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?
I wonder how much Chinese money is propping up the market, just waiting for the right time to pull it all out.
Junk bond funds.....
Your metaphor “our reality is between gears” is so apt and clever that I will shamelessly appropriate it. The bonus is that no millennial will understand what it means.
Beat me to it.
Worse, you did it better...
Because they can, and because Biden will be OK with it.
Invest in TIPS, Inflation protected bonds. When the economy tanks and inflation takes off, they are the last refuge. VIPSX
Wouldn’t surprise me
I would sell 1/2 NOW. Take the cash. In the next few days, if Trump really is going, the market is going to either go down or fluctuate wildly. And I don’t think it’s going up with this chaos, which I imagine is going to go nuts...people surging our border, Antifa burning down book stores. Stock up on food, because...why not? That is one thing you will need. Hope I’m wrong, and good luck. A lot of us have these worries.
Heh
Oh....maybe Sun Tzu?
In my case, I had my house paid off LONG before I retired at age 51, and I had no other debts besides the mortgage. I figured that the less monthly expenses I had, the less regular income I'd need.
BTW, I owned a municipal bond once for a couple of years about three or four decades ago. I understand them, to the point that my conclusion was that they didn't make any sense as a long term investment. At least not unless you're buying them in a very high interest rate environment.
As contrasted to willingness to brutally deal with domestic 'issues'...
Sorta like another $1,400 for you is too much, but $Trillions to every hostile regime on Earth? No problem!
I will say what I am doing and why (short version). Heed or ignore as you wish.
1) Democrats are the party of the rich, and of the super rich. Swim downstream, not upstream.
2) For multiple reasons, including massive deficit spending, I expect a lower US $ vs other currencies and more inflation. I am about 40% international and am investing in sector ETF’s that focus on infrastructure, on financial services, on rebounding consumer spending including leisure & entertainment. Oil & other commodities will rise.
3) Bonds will get crushed if interest rates rise, and the Fed wants higher rates. High yield bond ETF’s that don’t include fracking loans are the only bonds I am interested in. Besides, the Fed is going to backstop any risky bonds for the foreseeable future (except for politically incorrect Fracking, of course).
4) Remember the phrase “helicopter money”? Here comes a Chinook.
“I have never understood bonds.”
Basically, bonds are loans to a company or a government. Ideally, they pay back the loan, with interest.
Simplified example: Entity XYZ issues 10-year bonds worth $1,000 face value each. You buy some at $500 each, and in 10 years (the maturity date of the bonds) Entity XYZ owes you $1,000 per bond.
OTOH, anyone under 40 needs to lock in now, depose mutuals, and then directly buy Class A voting stock until we reach a tipping point to end-run corporatism. It can be done, and quickly.
“I am expecting China to attack Taiwan on January 21st.”
Within 12 months, anyway. Vietnam is also on China’s radar. Just look at a map: Vietnam abuts SE China, and has a long coastline. If China controlled Vietnam it would in effect extend its coastline all the way down to the Gulf of Thailand, and would thus completely control and dominate the South China Sea, which China has been coveting for ages. Whomever controls the South China Sea controls a great deal of the world’s trade.
Are you suggesting we’re going to end up fighting in Vietnam again?
I have a bond ladder in one of my IRAS.
Diversification is the key. You don't want your entire portfolio going down at the same time. I fully expect the liberals to crash the economy hard. Forgiving student loans, subsidizing low interest rates, printing money, continuing the rapid increase in national debt, bailing out state and local governments ... I expect quite a show.
Advice I received and took in September/October:
Person suggested I decide how much I expect to need to supplement expected Social Security benefits, in the first 10 years of retirement, and I moved that amount to fixed income funds. It is about 1/4 of my retirement savings, but gives me a more secure feeling for the upcoming few years. I may move more, if things start to turn shaky under Slo Joe. I am 64, plan to work another 12-18 months maybe.
Do more of what is working and less of what isn’t.
Remember that the “Trend Is Your Friend.”
Be either bullish or bearish, but not “hoggish.” (Hogs get slaughtered)
Remember it is “Okay” to pay taxes.
Maximize profits by staging your buys, working your orders, and getting the best price.
Look to buy damaged opportunities, not damaged investments.
Diversify to control your risk.
Control your risk by always having pre-determined sell levels and stop-losses.
Do your homework.
Do not allow panic to influence your buy/sell decisions.
Remember that “cash” is for winners.
Expect, but not fear, corrections.
Expect to be wrong, and correct your errors quickly.
Check “hope” at the door.
Be flexible.
Have the patience to allow your discipline and strategy to work.
Turn off the television, put down the newspaper, and focus on your analysis.
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