While this may come as a shock to some readers, Money Daily's editorial slant is slightly unenthusiastic when it comes to owning stocks and/or having a 401k or other retirement plan invested manly in equities.
The rationale comes from decades of experience watching stocks go up and down and up and down, sometimes staying at lower levels for long, painful periods of time. Not that owning stocks is a bad thing, it's just that stocks are only one asset class - of many - and proper balance comes from diversifying among a multitude of assets, such as fixed income, real estate, precious metals, commodities, collectibles, art, one's own business, and hard assets such as income-producing machinery, vehicles, food-producing land, water, alternative energy, computers and peripherals, furniture, and other mundane items like cooking and baking essentials, hardware and household items.
Taken as a whole, Americans are over-invested n stocks. The rich like them because they have enough money to afford occasional losses. Ordinary, less-wealthy types can't take on losses readily without bursting their retirement dreams, which, if you're retired or know anybody who is, isn't all golf and boating.
That said, here's part of the Motley Fool's take on retirement savings:
Many workers assume that Social Security will suffice in retirement because their living expenses will go down once they stop working. The reality, however, is that things like housing and transportation tend to only drop modestly, if at all, during retirement. The reason? While many seniors enter retirement with their mortgages already paid off, as homes age, they tend to require more repairs and maintenance, the cost of which can be enough to offset an absent mortgage payment. The same holds true for owning a car -- though retirees don't have commuting costs to contend with, they still have to worry about insurance and auto maintenance, which can be far more expensive than filling up a vehicle's tank twice a week.
The statement above, of course, supports the Fool's claim that Social Security isn't enough to cover living expenses after one has stopped working. It's rubbish if one happens to be inventive, resilient, independent-thinking, and self-sufficient.
The idea that repairs and maintenance of a home are somehow equal to a mortgage payment requires some extensive mental gymnastics. Besides, repairs and maintenance were always a part of the deal even before the mortgage was paid off. No home is perfectly maintenance-free. The same goes for the car assumptions they make. If you're not driving much, your maintenance costs will decline in a somewhat inverse proportion. The Motley Fool likes to pimp stocks. They're not very good at turning screws or fastening bolts and rationalize that you aren't either.
Their contention that Social Security won't cover living expenses in retirement is bollocks. In 2020, even taking early retirement at age 62, the maximum benefit is $2,265, and goes all the way up to $3,790 if one delays collecting until age 70.
Now, anybody who can't make ends meet on $3,790 a month has some serious spending issues. Even taking in less than the maximum, say, $1300-1600, isn't bad if you've got your mortgage paid off, a functioning automobile, good health (that's very important) and low to no debt. What else is there? Sounds like a lot of ham and cheese sandwiches, and steaks, and cold beer.
Unless you're an absolute Amazonian compulsive shopper (they're out there), not being able to get by on anything between $1200 and $2200 a month seems a little preposterous.
So, let's blow the lid off retirement plans, IRAs, and all the other stock-first plans that often aren't invested in one's best interests, carry management fees, are taxable, and can't be touched until a certain age without triggering a penalty. There is such a thing as a retirement trap and many find themselves lodged firmly within its jowls, so, when stocks go down - and they need to go down quite a bit more before considered affordable as investments - there is a crowd that might be celebrating. 42% of people don't have a traditional retirement pension plan, so they might, besides being a little bit jealous of their neighbors, think cheaper stocks are just what America needs.
Consider that couple down he road who worked hard all of their lives and now have a little $1.5 million nest egg, and that's not including Social Security.
If they both retire at 65 and live to be 90, they can withdraw $5,000 a month if the plan is to spend it all while still drawing breaths. That's not bad. Their only concern should be health issues, so they'd be best-suited to squirrel away the bulk of their wealth into a living trust or other protective vehicle, to avoid having it all taken away by by the blood-curdling costs of a nursing home.
Or, they could buy a boat or two, a few nice cars, some luxurious furniture and carpeting, some cool art, gold, silver, maybe a fully-functioning woodworking pole barn, and live it up.
The point is, keeping all of your currency inside the rigid and rigged control mechanism known as the stock market is probably not the wisest choice.
On that note, the current condition, be it mostly or altogether contrived, has everybody worried about dying before their time from the dreaded coronavirus. Note that rioting, looting and protesting seem to have died down quite a bit. Nothing on the nightly propaganda network shows about any protests, burning, drama-queening, queer-baiting, LBGVTQSWYRetc., statuary defacing, looting, wilding (old-school reference), soy-latte slurping, or general urban mayhem were to be seen the past few days.
Can we just get this all over with now? Take off your masks. The plandemic is a massive hoax. All the talk of a second viral wave is just dancing numbers. Black lives matter as much as all others. Joe Biden? Get real.
Re-elect Trump even though he's not perfect (who is?). But, he's light years ahead of Joe Biden and the bone-headed Democrats. Let's not forgive nor forget the damage done by slow-walking Republicans. They're as much a part of the problem and offer no viable solutions to anything.
Re-elect Trump and hope that the Dems hold the House and take the Senate. Nothing better for Americans than a split federal government. While they're flailing about, bickering and keeping the slimy, asshat media busy, we can get back to work and play and have some fun again.
Stop the BS. Take off your masks. Remove the blinders the media and government has forced upon you and start living like a human being again.
Adjunctive to stocks sliding, the price of oil was lower on the day, seen at $37.57 a barrel for WTI crude Thursday morning. It's a step in the right direction.
Treasury yields fell across the complex. The 10-year note checked in at 0.69%. On-month bills netted out to 0.11% while the 30-year dripped to 1.44%.
Gold and silver got their usual spanking for being too pricey so close to futures expirations. Gold, getting a little too close to $1800 an ounce, had to be taken down, but it's only a matter of time before both metals make sustained advances. One might say they already have in a very real, physical sense, considering the high premiums being taken by dealers and eBay sellers.
Wealth is all so very relative. The couple with $1.5 million in stock might seem rich today, but, in other circumstances, as we saw during the lockdowns, the guy with a couple ounces of gold, a fully-stocked liquor cabinet, a pantry loaded with canned goods (and toilet paper ;-) may be far better off than his neighbors.
In a blind society, the one-eyed man is king.
At the Close, Wednesday, June 24, 2020:
Dow: 25,445.94, -710.16 (-2.72%)
NASDAQ: 9,909.17, -222.20 (-2.19%)
S&P 500: 3,050.33, -80.96 (-2.59%)
NYSE: 11,726.54, -351.21 (-2.91%)
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