The January 2018 stock market - easy come, easy go.

[The Heretic]

I could retire tomorrow but I have plans for where and how I want to live while I can still be independent.

More importantly, I plan to not have debt so that I can live solely on my SSI benefits until such time as maybe health problems require I start taking disbursements from my retirement funds. Preferably that would never happen because my plan is to keep those funds in reserve for my daughter who may need them before I do, and may need them more than I will.

I hope to have $450-$500K in those funds by 2020, and if I retire in 2020 I plan to pull just enough out of them to stay in the lowest tax bracket, put the max I can into the Roth IRA, and the rest into tax free bonds or something like that.

The idea being to move the most I can into tax free assets that will grow, while paying the lowest tax on the disbursements. If my daughter needs funds, then I can get her funds from the tax free assets first so we don't have to pay a higher rate on them. If I am gone early, then she can pull the minimum disbursement amount from those funds that she will have to pay taxes on them, and the rest from the tax free assets.

When I am forced to take RMDs in 2025, roll over some of that into the Roth and tax free bonds too, and hope that growth alone will double all of those assets in ten years. I don't think I will have significant healthcare expenditures until I am in my mid 70s, and the "interest" (growth) of the funds at that point should be enough to cover my healthcare unless something catastrophic happens (cancer, stroke, memory care).

The goal being to leave a significant amount behind for my daughter who is not able to set aside much of anything for retirement, especially if she needs to retire early due to her health.

 

[CoastRange57]

Getting rid of the mortgage is the best thing you can do. I was not able to be get rid of mine, since I got divorced 30 years ago, and paid half of a business at that time, and then paid over 200K in child support over the next 20 years. That will kill any plan of paying off a mortgage.

Fortunately the property is worth about 2.5 times the amount owing on it and we are selling it next years. The wife did inherit some IRA funds and some cash when her mom passed away 4 years ago and that has helped out a lot. Nothing that is going to let us both retire tomorrow, but enough that there will be some mandatory distributions, that we have rolled into Roths.

We purchased the ground in Central Oregon in 2016 and 2017 and were very fortunate to have got it at a great price. The prices have went up about 30% since then. When we sell this place, we can build a place for cash over there. My wife and I will still have to work for about the next 5 years, but there is light at the end of the tunnel. I am working on a passive income website and process that will hopefully generate about 60k per year, which will take care of all our expenses.

I so wish I had been able to pay this mortgage off about 12 years ago, the amount of money you can put towards retirement is so huge and helps out so much.

 

[The Heretic]

This property has appreciated almost as fast as my mortgage payments - if you only count the interest, taxes and insurance, and consider that the principal equates to equity, theoretically (depends on what I actually sell it for) I have been living here for free due to the appreciation.

If the timber sale works as well as the buyer thinks it might, then even better, I will make a significant profit on it even after including all the costs (closing, interest, taxes, improvements). Which is great because I did not intend to buy it as that kind of investment, only to not waste money on rent anymore.

So if everything with the property goes well, it will have been the best investment I have made in my life.

 

[Ruger Rich]

Nothing goes up forever. Know when to bag it just prior to the peak and ye shall be wealthy. Kinda like being in Wyoming with your 25-06 at your shoulder and the antelope out there going full on at 250 yards. Just how much do you lead it?

 

[MasterChief]

"The Crystal Ball"

"Take a look into the crystal ball.....here's what you saw:

Prime rates as high as 18.87%
Mortgage rates as high as 16.55%
Unemployment at 9.7%
Record bannkruptcies and defaults in American businesses
The worst stock market crash in history
The US president shot
US involved in a war

Now ask.....knowing all that, would you still buy stocks?

I forgot to tell you one thing. The crystal ball was tuned to 1979...All of those things occured in the following ten years. But investors who stayed out of the market in the 1980's would have missed:

The biggest bull market in history
A Dow Jones Industrial Average that moved from 838.7 to 2,753.2
The average stock almost up 17.49%....per year

Its not timing that counts when investing....it's patience. The biggest single obstacle to financial success in America today isn't lack of opportunity. It's lack of patience." ~Don Connelly

Personal opinion:

Things have changed since 1980, but things are the same. Our world is different, but the same. Is the above a perfect world? Nope, but is today?...... Do I think we're near the collapse?.....I really hope not, the same way I would never wish a solar flair or EMP on this nation...but will I prepare and hedge for the worst?.....YES SIR! Don't have all you're eggs in one basket.

I do believe that in our age of instant gratification patience is a virtue. Stay thirsty and hustle my friends.

 

[The Heretic]

I am both patient and impatient.

I am hoping I won't ever have to touch my retirement funds, and that my daughter won't need them for 20 years, at which point they will hopefully be plenty for her needs, even accounting for inflation. If not, then they may at least be enough for her to survive a few more years. I can only do so much and I hope that she realizes that when she needs those funds.

I am impatient to retire because of my family history; I've watched too many of my family barely make it a decade into retirement before they died. I like my job, but I am tired of working at it 5 days a week, and I am tired of not being able to do the things I want to do on my own timetable instead of always having to rush things in order to get back to my job. It is getting to be too much of a grind - I have been doing it for over 45 years and I won't miss it one iota.

 

[USMC1911]

I have been fortunate to have started early at 20 and have a pension (17 years) and 401k that had a max contribution from day one in it. Saved a good chunk of money in that time and have made some great investment choices in 2008 that really accelerate the curve. Started a brokerage account in 2010 and its the best thing I have done as options have made me more in 3 years then max contributions to my 401k did in 10 years. House is getting closer to payed off and hope to be all finished working at 55. That's the plan at least.

 

[The Heretic]

Back to where I was at the end of January.

My IRA, where I moved about $150K out of bonds into the market, took off.

The more you play, the more you get when you win, and the more you lose when you lose.

The key is to ride it out and sell high, buy low.

 

[etrain16]

Back to where I was at the end of January.

My IRA, where I moved about $150K out of bonds into the market, took off.

The more you play, the more you get when you win, and the more you lose when you lose.

The key is to ride it out and sell high, buy low.

Same here, anything I lost in the correction, I've gotten back, which is what I expected, though I knew it wasn't guaranteed. I've done this long enough to see these things and know it's best to ride out the bumps. This wasn't anything like 2008, that seemed pretty obvious.

I guess that gives us 2 more days before the market crashes and we lose everything. As our prognosticator pointed out:

I dont know what will start the crash.. It could either be a false flag, a big natural disaster, or they just simply crash the market for no reason.

But I know for 100% certain, it is happening this month for sure.

As he said, he is 100% certain, it is happening this month for sure.

The next question will be, if it doesn't happen, what's the next prediction? Next month, for sure? April, for sure?

If it were me, I would have left at least a few % points for margin of error. 100% is hard to nail down in a prediction.

His last post (#110, page 6) stated:

"This is my last post, until I see the collapse happens this month."

Does that mean he won't post again if the collapse doesn't happen? Again, I'll be curious to hear why it didn't and what the next prediction will be.

 

[Oregonhunter5]

I've made a killing off my Invisalign stock. I work for them. Gonna pay off most of the House.

 

[The Heretic]

I rode out the dot com crunch - got everything back and then some.

I rode out the housing bubble recession - got everything back and then some.

A little correction like this that happens quite often? Meh. It is an opportunity to buy, and buy I did.

 

[etrain16]

During the recession, my contributions continued - buying stock the entire time. With values low, that meant more shares were being purchased than I would have otherwise. The result? When the market came back, more value earned across more shares, meaning my money came back more quickly, and, as you said, and then some. A market crash/correction can be an opportunity if you're not on the cusp of retirement.

 

[USMC1911]

I'm not a ride it out kinda investor. If it looks/feels bad is usually is so get into cash/bonds and save your capital. When the market bottoms or looks like it starting to rebound get back in. A 10% correction can set ya back over a year. I work hard to make my grow and preservation of capital is one of the keys to make it grow.

 

[SIG34]

Buy Silver & Lead both will help

 

[etrain16]

I'm not a ride it out kinda investor. If it looks/feels bad is usually is so get into cash/bonds and save your capital. When the market bottoms or looks like it starting to rebound get back in. A 10% correction can set ya back over a year. I work hard to make my grow and preservation of capital is one of the keys to make it grow.

Everyone's risk tolerance is different. I had nothing more than a gut feeling, by listening to long time investors, that things would be fine on this last correction. Whatever I lost, I regained within 2 weeks and am growing beyond that now. The recession took longer to recover from, but the losses there were substantially bigger and the market recovery was slower.

 

[RicInOR]

Remus'

Woodpile Report

Near the top (after the painting)

"1929. Silent movies and hot jazz, flappers and bathtub gin, fast cars and dare devil aviators, and a near-parabolic stock market at dizzying heights." ...


3 years - 1000 days. Maybe 3-1/2 years.

 

[USMC1911]

Everyone's risk tolerance is different. I had nothing more than a gut feeling, by listening to long time investors, that things would be fine on this last correction. Whatever I lost, I regained within 2 weeks and am growing beyond that now. The recession took longer to recover from, but the losses there were substantially bigger and the market recovery was slower.

Totally understand risk tolerance as mine is very very high. Was not saying your investment strategy is wrong or you did the wrong thing just pointing out that most times a 10% correction is a year of gains gone. The average rate of return of the S&P500 is just under 10% for the last 90 years. Just shows the crazy bull market we have been in for the last almost decade. I still think were gonna see a retest in the next week or two and then see a slower market the last 3 quarters of the year.

 

[The Heretic]

Lots of volatility.

Some are thinking it is selloffs of people who exceeded their margin calls and the holders selling them off.

Lots of theories.

I look at the market one day and see 1+% upswings. I look the next and see the opposite.

Ride it out. Over time it will average out to trend upwards. I am just hoping it is not another flat year - those make me think I accomplished nothing when in actuality my paycheck contributions are buying in a flat market so later when it does go up I actually have more stock in the game and a better earning later.

~2.5 more years and then no more contributions - I will then really let it ride (except for moving some from the IRA into the Roth IRA). If my plan goes well, and my daughter can still work, then hopefully at least another decade of those funds riding the ups and downs before she needs them. If the averages play out over the decade, then she should have a nice nest egg and at that point I will start shifting to protecting those assets instead of growing them - maybe moving 5-10% per year into bonds or something safe like that.

 

[USMC1911]

Flat years are hard to make work for any portfolio. Volitality is needed to make money if the market is not climbing. Hard to play options in a flat market. The selloff a few weeks ago was pretty good for me. Lost some at the start but made it back and more playing the vix/svxy future's. Played a bit more cautious getting my money back to work but still feel I dis pretty good moving with/before the market did.

 

[66PonyCar]

Well February is over and even though today was a bad day, the market did not implode as predicted by our resident soothsayer. My portfolio is back to where it was on 12/31/2017. Can't wait to see what the next prediction is................not!