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Jul 11, 2019, 11:29 AM
Alarm Bells Softening!
Big Foot 48's Avatar
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Discussion

Dow 27,000!


Woohoo! Making America Great Again. S&P 500 (my fund) also at a record 3,000.
Jul 11, 2019, 11:35 AM
turn, turn, turn.
The way I see it, a person can go to Vegas and make their money gambling which is perfectly legitimate… however, gambling with the economy is not my idea of fair play… the results affect a lot of people that have no input at all.

All I can say to them is, do a good job.
Jul 11, 2019, 11:44 AM
Bagpipes spoken here
Pipemajor's Avatar
Quote:
Originally Posted by Big Foot 48
Woohoo! Making America Great Again. S&P 500 (my fund) also at a record 3,000.
Isn't this kind of meaningless until you cash out? I retired first of the year but have yet to draw a penny out of any of my IRA or 401(k) or the one stock account I own. Yes, all my funds are up - but they've been up many times during the 35 years since I started investing in them.

If anything, it may cause the Fed to hike interest rates again. Yes, I have a fixed rate mortgage I locked in back in 2015 but my savings doesn't match the inflation rate. That's why I've been drawing my savings down but leaving my equities alone for now. You spend the lowest-performing asset first.
Jul 11, 2019, 11:48 AM
Alarm Bells Softening!
Big Foot 48's Avatar
Thread OP
Quote:
Originally Posted by Pipemajor
Isn't this kind of meaningless until you cash out? I retired first of the year but have yet to draw a penny out of any of my IRA or 401(k) or the one stock account I own. Yes, all my funds are up - but they've been up many times during the 35 years since I started investing in them.

If anything, it may cause the Fed to hike interest rates again. Yes, I have a fixed rate mortgage I locked in back in 2015 but my savings doesn't match the inflation rate. That's why I've been drawing my savings down but leaving my equities alone for now. You spend the lowest-performing asset first.
The value of these record highs are that any withdrawals are at the high value with fewer shares sold, and when the crash comes the low it reaches is likely to be higher than it would have otherwise.

And as a large bond holder I say: raise those rates - please!

And as a 20-year retiree I would say I've rarely had to sell stock funds for income as the dividends and distributed capital gains have been enough, along with Social Security when it started, to fund my meager living expenses ( a little below the $500,000 guy).
Last edited by Big Foot 48; Jul 11, 2019 at 11:57 AM.
Jul 11, 2019, 11:56 AM
Bagpipes spoken here
Pipemajor's Avatar
Quote:
Originally Posted by Big Foot 48
The value of these record highs are that any withdrawals are at the high value with fewer shares sold, and when the crash comes the low it reaches is likely to be higher than it would have otherwise.

And as a large bond holder I say: raise those rates - please!
I'm afraid you have that backwards regarding your bond portfolio. If you hold bonds now and new bonds are being issued at a higher rate then the price on your lower interest bond drops.

Ever bought a Treasury via an auction? I had some CDs which were maturing and decided to buy a couple of T-Bills rather than renew the CD. You have to register for an account with the U.S. Treasury but it's pretty interesting.
Jul 11, 2019, 01:16 PM
Misfit Multirotor Monkey
Cyberdactyl's Avatar
Quote:
Originally Posted by Pipemajor
Isn't this kind of meaningless until you cash out? I retired first of the year but have yet to draw a penny out of any of my IRA or 401(k) or the one stock account I own. Yes, all my funds are up - but they've been up many times during the 35 years since I started investing in them.

If anything, it may cause the Fed to hike interest rates again. Yes, I have a fixed rate mortgage I locked in back in 2015 but my savings doesn't match the inflation rate. That's why I've been drawing my savings down but leaving my equities alone for now. You spend the lowest-performing asset first.
BUHAHA
Jul 11, 2019, 01:28 PM
Alarm Bells Softening!
Big Foot 48's Avatar
Thread OP
Quote:
Originally Posted by Pipemajor
I'm afraid you have that backwards regarding your bond portfolio. If you hold bonds now and new bonds are being issued at a higher rate then the price on your lower interest bond drops.

Ever bought a Treasury via an auction? I had some CDs which were maturing and decided to buy a couple of T-Bills rather than renew the CD. You have to register for an account with the U.S. Treasury but it's pretty interesting.
I don't really care about the temporary reduction in value as I never sell them, but do like the interest income they provide. I use to use Treasury Direct for i-bonds but cashed out when I simplified to a 3-fund portfolio.
Jul 11, 2019, 01:29 PM
turn, turn, turn.
Quote:
Originally Posted by Big Foot 48
I don't really care about the value as I never sell them, but do like the interest income they provide. I use to use Treasury Direct but cashed out when I simplified to a 3-fund portfolio.
So basically on government support with regards to being supported by the stock market.
Jul 11, 2019, 04:04 PM
Bagpipes spoken here
Pipemajor's Avatar
Quote:
Originally Posted by Big Foot 48
I don't really care about the temporary reduction in value as I never sell them, but do like the interest income they provide. I use to use Treasury Direct for i-bonds but cashed out when I simplified to a 3-fund portfolio.
If you bought these bonds within the last 8 years you'll probably never see them appreciate. The federal funds rate was pushed down to practically zero.

We bought EE saving bonds when the kids were small. The ones purchased in the '80s were paying over 6%. They all matured and we redeemed them tax-free for their college expenses. Did not want them to revert to I bonds. Treasuries are going for a bit over 2% today.

I took a severance package 28 years ago and used it to purchase a tax-sheltered annuity via a 403(b) plan. It pays a minimum of 4.5% . The monthly interest gets reinvested but is nearly as much as either one of my pensions. It matures in 12/2021 so I'll have to decide what to do with it then. I'd like to not have to dip into it until then.

All my colleagues who blew their severance on 'fun stuff' that summer - wonder what they are thinking about that decision now?
Jul 11, 2019, 04:07 PM
Bagpipes spoken here
Pipemajor's Avatar
Quote:
Originally Posted by Kenny Sharp
So basically on government support with regards to being supported by the stock market.
Most of the U.S. debt is held by private citizens like BF48 and (formerly) me. The safest place on the planet to invest was the U.S. Government. Until recently. Shame we lost our AAA rating.
Jul 11, 2019, 04:21 PM
Alarm Bells Softening!
Big Foot 48's Avatar
Thread OP
Quote:
Originally Posted by Pipemajor
If you bought these bonds within the last 8 years you'll probably never see them appreciate. The federal funds rate was pushed down to practically zero.
I wasn't clear, I bought a small amount of inflation-protected bonds on Treasury Direct, and have since sold them, but otherwise don't own any individual bonds, just the Vanguard Total Bond Index Fund. It buys and sells all the time and it's value iss barely impacted by an interest increase by the Fed, and then rises again. It's the only bond I would own.
Jul 11, 2019, 04:39 PM
Bagpipes spoken here
Pipemajor's Avatar
Quote:
Originally Posted by Big Foot 48
I wasn't clear, I bought a small amount of inflation-protected bonds on Treasury Direct, and have since sold them, but otherwise don't own any individual bonds, just the Vanguard Total Bond Index Fund. It buys and sells all the time and it's value iss barely impacted by an interest increase by the Fed, and then rises again. It's the only bond I would own.
Then you don't own a bond but a bond fund. I have some broad-based funds which include some bonds in their portfolio but I'd never buy individual bonds in this market. I only have one individual stock and it's not in a retirement account. Except the last 12 months, it's been in negative territory. EPS is -2.68. I could sell today at a small profit.
Jul 11, 2019, 04:45 PM
Alarm Bells Softening!
Big Foot 48's Avatar
Thread OP
I sold the last 100 shares of my former employer's stock 10 years ago when I became convinced owning individual stocks was too risky for retirees, and sentimentality didn't have a place in my portfolio.
Jul 11, 2019, 04:57 PM
Misfit Multirotor Monkey
Cyberdactyl's Avatar
...
Jul 11, 2019, 08:23 PM
Really?
dll932's Avatar
Profit without value. Many large publically traded companies do all kinds of tricks to boost stock prices. Stock buybacks (where most of those tax reductions went, rather than something productive), patent trolling...Apple is good for these. Acquisitions and divestitures that don't add value. Now, only 40% of the people own stock, generally the better off. Yet another path of money from the bottom to the top, who doesn't need it as much and won't spend as much of it. Our economy is over 70% based on consumption...do the math.


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