The Long View, Ignoring the noise, and staying the course

[Tim]

I don’t regard myself as being especially wise, nor as blindly nationalistic or patriotic. But, I can tell you that my impression of America in late 60’s and early 70’s was much more worrisome than today. Don’t bet against the continued future and success of the U.S.

https://youtu.be/MdWGp3HQVjU
I was a child of the late 60’s and early 70’s..
Maybe you were too.
At the time what was your concern? We’re you worried and unhappy? Was it inflation and high interest rate? There was more concern (as I remembered) about the long haired, freelove, hippy pot smoking acid dropping college generation influenced by Timothy Leary and communes.
What has changed?
Laws of nature - drastic improvements
Laws of human nature- not so much
Governments make decisions on power and information. The choice came down to artificial line, North and South Vietnam. Political was can’t fight in the North. Was it correct? Maybe. No one dropped nuclear weapons.
I do think the political games have changed. Those decisions have me worried. I don’t like interest rates set by a government bureaucracy.
BTW, North and South Vietnam seem to be doing fine. They may not have the same opinion.

The short version, depends on the point of view.
Hindsight is much more accurate. Just a law of human nature.

[Random1]

I was young in the 70s, I remember the gas lines , but that was about it, we never traveled much. Most of our lives was limited to being in a small town. I am sure my parents were stressed financially but I did not see it. I think what is different this time, is the constant barrage of news and other information, Now you can instantly see what is instant raising of gas prices, the multitude of negative comments, almost instant pictures of bombs hitting women and kids. So, what has changed the the instant availability of information which creates and reinforces the negative psychological impact

[Nysoz]

For the average physician and long term goals, I do agree there shouldn't be any change for now. There's quite a few issues out there that may take months or years to play out which may lead to flat or down years. But over 20 years, as long as the US is the world's power/reserve currency, then everything 'should' be fine.

For people close to FIRE, the next few years may have slowed down plans a bit and may require a few more years of work or planning. To hit previous goals set, may need additional risk/leverage, but if you're willing to work more years, shouldn't be an issue.

Personally, I'm not changing my overall plan either (as different as it is). I've gone from fatFI to obeseFI and back to fatFI in the past 6 months. I did have a realization of not needing to chase 100-400% gains for the next 10 years for my low key goals of being a billionaire lol. Instead my goal now is to have a more 'realistic' goal of 0.5%+ in cash flow/premium a week and adjusting my level of risk/leverage. My overall portfolio/net worth may not increase by that much if the underlying holdings keep going down, but over the long run should continue to even things out a little at least and provide cash flow for spending/reinvesting.

[Kennyt7]

Look if your time horizon is greater than 10yrs there is not much to worry about
NEARING RETIREMENT-you had better DERISK your portfolio as every pre-retiree should do

[VagabondMD]

I was young in the 70s, I remember the gas lines , but that was about it, we never traveled much. Most of our lives was limited to being in a small town. I am sure my parents were stressed financially but I did not see it. I think what is different this time, is the constant barrage of news and other information, Now you can instantly see what is instant raising of gas prices, the multitude of negative comments, almost instant pictures of bombs hitting women and kids. So, what has changed the the instant availability of information which creates and reinforces the negative psychological impact

I also was a child in the 70's, remember gas lines, high inflation, etc. Even my orthodontist father was very concerned. One of his offices was located in a steel town. The mill was shut down, and his clientele went from having middle class union jobs to being unemployed and on Medicaid.

I agree with the barrage of negative news and opinions and how it affects one's psyche and outlook. Sure we can turn off Twitter, but it is hard to look away. The images and firsthand, real time accounts of dead women and children lying in the streets is jolting and is affecting worldwide public opinion action. I do not think that 6 million Jews would have been murdered in the age of Twitter.

[Tangler]

Look if your time horizon is greater than 10yrs there is not much to worry about
NEARING RETIREMENT-you had better DERISK your portfolio as every pre-retiree should do

Agree, near retirement and soon after you need a mechanism for dealing with potential SORR.

For me that is 3-5 years worth of cash in taxable. For others it is something else.

If you can live off of your cash for 5 years, IMO you can take more risk with your IRA money.

This is my opinion: Cash bucket + stock bucket = most of the money during retirement. Why few bonds?

Others disagree but my simple thinking is as follows:

1. I am nearing retirement and SORR is a real thing so we are saving 3-5 years worth of spending in cash in taxable (300-500k).

2. I don't need my IRA money for >20 years (so we put it into stock index funds: 70:30 usa: international) (cash bucket allows more risk here)

3. Why so few bonds?

Multifactorial:

-Inflation is bad (stock funds compete with inflation but bonds won't keep up).

-Interest rates are rising,

-Bond yields stink.

In 10 years if rates are 7% then sure will look at a VG total bond fund but for now will just keep buying I-bonds.

We do own some I-bonds (like it) but it is not enough to move the needle.

I might be foolish but I am stubborn & tenacious. I'm not going to panic sell.

I might feel sick / sad about the state of the world but I will stay the course. It will be a bumpy ride.

[Tangler]

I also was a child in the 70's, remember gas lines, high inflation, etc. Even my orthodontist father was very concerned. One of his offices was located in a steel town. The mill was shut down, and his clientele went from having middle class union jobs to being unemployed and on Medicaid.

I agree with the barrage of negative news and opinions and how it affects one's psyche and outlook. Sure we can turn off Twitter, but it is hard to look away. The images and firsthand, real time accounts of dead women and children lying in the streets is jolting and is affecting worldwide public opinion action. I do not think that 6 million Jews would have been murdered in the age of Twitter.

Well I hope there is something good that twitter does.



Had another guy (brother's brother-in-law) (teacher who lives in south Louisiana) call me today wanting to panic sell his stocks.

Interesting and sad. Poor guy needs to turn off the news more than I do.

He teaches agricultural stuff at a local junior college and he is in a community supported by the oil industry and farming.

I told him. Hang in there! Do not panic sell! Hold on brother! Stop watching the news!

[Lordosis]

Does anyone actually watch the news? Like tune the tv to a news station? My grandparents do but they are in their 80s. I see it sometimes on in waiting rooms or the cafeteria. But I cannot remember the last time I watched the news. Radio maybe? When I hear something interesting or important I will look it up online. I still read Morning Brew daily but that is mostly financial.

[artemis]

I watch the news - when I am working out on a treadmill at the gym and that's what is playing on the TV. Like everybody else I know, I get my news mostly online these days.

[Tangler]

Does anyone actually watch the news? Like tune the tv to a news station? My grandparents do but they are in their 80s. I see it sometimes on in waiting rooms or the cafeteria. But I cannot remember the last time I watched the news. Radio maybe? When I hear something interesting or important I will look it up online. I still read Morning Brew daily but that is mostly financial.

When I mention "turn off the news” I mean the stream of depressing stuff that flows at us nonstop via phone, computer, TV, radio etc.

As for TV, I very rarely watch it. Sometimes football but now it is mostly streaming and mostly what my wife wants to watch (cooking shows etc.).

Cable news on TV? Not in years, but I did make the mistake of turning it on after the war started.

Lordosis......you are making me feel like an old dude.

I remember when everyone watched the news. For me, almost all news is online. podcasts, etc. Still sad.

[Lordosis]

When I mention "turn off the news I mean the stream of depressing stuff that flows at us nonstop via phone, computer, TV, radio etc.

As for TV, I very rarely watch it. Sometimes football but now it is mostly streaming and mostly what my wife wants to watch (cooking shows etc.).

Cable news on TV? Not in years, but I did make the mistake of turning it on after the war started.

Lordosis......you are making me feel like an old dude.

I remember when everyone watched the news. For me, almost all news is online. podcasts, etc. Still sad.

I know what you meant. But it got me thinking about the TV news.
I guess people get a lot from social media these days as well. Real or fake...

[Kamban]

Does anyone actually watch the news? Like tune the tv to a news station? My grandparents do but they are in their 80s. I see it sometimes on in waiting rooms or the cafeteria. But I cannot remember the last time I watched the news. Radio maybe? When I hear something interesting or important I will look it up online. I still read Morning Brew daily but that is mostly financial.

The only time my wife watches the news on TV is when we have a snow alert or if a hurricane is heading the SC coast. I get my news here and on the net.

[Tangler]

The only time my wife watches the news on TV is when we have a snow alert or if a hurricane is heading the SC coast. I get my news here and on the net.

I remember when the mainstream media was excellent.

NYT was superb.

CNN coverage of first gulf war was amazing.

Nightly news had broad appeal.

Critical stories were well researched.

Over the last 10 -20 years it has become increasingly partisan and disturbing.

Quality and integrity as well as balance have diminished.

Echo chamber amplification is easy, real journalism is a challenge.

[Dusn]

I remember when the mainstream media was excellent.

NYT was superb.

CNN coverage of first gulf war was amazing.

Nightly news had broad appeal.

Critical stories were well researched.

Over the last 10 -20 years it has become increasingly partisan and disturbing.

Quality and integrity as well as balance have diminished.

Echo chamber amplification is easy, real journalism is a challenge.

“Real journalism” does not work financially in the internet/social media age. They get paid with advertising clicks and subscriptions from people who want to hear a viewpoint that agrees with their larger world views and self-interests.

If we believe in a capitalist economy, the journals are just following it. The problem is with the readers.

[Antares]

Agree, near retirement and soon after you need a mechanism for dealing with potential SORR.

For me that is 3-5 years worth of cash in taxable. For others it is something else.

If you can live off of your cash for 5 years, IMO you can take more risk with your IRA money.

This is my opinion: Cash bucket + stock bucket = most of the money during retirement. Why few bonds?

Others disagree but my simple thinking is as follows:

1. I am nearing retirement and SORR is a real thing so we are saving 3-5 years worth of spending in cash in taxable (300-500k).

2. I don't need my IRA money for >20 years (so we put it into stock index funds: 70:30 usa: international) (cash bucket allows more risk here)

3. Why so few bonds?

Multifactorial:

-Inflation is bad (stock funds compete with inflation but bonds won't keep up).

-Interest rates are rising,

-Bond yields stink.

In 10 years if rates are 7% then sure will look at a VG total bond fund but for now will just keep buying I-bonds.

We do own some I-bonds (like it) but it is not enough to move the needle.

I might be foolish but I am stubborn & tenacious. I'm not going to panic sell.

I might feel sick / sad about the state of the world but I will stay the course. It will be a bumpy ride.

Near retirement, I see it the same way. 5 years of expenses in cash, the rest in a diversified set of index funds. Five years should be enough. Nonetheless, I’d much rather retire into calm market (and global) waters. I don’t get to choose, but at least I have a plan.