Money and Investing (formerly Pfizer Stock prices)
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Ok, fair enough..
Your customer is approaching retirement age , and prefers limited volatility in their portfolio being they will start drawing down their investments as they wish to retire ..
life expectancy 30 years.. ( social security/ pension moot for this example
Using simple math
Needs 3k per month (360 months/30 years).... 1,080,000 total need.. must take into account inflation and tax implications for the 3k per year draw)
If they had those assets currently- how do we allocate to last the 30 years
Your customer is approaching retirement age , and prefers limited volatility in their portfolio being they will start drawing down their investments as they wish to retire ..
life expectancy 30 years.. ( social security/ pension moot for this example
Using simple math
Needs 3k per month (360 months/30 years).... 1,080,000 total need.. must take into account inflation and tax implications for the 3k per year draw)
If they had those assets currently- how do we allocate to last the 30 years
If you read my post you will see the line "IMHO, when a person reaches his 70's, he should be invested in stocks at least 60% with maturing bonds laddered over 6 years or so — so I always have enough cash to ride out dips and not sell stocks"
So no, I'm not 100% stocks.
In fact I started the year out 80% stocks and 20% laddered investment grade bond etf's (they all mature in mid dec — e.g. my 2020 one liquidated dec 15th 2020, my 2021 mid dec 2021, etc) that was to go for my RMD. Everything did well, even the long bond etf's in the ladder.
Note that my total market index did only just over 12% but that is only around (now anyway) 1/3 of my stocks. I had 2 winners, chip stocks that are positioned perfectly for ev's that I hold a lot of (I wont go into why) and are in just about all smart appliances and gas/diesel veh's. They are now too big a part of my portfolio so I will be lightening up in next couple of weeks — will go into next rung of the bond ladder and total market index. I can only hope that the new administration doesn't bring LTCG rate up to regular income rate as tax bite will hurt. Unfortunately (for tax purposes anyway — otherwise it's fortunate) I have no loses to sell to offset some of the gains.
This has been a crazy year and I don't expect my gains to be anywhere near that of 2020.
Now if I can just survive until I get the vaccine so I can return to mongering, restaurants, travel, etc.
So no, I'm not 100% stocks.
In fact I started the year out 80% stocks and 20% laddered investment grade bond etf's (they all mature in mid dec — e.g. my 2020 one liquidated dec 15th 2020, my 2021 mid dec 2021, etc) that was to go for my RMD. Everything did well, even the long bond etf's in the ladder.
Note that my total market index did only just over 12% but that is only around (now anyway) 1/3 of my stocks. I had 2 winners, chip stocks that are positioned perfectly for ev's that I hold a lot of (I wont go into why) and are in just about all smart appliances and gas/diesel veh's. They are now too big a part of my portfolio so I will be lightening up in next couple of weeks — will go into next rung of the bond ladder and total market index. I can only hope that the new administration doesn't bring LTCG rate up to regular income rate as tax bite will hurt. Unfortunately (for tax purposes anyway — otherwise it's fortunate) I have no loses to sell to offset some of the gains.
This has been a crazy year and I don't expect my gains to be anywhere near that of 2020.
Now if I can just survive until I get the vaccine so I can return to mongering, restaurants, travel, etc.
I do that every year on Jan 1; sort of a financial annual checkup. Pretty easy to do given everything is online such as credit cards, bank accounts, investment accounts, etc. Takes me maybe half hour and I cut and paste $-#'s to a spread sheet I set up for that years ago. The only thing I don't know on Jan 1 is how much underpayment I owe IRS and NYS on April 15th (I guess if I were totally anal retentive I could update the #'s then .)
I don't take it to an extreme and add in value of house, car, etc .
I don't take it to an extreme and add in value of house, car, etc .
I keep it simple — I just look at end of year balances for $ assets and $ liabilities. I just use it as a guide for myself as to net worth and not interested is expenses, cash flows, etc. (after all this is not a certified audit for a public company for its 10K). I figure out my taxes due A15th in Dec after all the annual cap gain and div distributions are made (I know P/L on sales during the year) and adjust the withholding on my RMD and take it then so I don't end up with a penalty — I don't do estimated taxes because I don't want to. (this process changed this year when gov't said no RMD required this year -— so I had to do all my withholding thru my pensions, soc sec (both are kept at zero holding otherwise — I changed them all back to zero since RMD will probably be required in 2021.)
when I was on salary I would guess how much taxes would be due, withhold nothing (other than FICA as I had no choice.) for most of the year and then with hold my whole salary last couple months — the IRS treats W2 with holding as a single # as if withheld evenly during the year and it does the same with RMD's.
when I was on salary I would guess how much taxes would be due, withhold nothing (other than FICA as I had no choice.) for most of the year and then with hold my whole salary last couple months — the IRS treats W2 with holding as a single # as if withheld evenly during the year and it does the same with RMD's.
Referring to @pokler thread about 2021 market predictions—
I do agree with @OSMonger - impossible to make any logical prediction until we see who is going to control Senate after the runoff—IMHO, if dems gain control I see capital gains benefit being repealed, higher taxes etc etc which again imho will result in a much lower scenario for 2021... Republicans maintain, we see either side of zero for the year
I do agree with @OSMonger - impossible to make any logical prediction until we see who is going to control Senate after the runoff—IMHO, if dems gain control I see capital gains benefit being repealed, higher taxes etc etc which again imho will result in a much lower scenario for 2021... Republicans maintain, we see either side of zero for the year
If you were a financial guy with an Einstein level IQ and made some predictions in Jan 2020 how would you have done?
I watched an interview with Ed Hyman, a really smart guy whose opinion I value. During the interview he said he was dead wrong with almost every prediction (he revised his predictions dramatically every month or so after mid-feb when the sh*t hit the fan. He was of the opinion that no one knows what's going to happen as so much has changed with companies in the past 9 months.
For example, NYS just raised min wage to $14/hr. Well I went to Wal-Mart Market (Levittown - groceries only sold there) and you know what —there wasn’t a single cashier. All checkout was done by the customers themselves. At Target last week, there were 2 cashiers and all the rest of the customers were using self-checkout. IMHO, most of the cashier jobs are not coming back .
I ordered some vitamins and other stuff for me and my SO. I used to go the local store (maybe once a quarter) and maybe they had all the stuff oin stock and maybe not. I now order it online. Stuff always in stock. Prices are good. Gets shipped to my front door in a couple of days. No shipping charges if over $30 (or so). My former method of shopping for many things is gone forever, along with many of the jobs in those places.
13 years ago I sold my company and retired. Two years later I got a call asking if I wanted to work. One of the benefits was I could work at home all I wanted except for when customers/meets, etc., where my presence was required. They set me up with secure computer and VPN service. I got a day’s work done in half the time. When I need to pee I just walked 10 feet to my bathroom, not half a building away where the bathrooms were and I didn’t get waylaid by colleagues discussing some football game. When I wanted a cup of coffee same thing. Didn’t have to scrape the snow and ice off my car in the parking lot in winter. I only agreed to 2 years (when the project was over) but ended up 7 years. My auto insurance went down, my agita during commuting was gone, there are Many, many people who used to commute to work got to sample this environment this year — and the companies saw that the work got done, no one came in late because the 495 was jammed from an accident. As is said, “How 'ya gonna keep'em down at the farm now that they've seen Paree?”
Lots of jobs will be gone, the food suppliers, cafeteria workers, people who empty the waste bins.
The point of this long winded post is that no one knows what's going to happen in the economy once this particular catastrophe is resolved, no less the stock market (they are not always related).
Many experts think that the flooding of the money supply is going to cause inflation ( à la the late Milton Friedman - another guy whose opinion I valued) but Ed Hyman thinks that there very well be a deflation, as there will be slack employment (resulting in less demand) and lots of $ at low rates for companies to invest in productivity boosting technology (resulting in more supply).
I don't know who has it right — what I am pretty certain is things are going to change from the way things were as recent as 2019, and they are going to change fast.
So I'm going to disappoint you as I have no clue as to how the markets will end up at the end of 2021.
I watched an interview with Ed Hyman, a really smart guy whose opinion I value. During the interview he said he was dead wrong with almost every prediction (he revised his predictions dramatically every month or so after mid-feb when the sh*t hit the fan. He was of the opinion that no one knows what's going to happen as so much has changed with companies in the past 9 months.
For example, NYS just raised min wage to $14/hr. Well I went to Wal-Mart Market (Levittown - groceries only sold there) and you know what —there wasn’t a single cashier. All checkout was done by the customers themselves. At Target last week, there were 2 cashiers and all the rest of the customers were using self-checkout. IMHO, most of the cashier jobs are not coming back .
I ordered some vitamins and other stuff for me and my SO. I used to go the local store (maybe once a quarter) and maybe they had all the stuff oin stock and maybe not. I now order it online. Stuff always in stock. Prices are good. Gets shipped to my front door in a couple of days. No shipping charges if over $30 (or so). My former method of shopping for many things is gone forever, along with many of the jobs in those places.
13 years ago I sold my company and retired. Two years later I got a call asking if I wanted to work. One of the benefits was I could work at home all I wanted except for when customers/meets, etc., where my presence was required. They set me up with secure computer and VPN service. I got a day’s work done in half the time. When I need to pee I just walked 10 feet to my bathroom, not half a building away where the bathrooms were and I didn’t get waylaid by colleagues discussing some football game. When I wanted a cup of coffee same thing. Didn’t have to scrape the snow and ice off my car in the parking lot in winter. I only agreed to 2 years (when the project was over) but ended up 7 years. My auto insurance went down, my agita during commuting was gone, there are Many, many people who used to commute to work got to sample this environment this year — and the companies saw that the work got done, no one came in late because the 495 was jammed from an accident. As is said, “How 'ya gonna keep'em down at the farm now that they've seen Paree?”
Lots of jobs will be gone, the food suppliers, cafeteria workers, people who empty the waste bins.
The point of this long winded post is that no one knows what's going to happen in the economy once this particular catastrophe is resolved, no less the stock market (they are not always related).
Many experts think that the flooding of the money supply is going to cause inflation ( à la the late Milton Friedman - another guy whose opinion I valued) but Ed Hyman thinks that there very well be a deflation, as there will be slack employment (resulting in less demand) and lots of $ at low rates for companies to invest in productivity boosting technology (resulting in more supply).
I don't know who has it right — what I am pretty certain is things are going to change from the way things were as recent as 2019, and they are going to change fast.
So I'm going to disappoint you as I have no clue as to how the markets will end up at the end of 2021.
One of the things I've always liked about Hyman is that he always is willing to make predictions and adjust as new info comes in.
No worries its just that I've always respected your opinion and still do. It's not as if you are a market pro and I can bust your chops for not manning up ( like other around here)
No worries its just that I've always respected your opinion and still do. It's not as if you are a market pro and I can bust your chops for not manning up ( like other around here)
The future is looking awfully bleak.
"Go into the trades"
No one can pay for repairs, nothing will get built.
Can't change people. Can only move them in place. Would be less awful if they just stuck with the low minimum wage, kept their shitty jobs, lived 2, 3 generations to a household, and kept their families at least intact. Now people will just be broke and alone. Sad!
"Go into the trades"
No one can pay for repairs, nothing will get built.
Can't change people. Can only move them in place. Would be less awful if they just stuck with the low minimum wage, kept their shitty jobs, lived 2, 3 generations to a household, and kept their families at least intact. Now people will just be broke and alone. Sad!