Baby Boomers like myself are running out of time! We need help and buy and hold
hasn't works for 10 years.
This is something I've been writing about since the start of this site. The dilemma is not new, hopefully, but there is no easy answer. Ultimately everyone will have to figure out there own solution.
In terms of lifestyle, those who can, should plan on figuring out how to earn some income during retirement or not actually retire. Everyone who needs to should be able to reduce their spending although this will be difficult on an emotional level as very few people think they spend a lot.
On a portfolio level the reader's comment that buy and hold hasn't worked for ten years, well he is mostly correct about domestic stocks at least where the indexes are concerned. I would add that buy and hold has worked for select other countries. Much of the content for this site has focused on a more tactical approach for a portfolio by taking defensive action based on a technical indicator.
What should be frustrating, I think, to many people is the lack of willingness within the industry to seek out innovative idea about how to construct a portfolio and how to navigate cycles. The market will do what it will do and without regard for what any of us need to happen to make our financial plans work. Some annualized target return is now not a realistic way to come at the problem so then a straight buy and hold cannot be a realistic way to come at the problem either.
There is no easy answer that will universally solve the problem for people for whom this is a problem-- which is of course most people. Although a bit of cold medicine, the reality for many will involve saving more, spending less and working (one way or another) longer. In mentioning this line of thinking in the past occasionally someone will say that this is not much of answer as many people can't do the above. No doubt spending less, saving more and working longer will be difficult, but something is going to have to give in order for things to work out.
5 comments:
It's too bad when you hear something like this. Buy and hold HAS worked for the last 10 years - you just can't concentrate all your holdings in domestic stocks, as you point out.
Roger,
Your change in allocation with 200 dma really does not beet the market. It does smooth the ride and thus guard against panic sells at the bottom so I am not being critical, but it really does not gain you much,
What you do well is avoid risky sectors like banking or whatever, diversify holdings, and invest in foreign equities. You do better than average with this approach. But, it is not a magic bullet or get rich quick scheme for people running out of time.
It takes a life time of your approach plus earning more, spending less and not really retiring. NO BODY wants to hear that.
Still I think you should continue to beat the drum as you will help a few who take these things seriously.
SEG
SEG,
your monatary model?
SD,
Look at my comment on yestarday's Post
Mike C.
hello my friend. I am still in the italian riviera. Next week Milan, the off to Venice. When I get back to Milan, I will try to give you the projected high.
Jeff from Milan, Italy
BTW, I was not criticizing Roger I think he does well by his clients. I'm just saying there are no silver bullets or short cuts. It is just the way it works.
Jeff, I still view this as a panic correction not the end of the bull and hope to hell I am still correct. But, that is how it still looks for now. So no selling from me.
SEG
Jeff - I know, I'm writing down the date to see if you're right!
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