Saturday, January 13, 2018

Convincing Myself to Buy More Stocks

At the end of 2017, I posted that I would add funds if the market went up or if the market went down.  Well, the market went up the eight out of the nine first trading days of the year.   I didn't expect that.   I was planning on a decline, which would allow me to add funds at a lower cost basis. (For reference, I did buy some on the down day.)  Now, I will need to buy at higher prices, with the fear that the market will fall right after I buy.

After spending the last week considering my options, I have convinced myself to add funds systematically by purchasing on the dip with winning stocks and buying good stocks in beaten down sectors to mitigate the downside risk.  However, I will wait for a correction before adding significantly more funds.

Despite many arguments for the market being too high and the bull market being too long, below are my reasons that I believe the stock market will continue to rise:
  • The stock market advance indicates approval of the government's actions over the past year.  The sentiment is the economy will improve, businesses will grow, and 
  • Trump will continue to drive his pro-business, anti-regulation, and America first agenda.  wall Street and business are responding well in this environment.
Of course, interest rates could rise sharply, which would cause stocks to decline.

Finally, an Wall Street adage is " A bull market climbs a wall of worry."   And there is a lot of worry right now.

For more on Reflections and Musings, check back Saturdays for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2018 Achievement Catalyst, LLC

Thursday, January 04, 2018

Million Dollar Poverty

"A nickel ain't worth a dime anymore." ~ Yogi Berra

When I was growing up, a million dollars or being a millionaire was the holy grail.  I thought I would have it made if I could accumulate a million dollars.  It definitely would have been enough

Nowadays, a million dollars may not be enough according to CNBC for today's retirees.   A million dollar nest egg would yield $40,000/year using a 4% withdrawal rule.   This would last about 12 to 25 years depending on one's state of residence.   For 42 year old GenXer, the withdrawal would be $19,000/year inflation adjusted.   The articles notes for a 32 year millennial, the withdrawal would be below the poverty line, which the article characterizes as "million dollar poverty."

Given inflation and longer life expectancies, I estimate the nest egg holy grail for our kids will be at least $5 million...or even more.  

For more on Crossing Generations, check back Thursdays for a new segment.

This is not financial or retirement advice. Please consult a professional advisor.

Copyright © 2018 Achievement Catalyst, LLC

Monday, January 01, 2018

Going with the Flow in 2018

I am convinced the next couple months will be a good time to put more funds back into the market.  If the market goes up, I will buy into the advance.  If the market declines, I will buy into the dip.   If it stays flat, I will wait before buying.

My plan is to buy commission free ETFs so that I can make several buys in small quantities.  That way if my timing is off, I can use the opportunity to dollar cost average down..

Tomorrow, January 2, is the first trading day of 2018 and will be my first read of the market sentiment/direction.

For more on Strategies and Plans, check back Mondays  for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2018 Achievement Catalyst, LLC