Annuities?

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mathjak107
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Re: Annuities?

Post by mathjak107 » Sat Jun 02, 2018 3:49 pm

no , the fidelity investor did the same , fidelity monitor had done even better than my fidelity insight and vanguard has newsletters that did as well and a total market fund was 450k behind the growth model over the same period which still was not to shabby .

wellesley was not even close at 40% equities . wellesly did well in the lost decade which was a rare time frame where bonds beat stocks .

but their is no way wellesly will beat equities at growing money over an accumulation perid .

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Re: Annuities?

Post by mathjak107 » Sun Jun 03, 2018 8:00 am

well comparing wellsely to wellington from 1970 i see wellington is at 1,164,253 based on 10k . wellesly is at only 839.104 so we are talking over 325k for that higher allocation to equities . i show my contra fund which i did not own back in the 1970's would be 4 , 071,153 today. i got in in the 1980's .

the models in the insight newsletter began on the dates i posted above with the earliest being the growth model in 1987 .
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Re: Annuities?

Post by mathjak107 » Sun Jun 03, 2018 5:08 pm

wellesly only beat 60/40 over the time frames where the lost decade dominated . bonds beat stock . wellesley beating 60/40 is going to be rare and it was. all that counts is your time frame and your investment . 60/40 blew wellesley away over my investing time frame since the bulk of our money was put in which was the last 10 years post 2008.

once you weed out that abnormality wellesley usually lags 60/40 by about 20% which matches the difference in allocation
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Re: Annuities?

Post by mathjak107 » Mon Jun 04, 2018 8:04 am

but keep in mind , there has never been a period in time spanning typical retirement and accumulation time frames which are decades that 100% equities did not work out to being within 2% of each other despite the great depression, the 70's, the 2000 bust, the 2008 great recession, etc.,

a poor first 15 years or so seems to end up with a very good next 15 years or so . in fact we saw that happen . 1987 to 2003 was incredible . it averaged almost 14% cagr for 17 years . then it met the lost decade and leveled out . if you look from 2008 on markets are up about 300% leveling out the lost decade numbers .

in the end i have found 100% equities the only way to go up until a few years from retirement . even if markets are down a few years from retirement odds are pretty good even when down your balance would still be higher after decades than had you been more conservative all those years . if i could not do it because my personality could not stand the volatility i would find a low cost mgmt company like rebalance ira to keep my hands off it .

most of us don't make big salary's . we need the best darn compounding on our money we can get to grow those little bits in to meaningful sums .

a penny saved is a penny earned but it will always be a penny or close to it without good compounding .

investing in index funds or diversified equity funds is volatile but long term they have had little risk . the normal market cycles are only volatile unless bad investor behavior or poor planning turn that volatility in to risk .
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Re: Annuities?

Post by Cortopassi » Mon Jun 04, 2018 8:25 am

mathjak107 wrote:
Mon Jun 04, 2018 8:04 am

in the end i have found 100% equities the only way to go up until a few years from retirement . if i could not do it because my personality could not stand the volatility i would find a low cost mgmt company like rebalance ira to keep my hands off it .
I'm not sure I understand your reference to an outside management company. Are you saying if you can't handle being in 100% equities, give it to someone else to invest in 100% equities? And when you get the statement from Dec 2008, are you not freaking out just as much as if you were managing it?

I totally get it. If I could go back with a crystal ball I would have been 100% in Amazon, or Apple, and the 2000 dot com bust and 2008 collapse aren't even blips and I would have been long retired. If I was 25 with the emotional stability I have now, I probably would be 75+% equities.

But I am coming from a background of screwing things up royally for a very long time. And the PP has brought stability. My kids will be better investors than me. And I'll be fine in retirement. Could have been better. But at 51, in this environment, I would not feel comfortable much over the 35% in equities I currently have spread around in a GB variant.
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Re: Annuities?

Post by mathjak107 » Mon Jun 04, 2018 8:38 am

most of those who turn their money over to be managed have far better statistics staying the course when they are not the ones with their finger on the trigger .
vanguard studies have shown that those skittish investors do much better when they are not faced with the burden of having to decide their own fate
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Re: Annuities?

Post by mathjak107 » Mon Jun 04, 2018 9:48 am

the less risk , adverse investors have immediate access to that trigger the better they tend to do . i was on the 401k committee at work back in 2008. it was a shame the beating most took left to their own devices and that was whether or not they were aggressive or conservative . the lower trigger points the more conservative investors had were just triggered at lower points .

most never came back in and their retirement savings has been severely effected by their bad behavior .
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Re: Annuities?

Post by Cortopassi » Mon Jun 04, 2018 3:20 pm

I thought this post (first saw on ZH) does a good job summarizing both sides here:

https://realinvestmentadvice.com/the-my ... un-part-i/

and another good one:

http://realinvestmentadvice.com/bulls-b ... -syndrome/

The gist is we have a limited investing lifetime and the timing of when your investing years occur is pretty critical. I thought this was pretty key in the second article (written a couple years ago so a little outdated):

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Re: Annuities?

Post by barrett » Mon Jun 04, 2018 3:52 pm

Very interesting reads, Cortopassi. Thanks for posting those links.
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Re: Annuities?

Post by mathjak107 » Mon Jun 04, 2018 4:30 pm

actually markets spend 80% of their time below the last high . in fact most individual stocks trade in a 40-50% trading range in a year between their lows and highs . but markets have grown big amounts over time . like i said i started in 1987 in the insight growth model and that model saw 100k go to 2.9 million and the sector model go to 4.1 million . don't forget that included the dot coms , 2008 and the lost decade . the s&p 500 was not all that far behind the growth model . .

most of our accumulation stages are from our 30's to our 60's or about 25-30 years . .

but as i mentioned earlier , it is what markets do when you have the fullest fuel tanks that matter . so as you say when we start out and have little invested yet markets can be awful and it would not matter much

you have those who always point out how investors were lucky to catch the great bull of the 1980's . but the years leading up to it were terrible . some of the worst times in history so very few regular people had much invested , if anything . so it was all well and good the bull was here but we did not even have 401k's yet . so it really did not help you much unless you had money .

so going forward whatever happens to us with a lot of money invested at this stage has a huge dollar effect . i mean i am retired 3 years , delayed ss so my portfolio has been providing us with more than 100k plus a year and my balance is higher today than the day we retired .

the first 5 years of a retirement are crucial . a bad start can be like a trader having a string of losing trades day 1 . i entered retirement at 40% equities and once we started to have up years i increased it to 50% equities . so a rising glide path is not a bad idea . i would not go lower than 35% equities though .
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Re: Annuities?

Post by mathjak107 » Mon Jun 04, 2018 7:11 pm

keep in mind very few of us sell a stock at the high . but we still make loads of money just because fund managers or us sell a stock and buy another and profit each time . i made a lot of money last year trading in and out of gld . 31 trades last year netting 32k in profits all without gold making a new high . so going by highs can be mis-leading because funds make money on stocks but not always market highs . catching a high is rare most of the time when we look at our balances it is below the last high but we are still up nicely . .
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Re: Annuities?

Post by Cortopassi » Mon Jun 04, 2018 9:17 pm

mathjak107 wrote:
Mon Jun 04, 2018 7:11 pm
keep in mind very few of us sell a stock at the high . but we still make loads of money just because fund managers or us sell a stock and buy another and profit each time . i made a lot of money last year trading in and out of gld . 31 trades last year netting 32k in profits all without gold making a new high . so going by highs can be mis-leading because funds make money on stocks but not always market highs . catching a high is rare most of the time when we look at our balances it is below the last high but we are still up nicely . .
You are talking to the wrong audience here for the most part I think. Many of us don't want to trade a lot, or want it to be mechanical and emotionless, one reason annual or band rebalancing is used. Automatically sells high and buys low.

I recall your gold trades, and just like with another friend, I am jealous, but have learned to get past that. I always thought I could trade, or at least get better at it. I am nearly certain if I look back at my buys and sells from the time I started trading individual stocks to the time I gave it up (~22 years) if I sold short instead of bought and bought instead of sold I would have done exponentially better. I was terrible at entry and exits. Where you made 32k, I can almost guarantee you I would have lost money.
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Re: Annuities?

Post by mathjak107 » Tue Jun 05, 2018 3:08 am

ha ha ha , i guess you would be that candidate who would have done better letting someone else do your investing keeping you from yourself . .
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Re: Annuities?

Post by Xan » Tue Jun 05, 2018 12:58 pm

Mathjak, you don't get to laugh at people who weren't as lucky as you.
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Re: Annuities?

Post by mathjak107 » Tue Jun 05, 2018 2:40 pm

noooooooooooo , cortopossi made a joke about his investing prowess . you guys just love to start shit . i am done here trying to bring another side of investing here . you guys can high five each other and just keep believing your own bull shit and arguing with everyone with a different view . i am done here with your forum .
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Re: Annuities?

Post by Cortopassi » Tue Jun 05, 2018 3:35 pm

mathjak107 wrote:
Tue Jun 05, 2018 2:40 pm
noooooooooooo , cortopossi made a joke about his investing prowess . you guys just love to start shit . i am done here trying to bring another side of investing here . you guys can high five each other and just keep believing your own bull shit and arguing with everyone with a different view . i am done here with your forum .
mathjak, you are right, I was joking about the lack of my trading prowess, no big deal.

The one thing I want to make clear is I appreciate that there are different methods to try to make money and have a successful retirement. The PP is one method. Your method is another. Saving cash under a mattress is another. Having 90% in gold bullion is yet another. Covered calls, etc, etc.

Whether you mean to or not, you are the one who comes off as a strict evangelist for your method, and the person who is, on the surface at least, most closed off to other views. For example, you asked for a PP to your return comparison for 2007 to 2017 and when the PP was shown to do better, you immediately found a way to write it off.

The main reason I am in this is for some non-standard diversification (gold/silver) and smoothing of peaks and valleys. Take this year, for example. Yellow is S&P500, blue is my allocation. Yes, I am currently a tiny bit negative, and S&P is 3% better return. But I could sleep at night during the >10% drop in late Jan, when the PP shed only about half that amount.

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Yeah, I know for a fact I likely won't make as much over the next 20-30 years with this investing style, but it works for me.
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Re: Annuities?

Post by mathjak107 » Tue Jun 05, 2018 3:50 pm

i picked 2007 to 2017 because that contained the lost decade when we had one of those rare times where bonds beat stocks . that was about as bad as we have had for stocks in decades . so that was one of the worst times for 60/40 so i wanted to see the comparison .

but i am done here with the mods . you were a pleasure to chat with and a real gentleman .
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Re: Annuities?

Post by Cortopassi » Tue Jun 05, 2018 4:15 pm

Just one last thing about that lost decade... it wasn't bonds that carried the day for the PP. It was gold. Even after the rout after 2011, gold beat out VTI.

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Even as far back as 2001 to today, the leader is gold. Strange, isn't it, that you won't find virtually any broker recommending holding even a tiny % in gold.

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Re: Annuities?

Post by stuper1 » Tue Jun 05, 2018 5:39 pm

But we're the ones that believe our own group speak. Rich. He couldn't quite understand that some people have different investing philosophies for valid reasons. He gave it lip service, but didn't really believe it.
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Re: Annuities?

Post by jhogue » Tue Jun 05, 2018 11:57 pm

Cortopassi:

1. Terrific charts! So much for the notion that gold has been "dragging down" the HBPP.

2. I can identify with your feelings about living through the crash of 2008. I "stayed the course" while my stock heavy portfolio fell by 41%. I did not sell during that equity depression, but it did dawn on me that I would want a different portfolio with more diversification and less volatility by the time I retired. The past 5 years have certainly been a much smoother ride thanks to the HBPP.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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