"There are some things which cannot be learned quickly, and time, which is all we have, must be paid heavily for their acquiring."
Ernest Hemingway
Chartz and table Zup!!!!!
So it goes... the year is winding down and it doesn't look like this year is as good recently for my 401a as the last coupla two or three have been. But appearances can deceive... In 2003 and '04, we were coming out of a brutal three/four/five year recession, the Fed had driven rates down close to free as you can get and the system was awash in cash. Very Bad Things were priced in everywhere and it was as if no one expected some parts of the economy to ever sell anything ever again. So when we finally got some reasonable investment vehicles in the 401a in Sept '04, I has a high level of confidence in going major long stocks for an extended period. It's been three years and a week since then and as of two days ago, I'm up 50% over three years. Over 15% a year in tax advantaged investment contributions and tax advantaged returns. Not half shabby.
But my personal rate of return has been dropping off lately from what it had been, even though the various mutual funds in the 401a are still performing well. To a small degree, I find that troubling. As is detailed on my web page, I believe that my defined benefit retirement plan has been poorly managed and a huge amount of returns have been left on the table. In addition, the same mismanagement has occurred in the 401a. It's been a double whammy there as the lousy performance of the 401a has not only cost me returns, but it has prevented me from seeing the advantage to investing at a level above the absolute minimum required. So when all is said and done, I hate not being able to wring the last bit of performance out of the 401a. After all, I'm gonna be 57 years old in two months and I've only got a few years left to fit pipe before my career is over.
But where I've made less money than I could have, I've done it because I felt the risks were too high to not pull back some money off the table. I've paid in performance for safety. To a large degree, I'm comfortable wid dat. My time horizon is short, my needs are significant, I'm not really good at passive acceptance, I don't ever intend to good at it. My natural aggression level is high, and if my head goes down in the last few laps, that means I gotta be as good on the brakes as I am on the throttle. Ya gotta work on makin' time on the brakes and in the corners too.
So.... The game has changed. The prior trend has peaked and is over. The expansion that was post the tech bubble's bursting is over. We gotta new bubble. It's not the tech bubble this time, it's the real estate and structured finance/debt/mbs bubble. This week's developments are: The Fed announced that it would see that the frozen debt markets and banks would thaw out and stay thawed out because they would see to it with money and rate reductions. The Fed does not see inflation as an issue and doesn't appear to be likely to change that mindset in the near future. The dollar has had the rug pulled out from under it and is goin' down. Gold and oil and foreign currencies were the place to be last month because the whole rest of the world sees a cheap dollar and inflation as a real problem. For all the arm waving, I don't see a lotta sub primers or hedge funds getting bailed out here. They're goin' down too. The MBS industry, real estate industry, home builders, title companies, and mortgage brokers are gonna see some serious hard times. Things will go downhill until some of the stresses in place get unwound. There will be a fair amount of pain felt and I believe, ultimately, a bear market in stocks. That said, the quickest hardest, most unforgiving rallies and plunges occurr in bear markets. You can make a lot or lose a lot a lot faster in a bear market. So it's time to take it up a notch.
The goal is still to make a dollar with the tools at hand. Sooo...
The Fed is cutting. Three percent of assets in the GIC. The rest in stocks proportioned so that I can get mostly clear of stocks in three days time without compromising my ability to get back in.
An ear to the market. Time and price will tell me what to do...
Yeah, I got a wad of stuff from the Trust Fund Office. There was a huge wad of prospectii full of arcane info and tables and charts and, and, and. I threw it all away. Think of it this way. The stock market is a horse race that started a long time ago, it is ongoing, and won't ever stop. We're allowed to watch the race (which I do with the tools on my website) and place bets every day and collect on them or settle on them when we want to. The paper I threw away tells me all the finer details about how much and how long and when as of last quarter. That kinda stuff distracts me from what's happenin' today. THAT"S what I'M interested in. Know what ah mean, Vern?
More To Come, here and on my website in Reforming A Pension Plan From The Outside and COFGBLOG ESSAYS .... Did you expect anything less?
Ernest Hemingway
Chartz and table Zup!!!!!
So it goes... the year is winding down and it doesn't look like this year is as good recently for my 401a as the last coupla two or three have been. But appearances can deceive... In 2003 and '04, we were coming out of a brutal three/four/five year recession, the Fed had driven rates down close to free as you can get and the system was awash in cash. Very Bad Things were priced in everywhere and it was as if no one expected some parts of the economy to ever sell anything ever again. So when we finally got some reasonable investment vehicles in the 401a in Sept '04, I has a high level of confidence in going major long stocks for an extended period. It's been three years and a week since then and as of two days ago, I'm up 50% over three years. Over 15% a year in tax advantaged investment contributions and tax advantaged returns. Not half shabby.
But my personal rate of return has been dropping off lately from what it had been, even though the various mutual funds in the 401a are still performing well. To a small degree, I find that troubling. As is detailed on my web page, I believe that my defined benefit retirement plan has been poorly managed and a huge amount of returns have been left on the table. In addition, the same mismanagement has occurred in the 401a. It's been a double whammy there as the lousy performance of the 401a has not only cost me returns, but it has prevented me from seeing the advantage to investing at a level above the absolute minimum required. So when all is said and done, I hate not being able to wring the last bit of performance out of the 401a. After all, I'm gonna be 57 years old in two months and I've only got a few years left to fit pipe before my career is over.
But where I've made less money than I could have, I've done it because I felt the risks were too high to not pull back some money off the table. I've paid in performance for safety. To a large degree, I'm comfortable wid dat. My time horizon is short, my needs are significant, I'm not really good at passive acceptance, I don't ever intend to good at it. My natural aggression level is high, and if my head goes down in the last few laps, that means I gotta be as good on the brakes as I am on the throttle. Ya gotta work on makin' time on the brakes and in the corners too.
So.... The game has changed. The prior trend has peaked and is over. The expansion that was post the tech bubble's bursting is over. We gotta new bubble. It's not the tech bubble this time, it's the real estate and structured finance/debt/mbs bubble. This week's developments are: The Fed announced that it would see that the frozen debt markets and banks would thaw out and stay thawed out because they would see to it with money and rate reductions. The Fed does not see inflation as an issue and doesn't appear to be likely to change that mindset in the near future. The dollar has had the rug pulled out from under it and is goin' down. Gold and oil and foreign currencies were the place to be last month because the whole rest of the world sees a cheap dollar and inflation as a real problem. For all the arm waving, I don't see a lotta sub primers or hedge funds getting bailed out here. They're goin' down too. The MBS industry, real estate industry, home builders, title companies, and mortgage brokers are gonna see some serious hard times. Things will go downhill until some of the stresses in place get unwound. There will be a fair amount of pain felt and I believe, ultimately, a bear market in stocks. That said, the quickest hardest, most unforgiving rallies and plunges occurr in bear markets. You can make a lot or lose a lot a lot faster in a bear market. So it's time to take it up a notch.
The goal is still to make a dollar with the tools at hand. Sooo...
The Fed is cutting. Three percent of assets in the GIC. The rest in stocks proportioned so that I can get mostly clear of stocks in three days time without compromising my ability to get back in.
An ear to the market. Time and price will tell me what to do...
Yeah, I got a wad of stuff from the Trust Fund Office. There was a huge wad of prospectii full of arcane info and tables and charts and, and, and. I threw it all away. Think of it this way. The stock market is a horse race that started a long time ago, it is ongoing, and won't ever stop. We're allowed to watch the race (which I do with the tools on my website) and place bets every day and collect on them or settle on them when we want to. The paper I threw away tells me all the finer details about how much and how long and when as of last quarter. That kinda stuff distracts me from what's happenin' today. THAT"S what I'M interested in. Know what ah mean, Vern?
More To Come, here and on my website in Reforming A Pension Plan From The Outside and COFGBLOG ESSAYS .... Did you expect anything less?
Calendar
