Posted on 01/17/2021 12:03:33 PM PST by MrChips
I am not like a lot of my friends and acquaintances who worked for the government in some capacity and retired on big government pensions (with healthcare) on top of their Social Security. No, I worked all my life in the private sector, teaching in private schools and sometimes (to save money) in boarding schools. Other than the equity I have in my home, my entire retirement is in the stock market . . . in one IRA or another. I have worked hard and I have assiduously saved, investing wisely and somewhat conservatively, enjoying President Trump's transformation of the Dow from 17,000 when he was elected to nearly 31,000 today. But I am just now hitting retirement age and I am scared to death what the Biden idiots are going to do to the stock market. What do I do?
A couple of options you could consider to de-risk.
Move SOME (not all) of your IRA investments into Target Date funds. T Rowe Price https://www.troweprice.com/personal-investing/tools/fund-research/target-date-funds and most of the other discount houses offer them (Fidelity, for example, https://www.fidelity.com/mutual-funds/fidelity-fund-portfolios/freedom-funds) - The shift from more volatile to less volatile as you near and reach retirement.
NOTE: They do NOT remove market fluctuation risk, they help blunt the high and low points.
Another option is a single premium annuity. I am personally anti annuity but even I bit when I saw the covid shutdowns coming. They focus on asset preservation, not growth, and can be a useful tool for removing some risk. Most are annuities with a life insurance wrapper, and salesmen (and saleswomen) make I nice commission off of them. But again, if you are trying to de-risk a portion of your investments, they can be a good tool.
Finally, you can do the equivalent of the target date yourself - moving from higher risk equity funds to a mix of less volatile equity and bond funds.
Another thing to consider would be to start to consolidate your IRAs with one company. Depending on the size of each, and the company it is with, you can save some fees if you do that.
If there is enough money there, you can always go with a fee based money manager to try to run things for you. But that’s going to layer on another 1 or 2% fee. If you are in the $1 - $2 million range, one of the private bankers at UBS or another megabank will be happy to play with your money for you.
And, post-final note of course, the key rule - Don’t panic. The way to go broke is to panic and sell AFTER the market drops. Over time, it’s better to try to ride it out.
If you’re worried, cash out and invest your money in leveraged munis. ~4.5% in tax-free income, at least at the Federal level. An example:
https://finance.yahoo.com/quote/IQI?p=IQI
The likelihood is that market will continue going up. That’s what inflation does - raise the price of assets across the board.
Democrat administrations tend to see bigger stock price increases. That’s because stock prices have to go up more to keep up with higher inflation. As an inflation hedge, it’s hard to beat stocks. But if you need that money in the short term, and can’t afford to see it go down substantially, bond funds aren’t such a bad alternative.
Why would they do anything to really alarm the Americans, now that they have their puppet in as president?
Gonna post this here as this is the first time I’ve viewed this. Many of you may already be aware of it’s existence and if so, please disregard, otherwise pass it along.
https://www.youtube.com/watch?v=KcOk1Au6xWA&t=2
I missed two big surges and a couple of big losses. My IRA is flatlined but not showing the peaks and valleys of the past year or two.
They don’t need to attack, just tell the chicom sleepers they’ve put in place that their orders will be coming from Beijing from now on.
Maybe take some of your profits from your IRA(s) and keep in cash, use it to pay off your house a little extra every month. If inflation hits (more than it already has), your house payments could end up being chump change. Sounds like you’ve done and are doing everything right. Stock up on canned food and food items that will keep for many years, a little at a time. Plant a few vegetables. Stay away from seed oils. Eat healthy. Get some sun and take extra Vitamin D. Don’t get the vaccination. Enjoy your life.
If bad things happen, there’s not a lot any of us can do about it.
They can still be had for reasonable prices, but you have to wait.
I had all my money in the stock market up until early October.
All the 401K of my husband who passed after working for Sears 30 years (PERFECT ATTENDANCE!!!). The there was my 401K-work many years.
The law for saving in a 401K is one of the better laws congress every made.
It was about $100 (not real amount but to illustrate) and I had already made about $50 with Trump and for the first time, after gathering it all in one account. But I figured if Biden should win it will drop like a rock.
But, but, but....I kinda liked the stock market, But this last October so close to election where it might drop like a rock once Biden won.
I took $60 and purchased a CD. Sure a CD nowadays doesn’t pay much but I wanted it out of the stock market yet sitting save earning 33/45 a percent in interest.
To my surprise, the remaining $40 , as you know, have gone up and what a surprise.
No, I’m not sorry I moved the $60. I’d have been a nervous wreck with the entire $100 in the stock market but way I figure, not that I’m any financial wizard, that I came out ok.
If any of this helps.......
As you know its a matter of the level of risk you’re willing to absorb. You say you are in the market but I bet you’re not 100% invested in the stock market.
As I approached retirement I used highs like we have now to take profits and put money aside but I didn’t sell all. I probably got down to 30% in the market but it has creeped back up.
I put most of my stock holdings into bluechip stock funds made up of stocks that have paid dividends for decades. The logic being that even if the market crashed and those holdings were at 50% their value what do I care as long as they keep paying 3+% income. If you look at some of those high dividend blue chip stocks they kept paying dividends through all modern crashes and many increased dividends each year. No guarantees but it seems to be a reasonable bet for the next 5+ years or so. One has to always reassess.
Even despite Obama the market went up annualized 12% return. So I don’t base investment on partisan politics. Of course this Biden crew is worse than Obama but there are still some RINOs to slow them down slightly. The chickens will come home to roost but I suspect it will take a while. But I will be constantly watching.
However I won’t make the mistake I made once and bail and sell everything. I ended up buying back in when the market was higher than when I sold it. One should keep a slice in market even if a small sliver to offset inflation which WILL come in a big way at some point.
Fixed income funds aren’t much help with rising interests pummeling their value. I do invest in some bond funds but a lot in cash to pay bills and waiting for a buying opportunity. Don’t want to be in position where you have to sell stock funds to pay bills.
Good luck!
On one hand the financial markets like it when government turns on the printing presses and spews out trillions of fake dollars.
On the other hand the financial markets do not like over-regulation.
Biden will be doing both:
1. Printing funny money
2. Increasing regulations
As an old Jewish friend told me a long time ago: “It never hurts to take home a profit.”
That saying has been my guide for now over 40 years.
I have sunk all my assets into ACME widgets, so I am ready for the apocalypse when it hits.
I have sunk all my assets into ACME widgets, so I am ready for the apocalypse when it hits.
Wait...when did ACME widgets become an actual thing?
You are asking a lot. I am in 100% high risk right now because the left is worried about optics.
They will pump this market ‘till the cows come home, just to make sure they can talk about it to the media.
Pull out by June. Find your most conservative safe place.
Good advise - financial advisor will provide options based on acceptable risk for client.
Not too late. Bump
Keep it in the stock market. The powers that be dare not allow ANYTHING bad happen for Saint Sniffer of Biden. There will be bailouts galore. The Green New Deal and “green” energy mandates and subsidies will send stocks soaring. If I didn’t require cash flow I would dump everything in to green company stocks and gold. Savings are losing 10% a year, at least.
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