# Some Notes On CNBC's Jim Cramer



## fmdog44 (Dec 23, 2021)

From the recent AARP Magazine:
His trades are not for him rather for a charitable trust. All of his investments are in index funds. He cashed out of his stock investments in 2020 and believes anyone trying to beat the indexes is a "terrible idea". After he turned 65 he cut his investments in half moving the half into cash. Currently, he has 40% in U.S. stock index funds, 5% in international fund index funds, 5% split between gold and cryptocurrency and the rest in cash. His major move into cash is due to discussing it with his wife. I agree with her at a certain age and wealth level we need to move away from investing and toward the security of cash. I have argued this idea with several members here.  I kind of hate selling my stocks and moving them to index funds just because it is more exciting to watch several investments. But it is time for me at 73 with 74 coming soon to turn down the flame. Add to this I get nervous when I read the underlying reasons stocks move in either direction as in manipulation, hedge fund managers, and CEOs buying and selling massive quantities of shares in one day. When I don't understand something I don't invest in it.


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## Aunt Bea (Dec 23, 2021)

It’s interesting, but we are all different.

Warren Buffet has recommended 90/10.  With 90% in a stock index fund and 10% in cash and bonds.

I think it depends on how much you rely on your investments for your day to day expenses and if you plan to have money in the bank when you die.

My SS and small pension cover the majority of my day to day expenses so I plan to stay at roughly 60/40.

If you enjoy picking stocks why not continue to allocate a percentage of your portfolio to that hobby.

_“If you can’t sleep at night because of your stock market position, then you have gone too far. If this is the case, then sell your position down to the sleeping level.”_ - Jesse Livermore


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## mathjak107 (Dec 24, 2021)

fmdog44 said:


> From the recent AARP Magazine:
> His trades are not for him rather for a charitable trust. All of his investments are in index funds. He cashed out of his stock investments in 2020 and believes anyone trying to beat the indexes is a "terrible idea". After he turned 65 he cut his investments in half moving the half into cash. Currently, he has 40% in U.S. stock index funds, 5% in international fund index funds, 5% split between gold and cryptocurrency and the rest in cash. His major move into cash is due to discussing it with his wife. I agree with her at a certain age and wealth level we need to move away from investing and toward the security of cash. I have argued this idea with several members here.  I kind of hate selling my stocks and moving them to index funds just because it is more exciting to watch several investments. But it is time for me at 73 with 74 coming soon to turn down the flame. Add to this I get nervous when I read the underlying reasons stocks move in either direction as in manipulation, hedge fund managers, and CEOs buying and selling massive quantities of shares in one day. When I don't understand something I don't invest in it.


You might want to read michael kitces article on the red zone ..there is no reason one needs to move out of equities as they age .

in fact his research shows the opposite ..once you clear what is called the red zone you can go as high as you like 

There is no financial logic to dumping equities based on age only 

https://www.kitces.com/blog/managing-portfolio-size-effect-with-bond-tent-in-retirement-red-zone/


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## Liberty (Dec 24, 2021)

Not a bond fan though.


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## mathjak107 (Dec 24, 2021)

Interesting enough bonds typically outperform cash once the time frames are evened up ..go back five tears and looks at a five year cd and a total bond funds performance and odds are the bonds beat it .

Likely if you bought a total bond fund today and looked in 5 years it would beat cash instruments again .

So typically over time bonds beat  the equivalent cash instruments.

Now , what is interesting is equities and gold has beaten equities and bonds over most time frames .

While gold hasn’t done much by itself in isolation, when it is used with other assets and its spikes are rebalanced it is a whole other animal


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## Liberty (Dec 24, 2021)

Would rather have a  larger equity ratio and money in the bank.  LOL!  

https://www.thebalance.com/stocks-vs-bonds-the-long-term-performance-data-416861


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## fmdog44 (Dec 24, 2021)

mathjak107 said:


> You might want to read michael kitces article on the red zone ..there is no reason one needs to move out of equities as they age .
> 
> in fact his research shows the opposite ..once you clear what is called the red zone you can go as high as you like
> 
> ...


I always disagree with nearly everything you post. Only fools with limited time on earth continue to invest for the reason of income if you already have it. We work to make money and invest that money to make more money. I and millions of others no longer need to make more because we have enough. "No financial logic" you say? I laugh at that.


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## fmdog44 (Dec 24, 2021)

Liberty said:


> Would rather have a  larger equity ratio and money in the bank.  LOL!
> 
> https://www.thebalance.com/stocks-vs-bonds-the-long-term-performance-data-416861


Good post!


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## mathjak107 (Dec 24, 2021)

fmdog44 said:


> I always disagree with nearly everything you post. Only fools with limited time on earth continue to invest for the reason of income if you already have it. We work to make money and invest that money to make more money. I and millions of others no longer need to make more because we have enough. "No financial logic" you say? I laugh at that.


you can disagree but facts show otherwise

trying to support even a 4% draw inflation adjusted has failed so many times when using very low equity levels it is considered unsafe

using fixed income  like thinking you won the game  so why play anymore has failed to last at 4%  over 60% of the 121 rolling 30 year  retirement time frames to date without taking a pay cut from an already conservative draw .

so to little in equities is far more dangerous then even being 100% equities.

anything less than 90% is considered unsafe to use

10% equities

FIRECalc Results​Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.



FIRECalc looked at the 121 possible 30 year periods in the available data, starting with a portfolio of $1,000,000 and spending your specified amounts each year thereafter.

Here is how your portfolio would have fared in each of the 121 cycles. The lowest and highest portfolio balance at the end of your retirement was $-517,560 to $2,349,575, with an average at the end of $191,362. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 64 cycles failed, for a success rate of 47.1%.


here is 60/40

FIRECalc Results​Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.



FIRECalc looked at the 121 possible 30 year periods in the available data, starting with a portfolio of $1,000,000 and spending your specified amounts each year thereafter.

Here is how your portfolio would have fared in each of the 121 cycles. The lowest and highest portfolio balance at the end of your retirement was $-272,474 to $4,564,899, with an average at the end of $1,430,295. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 5 cycles failed, for a success rate of 95.9%.


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## Aunt Bea (Dec 24, 2021)

fmdog44 said:


> I always disagree with nearly everything you post. Only fools with limited time on earth continue to invest for the reason of income if you already have it. We work to make money and invest that money to make more money.* I and millions of others no longer need to make more because we have enough.* "No financial logic" you say? I laugh at that.


What is enough today may not be enough tomorrow.

In 10, 15, 20, years it will be too late to take advantage of slow steady growth, compounding, etc...

I wouldn't swing for the fences, but I would definitely stay in the game.


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## fmdog44 (Dec 24, 2021)

Aunt Bea said:


> It’s interesting, but we are all different.
> 
> Warren Buffet has recommended 90/10.  With 90% in a stock index fund and 10% in cash and bonds.
> 
> ...


I have always agreed with your quote from Jesse Livermore. Yesterday I finalized my new will to feel 100% comfortable with who gets what. I don't see trouble coming in the market but if I do switch out some portion to index funds I don't feel it is a mistake. I recall comments from the last three downturns about elderly people losing money and the responses always "they should not have had money there at their ages" and I agreed with that. Take a look at Clorox (CLX) for the past several months. I was doing fine until the bottom fell out. I sold it only to get a little more than my initial investment back.


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## Aunt Bea (Dec 24, 2021)

fmdog44 said:


> I have always agreed with your quote from Jesse Livermore. Yesterday I finalized my new will to feel 100% comfortable with who gets what. I don't see trouble coming in the market but if I do switch out some portion to index funds I don't feel it is a mistake. I recall comments from the last three downturns about elderly people losing money and the responses always "they should not have had money there at their ages" and I agreed with that. Take a look at Clorox (CLX) for the past several months. I was doing fine until the bottom fell out. I sold it only to get a little more than my initial investment back.


I misunderstood.

Switching to stock index funds is not getting out of the equity market.

I use mostly balanced funds so I don't have to deal with rebalancing.

Also, I don't put anything in the market that I will need in the next five years.


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## mathjak107 (Dec 24, 2021)

Aunt Bea said:


> What is enough today may not be enough tomorrow.
> 
> In 10, 15, 20, years it will be too late to take advantage of slow steady growth, compounding, etc...
> 
> I wouldn't swing for the fences, but I would definitely stay in the game.


all those failures we have had  as shown above already are  from those who thought they won the game so they can avoid  using equities .

they ended up having to take pay cuts from what they were drawing as 4% failed to stand up .

no one wants a pay cut , not when working and not in retirement but with little equities that is exactly what happened.

winning seems to take 35-40% equities which is why the 40/60 vanguard wellesly income fund has been one of the most used retirement funds


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## OneEyedDiva (Dec 24, 2021)

It's funny. I was going to post about this but forgot to do it. I was struck by the fact that he listened to his wife about their ongoing investment strategy. Way to go Mrs. Cramer. I know he's a respected financial analyst but I could never stand to watch him on T.V.  I wound up regretting the one peace of advice I took from him (and other "experts"). I kept reading how they were highly touting Fitbit. The company seemed like it was poised to do well. The stock tank and as of last checking a couple of weeks ago, has yet to recover. I'm glad I dumped it when I did, so didn't lose nearly as much as if I'd waited. Also lucky that I didn't buy that many shares.


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## dseag2 (Dec 24, 2021)

fmdog44 said:


> I always disagree with nearly everything you post. Only fools with limited time on earth continue to invest for the reason of income if you already have it. We work to make money and invest that money to make more money. I and millions of others no longer need to make more because we have enough. "No financial logic" you say? I laugh at that.



I think this all depends on age.  I'm 64.  I had my broker take me out of stocks in March of this year, during the height of the Covid crisis, because I was paying for my mother's assisted living and needed guaranteed cash. I went back into the market a few months later and haven't been sorry.

Why let my money sit in cash and stagnate while I spend it down?  Those with investments in 2021 have netted over a 30% return.  Sure, in any year the market could correct, but over its' history it has returned approximately 10%.  And I do agree with index funds.

Sorry, but I don't consider myself a "fool".  I have a decent net worth, but my mother lived to 89 y/o with lots of health issues.  I could live well past 90.  Support your point of view and tell me how much you think I'll need to live a decent life and not to outlive my money?  No, don't.  No one really has the answer to this, which is why I continue to invest.


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## dseag2 (Dec 24, 2021)

mathjak107 said:


> You might want to read michael kitces article on the red zone ..there is no reason one needs to move out of equities as they age .
> 
> in fact his research shows the opposite ..once you clear what is called the red zone you can go as high as you like
> 
> ...


I don't disagree with you at all.  I think you are spot on.  Thanks for the article!


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## mathjak107 (Dec 25, 2021)

dseag2 said:


> I think this all depends on age.  I'm 64.  I had my broker take me out of stocks in March of this year, during the height of the Covid crisis, because I was paying for my mother's assisted living and needed guaranteed cash. I went back into the market a few months later and haven't been sorry.
> 
> Why let my money sit in cash and stagnate while I spend it down?  Those with investments in 2021 have netted over a 30% return.  Sure, in any year the market could correct, but over its' history it has returned approximately 10%.  And I do agree with index funds.
> 
> Sorry, but I don't consider myself a "fool".  I have a decent net worth, but my mother lived to 89 y/o with lots of health issues.  I could live well past 90.  Support your point of view and tell me how much you think I'll need to live a decent life and not to outlive my money?  No, don't.  No one really has the answer to this, which is why I continue to invest.


Actually age is the smallest factor …a 65 year old with their bills covered and investing for legacy money can be 100% equities .

a retiree with pension and ss covering bills can be as high or low as far as equities that they like .

those pensionizing their own income need a certain amount of equities to guarantee at least a 4% draw in good and bad times . they can be anywhere from 35-75% depending on their own pucker factor .

so age is not a determining factor as much as other factors.

so far based on research by famous researcher michael kitces , the best glide path for those living off their portfolios is to reduce down about 10 years before until about 10 years in to retirement , then season to taste and go as high as you like


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## oldmontana (Dec 25, 2021)

mathjak107 said:


> a retiree with pension and ss covering bills can be as high or low as far as equities that they like .
> 
> =====================================


_   I agree.  Because I have not gone for the 60 / 40 or what some say I have about 90% in stocks and stock funds, 10% in cash and have done very well and I do enjoy investing.  If one can not take the ups and downs of stocks one should not be in stocks._

I am well over 80.

_Merry Christmas_


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## Liberty (Dec 26, 2021)

Its whatever you are comfortable sleeping at night with.  Each person's stress level is uniquely their own.  One man's road to purgatory is another man's prune danish.


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## mathjak107 (Dec 26, 2021)

Many times though it isn’t about what you are comfortable with ..it is only about what the draw rate is you want to get from your portfolio.

you cant safely even draw 4% inflation adjusted from fixed income alone no matter what one’s stress level is when it comes to using equities..

so one’s needs are going to rule as far as what you do ……we couldn’t generate the income we want on fixed income safely …it would have already failed way way way to many times to be called safe.

for those drawing a pensionized income off their own money to live on the investing does not end when you retire …it is still needed to safely generate a safe , secure , consistent income in good and bad times that is inflation  adjusted


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## Liberty (Dec 26, 2021)

Investing is so very personal and if you have too little funds obviously you are going to be stressed as a result if you can't seem to adjust your living conditions to maximize what you have.

Sometimes I think so many are looking for "oversimplification" when they retire. That can be somewhat achieved if you have sufficient funds, perhaps with the "lazy man's portfolio",  but if you don't  have the grub stake its pretty hard to invest what you don't have or can't seem to get too late in life.  It takes money to make money.


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## mathjak107 (Dec 26, 2021)

Liberty said:


> Investing is so very personal and if you have too little funds obviously you are going to be stressed as a result if you can't seem to adjust your living conditions to maximize what you have.
> 
> Sometimes I think so many are looking for "oversimplification" when they retire. That can be somewhat achieved if you have sufficient funds, perhaps with the "lazy man's portfolio",  but if you don't  have the grub stake its pretty hard to invest what you don't have or can't seem to get too late in life.  It takes money to make money.


Absolutely………people want to take something so complex and dumb it down to the point they need to know nothing or little ….
as usual simple answers to complex questions,like why keep playing when you won the game are going to be the wrong answers for many.

the game ain’t done until we are ..especially if living off a portfolio that is providing a decent draw rate …equites are needed until well into retirement


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## dseag2 (Dec 26, 2021)

mathjak107 said:


> Actually age is the smallest factor …a 65 year old with their bills covered and investing for legacy money can be 100% equities .
> 
> a retiree with pension and ss covering bills can be as high or low as far as equities that they like .
> 
> ...





mathjak107 said:


> Many times though it isn’t about what you are comfortable with ..it is only about what the draw rate is you want to get from your portfolio.
> 
> you cant safely even draw 4% inflation adjusted from fixed income alone no matter what one’s stress level is when it comes to using equities..
> 
> ...


You have mentioned pensionized income a couple of times.  That may be a factor in the UK, but very few of us in the US have pensions.  My father had one, but that was in the 70's.  Very few big corporations in the US provide pensions.  It is up to us to put as much as we can into our 401k's.  That means that my only income is from Social Security and whatever I draw from my investments.


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## mathjak107 (Dec 27, 2021)

dseag2 said:


> You have mentioned pensionized income a couple of times.  That may be a factor in the UK, but very few of us in the US have pensions.  My father had one, but that was in the 70's.  Very few big corporations in the US provide pensions.  It is up to us to put as much as we can into our 401k's.  That means that my only income is from Social Security and whatever I draw from my investments.


Don’t misunderstand..

the term pensionized income does not mean a pension …it means taking what we manage to save and invest ourselves and turning it into a safe , secure , consistent income stream .

it is creating our own pension  where we don’t have one

that is what something like the 4% safe withdrawal rate attempts to do .

it takes a big ole pile of money that we saved on our own and it creates what is called a pensionized income ….

it looks and acts and smells like a pension in the way it provides a  consistent income source in good and bad times


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## JimBob1952 (Dec 27, 2021)

dseag2 said:


> I don't disagree with you at all.  I think you are spot on.  Thanks for the article!


  Mathjak does the work and has the skills needed to invest wisely.  His contributions to SF are very valuable.


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## mathjak107 (Dec 27, 2021)

JimBob1952 said:


> Mathjak does the work and has the skills needed to invest wisely.  His contributions to SF are very valuable.


Thank you


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## OneEyedDiva (Dec 30, 2021)

dseag2 said:


> You have mentioned pensionized income a couple of times.  That may be a factor in the UK, but very few of us in the US have pensions.  My father had one, but that was in the 70's.  Very few big corporations in the US provide pensions.  It is up to us to put as much as we can into our 401k's.  That means that my only income is from Social Security and whatever I draw from my investments.


I feel so blessed to be one of those very few dseag2! Pensions have gone the way of the dinosaur. I wasn't in the corporate world but worked for the state of N.J. Here are two articles on how to create your own "pension".  In article #2, I think I'd forego the reverse mortgage idea. But for some, it works.
https://awealthofcommonsense.com/2019/03/how-to-create-your-own-pension/

https://www.kiplinger.com/article/investing/t023-c032-s014-4-ways-to-create-your-own-pension.html


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## bowmore (Dec 30, 2021)

The old (and wrong) rule of thumb was you subtract your age from 100, and that percentage should be in fixed income. You would be losing to inflation every year, especially when banks are paying 1% and inflation this year was 6%.


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## mathjak107 (Dec 30, 2021)

bowmore said:


> The old (and wrong) rule of thumb was you subtract your age from 100, and that percentage should be in fixed income. You would be losing to inflation every year, especially when banks are paying 1% and inflation this year was 6%.


yep , that rule was a poor attempt at some bogus one size fits no one investing


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## OneEyedDiva (Dec 30, 2021)

bowmore said:


> The old (and wrong) rule of thumb was you subtract your age from 100, and that percentage should be in fixed income. You would be losing to inflation every year, especially when banks are paying 1% and inflation this year was 6%.


Yes, that rule was adjusted a few years back. There's talk that even the 4% rule is no longer a good one for some...that it should be a lower percentage starting out.


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## mathjak107 (Dec 30, 2021)

OneEyedDiva said:


> Yes, that rule was adjusted a few years back. There's talk that even the 4% rule is no longer a good one for some...that it should be a lower percentage starting out.


Most of those who do proclaim it has to be adjusted downward either have no clue as to what a safe withdrawal rate is based on  or they have an agenda .

As one example ,while dr wade Pfau is a brilliant writer he sells annuity products for a living ..

to understand just how hard it is for 4% to fail you can read michael kitces analysis


EXECUTIVE SUMMARY​As retirees and their planners adjust to the 'new normal' - a world of lower-than-average returns for the foreseeable future, many have questioned whether the historical safe withdrawal rate research is still valid.

After all, if returns will be below average in the coming years, doesn't that imply safe withdrawal rates must be below average as well?

In point of fact, though, safe withdrawal rates do not depend on average returns in the first place; the worst safe withdrawal rates in history that we rely upon are actually associated with 15-year real returns of less than 1%/year from a balanced portfolio! Accordingly, given current bond yields, dividend yields, and inflation, if the current environment for today's retirees will result in a "new record low" safe withdrawal rate, the S&P 500 would still have to be no higher in 2027 than it was in 2007 or even 2000!

On the other hand, merely projecting equities to recover to new highs by the end of the decade or generating a mid-single-digits return would actually represent an upside surprise, allowing for higher retirement spending than 4.5% safe withdrawal rates!

https://www.kitces.com/blog/what-returns-are-safe-withdrawal-rates-really-based-upon/


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## OneEyedDiva (Dec 30, 2021)

mathjak107 said:


> Most of those who do proclaim it has to be adjusted downward either have no clue as to what a safe withdrawal rate is based on  or they have an agenda .
> 
> As one example ,while dr wade Pfau is a brilliant writer he sells annuity products for a living ..
> 
> ...


Ulterior motives such as having "an agenda" is certainly no surprise. I take *everything* "experts" say with a grain of salt because there's no one size fits all. And sometimes it seems like they don't live in the "real world".


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## mathjak107 (Dec 30, 2021)

OneEyedDiva said:


> Ulterior motives such as having "an agenda" is certainly no surprise. I take *everything* "experts" say with a grain of salt because there's no one size fits all. And sometimes it seems like they don't live in the "real world".


My favorite is michael kitces


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## oldmontana (Dec 30, 2021)

OneEyedDiva said:


> Ulterior motives such as having "an agenda" is certainly no surprise. I take *everything* "experts" say with a grain of salt because there's no one size fits all. And sometimes it seems like they don't live in the "real world".


Everyone has a different situation.  One is risk tolarance.  I enjoy investing some in stocks that are considered risky.


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## OneEyedDiva (Dec 30, 2021)

oldmontana said:


> Everyone has a different situation.  One is risk tolarance.  I enjoy investing some in stocks that are considered risky.


It's good when we can do that Oldmontana. My most "risky" moves lately have been investing in the ETFs connected to Crypto, as well as buying a pittance of Dogecoin. Over the years, I surprised myself because my risk tolerance is higher than I would have thought. I have 71% in the stock market and will not likely reduce that allocation because I don't need to touch my investments.


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## mathjak107 (Dec 31, 2021)

OneEyedDiva said:


> It's good when we can do that Oldmontana. My most "risky" moves lately have been investing in the ETFs connected to Crypto, as well as buying a pittance of Dogecoin. Over the years, I surprised myself because my risk tolerance is higher than I would have thought. I have 71% in the stock market and will not likely reduce that allocation because I don't need to touch my investments.


Way to go …..

I don’t have that much allocated to equities anymore but i do have other powerful movers when it’s day in the sun , like gold , bitcoin , commodities which go with a portfolio that runs about 40% equities …i dont need such high levels anymore so we toned things down


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