Shopsmith Forums

pennview wrote:Fred, you also predicted lower gasoline prices. Nevertheless, where does one find the "affordable" health care you mention?

Just go to any ER and declare that you have no insurance and no money and no job. If you can avoid giving them any ID........

I worked with a guy his name was Bill that was deep into the stock market. Once a younger guy came up to Bill and asked him to help him get into the stock market. Bill said okay how much do you want to invest the young man said no more than 15K so Bill said okay bring a cashiers check for 5 k tomorrow and I will begin to teach you. The next day the young man showed up with the cashiers check all eager to make some money.

Bill looked at the kid and said set the check on fire. Of course the horrified kid refused. Then Bill told him never to try to get into stock, if your afraid of losing 5k you can't afford the Stock market he told him.

Bill lived and breathed the stock market and right before he died he told me that he had made a few men rich and one man poor. Men he made rich were investment brokers and the poor man was himself. Bill when he died left a nice sum to his wife and kids but his wife said their life was not what it should have been Bill was so occupied with the stock market.

Money Market doesn't look all bad even with the lousy interest rates when you realize how fast your money can be gone in the Stock Market.

letterk wrote:Stock picking is easier when things are down - the fundamentals look good and conservative. At this price I'd probably be hard pressed to pick out a portfolio of good stocks if I had money to invest. As for metals, look at where they advertise - it's all doom and gloom and very right of center. I know metals are used to smooth volatility and not to be 50%-100% of your investments. Why worry about the end of the world - I guarantee you'll spend more time worrying than is necessary.

The doom and gloom hype is a pet peeve of mine as well. I live in the Ozarks where people are stockpiling ammo for the government collapse, rather than paying their light bills and feeding their kids. Even shotgun shells are up about 50% since Christmas and bird shot is selling out during non-hunting season. I did the math and if you're a perfect shot, dove hunting is around $2.50/lbs. For the guys I hunt with, more like $10/lbs

Ok cease fire, I get the message:p I'm 69 and will be required to start pulling my IRAs out at 70 1/2. So, it's important to me that the price be high at that time. Do you mind if we put this topic on hold until 4 years from now and see if things have either gotten better or worse. I will then tuck my tail and slowly walk away with my head held low if all of your predicitions are correct. Now back to bowl making, I just cut a log in half and it's waiting for me. Are we all still friends

fredsheldon wrote:Ok cease fire, I get the message:p I'm 69 and will be required to start pulling my IRAs out at 70 1/2. So, it's important to me that the price be high at that time. Do you mind if we put this topic on hold until 4 years from now and see if things have either gotten better or worse. I will then tuck my tail and slowly walk away with my head held low if all of your predicitions are correct. Now back to bowl making, I just cut a log in half and it's waiting for me. Are we all still friends

Is there any doubt?

letterk wrote: Actually, at these prices you're getting less for you money.

frank81 wrote:Never heard another person make that point. Until the day you start withdrawing, a down market is a good thing.

This is the premise of the commonly heard phrase "Buy low, Sell high". I was quite happy during 2008-2009 while the stock prices were falling because I knew I was getting more shares purchased for my money in the 401k. The phenomenal amount of growth those shares got over time offsets the higher cost of shares purchased while the markets are up, like currently, where the growth will take longer to occur and you'll likely see dips in the value time to time as the markets fluctuate. The important thing if your investing is to keep investing on a regular basis so you take advantage of the dips to offset prices of purchases during the spikes. It's a process they call "dollar cost averaging" which will usually brings more gains over the long term than trying to guess and time the markets.

frank81 wrote:We could debate the importance and causation of this all day. As a finance guy, I hope most of the members on here are only making small side bets on stocks. If you're over 50, most of your money should be in bonds and treasuries and most of that held to maturity. A little bit in index funds, and unless you have a $10m portfolio treat individual stocks like Vegas - don't bet more than you're willing to lose.

That is all. Be responsible folks.

A lot of talk about individual stocks in this thread, which isn't for me. Likewise what I do isn't for everyone but I believe it gives me a good return while avoiding the pitfalls of investing in individual stocks.

For me, I'll start thinking about the above investment options when I'm around 65. I'm 56 and have all my investments in stock based Mutual Funds, but no individual stocks whatsoever. And no bonds or treasuries "yet". At my age, I plan to be working another 15 years and want to continue see my investments for the future grow as quickly as possible while maintaining a safety factor through diversification.

The growth comes through stock based funds, while avoiding the risk of individual stocks, where if the company or companies you've invested in go belly up you've lost out. With Mutual Funds invested in 20-100+ different companies you have diversification of your investment money. And the fund and you are not destroyed if one or two of the companies within the portfolio does badly or fails.

Further diversification comes through keeping four distinct types of funds in the portfolio.
25% in Large Cap funds that go up and down slowly for stability.
25% in Mid Cap funds which provide slightly larger swings, and a little more growth potential to go with them while remaining fairly stable.
25% in Small Cap funds, which provide greater growth potential along with the wilder ride of price fluctuations like individual stocks, while maintaining a level of protection through diversification.
And 25% in International Funds which during normal times helps balance the overall portfolio as they tend to swing in slightly different cycles than the US stock based funds.

I plan on changing very little in my strategy until I hit 65 at least, and maybe not until I'm forced to start the MRDs at 72 (if I remember correctly). I wholly expect the market to take another dive between now and then just as I've seen several over the past 30 years. That gives me at least one more chance to buy up more shares during the blue-light special of a market down turn.

Best Regards,

Dave
Only one thing to consider and that is if something happens to the mutual fund company.
In 2008 my mother in law had a number of mutual funds, one and I don't remember the name went belly up. From what I recall she had to wait until everything was sorted out before she got any of her money. From what I remember from the time she found out the company was in trouble until she got her money it fell like a rock, and then for some legal reason when the market started to recover in 2009 the money in the mutal was locked to just an interest rate income. I think when the all the screaming and shouting was over she had lost about 40-50% of the funds worth before the 2008 collapse. People that knew told her she was lucky because she could have lost it all. It took about a year and half before she began to get any money.

Wasn't old Bernie Madoff running a mutual fund ponzie that caught a lot of people that should have known better?

Ed in Tampa wrote:Dave
Only one thing to consider and that is if something happens to the mutual fund company.
In 2008 my mother in law had a number of mutual funds, one and I don't remember the name went belly up. From what I recall she had to wait until everything was sorted out before she got any of her money. From what I remember from the time she found out the company was in trouble until she got her money it fell like a rock, and then for some legal reason when the market started to recover in 2009 the money in the mutal was locked to just an interest rate income. I think when the all the screaming and shouting was over she had lost about 40-50% of the funds worth before the 2008 collapse. People that knew told her she was lucky because she could have lost it all. It took about a year and half before she began to get any money.

Wasn't old Bernie Madoff running a mutual fund ponzie that caught a lot of people that should have known better?

Mutual funds, variable insurance products, etc. are in their own "fund" separate from the company's general fund so as long as everything is done legally your money is safe even if the company goes into receivership. The company has to transfer cash in or out at the close of every single day to cover account balances.

If you had a fixed interest product, you could potentially lose part of your account balance if the company goes under. Fixed and variable are treated very differently.

Madoff gave false info on the separate accounts fund, inflating people's balances (so people would do more business with him) and lying about the assets in the account to cover them....not really a pyramid scheme but lots of fraud. Corzine "borrowed" money that was supposed to be transferred into separate accounts to use for other purposes which is super illegal.

frank81 wrote:Mutual funds, variable insurance products, etc. are in their own "fund" separate from the company's general fund so as long as everything is done legally your money is safe even if the company goes into receivership. The company has to transfer cash in or out at the close of every single day to cover account balances.

If you had a fixed interest product, you could potentially lose part of your account balance if the company goes under. Fixed and variable are treated very differently.

Madoff gave false info on the separate accounts fund, inflating people's balances (so people would do more business with him) and lying about the assets in the account to cover them....not really a pyramid scheme but lots of fraud. Corzine "borrowed" money that was supposed to be transferred into separate accounts to use for other purposes which is super illegal.

But, but isn't Corzine out on the street a free man?