Let's see....ran hypo using Van Kampen Equity and Income...1 million invested on 1/01/68 through 1/01/83...withdrew 5%...+ 3%  increase for inflation every year....withdrew total of over 1 million and acct was still worth 1.3 mill.  1982's income was 77k.  Am I stupid?

Well, since you don’t agree with Put Trader, yes.

[quote=speakeasy]

Let’s see…ran hypo using Van Kampen Equity and
Income…1 million invested on 1/01/68 through 1/01/83…withdrew
5%…+ 3%  increase for inflation every year…withdrew total of
over 1 million and acct was still worth 1.3 mill.  1982’s income
was 77k.  Am I stupid?

[/quote]

Link?

If that is true why are the folks not lining up to privatize Social Security?

[quote=speakeasy]

<>Let’s see…ran hypo using Van Kampen Equity and Income…1 million
invested on 1/01/68 through 1/01/83…withdrew 5%…+ 3%  increase
for inflation every year…withdrew total of over 1 million and acct
was still worth 1.3 mill.  1982’s income was 77k.  Am I
stupid?

[/quote]



From the Van Kampen website:</><span style=“font-weight: bold;” =“sub”>

In 1984, Van Kampen Merritt introduced its first mutual fund, the Van Kampen Merritt U.S. Government Fund. Just two years later, the firm’s mutual fund business topped $3.5 billion.

Let me see if I have this right.  Speakeasy ran some sort of hypo for the 1968 to 1982 period on a fund that was not even in existance?

[quote=Put Trader] [quote=Put Sucks]

Well genius, let's first assume that your prediction is accurate and we experience a truly flat market as we did from '66 through '82.  To that end let us say that the stock doesn't decline.  The dividends paid and reinvested give you more shares of XYZ stock.  The newly acquired shares also pay dividends.  Now, we have a nice compounding effect.  Obviously, if XYZ instead declines markedly, we have a different story.

[/quote]

OK, let's see.  I pay $10,000 for 500 shares of ABC at $20.  It pays $1 per share dividend.

At the first payment date I reinvest my $125 dividend in 6.25 shares--I now have 506.25 shares which I could sell for $10,000--don't lose sight of the fact that the stock will be adjusted down for the dividend.

We cold do this mental masturbation for twenty years and what we would get is $10,000 worth of stock.  It's impossible to experience growth in the stock market if stock prices do not advance--even if you reinvest the dividend till the cows come home.
[/quote]

Put,

It's could not cold. Don't you know the difference? Very poor english Put. Now go back to the baked beans you're cooking on your range top in your apartment. Try wearing something other than a robe all day and get out and meet some people.

[quote=ezmoney]

Put,

It's could not cold. Don't you know the difference? Very poor english Put. Now go back to the baked beans you're cooking on your range top in your apartment. Try wearing something other than a robe all day and get out and meet some people.

Put Trader-



Based on an earlier post of yours, can we assume you do not support
strategic asset allocation and the work of our father Markowitz? 
Are you putting out there that if the “market” is flat or negative for
the next say 10 years, that following Strategic Models cannot make
money? 

[quote=rightway]Put Trader-



Based on an earlier post of yours, can we assume you do not support
strategic asset allocation and the work of our father Markowitz? 
Are you putting out there that if the “market” is flat or negative for
the next say 10 years, that following Strategic Models cannot make
money? 

[/quote]

The Markowitz theory includes capital assets beyond stocks and bonds–real estate, metals, etc.



In the 1970s the stock market went nowhere, however real estate did
very well as did Gold, although both petered out in the early 80s as
the stock market took off.



If the Capital Asset Pricing Model was the answer why are we not all rich?



If the efficiency frontier was what it’s all about why doesn’t every portfolio manager follow it?



If the mutual funds being pushed by the kids on this forum are so great
why do so many of them suck compared to simple index funds?



Why should I pay a Gen X slacker at AG Edwards a commission to put my
money at risk when I can accomplish the same thing with dozens of
no-load funds?

So are you saying following many assets classes, both equity and other, can produce profits in a flat or declining “market”?

[quote=rightway]So are you saying following many assets classes, both
equity and other, can produce profits in a flat or declining “market”?
[/quote]



No, what I’m saying is that there are theories that suggest it can be
done–but as with any theory they work on paper but not necessarily in
real time.



Something like 90% of the registered reps have gotten registered since
1980–a chimpanzee could have succeeded as a stock broker since 1980
yet there is a huge washout rate.



The blood in the street will be even deeper if the stock market goes sideways or down for ten years.



There are hundreds of thousands of aging baby boomers who suffered huge
loses in their retirement accounts in the last several years.



Huge corporations are coming to grips with the fact that their pensions
are underfunded after all, in spite of the run up since 1980.



Real estate is in a bubble–see the cover of this week’s "New Hork"
magazine.  Where are the younger people who can afford to buy
houses that are crazy overvalued?



Mr. and Mrs. Jones were burned by the tech implosion so they fled the
stock market in favor of money markets, treauries and the like. 
They are now realizing that they are not gaining back the losses and
their retirement plans are “on hold.”  A great many of them are
moving into long term bonds because they are offering what appears to
be attractive returns.



I write straddles against long equity positions.  I’ve been doing
it since the CBOE opened and will continue to do it for the rest of my
life.  It was like printing money in the 1970s, it was scary as
hell in the 1980s, by the 1990s I had learned to weight the positions
better so that decade was OK, this decade has been fine and I expect
that the rest of my life will be too.



So sure money can be made in a sideways market.



Gotta go watch The Donald hire one of those girls.  Hasta Manana.

Put,



I like a combintation of strategic allocations using many asset
classes, including those outside of stocks and bonds, and tactical
strategies, including options.  Ther are never all up and never
all down.  I happen to think there are some real good mutual fund
managers out there, both load and no load, that serve investors
well.  I think not everyone out here are “kids” as you
stereotype.  This is just a nice distraction for some of us, a
comedic look at our business.



Playing options strategies on long equities is just another strategy,
one in which is very simple, and may yield results…but not any more
than anything else others are doing…it just works for you and your
process…but that does not propel you above all who post out
here.  After all, we do not know what the future holds, so
planting roots in any one thing is dangerous. 



Finally, like so many other posts out here, I like yours, but if you really believe everything you write I feel bad for you.

[quote=rightway]



Finally, like so many other posts out here, I like yours, but if you really believe everything you write I feel bad for you.
[/quote]



What would be an example of something you think I might believe that is worthy of sorrow?

Put, Jackass, after 357 years in the business like you, wouldn’t you realize that the reason load investors have advisors is that advisors make them hang in there in flat/sideways markets?



Oh, I forgot to mention, ICA averaged 10.7 percent between 1966 and 1982, when the “market” was flat. But that’s ok. I’m sure people who invested in 1966 didn’t sell in 73-74. In fact, they added. Just like those in 2002 stayed invested and instead added to their positions.



Here’s a great investment strategy: stay away from Put!!!

Bubba,



Take it easy on the old guy.



Are you having a bad night or what?



Get some rest, maybe you’ll feel better in the morning.

[quote=Bubba Gump]Put, Jackass, after 357 years in the business like
you, wouldn’t you realize that the reason load investors have advisors
is that advisors make them hang in there in flat/sideways markets?

[/quote]

How?  How does a broker “make” customers open an account, much
less keep one if the customer doesn’t want to?  Is it some sort of
magic potion?



I am as pro full-service-brokering as anybody, and I have spent most of
my working life in Wall Street.  I know it as well as anybody and
I’m here to tell you that you’re whistling past the grave yard if you
think that it is anything other than the toughest job on earth, if you
think that age doesn’t matter, and if you think that education doesn’t
matter.



When clients begin to lose–and it happens because of the cyclical
nature of the market–they seek relief from lawyers.  The
plaintiff’s bar goes straight to the broker’s history and will know
what your educational background is, how long you’ve been in the
business, and what you scored on your Series 7.  How do you put a
happy face on:



"…so in summation I believe that my
client is due relief because Acme Brokerage hired a college drop out
with no experience and a 73% score on their basic qualification exam to
manage the client’s account."



Now, the reality is that the attorney will be speaking to an
arbitration panel most of the time and the panel will not become as
inflamed as a jury would–but the panelists will still hear “no
experience” and “college drop out” and “73 on qualification exams” and
those facts cannot help but color their point of view as they
deliberate.

[QUOTE]
Oh, I forgot to mention, ICA averaged 10.7 percent between
1966 and 1982, when the “market” was flat. But that’s ok. I’m sure
people who invested in 1966 didn’t sell in 73-74. In fact, they added.
Just like those in 2002 stayed invested and instead added to their
positions.


[/quote]

I do not disagree that there are those who add to positions in times of
weakness, but most don’t and the average person certainly does not.



If there was all that buying going on in 2002 why did the market decline?



New brokers tend to think that they’re playing a really sophisticated
form of Monopoly–and that money their client’s lose will, magically,
come back.  That all they have to do is "hang in there."



Are you children really so naive that you do not grasp that people are
funny about their money?  99% of them can call you and tell you
that they want to buy the Smegma Fund then blame you for having
suggested it if it doesn’t work out.



Years ago I told a client something like, “It will work out if we just
hang in there…”  The client snapped back, "We?  It’s my money, not yours that is being lost."



So don’t say “We” say "It will work out if you just hang in there…"
and that same client will look at you and think, "You obnoxious punk,
what do you know about anything?"



As I said, a chimpanzee could have succeeded as a broker since
1982–the test will be how many brokers who got registered since 1980
will actually retire in 2010 and beyond.



Why do you suppose there are not very many brokers older than 60? 
Hint, it’s not because they made so much money that they were able to
quit at age 53 or something.



Nor is it because they retired because they got to retirement age.



They left the business because the clients left them following years of negative inflation adjusted returns.



It’s a cyclical game.  It would be good to heed the warning that
no tree grows forever and have a plan for an entire career spent in a
Chinese water torture style bear market–one where the indices drop
just a little every day, day after day after day. 



Just about the time you’re ready to dump your holdings and convert to
cash there’s a minor rally–a classic bull trap–then it’s down
again.  The next thing you know you’ve lost half your net
worth–or more.



The Dow is at 10,000—it could be at 3,000 in ten years and still have had a pretty remarkable run since the summer of 1982.

Put wrote: "What is ICA?  To me it means two things--"Investment Company Act" and "Investment Centers of America."  Laws don't have rates of return and Investment Centers of America was not even formed until the mid to late 1980s so it can't be them.  What is it?"

Well, guys after we all finish laughing shall we tell him????

Put, ICA (Investment Company of America) is one of the oldest & largest mutual funds.  Started in 1934 and something over $70 billion in assets.  Part of the American Funds group (ever heard of them, Put??)

Guys, there's an old saying:  "Don't engage in intellectual combat with an un-armed man".  Put is that man.

[quote=Duke#1]

Put wrote: “What is ICA? 
To me it means two things–“Investment Company Act” and “Investment
Centers of America.”  Laws don’t have rates of return and
Investment Centers of America was not even formed until the mid to late
1980s so it can’t be them.  What is it?”

Well, guys after we all finish laughing shall we tell him????

Put, ICA (Investment Company of America) is one of the oldest & largest mutual funds.  Started in 1934 and something over $70 billion in assets.  Part of the American Funds group (ever heard of them, Put??)

Guys, there's an old saying:  "Don't engage in intellectual combat with an un-armed man".  Put is that man.

Oh, and I forgot, Put also wrote: "From the Van Kampen website:</><SPAN style=“FONT-WEIGHT: bold” =“sub”>

In 1984, Van Kampen Merritt introduced its first mutual fund, the Van Kampen Merritt U.S. Government Fund. Just two years later, the firm’s mutual fund business topped $3.5 billion.

Let me see if I have this right.  Speakeasy ran some sort of hypo for the 1968 to 1982 period on a fund that was not even in existance?"

Put, The Van Kampen Growth & Income fund has been around since the mid 40's, I believe.  Put, you just don't know what you're talking about.  I'm not even sure you're in the business and all you're doing is searching web sites.  Try researching the history of Van Kampen and you'll find a big merger that led to this fund being a part of it.  Whatever though, if you've really been in the business you'd know this already.

[quote=Put Trader] [quote=Duke#1]

Put wrote: "What is ICA?  To me it means two things--"Investment Company Act" and "Investment Centers of America."  Laws don't have rates of return and Investment Centers of America was not even formed until the mid to late 1980s so it can't be them.  What is it?"

Well, guys after we all finish laughing shall we tell him????

Put, ICA (Investment Company of America) is one of the oldest & largest mutual funds.  Started in 1934 and something over $70 billion in assets.  Part of the American Funds group (ever heard of them, Put??)

Guys, there's an old saying:  "Don't engage in intellectual combat with an un-armed man".  Put is that man.

[/quote]
Oh, it's one of about 5,000 mutual funds--so sorry I didn't know it by it's initials.

You, of course, had never heard of the Investment Comany Act or Investment Centers of America, so I win the I use letters to discuss obscure topics.

Tell me, what does OCC mean?
[/quote]

Put, you have no excuse for not knowing ICA regardless of how many funds there are.  Anyone who's been in the business for any period of time would recognize ICA.  It's not an obscure topic. But, maybe you have been in the business for a long time and you've just lost too many brain cells to remember the obvious.

OCC could be a couples things to me anyway.  Could be the Options Clearing Corp. or the Office of the Comptroller of the currency.  What's your reference? 

[quote=Duke#1]

Put, you have no excuse for not knowing ICA
regardless of how many funds there are.  Anyone who’s been in the
business for any period of time would recognize ICA.  It’s not an
obscure topic. But, maybe you have been in the business for a long time
and you’ve just lost too many brain cells to remember the obvious.[/quote]

When there are about 5,000 mutual funds any given one of  them is obscure--especially if one has never sold it.

I apologize to nobody for saying that ICA meant Investment Company Act and/or Investment Centers of America without also including one fund in a second tier fund family.