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I recommend that everybody takes a look at the work of economist Laurence Kotlikoff. He's done a tremendous amount of work on how people spend over a lifetime. He's concluded that too many people are oversaving (and missing out on spending over prime years) and, much more visibly, too many people are undersaving. For example, for anyone who goes to the gym, look at the people on the treadmills. They're mostly in great shape or skinny--and also the people who need to be on a treadmill the least. The same applies to many people who oversave. Also, I'm not sure that long-term investing works at all. It's easy for a Siegel to come in and study the past and say it'll happen again. Truthfully, the stock market was never intended to be a long-term investment vehicle, especially for the average person. Finally, I'm leery of the projections of people needing $1m+ for a comfortable retirement. There are only $10m millionaires in the world, most of which popped up in the last 20 years and only after going through one of the greatest bursts of global growth in modern times. How many people putting $5k into an IRA annually are going to join them, even with future inflation? How many will even get half-way there?
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Jul 13, 2008 23:29
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I have a hypothetical question for you guys: What if the cumulative return on stocks over the next ten years (complete with peaks and dips) is 0%? This would make for a total annual return from 2000 to 2018 of ~0.2%. Was 'stocks for the long run' worth it?
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Sep 26, 2008 03:42
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When inflation dropped in the 90s the rumor was that the CPI was overstated. However, it's void anyway as the government has changed the way many indicators are determined multiple times over the last century. And just to touch on the conspiracy theory stuff, here's your official resource for musing: http://www.shadowstats.com/ It indicates price inflation, currency deflation, 'high' unemployment, and anemic GDP growth with the differences coming from the new way all of these are measured and massive amounts of credit/leverage.
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Sep 27, 2008 21:18
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burmart posted:I'm having a kid soon and want to start a passive investment in his name on a cheap basis. Essentially, I'm looking into a DRIP. What would be a good company to move this cash into? I'm looking at either JNJ or Disney. I'm open to other suggestions. My first investments as a teenager were in DRIPs--General Electric, IBM, and Home Depot. I cannot suggest a particular stock, but I can endorse the concept.
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Oct 2, 2008 03:35
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