Dow 30,000

Discussion in 'Off-Topic' started by RonBurgundy, Jul 11, 2019.

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Poll: Dow 30,000

  1. By End of This Year

    15 vote(s)
    10.6%
  2. 1st Half 2020

    24 vote(s)
    16.9%
  3. 2nd Half 2020

    21 vote(s)
    14.8%
  4. 2021 - 2022

    18 vote(s)
    12.7%
  5. Won't Hit It In Next 3 Years, Recession Will Knock It Back

    64 vote(s)
    45.1%
  1. ArgentCy

    ArgentCy Well-Known Member
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    Now run the numbers if the person freaks out and sells at the bottom and then waits 3x as long to get back invested. Because that's how people go wrong.
     
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  2. aeroclone

    aeroclone Well-Known Member

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    Sig, I'm assuming in this analysis you are just assuming a single lump sum investment and then waiting ott the recovery? In a real world scenario where you continue to invest you would shorten that recovery period more as you benefit from buying stocks at a reduced price after the initial crash and then riding the recovery.
     
  3. Althetuna

    Althetuna Well-Known Member
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    #183 Althetuna, Jul 14, 2019
    Last edited: Jul 14, 2019
    I don't ever recall saying Social Security wasn't an issue but there's no need for apocalyptic hyperbole.

    Comparing the American financial/economic system to Greece or Argentina is a joke. You know that.

    Yes we have issues. All of which are completely surmountable, if people are willing to be honest about them.(Your statement linking SS to losing world reserve currency status was not honest.)
     
  4. Althetuna

    Althetuna Well-Known Member
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    #184 Althetuna, Jul 14, 2019
    Last edited: Jul 14, 2019
    That argement cuts both ways, who's doing a diservice to their children if a parent runs out of retirement funds?

    I have no problems with individual plans (I am in one myself.) but be honest. An individual investor has to save more to get the same level of protection than those in a defined-benefit plan.

    The downside to defined-benefit plan. You can't pass on any benefit to your kids.

    They're different plans with different benefits. Being in a defined-benefit plan doesn't make a person an extremely conservative investor. They are merely addressing their retirement needs in a different manor.
     
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  5. Gunnerclone

    Gunnerclone Well-Known Member

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    You can totally pass on benefits from a defined benefit plan depending on the plan provisions. IPERS people feel so strongly about that plan because they put money in to it. They really get defensive about it.

    For people like me with a corporate plan it is 100% employer funded. It’s like a retirement bonus.
     
  6. Althetuna

    Althetuna Well-Known Member
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    I stand corrected.
     
  7. Cyched

    Cyched Well-Known Member

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    1. He doesn't lose anything unless he cashes out. Which is what Sig and others are trying to prove, that, while scary at the time, history says he'll recoup his account if he stays in the market.

    2.

    [​IMG]
     
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  8. Sigmapolis

    Sigmapolis Well-Known Member
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    #188 Sigmapolis, Jul 14, 2019
    Last edited: Jul 14, 2019
    I have seen you make far more hyperbolic comparisons of the state of the American experiment in self-governance to some truly evil and malevolent regimes from the 1930s at present and in the relatively recent past, rather than the garden-variety incompetence and stupidity of Argentina in the 1980s and 1990s and Greece and Venezuela more recently. To be fair, though, Argentina and Venezuela do have some nasty atrocities to their name from that era. It seems overblown historical comparisons are okay when you do it, but mine -- which are much more tightly focused to what happens when the dole runs dry -- are somehow invalid?

    Never ascribe to malice what stupidity explains equally well.

    That brings up to why I think it eventually runs dry during a crisis. Any reasonable student of American governance in the past few decades would watch a system the lurches from crisis to crisis rather than proactively trying to address developing problems. I have seen very little interest or action out of state and federal policymakers to address our brewing long-term fiscal imbalances with pensions, funding for various state programs (education, infrastructure, etc.), and federal entitlement programs. If anything, and especially federally where there is no balanced budget amendment, the interest seems to be further profligacy (more tax cuts, more defense spending, multi-trillion dollar "free" XYZ programs, etc.) rather than fixing it up.

    Are you right these problems are solvable? Yes, in the strictly mathematical sense, but I do not feel they are solvable in the political sense without outside forces forcing it upon us at the absolute last second. The mathematics and the politics become harder the longer we wait, too. This would have been easier in 2005. The most obvious crises that might develop are a major financial crisis, a run on U.S. debt or the dollar, and perhaps even a loss of reserve currency status. Are those extreme? Yes, sure are, but we are practically inviting them on our current trajectory.

    Any charges you make about Republican profligacy and hypocrisy are completely correct, by the way -- and hence I have zero faith, trust, or love for them whatsoever.
     
  9. Sigmapolis

    Sigmapolis Well-Known Member
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    This is true. Like I said, I was looking for the most extremely unfavorable conditions and timing one could find in the history of the market to see how it affects our 57 year old.

    Even under those conditions, even if Mr./Ms. 57 is 100% in equities and has not shifted into safer securities like they should at that age, history says, even if the market does as bad as has ever done since the 1940s, if they stay in it and ride it out and only make what withdrawals they need for basic living expenses, they would end up no worse than they started.

    And in reality, even after a big decline, their money is likely (99%) back in two years.
     
  10. SEIOWA CLONE

    SEIOWA CLONE Well-Known Member

    Dec 19, 2018
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    Under IPERS it totally depends upon the plan you chose at retirement if there will be money passed on to one person listed and the percent of your retirement you want to leave them. Looking at my writeup that I had them do in the spring, there are 6 plans to chose from.

    I would not say "defensive" is the word I would use to describe defending IPERS, more like its a great way to save for retirement and not have to worry about it. A new teacher or city employee making $30,000 a year would put 6% in the fund for a total of $1,800 a year, the employer would add another 8.4%, $ 2,520. It takes 7 years to be vested in the program and you can always take out the money you put into the program is you leave the job and move into another field and then roll that money into a 401K. IPERS also travels from district to district.

    I suppose the question I would ask is how many 22-24 year olds are putting $1,800 of their own money away into a 401K? Many companies offer a 401K type system and will match up to a certain dollar level, but how many are really putting in much money when you are only pulling in 30 grand those first few years? Let alone getting it matched? With IPERS, I have no choice and that money will be there when I hit my rule of 88. Which for some people is at age 55. Nice benefit to walk away from any job with a full retirement at that age.
     
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  11. SEIOWA CLONE

    SEIOWA CLONE Well-Known Member

    Dec 19, 2018
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    You do not know that he will regain all he has lost, that is what history says, that does not make it true in every occasion.
    We are in the longest bull market in history, its not going to continue forever, but some here seem to think it will. But if we are a student of history, it tells us we are overdue for a crash or at least a market correction.
     
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  12. Cyched

    Cyched Well-Known Member

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    1. Neither do you.

    2. Who's been saying that?

    Yes, I also think we're overdue for a recession. That's just how our economy works; periods of growth and recession. And the periods of growth are usually much longer than the recessions.

    Bear markets average 14 months in length, and people who get scared and pull out usually miss out on the bounce back.

    https://www.cbsnews.com/news/whats-a-bear-market-and-how-long-might-it-last/

    We've had a handful of market corrections since the beginning of 2018, and each one has bounced back so far. No one knows what will happen. And if we do have another recession, so what? No recession lasts forever.
     
  13. Sigmapolis

    Sigmapolis Well-Known Member
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    @SEIOWA CLONE is not even trying to address the historical evidence that I and others have presented. Unless you use 1929 as your example, there is not an instance in the historical DJI or SPX series that justifies his fears for somebody in the situations he describes following the reasonable strategies for asset allocations or risk tolerances.
     
  14. DurangoCy

    DurangoCy Well-Known Member

    Jul 5, 2010
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    You don't have to save more. You can save the same amount, have significantly more in assets at retirement, take the same dispersements (which is a smaller percentage of your assets), and your kids can keep the equity with individual plans invested in the S&P500.

    IPERs 30 year return = 8.64%
    S&P 500 30 year return = 10.11%
    A 1.47% annualized delta is millions of dollars for a worker who's contributing systematically over 40 years.

    The "protection" is a myth that has been sold to workers in DB plans. When markets go bad, everyone feels the pain, not just individual investors.

    http://www.pensionrights.org/publications/fact-sheet/pension-plans-have-applied-cut-benefits-under-multiemployer-pension-reform-a

    upload_2019-7-14_9-22-10.png
     
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  15. Sigmapolis

    Sigmapolis Well-Known Member
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    DC plans bend and their investors know they do.

    DB plans break and their investors pretend they don't.
     
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  16. Rabbuk

    Rabbuk Well-Known Member

    Mar 1, 2011
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    I'm doing my retirement planning based on a 5% expected return. Rather have too much than too little. Seems unrealistic to expect 10% from a state run pension plan going forward since treasury stuff is so low and going lower.
     
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  17. CloneGuy8

    CloneGuy8 Well-Known Member

    Mar 20, 2017
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    5% is a good conservative figure, as it also figures in inflation. Prep for the worst, hope for the best.
     
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  18. SEIOWA CLONE

    SEIOWA CLONE Well-Known Member

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    Here is an article that talks about public pensions being a ticking time bomb for some cities and counties. It also states that Iowa and IPERS is well below what other states are being forced to budget for these retirements.

    https://econofact.org/a-public-pension-time-bomb
     
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  19. SpokaneCY

    SpokaneCY Well-Known Member
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    In the OP's argument, it sounds like he says a guy retires at 57 then has to spend all his money then. It really seems the market cycles, dollar-cost averaging, dividend reinvestment, etc. are "risky" investment strategies...
     
  20. SEIOWA CLONE

    SEIOWA CLONE Well-Known Member

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    No one has said that but you. You are projecting something that I have never said.
     
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