<p>BC, correct, but if you are looking at any 20 year period and you save 10-20% of your income in a well balanced portfolio you historically have seen a positive return. If you run out scenarios with a planner, generally you can “choose” your risk and “choose” your estimated rate of return to target what that rate of savings needs to be. Most people that saved, while crying in their soup today…we all are… at least have something left over. People that never saved are the ones that now have to look their kids in the eye and be honest with them or amass some major debt now, later in their lives…but those non-savers should not be shocked that there are “savers” in the world and the non-savers shouldn’t be shocked when they realize the day of recognition arrives with the tuition bill and they have to pony up. Those that never earned a living wage despite years of hardwork have kids that deserve a helping hand, that I can totally agree with. My kids I still encourage to save…10% of their tips or $1.00 a week or whatever. Young adults, maybe it’s better to be in CDs or some sort of cash account, but they still need to save even in these turbulent times. 3% on your 1.00 is better than nothing and always has been. Only time will tell if the law of 7s still applies and we will probably never see a bull market like we have, but I’m betting that over time it’s better than to save than not save.</p>
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<p>1929 to 1949, $INDU.
1987, 1988, 1989, 1990 to current, Nikkei.
Do you think that the NASDAQ will return to 5,000 in your lifetime?</p>
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<p>I was at a Fidelity Traders Summit earlier this year and the first
speaker was O’Neil who runs IBD. He said that the LTBH stuff is for
the unwashed masses. We’re traders. We don’t want to participate in
the markets falling except on the short side.</p>
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<p>Or not. Those with no savings look better for Financial Aid than those
with savings.</p>
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<p>Bull market or bear market, you can make money as long as the market
moves. I think that it’s better to trade than it is to save. We’re
facing the big question of inflation or deflation. If the answer is
inflation, then saving is stupid. Saving is a win with deflation.</p>
<p>Its laughable when financial planners and other “experts” use the 20 year example for proving their point when it is financially advantageous for them. Try 40 year time periods - which is more approriate as people would be saving and investing from roughly the age of 25 to 65.</p>
<p>BC - you know that is the million dollar question. Inflation or deflation. We’re (H & I) grappling with that question now…the what next. I guess deep inside I’m betting on deflation. But I’m no expert. Even the experts don’t agree. I’m thinking “no” on he Nasdaq…I’m thinking the market will continue to rise for a short period of time and then fall again – significantly – </p>
<p>Doc T I just used 20 years as most people don’t think about saving until they get married and since it’s a college forum you’re looking at about 20 years to save for child #1 if you wait a year or so to start a family. In my case my H and I looked at 20 year segments…20 years til the kids went off to college and then another 20 years of work and then 20 years of retirement for minimums so for us it was easier to segment out savings planning into 20 year chunks…but that was just us.</p>
<p>A bunch of guys where I work use a financial planner so I asked to talk to him after he was done with one of his clients. We talked for about 90 minutes. This was back around 2002. I put up a chart of a stock and asked what he thought of it. He had no comments on it. Apparently he knew nothing of technical analysis. His approach in picking mutual funds for his clients was to take the top three performers from the previous year in various categories and offer them to his clients and they’d choose. I asked him if he got his clients out in 2000 before the market crash. He said no. He showed surprise that I got out and went short.</p>
<p>My view of financial planners plummeted after that meeting.</p>
<p>Oh dear. I’ve always likened finding a financial planner similar to finding a spouse. In fact, my husband and I use different ones LOL. Really. My husband has one he works with and I have one that I work with. But there are many different “types” of financial planners. We actually have a friend who is really an insurance salesman, but he calls himself a “financial planner.”</p>
<p>I did explain that. One should receive financial aid if they NEED it. If the only way an individual can attend college is through financial aid, so be it. That’s the purpose of financial aid. Someone making 450K does not NEED financial aid in order to attend college. That’s cheating the system.</p>
<p>The inflation/deflation question is very hard. Bernanke is known as “Helicopter Ben” for a reason. Greenspan relished the prospect of a Kondreytieff Winter and had a plan to fight it and Bernanke grew up under Greenspan. The current administration and Congress are inflationary with only small concerns about budgets.</p>
<p>The US markets have the advantage of the US Dollar as the undisputed reserve currency of the world for many decades. This is a special privilege and our actions lately show that we aren’t worthy of the privilege. If we can convince central bankers around the world that inflation is the way to go, then maybe we can get away with inflating away. But China is hammering us regularly on our excesses publicly and the dollar is under pressure. The 79 - 88 US Dollar Index trading range is showing signs of breaking down. Sure, the Swiss can weaken their own currency to help us out but can we keep issuing debt without consequences? If the dollar plummets, we get inflation. I think that this wouldn’t be a bad thing long-term.</p>
<p>One of the Fed’s primary dealers dropped out of the Gang of 22. Someone else took their place - don’t know who but it doesn’t matter. Being a member of the Gang of 22 is a license to print money. That a bank would withdraw is an eye-opener. Being a primary dealer obligates you to bid for auctions and it appears that primary dealers are awash in treasury and agency debt to the point where they are having to dump corporate debt. Is this sustainable? Can the world continue to soak up a trillion of our debt a year? Do they want to?</p>
<p>Basically one has to play for both the inflation and deflation scenarios. That means currency diversification, gold (which should work well in inflationary and deflationary scenarios but not in a goldilocks environment), a little bit in other commodities and companies with solid revenue streams and preferably good dividends. A weaker US dollar will be beneficial to US multinationals so I like some exposure there.</p>
<p>My biggest problem is where to park domestic cash. We had another four banks fail this weekend. I don’t like to have to eat the interest on my CDs.</p>
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<p>No you didn’t. You merely asserted it.</p>
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<p>I need a new shopping mall. Should I get financial aid for it?</p>
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<p>Well, that’s not the only way that one can attend college.</p>
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<p>Really? You know that this is the only legislative intent of financial aid?</p>
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<p>That’s your opinion.</p>
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<p>Do you know how much in taxes you pay with $450K in income? It easily covers a year at a private institution.</p>
<p>As far as even 20 year periods, financial planners say to buy and hold. You would have done a factor of 4 better by buying and selling using the “golden cross” without even shorting the market.</p>
<p>O’Neil demonstrated the CANSLIM system and applied it to the 1929 crash. His system had you out before the plunge and you still had a few months to get out. I’ve read a lot of other posts about the system and finally learned a few more details of the system. What I did learn is that it is a lot of work to learn and use and you have to be looking for new stocks. I prefer to trade a known set of stock where I know the technical and intraday behavior. I also trade stocks recommended by people that I trust but the list of those people is under five.</p>
<p>The methodology I mentioned is trivial to use. It may not be the best as moving averages are lagging indicators but it is a whole lot better than ones financial planners and the conventional wisdom preach.</p>
<p>Looking at the data, it would have gotten you out of the S& P at 1450 in December of 2007 and back in around now - a saving of more than 500 points. It also signalled going short the market in December of 2008</p>
<p>oops short in December of 2007</p>
<p>I watch for the 50/200 cross. For shorter-term trades, I look at a few EMAs. I mainly use patterns, trendlines, fibonacci retracements and momentum indicators in trading.</p>
<p>I pointed this out because anybody can follow it because its simple. I use it longer term. In range bound stuff, I use a combination of bollinger bands, macd, stochastic oscillators and on balance volume. In trending markets I go to shorter term moving averages.</p>
<p>Well, our family’s income fell by 60% three months ago. We filed for an amended FAFSA and were told we are $200 over the threshold for our daughters PUBLIC university financial aid. We have to now sell our home to pay for college for her and our other daughter. </p>
<p>You have to make very little money to qualify for benefits through FAFSA.</p>
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<p>Yes. \ Most Pell grant recipients (which is basically the only free money FAFSA offers) have family incomes of $40,000 or less - that is to say, officially low-income (150% of the poverty line or less). Some recipients have incomes extending into the $50,000 - $60,000 range, but I’m pretty sure that’s less than 10% of all recipients.</p>
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<p>Sanppy, that seems very extreme…your income could decrease or increase in a matter of months. Surely they can take loans, work, start at a CC/local U or defer their college plans rather than lose the family home, can’t they? Unless you’re also not able to afford the mortgage and don’t qualify for the Obama home affordability plans, I think this is the last option I’d consider…kids are young enough to start small and think big, parents have much less time to regain assets. Good luck with your decision (and finding a buyer who can actually obtain a mortgage!).</p>
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depends on what you consider “benefits”. For Pell and SEOG grants - yes. But not for Subsidized loans and FA grants from the university. There are other grants available for students in specific fields (teaching and nursing e.g) that can also be awarded based on FAFSA.
While public colleges generally are not in the position to offer large need based grants this is not so with many private schools - even private schools that don’t require the Profile.</p>
<p>Frankly, I’d make my kid work for a year or attend a CC before I would sell my house. Remember - you have to live somewhere and no parent is obligated to pay for college.</p>