Stock Market & Retirement Planning

[leftshot]

I learned some lessons early on while in college. I worked at Sears and saw a number of employees have to delay their retirement because Sear's retirement plan was all in Sears stock and it went seriously south. I don't know if those folks ever recovered.

So, I started saving for retirement in earnest at age 20. Time is a wonderful asset. Every time I changed employers, I rolled it all over into my IRA where I could diversify and manage it. I still max. out employer matching, even though I'm at a point where gains and losses are really all about investment returns, not contributions. I'm now at the point where I can retire any time I want and have several income sources. But I don't want to and am in great health. I figure the wife and I likely have a few decades ahead of us.

 

[Northerner]

For those of you who could opine - for people that don't believe in the merit/validity/substance of stock, what would you advise them to invest in?


Gold
Real estate
Cash
Something else?


I'm curious. (And I apologize if this has been gone over in this thread already I have not read all of it.)

 

[Reframmellator]

For those of you who could opine - for people that don't believe in the merit/validity/substance of stock, what would you advise them to invest in?


Gold
Real estate
Cash
Something else?


I'm curious. (And I apologize if this has been gone over in this thread already I have not read all of it.)

First off, I believe in equities. But before someone would offer an opinion as to WHAT to invest in, someone should want to know, at a minimum:

What is it about stocks that makes you not believe in them?

Do you not believe in holding individual stocks or is it equities in general you’re opposed to?

When do you first expect to need the money you’re investing? How quickly would you need to convert it to cash?

How much risk are you willing to tolerate? How much return do you want?

 

[tahoebum]

I also believe in equities. I have zero gold, some real estate, and very little cash(3%).

So many great companies have seen there stock beaten down the last few weeks and many of them are overdone. IMO, Apple is one of them, I'm adding shares at these below $175 levels.

 

[parsaver]

I have been in the market of about 30 years. With the present economy and political atmosphere being weird and unpredictable I am now mostly into real estate trusts or REITS. I get about 12+% and then re-invest the dividends. The one stock I have made the most money is CSCO. I don't presently own it now but has in the past. I think there are some real bargains now with the market down. I expect a recession soon especially since the feds are so aggressive on interest rates.

 

[tahoebum]

Wow, what a week for the market. Worst week since the financial crisis 10 years ago.

 

[Danimal]

It was brutal. The volatility is astounding.

 

[Reframmellator]

Wow, what a week for the market. Worst week since the financial crisis 10 years ago.

For me, better now than about 4.5 years from now. But with this, in addition to all the big irreversible decisions coming up in the next five years, I think it's time to hire a finanical planner/advisor.

 

[tahoebum]

For me, better now than about 4.5 years from now. But with this, in addition to all the big irreversible decisions coming up in the next five years, I think it's time to hire a finanical planner/advisor.

We found a good one a few months ago. I can’t thank her and her team enough for making us sell a highly concentrated position in my wife’s ex company that was about 35% of our portfolio and we had owned for over a decade. We had sold a bunch in the last 12 months but still had way too much. That stock is down 31% since we sold it November 1st and the pain would have been immense had we not sold most of it. Since I just retired and my wife is less than a few years away from doing the same, our allocation is much more conservative and after being 80% plus in equities for the last 30 years, our portfolio is balanced to minimize the losses when the market tanks like it has in the last several weeks. A good financial planner can get you there much better than most of us can do on our own.

 

[Reframmellator]

We found a good one a few months ago. I can’t thank her and her team enough for making us sell a highly concentrated position in my wife’s ex company that was about 35% of our portfolio and we had owned for over a decade. We had sold a bunch in the last 12 months but still had way too much. That stock is down 31% since we sold it November 1st and the pain would have been immense had we not sold most of it. Since I just retired and my wife is less than a few years away from doing the same, our allocation is much more conservative and after being 80% plus in equities for the last 30 years, our portfolio is balanced to minimize the losses when the market tanks like it has in the last several weeks. A good financial planner can get you there much better than most of us can do on our own.

This is like a mirror image of us. My wife is about to retire and I'm about five years out. The firm I will probably go with consists of two brothers and a son. They've been doing it for ober 25 years, and they say one o f their primary objectives is to "prevent our clients from making the really big mistake." I did OK, even in down markets (relatively speaking) when I was 100% in equities, but now I'm about 25% in bonds and I just don't have the same comfort level.

For reference purposes, what kind of fee structure do you have with her? That's my next step.

 

[myspinonit]

This is like a mirror image of us. My wife is about to retire and I'm about five years out. The firm I will probably go with consists of two brothers and a son. They've been doing it for ober 25 years, and they say one o f their primary objectives is to "prevent our clients from making the really big mistake." I did OK, even in down markets (relatively speaking) when I was 100% in equities, but now I'm about 25% in bonds and I just don't have the same comfort level.

For reference purposes, what kind of fee structure do you have with her? That's my next step.

It may be a flat rate percentage for managing your portfolio, perhaps two percent or less, but probably depends on the size of the portfolio. One advantage with an advisor is the ability to get such as bond issues, laddering bonds, or spreading small lots of stock shares among the clients for diversification more easily than an individual investor can.

In "smaller" accounts often the only option they allow for managing is through mutual funds, or ETFs. If you decide to purchase any mutual funds or even ETFs though them, really watch any ongoing MER from the fund or "load" to the advisor. Often there are several versions of the same fund with different fee structures and that's how advisors get their dough.

This may or may not be better than doing it yourself in my opinion especially if one can get No Load funds in self - directing, and have the discipline to buy and hold. But... it's the research knowledge and discipline in rocky times to stay the course that you pay an advisor for.

Some years ago, right at the beginning of the post 2008 recovery, I had dough in a small portfolio I self- managed but I did not have the right temperment and bought and sold and worried away too much. If I had stuck with most of what I bought at the get go and held on, I would have done quite well. I moved to No Load mutual funds and finally just put into a higher rate interest account for simplicity since I would be drawing on it and it wasn't our prime investment.

We're retired, with other pensions fortunately, and all our portfolio is managed. Sure we've taken a hit-on paper- the last month but we have a good disciplined team handling it, affiliated with the largest bank in Canada, and mostly I'm letting them do the worrying.

 

[dhartmann34]

Most fee structures these days are going to be "fee only"... Which in reality means one of two things.

First and most common, they will charge you a percentage of your portfolio managed. If it's anything more than 1%, find another place to go. I see so many folks paying 1.5% and having high cost funds in their portfolio so before they even start the year they're trying to make 2-3%, which is obviously a tough road.

Second, in a true "fee only" manner, they will charge you an hourly or monthly fee and direct you how to manage your portfolio, along with giving you a plan for everything that goes along with it. They are more of the director for you to make everything happen.

No matter which way you go, they shouldn't just be looking at your investments. They should be looking at your cash flow, sequence of returns risk, insurance needs, estate plan, taxes, and other risks and needs that exist. If you're paying good money, you should be getting all you deserve.

If you have anymore questions, feel free to send me a PM.

This is like a mirror image of us. My wife is about to retire and I'm about five years out. The firm I will probably go with consists of two brothers and a son. They've been doing it for ober 25 years, and they say one o f their primary objectives is to "prevent our clients from making the really big mistake." I did OK, even in down markets (relatively speaking) when I was 100% in equities, but now I'm about 25% in bonds and I just don't have the same comfort level.

For reference purposes, what kind of fee structure do you have with her? That's my next step.

Sent from my Pixel XL using Tapatalk

 

[Reframmellator]

Thanks for the feedback. These guys tend to be pretty transparent about their holdings and stuff, so I don't anticipate any high expense funds, and I like to think I'd know enough to see that coming. They are fiduciaries, so that is a plus.

Staying the course has not been an issue for me. I've tried to play the long game, and to be honest, right now I wish I had some cash to put to work in the market right now.

In addition to managing my retirement funds, I have a number of other issues that we need to address, such as specifics of my wife's pension/Social Security; as well as long-term care, Medicaid, and estate planning. My Mom lives in PA, and should she need long-term care, PA would comes after me to pay her bills instead of Medicaid, so I need to protect what we have. I expect a financial planner/advisor to have a team in place that can address all of those issues effectively.

 

[Reframmellator]

Most fee structures these days are going to be "fee only"... Which in reality means one of two things.

First and most common, they will charge you a percentage of your portfolio managed. If it's anything more than 1%, find another place to go. I see so many folks paying 1.5% and having high cost funds in their portfolio so before they even start the year they're trying to make 2-3%, which is obviously a tough road.

Second, in a true "fee only" manner, they will charge you an hourly or monthly fee and direct you how to manage your portfolio, along with giving you a plan for everything that goes along with it. They are more of the director for you to make everything happen.

No matter which way you go, they shouldn't just be looking at your investments. They should be looking at your cash flow, sequence of returns risk, insurance needs, estate plan, taxes, and other risks and needs that exist. If you're paying good money, you should be getting all you deserve.

If you have anymore questions, feel free to send me a PM.

Sent from my Pixel XL using Tapatalk

This is incredibly helpful guidance - exactly what I was looking for, especially the information on fees.~ Many thanks!

 

[tahoebum]

This is like a mirror image of us. My wife is about to retire and I'm about five years out. The firm I will probably go with consists of two brothers and a son. They've been doing it for ober 25 years, and they say one o f their primary objectives is to "prevent our clients from making the really big mistake." I did OK, even in down markets (relatively speaking) when I was 100% in equities, but now I'm about 25% in bonds and I just don't have the same comfort level.

For reference purposes, what kind of fee structure do you have with her? That's my next step.

Her fee varies by how much you have invested and is charging us 0.9%. Cash and the company stock we still hold from my wife’s ex-employer are exempt from any fees. She has 26 years of experience owns the firm that her father started and has a team of 10 employees. She has made the Barron’s top 100 list of financial advisors in the country and their top 25 list for female financial advisors. We have had two other financial advisors in the last 15 years and both paled in comparison to our current advisor and her team. It’s not easy finding a good one that both of us trust.

 

[Howzat]

Today being a record day can't be just about a strong holiday shopping season. What am I missing?

 

[JB]

Today being a record day can't be just about a strong holiday shopping season. What am I missing?

Its a big part of it. Plus the crazy downs we have seen the last 4 sessions.
Just heard on CNBC that we should expect a bit down again, but today was amazing.

 

[Howzat]

Its a big part of it. Plus the crazy downs we have seen the last 4 sessions.
Just heard on CNBC that we should expect a bit down again, but today was amazing.

I guess that makes sense. Energy stocks did well today too. What a wild ride lately. Glad I am in for the long haul I guess.

 

[JB]

I guess that makes sense. Energy stocks did well today too. What a wild ride lately. Glad I am in for the long haul I guess.

Yup. Thats my view. Its been a solid couple of years overall.

 

[tahoebum]

I guess that makes sense. Energy stocks did well today too. What a wild ride lately. Glad I am in for the long haul I guess.

I feel bad for those close to retirement who haven’t rebalanced and are 80% or more in equities. I have friends in this situation and they are likely going to delay retirement a couple years because of the recent downturn. It’s very foolish to not get much more conservative as you get closer to retirement age.

 

[dhartmann34]

Yeah I had my in-laws liquidate 2 years of living expenses into cash back in October. That way they don't have to worry what the market does when they retire at the end of next year. I'll do the same for my dad when he's a couple years from retirement.

I feel bad for those close to retirement who haven’t rebalanced and are 80% or more in equities. I have friends in this situation and they are likely going to delay retirement a couple years because of the recent downturn. It’s very foolish to not get much more conservative as you get closer to retirement age.

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[topspark]

Being a novice in this area, I’m assuming by liquidate, you mean transfer from within the fund to more cash based?
In Australia, and getting close myself, and it really is a dilemma given what most experts are predicting.

Yeah I had my in-laws liquidate 2 years of living expenses into cash back in October. That way they don't have to worry what the market does when they retire at the end of next year. I'll do the same for my dad when he's a couple years from retirement.

Sent from my Pixel XL using Tapatalk

 

[dhartmann34]

Being a novice in this area, I’m assuming by liquidate, you mean transfer from within the fund to more cash based?
In Australia, and getting close myself, and it really is a dilemma given what most experts are predicting.

Yeah sold off some of the equity portfolio and kept the funds in cash. Gives them peace of mind knowing that it's there for them and they aren't worried about their portfolio dropping because history has shown a down market recovers in 2 years or so.

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[Reframmellator]

Just saw today that the top two fund managers for T. Rowe Price New Horizons (PRNHX) are leaving the firm by March 31. It's my second largest holding and my top performer over the years, but it is now a massive fund at ~$25B and closed to new investors. Looks like I'll be moving my IRA to a financial advisor so this fund will go away, and that might be happening at the right time vis a vis this fund.

 

[dhartmann34]

Just saw today that the top two fund managers for T. Rowe Price New Horizons (PRNHX) are leaving the firm by March 31. It's my second largest holding and my top performer over the years, but it is now a massive fund at ~$25B and closed to new investors. Looks like I'll be moving my IRA to a financial advisor so this fund will go away, and that might be happening at the right time vis a vis this fund.

I'm sure there will be competent leadership taking over the fund. What is your potential advisor suggesting?

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