Saturday, August 22, 2015

Stock market "crash" makes retirees ponder, again (and, yes, Porter Stansberry gets mentioned)


So, what to make of the latest “correction” in the stock market?
  
I don’t recall two successive days with big drops since the 2008 crisis.  My own “portfolio” dropped about 1% over the two days.  But the accounts filled mostly with bonds (especially munis) actually gained.

This "correction" is proportionately much less than, say, the October 1987 crash. 
  
There have been some doomsday predictions about what happens if the Fed raises rates in September.  I think it probably won’t, and will wait until the end of 2015.

But I'm told that a senior like me should care about an authoritarian country like China. I even get unsolicited proposals to go there myself.  
     
And there is Porter Stansberry’s prediction that ATM’s stop working in October, and that the US becomes like Greece.  I really don’t get this at all. But it is true that oil and commodity prices fell much faster than experts expected (link ).  That ought to be good in many ways, as states can probably hide gas tax increases and fund critical infrastructure repairs, or even fund more use of renewable and non-carbon emitting transportation energy sources.   You can read about Stansberry here or on my “cf: blog September 2014.   Here’s another account, link which raises a troubling question if just publishing “misleading” financial information in a newsletter is a tort, or should be protected by the First Amendment, but that question belongs on my main blog.

Scary is that Ron Paul   (former presidential candidate) joined his message, which has more to do with our own government's printing money than China's devaluation and oil prices.  Paul predicts our own currency crisis (like Stansberry).
Paul has another "cheesy" (lead-you-on video) that he advertises on CNN here.   Of course, if the Chinese yuan is less reliable now, doesn't the dollar seem more secure by comparison?  

Back to the mainstream: For many retirees the best thing is to wait things out,  as Jason Zweig wrote in the weekend WSJ here. It's noteworthy that this time there are no institutional failures being speculated on the horizon. 
But retirees with large IRA’s have to pull out a certain percentage each year (if over 70-1/2) and that can lead to losses.

On the other hand, people still building IRA’s while still working just keep buying stocks and using dollar-cost-averaging to balance out in the long run.

For some retirees, the wisdom of living off of assets and investments (becoming a rentier) becomes controversial.  Yet the job market really hasn’t provided opportunities that aren’t in many ways cheesy. Would I have wanted to become a “financial planner” in 2005, two years before the big crash started?  Would I want to become a tax preparer and help “married” couples get out of taxes by strategic divorce?  (Gay marriage could be providing a book for tax preparation now, admittedly).  Could I survive as an Uber driver?

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