Uh Oh!

To get back to the original post, I discovered the joys of displacement cruising when I repowered and needed to have a break in period. We enjoy cruising at about 8 or 9 knots and the fuel saving is a bonus so we will not be curtailing our cruising much.

I have several friends with big old twin engined gas guzzlers and I dont envy them at all. Big boats arent selling here much and my C-Dory is looking pretty good about now.

Most of us will adjust I suspect and I look forward to spring......no matter what the cost of fuel!!!
 
Here's my plan:
Remove the cap on Social Security tax.
Expand the actuarial base of Medicare by single payer health care for all on the VA model of scope of benefits.
Require negotiation of drug prices.
Build a border wall around DC and require demonstrated knowledge of the Constitution to enter.
Now let's go watch football.
 
Okay, you guys have convinced me. The economy is going to hell in a hand basket. I'm going to trade the 25 for a 16, get rid of the Expedition EL and get a hybrid Escape to pull it. To save on weight, Shelley doesn't even get a porta potti, a keg cup will have to do.

With the money we save I'm going to put more insulation in the roof and triple pane the windows in the house.

My daughter is dating a guy who doesn't own a car. He lives above his place of work and rides a bike for transportation. If I encourage this relationship I might be able to claim him as a carbon credit to offset my overly large carbon footprint.

It looks like it's time to grow more than herbs in the garden and get mom's canning jars out of the basement. Even our dog could be downsized, anybody want a springer spaniel?

Let's hunker down!
Lyle
 
The post that we used to start this discussion was primarily concerned about a reduction in consumer spending and how that might affect the economy and our boating -- your responses have been informative and interesting. Now, for a slightly different slant, this quote looks primarily at insufficient capital availability and its effect on the stock markets:

During the financial market disturbance last summer, economic policymakers were mostly concerned about liquidity -- the availability of short-term money as banks husband their cash rather than lend to one another. But after aggressive efforts by the central banks to make hundreds of billions of dollars available to banks on easy terms, the liquidity crisis has largely abated.

The problem now is a more serious one -- a credit crisis in which commercial banks, investment banks, insurance companies and hedge funds all around the world are being forced to write off billions of dollars from American subprime mortgages and more exotic securities. The stronger ones have enough capital, or can raise it, so that their viability is not jeopardized by these losses. But if even a few of the weaker ones collapse and are unable to repay loans or make good on their commitments, it would have a domino effect that could threaten still more institutions and trigger another wave of panicked selling.

http://www.washingtonpost.com/wp-dyn/co ... components

So, to examine this particular issue a bit more. This concern primarily affects those of us who are retired or about to retire (and, perhaps, it is also an issue that affects most of us even though not in or near retirement). Many have investments that we rely on for our income source, for a future retired income source, or for our savings and/or 'extra' purchases such as a boat or a lengthy cruise on a boat we own. How does the possibility of an extended bear market affect us in regards to our boating plans? Specifically, are there any actions some are taking, that you would be willing to share with us, on how you are protecting those investments? Perhaps there are among us brokers or investment advisors who would share some thoughts? Perhaps some good ideas would enable us boaters to 'hold on to our pennies' through hard times and continue our boating.
 
Well, "Uh Oh!" has been a most appropriate phrase as the market tanks yet again this morning. While the credit crunch isn't a problem for those of us who aren't looking to buy or sell real estate, it certainly affects the general mood of the consuming public. And certainly as investments fail to perform as planned, it affects many of us retired folks. Our plan through every downturn in the past had been to continue to invest, as that investment dollar bought more. No plan for that through this one, though... this not having an income thing is the one drawback of retirement. Buckle in, it's going to be a bumpy ride.
 
Comment on El and Bill's statement:

I'm certainly in that worried group. My retirement income is made up on my TIAA/CREF pension from Vassar,good health insurance, Social Security, and my stock portfolio. My tendency has been to try to live from the pension and S.S. as much as possible, only drawing down the stock portfolio for larger $$ "I try to keep a balance in the investment package below which i don't go..but this time, who knows.

I do have one "phony budget " thing i do. I keep a certan amount of funds in my local bank earmarked C Dory..This pays slip, repairs, maintenance, gas....and i try not to go beyond it.

I echo the idea of any advice...welcome
 
Bill- I for one appreciate that your sincere effort to share opinion about a very real problem. It is indeed a serious issue and could be a very helpful thread. As one who is directly affected, I try to husband my resources, and wait it out. At 72, the sliding averages that have shown a constant upward trend in the markets may be of more benefit to my children than to me. Anyway, your postings remind me to count my blessings, which significantly outweigh the other stuff. Regards
 
The recent posts do highlight a significant difference amongst us Brats in the pub -- and that is age differential. Those who are younger are perhaps better invested in a diversified portfolio of stocks (mostly) and bonds since markets have historically favored that option -- time is on the side of the younger ones. One relies on salary income and not investments -- that's for the their future and in 20 years (or whatever), when they retire, markets will be higher and their investments will have grown.

Then there are older folks -- they don't necessarily have years to recoup any downturn in their investments -- they need that investment income now to supplement their pensions. They couldn't afford a major loss in investments (and potentially, therefore, their investment income).

Of course, like picking your size boat or one engine/two engine we are all unique -- each of us have made our choices in the past based on our experience and needs. So, one answer won't fit all.

But, perhaps, if this is indeed a long-term bear market, we might all be affected in one way or another, and it might affect our future boating ability. Interesting to hear that Jim "has no plan for this one," being recently retired and to read Tom's design which has a special account for his C-Dory boating and to heartily agree with Dot and Marty's comment "count my blessings, which significantly outweigh the other stuff."

No way do we think of this stuff as the most important thing in life -- a smile from a grandkid outweighs this by a mile, but it is just one more of those important other things in life to consider but not lose sleep over. We appreciate your thoughts, folks, and its nice to share musings.
 
My perspective: we're in our mid 40's and so we have a few market cycles to go before we'll need to draw on our nest egg. That egg is signifigantly smaller today than it was 2 months ago! I continue to have faith in the work ethic and inventiveness/creativity/motivation of my fellow Americans as expressed in the US stock market, and so we'll continue to invest, chipping away at it every month. Right now it's hard to have faith in an imploding system, but faith is very easy in good times. We do get frustrated when we see the irresponsible, undisciplined behavior of others (borrowing and living beyond one's means, lending without due diligence) cause volatility in the financial markets. But that's always been part of the risk you assume when investing. Don't get me wrong; I don't feel like I'm better than others because of how I choose to operate. It's just not always easy to be a tortoise in what seems to be a world of hares. The best thing my wife and I can do is continue to chip away steadily, while enjoying every individual day as it comes. Nothing in the economy can diminish the utter beauty of the walk we took in the San Juan's yesterday in the clear, brilliant sunshine. The market spikes up, the market spikes down, but if you stand back from the growth chart you can see that in the long term it's a line that goes steadily upward. I'm really looking forward to putting the boat back in the water this Spring and doing some exploring. Best wishes to all! Mike.
 
i can still remember to good old days. it was 1979, a stay at home spouse and two small children, a 11% 30 year fixed rate mortgage and living on fishheads and rice one week (for the west coast) or (pinto beans and cornbread for the east coast) and caviar the next. boy, do i miss those days, working a half day, (12 hours), monday thru friday and 5 or 6 hours on saturday.
i remember as though it were yesterday, january 1983, total monthly income was $428. and the following month only making $586., yeah, by golly, those were the good old days, for sure!
i guess, 100 years from now, it wont make to much of a difference.
pat
400/2008
 
Ah, Bill, perhaps I didn't state my thought clearly... we have "no plan" to continue buying through this next financial chapter. Certainly not the same as "no plan". As you said, when one is younger and still working, the ups and downs of the market and investments are easier to weather. My take is that this next crunch may last a while, so rather than buy on the way down, we'll step back and see where it all goes.

I've done the "buy high, sell low" thing... can't say that I was pleased with those results. :disgust We can weather a downturn in the market, because our day to day living expenses don't depend on those returns, yet. For the near future, we will stay with our investments, but not add to them until we can see just how deep this situation is.

Hope that clarifies my take on it.

Best wishes,
Jim
 
Exciting times for sure! :shock:

We're both about 65ish here, I'm still working full time. Got a lot of our $ in the market and, since I really don't need it now, am not really worried. I was in Australia when the market took the big dive in 1987 and my wife about panicked. Fortunately we didn't have much money then!!

Fed really surprised us all this morning as did the overseas markets yesterday! I'll be surprised if the Bush Administration and the Congress can agree on any package that will help in any kind of a timely manner.

Don't remember who said it but the phrase, "The country is safe only when Congress is not in session" sums it up!

I made $88 a month when I went into the Navy in 1959. Considerably more when I retired in 1991!! :wink:

Charlie
 
Sorry, Jim -- I misinterpreted your "no plan" comment -- and perhaps there's nothing wrong with a no plan idea -- just stay the course and ride it on out. Seems like we hear different suggestions from friends:

1. Buy gold -- if the economy tanks, gold is valuable. Value of dollar is going down but recently value of gold has been rising. Possible downside: gold is too high already, and might itself be a bubble.

2. Buy bonds -- as interest rates go down, bonds generally go up. (IE - if you have a 6% bond, and interest goes down to 5% then your bond is competing against other new bonds of same maturity and yours pays more dividend so it's price goes up). Possible downside: bonds go up and down like stocks and they are heavily influenced by inflation.

3. Dollar cost average -- put in the same amount every month into a good investment (stock, bond, or mutual fund). If the price declines, your same dollar investment that month will buy more. If price keeps declining, you get even more. If it goes up, conversely, you buy less. And that's the right thing to do -- buy (more) low, and buy (less) when high. An easy, no sweat plan. Possible downside: What if this is now a black swan and the market goes way down for a very long time? Your investment will go down for a very long time, and you may not have that much time.

4. Time the market -- buy when you think its low, and sell when you think its high. If you're right, you get rich. Possible downside: Most studies (including one that earned an economist a Nobel Prize) show that market timers lose -- Greed vs. fear -- a tough call.

5. Diversify your investments -- some stocks, some bonds, some real estate, some ..... They won't all go up (or all go down) together and since most over time go up you'll be ahead over time. Possible downside: Too old, not enough time maybe. Or, this is a black swan and they all go down for too long a time. Or, I'm just plan greedy and want more to go up and I'll take the risk.

6. Don't invest at all -- too much like gambling. Spend it on things. Possible downside: We work hard for our money -- maybe we should think about it and let some of our money work for us.

7. Have a rich uncle or win the lottery! Don't we wish?
 
El and Bill":11drq9z7 said:
Sorry, Jim -- I misinterpreted your "no plan" comment -- and perhaps there's nothing wrong with a no plan idea -- just stay the course and ride it on out. Seems like we hear different suggestions from friends:
Click to expand...

Here's another option for the truly chronologically advantaged:

8. Keep it in short term CD's or 5+% savings accounts until the volatility gets down to a low roar.

I'm amazed at the number of banks now offering FDIC insured "money market savings" in excess of 5% and even more offering 5+% 4-6 month CD's. Sure is beating hell out of my current equity portfolio.... :sad
 
Along the line of #8, check if your bank offers CDARS product. Designed to provide FDIC protection for CD savings in excess of $100,000 through interbank placement. The rates are often a little above other CD rates and length of deposit can vary.

Bill Uffelman
President & CEO
Nevada Bankers Association
Las Vegas NV
 
Back
Top