They forget to mention the old high was just over 14,000 in October 2007 – just before the Great Recession financial crisis wiped out HALF the Dow.
Therefore, many retirees and near retirees are now free-falling. When the market prices of their stocks go down, seniors have to sell more shares to pay their bills.
No wonder they feel sick to their stomachs when they receive their brokerage, IRA, 401(k) and mutual fund statements.
It’s likely many people you know are now wondering whether they’ll ever take that special cruise, give great presents to their grandchildren or receive the best medical care if they suffer a prolonged illness.
Chances are, nobody told them this could happen. They simply followed the mainstream advice to load their 401(k) plans, IRAs and mutual funds up with "growth stocks" to sell many years later at a huge profit.
Despite following the conventional financial wisdom, many senior citizens are now asking what happened to that worry-free fun and relaxation they promised themselves after a long career of hard work.
Many people in their fifties and early sixties are wondering when — or even if — they’ll be able to retire.
Many today wonder whether they’ll be able to leave an estate to their families or a legacy to their favorite charity.
The more you learn about the stock market, the more you understand basing your retirement on continuous stock market price rises is like building a house on the edge of a steep dirt cliff. Sooner or later, a hard rain will fall.
Serious investors who would never day trade, buy and sell penny stocks, splurge on Internet chat room stock tips or throw money away on Bitcoin . . .
. . . failed to understand that buying stocks and bonds in hopes of later selling at a higher price is an intrinsically risky form of gambling no matter how long in the future that "later" is. A 10-year "retirement trade" is not more virtuous or safer than a 10-minute day trade — it just takes a lot longer.
"Rick Stooker is on the right track. We also intend to pursue a more income-oriented strategy in the years to come. Capital gains are subject to both the risk of a decline in economic fundamentals and a deterioration in market psychology. High-quality dividends and income are subject only to the former, and that makes a big difference in modeling your portfolio returns in retirement."
Charles Lewis Sizemore, CFA Senior Analyst, HS Dent Investment Management, LLC http://www.hsdent.com/
Look, I’m just another guy who has to go to work every day to pay his bills. I’ve spent years studying investing, hoping to find a way to "get rich quick."
I tried everything you could name, and then some — options, growth stocks, commodities, gold, silver, index funds.
I’ve bought no-name stocks and seen them triple in price in one day for no reason I could figure out. I’ve bought "bottom feeder" stocks for under one penny and discovered there’s always a smaller infinitesimal fraction of a cent they can sink down to. I’ve sold covered calls and learned the underlying stock price can drop by half while waiting to sell another call. (Book authors told me not to buy stocks that would go down . . . guess I just refused to listen.)
In the summer of 1998 I discovered a way to trade U.S. Treasury bond options with a 90% chance of success. Just to make sure I lost money, the world’s entire financial system almost melted down.
Oh well . . . I didn’t do as badly as Russian stock owners or the wealthy people who entrusted their funds to the Nobel prize winners and super trader at the Long-Term Capital Management hedge fund.
I did fail to get rich, quick or slow. Yet one day I had a revelation — one of those "things I learned in kindergarten but didn’t think they applied in adult life" insights.
When you buy stocks for growth, you can’t put actual, spendable cash back into your pocket until you sell the stock.
And then you can’t participate in its future growth. Plus, you have to share your profit (if any!) with the government, by paying capital gains taxes.
Sure, receiving a brokerage statement with a six or seven figure total balance FEELS good . . . that, and $6.95, will buy you a cappuccino at Starbucks.
If investing for capital gains is risky and pointless — obviously, investing for income is the logical alternative.
So I began learning all I could about investing for income. I discovered many income investments I’d never even heard of — some of them paying out terrific yields.
One day after I began my research, I was helping my mother organize her paperwork and she showed me the original notebook where Grandpa wrote down the stocks he bought for her with the life insurance money from my father’s death.
As I looked through it, I wanted to slap myself! The secret to successful investing had been under my nose all along . . .
All I had to do was follow his lead, update it for the modern financial world, and organize it into a system anyone can easily follow.
Chances are, at some point in your life you have seen your portfolio grow. Maybe you have sold stocks at a profit, and it felt good. People who put money into Dot Com stocks during the 1990s may have made a lot of money — if lucky enough to sell before the crash. Maybe you’ve got profits riding in the so-called FAANG stocks: Faceboook, Apple, Amazon, Netflix & Google.
Wall Street wants customers to keep buying and selling so they keep raking in commissions and fees. They know that trading makes clients losers.
Yet brokers (who make a commission when stocks are sold), financial advisors (who… Read more…