'retirees' flood job mkt to make ends meet

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wanderer
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'retirees' flood job mkt to make ends meet

Post by wanderer »

regards,

wanderer

The field has eyes / the wood has ears / I will see / be silent and hear
Trex
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Post by Trex »

One of the largest employers of seniors is Wal-Mart, where 22% of its 1.1 million workers are over the age of 55

:shock:

Trex
peteyperson
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Re: 'retirees' flood job mkt to make ends meet

Post by peteyperson »

As I mention in a recent previous thread, this comes out of the fact that people are not doing their sums correctly, counting a 100% inflated market as a fair valuation (then act surprised when it drops 30%, and have no idea that it is likely to drop another 40%), they have not got a solid global asset allocation in place to weather domestic market falls or have the ability to benefit from lower standard deviation through diversification and be able to choose which asset class to sell from a range of three or more some which are up, some which are down..

A 50% allocation to the US markets would have limited the drop to 15%. A mixture of REITS, TIPS, Bonds and Cash would have reduced the loss still further with positive income.

I really have little sympathy for these people. They didn't do their homework. Stock market down 30%. Shocker!! Like that hasn't happened over the history of the markets. As we Brits would say, Bloody idiots!

Petey
tuffy88
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Post by tuffy88 »

A 50-50 stock-bond allocation in broad based funds would have made the last 3 years a moderate if long downturn. At the present time such a portfolio would have regained all of its bear market losses. But after the long bull market too many people had gone too heavy into stocks. Maybe they should have known better, but most had never known anything but a bull market with only mild downturns. A hard lesson hopefully learned.

Charles
charles leary
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Post by peteyperson »

Isn't that what books that detail history and how to deal with booms and busts are there for? Ignorance of history really is no excuse. Bernstein in Four Pillars highlights this point well.

Petey
tuffy88 wrote: A 50-50 stock-bond allocation in broad based funds would have made the last 3 years a moderate if long downturn. At the present time such a portfolio would have regained all of its bear market losses. But after the long bull market too many people had gone too heavy into stocks. Maybe they should have known better, but most had never known anything but a bull market with only mild downturns. A hard lesson hopefully learned.

Charles
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Only financial reasons for returning to work?

Post by Dual »

One reason many retirees have had to go back to work is because of poor financial planning,


I think that is one reason. Another reason may be boredom and need for the social interactions that you get from a job.

Yet another is the large impact of wage earnings compared with income from savings. It takes $25 of savings to generate every $1 of income from a job.

Dual
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Post by tuffy88 »

Petey

You are right. People should have known. I was just commenting on human nature. Bernstein, Larry Swedrow, Charles Ellis and many others wrote about this. They were regarded as old fogies. This was the new economy. But they were right. What happened usually happens at the top of bull markets. I was just commenting on human nature. And that 80 or 90% of investors in 2000 had never been in a bear market. Their reality was an illusion, but they found out too late.

Charles
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Post by ElSupremo »

Greetings tuffy88 :)
You are right. People should have known. I was just commenting on human nature.

And you can keep right on commenting on it because most people will never know better. Most of the "experts" would tell you that diversification is the biggest factor in investment returns. But I would say human nature is the biggest factor. That will never change. You only need to look at a few history books to see that. Most of the folks here are the exception rather than the rule. Good for us!
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tuffy88
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Post by tuffy88 »

E. S

Most will probably never fully learn. Still diversivication does get a lot more print and air time now. Hope it will help some. It is a real shame when people retired and then lost as much as half of their retirements assets in the bubble. Or I should say when the bubble burst.

Charles
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Post by [KenM] »

It is a real shame when people retired and then lost as much as half of their retirements assets in the bubble

...but I suggest that the majority did not suddenly invest a big lump sum at the top and then lose 30% to 50%. Most saw meagre savings soar in the bubble from the mid-nineties - congratulated themselves on being wealthy enough for a comfortable retirement - then were very disappointed when the bubble burst. Probably most were no worse off than if the bubble had never happened. I suggest that it's a meagre savings rate over an extended period that's the problem with underfunded retirements - not poor judgement on asset allocation.
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Post by tuffy88 »

Ken M
A lot had been invested for years, but became increasinlly aggresive as the bubble grew. Much as active investors moved more and more into high risk stocks or funds as the bull market progressed. When it finally blew up in their face most of their money had not been in the high risk sectors from the beginning. They watched prices moving up and finally close to the top they got in. That is when they lost big, and are now forced back into the labor market. That was what I ment when I said it was a shame. Not that much of their trouble was not mostly their own fault.

Charles
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Post by wanderer »

regards,

wanderer

The field has eyes / the wood has ears / I will see / be silent and hear
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ataloss
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Post by ataloss »

otoh, we had a thread a while back about retirees facing problems because they were counting on income from CDs which was diminishing. I am not sure we can expect the "average investor" in the Wal-mart employee group to make highly informed asset allocation decisions.
Have fun.

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Post by peteyperson »

Ken,
KenM wrote: ...but I suggest that the majority did not suddenly invest a big lump sum at the top and then lose 30% to 50%. Most saw meagre savings soar in the bubble from the mid-nineties - congratulated themselves on being wealthy enough for a comfortable retirement - then were very disappointed when the bubble burst. Probably most were no worse off than if the bubble had never happened. I suggest that it's a meagre savings rate over an extended period that's the problem with underfunded retirements - not poor judgement on asset allocation.


I partly agree with you here and partly disagree.

Of course, a higher savings rate would have delivered a higher amount of investments and a 30-50% loss might still have been enough. But lack of knowledge would have meant these people retiring sooner but still with values way up from oversized returns. They would still have lost heavy just because of their overexposure even if less was capital gains/losses vs principle invested earlier.

Regardless of the sum you save, not diversifying away from a single major asset class puts you at grave risk. Anything from a 1929 on down. It matters little how much you have if all your eggs are in one basket and if you're messing with something you know little about. These people won't know to save $2m instead of $1m because they've calculated that they are taking huge risks with their allocation and so allow for a 50% loss and still be able to live. They retire with the $1m and then lose half and sit around scratching their heads wondering, " What happened here? "

With FIRE investing, ignorance is not bliss. They're acting as if ignorance is a charming quality. How can you know how much you need to FIRE, if you don't understand what income can be expected over the rest of your lifetime or what measures to take to protect your wealth? It's a bit like a beginner jumped out of a perfectly good airplane with a parachute strapped to their back, coming closer and closer to the ground and wondering, " What do I do now to make the ground slow down? " That's the kind of thing they should have asked before jumping. Ditto retirement.

Petey
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