Makes sense. If the insurance company is going to pay better than CD rates, the money has to be in the market.

Thanks, I did google index annuities, I’m trying to get a sense at the product level. A couple of decades ago, I was taught the business by pitching annuities. I spent much  of the next decade moving them to wrap, then C shares, then back to wrap and ETFs.

[quote=Ron 14]

I wasnt giving a philosophy for retirement income, I am talking about the broad equity market and the reason it shouldn't be feared moving forward

When one has their protection elements taken care of, is sufficiently liquid, and is saving enough of their pretax income, then the client has permission to invest in whatever market they wish.  If they want equities, fine.  If they want to buy real estate, knock yourself out.  If they want to put money into a private business, go for it.  I take the fear of equities out of my clients' minds because I have made them 100% bulletproof.  If the market takes a dump over the next 10 years, they've got contingencies.  If the markets take off, it's a bonus. 

So how do you stay ahead of inflation ? You actually believe that a savings account is an adequate long term savings vehicle ? The first thing every advisor does, I would think, is to make sure their is an adequate emergency fund. Are you head of the Suze Orman fan club?

I think a savings account is terribly inefficient as a long-term savings vehicle.  I think equities are over-emphasized as a counterbalance to the impact of inflation.  Minimizing taxes and maximizing the amount of savings that you put away is much more important than maximizing the rate of return of your savings.  If I sock away 25% of my pre-tax income into a savings account and accumulate $1mm and you save 5% of your income, take risk in the market to get to $1mm accumulated, who’s better off?  Now, don’t get me wrong, most of my clients invest in stocks and mutual funds.  But we always emphasize that it is more important to save more of their income overall.

Allright, it's not nothing then.

Ron- You read too far into my post.

Ok. Please let us all know when to get back in. I can't hear that bell at my office, maybe it rings at yours.

Who knows what the markets will do? Geopolitical risk certainly plays a bigger role now, too.

Yep and the more I hear that more advisors are going to  “tactical” asset allocation the better I feel.

[quote=BioFreeze] [quote=Ron 14]

Ok. Please let us all know when to get back in. I can't hear that bell at my office, maybe it rings at yours.

[quote=Ron 14][quote=BioFreeze] [quote=Ron 14]

Ok. Please let us all know when to get back in. I can't hear that bell at my office, maybe it rings at yours.

[quote=Ron 14] [quote=BioFreeze] [quote=Ron 14]

Ok. Please let us all know when to get back in. I can’t hear that bell at my office, maybe it rings at yours.

[quote=Ron 14]

 If America’s economic landscape seems suddenly alien and hostile to many citizens, there is good reason: they have never seen anything like it. Nothing in memory has prepared consumers for such turbulent, epochal change, the sort of upheaval that happens once in 50 years. Even the economists do not have a name for the present condition, though one has described it as “suspended animation” and “never-never land.”

The outward sign of the change is an economy that stubbornly refuses to recover from the recession. The current slump already ranks as the longest period of sustained weakness since the Great Depression. That was the last time the economy staggered under as many "structural" burdens, as opposed to the familiar "cyclical" problems that create temporary recessions once or twice a decade. The structural faults represent once-in-a-lifetime dislocations that will take years to work out.

Among them: the job drought, the debt hangover, the banking crisis, the real estate depression, the health-care cost explosion and the runaway federal deficit. "This is a sick economy that won’t respond to traditional remedies," said Bank of New York Mellon economist Norman Robertson. "There’s going to be a lot of trauma before it’s over."

— From Time magazine — September 28, 1992[/quote]

Are you trying to say this is the Bush family's fault?

Not at all. How the hell did you gather that ?

[quote=Ron 14]Not at all. How the hell did you gather that ?

Americans are being hammered again by more bad news as the jobless rate inches ever closer to 10% - and some forecasters say it'll go as high as 15%.

The economist known 'affectionately' as "Dr. Doom" remains true to his name telling CNBC he sees "the unemployment rate rising through most of 2010."

Ugh.

But today, one author says - Enough is Enough! Terry Savage author and personal finance columnist says it's time to look forward - it's time to think positive by investing in America.

Enough of Doom and Gloom! by Terry Savage, author The New Savage Number: How Much Money Do You Really Need to Retire?

There’s a kind of masochism in “celebrating” the one-year anniversary of Wall Street’s collapse . Yet that’s what the media is busy doing this week – recounting the scary stories of Fannie and Freddie, and Lehman, along with Congress’ rejection of the original $700 billion bank bailout, and the day the market lost a trillion dollars - September 29, 2008.

Funny what a little perspective does for you. Even $1 trillion seems cheap in hindsight! Why, that’s only half our federal budget deficit for this year. It’s only a drop in the bucket compared to the losses that came after that day, not only for stocks investors, but for real estate owners.

And we survived!

There’s a lesson in itself.

Not that we’d want to look over the brink again. The horror, the horror! With apologies to Joseph Conrad’s Heart of Darkness, now I know how Marlow felt as he peered into the abyss.

But we made it through. In fact, although hindsight is 20/20 it might be worth a look back – if only to impress upon ourselves the lessons we learned, or should have learned, from the incredible year we’ve been through.

The Dow is now down slightly over 10 percent from 52 weeks ago – but up nearly 50 percent from its 12-year closing low of 6547.06 on March 9, 2009. And it’s up just over 10 percent year to date.

If you were one of the people who “gave up” and sold stocks in the gloom of last winter, you may be feeling a little foolish these days.

But the real question is: What will you do during the next decline?

There will be another decline, of course.

But if you’re planning to retire in America, you’ll be much better off investing in America.

Remember, going back to 1926, there’s never been a 20-year period where you would have lost money in a diversified portfolio of large company stocks, with dividends reinvested. Even adjusted for inflation.

Sure the economy appears gloomy, with bankruptcies and foreclosures and unemployment all rising. But we’ve gotten through tough times before. It’s just that most people under 50 have no memory of the 1981-82 recession, when inflation was 13 percent, unemployment hit 12 percent, and the prime rate hit 21-1/2 percent!

Back then the DJIA was trading around 800 – and no one was predicting a technology boom that would take the Dow to nearly 15,000 in the next twenty years. If you sold out back then, in the midst of that steep recession, just think of the gains you would have missed.

So start planning, saving, and investing for retirement. No one ever got rich betting against America!

[quote=Ron 14]Not at all. How the hell did you gather that ?

This time is different…for one reason only.   Because it is happening to us NOW!  Everytime a recession hits people say “this time it’s different”…“it’s gonna take 25 years to recover” and everytime the recovery happens quickly and in 5-7 years it happens again.  To quote the great economist Alan Skrainka ()…“History doesn’t always repeat itself exactly, but it usually Rhymes.”

I was with you until you quoted Skrainka.



I personally believe it’s different EVERY time, but we adapt as people and investors, as we should.