stocks? i sure hope we are not going thru that again
>> >are we?
>>
>> No, just that if you invest in a broad selection of stocks like the
>> S&P 500 that it would pay dividends, and it is fraudulent to look at
>> their returns while ignoring a portion of that return.
>>
>
> not really. unless of course the majority of stocks pay dividends,
>hey alex my boy:) you are clinging to a tiny scenario that few can do.
I'm sure that few of your financial sophistication would be able to go
to their 401(k) administrator and say "I'd like to sign up for $100
per paycheck, invested in the S&P500 index fund" or say the same to
the local Fidelity office. But many can handle a financial transaction
that complex.
>we of course are speaking of averages of the markets. that includes
>lots of companies that do not pay dividends.
Right. That's why you consider only the dividends that are actually
paid on the stocks included in the S&P.
>
>
>> > or reality is that millions never attained parity till 1954, let
>> >alone made up for the lack of gains in that period, its history.
>> >distortions, distractions, propaganda will not hide the fact that
>> >perhaps millions retired, or were wiped out from a period of
>> >1929-1954.
Only in your mind.
>
>> >> > some bear markets have lasted 25 years. some 18 years.
>>
>> >> The way you define them, yes. No bear market, as the term is
>> >> understood by anyone familiar with investments, has lasted that long.
>>
>> > then refute, go to the sources i posted, point out their mistakes to
>> >them, take them on, alex can beat them, i am sure of it.
>>
>> Show me one that talks of a bear market that lasts 25 or 18 years.
>>
>>
>
> i posted a nice article on the bear market from 1966-1982.
Once does call that a bear market.
>it might
>even be the u of m article you have used, that i posted. also includes
>1929-1954.
None of those articles calls that a bear market.
So the question remains; show me an article that talks of a bear
market that lasts 25 or 18 years.
>> >> No. The example I ran based on Retrogrouch's hypothetical gives an
>> >> example. Two people investing similar amounts in the 1900's and 1910's
>> >> were about even at the beginning of the 20's. At the peak in 1929, the
>> >> stock investor had 4.5 times as much. Yes, he lost MUCH more in the
>> >> crash, but that just wiped out the windfall gains he got in the
>> >> run-up, bringing the two to parity. Everything else (in the 30's and
>> >> 40's, when you claim that the market was not growing, was pure gravy
>> >> for the stock investor.
>>
>> > you picked the timeline, as retro said.
>>
>> No that was his timeline.
>>
>
> i was watching your exchange with him.
Then why did you lie about who set up the timeline?
Here's where he asked the question, in response to another poster who
had used 1929 as a starting point:
:Silly boy. Starting the year of the crash is disingenuous. How about
:if you started in 1900 and retired in 1935, say. What did the crash do
:to your accumulated stock from the previous 30 years? It lost 80% of
:it's value. Ooops. No retirement for you.
I used that timeline and showed that someone saving for retirement
over that time would have done better saving in stock than in
long-term interest contract, basically because simple reactions to the
crash of 31-32 tend to ignore the bubble of the 20's.
>> No, the only averages is using the S&P or DJIA, which is readily
>> available to any investor. Others may do better or worse, but that
>> average is reliably achievable.
>>
>
>
> snicker, another giant response that ignored what i asked. how are
>averages figured?
Explained above.
> and yes, in a perfect world, anyone can.
No need for perfection. Just a bare minimum of information.
--
Jorge W. Arbusto, Prezidentchul Candydate
>> as long as you are ok, then all is well.
>
> nose in the FACT that that article you stole is full of shit.
>
By using yourself as an example, how did you " rub his nose" in it? Your
personal anecdote doesn't negate the premise of the article he cited,
dumbass.
Jorge W. Arbusto, Prezidentchul Candydate
shit, for all the world to ridicule:
> You're lying, as always.
>
> And it didnt wreck every USians retirement either.
>
The article doesn't say it wrecked everyone's retirement, ya dumb fuckhole.
jane....@gmail.com
I now understand why there is so much confusion in our discussions.
Once I read your statement, “... if you lose, you lose. even if the
averages say different.”
It dawned on me that you have a misunderstanding of how Annualized
Rate of Return (ARR) is calculated. You think that a person can lose
everything and still have an ARR of 9.01%. You can't!
Let me explain ARR without going into any calculations. It ONLY
considers the contributions, how long they were in the portfolio and
the end VALUE.
ARR considers your total contributions to a portfolio. It then looks
at the value of the portfolio on the end date and calculates the ratio
between the contributions over time vs the value at the end. The ARR
does not consider any ups or down during the interim.
If your value at the end exceeds your total contributions, then you
have a positive ARR.
If your value at the end equals your total contributions, then your
ARR = 0%
If your value at the end is less than your total contributions, then
your ARR is Negative.
You can NOT "...lose. even if the averages say different.”
Now to the next level: The ARR calculation for stock portfolios is
the exact calculation used in CD calculations. So, if you invest
$1,000 in a CD and $1,000 in stocks and then end values are the same,
the ARR for each is EXACTLY the same.
Knowing that, let's look at a simplistic CD calculation. Presume
that you found a $1,000 2year CD that paid 10% per year, compounded
yearly.
At the end of the first year, your CD statement would indicate that
your value is $1,100.
At the end of the second year your CD statement would indicate that
your value is $1,210.
The ARR is 10%.
Now, lets presume that you also invest $1,000 in the stock market on
the same day. Irrespective of what the market did during those two
years, if the end value, after 2 years, of your portfolio is $1,210,
then your ARR is 10%. Your portfolio could have gained 200% the first
year, going to a value of $3,000 and then crashing 60% down to
$1,210. IT DOESN'T MATTER! Your ARR is still 10%.
SO. If the S&P500 index fund in your portfolio had an ARR of 9.01%
after the 2000 crash, then you haven't lost anything, anymore than a
the guy who bought a 9.01% CD.
Now that we have an understanding of ARR, let's get back to the real
discussion and the facts and figures.
Yesterday, I stated that Mr. S invested in the S&P500 at age 28 and
retired at the age of 60, the year after the crash of 2000, and had an
ARR of 9.01%. His buddy, Mr G, with government bonds only had an ARR
of 1.8%. You accused me of, “propaganda not backed up anything
real.” My data came from the S&P500 historical data located in the
Yahoo.com financial section.
My premise is, “if a person invests for the long term, during his
working years, the stock market will outperform a CD or government
bonds”. Thank you for your citation. It proves me right, not wrong.
“...an investor who stayed in the US stock market during the entire 30-
year period from 1963 to 1993...would have had an average annual
return of 11.83 %.” (YOUR citation, not mine)
I have an additional premise: “Even after a stock market crash, your
ARR, and hence your portfolio VALUE, will exceed a CD or government
bonds!”
Instead of Yahoo.com I will use the citation that you provided. I
will do this for several reasons.
1) you can't accuse me of using bogus data.
2) That site posted NASDAQ historical data
3) Since the NASDAQ had a 58% crash in 2000, it truly represents a bad
crash
4) 8 years later, the NASDAQ still hasn't recovered to the pre-crash
high. (You used the word "parity")
I took the NASDAQ figures from your citation and created a spread
sheet of a family making average income (US census figures). Starting
work at age 25 in 1960 and retiring at age 65 in Jan, 1 2001 (the year
after the crash of 2000). This average family contribute 12.5% of his
yearly average income into the NASDAQ (using the figures from your
citation). This is a real life scenario that includes the stagnant
years beginning in 1966, the crash of 87, the recession of 91 and the
crash of 2000.
Jan 1, 2000, the time immediately before the crash, Mr Average's
portfolio had an ARR of 15.22%
On Jan 1, 2001 (AFTER THE NASDAQ CRASH of 2000) Mr. Average had an
ARR of 12.58%
His buddy, Mr G, with government bonds had a portfolio ARR of 1.8%.
Jane.
jane....@gmail.com
... snipped for brevity ...
> > Not at all. That's why I suggest regular small investments rather than
> > trying to time the market.
>
> snicker, tell someone who is 69 right now, that lost a good portion
> of their pre 2001 investment, and has not regained parity, let alone
> made up for the lost years, that they should not time the market. you
> are beating a dead horse, plus ignoring reality, shame on you. you
> look foolish.
>
I can do that using the NASDAQ data from your citation. The NASDAQ
was the index that was the hardest hit by the 2000 crash AND it still
hasn't returned to the pre-crash high. A great example for a stock
pessimist like you.
Using the US census figures for an average family income, a yearly
investment of 12.5%, and retiring at age 65 the year after the 2000
crash.
He would be 70 in the year 2006. The last year of your web citation
table.
In 2006, the old fart would have $1,381,814.00. Not too shabby for an
average Joe.
NOW, why don't you run the numbers and tell me how much he would have
if he purchased Government Bonds?
> I know that I WILL make some purchases at
>
> > the top of a bubble, and WILL make some sales at the bottom of a
> > trough. But I know better than trying to time the market precisely
> > BECAUSE everything is not perfect in my world, and mistakes can and do
> > happen.
>
The above portfolio value of $1.4 million included the stagnant years
beginning in 1966, the crash of 87, the recession of 91, the crash of
2000 and the recession of 2001. It also included buying into the
market peak of the late 90s.
Jane
... snipped...
alexy
>NOW, why don't you run the numbers and tell me how much he would have
>if he purchased Government Bonds?
He'd need the cash flows. But it'll never happen. He is the
personification of "ignorance is bliss" and "don't confuse me with
facts; I've got my mind made up".
--
Les Cargill
Vid, it's like sand on a beach. If you look at it from 50,000 feet, a
beach is a smooth line. From right at it, it's less smooth and the waves
change it over time. From an inch or so, it's very complicated, and
the closer you get, the more complex it is.
If the system provides the most strength with a longer view, then
that's the better way to look at it. Otherwise avoid it and
find some other way to store and grow money.
--
Les Cargill
Vid...@tcq.net
> Vid, it's like sand on a beach. If you look at it from 50,000 feet, a
> beach is a smooth line. From right at it, it's less smooth and the waves
> change it over time. From an inch or so, it's very complicated, and
> the closer you get, the more complex it is.
>
> If the system provides the most strength with a longer view, then
> that's the better way to look at it. Otherwise avoid it and
> find some other way to store and grow money.
>
but most people never get to do the long term thing when you are
young, most people do not have the income to even take advantage of
employer matching contributions.
so most people get into the markets thru their 401ks in the 30's,
sometimes 40's. these two that i am arguing with make the assumption
that you have 40 years, when most do not. so using averages is a false
scenario, because, people do not always live, and earn enough to take
advantage of their scenario, on top of that, they ignore the fact that
not everyone gets in at the bottom, and out at the top, a average also
includes the downs, as well as the ups. so if you are forced out in
the down with a diminished investment, the averages mean nothing to
you. and the annualized rate of return is another scam. if you lose
half your investment, you still get the average annualized rate of
return, which is a average that goes up, and down because of gains and
loses.
here is a 45 year period,
'If you bought the average Dow Jones Industrial stock before the
Crash of '29, you would have lost 89 cents for every dollar invested.
And even if you had both the cash and the courage to hold on (few
did!), you'd still have to wait 24 years — a full generation — before
you could recoup your original investment ... and another 20 years
before you could catch up with an investor who just earned a steady 5%
yield during that period."
so, the stock market is not always what they tell you it is. they are
simply lying with statistics. its good if you buy low, then get out
high, but that is a hard thing to do. if so, we would have millions of
warren buffets, and peter lynches.
http://www.straightstocks.com/investing-lessons/sell-hedge-or-be-prepared-to-lose/
Sell, Hedge your Stock Market Investments.. or Be Prepared to Lose!
Martin Weiss writes: The stock market is falling swiftly, and you
don't have the luxury of time. So I'll get straight to the point:
If you haven't done so already in response to our many earlier
warnings, you'd better sell or hedge your vulnerable investments now .
If you don't, be prepared to suffer far deeper losses in the bear
market of 2008 and beyond.
But beware: Most brokers will try to talk you out of it. They have a
hidden agenda. They want to keep you as a customer; and they know
that, once customers sell their stocks, they often close their
brokerage accounts.
With this in mind, many brokers have been trained with up to seven
sales pitches designed to keep you in the market come hell or high
water.
Broker Pitch #1: "Buy more." Their argument goes something like this:
"Your stock is now selling at bargain prices. So if you didn't already
own 100 shares, you'd probably be thinking about buying — not selling.
Instead, why not double down and take advantage of dollar-cost
averaging?"
The more likely result in a bear market: Every time your stock falls
by another $1 per share, instead of losing just $100, you'll be losing
$200.
Broker Pitch #2: "Hold for a recovery!" They argue that the "market
will inevitably recover," that the "recovery is always bigger and
better than any near-term decline," and that you should therefore
"always invest for the long term."
The reality: Bear markets can last for years. It could take still
longer for the averages to recover to current levels. During all those
years, your money is dead in the water. And don't forget: If the
company goes out of business, your stock will be worthless and will
never recover.
Broker Pitch #3: "You can't afford to take a loss." If you insist on
selling, brokers often come back with this approach: "Your losses are
just on paper right now. So if you sell, all you'll be doing is
locking them in. You can't afford to do that."
What they don't tell you is that there's no fundamental difference
between a paper loss and a realized loss. Nor do they reveal that the
Securities & Exchange Commission (SEC) requires brokers themselves to
value the securities they hold in their own portfolio at the current
market price — to recognize the losses as real whether they've sold
the securities or not.
Broker Pitch #4: "You can't afford to take a profit and pay the
taxes." If you've got a profit in a stock, they say: "All you'll be
doing is writing a fat check to Uncle Sam. You can't afford to do
that."
The reality: Although it's not shown on your brokerage statement, the
true value of your portfolio is NET of taxes. So whether you or your
heirs pay those taxes now or in the future is mostly a difference of
timing. And if our next president approves legislation to raise
capital gains taxes next year, it could actually cost you more.
Besides, which would you prefer — paying some taxes on profits or
paying no taxes on losses?
Broker Pitch #5: The "don't-be-a-fool" argument. "Stocks look very
cheap now and we're very close to rock bottom," goes the script. "We
may even be right at the bottom. If you sell now, three months from
now, you'll be kicking yourself. Don't be a fool."
The truth: Brokers don't have the faintest idea where the bottom is.
Nor does anyone at their firm. And they know darn well that stocks do
not hit bottom just because they look cheap. Worse, for their own
accounts, brokers and their affiliates have been — and are likely to
continue — liquidating shares, often targeting precisely the same
shares they pitch to their customers.
Broker Pitch #6: "The market is turning." If the market enjoys an
intermediate bounce, which it certainly will at some point soon, this
pitch is invoked. "Look at this big rally!" they say. "Your shares are
finally starting to come back. After waiting all this time, are you
sure you want to run away now — just when things are starting to turn
around in your favor?"
The truth: In a bear market, intermediate rallies actually give you
the best opportunity to sell.
Broker Pitch #7: The last ace-in-the hole in the broker's arsenal of
pitches is the patriotic approach. "Do you realize," they'll say,
"what could happen if everyone does what you're talking about doing?
That's when the market would really nosedive. But if you and millions
of other investors would just have a bit more faith in our economy —
in our country — then the market will recover and everyone will come
out ahead."
The truth: Locking up precious capital in sinking enterprises is not
exactly good for our country. Better to safeguard the funds and
reinvest them in better opportunities at a better time.
Surprise, Surprise: The Wall Street Journal Has Just Made Some of
These Same Pitches
Given that the Nasdaq lost more than 75% of its value in the early
part of this decade and that bank stocks are now down over 50% since
their recent peaks, you'd think Wall Street would have learned to
refrain from pitching the same old BS.
But if this weekend's edition of The Wall Street Journal is any
indication, little has changed ...
"There's a decent argument to be made for buy and hold," says the
Journal . "Aside from the absurdity of liquidating an entire equity
portfolio — the tax headaches would be epic — investors ultimately end
up better off than if they had tried to sell at the top and buy at the
bottom. 'It's hard to time the market, so stay in and benefit from the
inevitable turnaround,' says David Dreman, chairman of Dreman Value
Management."
In other words, they're telling you to sit it out and watch the value
of vulnerable stocks evaporate.
My view: This advice is driven by the same hidden agenda still
prevailing in the brokerage industry — to keep you in bad stocks at
all costs.
Were you entrapped by similar pitches during the great tech wreck of
2000-2002? If not, great! If so, don't let it happen again. And in
either case, use it as a learning experience — to pull out some
valuable lessons that could save you a lot of money today ...
Lesson #1
Many Stocks Have Hidden Risks That No One Tells You About.
Even during the tech bubble, most investors recognized that there was
a chance their stocks could go down, at least for a short while. But
they never dreamed their tech stocks could go down so far nor so fast.
They had no inkling of the multiple, hidden risks that can drive their
portfolios into the gutter:
The risk of earnings lies. Let's say a stock is selling for $40. And
let's say its earnings are $2 per share. So it's valued at 20 times
earnings, and this is considered fair. Suddenly, the news comes out
that the earnings are a bold-faced lie. The true earnings of the
company is only half what was stated — $1 per share. "Oh, no!" exclaim
the investors. "At 20 times earnings, it's really only worth $20 per
share." The stock promptly plunges to $20 — an instant 50% loss to
shareholders.
In the tech wreck, we saw this kind of outright fraud at big-name
companies like Enron, Worldcom, Tyco, and Adelphia. And we saw it
repeated hundreds of times with lesser companies. This time around, we
see a similar pattern among financial companies that continually
understate, cover up or even lie about their true losses.
Case in point: In March 2007, a Bear Stearns hedge fund manager
emailed a colleague saying, "The sub-prime market is pretty damn
ugly ... I think we should close these funds down." Instead, the
company soothed investors with the message that "all was fine." Three
months later, the funds failed and investors were left with less than
30 cents on the dollar.
The risk of inflated Wall Street ratings. In the tech bubble, Wall
Street's enthusiastic "buy" ratings — often bought and paid for by the
rated companies — drove thousands of investors into stocks that
weren't worth the paper they were printed on. When it became apparent
that the stock ratings were a sham, investor losses were greatly
compounded.
Today, little has changed. The SEC and Elliot Spitzer's attempt to
encourage independent research on Wall Street has largely failed.
Worse, the ratings issued by Wall Street's leading government-
sanctioned agencies — Moody's, S&P and Fitch — are still bought and
paid for by the rated companies, often resulting in inflated grades.
Case in point: The rating agencies stalled for months before finally
downgrading the nation's giant bond insurers, Ambac and MBIA. And
despite the recent downgrades, the ratings still fail to recognize
that the bond insurers' entire business model — based on unanimous
triple-A ratings — has been destroyed.
The evidence: Credit swaps being traded right now on Ambac and MBIA
imply that the probability of default over the next five years is an
astounding 90%! And still they're getting "A" or better ratings? It's
a joke.
The risk of failure. The company goes out of business and investors
suffer a 100% loss. Unusual? Not quite. In the tech wreck, at least
600 Internet companies went under. And between 1990 and 2002,
bankruptcy claimed 390 insurance companies, 932 banks and thrifts,
plus tens of thousands of business corporations.
The situation today: Although the Federal Reserve was able to ease the
credit crunch by dropping interest rates seven times and rescuing the
likes of Bear Stearns, analysts are now concerned that the Fed is
running out of options. What happens in the wake of the next big
meltdown? I don't think you want to hang on to your financial stocks
while Wall Street tries to guess at the answer.
My rule number one of investing is: Never underestimate the risk .
Lesson #2
So-Called "Free Advice" Can Cost You a Fortune!
You can get "free advice" from many sources — not just your
stockbroker, but also your insurance agent, your financial planner and
other professionals. But it isn't really advice. And it certainly
isn't free.
In the last bear market, "free advice" — embedded in the hyped-up
ratings and research reports issued by major Wall Street firms — cost
investors a fortune, luring them into Nasdaq stocks that brought
losses averaging more than $75 for every $100 invested near the peak.
Plus, free advice in other areas — from bonds to insurance — can be
equally expensive.
With "free advice," you can actually get hurt in three different ways:
• You pay significant fees that, despite any assurances to the
contrary, inevitably wind up coming out of your pocket.
• You buy investments that are more likely than usual to be
underperformers or outright losers.
• You wind up getting locked in to plans or programs that charge
various kinds of exit penalties. So when a better, alternative
opportunity comes your way, you have to either pass it up or pay
through the nose to switch.
In short, taking "free advice" can be like walking into the ring with
a professional wrestler. First, he socks it to you with fees. Then, he
dumps you into bad investments. And last, he pins you down on the mat
and won't let you go.
So my rule number two of investing is: Never act on so-called "free
advice."
How can you tell? It's actually quite simple. Everyone you deal with
in the financial industry is either a salesperson or an analyst/
advisor . It's virtually impossible for anyone to be both at the same
time.
The salesperson will tell you he's not charging you for the advice.
He'll tell you it "comes with the service" or it's covered by the
transaction fees or commissions. That's a dead giveaway.
The analyst (or a true advisor) tells you, up front, what he's going
to charge you, he charges the fee, and then he tells you what he
charged you. It couldn't be clearer.
The fee could be something in the neighborhood of $100 per year for a
subscription to an investment newsletter. Or it could be, say, $100
per hour for a personal consultation. That's cheap insurance that can
save you — or make you — a tidy sum.
Still not sure how to distinguish between a salesperson and a true
analyst or advisor? Here's what I suggest: No matter whom you
encounter in the financial industry — stockbroker, insurance agent,
financial planner or banker — ask these questions:
1. Do you (or your company) make more money the more I buy? If the
answer is yes, you've got a problem right off the bat. Often, the best
investment decision is not to buy. And sometimes an even better
decision is to sell . If buying nothing or selling is going to be a
negative for his earnings, you don't have an advisor. You've got a
salesperson posing as an advisor.
2. Who pays your commissions or fees? If he says it's someone other
than you, he's probably lying. Shake his hand, bid him farewell and
walk out the door. No financial institution I've ever heard of really
pays sales commissions out of its own pocket. If a salesperson is
making commissions, it always comes out of your pocket, directly or
indirectly.
3. Where are you getting the information or report you're giving me?
If the answer is a source that will benefit from your purchase, you
can probably throw most of the info into the trashcan.
In the tech wreck, investors got hooked by salespeople repeatedly. And
the same is happening right now. But with these three questions, you
can discard the salespeople and find the true advisors. They are those
who are ...
• Always compensated by you — not by the companies whose financial
products you buy.
• Always compensated for their time or their information — not for a
sale.
• Always your advocate and defender. Whether it's just a normal,
friendly transaction or a heated legal dispute, it's always crystal-
clear which side they're on — yours and only yours.
I repeat: "Free advice" is neither free nor advice. Sooner or later,
it could cost you a fortune in terms of mediocre performance or,
worse, outright losses.
Am I being overly harsh on ethical brokers, sales agents and financial
planners? Perhaps. But only in the sense that it's not really their
fault. It's the system that's rigged against you.
You see, even the most well-meaning salespeople still have to make a
living. But they can't make a good living if they tell their clients
to stay out of the most popular stocks ... avoid mutual funds that
charge a big fee ... or stick with insurance policies that pay the
lowest commissions. Nor can they afford to recommend investments that
involve very low fees and commissions, which happen to include some of
the best choices you can make today .
If they consistently give you this kind of advice, they can't put food
on the table for their families — let alone send their kids to a good
college. And they'll never be eligible for the big bonuses and rich
rewards that inevitably flow to the top-performing salespeople.
Many salespeople do try to be as ethical as they can be within the
limitations of the system. They're friendly and helpful. They bend
over backwards to do right for their clients. But they're still
salespeople. Work with them to buy the products you want. But get your
information and advice elsewhere.
Lesson #3
Wall Street's "Rules of Thumb" Are Often Flawed or
Deceptive
The bias revealed in the last bear market went beyond just
recommending bad investments. It also was the source of many investing
"rules" promulgated by Wall Street pros and blindly accepted by most
investors — most of which were myths in disguise.
Some examples ...
Myth: "Always invest in stocks for the long term." You saw this in The
Wall Street Journal story I just quoted. And you've probably heard it
in many other permutations as well: "Historically, stocks have always
moved higher," they say. "Bull markets are longer than bear markets,"
goes the argument.
The reality: Most of the stats they cite assume you bought stocks
after a major decline, when they were at rock bottom. The reality is
few people ever buy at those levels. Indeed, most people tend to buy
most of their stock after a major rise, when stocks are very pricey.
For example:
• If you bought the average Dow Jones Industrial stock before the
Crash of '29, you would have lost 89 cents for every dollar invested.
And even if you had both the cash and the courage to hold on (few
did!), you'd still have to wait 24 years — a full generation — before
you could recoup your original investment ... and another 20 years
before you could catch up with an investor who just earned a steady 5%
yield during that period.
• If you bought the average Dow stock at its peak in 1973, you would
have lost 45.1%. The Dow touched an all-time high of 1051 on January
11, and then dropped for two years, hitting 577 in December 1974. It
did not cross above 1000 again until eight years later.
• Losses in many so-called "conservative stocks" were just as bad. If
you bought the average utility shares, considered safer than most
stocks, your losses would have been 88.2% in 1929-32 and 45.3% in
1973-74.
• All the averages understate the true losses and recovery periods.
Reason: Bankrupted — or greatly downsized —companies are routinely
removed from the averages and replaced with cream-of-the-crop
companies. If your portfolio includes some of those companies, your
losses will be worse than the averages and your recovery period will
be longer.
Myth: "Don't sell in panic. It's probably the bottom." Why is it that
when brokers sell, it's supposedly based on reason — but when you or I
sell, they say it's based on emotion?
The classic example they like to remind you of is the Crash of '87,
which took the Dow down 36% in a big hurry, and then was over almost
as quickly as it began. "People who sold at the bottom of the '87
crash missed out on the biggest bull market in history," they say.
The reality: There are two problems with that argument. First of all,
even if you sold at the very worst time in 1987, there were many, many
opportunities to buy back into the market in subsequent months.
Second, their recommendation not to sell didn't work too well in
2000-2001. The pundits unanimously declared a bottom in April 2000
when the Nasdaq was off 37.1%. Then, they declared another bottom in
December 2000, when it was down 55.4%. If you followed their advice,
instead of getting hurt just once, you got killed again and again.
Then, ironically, when the Nasdaq did hit a bottom — that's when the
majority of "experts" on Wall Street themselves began to panic!
Reflecting the nearly unanimous pessimism of Wall Street experts,
Business Week advised its readers to dump their shares even if they
had already plunged 80% or 90%. Time's front cover featured a mean
bear and warned of more big trouble ahead. Nearly all the great
"bulls" on Wall Street temporarily abandoned their optimistic bent and
"warned" you about events that had already happened.
My rule number three of investing: Sell BEFORE the panic stage. In
practice, that means selling just as soon as your stocks fall below a
predetermined loss level that you're comfortable with. The actual
level will vary, and certain investments, like options, must be
treated differently. But generally, a 20% decline in a stock is a key
level to consider.
Myth: "Mutual funds have smart managers. They will give you
diversification. They will protect you."
The reality: Mutual funds are neither manna from heaven nor the holy
grail of investing. In the great stock market years between 1997 and
1999, only 24% outperformed the S&P 500.
In 2000-2001, the smart, sophisticated mutual fund managers running
tech funds got scammed just like everyone else. In fact, every single
one of 200 tech stock funds lost money, with 72.5% of the funds losing
more than the Nasdaq Composite Index. So much for expertise and
diversification!
Four More Rules of Investing in Today's Market
My rule number four: Keep a substantial portion of your money in cash
or cash-equivalent, including foreign currencies. (For specific
instructions, see my two-weeks-ago Money and Markets , Triple Crisis:
Your First Defense .)
My rule number five: Hedge with inverse ETFs — special exchange-traded
funds designed to go UP in value when the market goes down. (For my
step-by-step plan, see last Monday's Money and Markets , The Triple
Crisis Strikes Harder .)
My rule number six: Diversify over a broad spectrum of other
investment classes, including natural resources like oil and natural
gas. (If you want to get Sean's oil report coming out tomorrow,
today's your last day to sign up. Click here. And if you invest in oil
and gas stocks, be sure to also follow my rule number five for
protection.)
My rule number seven: If you work with a money manager, ask him about
his programs designed for a bear market. If he doesn't have one, move
your assets to one who does.
Good luck and God bless!
Martin
This investment news is brought to you by Money and Markets . Money
and Markets is a free daily investment newsletter from Martin D. Weiss
and Weiss Research analysts offering the latest investing news and
financial insights for the stock market, including tips and advice on
investing in gold, energy and oil. Dr. Weiss is a leader in the fields
of investing, interest rates, financial safety and economic
forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com
.
> --
> Les Cargill
Vid...@tcq.net
what if it crashes below your initial investment of $1000.00 after
two years? then your return would be negative, correct?
"If you bought the average Dow Jones Industrial stock before the Crash
of '29, you would have lost 89 cents for every dollar invested. And
even if you had both the cash and the courage to hold on (few did!),
you'd still have to wait 24 years — a full generation — before you
could recoup your original investment ... and another 20 years before
you could catch up with an investor who just earned a steady 5% yield
during that period.
• If you bought the average Dow stock at its peak in 1973, you would
have lost 45.1%. The Dow touched an all-time high of 1051 on January
11, and then dropped for two years, hitting 577 in December 1974. It
did not cross above 1000 again until eight years later.
• Losses in many so-called "conservative stocks" were just as bad. If
you bought the average utility shares, considered safer than most
stocks, your losses would have been 88.2% in 1929-32 and 45.3% in
1973-74.
• All the averages understate the true losses and recovery periods.
Reason: Bankrupted — or greatly downsized —companies are routinely
removed from the averages and replaced with cream-of-the-crop
companies. If your portfolio includes some of those companies, your
losses will be worse than the averages and your recovery period will
be longer."
> SO. If the S&P500 index fund in your portfolio had an ARR of 9.01%
> after the 2000 crash, then you haven't lost anything, anymore than a
> the guy who bought a 9.01% CD.
>
that is also a average. to attain a average, some win, some lose
http://www.moneychimp.com/features/market_cagr.htm
Compound Annual Growth Rate (Annualized Return)
A problem with talking about average investment returns is that there
is real ambiguity about what people mean by "average". For example, if
you had an investment that went up 100% one year and then came down
50% the next, you certainly wouldn't say that you had an average
return of 25% = (100% - 50%)/2, because your principal is back where
it started: your real annualized gain is zero.
In this example, the 25% is the simple average, or "arithmetic mean".
The zero percent that you really got is the "geometric mean", also
called the "annualized return", or the "CAGR" for Compound Annual
Growth Rate.
Volatile investments are frequently stated in terms of the simple
average, rather than the CAGR that you actually get. (Bad news: the
CAGR is smaller.)
CAGR of the Stock Market
This calculator lets you find the annualized growth rate of the S&P
500 over the date range you specify; you'll find that the CAGR is
usually about a percent less than the simple average.
2007 3.81
2006 12.80
2005 3.01
2004 9.00
2003 26.39
2002 -23.37
2001 -13.04
2000 -10.14
1999 19.51
1998 26.67
1997 31.02
1996 20.27
1995 34.11
1994 -1.47
1993 7.03
1992 4.47
1991 26.35
1990 -6.58
1989 27.25
1988 12.41
1987 2.59
1986 15.32
1985 26.38
1984 1.41
1983 17.23
1982 15.12
1981 -10.03
1980 25.76
1979 12.49
1978 -0.32
1977 -11.36
1976 19.14
1975 31.13
1974 -29.56
1973 -17.10
1972 15.63
1971 10.28
1970 0.10
1969 -11.45
1968 6.55
1967 20.09
1966 -12.98
1965 9.06
1964 12.98
1963 18.68
1962 -11.81
1961 19.88
1960 -4.02
1959 6.76
1958 31.83
1957 -13.62
1956 -2.19
1955 26.24
1954 42.33
1953 -8.07
1952 11.02
1951 10.37
1950 16.82
> Now that we have an understanding of ARR, let's get back to the real
> discussion and the facts and figures.
>
> Yesterday, I stated that Mr. S invested in the S&P500 at age 28 and
> retired at the age of 60, the year after the crash of 2000, and had an
> ARR of 9.01%. His buddy, Mr G, with government bonds only had an ARR
> of 1.8%. You accused me of, “propaganda not backed up anything
> real.” My data came from the S&P500 historical data located in the
> Yahoo.com financial section.
>
unless of course he is wiped out, or seriously diminished. again,
averages are attained because some win high, many lose low. mr. s may
have attained the average return, but does not have his initial
investment.
> My premise is, “if a person invests for the long term, during his
> working years, the stock market will outperform a CD or government
> bonds”. Thank you for your citation. It proves me right, not wrong.
> “...an investor who stayed in the US stock market during the entire 30-
> year period from 1963 to 1993...would have had an average annual
> return of 11.83 %.” (YOUR citation, not mine)
>
and he would have had to be perfect in his stock picks, and had no
life's little problems. because there was only 90 trading days spread
over 30 years to attain that return. life is not perfect, if one was
for who knows what reason forced out of the market, once or twice for
a period of time, and missed even a couple of those days, then the
return drops. and if that person made some bad stock choices, then the
loss compounds.
and if there is a market crash,
"If you bought the average Dow Jones Industrial stock before the Crash
of '29, you would have lost 89 cents for every dollar invested. And
even if you had both the cash and the courage to hold on (few did!),
you'd still have to wait 24 years — a full generation — before you
could recoup your original investment ... and another 20 years before
you could catch up with an investor who just earned a steady 5% yield
during that period.
• If you bought the average Dow stock at its peak in 1973, you would
have lost 45.1%. The Dow touched an all-time high of 1051 on January
11, and then dropped for two years, hitting 577 in December 1974. It
did not cross above 1000 again until eight years later.
• Losses in many so-called "conservative stocks" were just as bad. If
you bought the average utility shares, considered safer than most
stocks, your losses would have been 88.2% in 1929-32 and 45.3% in
1973-74.
• All the averages understate the true losses and recovery periods.
Reason: Bankrupted — or greatly downsized —companies are routinely
removed from the averages and replaced with cream-of-the-crop
companies. If your portfolio includes some of those companies, your
losses will be worse than the averages and your recovery period will
be longer."
> I have an additional premise: “Even after a stock market crash, your
> ARR, and hence your portfolio VALUE, will exceed a CD or government
> bonds!”
>
and you can attain that even if you lose big time. so its lying with
statistics. if you are forced out when the rate of return on your
diminished or wiped out investment is little comfort.
not all years have been good for the s&p 500.
2007 3.81
2006 12.80
2005 3.01
2004 9.00
2003 26.39
2002 -23.37
2001 -13.04
2000 -10.14
1999 19.51
1998 26.67
1997 31.02
1996 20.27
1995 34.11
1994 -1.47
1993 7.03
1992 4.47
1991 26.35
1990 -6.58
1989 27.25
1988 12.41
1987 2.59
1986 15.32
1985 26.38
1984 1.41
1983 17.23
1982 15.12
1981 -10.03
1980 25.76
1979 12.49
1978 -0.32
1977 -11.36
1976 19.14
1975 31.13
1974 -29.56
1973 -17.10
1972 15.63
1971 10.28
1970 0.10
1969 -11.45
1968 6.55
1967 20.09
1966 -12.98
1965 9.06
1964 12.98
1963 18.68
1962 -11.81
1961 19.88
1960 -4.02
1959 6.76
1958 31.83
1957 -13.62
1956 -2.19
1955 26.24
1954 42.33
1953 -8.07
1952 11.02
1951 10.37
1950 16.82
it still depends when you get in, and when you get out.
> Instead of Yahoo.com I will use the citation that you provided. I
> will do this for several reasons.
> 1) you can't accuse me of using bogus data.
> 2) That site posted NASDAQ historical data
> 3) Since the NASDAQ had a 58% crash in 2000, it truly represents a bad
> crash
> 4) 8 years later, the NASDAQ still hasn't recovered to the pre-crash
> high. (You used the word "parity")
>
> I took the NASDAQ figures from your citation and created a spread
> sheet of a family making average income (US census figures). Starting
> work at age 25 in 1960 and retiring at age 65 in Jan, 1 2001 (the year
> after the crash of 2000). This average family contribute 12.5% of his
> yearly average income into the NASDAQ (using the figures from your
> citation). This is a real life scenario that includes the stagnant
> years beginning in 1966, the crash of 87, the recession of 91 and the
> crash of 2000.
>
> Jan 1, 2000, the time immediately before the crash, Mr Average's
> portfolio had an ARR of 15.22%
> On Jan 1, 2001 (AFTER THE NASDAQ CRASH of 2000) Mr. Average had an
> ARR of 12.58%
>
and of course that takes in that life goes perfect. also, you say
that they get out after the crash, how about 18 years of a bear
market, like 1966-1982. or 1929-1954. if you get out then, well, what?
If you bought the average Dow Jones Industrial stock before the Crash
of '29, you would have lost 89 cents for every dollar invested. And
even if you had both the cash and the courage to hold on (few did!),
you'd still have to wait 24 years — a full generation — before you
could recoup your original investment ... and another 20 years before
you could catch up with an investor who just earned a steady 5% yield
during that period.
• If you bought the average Dow stock at its peak in 1973, you would
have lost 45.1%. The Dow touched an all-time high of 1051 on January
11, and then dropped for two years, hitting 577 in December 1974. It
did not cross above 1000 again until eight years later.
• Losses in many so-called "conservative stocks" were just as bad. If
you bought the average utility shares, considered safer than most
stocks, your losses would have been 88.2% in 1929-32 and 45.3% in
1973-74.
• All the averages understate the true losses and recovery periods.
Reason: Bankrupted — or greatly downsized —companies are routinely
removed from the averages and replaced with cream-of-the-crop
companies. If your portfolio includes some of those companies, your
losses will be worse than the averages and your recovery period will
be longer.
> His buddy, Mr G, with government bonds had a portfolio ARR of 1.8%.
>
> Jane.
and there are other forms of investing besides what you list. you
simply have shown me that you do not take long bear markets into
consideration if you have to pull out of the market. you use one year
after. stocks take a long time to drop.
Vid...@tcq.net
> On Jul 31, 12:19 am, Vide...@tcq.net wrote:
>
> > On Jul 30, 10:12 pm, alexy <nos...@asbry.net> wrote:
>
> ... snipped for brevity ...
>
> > > Not at all. That's why I suggest regular small investments rather than
> > > trying to time the market.
>
> > snicker, tell someone who is 69 right now, that lost a good portion
> > of their pre 2001 investment, and has not regained parity, let alone
> > made up for the lost years, that they should not time the market. you
> > are beating a dead horse, plus ignoring reality, shame on you. you
> > look foolish.
>
> I can do that using the NASDAQ data from your citation. The NASDAQ
> was the index that was the hardest hit by the 2000 crash AND it still
> hasn't returned to the pre-crash high. A great example for a stock
> pessimist like you.
>
> Using the US census figures for an average family income, a yearly
> investment of 12.5%, and retiring at age 65 the year after the 2000
> crash.
>
that would be people making over 50,000 dollars a year, most do not.
and most could never invest 12.5% of their income yearly. you are like
alex, the real world has escaped you.
> He would be 70 in the year 2006. The last year of your web citation
> table.
>
> In 2006, the old fart would have $1,381,814.00. Not too shabby for an
> average Joe.
>
most will never attain that, because most do not make what you
assume, and you assume much. the old farts life would have to be
perfect, and be able to stick to what you say. few can do that. life
serves up much. your scenario is to simple. and in the real world,
life is not so simple.
> NOW, why don't you run the numbers and tell me how much he would have
> if he purchased Government Bonds?
>
i do not buy them.
> > I know that I WILL make some purchases at
>
> > > the top of a bubble, and WILL make some sales at the bottom of a
> > > trough. But I know better than trying to time the market precisely
> > > BECAUSE everything is not perfect in my world, and mistakes can and do
> > > happen.
>
> The above portfolio value of $1.4 million included the stagnant years
> beginning in 1966, the crash of 87, the recession of 91, the crash of
> 2000 and the recession of 2001. It also included buying into the
> market peak of the late 90s.
>
oh, those 90 days in a 30 year period, perfection.
> Jane
>
> ... snipped...
Les Cargill
> On Jul 31, 9:15 pm, Les Cargill <lcarg...@cfl.rr.com> wrote:
>
>> Vid, it's like sand on a beach. If you look at it from 50,000 feet, a
>> beach is a smooth line. From right at it, it's less smooth and the waves
>> change it over time. From an inch or so, it's very complicated, and
>> the closer you get, the more complex it is.
>>
>> If the system provides the most strength with a longer view, then
>> that's the better way to look at it. Otherwise avoid it and
>> find some other way to store and grow money.
>>
>
> but most people never get to do the long term thing when you are
> young, most people do not have the income to even take advantage of
> employer matching contributions.
And that is okay. The sort of thing you are talking about *as standard*
would have made just about all people in human history blush by its ...
opulence.
But this is not what people live for. My God , almost all people in
the history of the species have had much less... and they have done very
well.
> so most people get into the markets thru their 401ks in the 30's,
> sometimes 40's. these two that i am arguing with make the assumption
> that you have 40 years, when most do not. so using averages is a false
> scenario, because, people do not always live, and earn enough to take
> advantage of their scenario, on top of that, they ignore the fact that
> not everyone gets in at the bottom, and out at the top, a average also
> includes the downs, as well as the ups. so if you are forced out in
> the down with a diminished investment, the averages mean nothing to
> you. and the annualized rate of return is another scam. if you lose
> half your investment, you still get the average annualized rate of
> return, which is a average that goes up, and down because of gains and
> loses.
Look. Stop.
I just got another report of a person who Won The Game
picking stocks, and retired, but *Lost The Game* because the didn't
have enough to do *after* they retired.
They are not with us any more.
--
Les Cargill
alexy
>On Jul 31, 9:53 am, jane.pla...@gmail.com wrote:
>
>> I now understand why there is so much confusion in our discussions.
>> Once I read your statement, “... if you lose, you lose. even if the
>> averages say different.”
>>
>> It dawned on me that you have a misunderstanding of how Annualized
>> Rate of Return (ARR) is calculated. You think that a person can lose
>> everything and still have an ARR of 9.01%. You can't!
>>
>> Let me explain ARR without going into any calculations. It ONLY
>> considers the contributions, how long they were in the portfolio and
>> the end VALUE.
>>
>> ARR considers your total contributions to a portfolio. It then looks
>> at the value of the portfolio on the end date and calculates the ratio
>> between the contributions over time vs the value at the end. The ARR
>> does not consider any ups or down during the interim.
Jane,
You did an excellent job of bringing down IRR to a level that would be
understandable by most. While I unfortunately predicted the reaction
that you see here, I kept my cynicism close to the vest on the off
chance that this would sink in.
P.S. Didn't you appreciate the quoted article explaining that the rate
of return is not the same as the simple average of rates of return?!
The fact that that was quoted (several times, in both this post and
another reply) as if it provided any information says much. If you
have the patience to continue to try educating, you need to take that
into consideration and try to aim at a level that would find that
article informative.
--
Vid...@tcq.net
poor poor alex, you ignore a 45 year period. you also ignore what if
after two years, you are left with less than what you invested,
crickets. of course you still get the return correct:)
you are so determined to prove me wrong, yet you refuse to answer a
simple question, what if you end up with less than you started out
with. it happens all of the time. its why fidelity and others say, its
no guarantee.
hey, know anyone who was forced into the stock market:)
you are a little man, you live to drive others in the ground. you
lie, distort, quibble, distract. anything, to look better than others.
except you refuse to answer questions directly. that exposes you for
what you are, little.
jane is a shill for the industry, just like you. her scenario is
fine, till i asked the question, what if after two years your
investment is less that what you started with. do you still get the
same return. if yes, so what. your investment has shrank. and if you
are forced out of the market at that time, wow, you got the return.
little people trying to lure the gullible. sorry, no bites.
Vid...@tcq.net
look les, i know people who win at casino's regularly. but most lose.
so we listen to the winners, and pile into the casino's. that is the
way it works in the markets also. there are a few winners that are run
up the pole to salute, and paraded around the world thru decades of
intense propaganda.
what you never hear about, or its drowned out by the shills and
feverish followers, are the many untold losers. how do you think
averages are attained? if everyone was a winner, the averages would be
100%.
i know more people who lost in the markets, than won.
-
> Les Cargill
alexy
> poor poor alex, you ignore a 45 year period
What 45 year period do you imagine I am ignoring. Identify that
period, and let's talk about how investors did during that period.
>you also ignore what if
>after two years, you are left with less than what you invested,
In that case you would have lost money over that two-year period.
What's the question, and where have I ignored such a trivial point?
> of course you still get the return correct:)
Damn you are dense. It would be negative return over that period. How
can that be hard to understand.
Now a question for you: If you start with $1,000, and two years later
it has grown to $2,000, and two years after that has shrunk back to
$1,500, did you make or lose money over the four-year period?
> you are so determined to prove me wrong, yet you refuse to answer a
>simple question, what if you end up with less than you started out
>with.
If I ever refused to answer the question, it was because it was so
assinine that it really seemed not worth answering. Clearly you would
have lost in that case. DUH.
> it happens all of the time. its why fidelity and others say, its
>no guarantee.
> hey, know anyone who was forced into the stock market:)
No.
>except you refuse to answer questions directly.
Well, hopefully these answers to what must seem to you profound
questions will help you with your understanding of investments.
alexy
> look les, i know people who win at casino's regularly. but most lose.
Yep, that's the difference between gambling and investing. Any legal
strategy in a casino will over the long run result in the gambler
loosing money to the house. I.e., there is a negative expected return.
A strategy of making lots of small bets virtually assures loss to the
house, and eliminates any real likelihood of hitting it big.
In the stock market, there is a positive expected return. People can
lose, but a strategy of many small bets makes you more likely to get
the expected return and less likely to lose big.
>so we listen to the winners, and pile into the casino's.
Speak for yourself.
> i know more people who lost in the markets, than won.
That does not surprise me.
--
Les Cargill
Casinos are zero-sum. Investments aren't.
> so we listen to the winners, and pile into the casino's. that is the
> way it works in the markets also. there are a few winners that are run
> up the pole to salute, and paraded around the world thru decades of
> intense propaganda.
> what you never hear about, or its drowned out by the shills and
> feverish followers, are the many untold losers. how do you think
> averages are attained? if everyone was a winner, the averages would be
> 100%.
> i know more people who lost in the markets, than won.
>
That's an unusual circumstance. Most people in the market long enough
have significant gains. But there are always bonds, or just plain-old
CDs as alternatives.
> -
>> Les Cargill
>
--
Les Cargill
alexy
>Vid...@tcq.net wrote:
>> i know more people who lost in the markets, than won.
>That's an unusual circumstance.
I don't think so. People who view the markets as a casino are more
likely to stick together, and are more likely to have losses. Do you
think Vid is likely to know and have real-life discussions about
finance with many people who invest systematically for the long run in
the market? So he won't know those people. Among the
markets-are-casinos crowd he is likely to hang with, I suspect that
many share his overall negative view, so would not admit to winning in
the market. In fact, Vid himself has bragged about getting his wife
into FDIC-insured accounts (in her 401(k)!!!) when the market was high
at the end of the 90's, but has never acknowledged winning in the
market before that. Finally, even if some of his friends have won and
are not so blinded by their own bias that they deny winning, it is
very unlikely that Vid would be able to hear them say that they won in
the market.
>Most people in the market long enough
>have significant gains.
Sure. But facts do not carry much weight with Vid.
--
Les Cargill
> Les Cargill <lcar...@cfl.rr.com> wrote:
>
>> Vid...@tcq.net wrote:
>
>>> i know more people who lost in the markets, than won.
>
>> That's an unusual circumstance.
> I don't think so. People who view the markets as a casino are more
> likely to stick together, and are more likely to have losses.
So don't do that :)
> Do you
> think Vid is likely to know and have real-life discussions about
> finance with many people who invest systematically for the long run in
> the market? So he won't know those people. Among the
> markets-are-casinos crowd he is likely to hang with, I suspect that
> many share his overall negative view, so would not admit to winning in
> the market.
Good point.
> In fact, Vid himself has bragged about getting his wife
> into FDIC-insured accounts (in her 401(k)!!!) when the market was high
> at the end of the 90's, but has never acknowledged winning in the
> market before that. Finally, even if some of his friends have won and
> are not so blinded by their own bias that they deny winning, it is
> very unlikely that Vid would be able to hear them say that they won in
> the market.
>
Never mind that he's one of our "journalists" here.
>> Most people in the market long enough
>> have significant gains.
> Sure. But facts do not carry much weight with Vid.
It's not a bloody scratch-off. Anybody above the age of 12
should know that....
--
Les Cargill
zzbunker
Well, that's true, But since wank casino's kick card counters out,
that's why A.I. digital computers, lasers, satellites, and robots
were invented. Since the wanks can't kick you off a robot track.
> what you never hear about, or its drowned out by the shills and
> feverish followers, are the many untold losers. how do you think
> averages are attained? if everyone was a winner, the averages would be
> 100%.
> i know more people who lost in the markets, than won.
>
> -
>
>
>
> > Les Cargill- Hide quoted text -
>
> - Show quoted text -- Hide quoted text -
>
> - Show quoted text -
Vid...@tcq.net
well, you will not answer the question that a investor can get in the
market when its high, and for many reasons forced out of the market
when its low. you refuse to answer that the markets can tank for 2
decades or longer, and that many people lost most, if not all of their
investments, and never got them back. you refuse to answer the
question about catch up time. you say show me a 40 year period, and i
have shown you one. 1929-1954, then another 20 years to catch up on
lost gains, that is a 45 year period.
you have shown me a model of annualized returns, but that model is
flawed, its based on your investment not shrinking, but growing. i
have shown you that that is a assumption. what if you investment
shrinks like in 1929, and even if you are broadly invested, many
companies simply went under, no longer paid dividends, and never
recouped their original value.
even fidelity, and others on their web sites that advertises broad
based investing, have a disclaimer that you could lose all or part of
your investment, even if you are broadly invested. i have shown you
that, crickets. along with distortions, distractions, insults, and
putting words into my mouth which is lying.
so, its put up, or shut up. i might be open to investing your way. i
might be willing to take a 30 year chance(i should live that long, or
longer if all goes well, but i am human, not perfect, so we shall
see.)on your investment strategy.
you pick the investments, you run the show, but, you also must
guarantee that my investment does not shrink to less than what i
invested, and that i get the 9% or better return year in, year out
till the 30 year period is up. i know some years there are no gains,
maybe a loss on the return, but after 30 years, it would be the
average. i would end up with a larger investment amount than my
original investment because of 30 years of annualized returns of 9% or
better.
so, lets put it on paper, your guarantee that this will be
successful, and if not, you cover my losses out of your own pocket.
and i think we should get this insured in case you default.
my turn for the disclaimer, be careful, there are no brokerages that
i know of that guarantee success, they all say you may lose some, or
all of your investments no matter how well diversified you are because
markets fall.
but, according to you this is a no brainer, written in stone, cannot
fail investing plan. what do you say, you know the ground rules?
Les Cargill
> my turn for the disclaimer, be careful, there are no brokerages that
> i know of that guarantee success, they all say you may lose some, or
> all of your investments no matter how well diversified you are because
> markets fall.
Individual issues will go up, some will crash utterly. The *aggregate*
market exhibits an overall pattern of growth.
> but, according to you this is a no brainer, written in stone, cannot
> fail investing plan. what do you say, you know the ground rules?
It just depends on how you allocate your assets.
--
Les Cargill
alexy
>On Aug 1, 1:46 pm, alexy <nos...@asbry.net> wrote:
> you say show me a 40 year period, and i
>have shown you one. 1929-1954, then another 20 years to catch up on
>lost gains, that is a 45 year period.
Okay, let's see what consistent investing over that time results in.
Let's assume you invest 1,000 on 7/1 of each year in the S&P 500. (I
know that you tend to care only about the kind of people who have
enough money to invest it all at the beginning and wait, but I'm
talking about how the markets work for the working man who doesn't
have lots of cash to invest in one lump sum). Here's how the working
guy fares in the 45-year period when you are so concerned about the
rich guy losing his single lump sum investment.
1929: invests 1,000
1930: Stock now worth 774, (for which he paid $1,000), invests another
1,000
1931: Stock now worth 1282 (for which he paid $2,000), invests another
1,000
1932: Stock now worth 899 (for which he paid 3,000), invests another
1,000
1933: Stock now worth $4432 (for which he paid 4,000, in a net gain
position), invests another 1,000
1934: Stock now worth $4796 (for which he paid 5,000, back to a loss
position), invests another 1,000
1935: Stock now worth $6787(for which he paid 6,000), invests another
1,000
...
1954: Stock now worth $131,455 (for which he paid 25,000)
This is the year in which your rich pal with a single lump sum to
invest in 1929, and who frittered away his dividend checks just broke
even. The working stiff who just saved a little a year, putting it
into an index fund that reinvests dividends made a handsome profit.
I know this takes you only through the first 25 of your 45-year
period, but since the stock prices, even ignoring dividends, doubled
in the next 20 years, I doubt the picture will change.
And by the way, since I know that you can't understand the rationale
for including all the returns on stocks, I tried it assuming that the
annual investor was as dumb as your hypothetical rich guy and threw
away all his dividends. In that case, his $25,000 investment grew to
only 58,000, a 5.9% return. Still WAY more than he could get in that
period on bank savings, but significantly less than the 11.9% return
available if he stuck to the fund with dividend reinvestment.
Not bad for what some claim is a period in which the markets weren't
growing!
> you have shown me a model of annualized returns, but that model is
>flawed, its based on your investment not shrinking, but growing.
No, the investment is the same each year. It grows and shrinks with
market fluctuations. Look at the value in 1932 -- pretty severely
shrunk.
> so, its put up, or shut up. i might be open to investing your way. i
>might be willing to take a 30 year chance
Okay. But I'm not willing to wait the thirty years to collect my
winnings. So I'll give you an advantage. We'll work with actual
historical data, and you can cherry pick the period.
> you pick the investments, you run the show, but, you also must
>guarantee that my investment does not shrink to less than what i
>invested,
If you mean that it will never go negative, no dice. If you mean that
it will not be negative at the end, that's fine.
> and that i get the 9% or better return year in, year out
>till the 30 year period is up.
No way! The very nature of equity investing is that there are
fluctuations; that is why there is a risk premium in the return.
>i know some years there are no gains,
>maybe a loss on the return,
Then why are you requesting a certain return year in and year out?
> but after 30 years, it would be the
>average. i would end up with a larger investment amount than my
>original investment because of 30 years of annualized returns of 9% or
>better.
Can't guarantee a given rate, since underlying rates may be different
in different periods of history. Can guarantee beating some fixed
income investment alternative of your choosing, though.
> so, lets put it on paper, your guarantee that this will be
>successful, and if not, you cover my losses out of your own pocket.
>and i think we should get this insured in case you default.
And what's in it for me? You pay me the amount that the historical
investments beat a fixed income investment?
> my turn for the disclaimer, be careful, there are no brokerages that
>i know of that guarantee success, they all say you may lose some, or
>all of your investments no matter how well diversified you are because
>markets fall.
That's to cover them in case they ever get anyone stupid enough to
invest all his money at one point in time in 1929 and throw away all
his dividend checks.
> but, according to you this is a no brainer, written in stone, cannot
>fail investing plan. what do you say, you know the ground rules?
Pick the period and suggest the fixed income standard relevant to that
historical period.
Vid...@tcq.net
> Vide...@tcq.net wrote:
> > On Aug 1, 1:46 pm, alexy <nos...@asbry.net> wrote:
> <snip>
> > my turn for the disclaimer, be careful, there are no brokerages that
> > i know of that guarantee success, they all say you may lose some, or
> > all of your investments no matter how well diversified you are because
> > markets fall.
>
> Individual issues will go up, some will crash utterly. The *aggregate*
> market exhibits an overall pattern of growth.
>
that is correct. its also how averages are attained, some win, some
lose.
> > but, according to you this is a no brainer, written in stone, cannot
> > fail investing plan. what do you say, you know the ground rules?
>
> It just depends on how you allocate your assets.
>
that is also partly correct. there is lots of luck involved. life can
dish you up all sorts of unforeseen things. so not everybody can
attain those averages, and of course companies come and go. so its not
so easy, and only a few can attain them.
> --
> Les Cargill
alexy
> that is also partly correct. there is lots of luck involved. life can
>dish you up all sorts of unforeseen things. so not everybody can
>attain those averages, and of course companies come and go. so its not
>so easy, and only a few can attain them.
Yes, it's quite difficult. What you need to do is to walk into any
brokerage office and say "I'd like to invest this $1,000 in a no-load
S&P 500 index fund". Not many people can do that. Right.
Vid...@tcq.net
that assumes that during a depression when there was 255
unemployment, and that wages were plummeting, that that little guy had
the money to invest. you assume much.
> This is the year in which your rich pal with a single lump sum to
> invest in 1929, and who frittered away his dividend checks just broke
> even. The working stiff who just saved a little a year, putting it
> into an index fund that reinvests dividends made a handsome profit.
>
but not many could.
> I know this takes you only through the first 25 of your 45-year
> period, but since the stock prices, even ignoring dividends, doubled
> in the next 20 years, I doubt the picture will change.
>
but lots of campanies recinded their dividends, just like today, and
many simply went under. you still will not recognize that.
> And by the way, since I know that you can't understand the rationale
> for including all the returns on stocks, I tried it assuming that the
> annual investor was as dumb as your hypothetical rich guy and threw
> away all his dividends. In that case, his $25,000 investment grew to
> only 58,000, a 5.9% return. Still WAY more than he could get in that
> period on bank savings, but significantly less than the 11.9% return
> available if he stuck to the fund with dividend reinvestment.
>
i understand it. i also understand that in bad economic times,
dividends get the heave ho at lots of companies.
> Not bad for what some claim is a period in which the markets weren't
> growing!
>
in a rosy fantasy, correct, in reality, no.
> > you have shown me a model of annualized returns, but that model is
> >flawed, its based on your investment not shrinking, but growing.
>
> No, the investment is the same each year. It grows and shrinks with
> market fluctuations. Look at the value in 1932 -- pretty severely
> shrunk.
>
you assume that in a market where over .80 cents on every dollar was
lost, and it took 25 years to reach parity, that your original
investment would not have shrunk, or disappeared
.
> > so, its put up, or shut up. i might be open to investing your way. i
> >might be willing to take a 30 year chance
>
> Okay. But I'm not willing to wait the thirty years to collect my
> winnings. So I'll give you an advantage. We'll work with actual
> historical data, and you can cherry pick the period.
>
no, you get no winnings. you are proving to me that it works. i get
the winnings, you take the losses. that is how it works if you are to
prove your point. its a no brainer according to you.
> > you pick the investments, you run the show, but, you also must
> >guarantee that my investment does not shrink to less than what i
> >invested,
>
> If you mean that it will never go negative, no dice. If you mean that
> it will not be negative at the end, that's fine.
>
i understand averages. i know there will be down years, i know there
will be up years. but according to you, at the end, i will have far
more than i started out with, because of the annualized returns, and
the broad based investments.
> > and that i get the 9% or better return year in, year out
> >till the 30 year period is up.
>
> No way! The very nature of equity investing is that there are
> fluctuations; that is why there is a risk premium in the return.
>
what i meant was that after the thirty years, i would have attained
the equivalent of 9% or better per year.
> >i know some years there are no gains,
> >maybe a loss on the return,
>
> Then why are you requesting a certain return year in and year out?
>
i meant the average over 30 years.
> > but after 30 years, it would be the
> >average. i would end up with a larger investment amount than my
> >original investment because of 30 years of annualized returns of 9% or
> >better.
>
> Can't guarantee a given rate, since underlying rates may be different
> in different periods of history. Can guarantee beating some fixed
> income investment alternative of your choosing, though.
>
WAIT A MINUTE HERE, WHAT ARE YOU SAYING. ACCORDING TO YOU, YOU CAN
BEAT ALL OTHER INVESTMENTS, ITS A NO BRAINER, AND ANYONE CAN DO IT.
THERE ARE NO LOSERS ACCORDING TO YOU, ALL WIN. SO MAYBE NOT EVERYONE
WINS, AND MAYBE NOT EVERYONE GETS 9% OR BETTER, AFTER ALL, THAT IS THE
FIGURE YOU AND JANE ARE THROWING AROUND. IS THAT THE STORY NOW HEY?
MAYBE MANY GET 1%? COME ON, FESS UP, YOU MEAN THE 9% OR BETTER IS A
AVERAGE, AND HOW ARE AVERAGES COMPILED. BECAUSE DIFFERENT TIMES IN
HISTORY, THE RATE MAYBE HIGHER, OR LOWER. BUT ACCORDING TO YOU GUYS,
AFTER 30 YEARS I WILL GET 9% OR BETTER, BUT IF HISTORY SAYS THERE ARE
DIFFERENT RATES OVER TIME, THAN 30 YEARS MAY COVER HISTORY.
MAYBE YOU COULD ATTAIN ME A 1% RATE, COME ON NOW, COUGH IT UP.
ACCORDING TO YOU, ITS EASY.
YOU JUST SAID ACCORDING TO YOU, " Can't guarantee a given rate, since
underlying rates may be different
> in different periods of history". THAT MEANS THAT THE MARKETS MAY NOT BE PERFORMING WELL, AND IF I RETIRE THEN, AFTER THE 30 YEARS WHEN THE MARKET IS NOT PREFORMING WELL, I WILL NOT GET MY 9%? NOT ACCORDING TO WHAT YOU JUST SAID.
> > so, lets put it on paper, your guarantee that this will be
> >successful, and if not, you cover my losses out of your own pocket.
> >and i think we should get this insured in case you default.
>
> And what's in it for me? You pay me the amount that the historical
> investments beat a fixed income investment?
>
whats in it for you? if you are so sure, you are such a believer, you
are dying to prove me wrong, you should be ready and willing to take
this on, and prove me the dummy. that is a huge reward in my book.
> > my turn for the disclaimer, be careful, there are no brokerages that
> >i know of that guarantee success, they all say you may lose some, or
> >all of your investments no matter how well diversified you are because
> >markets fall.
>
> That's to cover them in case they ever get anyone stupid enough to
> invest all his money at one point in time in 1929 and throw away all
> his dividend checks.
>
BWAAAAAAAAAAA, CAUGHT AGAIN HEY. and it does not mean that they threw
away their dividend checks. history tells us that many companies
abandoned their dividends during hard times, if they can stay in
business. its happening now as we speak.
you just admitted that if i got in at the high point, and it crashed,
that i would be broke. and as the case with investing, most people get
in the markets because when they are in a feverish bubble, they
attract many people to the casino.
> > but, according to you this is a no brainer, written in stone, cannot
> >fail investing plan. what do you say, you know the ground rules?
>
> Pick the period and suggest the fixed income standard relevant to that
> historical period.
>
back peddling, and evading. 2008-2038. you pick the investments. you
manage them for 30 years. you guarantee the return. you cover the
losses if any. that means after 30 years, my investment has grown
because i got 9% or better annualized returns over a 30 year period,
not to bad for a old fart ey:). if you are unwilling, maybe jane will
ey?
jane....@gmail.com
Vide, you are so determined to win an argument, that you are unwilling
to even consider that the other person just might have a valid point.
Let me illustrate: My contention is that a person who invests over
the long term will do well in the stock market. Not only that, the
long term investor can suffer through two market crashes and still do
well even if he retires immediately after the last crash. I
illustrated that using average family income from the US census
figures and NASDAQ figures from the web site that you provided. When
my figures indicated a sizable return, your counter argument was not
whether or not the person had a net return after the crash. Your
counter argument was the particular yearly contribution rate that I
chose.
The reason the stock market will out perform fixed investments is that
the stock market is nothing more than ownership in business. Stock
investing goes up over the long term because businesses make and sell
products. It would be hard for you to argue that the family owned
corner business that provided for a family for 40 years did not
provide a positive rate of return. The family corner store provided
yearly returns because the business had sales. Now, I am sure that
you are going to point out that companies such as Enron go bankrupt.
Likewise, 450,000 small businesses (including family business) go out
of business every year. That is why you invest in a broad sector of
businesses.
The reason stock values vary over the short term is because of
unrealistic expectation (both over and under expectations). This is
what happened with the stock bubble of the 90s. In spite of history,
people expected double digit stock growth to continue forever.
Stocks are not for everyone and you are one of those people. Whenever
a person even mentions the comparison to a casino, that person should
not even think about the stock market. Reduce the casino down to 6
guys playing poker. When they walk out the door, the total money
leaving through the door is exactly the same as the money that came in
the door. No products were produced and no sales were made. That is
what you call a zero sum game. People such as yourself who do not
know the difference between a game of chance and a business should
avoid the stock market.
You challenged people in this discussion, including me, to guarantee a
rate of return. These people exist and I have been one of them in the
past. One prime example are CDs. People who sell you a CD take your
money, offer you a fixed guaranteed rate of return, invest your money
in the private sector and keep the difference.
This is why the long term market will outperform the market. CDs are
designed, and calculated, to provide a positive rate of return to
those who are investing your money.
Vide, stay out of the market. We need people like you to invest in CDs
and other guaranteed fixed income investments.
Jane.
jane....@gmail.com
Typo corrected below:
Sorry, this paragraph should have stated:
"This is why the long term market will outperform the fixed,
guaranteed investments. CDs are
Vid...@tcq.net
well, you will not answer the question that a investor can get in the
market when its high, and for many reasons forced out of the market
when its low. you refuse to answer that the markets can tank for 2
decades or longer, and that many people lost most, if not all of their
investments, and never got them back. you refuse to answer the
question about catch up time. you say show me a 40 year period, and i
have shown you one. 1929-1954, then another 20 years to catch up on
lost gains, that is a 45 year period.
you have shown me a model of annualized returns, but that model is
flawed, its based on your investment not shrinking, but growing. i
have shown you that that is a assumption. what if you investment
shrinks like in 1929, and even if you are broadly invested, many
companies simply went under, no longer paid dividends, and never
recouped their original value.
even fidelity, and others on their web sites that advertises broad
based investing, have a disclaimer that you could lose all or part of
your investment, even if you are broadly invested. i have shown you
that, crickets.
so, its put up, or shut up. i might be open to investing your way. i
might be willing to take a 30 year chance(i should live that long, or
longer if all goes well, but i am human, not perfect, so we shall
see.)on your investment strategy.
you pick the investments, you run the show, but, you also must
guarantee that my investment does not shrink to less than what i
invested, and that i get the 9% or better return year in, year out
till the 30 year period is up. i know some years there are no gains,
maybe a loss on the return, but after 30 years, it would be the
average. i would end up with a larger investment amount than my
original investment because of 30 years of annualized returns of 9% or
better.
so, lets put it on paper, your guarantee that this will be
successful, and if not, you cover my losses out of your own pocket.
and i think we should get this insured in case you default.
my turn for the disclaimer, be careful, there are no brokerages that
i know of that guarantee success, they all say you may lose some, or
all of your investments no matter how well diversified you are because
markets fall.
jane....@gmail.com
What I stated was that the market would provide a greater return in
the long term than guaranteed fixed investments, not a guaranteed ARR
of 9%.
You claim that you could present a long term period were "many people
lost most, if not all of their investments, and never got them back."
You chose 1929-1974.
I ran the numbers. I did not even include reinvestment of income
because I did not want to waste too much time on you. Even without
including reinvestment, the investor who invested a fixed amount every
Jan, 02 from 1929 through 1974 had a POSITIVE ARR.
As I said, Vide, stay away from the stock market. It is not for
everyone, especially you.
BTW #1: Where do you think people should put their retirement money?
You are asking us to present our numbers, but you refuse to expose
your hand. It is now time. Where do you recommend a person put his
retirement money?
BTW #2: Your insistence on using 1929 is a very bad comparison. We
are comparing the stock market with other forms of investing, such as
guaranteed fixed investments. There was no such thing as the FDIC in
1929. There were no "guaranteed" bank notes. Many who had their
money in banks also lost everything.
Jane.
alexy
Trying to shift the focus from WHAT to invest in to whether someone
could afford to save? Why?
>
>
>> I know this takes you only through the first 25 of your 45-year
>> period, but since the stock prices, even ignoring dividends, doubled
>> in the next 20 years, I doubt the picture will change.
>>
>
> but lots of campanies recinded their dividends, just like today, and
>many simply went under. you still will not recognize that.
Sure I do. That's why I used only those actually paid, not some
hypothetical.
>
>> And by the way, since I know that you can't understand the rationale
>> for including all the returns on stocks, I tried it assuming that the
>> annual investor was as dumb as your hypothetical rich guy and threw
>> away all his dividends. In that case, his $25,000 investment grew to
>> only 58,000, a 5.9% return. Still WAY more than he could get in that
>> period on bank savings, but significantly less than the 11.9% return
>> available if he stuck to the fund with dividend reinvestment.
>>
>
>
> i understand it. i also understand that in bad economic times,
>dividends get the heave ho at lots of companies.
So? Just include dividends for companies that actually paid them, as I
did. All I am showing is what someone would have earned in an earlier
version of an S&P500 index fund. No hypotheticals here. Just what was
actually paid the those who invested in those stocks.
>
>> Not bad for what some claim is a period in which the markets weren't
>> growing!
>>
>
> in a rosy fantasy, correct, in reality, no.
Maybe not in your reality.
>
>
>> > you have shown me a model of annualized returns, but that model is
>> >flawed, its based on your investment not shrinking, but growing.
>>
>> No, the investment is the same each year. It grows and shrinks with
>> market fluctuations. Look at the value in 1932 -- pretty severely
>> shrunk.
>>
>
> you assume that in a market where over .80 cents on every dollar was
>lost, and it took 25 years to reach parity, that your original
>investment would not have shrunk, or disappeared
No. My original investment of $1,000 in 7/29 bought 35.11 shares of
s&P at $28.48. By 7/32, those 35.11 shares were worth only $176 at the
price then of $5.01. So, yes, that original investment shrunk quite a
bit.
>.
>
>
>> > so, its put up, or shut up. i might be open to investing your way. i
>> >might be willing to take a 30 year chance
>>
>> Okay. But I'm not willing to wait the thirty years to collect my
>> winnings. So I'll give you an advantage. We'll work with actual
>> historical data, and you can cherry pick the period.
>>
>
> no, you get no winnings.
So you are looking for a sucker to give you a guarantee that you don't
have to pay for? If you find one, point him out to me; I've got a
bridge I'd like to sell him.
> you are proving to me that it works. i get
>the winnings, you take the losses. that is how it works if you are to
>prove your point.
So my potential gain is like the psychic reward received by a special
ed teacher who finally succeeds in getting a simple point across to a
particularly challenged student? No thanks. I have loads of respect
and admiration for people with those skills, but I'm not wired that
way.
>its a no brainer according to you.
Yes, it is. And by trying to delay the day of reckoning by 30 years.
you are showing that you might actually be catching on.
>
> what i meant was that after the thirty years, i would have attained
>the equivalent of 9% or better per year.
>
>> >i know some years there are no gains,
>> >maybe a loss on the return,
>>
>> Then why are you requesting a certain return year in and year out?
>>
>
> i meant the average over 30 years.
You have a weird way of saying that.
>
>> > but after 30 years, it would be the
>> >average. i would end up with a larger investment amount than my
>> >original investment because of 30 years of annualized returns of 9% or
>> >better.
>>
>> Can't guarantee a given rate, since underlying rates may be different
>> in different periods of history. Can guarantee beating some fixed
>> income investment alternative of your choosing, though.
>>
>
>
>
> WAIT A MINUTE HERE, WHAT ARE YOU SAYING. ACCORDING TO YOU, YOU CAN
>BEAT ALL OTHER INVESTMENTS,
Yes
> ITS A NO BRAINER, AND ANYONE CAN DO IT.
Yes
>THERE ARE NO LOSERS ACCORDING TO YOU, ALL WIN. SO MAYBE NOT EVERYONE
>WINS, AND MAYBE NOT EVERYONE GETS 9% OR BETTER, AFTER ALL,
Who has ever said they would?
>THAT IS THE
>FIGURE YOU AND JANE ARE THROWING AROUND.
Yes. And you probably don't have the ability to distinguish between a
point about historical returns and a guarantee for future returns.
> IS THAT THE STORY NOW HEY?
>MAYBE MANY GET 1%? COME ON, FESS UP, YOU MEAN THE 9% OR BETTER IS A
>AVERAGE, AND HOW ARE AVERAGES COMPILED. BECAUSE DIFFERENT TIMES IN
>HISTORY, THE RATE MAYBE HIGHER, OR LOWER. BUT ACCORDING TO YOU GUYS,
>AFTER 30 YEARS I WILL GET 9% OR BETTER,
Liar. Show where either of us has said that. I'm pretty sure I
haven't, and I don't remember Jane making such a silly statement.
> BUT IF HISTORY SAYS THERE ARE
>DIFFERENT RATES OVER TIME, THAN 30 YEARS MAY COVER HISTORY.
> MAYBE YOU COULD ATTAIN ME A 1% RATE, COME ON NOW, COUGH IT UP.
>ACCORDING TO YOU, ITS EASY.
>YOU JUST SAID ACCORDING TO YOU, " Can't guarantee a given rate, since
>underlying rates may be different
>> in different periods of history". THAT MEANS THAT THE MARKETS MAY NOT BE PERFORMING WELL,
>AND IF I RETIRE THEN, AFTER THE 30 YEARS WHEN THE MARKET IS NOT PREFORMING WELL,
>I WILL NOT GET MY 9%? NOT ACCORDING TO WHAT YOU JUST SAID.
If you were anyone else, I would say "Come on, you can't be that
stupid; you know what it means to earn a premium over the underlying
interest rates". But it's you, so I know that would not be accurate.
<snip>
>> That's to cover them in case they ever get anyone stupid enough to
>> invest all his money at one point in time in 1929 and throw away all
>> his dividend checks.
>>
>
>
> BWAAAAAAAAAAA, CAUGHT AGAIN HEY. and it does not mean that they threw
>away their dividend checks. history tells us that many companies
>abandoned their dividends during hard times, if they can stay in
>business.
More specifically, history tells us that companies only paid dividends
during that period exactly as I have illustrated.
Vid...@tcq.net
here is your chance. no more distractions, distortions, evasions,
putting words into my mouth, lying, ignoring reality. here it is. this
is your chance. i cannot put it any plainer than this. its your show
based on your for sure dog and pony act. and hey, this could not have
come at a sweeter time, the markets have been down now almost 8 long
years, there is no where but up according to you. its a no brainer,
finally a chance to prove you are correct. why have you not grabbed
for the brass ring?
i have reposted this in case you may have missed the sweetest
opportunity in your vendetta to prove me wrong in all things.
well, you will not answer the question that a investor can get in the
market when its high, and for many reasons forced out of the market
when its low. you refuse to answer that the markets can tank for 2
decades or longer, and that many people lost most, if not all of their
investments, and never got them back. you refuse to answer the
question about catch up time. you say show me a 40 year period, and i
have shown you one. 1929-1954, then another 20 years to catch up on
lost gains, that is a 45 year period.
you have shown me a model of annualized returns, but that model is
flawed, its based on your investment not shrinking, but growing. i
have shown you that that is a assumption. what if you investment
shrinks like in 1929, and even if you are broadly invested, many
companies simply went under, no longer paid dividends, and never
recouped their original value.
even fidelity, and others on their web sites that advertises broad
based investing, have a disclaimer that you could lose all or part of
your investment, even if you are broadly invested. i have shown you
that, crickets. along with distortions, distractions, insults, and
putting words into my mouth which is lying.
so, its put up, or shut up. i might be open to investing your way. i
might be willing to take a 30 year chance(i should live that long, or
longer if all goes well, but i am human, not perfect, so we shall
see.)on your investment strategy.
you pick the investments, you run the show, but, you also must
guarantee that my investment does not shrink to less than what i
invested, and that i get the 9% or better return year in, year out
till the 30 year period is up. i know some years there are no gains,
maybe a loss on the return, but after 30 years, it would be the
average. i would end up with a larger investment amount than my
original investment because of 30 years of annualized returns of 9% or
better.
so, lets put it on paper, your guarantee that this will be
successful, and if not, you cover my losses out of your own pocket.
and i think we should get this insured in case you default.
my turn for the disclaimer, be careful, there are no brokerages that
i know of that guarantee success, they all say you may lose some, or
all of your investments no matter how well diversified you are because
markets fall.
but, according to you this is a no brainer, written in stone, cannot
fail investing plan. what do you say, you know the ground rules?
Rod Speed
> Vide...@tcq.net wrote>>>> alexy <nos...@asbry.net> wrote
> Vide, you are so determined to win an argument, that you are unwilling
> to even consider that the other person just might have a valid point.
He doesnt have enough viable between the ears to do that.
> Let me illustrate: My contention is that a person who
> invests over the long term will do well in the stock market.
Not necessarily, depends on the detail of how that person invests in the stock market.
Its quite possible to do badly over the long term.
> Not only that, the long term investor can suffer through two market crashes
> and still do well even if he retires immediately after the last crash.
Correct.
> I illustrated that using average family income from the US census
> figures and NASDAQ figures from the web site that you provided.
> When my figures indicated a sizable return, your counter argument was
> not whether or not the person had a net return after the crash. Your
> counter argument was the particular yearly contribution rate that I chose.
Thats all he can nit pick about.
> The reason the stock market will out perform fixed investments
> is that the stock market is nothing more than ownership in
> business. Stock investing goes up over the long term
> because businesses make and sell products.
Nope, most business are actually involved in selling services now, not products.
> It would be hard for you to argue that the family
> owned corner business that provided for a family
> for 40 years did not provide a positive rate of return.
None of the businesses you invest in via the stock market
are anything like the family owned corner business.
> The family corner store provided yearly returns because
> the business had sales. Now, I am sure that you are
> going to point out that companies such as Enron go
> bankrupt. Likewise, 450,000 small businesses (including
> family business) go out of business every year.
And those clearly dont produce a positive rate of return.
> That is why you invest in a broad sector of businesses.
That wont necessarily help if the entire economy tanks.
> The reason stock values vary over the short term is because
> of unrealistic expectation (both over and under expectations).
Most of the variation is actually realistic, the price of the
stock reflects real variations in the value of that investment.
> This is what happened with the stock bubble of the 90s. In spite of
> history, people expected double digit stock growth to continue forever.
And currently plenty expect a number of the banks to go bust, and that will indeed happen.
> Stocks are not for everyone and you are one of those people.
> Whenever a person even mentions the comparison to a casino,
> that person should not even think about the stock market.
Thats wrong too. It doesnt matter how they think of something, they
may well still do well out of stocks even if they believe its just a casino,
particularly if they use a decent fund manager to invest in stocks.
> Reduce the casino down to 6 guys playing poker.
You cant.
> When they walk out the door, the total money leaving through
> the door is exactly the same as the money that came in the door.
Casinos dont work like that. There is always the house take.
> No products were produced and no sales were made.
Modern first world economys are about a
hell of a lot more than just products and sales.
Its not even a recent phenomenon, most obviously with religion.
> That is what you call a zero sum game.
No casino is anything like that.
> People such as yourself who do not know the difference between
> a game of chance and a business should avoid the stock market.
Wrong again. If they avoid it, they cant benefit from it.
Doesnt matter if they believe its just a casino or not.
> You challenged people in this discussion, including me, to guarantee
> a rate of return. These people exist and I have been one of them in
> the past. One prime example are CDs. People who sell you a CD
> take your money, offer you a fixed guaranteed rate of return, invest
> your money in the private sector and keep the difference.
Not necessarily.
> This is why the long term market will outperform the market.
Nope.
> CDs are designed, and calculated, to provide a positive
> rate of return to those who are investing your money.
They dont however always do that in practice.
> Vide, stay out of the market. We need people like you to
> invest in CDs and other guaranteed fixed income investments.
No we dont.
Rod Speed
Still wrong. Many dont get a positive rate of return after tax.
And even more dont after inflation.
alexy
>On Aug 4, 1:29 pm, alexy <nos...@asbry.net> wrote:
>
>
> here is your chance. no more distractions, distortions, evasions,
>putting words into my mouth, lying, ignoring reality. here it is. this
>is your chance. i cannot put it any plainer than this. its your show
>based on your for sure dog and pony act. and hey, this could not have
>come at a sweeter time, the markets have been down now almost 8 long
>years, there is no where but up according to you. its a no brainer,
>finally a chance to prove you are correct. why have you not grabbed
>for the brass ring?
Because you want to delay the day of reckoning for 30 years. If I were
trying to argue your position, I would do the same!
> i have reposted this in case you may have missed the sweetest
>opportunity in your vendetta to prove me wrong in all things.
>
> well, you will not answer the question that a investor can get in the
>market when its high, and for many reasons forced out of the market
>when its low.
Liar. While there is no question there, I have acknowledged that a
fool can buy high and sell low.
> you refuse to answer that the markets can tank for 2
>decades or longer, and that many people lost most, if not all of their
>investments, and never got them back. you refuse to answer the
>question about catch up time.
What's the question?
> you say show me a 40 year period, and i
>have shown you one. 1929-1954, then another 20 years to catch up on
>lost gains, that is a 45 year period.
And I have shown what a person would earn who invested consistently
during that period. Apparently, you can't get your mind around
anything more complex than making a single investment at the top of
the market, throwing away any dividends you receive, and watching to
see when that one investment catches up. As Jane has said, with your
comprehension of the markets, you should steer clear of them.
> you have shown me a model of annualized returns, but that model is
>flawed, its based on your investment not shrinking,
Liar. I have shown how much the initial investment shrank. you can't
comprehend that subsequent investments in that period grow, but that
is your problem.
Vid...@tcq.net
then there should be no problems should there:)
Apparently, you can't get your mind around
> anything more complex than making a single investment at the top of
> the market, throwing away any dividends you receive, and watching to
> see when that one investment catches up.
see, you are putting words into my mouth again liar.
As Jane has said, with your
> comprehension of the markets, you should steer clear of them.
>
> > you have shown me a model of annualized returns, but that model is
> >flawed, its based on your investment not shrinking,
>
> Liar. I have shown how much the initial investment shrank. you can't
> comprehend that subsequent investments in that period grow, but that
> is your problem.
>
i understand, that is your problem, i do understand. but, you do not,
its why you will not take me up on my possible offer. 30 years is
really nothing. just think, you will make history. we both could end
up on the t.v. interview circuit someday.
jane....@gmail.com
> On Aug 4, 1:29 pm, alexy <nos...@asbry.net> wrote:
>
> here is your chance. no more distractions, distortions, evasions,
> putting words into my mouth, lying, ignoring reality. here it is. this
> is your chance. i cannot put it any plainer than this. its your show
> based on your for sure dog and pony act. and hey, this could not have
> come at a sweeter time, the markets have been down now almost 8 long
> years, there is no where but up according to you. its a no brainer,
> finally a chance to prove you are correct. why have you not grabbed
> for the brass ring?
> i have reposted this in case you may have missed the sweetest
> opportunity in your vendetta to prove me wrong in all things.
>
> well, you will not answer the question that a investor can get in the
> market when its high, and for many reasons forced out of the market
> when its low. you refuse to answer that the markets can tank for 2
> decades or longer, and that many people lost most, if not all of their
> investments, and never got them back. you refuse to answer the
> question about catch up time. you say show me a 40 year period, and i
> have shown you one. 1929-1954, then another 20 years to catch up on
> lost gains, that is a 45 year period.
Check my response to this particular issue in another one of your
posts regarding this 45 yr period.
A person investing during that 45yr period 29-74 would have a positive
ARR.
Answer my question at the end of my other post and we will continue.
It is time for you to lay your cards on the table.
One additional question: You continually use the word "parity". You
haven't defined how you are using the word. Do you mean returning to
the peak that occurred during the preceding bubble? Do you mean
returning to a point of positive ARR? The word "parity" requires two
parameters. Obviously, the first parameter is the end value, but you
are not defining the other parameter.
You continually claim that parity was not achieved until 1954, but the
article that you cited stated that parity was achieved only 9 years
later. Obviously you are using the word parity differently than the
article that you cited.
Jane
Jane.
jane....@gmail.com
Correction: "...nine years earlier, in 1945." Not "...9 years
later..." as I stated.
Jane.
Vid...@tcq.net
the article states that there is a group that states its not fair to
use 1954, because of dividends. what they did not say is that lots of
companies either went out of business that paid dividends, or were
replaced by other companies in the exchanges that did pay dividends.
so to attain those dividends then, you had to buy additional stock if
your company went out of business, pure hucksterism.
besides, according to you, you are right. so ,why not put up, or shut
up.
jane....@gmail.com
1) Define your use of the word "parity"
2) Lay your cards on the table. Tell us what we should be doing with
our retirement funds rather than the stock market.
I will write more about parity tomorrow morning.
Jane.
alexy
>On Aug 4, 4:32 pm, jane.pla...@gmail.com wrote:
>> ...snipped...
>>
>> Correction: "...nine years earlier, in 1945." Not "...9 years
>> later..." as I stated.
>>
>> Jane.
>
> the article states that there is a group that states its not fair to
>use 1954, because of dividends. what they did not say is that lots of
>companies either went out of business that paid dividends, or were
>replaced by other companies in the exchanges that did pay dividends.
>so to attain those dividends then, you had to buy additional stock if
>your company went out of business,
Not true, but given your ignorance of the stock market, this is not a
surprising perceptions.
> pure hucksterism.
> besides, according to you, you are right. so ,why not put up, or shut
>up.
--
Vid...@tcq.net
> Vide...@tcq.net wrote:
> >On Aug 4, 4:32 pm, jane.pla...@gmail.com wrote:
> >> ...snipped...
>
> >> Correction: "...nine years earlier, in 1945." Not "...9 years
> >> later..." as I stated.
>
> >> Jane.
>
> > the article states that there is a group that states its not fair to
> >use 1954, because of dividends. what they did not say is that lots of
> >companies either went out of business that paid dividends, or were
> >replaced by other companies in the exchanges that did pay dividends.
> >so to attain those dividends then, you had to buy additional stock if
> >your company went out of business,
>
> Not true, but given your ignorance of the stock market, this is not a
> surprising perceptions.
>
another distraction. so when a company goes out of business, the
stock exchanges do not replace them? pure hucksterism.