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Just hit 35,000!B)

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That’s why you need a parachute. ;)

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Posted (edited)

You can keep inflating a balloon until it POPS.  The same with the stock market.

 

Stock is a worthless piece of paper that you hope you can sell for more then what you paid for it.

 

History repeats itself.  Remembered what happen in the early 1900s!

Edited by Matthew Duncan
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I remember when it hit 10,000 and every news channel was buzzing about it. March 1999. 
 

The market will be just fine…until I retire. :lol:

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5 hours ago, Matthew Duncan said:

You can keep inflating a balloon until it POPS.  The same with the stock market.

 

Stock is a worthless piece of paper that you hope you can sell for more then what you paid for it.

 

History repeats itself.  Remembered what happen in the early 1900s!


You are not buying the paper.

 

Cat Brules

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Yep the IRA (actually a TSP for me) looks pretty good right now.  However, once inflation kicks in from all the spending by the feds with no revenue coming in it will drop like it did in 2008.

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9 minutes ago, Larsen E. Pettifogger, SASS #32933 said:

Yep the IRA (actually a TSP for me) looks pretty good right now.  However, once inflation kicks in from all the spending by the feds with no revenue coming in it will drop like it did in 2008.

Yep - trying to decide whether to move everything into the G fund or just leave it.

I won't be withdrawing any for another 10 years regardless.

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When the C19 crash happened, I backed up the truck and shoveled in the dividend stocks at fire-sale prices.
Due to my age, this was my last buying event.  Don't need any more.

When the next huge crash comes, that will be the time to take IRA distributions of stock to our cash account.
The value reported to the IRS for tax purposes is the previous-day closing price.
There is a big tax benefit to distributions of stock when the price is down.

I should have done this during the C19 price crash, but slept through it.
Drat.

 

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On 5/10/2021 at 8:39 AM, Yellowhouse Sam # 25171 said:

The market is overdue for a fall.   Get ready to buy!

Down 500 now. Not time to buy yet.

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The market is overdue for a correction.  The bubble is getting too large and the recent federal fiscal stunts have only made the situation worse.  My crystal ball says a 10-15% correction in the near future.  I'm waiting patiently for the market to go on sale again.

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It'll go down, it'll go up. Over the decades, the trend has been steadily up. I can attest to it since I've had 401k accounts and their predecessors for over 40 years. They've made for a good retirement, and will when they go down, too.

 

You haven't been able to make money with interest for decades. So for most it's real estate and the stock market. A combination of both is a good idea.

 

We've been through lots of crashes over the last 45 years. But it keeps going up overall.

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When I first entered the investment business in March 1993, the Dow was at 6338.

 

When I retired in February 2004 it was 15.061.

 

Those eleven years taught me three things:

 

1. the market goes up and the market goes down.

 

2. the market will recover, usually a lot faster than you might think.

 

3. Panic will make you a pauper if you give in to it.

 

Most of my clients rode it out and came out good.  A surprisingly large number became millionaires.

 

Some, including many very good friends who never saw me as a financial whiz (which I never really was, but the company I worked with was....and still is) panicked, sold or cashed out, and lost a lot more than they could afford.

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When I retired and rolled my 401k into an IRA as required, my broker (who's great and handled it all for me and my colleagues for years) said that without exception, the biggest accounts were those of people who just put it in over the years and decades, and never touched it, never borrowed, never tried to direct investments, sell and buy the individual stocks and funds, etc. etc.

 

Without exception.

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Over the long term, the strength of the U.S. Stock Market has been up.   

I recommend get a good broker and invest in the Market.  Be vigilant, bail out from time to time, but not often.

I'm thankful I've been in the Market.

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Age is our enemy.  Sure "over the long term" the market might be up.  But many of us won't be around for the long term.  If the market tanks and I am 75 and it takes six years to recover that is a big difference from being 35.  (Six years is what it took to recover from the 2008 crash.)

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2 hours ago, Red Gauntlet , SASS 60619 said:

When I retired and rolled my 401k into an IRA as required, my broker (who's great and handled it all for me and my colleagues for years) said that without exception, the biggest accounts were those of people who just put it in over the years and decades, and never touched it, never borrowed, never tried to direct investments, sell and buy the individual stocks and funds, etc. etc.

 

Without exception.

 

Red,

I wonder if that broker ever heard about Hillary's $1000 investment becoming $100,000 dollars

in just a few months?  :ph34r:

 

..........Widder

 

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Posted (edited)
2 hours ago, Larsen E. Pettifogger, SASS #32933 said:

Age is our enemy.  Sure "over the long term" the market might be up.  But many of us won't be around for the long term.  If the market tanks and I am 75 and it takes six years to recover that is a big difference from being 35.  (Six years is what it took to recover from the 2008 crash.)

 

Or age is our friend. If we start early enough, the laws of compounding produce large results. The point of tax-deferred plans is precisely that. They work. Sure, the market can go down, and distributions too, accordingly. But they still come, and are supplemented with SS and different investments.

 

If you think of IRA balances as money in the bank, then you'll worry about downturns, even though you didn't mind the increases. To some degree, both are illusions, but overall it's been very reliable.

 

If you're just talking about cash in hand and deciding how to invest it later in life, that is a different question.

Edited by Red Gauntlet , SASS 60619
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One thing about IRAs... you are saving yesterday's dollars, but distributing those dollars at today's tax rates.
I did the traditional IRA, and am now faced with distributions as income at today's tax rates.

I plan to take distributions of stocks to our cash account.  Not by selling them.
I can do this if the market takes a major crash, because the taxable stock value will be less.
I shoulda done this when the C19 crash came... but I slept right through it while scooping up the bargains at fire sale prices.

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If the value of the IRA goes down,  the required minimum distributions will go down and, of course, the taxes

 

I had to look up 'C19 crash', and see it means Covid 'crash' a year ago. I'd forgotten all about it, because the gains since not only erased it, but buried it. It hardly caused a blip to our distributions.

 

Many many moons ago, when these plans were introduced in the 1970s, there was talk that one's tax rates would be lower in retirement when one made withdrawls. But in fact, with all sources of income taken into account, with long-term IRAs that may not be the case. But it's not really a problem, because it means you have more money than expected long ago. That is not a bad thing.

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There is a difference between the RMD and an elected distribution.

For an RMD, the IRA value is based on the closing value on the last day of the taxable year.
The percentage of RMD is calculated from this.

An elective distribution value is based on the previous day close of the asset being distributed.
If you are distributing cash, it is the value of the cash.
However, if you are distributing stocks by moving from IRA to the Cash account, the value is based on the previous day closing value.

I hope to distribute stocks on the next big downturn in the market.
This will more than satisfy any minimum RMD, and give me a lesser taxed value as well.

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Mot of my clients opted for a three stage Mutual Fund package: half in moderate range growth finds, a quarter each in very stable low yield finds  and high risk, high yield funds.

 

Put in a stable amount every payday (you'll be amazed how fast twenty five or Fifty bucks a payday will grow IF YOU PUT IT IN FAITHFULLY AND LET IT RIDE

 

Don't try to outguess the ups and downs.  That's what your agent gets paid to do and if, like I did, they have a ton of professionals backing them up you'll come out ahead.  I followed my own advice and the stock crash of 2008 was backup in three and a half years for most of my people.

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I kinda like the S&P500 index fund.  It has very low overhead costs and actually beats the returns on most managed funds.  It's easy to understand.  It's the 500 largest capitalized stocks on the New York stock exchange.  If they go bankrupt, the dollar won't be worth spit.  For me, simple is best.

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