normr60189

Comments

• I agree. We can’t change the past, but we can influence our future. I suspect there are quite a few people who have triumphed in some fashion over financial difficulties. The author’s point isn’t much different from my own experience.  At the age of 53, my retirement and investment accounts had a combined value of $848. No pension either.   We spoke of setting goals and management by objective. The terms may have changed. Life is a marathon. When we can, we run. When obstacles occur, we may find that we can only walk. That’s okay. For me, it was always to continue and never stop. The real goal is to finish.   We get stopped from time to time by an obstacle. Sometimes it was simply that internal conversation “I can’t”.  When I was in kindergarten, as young children that would occur; I didn’t deal all that well with discomfiture or adversity.  I recall the nun who was my teacher once telling the class “You are Americans and that word ends with four letters ‘I can’. So you can!” That was good advice; it is funny what we remember and even the life’s lessons that can be learned at such an early age. 

  Post: It’s Never Too Late

  Link to comment from March 3, 2026

• AI is disruptive so it will influence companies. We see that today as there is a shift in interest underway from the hardware suppliers to the software companies that are involved in the AI industry.   The market has been overpriced. It doesn't take a genius to say that there will be a correction. In the present circumstances, when a market correction does occur, it can be large. But not always. As for AI, it is likely that certain jobs will be eliminated while others are modified. A few will be transformed. As for "massive" disruptions, who knows? Which jobs, how soon, etc. This cannot be predicted with any real accuracy.  However, if one is inclined to hype the stocks, then by all means, use words such as "massive" when describing the changes. As usual, a well-diversified portfolio is probably the investor’s best defense. Currently, foreign stocks (Ex-U.S.) are once again in vogue as some investors chase better returns. There is also a renewed interest away from large caps. As for AI, some companies will get rich off of this, while others are absorbed or go out of business entirely. Mr. Grossman’s article “Managing Investment Risk” points to the folly of investing in things we don’t understand. I’d add that chasing results isn’t a good strategy, either. I don’t put much stock into the gurus who think they can predict the fallout of this. At one end we have the utopia believers who say we’ll work far fewer hours per week (and perhaps earn far less per year). At the other end of the spectrum are the doom sayers.   I'm reminded of all of the changes anyone born in 1900 experienced before their retirement at age 65 including: WWI, the flu epidemic, the great recession and depression, WWII, the polio epidemic, the recessions after WWII, the Korean war, possible nuclear Armageddon, multiple stock declines and several "lost decades", etc.

  Post: Is AI going to affect our investments

  Link to comment from March 3, 2026

• I switched to using credit cards a few decades ago. For a time I had one credit card per category of bills. One for utilities, one for groceries, one for gas and auto, etc. Then the cash-back offers began and I did a quarterly roulette to get the best deals. When covid occurred and local vendors eschewed cash, that was pretty much the end of my use of cash. As I had pretty much weaned myself from cash this wasn’t an issue for me and the checking account fell into disuse. However, G had a monthly bill for $100 with a small business. She mailed a check until these began getting lost in the mail. The vendor suspected a problem at his end. His solution was for her to mail it via Fedex, which I frankly saw as a stupid, unnecessary expense and waste of time for her. Keep in mind she had to drive to a Fedex facility to get the special envelopes and drop it off.  I told G to use Zelle or drop the vendor. He resisted but finally relented. Now he gets his payment within 24 hours of rendering the service. Nor only is he convinced, he acts as if he invented this approach! As for cash, we use it when RVing for miscellaneous expenses and for the occasional time when credit cards are a problem, and for emergencies. For example, if a satellite goes down, gas stations, etc. cannot process credit cards. I did experience this a few years ago. Multiple cards are helpful if there is an issue with one card, such as possible fraud. So G and I each have several cards with different banks, etc. Some see using a credit card or cards as an issue, but we pay these off monthly, so we carry no debt. One advantage is there are certain fraud protections. However, I don’t use my debit card as this lacks some of those protections, except at the local bank branch. Today with “cash” advances available at grocers, etc. we’ve found this service to be desireable, but I’ve never used this “benefit”, always declining at the POS entry screen. However, I view this as a form of insurance for access to cash. Getting to a bank or out-of-network ATM while travelling can be a hassle, or it may incur fees. One of my goals is no fees and no interest payments, etc.  Now that we are retired and with pension and/or social security income and no need to save for retirement there really is no need to categorize expenses because we spend significantly less than our annual income. However, I continue to put expenses into my Quicken categories. It is a habit I’m willing to maintain. This has been useful as G is involved in the care of an elderly parent, and this requires cross-country travel four times a year. There are other expenses related to that, too. I view tracking as an aspect of good management; these care expenses can be $40k a year, or more.  It would be a mess if we only used cash and the checking account, and time consuming to track. One of the relatives bragged that she handles the family finances. It turned out that she wrote the checks. It was her husband who balanced the accounts and replenished the checking account. That approach wouldn’t work for me. 

  Post: Loose Change

  Link to comment from March 3, 2026

• Looking at the title of the post, I’d suggest that many seniors exhibit certain eccentricities that do make life more difficult.  Using an adult child to do taxes and provide tax advice is not a good approach in my opinion. Children often have difficulty corralling willful parents. I’m speaking from experience. 

  Post: Do some seniors make life more difficult for themselves?

  Link to comment from February 21, 2026

• I’m retired and began taking withdrawals from my retirement accounts in 2018. To prepare for that I gradually increased my cash/fixed income. It was a difficult decision because money market and CDs, etc. had been paying less than 2% for a number of years. The yield reached a less than stellar 2.31% in 2018. Add that in 2018 the S&P 500 had a loss of 4.38%. By 2021 I completed reallocating and had reduced the growth component of my stock portfolio. It was tempting to continue to ride the boom in growth stocks. Managing greed can be an issue. However, wealth defense was more important to me than gains. Today, my portfolio can accommodate a long-term downturn of 10 years or more, including another bond fund decline. My spouse is younger, but is also prepared. She has significant bonds and cash because she’ll be taking RMDs in a few years. My investment approach remains healthy. My stock style is 32% growth, hers is 22%. We both have a healthy ex-U.S. stock component as well as value and core stock holdings.  My perspective is not if a serious correction will occur, but when. I view this as inevitable. Of course, I’d prefer this didn’t happen, if for no other reason than the turmoil that will be the result. In 2008 I knew individuals including retirees and near retirees who experienced significant financial and emotional pain during that long reset. It will happen again.   Add the possible adjustments to social security retirement benefits in 2033. It is possible the politicians will punt, make up the payroll tax short-fall by drawing from general revenue and the Fed will simply print money. It will really get interesting then, as this ripples through the entire economy.

  Post: How Far Back Would a 40% Drop Take Us?

  Link to comment from February 21, 2026

• To make sense of this might require the indebtedness numbers for each country. The U.S. "Mortgage as a Percent of Income" is stated to be 30.1%, which is low on the table. Yet, it is also stated that "Countries where housing is the hardest to afford include .....the United States". Empasis is mine. Young U. S. buyers are supposedly strapped with other debt. If I spend 75% of my income on expenses including food, utilities, rent, loans and credit cards, that might make a home purchase impossible. Also, real estate taxes are a factor. I've decided that what this is, is a lifestyle decision and a home may not be a necessity. For example, air travel in the U.S. set a record in 2025, although there are indicators that business travel reduced. We all enjoy experiences, but I've read repeatedly that younger people value experiences very highly. That includes entertainment, dining and travel. These are things that those seeking to buy a home may forgo or reduce in order to achieve that goal.

  Post: Home Prices and Affordability

  Link to comment from February 19, 2026

• If I have done well, feel lucky!  Looking at my investments I guess I could give myself a pat on the back and my ego would love to take credit, but in fact, many investors follow simple rules. For example:  1. Save. 2. Invest cautiously and with purpose. 3. Use compounding to your advantage. 4. Avoid things you don’t understand. My portfolio is a bit more complex than simply owning indexes, so I guess I learned a few things to enable stepping outside the box. But I followed the rules above and, as they said in the movie: “The monkey threw the switch.” I have arrived where I am. Could I have done better?  After experiencing multiple “lost decades”, recessions and a few personal financial hiccups and spending shocks, I would suggest that consistently adhering to a few simple rules was helpful.  Yes, I did make certain decisions. For example, in the dark days I suspended saving, but as soon as the budget allowed, I did resume saving.  I would say, one decision I consciously made that did make a significant impact was to work longer than the usual “full retirement age”. That had a profound impact on our retirement, as opposed to retiring early, say at age 62.  But luck was a factor.  Not everyone has the good health to be able to do this. Luck, or providence is as much a contributor to success as any investing “skill” I may have applied. Investing isn’t rocket science. If anything, it is a slog, a slow uphill climb of saving and investing and no one knows with certainty the results 40 years hence. The experts tell us what we may expect. That isn’t fact; it is an extrapolation. A guess.  Following investing rules is hoping that the guess will materialize. Every time I buy an index or ETF, it is a guess that the S&P 500, or Ex-U.S. stocks or bonds (U.S. or foreign) will do well.  The Callan Periodic Table indicates how mercurial this is. Today, I do find it difficult to take credit for the outcome of “good” decisions. Memory tends to obscure the bad ones.   Yes, there are traits which are helpful, too. Resiliency comes to mind. But can I take credit for my wiring? It is true that I have done things to make myself a better human being. Investing for a long period of time is akin to achieving muscle memory. After a time, thinking isn’t required and decisions can become automatic. So too, are the results. Sometimes, it all seems to be a simulation. In recent years, one of the significant decisions I had to make was to unexpectedly tap my Roth-IRA for a significant amount. Automaticity made this difficult.  It definitely felt like the wrong thing to do, if for no other reason than a perception the Roth is a very long term, tax-advantaged account. I mentally stepped back and concluded that it was necessary and just did it.  There was a temporary decrease in our portfolio. But within two years it had not only recovered, but had gained 10 percent. There were no negative effects, other than the blip to the value of the accounts. Life went on, there was no need for belt-tightening, etc.  Looking at the financial reports today, and comparing them to 2021 it seems as if nothing had happened.  I’m happy for my good fortune.

  Post: If you have done well, be proud.

  Link to comment from February 19, 2026

• I view index funds as ballast. They’ll keep the “ship” upright and help to weather market storms with little involvement by the skipper. However, while they serve a purpose, they won’t overperform except in periods in which a few companies dominate the index, as has been the recent case with tech stocks in the S&P 500.    The minimum we want to achieve is to beat inflation.  Over longer periods of time, say 15 years or longer, it has been shown that indexes and a diversified portfolio can do that. Our 10-year annual returns have been in the double digits.    But we’re all different and my spouse and I are no exception.  It is possible to compare my spouse’s portfolio to mine. Her portfolio is about 30% Vanguard Target Date Funds, which are an amalgam of five indexes. I don’t own indexes, although I do own low cast ETFs and mutual funds.   Since 2018 I’ve taken RMDs and held more “cash”. So direct performance comparisons are difficult.  One thing that can be gleaned is the value of diversification which is present in both of our portfolios. One difference is overall total returns. For the last 10 years, my portfolio overall total return was 4.43% better than G’s, even though for most of that period I held more bonds/cash.   I do own 16 individual stocks, although two are spin-offs. Why own? I’m the one who takes RMDs and held the larger cash cushion. I decided I needed investments to offset that and wanted higher dividends.  I’ve held some of these stocks for 20 years. There have been some difficult years, 2018 and 2022. The bond route in 2022 had less impact on my portfolio because I own few bond funds/indexes (I prefer individual bonds). However, in fact, our returns were only slightly negative in 2022-2023.  I took a high 5-figure withdrawal from my Roth IRA in 2022 to deal with costs associated with a serious disease and relocation.  That withdrawal influenced my cash allocation and portfolio value.   Why the performance difference? G’s portfolio is about 43% bonds and cash. It was lower than mine, but the bond component in the target date funds gradually increase.   My portfolio has no indexes and is currently 46% cash and bonds, but few bond funds.  The bonds/cash was 30% in 2017-2018. I made allocation changes to prepare for RMDs.  Since 2018 my portfolio has held more bonds/cash to meet RMD requirements and to provide a multi-year cash-cushion.  The recent performance of the S&P 500 has helped G’s portfolio to recover from the bond route of 2022.    About 40% of my stock portfolio is individual stocks, the balance is ETFs/low cost mutual funds.  About 25% of my stock holdings are ex-U.S.  I haven’t really changed much of anything since 2021, although I did purchase a dividend ETF and a few shares of a rocket company in 2024.  G’s portfolio is indexes, ETFs and low cost mutual funds, with a few individual stocks. Here are a few observations about individual stocks. Owning individual stocks does require an awareness of management and the products. Companies can and do falter, so I generally don’t allow any one stock to exceed 5% of my portfolio. Some of the stocks I own were purchased about 20 years ago. The proliferation of ETFs implies I probably could replace the individual stocks and I have reduced the number of individual stocks I own. For example, I once owned energy sector stocks; today I own an energy sector ETF.  There are “high yield” ETFs available, too.  About 7 years ago I added Vanguard’s High Dividend Yield VHYAX and Vanguard Dividend Appreciation VIG to our portfolios. However, my stocks pay higher dividends.  In 2024 I added Schwab  U.S. Dividend Equity ETF SCHD to my portfolio. It has better dividends, but fewer holdings. Possibly a good compromise compared to holding dividend paying stocks. I do like G’s target date funds. Her 2025 fund is 50/50 stocks/bonds.  The yield is 2.89% and it includes 20.3% Vanguard total international stock index. While bond fund performance in 2022 was disappointing, international has helped.    We have saved enough for retirement, so goals for the most recent 10 years have been simple; i.e. beat inflation and maintain or improve the value of our portfolios while taking RMD withdrawals. Our portfolio values have increased each year.   Cash can be a drag, but that cushion has benefits. I avoid chasing yields, avoid darling stocks, sin stocks, etc. I’ve offset the sometimes poor returns for bonds/cash with a growth allocation and dividend stocks. I do pay attention to the stock style diversification of the portfolios and the underlying stock holdings percentages. The Morningstar X-Ray tool has been helpful. I make few changes and avoid emotional responses. I always buy with the intention to hold for at least 5 years. I’ve owned most of my remaining stocks for 15-20 years.  

  Post: A Very Sensible Conclusion

  Link to comment from February 18, 2026

• At any given time, one or more assets may underperform. Adam Grossman’s HD article “Sell America” includes a reference to the Callan Periodic Table of Investments. It depicts how regularly this occurs and how chasing winners may be futile. Now that the Ex-U.S. stock market and gold have been performing there is a tendency to chase these.  I don't chase performance and I've made few changes to my portfolio since 2021 (I did purchase stock in rocket company in 2024) . I’ve done very well since 2006-7 and I attribute this to a well-diversified portfolio which has had a healthy foreign stock component, some precious metal mining stocks and the avoidance of fads. 

  Post: Keep it Simpler

  Link to comment from February 18, 2026

• Upon graduation they faced the usual tasks. Find an apartment in the city in which they chose to live and work, provide a security deposit and so on. The point of the loan was to assure resources for these things until payday arrived. Alternately, I could have simply paid their bills and in doing so, promoted a dependency cycle.  The children had jobs upon graduating. That wasn’t the issue. As for “Why a loan?” Well, lending and repayment is what most of us will face, be it for a car loan, a mortgage or a credit card. They were adults and once they decided upon their school of choice, I made it a point to treat them as such. With choice comes responsibility.  In fact, the children had managed their finances throughout college. They had budgets and were expected to properly manage any funds they received. During college they all worked part-time, saved some and spent the rest. For example, one ran a painting crew during the summers.  When they graduated they made a smooth transition into the work force, for which they had been prepared.  None returned home after college; they had successfully left the nest, moving to CA and the east coast. Although the CA child learned that CA is a very expensive place to live and left it after a few years. After that initial loan I’ve never had to lend them money or pay their bills. As far as I know, they use debt strategically as they were taught. Home mortgage, for example.  

  Post: Helping Adult Children

  Link to comment from February 16, 2026