Income Investing Secrets Systems quality
Investing means finding stocks that go up and then selling them.
So does your financial advisor.
The media tells you the current bull market started in March 2009. March 2009 is the month the Dow hit its low point of 6,500, that’s true.
They forget to mention the old high was just over 14,000 in October 2007 – just before the Great Recession financial crisis wiped out HALF the Dow.
The market has gone up from that old high only since about August 2013.
And there’s no guarantee that the gains of the last 5 years – or more – won’t disappear again.
Therefore, many retirees and near retirees are now free-falling. When the market prices of their stocks go down, seniors have to sell more shares to pay their bills.
Leaving them with fewer shares they can sell next time they have to raise cash for an emergency.
No wonder they feel sick to their stomachs when they receive their brokerage, IRA, 401(k) and mutual fund statements.
It’s likely many people you know are now wondering whether they’ll ever take that special cruise, give great presents to their grandchildren or receive the best medical care if they suffer a prolonged illness.
Chances are, nobody told them this could happen. They simply followed the mainstream advice to load their 401(k) plans, IRAs and mutual funds up with “growth stocks” to sell many years later at a huge profit.
Despite following the conventional financial wisdom, many senior citizens are now asking what happened to that worry-free fun and relaxation they promised themselves after a long career of hard work.
Many people in their fifties and early sixties are wondering when — or even if — they’ll be able to retire.
Many today wonder whether they’ll be able to leave an estate to their families or a legacy to their favorite charity.
The more you learn about the stock market, the more you understand basing your retirement on continuous stock market price rises is like building a house on the edge of a steep dirt cliff. Sooner or later, a hard rain will fall.
Serious investors who would never day trade, buy and sell penny stocks, splurge on Internet chat room stock tips or throw money away on Bitcoin . . .
. . . failed to understand that buying stocks and bonds in hopes of later selling at a higher price is an intrinsically risky form of gambling no matter how long in the future that “later” is. A 10-year “retirement trade” is not more virtuous or safer than a 10-minute day trade — it just takes a lot longer.
Clearly, you’d have more fun if you took your retirement fund to Vegas.
“Rick Stooker is on the right track. We also intend to pursue a more income-oriented strategy in the years to come. Capital gains are subject to both the risk of a decline in economic fundamentals and a deterioration in market psychology. High-quality dividends and income are subject only to the former, and that makes a big difference in modeling your portfolio returns in retirement.”
Look, I’m just another guy who has to go to work every day to pay his bills. I’ve spent years studying investing, hoping to find a way to “get rich quick.”
I tried everything you could name, and then some — options, growth stocks, commodities, gold, silver, index funds.
I’ve bought no-name stocks and seen them triple in price in one day for no reason I could figure out. I’ve bought “bottom feeder” stocks for under one penny and discovered there’s always a smaller infinitesimal fraction of a cent they can sink down to. I’ve sold covered calls and learned the underlying stock price can drop by half while waiting to sell another call. (Book authors told me not to buy stocks that…
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