Stock Market

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Re: Stock Market

Postby King Sid the Great 87 on Tue Feb 05, 2013 8:25 pm

newarenanow wrote:I'm 34 and would like to retire by 62 or so. How much money do I need to retire if I plan on having my house paid off and just want to do some casual travel and live a reasonable lifestyle (maybe $50-60K in todays dollars) to retire?

How much should I have right now?

Does anyone have any of those calculators or a good site to point me to?


The first question is: do you have a pension? That significantly changes how much/aggressively you need to be investing.
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Re: Stock Market

Postby Tomas on Tue Feb 05, 2013 10:28 pm

newarenanow wrote:I'm 34 and would like to retire by 62 or so. How much money do I need to retire if I plan on having my house paid off and just want to do some casual travel and live a reasonable lifestyle (maybe $50-60K in todays dollars) to retire?

How much should I have right now?

Does anyone have any of those calculators or a good site to point me to?


You should be able to find more, but just to start your thinking:

Financial planners typically consider the "4% rule" to be reasonably conservative (if you follow it, you are reasonably unlikely to run out of money anytime during the 30 years following the retirement). The 4% rule says that you take 4% of the value of your retirement portfolio during the first year after you retire, and you keep on drawing that amount of money, raised by the level of inflation during the subsequent years. So, if you save, say, $1,000,000, you will be living on $40,000 (+inflation) during your retirement years. Naturally, those will be $40,000 in the dollars of your first retirement year, so roughly $40,000/(1+i)^t in todays dollars, where i=expected average annual inflation, and t=number of years until you retire.

In terms of "how to get there": Once you determine your Target Retirement level (TARGET), then solve for C (the necessary first year's contribution) in the formula:

C * [(1+r)^t - (1+g)^t]/(r-g) = TARGET - PV*(1+r)^t

where r = expected rate of return on your investment per year (for stocks, think r=10%; for bonds, r=5+%, so maybe pick something in between)
g= expected growth of your annual retirement contributions (that is, if you contribute C in year 1, you put in C*(1+g) in year 2, c*(1+g)^2 in year 3...)
PV = the value of your retirement portfolio now

(or, to put it intuitively: the future value of the growing annuity of your contributions has to reach the TARGET, lowered by the future value of your current retirement portfolio)

Naturally, the above assumes that TARGET is what you expect to have above and beyond your social security and other pensions.
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Re: Stock Market

Postby ExPatriatePen on Wed Feb 06, 2013 9:38 am

Tomas, great stuff on basic investing for retirement. Thanks for sharing.

Ive got a question for you, how would you play the bond market short to take advantage of the "Great Rotation"? Is there even a way?
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Re: Stock Market

Postby Tomas on Wed Feb 06, 2013 5:40 pm

ExPatriatePen wrote:Tomas, great stuff on basic investing for retirement. Thanks for sharing.

Ive got a question for you, how would you play the bond market short to take advantage of the "Great Rotation"? Is there even a way?


You mean other than doing the great rotation ahead of everybody else? :)

I consider myself a very long-term investor, so I don't think I will do anything with my personal investment portfolio (my retirement is 100% stocks, and will stay that way for at least next 10-12 years - that is, until I get closer to my mid-50's). Eventually, in terms of bond investment, this article (WSJ, today) definitely caught my attention:

http://online.wsj.com/article/SB1000142 ... &mg=id-wsj
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Re: Stock Market

Postby JeffDFD on Thu Feb 21, 2013 10:54 am

freeeeee.....freeee falling.

Couple of down days here...that 2% payroll tax increase (or expiration of the 2% cut, if you will) is starting to rear it's head for retailers.
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Re: Stock Market

Postby pfim on Thu Feb 21, 2013 11:18 am

mac5155 wrote:Since we're on the topic, I have about 10k$ in my 401k now. Can I use this to get a loan and pay myself back with interest?


It depends on your plan, all the rules should be easily available for you to view. You should look at how much you can borrow and what happens if you leave your job. All plans are different.

I would caution against using this as a source of credit unless you're paying off some high interest debt (credit cards) or can't get credit elsewhere. I would also strongly suggest continuing to fund your 401k pre-tax in addition to the loan payments.

Most plans will only allow you to borrow 50% of the balance, so while $5k is a lot of money, I'd strongly consider saving or paying down the other debt before taking out the loan.

Most plans will only allow one loan at a time as well, so you will also need to pay this loan off before another can be granted (even if your 401k balance increases). This could become an issue if you have an emergency and need a quick source of credit.
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Re: Stock Market

Postby Tomas on Mon Mar 11, 2013 3:17 pm

Speaking of retirement:

Guess where the United States ranks among the countries of the world when it comes to retirement security? Well, it’s not first or second (those honors belong to Norway and Switzerland.) Nor is it in the top ten. In fact, at number 19, the U.S. barely makes the top 20 nations for retirees. It trails several Western European countries, as well as Japan, Canada and Israel. It even trails Slovakia – a country where per capita income is less than half what it is in the U.S.


The article (with the link to full ranking of 150 countries):
http://blogs.marketwatch.com/encore/201 ... -security/

I should have been born Norwegian... :)
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Re: Stock Market

Postby KennyTheKangaroo on Tue Mar 12, 2013 11:22 am

one of the hot button topics on lgp has been the impending interest rate rise. here is a pretty good article on how the big boppers are preparing:

http://online.wsj.com/article/SB1000142 ... 39508.html
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Re: Stock Market

Postby Tomas on Tue Mar 12, 2013 7:51 pm

KennyTheKangaroo wrote:one of the hot button topics on lgp has been the impending interest rate rise. here is a pretty good article on how the big boppers are preparing:

http://online.wsj.com/article/SB1000142 ... 39508.html


UofA MBA students just earned another required article to read... :)
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Re: Stock Market

Postby columbia on Tue Mar 12, 2013 7:52 pm

Subscribers only...what's the gist of it?
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Re: Stock Market

Postby Tomas on Tue Mar 12, 2013 8:12 pm

columbia wrote:Subscribers only...what's the gist of it?


See if this link works (through Google News):

http://www.google.com/search?sourceid=n ... 80&bih=877
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Re: Stock Market

Postby Pitt87 on Tue Mar 12, 2013 8:55 pm

King Sid the Great 87 wrote:
newarenanow wrote:I'm 34 and would like to retire by 62 or so. How much money do I need to retire if I plan on having my house paid off and just want to do some casual travel and live a reasonable lifestyle (maybe $50-60K in todays dollars) to retire?

How much should I have right now?

Does anyone have any of those calculators or a good site to point me to?


The first question is: do you have a pension? That significantly changes how much/aggressively you need to be investing.


Don't rely on a pension... its not guaranteed to be there. Check to see if your pension is funded or unfunded... if its unfunded, kiss it good-bye... good chance it won't be there.

By the time people your age retire $1million in the bank will not cut it. You'll need $3-4million just to generate $90k in reliable income, which based on pretty conservative based on both returns and inflation adjustments could be the case. To put that in perspective... if you have $100k in investments today, and you plan to contribute $500/mo. for 30 years, and your portfolio yields 9% annually (S&P 10yr return, though 5yr is >6%), an you take NOTHING out for 30 years, you'll still only have ~$2.3million.

Seems like a lot, but once you start living on it, it will feel like a fixed income.
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Re: Stock Market

Postby KennyTheKangaroo on Tue Mar 12, 2013 9:00 pm

columbia wrote:Subscribers only...what's the gist of it?


A.) Kenny the kangaroo sincerly apologizes for the subscriber only thing. It was free at the time that it was linked, but perhaps the WSJ has a certain period of time when some articles are free and times when they are not.

B.) The gist was that a.) interest rates are going to rise and b.) some money managers are starting to plan accordingly.

C.) The unfortunate part is that as usual, there is no real way for schlepps like us to protect ourselves.

D.) They cited information from the Feds decision to raise rates in the early/mid 90s and certain treasuries lost ~25% of their value.
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Re: Stock Market

Postby columbia on Tue Mar 12, 2013 9:14 pm

Confirms my aversion to the bond market.

Thanks.
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Re: Stock Market

Postby JeffDFD on Wed Apr 10, 2013 11:20 am

Market just keeps going up...setting new highs...WILL NEVER GO DOWN AGAIN BUY BUY BUY!!!!
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Re: Stock Market

Postby King Sid the Great 87 on Wed Apr 10, 2013 4:11 pm

With Easy Money Bernanke at the wheel, the bubble will continue to inflate. Housing prices are moving up due to low rates, not income gains. What happens when rates increase? People can afford less house, so housing prices decline. Low rates have an analogous effect to eased lending restrictions. We are starting to re-live what got us into this mess in the first place, just with a new approach.

I suspect the market will continue a general climb, with slight dips possible as Fed Minutes start to give an indication of a real end to the good times rolling.

If the Fed is able to unwind this easily without stock market and housing tumbling significantly, it will be serendipity, not impeccable strategy.

It's all paper money, and we should all be riding it up. The stock market is one big ponzi scheme. You just don't want to be the one holding the bag when the bottom falls out.
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Re: Stock Market

Postby columbia on Mon Apr 15, 2013 3:38 pm

Gold Plummets to Two-Year Low
Gold's 9.4% Drop on Comex Is Largest in 30 Years
http://online.wsj.com/article/SB1000142 ... TopStories
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Re: Stock Market

Postby Sam's Drunk Dog on Mon Apr 15, 2013 4:21 pm

That's odd. I wonder how much of the drop has to do with that whole 2012 thing not ending up like planned. :lol:
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Re: Stock Market

Postby Shyster on Mon Apr 15, 2013 5:02 pm

columbia wrote:Gold Plummets to Two-Year Low
Gold's 9.4% Drop on Comex Is Largest in 30 Years
http://online.wsj.com/article/SB1000142 ... TopStories

Silver is way down too. Excellent. This is a great opportunity to buy more.
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Re: Stock Market

Postby Tomas on Mon Apr 15, 2013 5:47 pm

Shyster wrote:
columbia wrote:Gold Plummets to Two-Year Low
Gold's 9.4% Drop on Comex Is Largest in 30 Years
http://online.wsj.com/article/SB1000142 ... TopStories

Silver is way down too. Excellent. This is a great opportunity to buy more.


That's what I thought at the end of the last year when I bought Vanguard Precious Metals&Mining Fund, after it had been trailing down the whole year. Now, I am down more than 20% on that... :)
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Re: Stock Market

Postby columbia on Mon Apr 15, 2013 6:20 pm

Tomas wrote:
Shyster wrote:
columbia wrote:Gold Plummets to Two-Year Low
Gold's 9.4% Drop on Comex Is Largest in 30 Years
http://online.wsj.com/article/SB1000142 ... TopStories

Silver is way down too. Excellent. This is a great opportunity to buy more.


That's what I thought at the end of the last year when I bought Vanguard Precious Metals&Mining Fund, after it had been trailing down the whole year. Now, I am down more than 20% on that... :)


The USAA version of that fund has completely tanked in the last six months.....and that was before today.
I've been monitoring it, because I thought about buying into it last year. :pop:
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Re: Stock Market

Postby Tomas on Mon Apr 15, 2013 6:28 pm

columbia wrote:
Tomas wrote:
Shyster wrote:
columbia wrote:Gold Plummets to Two-Year Low
Gold's 9.4% Drop on Comex Is Largest in 30 Years
http://online.wsj.com/article/SB1000142 ... TopStories

Silver is way down too. Excellent. This is a great opportunity to buy more.


That's what I thought at the end of the last year when I bought Vanguard Precious Metals&Mining Fund, after it had been trailing down the whole year. Now, I am down more than 20% on that... :)


The USAA version of that fund has completely tanked in the last six months.....and that was before today.
I've been monitoring it, because I thought about buying into it last year. :pop:


Vanguard version (VGPMX): Down 2.57% on Friday. Down another 7.23% today. YTD return -19.26%. My loss 25.6%...Yikes! :evil: .
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Re: Stock Market

Postby mikey287 on Mon Apr 15, 2013 6:40 pm

Total amateur question: I've always been fascinated but completely un-knowledgeable about penny stocks. Can you sit there and play around with them and actually make money because the ROI is so (potentially) high. $100 on a $0.01 on the first of the month...goes up to $0.03 at the end of the month = $300...?

I understand that probably most of them don't pan out, but is there any unbiased place I can/should read about this...do people actually make money with these things or what's the deal...?
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Re: Stock Market

Postby Tomas on Mon Apr 15, 2013 7:07 pm

mikey287 wrote:Total amateur question: I've always been fascinated but completely un-knowledgeable about penny stocks. Can you sit there and play around with them and actually make money because the ROI is so (potentially) high. $100 on a $0.01 on the first of the month...goes up to $0.03 at the end of the month = $300...?

I understand that probably most of them don't pan out, but is there any unbiased place I can/should read about this...do people actually make money with these things or what's the deal...?


I would be very concerned about trading those stocks. You described one side of the movement, but the opposite side leads to equally draconic losses. The Wiki page on penny stocks describes the main concerns (thin trading, manipulation concerns) quite clearly:
http://en.wikipedia.org/wiki/Penny_stock

I do found it funny, though, that somebody named 50 Cents got rich trading penny stocks. :)
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Re: Stock Market

Postby JeffDFD on Mon Apr 15, 2013 7:35 pm

Hmm...wondering how low we are going to go. I was watching a few things and waiting for a small pull back and then everything took off for a few months here.
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