Bob Brinker Free Discussion Site 59,820+

Top 531. Sep 11, 2005 2:02 PM

» solarblast - Withdrawing Money from Investments after Retirement?

I'm retired and my investments in stocks and bonds are my sole source of income. We don't really have any problem withdrawing to keep us going, but there are special occasions where I think our strategy should be modifiable.

These are car purchases, trips, hobby interests. They tend to be larger expenses, maybe $5K for a trip. One always hopes that when money is needed for those moments, the stock and bond market is at a high. This is not so easy to coordinate with other expenditures as above. It seems to me a good strategy is to move money out of the stock market and to stabler less risky investments, MM or bonds, when the market is moving up, as it is now. Take some money out and move it a sort of a holding fund for these other purchases when necessary.

An argument against this is to just draw it out when necessary and reap the benefits of having it in the market longer. My argument against this is that there are sometimes long waits to acquire something at just the right market moment, so waiting may cause some unfortunate withdrawal action. For example, let's say you want your house painted or repaired. The cost may be $20K. One could put this off until one is forced to act, and may catch the market way down. Taking money out of the holding fund might be better.

Comments?

-- posted by solarblast

Top 532. Sep 11, 2005 3:41 PM

» Normxxx - Re: Withdrawing Money from Investments after Retirement?

In response to Withdrawing Money from Investments after Retirement? posted by solarblast:

It's always a good idea to take some money off the table when the market is high (as it is now), either for more or less current use or to reinvest when the market is at its lows (as, three or four years ago). Unless you like to ride the roller-coaster. But, remember, as high as it is today, the market is still around 1998 - 1999 levels. If you just "wait," you may well wait in vain.

-- posted by Normxxx

Top 533. Sep 11, 2005 3:44 PM

» allancoleman - Re: Withdrawing Money from Investments after Retirement?

In response to Withdrawing Money from Investments after Retirement? posted by solarblast:

hello solarblast ,

such a " holding fund " as you suggest is also called a " bucket number one " by other advisors to be used for living expenses and larger purchases such as trips and vehicles . some have even suggested such a fund have enough money to last for periods of time up to 7 years . and that this fund or money be kept in very liquid or short term investments .

i have used a similar fund with several years worth of funds for living expenses and i have found it relieves one from having to liquidate money from either stocks or bonds at any point in their cycles . i have used personally owned real estate sales to fund such a bucket and have lived out of it for over five years since i've retired in 2000 and haven't spent any money yet from my other invested assets such as my 401(k) , IRA , and ROTH IRA allowing me to put another double in those assets . try it . i think you'll like it as i do .

-- posted by allancoleman

Top 534. Sep 11, 2005 3:50 PM

» solarblast - Re: Re: Withdrawing Money from Investments after Retirement?

In response to Re: Withdrawing Money from Investments after Retirement? posted by Normxxx:

Yes, the levels are not at their highs of years ago, but we've recovered very nicely after Brinker's call a few years back and despite a good bit of spending from the low then, we are pretty much back to where we started. To make some modest sized purchases, I don't see waiting to get back to the high S&P of a few years ago.

-- posted by solarblast

http://www.syharding.com/comm4.html

Top 535. Sep 11, 2005 4:35 PM

» Normxxx - Re: Re: Re: Withdrawing Money from Investments after Retirement?

In response to Re: Re: Withdrawing Money from Investments after Retirement? posted by solarblast:

I was talking about "waiting" to make withdrawals.

Check out

and

http://comstockfunds.com/index.cfm/act/n...

______________

The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

The content of this message is not to be construed as constituting market or investment advice. It is intended for educational purposes only. Individuals should consult with their own advisors for specific investment advice.

-- posted by Normxxx

Top 536. Sep 11, 2005 5:52 PM

» JeffChristy - Re: Re: I disagree with Brinker on this one

In response to Re: I disagree with Brinker on this one posted by jamesj24:

James

My favorite oil tanker stock is Frontline FRO. It closed at $44.87 Friday. In the last 12 months the dividend payout was $22.18. For the 12 months prior to that it was $15.71. Here is the detail from Yahoo finance historical price screen.

Sept 5 $2.00
Jun 8 $3.10
Mar 3 $3.50
Feb 3 $5.85
Dec 23 $1.80
Nov 29 $3.43
Nov 23 $2.50
------
$22.18

Aug 26 $1.60
Jun 12 $8.31
Mar 10 $4.50
Nov 28 $1.30
------
$15.71

Cramer said he does not like this stock on his mad money show. I found it when Louie Navellier came to town and made a presentation. He recommended it and I did my own due diligence and bought the stock.

-- posted by JeffChristy

Top 537. Sep 11, 2005 6:20 PM

» JeffChristy - Today on Moneytalk

Did anyone hear the caller today who wanted to put an excess profits tax on oil companies. I think one of the biggest problems facing the entire world today is a shortage of oil and gas. Here in the US we don't have enough refineries to produce enough gasoline as demand rises year by year. One year in the not to distant future we will no longer have a shortage because it will become a crisis. Oil companies use their profits to explore for more oil and would build more refineries if government allowed them to do so. The current situation reminds me of what happened in California a few short years ago. No one built a new electric power plant for ten years as demand continue to grow. Then all of a sudden there were black outs. If this caller gets his excess profits tax passed one day he will go to the filling station and find out that not only is he out of gas but so is the station. I find it hard to believe that Brinker actually agreed with this asinine idea. I would love to discuss this with Kudlow the next time he is on and moneytalk has a host that knows something about economics.

-- posted by JeffChristy

Top 538. Sep 11, 2005 6:54 PM

» ohmmmm - Are we approaching a change?

Seems that investors have wanted to buy stocks lately dispite some bad news about katrina. I guess they remember other recent past hurricanes where the amrket has increased. I guess interest rates are relatively low dispite FED rate increases. So, where do we actually go from here? I aint that smart, but probably has high as continued available credit will take us. It was interesting to note taht one of the first people President Bush spoke with after the hurricane was Alan Greenspan.

On the other side of things, is the relative decrease...probably...of disposable income for most americans due to higher oil prices. I have talked with friends who are cutting back on unnecessry travel....so I bet we see a bigger impact from the storm and further pressure on many restaurant chains.

I also wonder if we will see some significant supply problems down the road in the oil sector. I am assuming that marginal excess supply of oil is decreasing and repairs to oil platforms and in many cases rebuilds will take many many months.

With the FED speculation set to go into hyper drive the next several weeks, it should be interesting to see what the markets do... Post FED rate increase should be interesting as well as the katrina effect will begin to show up in economic reports.

Best wishes

Jim S.

-- posted by ohmmmm

Top 539. Sep 12, 2005 10:00 AM

» jamesj24 - Re: Withdrawing Money from Investments after Retirement?

In response to Withdrawing Money from Investments after Retirement? posted by solarblast:

If one is in retirement, it would seem prudent to have plenty of reserves in stable value funds (such as money markets, etc.) anyway. Why would one put his money at risk, especially if he will need it in the near future for various things, as you describe your situation.

With all due respect to those who have huge equity portfolios, there is a more efficient way to go. It consists of having most of one's money in risk-free investments (such as treasury bonds, or cash), and using a small percentage to speculate on individual stocks (or sectors.) Usually this involves buying or selling calls and puts, either nakedly or in spreads.

I myself have more than 70% of my portfolio in cash, and have enjoyed that for many years now. Since the bear market, I cannot get too excited about tying my money up in stocks. I typically have about 10% of my financial assets engaged in stock speculation, and I do all of this using options. So, I don't even have to tie up my money directly, although I do have to maintain a margin requirement to cover naked options.

That is one reason I can't go for Bob's (or most financial advisors') basic recommendations for mutual funds, the SP500, etc., although I do have a small core holding of these as well, which I bought many years ago.

I've been actively following this strategy since April, and my return on the underlying stocks has been about 8%. Most of my trades are on the conservative side.

I usually have to find large cap stocks with high average daily volume for there to be a good options market.

Jim

-- posted by jamesj24