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  1. #1081
    I believe Covid-19 will have more long-term ramifications on financial markets than any other event (including the Great Recession) of my lifetime. For example, within the next 24 months, I believe most major investment firms will substantially change their traditional asset allocation recommendation from 60/40 (equity/fixed income) to 80/20, or, at least, 70/30. I suspect forecasted long-term aggregate investment returns will substantially decrease from ~ 8-10% to ~ 4-6%. Add in my expectation for substantially higher long-term individual and corporate tax rates and individual savings rates will need to substantially increase (maybe, double!) for future generations to fund a retirement equal to the generation before them.

  2. #1082
    Join Date
    Nov 2007
    Location
    Vermont
    Quote Originally Posted by Jeffrey View Post
    I completely understand... my compliments! If you have all the cash you two will ever need, then why take unnecessary risk?
    Tell me how long I'll live and how healthy I'll be and I'll tell you if the strategy works! We think we have a plan, so far so good, but ya never know.

  3. #1083
    Join Date
    Nov 2007
    Location
    Vermont
    Quote Originally Posted by Jeffrey View Post
    I believe Covid-19 will have more long-term ramifications on financial markets than any other event (including the Great Recession) of my lifetime. For example, within the next 24 months, I believe most major investment firms will substantially change their traditional asset allocation recommendation from 60/40 (equity/fixed income) to 80/20, or, at least, 70/30. I suspect forecasted long-term aggregate investment returns will substantially decrease from ~ 8-10% to ~ 4-6%. Add in my expectation for substantially higher long-term individual and corporate tax rates and individual savings rates will need to substantially increase (maybe, double!) for future generations to fund a retirement equal to the generation before them.
    I agree, big changes will be coming. We're already seeing how the demise of widespread pensions in this country is affecting things. Used to be that a blue collar guy could retire from a manufacturing job with a good pension to go along with Social Security, and those days are long gone. Very very few people have 401 (k) balances that will yield anything close to what a traditional pension would have yielded.

  4. #1084
    Quote Originally Posted by budwom View Post
    Tell me how long I'll live and how healthy I'll be and I'll tell you if the strategy works! We think we have a plan, so far so good, but ya never know.
    No doubt, we could make much better decisions (especially, financial decisions), if we knew how long we will live. The knowledge downside would be a depressing final couple of years.

  5. #1085
    Quote Originally Posted by budwom View Post
    I agree, big changes will be coming. We're already seeing how the demise of widespread pensions in this country is affecting things. Used to be that a blue collar guy could retire from a manufacturing job with a good pension to go along with Social Security, and those days are long gone. Very very few people have 401 (k) balances that will yield anything close to what a traditional pension would have yielded.
    I think the prudent solution is investment time period expansion. IMO, young people should start investing a decade earlier than their parents or plan on working substantially longer. They’re being dealt a tough hand.

  6. #1086
    Join Date
    Nov 2007
    Location
    Vermont
    Quote Originally Posted by Jeffrey View Post
    I think the prudent solution is investment time period expansion. IMO, young people should start investing a decade earlier than their parents or plan on working substantially longer. They’re being dealt a tough hand.
    Yeah, it's the prudent thing to do, but many just can't afford it. I remember when I got out of grad school, had a negative net worth (student loans), needed to buy a car and pay rent...I was only able to tuck away my 401k money by renting a room from a friend for a year. Something like 40% of Americans have essentially zero savings...that's not good.

  7. #1087
    Quote Originally Posted by budwom View Post
    Yeah, it's the prudent thing to do, but many just can't afford it. I remember when I got out of grad school, had a negative net worth (student loans), needed to buy a car and pay rent...I was only able to tuck away my 401k money by renting a room from a friend for a year. Something like 40% of Americans have essentially zero savings...that's not good.
    Many Americans certainly think they cannot afford it. Americans are great at confusing wants for needs, living large, and then complaining about the results. It’s possible to personally prepare every meal you eat, drive your car for more than a decade, live in a small house, never go to the movies, etc. However, few Americans are willing to make those financial sacrifices to achieve financial independence.

    FTR, my wife completely disagrees with my previous paragraph and has the credit card bills to prove it.

  8. #1088
    Join Date
    Feb 2007
    Location
    Raleigh
    Quote Originally Posted by Jeffrey View Post
    Many Americans certainly think they cannot afford it. Americans are great at confusing wants for needs, living large, and then complaining about the results. It’s possible to personally prepare every meal you eat, drive your car for more than a decade, live in a small house, never go to the movies, etc. However, few Americans are willing to make those financial sacrifices to achieve financial independence.

    FTR, my wife completely disagrees with my previous paragraph!
    She should post on DBR...

    [redacted] them and the horses they rode in on.

  9. #1089
    Quote Originally Posted by devildeac View Post
    She should post on DBR...

    Absolutely, free DBR entertainment for all!

  10. #1090
    Join Date
    Feb 2007
    Location
    Raleigh, NC
    Quote Originally Posted by devildeac View Post
    She should post on DBR...

    This might be why my wife switched hospitals a few years ago...DD had access to her

  11. #1091
    Join Date
    Feb 2007
    Location
    Raleigh
    Quote Originally Posted by elvis14 View Post
    This might be why my wife switched hospitals a few years ago...DD had access to her


    I tried but all she could talk about was your dirty socks and being a DBR “widow.”

    [redacted] them and the horses they rode in on.

  12. #1092
    Join Date
    Feb 2007
    Location
    Raleigh, NC
    Quote Originally Posted by devildeac View Post


    I tried but all she could talk about was your dirty socks and being a DBR “widow.”

    And there you have it! :-)

  13. #1093
    Join Date
    Nov 2007
    Location
    Vermont
    Quote Originally Posted by Jeffrey View Post
    Many Americans certainly think they cannot afford it. Americans are great at confusing wants for needs, living large, and then complaining about the results. It’s possible to personally prepare every meal you eat, drive your car for more than a decade, live in a small house, never go to the movies, etc. However, few Americans are willing to make those financial sacrifices to achieve financial independence.

    FTR, my wife completely disagrees with my previous paragraph and has the credit card bills to prove it.
    yep, I know what you're saying. We always had retirement in mind, so our house is smallish, and we paid off our 30 year mortgage in 15 years (doesn't take much additional payment per month as a banker like you knows)...keep our cars 15 years.
    Can't say we deprived ourselves, but saving was always a goal we stuck to.

    As we've discussed before, both high schools and colleges should have mandatory financial planning courses for kids...they need to be thinking about this stuff.

    (The prevalence of highly convenient home equity loans, turning houses into ATMs, has surely not helped people to save.) I'm amazed at how many people I know who've had good family income for decades, yet find themselves with little or modest home equity...

  14. #1094
    Quote Originally Posted by budwom View Post
    (The prevalence of highly convenient home equity loans, turning houses into ATMs, has surely not helped people to save.) I'm amazed at how many people I know who've had good family income for decades, yet find themselves with little or modest home equity...
    This describes my in-laws to a T. The only reason they have any savings right now is because my father in-law became seriously ill about 2 1/2 years ago and never fully recovered (which has stopped his spending). now they have 30 months of his retirement income saved up. No idea where the money went.

  15. #1095
    Quote Originally Posted by budwom View Post
    yep, I know what you're saying. We always had retirement in mind, so our house is smallish, and we paid off our 30 year mortgage in 15 years (doesn't take much additional payment per month as a banker like you knows)...keep our cars 15 years.
    Can't say we deprived ourselves, but saving was always a goal we stuck to.

    As we've discussed before, both high schools and colleges should have mandatory financial planning courses for kids...they need to be thinking about this stuff.

    (The prevalence of highly convenient home equity loans, turning houses into ATMs, has surely not helped people to save.) I'm amazed at how many people I know who've had good family income for decades, yet find themselves with little or modest home equity...
    My strong compliments... very impressive!

    I completely agree. These days, many (probably, most) of my friends are fine artists, musicians, writers, or actors. I really enjoy the company of highly creative people and, fortunately, they tolerate me. Most earn seven digits a year and clearly have the means for substantial wealth accumulation. However, numbers are not their game, and many of them, and their peers, have been financially exploited and/or highly foolish with their spending. From my more recent experiences, wealth accumulation is more an issue of effort than opportunity.

  16. #1096
    Quote Originally Posted by budwom View Post
    Yeah, it's the prudent thing to do, but many just can't afford it. I remember when I got out of grad school, had a negative net worth (student loans), needed to buy a car and pay rent...I was only able to tuck away my 401k money by renting a room from a friend for a year. Something like 40% of Americans have essentially zero savings...that's not good.
    Quote Originally Posted by Jeffrey View Post
    Many Americans certainly think they cannot afford it. Americans are great at confusing wants for needs, living large, and then complaining about the results. It’s possible to personally prepare every meal you eat, drive your car for more than a decade, live in a small house, never go to the movies, etc. However, few Americans are willing to make those financial sacrifices to achieve financial independence.

    FTR, my wife completely disagrees with my previous paragraph and has the credit card bills to prove it.
    I'm a financial planner/investment advisor, so I see both sides (quoted above) almost every day in my practice. No doubt, we live in a VERY expensive country (admittedly, I live in the Northeast - probably one of the most expensive areas of the U.S. in which to live). EVERYTHING (seems to) costs a LOT of money - houses (or rents), cars, food, clothes, taxes - state and federal income taxes, sales taxes, property taxes, etc., utilities, cable TV and the list goes on and on. If you aspire to a "middle-class" or upper middle-class lifestyle (as we define that here in the US), it is going to cost you a lot of money each year. No doubt, as Jeffrey points out above, many people DO spend money on things that they don't really need - big houses, fancy cars, country club memberships, eating out all the time, etc. but just affording the "basics" now runs a lot of money. And for many younger people, they are also saddled with trying to pay off substantial student loans, on top of normal living expenses. It's tough for many of those people to save much, if any, money.

    I have many clients in their 70's and 80's and I'm always amazed at how many of them are still financially supporting, to one degree or another, their adult children (like, I mean, "kids" in their 30's, 40's, and even 50's). A few weeks ago, the son, age 58, of one of my clients, called me up to say that he needed a "loan" of $100,000 from his mother who is in her late 70's (my client). He's a self-employed architect in NYC and his wife is professionally employed. But some potential architecture jobs he thought he might get fell through (thanks to the pandemic) and he had tax obligations that he couldn't pay (and my client, his mother, has paid for both of his kids private school education in NYC (right from kindergarten through HS) AND their private college tuitions for all four years. But he and his wife are living in one of the most expensive cities in the world and his income fluctuates so he always needs "help". The mother was not happy to have to give him the money but she wrote him the check.

  17. #1097
    Quote Originally Posted by Edouble View Post
    After some investigation on my own, I invested in a certain stock I had never heard of on 04/06 at $21.30 per share, on a tip from Jeffrey. The stock hit $39.50 today. The man knows his stuff.
    I think you should cash out today. It may go substantially higher (I still believe AMZN might buy it and I’m holding mine) but it’s now $51.50 and you’ve made 142% in less than 4 months. No need to be greedy.

  18. #1098
    Or today at the close. That looked like a gamed close to me at the month end.

  19. #1099
    Up and up it goes! I don't have much at risk but am positive for the year. It doesn't make sense to me but hey.

  20. #1100
    Quote Originally Posted by Jeffrey View Post
    I think you should cash out today. It may go substantially higher (I still believe AMZN might buy it and I’m holding mine) but it’s now $51.50 and you’ve made 142% in less than 4 months. No need to be greedy.
    IMO, this morning seems like a good time to decrease equity positions. For example, this morning, I sold some of the stock addressed above for $60.90.

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