The Stock Market is still a High Risk Investment??

[bleedingheart]

Okay I know that all the pundits on the TV have been trying to convince people that common folk can be rich too if they just invest in the market.

When I was a kid, I recall a radio program where people would call in for advice and once this fellow called in and told the host that he had just inherited $10,000 dollars and he wanted to invest it in the Stock Market. The host asked him if he had any savings and the caller said "no". The host then said that since he had no savings he should put the money in a savings account or a CD and then he went on to say that it was wise to invest in the market only money that you knew you could risk losing.

Today...that has changed...but has the market changed???

Today people put money into 401K's for their retirement...but is the Market a sure thing? Is it a better risk then it was years ago?

Back when, the mantra was..."Diverse Portfolio"...if you had enough money, you were encouraged to diversify your risk. The key was not to put all your eggs in one basket, so people with cash put it in savings, CD's, T-Bills, Stocks, Bonds, Land...etc and they had the comfort of knowing that if all else failed...there would be Social Security as a safety net.

But today...politicians are asking people to risk their safety net as well...

So someone explain to me...Is today's Stock Market a sure thing? I tend not to think so...even if investing in funds...What happened to people's common sense?

[fertilizeonarbusto]

1. I'd stay the fuck out n/t

[wtmusic]

2. The stock market is a sure thing

As sure as anything else in life. But you have to have a time frame longer than 10 years. If you want to get rich quick, you have to win the lotto or invent something really cool.

Best invest when there's "blood in the streets" -- everyone else is losing money. It's also the hardest time (mentally) to invest.

[MsTryska]

7. I agree.

it's not for getting rich quick. and it's not for the faint of heart.

and now is the best time to buy.

[LuckyTheDog]

31. yes

But only invest money you can let sit for 10 years.

[Selteri]

8. Trust me, inventing something cool doesn't mean jack.

I'm an inventor who can't sell his inventions, some of which are perfect for the up and comming retirement glut, yet I can't even get the time of day from most companies.

You don't get anywhere in invention unless you have someone who'll get you in the back door.

[nadinbrzezinski]

3. The market is still high risk

regardless of what copy cock they try to sell ya...

Now the risk also varies by actual stock you hold... some are riskier than others... but the bottom rule of... only invest what you can loose still applies.

It just requires being judcious about it... oh and it is a long term thng

[TreasonousBastard]

4. Yup-- it's risky...

and even more risky for the small retail investor.

If you want a good return on a moderately risky investment, something like an IHOP franchise might be a better idea. Means you actually have to work, though, but it will get you at least a $200,000 income-- maybe a LOT more. Hire a decent manager for 50 grand or so and you don't even have to work.

The stock market is more than simply stock price. Transfer costs, fees, commissions, buyouts, splits, dividends... a lot goes into whether or not you make any money even before taxes. The pros still call it wrong all the time when they have a lot more information than we do and their costs are less.

And don't even think about derivatives and hedging-- things the little guy can hardly do but affect him greatly.

Some people lucked out and got into Polaroid, AT&T, IBM, Microsoft, etc. a long time ago, watched them fly then got out at the right time. Most people now seem to be watching their portfolios slide into oblivion. There just aren't that type of growth companies any more.

I have cousin with an IQ maybe twice mine (and I'm in Mensa!) who aced all the math on the way to a doctorate in engineering. A jen-yoo-wine rocket scientist. Had a brilliant plan to make a fortune in the futures market. Gonna clean all their clocks.

Mathematically, it was perfect, but the market wasn't. Lost a chunk of his life savings before he had the good sense to get out with some money left in the bank.

And he never went back.

[DinahMoeHum]

5. It is no sure thing, and the market is NOT a rational animal. . .

contrary to what the Repukes are trying to make you believe with their tampering of Social Security.

Understand this: there IS risk in all kinds of investing/trading, whether it's in the stock market, futures, gold, bonds, etc. The only differences lie in degree of risk.

I'll say it again: Bush and Co. are trying to make people think that the "free" market out there is a rational animal. Well, IT AIN'T.


:evilfrown:

[Selteri]

6. No, it hasn't changed at all.

The best recommended investment scheme is along these lines.

Let's say you have 100,000 you want to invest and see grow.

30% should go into 'safe' investments, this includes Gold, CDs, Savings accounts, and governmental bonds.

20% should go into 'fairly safe' investments so long as your state has an insurance backup plan (Which is in I believe every state) such as fidelity / Mutual funds they are moderately safe investments, like a 401k that works off the bond market normally, they tend to work average in good times but well in bad times.

25% CAN go into 'risk' investment, like the stock market or the international stock market, at the moment I suggest investing in the English or Netherland stock markets as they are stronger and better run... though they have a recession cycle comming in about 6 years without anything being changed, though a recession cycle for them will be nothing as harsh as America is going through. THeir recession cycle tends to run on the same 15-20 year cycle most finances run on.

25% is best served in what I call 'high risk developement' investment, that's putting it into companies that are starting up that offer things that you want to see or are develoing things that you want to see ion a company, as an example, right now, alternate fuel source companies are in their infancy, but they will explode within the next 15 years.

[0rganism]

9. "they will explode within the next 15 years"

:nuke:
Hehe, not exactly auspicious language when tied to fuel research. ;)

[Selteri]

20. LOL I didn't even think of it in that fashion.

To not sound Alartmist I'll clarify

THe alternate fuels will expand greatly and in many directions of recycling that nobody is expecting.

Used Rubber and unrecycliable Plastics converted into Electricity and Biodeisel

Plant, Animal and human waste (Food included) converted into gasoline/deisel substitutes.

plenty of alternate fuel is already out there, but the investors aren't following up on them because they can't see the forest for the trees.

[MsTryska]

12. I agree with you.....I'm paper trading on a "dream team" portfolio

right now of alternative fuel companies. Plus threw in some early adopters (Ford, GM, Toyota, and the Devil GE) to round it out.....


many of the true altfuel stocks are penny stocks and pink sheets right now...but i'm looking for a few winners to come out of the pile. When i'll have the balls to put my money where my mind is, i don't know. I think i'll come back and re-evaluate in another year or so.

[Yupster]

48. I was with you Selteri until

you recommended a specific family of mutual funds.

That company like every other one has some of the very riskiest funds, and some of the very safest ones. It's not the fund family that apportions risk, it's the investments inside the fund.

[LSK]

10. your better off doing Real Estate

Get a rental property or do a fixer-upper.

[lyonn]

37. real property doesn't disappear

It's best when it has rental value and can pay for itself, but even raw land in the right location can be a great investment. We have had rental property, inexpensive mostly, for years and it is our nest egg. Property prices go down so you only have to be able to sit and wait. Just make sure you are not overextended in loans, mtg., etc.

Edit: I think the market realised that Bush's SS/privatization plan was a loser and that is what they were betting (investing) on - - crash, bang.

[Zynx]

45. Then again, the Japanese bought a lot of real estate....

And it sank their whole financial sector. Nearly destroyed it. Because all that land in the American West...well, it really isn't worth all that much.

Invest intelligently, do research, and DO NOT TRY TO GET RICH QUICK.

[MsTryska]

11. as it stands right now i feel i have no choice but to invest int he market

I'm 33 years old. So i have the time.

It used to be there were 3 prongs to providing for yourself in retirement:

Social Security
Employer Pensions
Retirement Accounts

In my 15 years of working I never once had access to an employee pension plan (well until the job I have now, but it’s government – in the private sector, never).

The way things are going, I highly doubt SS will be around for me.


So what does that leave me, but retirement accounts? SO I’m doing what I have to do. And in the long run – the Market does average ~10% interest. I’m doing what I can to take advantage of this bear market, and buying as much stock as I can afford – I have money in a higher-interest bearing account too, and I’ll be starting a Roth IRA and buying into some mutual funds within a few months too.


This is something I felt I had to do with my tax return this year, and I’m at peace with the risk, and the chaos in the market at the moment – I look at the dips as opportunities for me to become more vested.

Now when I get to my 50s I will start becoming more conservative, moving stuff to cash accounts and bonds and such, but for now – I’m aiming for as much of a return on my investment as I can get.

The way I figure it – if I can invest in companies and funds that were able to turn a profit over these last couple of years, I’m investing in some pretty good bets.

[Yupster]

47. Pensions for companies are history

Think of it from the company's point of view.

Do you want to run a defined benefit plan and have to send checks out to tens of thousands of retired people every month.

Who's going to handle the hundreds of address changes each month. The name changes. The estate documents when someone dies.

Are you in the business of selling _______ or are you in the business of sending out tens of thousands of checks each month?

Better to switch to a defined benefit plan like a 401 (k). When your loyal worker retires, you shake his hand, transfer his 401 (k) into an IRA, and wish him good luck.

It just makes sense for businesses who have to watch their bottom lines. The only people who will have pensions soon will be government employees. It's close to that way today.

[MsTryska]

56. I agree....

they are history - along with keeping employees around for 25 years.

it's that switch from paternalism to profiteering.

[amazona]

13. No the market is not a sure thing

Your broker is required to provide you with a prospectus that explains that you are at risk to lose all money invested in stocks. They are not insured against market loss. I know two people personally who lost over a million dollars in 2001 in the market. That's 2 people who told me about it. I know many personally who lost over six figures. That's several who told me about it. I lost money in the market, and I don't have it to lose. Who knows how many other people just in my circle lost money who are too embarrassed to say anything about it?

The issue is risk versus reward. If you buy a stock, it may be Enron or WorldCom -- both highly regarded companies in their day -- and you can still lose everything. Enron was a Fortune 10 company. I believe it was Number Seven! If you cannot invest safely in the largest ten companies in the nation, you can't invest without risk in anything.

If you'd bought the S&P 500 five years ago, you would have just spend the last five years without making a dime off your money. In fact, we're still well off the market high. Five years to sit around and lose a little money. Can you afford to risk going another five years without making anything?

If you bought a CD five years ago, yeah, interest rates were crap, but here's 2 facts -- your money is FDIC insured against loss so you cannot lose your principal, you would have made at least a little bit of GUARANTEED income each year on your money.

I don't have a problem with taking risk to make money. But people can't take risk with money meant for important things like retirement because risk means that you CAN lose. Smart people CAN lose. I know smart people who had to go back to work because they were invested in the market. If the money HAS to be there, it doesn't belong in an investment vehicle that is exposed to risk.

We chuckle at the CD and Savings Bond buyer because they have locked-in a lower expectation of reward...but their reward is GUARANTEED.

I have had banks go broke under me. Every penny was GUARANTEED and insured by the FDIC. I got every penny back. I went to a local bank the day the collapse was announced. I got every penny owed to me.

There is nothing wrong with putting the gambling money in stocks. Who knows, you may get lucky. But it is proven that we do not have good safeguards on stocks. Enron, Worldcom, and all the rest provided false information, and the investors won't get their money back. Therefore I don't know how anyone can argue in good conscience that retirement funds or funds for other serious purposes should be invested in stocks.


If you have no other way of getting money than to take great risk, fine. But if you think the stock market is a sure thing, then you should not be allowed to legally invest. By law, your broker is supposed to inform you of the risk of TOTAL loss including your principal.

On edit-- I worry about people who repeat the industry's claim that the stock market returns 10 percent over time, which is actually not the case. If you average in the best decade of all time, the 1990s, then it did average this high prior to 2000. But keep in mind that prior to the 1990s, the return was more like an average of 6 percent and you went decades with no movement at all (check out 1929 to 1953 to see what I'm talking about.) No one disputes that the 1990s Bull Market was an exceptional circumstance that never came before in human history and won't come again in our lifetime. It's funny how online chat rooms and sites will give you the 10 percent figure, but when they have to put it in writing on the prospectus, they project 3 to 4 percent returns as more realistic for the 21st century. It doesn't matter how young you are, you are never going to live long enough to go back and time be able to invest in the market in October 1987 and sell in late 1999 or early 2000.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[Zynx]

26. You are choosing the worst five year period in the market since the 1929-

1934 period to make your point which is silly. The 1950s, 1960s, 1980s, and the 1990s all provided good returns that beat anything else out there. Periodically we have a bad decade and that's what this could be just like the 1970s. However, picking and choosing stocks can make even more money than indexing if you know what your are doing. Since September of 2000 I have made 80% in Procter and Gamble without dividends being taken into account.

[amazona]

28. to a certain extent i agree with you

However I feel obligated to pull out worst case scenarios since too much of society is selling a best case scenario.

I wonder how anyone can guarantee that when it's their turn to retire that it won't be 1930 or 1970 or 2000?

I know real people who have lost their retirement and had to go back to work over this. Unfortunately, some people actually get old with the passage of time. One of those people has a repititive motion injury which is worsening yet he can't stop working. He'll never replace the money, as he is almost 70.

We all want to believe that God will smile on us and we'll be the lucky ones to cash out during the right decade. We won't all be right.

I'm guessing you're more knowledgeable than average. I like to think I'm more knowledgeable than average, which is why I'm still in the market and why I do have some individual stocks.

But the Original Poster, who asked a very naive question about risk and the market, is unlikely to get your results. I'd rather focus on the negative experiences because the industry, the advertising, even the durn anti-Social Security advertising, is already hitting him with the possible positives. Someone needs to stop and say, "There really isn't a Santa Claus, and real people who are bright and involved with their stocks do lose money and do get hurt."

But I'll admit there's a little bit of Do as I say and not as I do in there.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[Zynx]

30. For me, I'm 18 and I have been invested since I was 13.

I take a very long view.

[MsTryska]

34. With these people who've taken a bath with their retirement accounts....

knowing that they were near retirement, and seeing the market falling, did they not shuttle things to a safer place, like bonds?


You see a bear coming a long ways off, imo.


heck even with the plunge of 2000, i can clearly remeber 1998 having to make one of those midnight calls to my mom, because i jsut knew the bottom was going to fall. And i didn't even think of something like 9/11.

[Lone Pawn]

14. What risk?

DJIA, S&P, and NASDAQ over the last five years.

Nope, I don't see any risk at all.

[freethought]

15. Some Good Advice in these posts.

First, the general answer to your question is 'YES, the stock market is a high risk investment and the risk is higher if you are a small investor".

Alot of congressmen are pushing the 'personal accounts' because business interests give them information that a small investor would never get. As a result members of congress do, on average, twice as good in the market as joe q public.
If you are a small investor know this-"YOU ARE ON YOUR OWN!" Unless you have 3-5 million dollars none of the big full-service brokerage firms are going to give a rap about you. You counter this by educating yourself and paying attention. There are some books that one should purchase and read THOROUGHLY! Read them twice! The problem is with most small investors and why the lose is that they decide to buy or sell on raw emotion and not informed reason. For the small stock owner you need to do your own research and take a long term perspective. There is the chance, however narrow, that you could buy into a stock that could really rocket and you could do quite well. Generally if you pick 5 stocks well one will do quite well, two may do OK, the remaining two may break even or lose.

401ks are long term investments. They are meant to pay off over decades. 401Ks invest in mutual funds which are ususally diversified
pretty well and the buying decisions are left up to professionals, but again you have to KEEP AN EYE ON THEM. You just don't leave your money in the fund and forget about it.

The stock market is definitely not a sure thing and the small investor has got to educate himself and keep an eye on things, look carefull at balance sheets and income statements. In this way you can reduce, but not eliminate, the risk. Take a long term perspective and don't try to beat the market, you won't. You might buy a stock that could skyrocket but don't count on it. Same goes with mutual funds, a small investor is going be on his own. They are going to have to educate themselves on mutual funds and evaluating them.

The problem with people today is that you Wall Street propaganda machines like CNBC put so much trash and bullshit out there. The constantly propagandize stocks that have climbed a few points in hopes that the little guys will rush in to buy it as the institutional investors are getting ready to dump it, the big traders are hoping for a few extra points or partial points rise before they dump the stock.

As one who is invested in stocks I can tell you this. Of the stocks that I own two have done well, one is kind of stuck, and two have declined some. Overall I'm still in the positive for gains but I have to keep close eye on these. Especially since the market has been taking a beating these last days.

[htuttle]

16. Buy beer instead

Here's an anecdote that made the rounds after the market bubble crashed:

If you had bought $1000.00 worth of Nortel stock one year ago,it would now be worth $49.00.

With Enron, you would have $16.50 of the original $1000.00.

With WorldCom, you would have less than $5.00 left.

If you bought $1000.00 worth of Budweiser (the beer, not the stock) one year ago, drank all the beer, then turned in the cans for the 10 cent deposit, you would have $214.00.

Based on the above, my current investment advice is to drink heavily and recycle.

[lyonn]

38. Darn, we been throwing those

cans away. I had no idea there was money to be made in that market.

[Zynx]

40. And anyone who bought those stocks was a douche.

At the end of the day, if you bought an index fund ten years ago, even after this crappy period in the market, you're still making a lot of money.

[deadcenter]

17. it's still risky, but...

i'm a geologist, so i know a bunch about rocks and not a thing about money, so i've read a few books about investing and a slew of magazine articles as well. all boiled down they say pretty much the same thing.

1. before investing, put aside enough cash to see you through six months of expenses in case anything happens to you (injury, lost job, etc.)

2. diversify. today that's pretty easy with the number of mutual funds out there. how you diversify is dependent on how much time you have between your age now and when you expect to retire. The closer you are to retirement the more you want to be in bonds and less in stocks. Younger folks with more time to retirement can invest more heavily in stocks, but should put some in bonds just help ride out the bad or uncertain times. Most pros say 70/30 stocks to bonds. If you're okay with more risk, 80/20. There are some good mutual funds out there that mix stock and bond investments in one place if you want to minimize your paperwork.

20+ years you can afford to be stock heavy and bond light because you have enough time to ride out the ups and downs of the market. The average return on investment in the stock market during any 20 year period is roughly 10% per year.

10 years ago, the Dow Jones average was around 4,000. Today it's around 10,100. So, while the market has ranged wildly over the past 5 years, the over all gains for the 10 years are excellent.

The short answer is, yeah it's still risky. Is it high risk? I'd say that depends on your time horizon. If you're 5 years from retirement, it's incredibly high risk. If you're 40 years from retirement, it's much less risky.

deadcenter

[freethought]

18. And don't count on a 90's style bubble either!

We probably won't see something like that for a long time either.

[amazona]

19. everyone who says they'll get 10 percent a year over 40 years

...is counting on a 1990s style bubble.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[MsTryska]

21. hmmm.......

from the House Ways and Means Committee (in 1997):

To derive an estimated rate of return from capital markets in the future, the study assumes that over the next forty to fifty years, workers will be able to obtain a rate of return in capital markets equal to the average historical rate of return on bonds and stocks from the past 70 years (1926-95). For stocks that annual historical rate of return has been 10 percent (nominal); while for bonds the return has been 6 percent (nominal). (Incidentally, over the past twenty years, the financial markets have far exceeded the historical average.



http://waysandmeans.house.gov/Legacy/socsec/105cong/6-24-97/6-24moor.htm

[dcfirefighter]

23. I believe 'nominal'

Does not account for inflation. So closer to 7% & 3%.

[MsTryska]

25. Agreed - inflation isn't accounted for in these figures.

And yes you would have to adjust down, to take it into account - i prefer to adjust up, and aim for 10% once all is said an done. ;-)

[MsTryska]

22. And from Salomon Brothers in 1993...before there was a Bubble:

http://www.retirement-planning.com/returnrates.htm

[Zynx]

24. Now is not a bad time to stick it in.

We are seeing captiulation selling in a sell off triggered by the Dow's attempt to hit 10,000, but when there is panic, there is possibility. Stocks, particularly good dividend paying stocks, are the surest thing in the financial world for making money over a twenty year period.

[amazona]

27. about that dividend paying stock

Ever heard of a little company called Ford, F on the NYSE? <head in hands> I could weep the day I bought them looking at their wonderful dividends...which were promptly cut.

It's gambling. And the reason we don't know it's gambling is because most people are ashamed to talk about their losers and they're proud to talk up their winners.

I'm amazed at people who think they can wait 20 years, or even 40 years, to find out whether they were right. You know, if you're wrong, you don't get the 20 years back to replace the money.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[Zynx]

29. Ford is a horrid example.

Auto makers are special market cases. Buying a big diversified conglomerate like GE, a consumer products company like P&G, or a big bank is almost as safe over 25 years as sticking it under a pillow.

[MsTryska]

33. Precisely......

I'll keep my Wells-Fargo for as long as it will have me.

[Zynx]

43. And will people PLEASE DO RESEARCH?! *smacks self*

People buy Taser. People bought garbage like Nortel and JDSU and Pets.com. People didn't think Enron was a bad investment even though no one on Wall Street could tell you anything about their business.

People didn't look twice at AIG despite the fact its earnings were unusually good for the sector and everyone knew that their accounting was impossible to understand. 2+2= 5!! Get me some stock. I shorted the hell out of AIG in a simulated market game when I started reading stuff about their Bahamanian adventures. The stock has lost $5 a share since then.

The sudden nose-dive of General Motors is surprising some people. Why? Their financial model has been broken forever. They have a nice dividend but do you really want to buy something that could go from $26 to $0.00 if they go bankrupt? The 7% won't help then at all and stock holders get screwed when a company files.

You generally shouldn't sell on the way down because it *should* bounce or even grow over the long term, but there are some things you simply shouldn't be owning in the first place at all.

[freethought]

46. Taser!! Bastards!

This was my epiphany that CNBC was bullshit. CNBC was pumping this stock for an entire week after it had climbed 500-600% on the NASDAQ. Only days later the stock tanks like the Titanic. Correct me if I am wrong but I do believe they are being sued and being investigated for securities fraud?

You could just sence by watching CNBC that they were 'pumping and dumping'.

[MsTryska]

57. well i worked for Nortel in their heyday.....

even then i wasn't sure how they were doing it - i worked on this huge brand-spanking new campus with 2 sprawling buildings, and plans for a third and the best of everthing as far as amenities were concerned. i really wasn't sur ehow they were doing it, considering they had jsut bought Bay networks, and Cisco had and still has the lion's share of the router market. it was a strange time. Suffice to say i never held their stock. Altho i was disheartened for them when they crashed and burned. But you hit it right ont he head...

do your research - see if the numbers pan out, you're not buying stock, you're buying a company - and your holding it. At least put as much thought into that as you do when buying a car or a house.

[MsTryska]

32. You bought because they pay dividends?

you didn't look at their fundamentals?


investing is definitely gambling when you don't do your homework -

here's a timely article:

http://www.fool.com/News/mft/2005/mft05040501.htm

[sandnsea]

35. Warning

You're too arrogant by half. I sincerely hope you've got some money in something guaranteed. People much wiser than you have lost bundles in the stock market. That isn't meant as an attack, but a warning. Seen too many folks with your attitude go broke.

[MsTryska]

36. *lol* of course i've got money set aside and protected as well.

and i wouldn't say arrogant so much as confident.


even if i were to lose it, i will be able to make it back....



to quote Rudyard Kipling:

"If you can make one heap of all your winnings
And risk it all on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breath a word about your loss;"



bear in mind - i've got all the time in the world to be risky. and i understand that in 15 years it may be a different game.

[Zynx]

39. In the long run, it is very difficult to lose money in the market.

You have to invest like a drunk to do that. If you chase gains and sell losses, you can lose thousands, but if you buy and hold solid companies and indexes, you will be fine over any 15-20 year period.

[sandnsea]

41. Tell my 70 year old neighbor

He still hasn't recovered from 2001. He doesn't have another 15-20 years to do it either.

[Zynx]

42. When did he buy in and what did he buy?

It's very difficult to be underwater at this point unless you (a) chased a whole bunch of crap stocks (b) bought in towards the peak of the late 1990's run up or (c) bought into the NASDAQ on the way down but before it thumped in the 1100 range.* The Dow was 4000 ten years ago.

Do you know what burned him?

*NOTE: Not that this would have been good long term at all. The NASDAQ has no real fundamentals and its core P/E value is more like 800 than 2000. At best it won't be moving much higher until earnings finally flatten its current P/E's. At worst, it could move down to flatten the curve *that* way. It's really not worth the trouble.

[sandnsea]

49. No, I don't

I'm his neighbor. That's kind of personal information for people to share.

[Yupster]

50. In general though

once you get close to retirement, you should have little left in the stock market. As retirement approaches, you should be shifting toward fixed income investments.

In general, no retired person should lose 30 % of his money in the market because he normally wouldn't have 30 % of his money in the market.

[sandnsea]

51. But most do

I only know a handful of retired people who don't have the bulk of their money in the market in one way or another. The ones who don't are wealthy people who have had money for a long time. Not people who are trying to get the best return on what they have to make their retirement a little easier.

[Yupster]

53. They have bad brokers, or

they aren't listening to their brokers then.

[sandnsea]

55. I don't know

I'd suspect bad brokers. It's a small town, lots of retirees. Not alot of brokers I don't think. But I'd bet whoever is here is making a bundle. I never really thought about it.

[MsTryska]

58. But when y ou're close to retirement isn't the best time to be trying

to get a high return. High return = high risk.

late in life isn't the time for High Risk. It's the time for the lowest risk possible. If they got this advice from their brokers the brokers sucked. My mom provided for she and my dad's retirement by studying and learning all she could.

they made it through the bubble jsut fine, because she was already vested in a lower risk area.

But - she did it on her own - doing her own research - not having a broker do anything for her, but buy what she wanted him to buy.

[freethought]

44. In a nutshell!

Yes, the market is high risk but as the saying goes "nothing ventured nothing gained"

The stock market is not a rational animal. It can do great when the economy is lousy.

As far as diversification is concerned it is a good way to hedge against market ups and downs. But being too diversified can work against you as well.

The stock market is not a sure thing and likely will never be. Educate yourself on it. I am a firm believer that knowledge is power.

[Pockets]

52. I'll surely be criticized for saying this....

I have an unpopular, negative view of the stock market. I think it should be a thing of the past, or perhaps closed to small private investors. I don't mean to offend anyone, but I think it's one of the most evil ways to make a buck.

Companies lay off, outsource, and underpay their workers just to increase dividends to unknown faceless shareholders that the workers never meet.

At one time, investors may have put money into a company because they believed in the inherent goodness of the company or its employees, but now rarely do stockholders invest in a company because they care about it. No longer are a company's employees working to make better lives for themselves, but instead they are working to make a better life for their owners.

IMHO, the best way to make money is to work for it, do something innovative, start your own business, but investing in stocks is a way of trying to get something for nothing, and that often means others are getting ripped off in the process.

[MsTryska]

59. I somewhat agree.....

but i also think this where research comes into play.

Companies that screw their employees, and get shady tend to get screwed, eventually.


But there are companies out there that do honorable business, that still thrive.

I won't hold Wal-Mart - but I will hold Costco. I won't hold Bank of America - but I will hold Wells-Fargo - and I will hold Starbucks, and also Microsoft - I liek that Bill pays his taxes, and that he and his wife are the largest charity donors around today.

You can be socially and ethically responsible, and still be successful in the stock market.

[Melynn]

54. The stock market has always been a high risk investment

There is no quanartee that you will get any return on your investment in the stock market. Some people will try to tell that you is a lead pipe cinch that you will get a return on your money but those people have an agenda to push.