How much do YOU think YOU need to retire? ...and at what age will you (and spouse) retire? (Part 1)

Parent Cafe
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<p>I’m unable to find the ticker symbol for the PIMCO Fixed Income Fund but found the following link from morningstar, some thinks it’s a relative of PIMCO Total Return for institutional investor. But please note the following in bold.</p>

<p><a href=“http://socialize.morningstar.com/NewSocialize/forums/t/233631.aspx”>http://socialize.morningstar.com/NewSocialize/forums/t/233631.aspx&lt;/a&gt;

</p>

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<p><a href=“Bonds | FINRA.org”>https://www.finra.org/web/groups/investors/@inv/@protect/@ia/documents/investors/p230297.pdf&lt;/a&gt;&lt;/p&gt;

<p><a href=“http://news.morningstar.com/classroom2/course.asp?docId=5323&page=5&CN=com”>http://news.morningstar.com/classroom2/course.asp?docId=5323&page=5&CN=com&lt;/a&gt;&lt;/p&gt;

<p>The duration of a fund also tells you how much the value of the fund will decline with a 1 percent increase in rates.</p>

<p>A duration of 10 years means the value of a fund will decrease about 10 percent if
rates rise 1 percent.</p>

1263

<p><a href=“http://money.cnn.com/data/bonds/”>http://money.cnn.com/data/bonds/&lt;/a&gt;&lt;/p&gt;

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<p>I recently found this site. Has anyone used this or any other similar sites? Returns seem very good, 13 or 14%. Fundamental benefit being that the money is able to be directly and immediately utilized by someone, instead of with stocks which is money going to someone who gave money to a company that the company could theoretically use at some point, or bonds which may go direct to a business or government but aren’t utilized immediately and probably not effectively either because the main stakeholder isn’t the same as the main decision maker. </p>

<p><a href=“https://www.lendingclub.com/”>Online Personal Loans + Full-Service Banking at LendingClub;

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<p>I heard a piece on public radio about it. A couple things I remember:

  • Higher returns if you pick your own borrower (I think you can just put money in a pool for borrowing, too). But it is also a lot more work to pick your own, evaluating whether someone is a good risk. I don’t recall them talking about returns quite as high as you mention (possibly for riskier borrowers?)
  • While the economy is pretty good right now you will probably do okay. But if we have another sharp downturn, I assume you could lose your principal if people default on the loans. So… like with many investments, don’t invest what you can’t afford to lose.</p>
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<p>Slightly different than that intparent. You can pick your own borrowers, but that’s pretty silly for a number of reasons. 1. It takes time, a lot of time. 2. Lending Club does the statistical work (they take a cut, so it’s just in their interests to do so), you can tell them to make the best picks, statistically, and let it run. You don’t have to rely on likely faulty intuition (at least my own here) or do your own data mining (which I wouldn’t be able to do as well as they can).</p>

<p>The loan rates range from 6.something%-24.something%. Obviously some default, so that 13-14% is a broad portfolio across different interest rates, after subtracting a default rate (which will vary depending on the mixture). </p>

1267

<p>It seems exoteric to me. I’m just sticking with what I know best and that’s tech stocks. I bought underperforming tech stocks that paying high yield and then sell covered calls to generate more premium. As recently as Intel and Cisco, were both unloved by the market. They both had popped up nicely which I profited. I typically generate better returns than 13%. The risk is very low, even on the down day, these stocks didn’t go down anymore because they are already down big time. Same with HP. But of course if there is a scenario like 2009, doesn’t matter which investment, they all go down in unison.</p>

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<p>Wanna PM me any trades you make DrGoogle? I’d like 13% too. </p>

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<p>The S&P 500 is up about 7% so far this year, not counting dividend returns. </p>

<p>I looked at the lending club prospectus. Pretty interesting situation, and they have a pretty good board of directors, but I don’t think those guys have a duty to the actual “member lenders”, but rather to the shareholders. I"d have to know a lot more about what the profile of their borrowers is. My sense is that banks are perfectly willing to loan money to creditworthy borrowers these days, so that loans made through a channel such as this are likely, IMO, to suffer from an “adverse selection” problem.</p>

1270

<p>My 401K and MF are spread among Fedelity, John Hancock, Trow Price, Vanguard,… Should I withdraw and put into only one company? Is Vanguard the best?</p>

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<p>I can’t speak about the benefits of any of the others, but Vanguard is great. No load funds, very low fees, easy to do everything online. They aren’t trying to sell you stuff all the time, they are a non profit, believe it or not. I’d think it would be far easier to have assets at just one company instead of four, but maybe others see a benefit. Easy to transfer your stuff from other companies to them, also.</p>

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<p>I don’t think it is exotic. The idea is that it takes the bank out as the middleman, and thus is a better deal for the lender and borrower to deal with each other directly. The bank doesn’t get their cut. A little like eBay for loans, I guess. You don’t need a bank in the middle. I haven’t put any money into it, but have been thinking about lending some (not a lot – but I am about the most diversified investor on the planet, so I never put a lot into any one thing).</p>

<p>To me, “exotic” is something touted by Wall Street, but I can’t understand the mechanics of the instrument.</p>

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<p>I think I meant esoteric(per dictionary, understood by or meant for only the select few who have special knowledge or interest) and perhaps exotic(per dictionary, very different, strange, or unusual)</p>

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<p>This site definitely has generated some good discussion. </p>

<p>We need to brace for a stock market adjustment. No one knows how big it will be…Will see our financial planner on the 19th, so will be interested to hear what he has to say. We also had an email from him regarding the most recent activity. </p>

<p>I did enjoy seeing our ‘high’ 401K account - hope whatever the market adjustment is, it won’t be too heavy of a hit.</p>

<p>I guess there are folks looking to open investment options, and ways to understand the variety of funds.</p>

<p>It wouldn’t hurt to talk to “Endorsed Local Provider” via Dave Ramsey web site and hear what they have to say - he endorses people that are willing to ‘teach’ and with small accounts. If anyone has used, maybe share what you think on this thread. </p>

<p>I don’t agree with everything Dave Ramsey, but a lot of it. He likes real estate - he essentially has purchased properties for cash and continues to hold while renting out; so of course he deals with property management. I like more liquid forms of investment. I also see in our area lots of new homes continuing to be built while older homes sitting longer for sale; people who have to sell more quickly end up dropping price substantially. With retirement (down the road), will want to sell our home at most favorable time - after doing upgrades to compete with those new homes…</p>

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<p>@SOSConcern‌ , with due respect, your financial planner and everyone else’s financial planner has no more idea of when the market will correct, how much, or how long it will last than your average Ouija board. If they did, they’d be making trades from their yacht instead of meeting with people like you or me. The market will correct and, eventually, correct again. Since we are still accumulating, I hope it corrects a lot; I like buying things on sale. </p>

<p>Re Dave Ramsey, he has helped many people get out of debt, which is a wonderful thing. I don’t care for his investment advice, and there have been questions raised about his financial ties with his endorsed providers. The ELPs all appear to be commission based advisors, which I disagree with. YMMV. </p>

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<p>I agree with one guess on cnbc that we are in a secular bull market like after the 70s and early 80s, there was 18 years of consecutive bull and that doesn’t mean there was no correction, there was, but the trend was up. My husband finally used his Excel skill and plotted the stock market for me, we’re try to identify bubble condition and but he also said it depends on what long term average for stocks we are using, it might make a difference on how we interpreting it. So the chart shows we are once again looks similar to the 70s and 80s, despite the fact that the stock market is at an all time high. But what I’ve seen is a lot of sector rotations, which is supposedly healthy, and there are still a lot more skepticisms out there which is also healthy. But we still have a lot of more cash to buy if there is a correction. </p>

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<p>^ Unfortunately the stock market doesn’t exist in a vacuum, and with the odd and unprecedented interest rate environment we have now, I think money is flooding into stocks in an attempt to get some kind of return, because people are getting zero or close to it from bank accounts and most “safe” bonds (like short-term treasuries).</p>

<p>Once interest rates return to normal, and you can get 3-5% from your bank account or money markets or short term treasuries, money will come pouring out of the stock market as seniors go for safety with a reasonable return.</p>

<p>IMO, of course.</p>

1278

<p>DrGoogle, </p>

<p>I like your covered call strategy.</p>

<p>I have no idea what the stock market is going to do in the future. My guess is interest rates are not going to normalize for years.</p>

<p>In 1981, stocks were very very very cheap. Interest rates were very high and were starting their 3 decade plus decline. Inflation was near its peak and starting its multi decade decline. Demographics were super bullish. </p>

<p>I dont see these super positive conditions now.</p>

<p>The stock market can do well anyway. There seems to be a consensus that stocks are the way to go. It is also true that stocks go on long runs and we had a poor run for close to a decade. </p>

<p>The consensus bugs me…</p>

<p>When somebody is 75 years old and retired and relying on the stock market and the market takes a hit… I think the emotions are a little dIfferent than when a person is 50 and has time to make back his wealth.</p>

<p>This board skews much wealthier compared to the rest of society so maybe everybody is fine here. </p>

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<p>dstark, I’m glad you remind me of the 80s. I need to let my husband know so he can model his chart properly.
I don’t hear or think there is a consensus, every time I turn on TV, there is always a guy predict a stock market is going to crash. For example, just recently Kelly Evans on cnbc was clearly annoyed at the Harry Dent for saying he was right in his prediction of 2009 crash. I remembered buying his book on Dow 40,000 due to birthrate. What happened to that theory?</p>

1280

<p>Here’s another one claiming the Dow is on the way to 44K:</p>

<p><a href=“Bull markets don’t die of old age, why Dow 44,000 is coming”>http://finance.yahoo.com/blogs/breakout/bull-markets-don-t-die-of-old-age--why-dow-44-000-is-coming-193910039.html&lt;/a&gt;&lt;/p&gt;

<p>It got him in the headlines, so mission accomplished I guess.</p>