DebateGate
General Category => 3DHS => Topic started by: sirs on January 22, 2008, 01:16:16 PM
-
We all keep getting the same bandwagon of distorted condemnations aimed at anything SS & Stockmarket. This question goes out to those with a business sense of understanding
At anytime in modern day U.S. history has the stock market, over a 30year period of time (a conservative number for a retiree, since it's much more likely to be pushing 50+yrs), provided a return less than what one put in?? Or more pertinent, has there been such a period that demonstrated a return LESS than that of SS??
The floor is opn to any answers
-
The main difference is that SS will pay you for as long as you live. Your stock market investment will only pay out until they are gone.
The intent and advantage of SS is that it pervodes everyone, even the improvedent, of which this country surely has hundreds of thousands, with enough so that they will not starve, which is what many did before SS.
SS is a RETIREMENT arrangement. The stock market is an INVESTMENT arrangement. Most small investors buy high, sell low and end up with less than they put in. You are comparing apples and celery here.
Some of the largest mutual funds in the country are LOAD funds, and underperform. This is evidence that many Americans are just not much good at investing. One gets nothing for the load on a mutual fund.
-
So, seriously, is anyone gonna actually address the question(s), vs trying to deflect from the "obvious"?
-
I don't see how anyone could answer the question without first assembling a traditional "basket" of stocks to be held over the 30-year period. And then there'd be a wide variation because of the choice of "basket" components. Also, realistically, nobody stays married to every stock in his or her "basket" for 30 years.
At the end of the day, some folks did well in the market over the long haul, and some not so well. The ones who I know did well are very shrewd professionals, most of them accountants. I can't think of any working class people I know who did well in the stock market. OTOH, I know a lot of working class people who did very well in residential real estate investments, several of whom are multi-millionaires. My own take is that with the exception of some exceptionally savvy investors, most folks would have done a lot better in real estate than in the market.
-
I don't see how anyone could answer the question...realistically, nobody stays married to every stock in his or her "basket" for 30 years. At the end of the day, some folks did well in the market over the long haul, and some not so well.
WHO didn't do well over the long haul?? Examples please. Someone show us how precarious and potentially detrimental it would be to leave SOME (read NOT ALL) of one's SS in selected mutual options within the stock market, over an extended period of time
That is the whole point of SS, supposedly. It's not meant to be a retirement, but it's being used as one, by far too many. It IS going to go bankrupt at its current pace, sooner vs later. And if one were to leave an equivalent amount of $$ in the stock market, over the same period they do in SS,.....well, as I inquired, show us how terribly disastrous that would be. I used 30+years, but the question should be more like 50+
So, show us
-
Sorry, I can't name names. I know a lot of people who are willing to talk openly and frankly about their successes in real estate. These include people who landed here as immigrants with Grade 3 educations, worked as labourers and wound up rich.
I know a few people - - very few - - who are willing to talk about their stock market investments. All of them are very successful investors. All are highly educated professionals - - usually accountants; one a lawyer who started his professional life as an accountant. One is a banker, one a mining engineer.
Most people don't like to talk about their losses, either in real estate or in the market. I concluded on the basis of people I know, that there are a lot more successful real estate investors than there are successful stock market investors. As to how many of my friends and acquaintances are stock market losers and how many are real estate market losers, I have no idea.
Sorry I can't make it more scientific, but that is about all the information that I have. It tells ME something that I think is relevant to the question you were asking, but I think it's a message you don't want to hear. Well, I am just offering up my two cents' worth - - take it or leave it for what it's worth.
-
Sorry, I can't name names.
Didn't think so. So again, all the left has then is to demonize the stock market, distort Bush's actual plans for trying to save SS, and misrepresent the idea of leaving $$ in the market for an extended period of time, equivalent to what SS mandates, using the occasional stock market drops as some smoking gun of how terrible an idea it is for following up on some form of SS reform that includes the stock market.
-
You're nuts. All I did was answer your question. I don't know a lot of people who did well in the stock market and those who did were highly educated professionals. I know lots of people who made money in real estate, and these include uneducated immigrants with nothing more than a Grade Three education. Draw your own conclusions, sirs.
<<So again, all the left has then is to demonize the stock market, distort Bush's actual plans for trying to save SS, and misrepresent the idea of leaving $$ in the market for an extended period of time, equivalent to what SS mandates, using the occasional stock market drops as some smoking gun of how terrible an idea it is for following up on some form of SS reform that includes the stock market. >>
I didn't do any of that. You're really crazy. It's actually quite amazing how you can take a simple and rather bare-bones answer to a simple question, read whatever you want into it and then when you finish re-crafting it, denounce it as a Commie plot against Bush.
Anyway, I stand by my answer. It's the plain truth. It's what I know from MY life (and maybe someone else knows the exact opposite from his or her own life, and if so, I'd like to hear) and I drew some conclusions from it, mainly that most ordinary folks are not wise investors in the market. Sorry 'bout that, but don't shoot the messenger.
-
All you want is someone to confirm that you actually know what your talking about, and admit that a retirement fund and an investment are the same thing, which they aren't, and that everyone would be better off investing in Wall Street than investing the same amount in SS.
But your first premise is wrong, and so is the second.
Juniorbush agrees with you, but he doesn't really worry about retirement. His momma's brother was president of Payne, Webber, and his poppa is making a killing with Carlisle's investment in weapons for his war, and last but not least, he's getting a HUGE juicy government pension.
I consider SS and my investments BOTH to be imp[ortant and irreplaceable parts of my retirement plan.
You already know YOUR answers to this question, but apparently have not managed to convince yourself of the correctness of your reply, so here you are bugging us. What did we ever do to deserve you and your snideness?
-
<< . . . and that everyone would be better off investing in Wall Street than investing the same amount in SS.>>
I think what sirs was actually saying was that some would invest wisely for their retirement and some would not, so that when retirement finally arrived, the wise would be rewarded for their skill or luck or whatever it was and the unwise would not, which is more or less the way things should be.
What would really happen if Wall Street were allowed to hold part of the funds that would otherwise be destined for SS?
From what I've seen of the average Joe's skill or luck in playing the market, I think it's a fairly safe bet that:
1. a fairly small number of retirees will have done spectacularly better than SS could have done for them and will have a very nice retirement as a result;
2. another fairly small number of retirees will have managed somehow to have done about as well as SS would have done in managing their retirement contributions;
3. all the rest, a large and clear majority, will have done worse than SS would have done for them, on a spectrum ranging all the way from marginally worse to "lost it all" worse, and
4. Wall Street and anyone connected to it will have made an unprecedented killing on all of them, the wise investors, the dumb schmucks, the lucky stiffs and the unlucky schlimazels. Most of that generation's wealth parked on Wall Street will be gone, into the pockets of smarter traders and the Street itself. Considerable portions of the "lost" funds will find their way into the pockets of the Bush and Cheney families and their friends. It'll be a real bonanza for them.
-
Sirs would seem to appreciate a world in which some unwise people were left with absof*ckinglutely nada, because he could look down upon them and fee spectacularly superior. But there is also the possibility that Sirs might be one of the unclever who is left with very little himself. He, of course, would not allow that this could be possible, but that does not mean that it is impossible. Smart people do dumb things, even though stupid people do them more often.
If you put your money away for 30 years and in the 25th year you feel drawn to put in ventures like Enron, (or better yet: gold mining shares) then in the 26th year, you will have doodly, and the 25 years you were counting on for your money to grow cannot be relived, so you're screwed. If you had SS, you would at least not starve, and not have to endure clowns like sirs staring down at you and clucking their tongues at your unwisdom as you do so.
-
The question is unanswerable Sirs, because "stock market" is such an ambiguous term.
If you want to know who has failed in the market, look no further than those who put their retirement accounts into profit sharing programs in World Com or Enron for recent examples. If you want names, there are plenty out there who got royally screwed by Arthur Andersen, which is why we now have SOX accounting standards (or more specifically, controls).
So you better believe you can lose money.
The purpose of social security is not to invest in private markets, but to have security for older folks whether or not the market fails. Privatization would be a huge for Wall Street brokers, hedge fund managers, and other administrators who would make fortunes in fees and commissions, but that isn't the purpose of the Social Security System either.
-
I'm thinking that this is pretty much all that has to be said regarding this topic.
-
I'm thinking that this is pretty much all that has to be said regarding this topic.
Agreed. You & Tee's (& Js's) inability to deal with the crux of the query, helped make the point as clear as could be. Again, I thank you
-
I have a Retirement account in the TSP. It is simular to a 401-k .
http://www.tsp.gov/
If I die my heirs get it.
When I divorced my ex got a share.
When I need a loan I can tap this fund to finance myself , paying back with intrest to myself.
If I choose to ignore it 1% of my pay is given to it whther I like it or not.
If I like , as much as 15% can be given.
The employer matches the first 3% dollar for dollar the next two percent at 50 cents on the dollar , If I give 5% I get 10.
I cannot avoid that the 1% mandated part will be invested in the G fund , a boring T-bond based fund that never looses money nor ever makes more than 6%. The rest I can direct to be invested in the C fund the I fund the S fund or the F fund. I can swap from one fund to another as often as I please but it doesn't realy help to churn it often , I am glad that I have a bit of it in the I fund which was the winner last year and the two years before , the I fund is the index of foreign investments.
http://www.tsp.gov/rates/index.html
Each of these is an indexed fund , a largely diversifed basket from the first dollar. It is really hard to go totally wrong.
All federal employees can participate , should a system like this be avilible to anyone elese ?
-
<<You & Tee's (& Js's) inability to deal with the crux of the query, helped make the point as clear as could be. >>
Here is the query:
<<At anytime in modern day U.S. history has the stock market, over a 30year period of time (a conservative number for a retiree, since it's much more likely to be pushing 50+yrs), provided a return less than what one put in?? Or more pertinent, has there been such a period that demonstrated a return LESS than that of SS??>>
sirs, for reasons which both JS and I made perfectly clear, your question as phrased was unanswerable. You failed to define your terms. What is "the stock market?" The NYSE alone lists over 2,000 companies. NASDAQ lists over 3,000. There are other stock markets as well, both in the U.S.A. and in Canada and in the rest of the world. A "stock market" itself pays no return. Nobody ever got a dividend cheque from the New York Stock Exchange. An investor buys shares in one or more companies listed on an exchange, and if he or she is lucky, the shares will pay a return on investment ("ROI.") Each company has a different ROI. No two investors will buy shares in the same companies and hold them for the same period of time. The ROI for any investor depends entirely on what particular shares he or she bought, and on what he or she paid for them at the time of purchase.
Although I could not answer the question you posed, I did provide some information which I felt had a bearing on what you were trying to prove. The information that I gave (which was all that I had) indicated to ME that very few people were good stock market investors. That's MY personal opinion based on MY personal experience. Anyone else is welcome to provide contradictory experiences and/or opinions, but I gave my own honest experience and my own logical conclusions.
Your query was very badly worded and as such, impossible to answer. It is ludicrous to complain as you did that JS, XO and I suffered from an "inability to deal with the crux" of your query. NOBODY can deal with the "crux" of your query as phrased. I did the best I could to provide you with information and an opinion based on that information which I felt related to the issue which you had chosen to explore. The conclusion was not to your liking, but that's OK. You don't have to accept it. There are any number of reasons to object to my conclusions: the data was not representative, there is no hard evidence that any of the "silent" investors had actually LOST money in stocks, the ones who didn't talk might have been the biggest winners, etc. But you did not present one valid argument against my facts or my theory - - instead, you just chose to whine about nobody being "able" to answer the "crux" of your query. That is just plain ridiculous.
<<Again, I thank you>>
I have definitely been patient with you up to now, but this comment is just too stupid to require a response.
-
To narrow it down a bit.
No,
...there is no period of even ten years in which a down market in the New York Stock Exchange has not made up its loss entirely.
The "advradge" stock in the USA has been a good investment compared with most.
Other stock markets milage may vary, and only a few stocks are advradge.
But in general , as a scheme for accumulateing wealth for the purpose of retiremnt Stock markets have a better than equal track record with government schemes.
-
<<...there is no period of even ten years in which a down market in the New York Stock Exchange has not made up its loss entirely.
<<The "advradge" stock in the USA has been a good investment compared with most.
<<Other stock markets milage may vary, and only a few stocks are advradge.
<<But in general , as a scheme for accumulateing wealth for the purpose of retiremnt Stock markets have a better than equal track record with government schemes.>>
What's the source of that information?
-
<<...there is no period of even ten years in which a down market in the New York Stock Exchange has not made up its loss entirely.
<<The "advradge" stock in the USA has been a good investment compared with most.
<<Other stock markets milage may vary, and only a few stocks are advradge.
<<But in general , as a scheme for accumulateing wealth for the purpose of retiremnt Stock markets have a better than equal track record with government schemes.>>
What's the source of that information?
Myself,
contradict me.
-
I won't contradict you. I'll just say that the allegation remains unproven.
-
As does yours
-
The difference being, I admitted from the outset that the only information I had was my own experience. My own conclusions. So right now, it's all I have to go on. I accept my conclusions are tentative. If someone has stronger evidence of a contrary conclusion I will be happy to accept it. I only say with respect to plane's opinion, he doesn't even base it on experience, so it's totally unsupported. At this point in time, the only evidence I have supports my tentative conclusion and plane hasn't been able to shake it because the evidence he has is zero. He's got an unsupported opinion, I have an opinion supported only by a very limited sampling of people with large unknown quantities unaccounted for.
-
It's actually quite simple Tee, though I understand why you, Js, and Xo are trying to muddy it up as much as posible. Where is this laundry list of folks who have left their money in the Stock Market (the U.S.) for 30+ years, and had less at the end of that time, than when they started??
Something to validate the continued egregious demagoguging of the notion of allowing the OPTION of some folks to invest a mere FRACTION of their OWN SS $$$ into a system that has yet to be demonstrated by anyone on the left, that leaving it there for similar amount of time that SS is kept, will be some sort of economic catastrophe
In other words, you have nothing, but your preconceived notions of how bad capitalism & the U.S., are supposed to be.
-
http://www.naaim.org/whyactive.php
(http://www.naaim.org/whyactive.php)
[][][][][][][][][][][[][]
Ok so my estimate of 10 years might be pessimistic.
[][][][][][][][][][][][][]
Modern portfolio theory holds that the marketplace demands a higher rate of return from higher risk investments. This has proven true for the stock market, which has historically outperformed most other forms of investments, but at the cost of subjecting investors to greater volatility or risk. Risk is defined as the variability of an investment's returns over time.
Between 1929 and 2006, there have been 14 bear markets, periods when the S&P 500 has fallen at least 20%. The average bear market caused stock prices to decline 39%. Omitting the 1929 crash, when values declined 87%, there was still an average loss of 33%. During those 70 years, a new bear market began on the average of every five years, and lasted 17 months. After the bear market bottomed, omitting the 1929 crash, it took an average of 3.5 years just to break even.
Studies of market indices over the past 70 years show that active managers can actually be on the wrong side of the market nearly 40% of the time and still equal a buy-and-hold return. In other words, the manager could miss 20% of a major up move in the market, participate in 20% of the drop and still equal the S&P 500 due to a phenomenon known as the buy-and-hold equalizer. (Why Market Timing Works, Journal of Portfolio Management, Summer 1997)
The equalizer represents the increased leverage an active investment strategy gains by preserving capital during a market drop. The more money an investor has to invest when the market turns up, the greater the performance leverage. Investors can outperform a buy-and-hold strategy even if they don't participate in the strongest times, as long as they escape major market declines.
-
How would buy-and-hold theory apply to a guy whose stock is de-listed during the 30-year period? He's left holding a piece of worthless paper in his hands. It'll never go up or down again.
Also, your theory seems to put aside the 1929 crash and not factor it into any of your conclusions. The very crash that led to the push for social security is turned into a non-event? If SS was delivered to guard against events like another 1929 crash, why calculate the risks of alternatives to SS by factoring out the very thing that inspired the need for SS in the first place? You've basically cut the raw data of your calculations to deliver the result you're looking for.
-
This is so aggravating.
What do you mean by "Stock Market?"
Are you including bonds, loan swaps, futures, forwards, commodities, currency exchange, etc?
You realize that mutual funds often include bonds which aren't traded on the exchange market, but on the bond market? So do you include mutual funds in this query?
It is complicated because the nature of the discussion is complicated, Sirs.
Where is this laundry list of folks who have left their money in the Stock Market (the U.S.) for 30+ years, and had less at the end of that time, than when they started??
Three points:
1. Ask those people who had profit sharing retirement accounts in Enron or World Com. They have less than they started with.
2. The question is simple, and also useless. You need to add the clarifier "in real terms" at the end of it. Simple inflation dictates that one should have more money now than when they started in 1978. Yet, if it hasn't kept pace with inflation then it is absolutely useless.
3. You missed my point about the goal of Social Security, which is not to enrich Wall Street brokers nor is it to fluctuate with the market.
-
<<It's actually quite simple Tee, though I understand why you, Js, and Xo are trying to muddy it up as much as posible. Where is this laundry list of folks who have left their money in the Stock Market (the U.S.) for 30+ years, and had less at the end of that time, than when they started?? >>
If you're looking for a laundry list from me, forget about it. I already told you I don't have one. There are such things as privacy laws and unless an investor wants to publicize his own stupidity, you won't hear about it from him. As I said, if anyone has a different life experience than mine, I'd love to hear about it. Anyone out there have friends who admit "I left $300,000 in the market for 30 years and when I went to take it out there was only $20,000 left?" Anyone? Anyone?
You managed to demonstrate with that one question both your naivete and your lack of imagination. If one piece of information (the laundry list) is not available, you want to abandon all attempts to solve the problem. Other more resourceful people than you, will look at the problem and think, what other relevant information IS available, that might shed some light on this? Granted a laundry list would be ideal, but in the absence of the ideal, is there any information which might shed some light on the problem? I found some and plane found some. If plane's information holds up, it's obviously stronger evidence than mine. I make no apologies for that - - I went with the best data I had, plane had better data. That's what this club is all about, exchange of information and views.
However even if plane's theories are correct and any 30-year period shows all representative indexes staying even or rising, you have another HUGE bump in the road to get around: where is the evidence that all or even a majority of American investors are going to go with the market average? Common sense and experience say that some will meet the average, some will exceed it by big or small margins and some will undershoot it by big or small margins.
<<Something to validate the continued egregious demagoguging of the notion of allowing the OPTION of some folks to invest a mere FRACTION of their OWN SS $$$ . . . >>
And what would that "mere fraction" be?
<< . . . into a system that has yet to be demonstrated by anyone on the left, that leaving it there for similar amount of time that SS is kept, will be some sort of economic catastrophe>>
Well it's sure as hell a catastrophe for someone who can't pay his bills after retirement because the stock market beat him. Although of course that won't be YOUR problem and it won't be Bush's either.
<<In other words, you have nothing, but your preconceived notions of how bad capitalism & the U.S., are supposed to be.>>
No, what I have is my knowledge based on personal experience that the number of investors who do well in the stock market seems to be much lower than the number who did well in real estate, and that whereas many uneducated and unsophisticated people seem to have done well in real estate, only a small number of exceptionally street-smart and savvy people seem to have done well in the stock markets.
Something else that just occurred to me: a majority of good stock market investment decisions can be wiped out by one bad one. True, if plane's theory holds true, thirty years will wipe out the effects of the bad one (if you don't factor in possible disasters like the 1929 crash, the very reason for SS in the first place.) But a guy who's cashing in at retirement doesn't HAVE thirty years. He needs the money when he retires, not thirty years down the road.
Your plan is a big fucking rip-off in the making and it should be obvious to every thinking person. Even if it's only a "fraction" of retirement savings. If Wall Street can get its hands on 30% of the nation's retirement savings instead of 100%, so that's OK, they'll just rip off the 30% if they can. It's a bonanza for them any way you slice it. Bush, Cheney and the people who back them don't give a shit about anyone. Not about Amerikkkan soldiers, whose lives they throw away for oil (or "Iraqi democracy" as they like to call it.) Not about Hurricane Katrina victims. Bush is a guy who openly laughed at and mocked the pleas of Karla Faye Tucker for her life. Can you imagine it? He's making fun of a condemned woman pleading for her life? But these guys also have a soft spot in their hearts, and it's reserved for YOU, the American worker. They want you to have a better retirement. Isn't that touching? And you can have that better retirement, just by investing your SS money, not with the big, bad U.S. government, but with their friends on Wall Street, those wonderful, good people who have so vigilantly guarded their investors' money lo these many years, sparing no effort to see that it would be protected against frauds, and con artists. Oh and don't worry, you don't have to give them ALL of your retirement money, 30% will be just dandy. See how we look after you? See how we care?
The level of stupidity required for this kind of thinking is just plain mind-boggling. But I can't say that I'm surprised in any way. Wish that I could. I say, if the Amerikkkan sheeple are so fucking stupid as to go along with this obvious rip-off from an administration which lies to them on a routine basis, then go ahead and just do it. You (the sheeple, sirs, not you personally) will deserve anything and everything that happens to you as a result.
-
This is so aggravating. What do you mean by "Stock Market?"
Simple, for those not trying to make this topic aggravating.......any examples of those who have invested within our Stock Market for 30+years, and came out with less than they put in. They could have applied it in mutual funds, commodities, what-ever. The point being not what specific derivatives of the Market, but the time allotted.
And it's not any more complicated than that, especially to prove the point being made.....that the left has zip examples apparently of anyone keeping an investment in some selected vestages of the Stock Market, and having less at the end, than when they started. Sure there are those who put "all of their eggs" in 1 basket, and then that 1 investment crashes where they lose everything. That's NEVER been discussed as one of the plans to reform SS, and not even worthy of discussion. This query is consistent with the plans that were being presented, regarding the option younger workers would have in being allowed to invest a mere FRACTION of their payroll tax/SS, into selected derivatives of the Market.
-
Roger Boyce, 71 and Dale Roberts, 54 - http://www.usatoday.com/money/industries/energy/2006-01-25-enron-employees-usat_x.htm
Dan Gannon, 60 - http://www.kvue.com/news/state/stories/032107kvueenronpowerball-eh.dc12b6.html
(This one has a twist - he won $182 million in the Powerball lottery ;) )
Lisa Brown's retirement fund fell from $45,000 to $210 from Worldcom's debacle. That was a 99.5% drop in value. You are suggesting that her $210 is going to recover its value in real terms before she retires? I'm not talking about putting new money into it. I'm talking about that original $210. It is going to recover the value it had ($45,000) plus the value of inflation, plus some positive value in returns, in the span of 30 - t (the years it took her to build it to $45,000) years?
I've provided the names and the data, now you answer my question Sirs.
-
It isn't wise to invest all of the retirement in a single company , or even a single type of company.
Someone who buys an index fund risks a lot less than someone who buys a single stock, the best choice is several index funds , and then the risk is spread as widely as it can be over the economy and only a general failure of the economy would cause true loss.
That makes a good base and safe nest egg , investing also in something more speculative is a good idea for people who can stand the risk of loss and inevitability of flux.
Investment in government lone is the opposite of diversification , it bears safety only in the surety of the government keeping its promises , why is that sure? Because reneging on those promises will be politically unpopular? These promises were made to be popular not to be possible to keep. The mathematical inevitability of Social security's failure can be demonstrated ,arithmetic doesn't care whether it is popular or not.
[][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][]
On the point of the 29 crash , being the worst event of its kind during the century it is fair to compute advrages while leaving the spike out , because that gives one a better idea of normal conditions. However if one computes the figures including the 29 crash surprisingly little changes . Someone who bought a share of every stock on the NYSE at the high shortly before the crash and simply held it all would have made all of his loss back in less than ten years.
[][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][][]How would buy-and-hold theory apply to a guy whose stock is de-listed during the 30-year period? He's left holding a piece of worthless paper in his hands. It'll never go up or down again.
Only a real clairvoyant should put all of his eggs in one basket . Some companies are going to fail even in very good years. Someone must suffer loss because they bought buggy whip manufacturers , this just has to happen. Forcing people to participate in a Ponzi scheme run by the government is no solution to the "problem" because t isn't a problem.
What should happen is that Mutual funds should become the most popular means of investment and , voila' they are. More is invested in Mutual funds than any other sort o investment availible to the general public. It is a truism to say that more is invested in mutual funds than in Social Security , nothing is invested in Social Security.
-
I am not opposed to investing in the stock market at all. In fact, over the years I have paid about $55K to SS, and three times as much into a constantly changing assortment of mutual funds. But he fact is this: SS is a retirement plan, not an investment. When I start collecting from SS, it will continue to pay me until I die. Whether my investments will do this is not guaranteed as is SS. Had the 65K I had invested in SS in mutual funds, I might have more money or less, depending on the investments I might have chosen fifty years ago. Most Americans have no useful knowledge of the stock market, mutual funds or investing, as nothing about this is taught normally in school, and most people seem to gain a very superficial knowledge from salesmen interested in their commission and rather brain-dead magazines, such as Money.
The government-run TSA plan is probably a good idea for the average person, and I would have chosen it over SS for at least some of my SS contributions had I been given a choice around the age of 40, but I have never been given a such a choice. It would cost the government a huge amount to allow such transfers at the present time, and I do not foresee this happening.
TSA is quite a bit different from the vast array of investment possibilities in the Stock Market, by the way. It is diversified and a lot more conservative than most of the advice one will get from a broker.
In 1990 when my father died, I inherited some money and decided to invest it with a cousin of my father's, who was a successful broker. I followed his advice, investing in Homestake Mines, GTE, Unisys preferred and even Enron. After two years, and making a lot in GTE, some in Homestake and Enron, and losing too much on the Unisys preferred, I had an annual profit of about 6.5%. On the other hand, the money in my IRA, invested in the Lindner Fund, earned an average 13% with no fluctuations, commissions, or discounts, and it was then I decided that individual stocks were a poorer choice than mutuals and I sold them and put the money in no-load funds.
The newsletter that my cousin the broker's firm sent me was typical: every month, it would rate a small assortment of stocks as buy, hold or sell. But this was always the same mix: 85% buy, 15% hold and 5% sell. This is unrealistic, as the buys and sells should be close to the same. But what was really happening is that the brokerage owned just these stocks in the company name, and shifted them from one investor to another, thereby never paying any Wall Street fees, but always charging the customer for every damn thing. In truth, the fees were less than half of Merrill Lynch, but they were way higher than I now pay Scottrade, and the advice was for the birds.
I estimate that had I continued to follow the advice given by this firm (which was bought and rebought several times, and is now called The Principal) I would have about a quarter as much money as I have now from investing in my various mutual funds.
-
"When I start collecting from SS, it will continue to pay me until I die."
If this were true , I would have no complaint.
I suppose you can make it true , by not liveing too long.
But the government has not got what it takes to make it true for everyone enrolled.
-
Roger Boyce, 71 and Dale Roberts, 54 - http://www.usatoday.com/money/industries/energy/2006-01-25-enron-employees-usat_x.htm
Dan Gannon, 60 - http://www.kvue.com/news/state/stories/032107kvueenronpowerball-eh.dc12b6.html
(This one has a twist - he won $182 million in the Powerball lottery ;) )
Lisa Brown's retirement fund fell from $45,000 to $210 from Worldcom's debacle.
I've provided the names and the data, now you answer my question Sirs.
Actually Js, you haven't. You provided some names of folks who did precisely what I referred to as would not be occuring with current SS reform dialog....putting one's eggs all in 1 basket, no diversifying, no leaving it in for a period of 30+years, no nothing of what was asked of. So, no you haven't answered the query in any way. But by all means, there must be some examples of how terrible this system must be to those who are in it for the long haul, like what people are required to do for SS
-
. But by all means, there must be some examples of how terrible this system must be to those who are in it for the long haul, like what people are required to do for SS
Sirs
Is it your point that successfull investing on the stock market is not very difficult?
-
But by all means, there must be some examples of how terrible this system must be to those who are in it for the long haul, like what people are required to do for SS
Sirs Is it your point that successfull investing on the stock market is not very difficult?
Not exactly......my point is that if left alone, like SS, in a diversified portfolio of selected funds, the stock market returns will be substantially greater than that of what SS would return. Especially considering that at the current rate, SS will be going bankrupt....there will not be enough workers to pay for those that'll become eligible for SS. The fact that no one can demonstrate to the contrary pretty much proves that point
-
Investing in the stock market can be quite easy, but most small investors lose money, so it isn't easy for the majority of those who try it.
You need to diversify a lot, and this takes a minimum of $100K if you use individual stocks and even these much be very carefully chosen. The best way to do this is to invest in a S&P 500 index fund with a no-load company such as Vanguard or Fidelity. Most people will never even be aware that they can buy a no-load fund directly from the company, or even that such funds exist. Instead, they will invest in individual stocks, pay a lot in commissions, and probably lose.
Saying that Social Security IF LEFT ALONE will go 'bankrupt' is not a realistic statement, since there will be major political pressure to force the government to rectify problems with SS. There was no such pressure when Juniorbush tried this, because the people did not trust him (why would anyone trust this lying geek?) and the situation is not critical, although by fighting a war on credit, Juniorbush has done more than any other president to destroy the financial reputation of the US.
Bankrupt is not something governments do the way individuals do, so the term is basically just a scary word here, and SS will not be left alone. So you and Plane constantly seem to have this annoying parrot siting on each of your shoulders constantly squawking "Social Security is going bankrupt! Social Security is going bankrupt!, Raaaaak! Wheeet!" only serves to make you annoying, plus it doubtlessly covers your shoulders with unpleasant, yet metaphorical birdsh*t.
There are fixes that can and will be made to Social Security once the proper people are elected. These proper people would not be Republicans in the pockets of hungry and greedy brokerage companies or lying geeks like Juniorbush, since they WANT the system to fail and will do everything in their power to insure that it does.
-
Roger Boyce, 71 and Dale Roberts, 54 - http://www.usatoday.com/money/industries/energy/2006-01-25-enron-employees-usat_x.htm
Dan Gannon, 60 - http://www.kvue.com/news/state/stories/032107kvueenronpowerball-eh.dc12b6.html
(This one has a twist - he won $182 million in the Powerball lottery ;) )
Lisa Brown's retirement fund fell from $45,000 to $210 from Worldcom's debacle.
I've provided the names and the data, now you answer my question Sirs.
Actually Js, you haven't. You provided some names of folks who did precisely what I referred to as would not be occuring with current SS reform dialog....putting one's eggs all in 1 basket, no diversifying, no leaving it in for a period of 30+years, no nothing of what was asked of. So, no you haven't answered the query in any way. But by all means, there must be some examples of how terrible this system must be to those who are in it for the long haul, like what people are required to do for SS
So, you aren't giving people the freedom to invest how they like? You are still directing them on where to invest?
-
So, you aren't giving people the freedom to invest how they like? You are still directing them on where to invest?
=========================================================
There is no way that the government can ethically allow people to invest in "what they like". Some would like to invest in a small arms collection, others perhaps in baseball cards, beanie babies, kewpie dolls, '64 mustangs, vintage marijuana, Airstream trailers and Nazi memorabilia , all of which have been known to appreciate in value at one time or another.
If indeed people are permitted to invest their SS money, no matter what the persuasion of those writing the laws regarding this, there will be some restrictions.
-
Roger Boyce, 71 and Dale Roberts, 54 - http://www.usatoday.com/money/industries/energy/2006-01-25-enron-employees-usat_x.htm
Dan Gannon, 60 - http://www.kvue.com/news/state/stories/032107kvueenronpowerball-eh.dc12b6.html
(This one has a twist - he won $182 million in the Powerball lottery ;) )
Lisa Brown's retirement fund fell from $45,000 to $210 from Worldcom's debacle.
I've provided the names and the data, now you answer my question Sirs.
Actually Js, you haven't. You provided some names of folks who did precisely what I referred to as would not be occuring with current SS reform dialog....putting one's eggs all in 1 basket, no diversifying, no leaving it in for a period of 30+years, no nothing of what was asked of. So, no you haven't answered the query in any way. But by all means, there must be some examples of how terrible this system must be to those who are in it for the long haul, like what people are required to do for SS
So, you aren't giving people the freedom to invest how they like? You are still directing them on where to invest?
That WAS the plan being advocated, despite the egregious distortions of how supposedly this was some form of all or nothing plan. What?, now you're NOT a proponent of the government running things? Personally, I would have advocated more freedom, but alas, Bush's reforms only allowed a mere fraction of one's SS $'s, being applied to several pre-selected avenues of investment. One's I can only assume considered reasonably safe & secure over the long haul
-
So, you aren't giving people the freedom to invest how they like? You are still directing them on where to invest?
The plan Bush proposed only allowed investment in a pre-selected group (selected by the government) of diversified mutual funds.
-
So, you aren't giving people the freedom to invest how they like? You are still directing them on where to invest?
The plan Bush proposed only allowed investment in a pre-selected group (selected by the government) of diversified mutual funds.
So only certain investment groups would make a fortune?
That sounds even worse. Pure corporatism, I can see why Sirs is in love with the idea. There's still no freedom, and specific groups make a fortune. Nice.
-
So only certain investment groups would make a fortune?
That sounds even worse. Pure corporatism, I can see why Sirs is in love with the idea. There's still no freedom, and specific groups make a fortune. Nice.
No; you could continue to leave your money in the current treasury bonds and hope you get your money back when you retire.
That's what "optional" means.
-
The plan Bush proposed only allowed investment in a pre-selected group (selected by the government) of diversified mutual funds.
So only certain investment groups would make a fortune?
That sounds even worse. Pure corporatism, I can see why Sirs is in love with the idea. There's still no freedom, and specific groups make a fortune. Nice.
=========================================================================
Actually, the mere fact that only this pre-selected group of funds would be permitted would tend to insure that precisely these funds would be low-yield, because the fact that they were pre-selected would prevent the usual competition from the marketplace to forsce a higher rate so they would compete. With no competition, the ,market produces mediocrity, and no one would make any fortune.
-
Thanks, Ami, for pointing out that the government still exerts considerable control over the SS funds "optionally" invested in the stock market. As I now understand the choice, it's really a no-brainer:
1. Put all of your money in Treasury bonds, backed by the government of the United States of America; or
2. Put some of your money into Treasury bonds and the rest (I'm already starting to laugh here) into a basket of securities (gov't-selected diversified mutuals) and hope for the best.
First of all, and I could be wrong here, I cannot see the U.S. government defaulting on any of its SS obligations. There is no doubt in my mind that the potential to raise any shortfall by a combination of increased income taxes on the rich, inheritance tax, taxes on accumulated capital, luxury and so-called sin taxes would be painful for the wealthy owners of the Republocrat Party, but would be a necessity that they will not be able to avoid. Not only for the sake of the pissed-off pensioners, all of whom can vote, but also for the very credit of the U.S. government in international markets. A government which lacks the resources to pay its own pensioners is a government that is one step away from bankruptcy. Whatever confidence is left in the U.S. dollar at that point in time (and, frankly, it won't be much) would simply evaporate overnight, were such a default to occur.
I seriously doubt that any basket of government-selected diversified mutual funds would out-perform social security investments by any significant amount, especially when netted out after commissions, management fees, etc., but even if it did, the net gain would affect only a fraction of the investor's total SS-invested retirement capital anyway. Not only that, but since the net gain itself is only being pursued for investment purposes, you're effectively looking at the interest on the net gain over the retiree's lifetime. NOT a hell of a lot at stake here. Some risk involved for gains that I really can't see as significant.
From the POV of Wall Street, OTOH, this is a real bonanza. Billions pumped into the markets, the fresh flow of capital cushioning any shocks the funds might otherwise feel from market fluctuations and maintaining a momentum that previously had been sustained only by individual investors cherry-picking their way through a whole orchard of funds. The jockeying to get into that basket could become intense, leading to a fiesta of bribery, nepotism, cronyism, junketing and good, old-fashioned American corruption in general that we all have come to know and love. Which is not all that distasteful to any of the regulars inside the Beltway.
This is, all in all, a pretty tasteful rip-off. Not an Enron- Worldcom-style rip-off that leaves the victims bleeding to death on the bathroom floor, just little, survivable bites from millions of investors, generating a steady investment stream from which all the usual profit is there to be made - - commissions, management fees, opening fees, close-out fees and all the tie-ins that the mutual funds in the basket can sell to their captive audience - - credit cards, prepaid funerals, life insurance with no medicals, etc. And if the investors are really fortunate, who knows? there might even be a modest return on investment waiting for them at the end of the road (although I really don't believe that there will.)
-
I seriously doubt that any basket of government-selected diversified mutual funds would out-perform social security investments by any significant amount, especially when netted out after commissions, management fees, etc.
ROFL
The Treasury Bonds that the current SS funds are "invested" in return like 3%.
That would be pitifully poor showing for mutual funds, who routinely, after fees, return at least 6% and more like 10%. A really good fund will return even more.
-
Roger Boyce, 71 and Dale Roberts, 54 - http://www.usatoday.com/money/industries/energy/2006-01-25-enron-employees-usat_x.htm
Dan Gannon, 60 - http://www.kvue.com/news/state/stories/032107kvueenronpowerball-eh.dc12b6.html
(This one has a twist - he won $182 million in the Powerball lottery ;) )
Lisa Brown's retirement fund fell from $45,000 to $210 from Worldcom's debacle.
I've provided the names and the data, now you answer my question Sirs.
Actually Js, you haven't. You provided some names of folks who did precisely what I referred to as would not be occuring with current SS reform dialog....putting one's eggs all in 1 basket, no diversifying, no leaving it in for a period of 30+years, no nothing of what was asked of. So, no you haven't answered the query in any way. But by all means, there must be some examples of how terrible this system must be to those who are in it for the long haul, like what people are required to do for SS
So, you aren't giving people the freedom to invest how they like? You are still directing them on where to invest?
People could volentarily invest in almost anything just as now.
Yes, there would be a short list of choices and all of the choices would be diversified funds
The diffrent funds could be specialist in certain sectors of the economy , but there would be no baseball card or commodity future type investents in the mandated investment scheme.
More importantly there would be no Ponzi scheme that had current investment as its only sorce of payout.
Saying that Social Security IF LEFT ALONE will go 'bankrupt' is not a realistic statement, since there will be major political pressure to force the government to rectify problems with SS.
How you can beleive this is a mystery to me. I might as well write a check to myself for a zillion dollars , thus makeing myself a zillionaire.
What can political pressure do to prevent the government from reduceing the payout ,when there is nothing in the till ?
If the answer is to raise taxes infinately , I predict political pressure in a difrent direction .
Bill Clinton took action to reuce the COLA by changeing the formula that computed it , the result was a more "realistic " Cola that would tend to rise by a lower perentage evey year , for example if the old formula would have produced a 5% Cola the new COLA would poduce 4%. This might not seem signifigant unless one considers that the diffrence is culumulitive over the years. If it makes 1% diffrence each year ten years down the road the difrence it makes is more than 10%, because the baseline each year is lower than it would have been.
So the promise will be broken , the process is already underway ,but the breaking is done in small stages so that it will be hard to tell exactly when it happened.
-
Roger Boyce, 71 and Dale Roberts, 54 - http://www.usatoday.com/money/industries/energy/2006-01-25-enron-employees-usat_x.htm
Dan Gannon, 60 - http://www.kvue.com/news/state/stories/032107kvueenronpowerball-eh.dc12b6.html
(This one has a twist - he won $182 million in the Powerball lottery ;) )
Lisa Brown's retirement fund fell from $45,000 to $210 from Worldcom's debacle.
I've provided the names and the data, now you answer my question Sirs.
Actually Js, you haven't. You provided some names of folks who did precisely what I referred to as would not be occuring with current SS reform dialog....putting one's eggs all in 1 basket, no diversifying, no leaving it in for a period of 30+years, no nothing of what was asked of. So, no you haven't answered the query in any way. But by all means, there must be some examples of how terrible this system must be to those who are in it for the long haul, like what people are required to do for SS
So, you aren't giving people the freedom to invest how they like? You are still directing them on where to invest?
People could volentarily invest in almost anything just as now.
Yes, there would be a short list of choices and all of the choices would be diversified funds
The diffrent funds could be specialist in certain sectors of the economy , but there would be no baseball card or commodity future type investents in the mandated investment scheme.
More importantly there would be no Ponzi scheme that had current investment as its only sorce of payout.
Plane read your first two sentences:
"People could volentarily invest in almost anything just as now."
"Yes, there would be a short list of choices and all of the choices would be diversified funds."
Don't you see a logical inconsistency there?
And just to be clear, we are talking corporatism here - neoliberal corporatism at that. For example, could you invest in your Trade Union? Could you take the money and donate it to the CPUSA?
No. You can invest in a government selected group of mutual funds, where a select group of investors will make a fortune by receiving a massive infusion of investment capital. Nice...
-
You see Plane, it works like this. We need to criticize and condemn any reform program for allowing the potential that one could lose everything (as implied by the Enron & Worldcom folks), yet equally condemn it for not allowing enough freedom for one to lose everything.
Isn't that nifty, how that works? You would think then, given such extremes in criticizing the same program, there would be some compromise that could be reached in the middle somewhere
???
-
What I'd like to know is how, if government is so devious, incompetent and untrustworthy, it is going to be allowed to pick out the one or two "chosen" baskets of mutual funds which are the only ones the "free to choose" investors are really free to choose?
Does nobody see the potential for government abuse here? Why is this devious, untrustworthy, power-hungry Federal Government suddenly endowed with the wisdom, honesty and probity to pick out which funds its citizens can invest in? Where does the confidence come from that this untrustworthy Federal Government won't put its friends' and supporters' funds into the basket and leave out the funds that have failed to show their support of the administration?
-
You see Plane, it works like this. We need to criticize and condemn any reform program for allowing the potential that one could lose everything (as implied by the Enron & Worldcom folks), yet equally condemn it for not allowing enough freedom for one to lose everything.
Isn't that nifty, how that works? You would think then, given such extremes in criticizing the same program, there would be some compromise that could be reached in the middle somewhere
???
No. That's your typical hit and run style once you've lost the ability to manipulate the framing of the debate, Sirs.
I told you very starkly why I disagree with privatisation of social security. It is not the goal of social security to fluctuate with the market, nor invest in private businesses, nor enrich Wall Street investors. That's it.
That does not mean I cannot appreciate the bizarre aspects of the plan y'all seem so hellbent on endorsing.
You speak of freedom, where there is none. You speak of choice, but there is none. The Federal Government, which you constantly berate, is the very institution that will tell you where you can place the funds. I'm not attacking the plan per se, but the fact that y'all support it so whole-heartedly. I find it humorous. "Freedom?" Hell, you couldn't even take the money and invest it in futures, foreign currency, or commodities. No, it must to be from a range of selected mutual funds. This from the same people that went ape shit over "Hillary Clinton won't let you select your own doctor" back in 1993!!
No. I gave my reason for opposing social security privatisation, but that doesn't preclude me from enjoying the many portrayals of Janus that are taking place in here.
-
You see Plane, it works like this. We need to criticize and condemn any reform program for allowing the potential that one could lose everything (as implied by the Enron & Worldcom folks), yet equally condemn it for not allowing enough freedom for one to lose everything.
Isn't that nifty, how that works? You would think then, given such extremes in criticizing the same program, there would be some compromise that could be reached in the middle somewhere
???
No. That's your typical hit and run style once you've lost the ability to manipulate the framing of the debate, Sirs.
Hit & run style?? Naaaa, the framing was clear cut......show us examples of folks who left their $$ in the stock market for 30+ years and came out with less. Fact is, nithing has been shown of such, with the only "examples" that of those putting all their investment $$ into 1 basket, and losing that 1 basket. That never was even a remote possibility with the reform being discussed, despite Lanya's and your efforts at implying such. Then when that is demonstrated to be the case, you quickly revert to the other extreme in criticism,...now there's not enough freedom in doing choosing.
Trying to have it both ways, and getting your hand caught in the cookie jar is the more accurate scenario. But more to the point, where's the medium in your criticisms? At what point is their enough freedom to provide better returns than the bankrupting train of SS, but enough Government oversight to prevent SS induced Enrons?
-
You see Plane, it works like this. We need to criticize and condemn any reform program for allowing the potential that one could lose everything (as implied by the Enron & Worldcom folks), yet equally condemn it for not allowing enough freedom for one to lose everything.
Isn't that nifty, how that works? You would think then, given such extremes in criticizing the same program, there would be some compromise that could be reached in the middle somewhere
???
No. That's your typical hit and run style once you've lost the ability to manipulate the framing of the debate, Sirs.
Hit & run style?? Naaaa, the framing was clear cut......show us examples of folks who left their $$ in the stock market for 30+ years and came out with less. Fact is, nithing has been shown of such, with the only "examples" that of those putting all their investment $$ into 1 basket, and losing that 1 basket. That never was even a remote possibility with the reform being discussed, despite Lanya's and your efforts at implying such. Then when that is demonstrated to be the case, you quickly revert to the other extreme in criticism,...now there's not enough freedom in doing choosing.
Trying to have it both ways, and getting your hand caught in the cookie jar is the more accurate scenario. But more to the point, where's the medium in your criticisms? At what point is their enough freedom to provide better returns than the bankrupting train of SS, but enough Government oversight to prevent SS induced Enrons?
Why privatise at all? We can have a perfectly stable Social Security fund and there are many solutions to do so. More importantly, these solutions will not deviate from the legal goal of social security. They will not create market distortions either, as your supported corporatist model would. We don't have to panic and enact any knee-jerk legislation. We can lift the cap on payroll taxes of those who make more than $97,000 and there are other steps that will lead to solvency. And in this way we will not require enriching select Wall Street investment firms.
-
...the framing was clear cut......show us examples of folks who left their $$ in the stock market for 30+ years and came out with less. Fact is, nithing has been shown of such, with the only "examples" that of those putting all their investment $$ into 1 basket, and losing that 1 basket. That never was even a remote possibility with the reform being discussed, despite Lanya's and your efforts at implying such. Then when that is demonstrated to be the case, you quickly revert to the other extreme in criticism,...now there's not enough freedom in doing choosing.
Trying to have it both ways, and getting your hand caught in the cookie jar is the more accurate scenario. But more to the point, where's the medium in your criticisms? At what point is their enough freedom to provide better returns than the bankrupting train of SS, but enough Government oversight to prevent SS induced Enrons?
Why privatise at all?
Because
a) the current SS system is going to go bankrupt, sooner rather than later...it NEEDS reformed
b) Katrina
c) it's egregiously unfair & UNETHICAL to try and make others ("the rich") make up the shortfall, when they've already been taxed on the same thing
d) you have yet to provide any examples of folks who have invested in a diverse portfolio, within the Stock Market, for 30+years and came out with less than when they started. On the contrary, as Ami has pointed out, even the most safe of diverse mutual fund arrangements will produce nearly DOUBLE what SS generates