Is the market correcting or not?  What do you folks think?  Are you changing your positions so that you're more conservatively positioned, going to cash?

Momentums seem to have  bottomed  and moving  positively. How long? 

I didn't have my glasses on, I read FATCAT. I had to look it up and then I realized I was correct, it is a FAT CAT issue. 

I eyeball it.  I look for anything where cost  is less than the strike differential.  This happens more with longer dated options because time value reduces the price differential of the spread.

The market "lets" it happen everyday.  As an example - today I bought the 6/21/14 IWM 114 - 116 call spread for 1.47, the max gain = .53 or a potential 36% gain in 12 days.  The breakeven price = 115.47.  When I did this IWM was around 116.9.  This technique of course works better with later expiration dates.

I like playing the market with the odds on my side.  As an example:  I bought the 1/17/15  168 - 173 spy call spread for 4.127 when spy was at 188.  If spy goes up or down I make 21%. To beat that return from that point in time (5/2/14), the market has to close above 2270 by January (maybe it happens but I don't like the odds on that).  For me to not get that return, the market has to drop to 1721 or so to break even on that date and I could still hedge the position and protect myself. 

Some of you are willing to take on a lot more risk than I am with some of these stocks.  I mainly dabble in index etfs with some speculative trades such as twtr but with very little potential loss.

Off the top - I don't know of any unbiased forums or unbiased anything for that matter.  I'm quite satisfied with what I'm doing and plan on doing.

I got an early pm from another poster at E_R forum on Brewer12345, informing me about Brewer12345 experience: Former bank examiner, cpa, big 5 accounting, a somewhat guru on SA, and who helped someone get out of an annuity.

I imagine that most of us are at or very near retirement. In late spring/early summer of 2008, I got very worried about the USA's financial well being, especially when I discovered via the news how bad the big banks  were doing; The cavalier attitude of big brother on his bank and the mortgage/credit balloon; and our retirement funds and the experience of the collapse of DS's college funds 2001-03. I initially thought about options and futures but realized that I had to get to expert level pretty quickly. My Financial Adviser guy said that they are coming out with a better annuity (I currently had a very small one purchased soon after 9/11 as a small insurance vehicle and to learn how this product works). I went to his presentations and saw many other presentations. Eventually bought at the collapse of the market in Nov-Dec 2008. Yes, I sold the MF at the bottom but I also bought at bottom when I bought the Variable Annuities. 

So why is our annuity allocation so high. Several reasons: The VA annuities are aggressively allocated since I bought downside insurance and the insurance company thinks it can beat the market. In any case, the strike date is 10 yeas from date of purchase. Another reason is the non-annuity funds are held both very conservatively (cash & dividend payers) and very aggressively (small cap-momentums). The all stock allocation in the annuities have done very well where the non annuity funds have done relatively poorly which is OK since this money is held for liquidity and opportunistically.

What does my experience has to do with Brewer12345? Today he posted: "With the notable exception of AIG, the insurance industry was actually left to sink or swim on its own while the banks got gubmint carte blanche. A few insurers hastily acquired tiny thrifts and applied for TARP to get some capital, but a number were rejected flat out (Genworth, most notably). As someone with a painfully close view of things at that time, I believe that the treatment of the insurers was due to A) the belief that they were in better shape than the banks and B) the nasty, catty attitude of the federal regulators dispensing ARP that the insurers are regulated by the states so let them deal with the problem. " 

Brewer, should know that how Bank's assets are different from Insurance's Assets and how they are valued. Bank's assets is the collateral to the loan, mark-to-market, and held short vs Insurance assets is the Insured life, future value, mark-to-cost, and held long.  BIG differences.

I am not pushing annuities. It is a financial product for some people and not a product for others. When I was on E_R, I did a quick evaluation of our assets and discovered the high portion of annuities in our portfolio. I was previously looking at more protection (insurance) but my FA advises me that the regulators frown on annuities being more than 50% of assets at purchase. The annuity products that we bought are no longer available.

-- Edited by longprime on Tuesday 3rd of June 2014 12:16:28 PM

JD; Are you now a proud member of Early-Retirement?

For you other refuges of Forums, CollegeConfidential moderators are wimps compared to the draconian Nazi of Early-Retirement.org. I mean this sersiously. 

Sorry for you, lp.

Crazy as my mom is, she's the only one my wife and I have left and I think I'll be bereft - a word I've never used but figure I'll need - when she's gone.

Take care.

My condolences, lp. 

We withdrew $30,000 from a MM account to finish our basement so at least we'd have something to enjoy. I just can't believe the market is going to continue to climb much longer. Something tells me there is going to be something closer to a crash than a correction coming in the not too distant future. We have a lot of cash just sitting in the bank in separate FDIC maximum accounts, but we are two years away from retirement. Can't afford and don't have time to gamble. 

I guess I'm slow these days.  I tried to get onto early_retirement.org and seem to be having problems becoming a member.  I'm having a problem with the questions to assure them I'm not some machine.  Maybe the problems is that I am!

Bad things will happen.  The big problem is that it depends on when those things happen.  One can have the same average return over a time period with the same standard deviation but if it happens at the beginning of you retirement the impact is much worse than near the end - it all depends on the order of those returns for each year.  Perhaps it is better to be more conservative near the beginning of retirement and get more aggressive as time goes on instead of the reverse.

Saw that too. FC has a place to put in a remainder value at the end of the 30 year run. -click on PerceIntage of remaining portfolio. I have kinda lost interest in this calculator. The interface is not the best and Firecalc is probably looking at their forum (money making side) and only minimally improving the calculator. IMO

Optional: Revise How You Will Spend Your Money During Retirement

If you leave this section alone, FIRECalc assumes you will continue to spend the same amount (after adjustments for inflation) every year for 30 years.

Note: FIRECalc adjusts just about everything for inflation. Any exceptions will be noted prominently.

Use the following inflation assumption:  PPI,  CPI, or   % for inflation adjustments to the historical data.

SA = Seeking Alpha.  The second mentioned paper compares predictions made from using the percentage of positive "words" in seeking alpha articles to those in the wall street journal.  The authors wrote an algorithm that mines words from all the articles in each of those and came to the conclusion that seeking alpha has a significant statistical advantage in predicting the direction of a stock than the wall street journal.

SA? == Statistical Analysis??

Since we are have been forced in to retirement, we can no longer contribute to it. My goal is protect what we had in the 2008 (not fast enough) and to growth what we had. We are still a few more years away from the distribution phase (70.5). The VA's allowed me to protect what was left and allow for topline growth. 

So, Weekend WSJ, May 24-25, artlcle, Calculating Your Retirement, byline Liz Moyer,  brought up the topic of retirement planners going in but also Calculators while in retirement. I did some googling on Bill Sholar, said originator of FireCalc, and eventually came to Rob Bennett and his blog, www.passionsavings.com. I had no idea until getting banned from Early-Retirement.com, how outliers and alternative investors, are quickly terrorized.  This guy was banned at Motley, Bogleheads, Firecalc, etc. 

Some things that he now believes: Buy and Hold is dangerous. 4% withdrawal rate is too high (?) in today's environment. The retirement allocation 60/40 should be 80/20. 

http://arichlife.passionsaving.com/category/investing-the-new-rules/

http://www.passionsaving.com/money-myths.html

You might find this paper of interest: WISDOM OF CROWDS: THE VALUE OF STOCK OPINIONS TRANSMITTED THROUGH SOCIAL MEDIA1.  It talks about using SA for predicting the movement of individual stocks.

s

I see that my thread is up to 1800+ views (had to use a another ISP to see this site. My DSL-line completely locks me out of www.early-retirement and FIRECALC.com. Can they do that?)

This is a early-retirement forum is/was dangerous site when different and opposing views are banned and a small cabal control the thinking. I am surprised that the mods and FIRECALC allows continued bashing. I also see that they left my post #37 up. 

Still nobody as offered alternatives other than sell the annuities without giving a reason 

You have been bullies to me and to others. You should reread your posts in just this thread and determine if you even once asked what are my objectives, my AA, my risk tolerance, when will I need the money, are you properly insured, how long I have been investing-All you could say was that I was sold, Sold, and SOLD when I kept saying I was Looking, and Looking Very Carefully; Innumerable presentations, a lot policies, and a lot of agents-representatives. I detailed what I had several times because I was looking for a way to get portfolio insurance and have an upside. 

I got an older bro, phD, economics, C level, private banking, A survivor in his world. Retail fees are nothing as compared to private banking. You somehow missed that I have 6 annuities from 2 different companies, bought at different times. Do you really think I didn't understand the fee structure when I kept ignoring your comments? 

My measure of good advice is your measure of success. None of you volunteered so what do you expect me to believe that the only road to FIRE is to do Vanguard and I stupid and sold crap? Tell me your successes and your failures, so that me and everyone who reads this thread-forum can benefit and get to FIRE. 

I will later start a new thread and hopefully get some better responses.