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Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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 Fidelity [WSJ] reported that the virus created a crisis for investors that now have to make the most difficult investing decision of whether to:

1... exit the market

2... wait out a long rebound that economists believe 10 years to recover

 Market is currently down for the current year:

1... DJ:  -9.7%

 2... S&P: -5.1%

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Re: Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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@chang wrote:

@retiredat48 Do you think Grantham is credible? I don’t find him so. He’s been a permabear for too long now, bordering on the Hussmanesque. He’s also gotten increasing political, which is a red flag for me (politics and investing don’t mix well). And his forecasts have been all over the place and not very accurate.


What you post is true.

But I still follow his rationale on things...he is one of many I listen to.  Grantham went bullish on commodities about three years ago, and it was completely off the mark.  His dire global warming concerns are very one-sided analysis, to me.  His seven year forecast are mostly based on return-to-the-mean analysis...sometimes spot on.  I think his current stock asset recommendation is Emerging Markets for best next 7 year return.

One thing to consider is that it is hard for mutual fund managers to go bearish.  Grantham long ago had large fund accounts he managed for Vanguard...until he went bearish publicaly one year.  He got fired, as monies fled; but he was only a little early!

But I decide in the final analysis.  Just be aware some other superstar fund gurus predict new lows, as the most likely course for the market.

R48

 

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Re: Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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@xray wrote:

 Fidelity [WSJ] reported that the virus created a crisis for investors that now have to make the most difficult investing decision of whether to:

1... exit the market

2... wait out a long rebound that economists believe 10 years to recover

 Market is currently down for the current year:

1... DJ:  -9.7%

 2... S&P: -5.1%

 


3. NASDAQ is up 11% in 2020.

I remain fully invested.

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Re: Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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@xray wrote:

 Fidelity [WSJ] reported that the virus created a crisis for investors that now have to make the most difficult investing decision of whether to:

1... exit the market

2... wait out a long rebound that economists believe 10 years to recover

 Market is currently down for the current year:

1... DJ:  -9.7%

 2... S&P: -5.1%


           Are these the same economists that gave us the Goldilocks economy last year with no possibility of a recession or disruption for at least 2-2.5 yrs?

           It’s not a surprise amateurs bailed. At the end of March I loaded up on more CEF income wait for more “bad news” like the “surprise” second wave when the lockdown began to be eased. I’am with Powell here, 2022, more crystal ball articles, maybe no vaccine until next year and election season coming up. Oh boy. Try existing on MM income for 10 years. 

            

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Re: Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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Thanks.

First of all, it is never clear how such data are compiled.  For example, how are they certain that their investors older than 65 "sold out"?  How do they define "sold out"?  What I have in Fidelity is just a part of my portfolio.  Etc.  

Thus I have very little confidence on such data and their implications. 

More importantly, I am not clear about their intention of providing such unreliable data.   

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Re: Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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@steelpony10 wrote:

@xray wrote:

 Fidelity [WSJ] reported that the virus created a crisis for investors that now have to make the most difficult investing decision of whether to:

1... exit the market

2... wait out a long rebound that economists believe 10 years to recover

 Market is currently down for the current year:

1... DJ:  -9.7%

 2... S&P: -5.1%


           Are these the same economists that gave us the Goldilocks economy last year with no possibility of a recession or disruption for at least 2-2.5 yrs?

           It’s not a surprise amateurs bailed. At the end of March I loaded up on more CEF income wait for more “bad news” like the “surprise” second wave when the lockdown began to be eased. I’am with Powell here, 2022, more crystal ball articles, maybe no vaccine until next year and election season coming up. Oh boy. Try existing on MM income for 10 years. 

            


Seriously how could economists forecast the possibility of an unknown unknown like a covid 19 epidemic a year ago? that’s like predicting when a 10 KM meteor will strike the earth.

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Re: Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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What does "sold out" mean? Did investors sell part or all of their investments? If they sold all their investments that is serious and plays into the debate of private vs state pensions. The dependency ratio has diminished to such a low level it could only be offset by large tax increases, which would be unpopular. People aren't saving enough for retirement. Retirees were placed in a bad spot after 2008, losing principal and income from annuities due to compressed rates. I suspect many close to retirement are wondering if 2008 will repeat itself. Research shows that countries such as Germany and France where there is a greater dependency on state pensions, retirees are less likely to retire in poverty than countries that have encouraged private pensions.

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Re: Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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I am 77. I bought 30 shares of VDE today. People are going to drive their cars next year, and it will go back to 75-80. Make a killer profit. I have been buying other stuff also.

Seriously, I did buy VDE today. Besides, VTI is down by only 2.72% (YTD) as of today. My portfolio was slightly up last week in spite of some losses in my CEFs.

Gloom and doom. Nah. I have been through this stuff several times in the past four decades. Life goes on. But, stay safe and well. Follow the social distancing. Wear your masks if you go out. Use mail order if necessary. It is safe for you as well as others.

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Re: Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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@Intruder wrote:

@steelpony10 wrote:

@xray wrote:

 Fidelity [WSJ] reported that the virus created a crisis for investors that now have to make the most difficult investing decision of whether to:

1... exit the market

2... wait out a long rebound that economists believe 10 years to recover

 Market is currently down for the current year:

1... DJ:  -9.7%

 2... S&P: -5.1%


           Are these the same economists that gave us the Goldilocks economy last year with no possibility of a recession or disruption for at least 2-2.5 yrs?

           It’s not a surprise amateurs bailed. At the end of March I loaded up on more CEF income wait for more “bad news” like the “surprise” second wave when the lockdown began to be eased. I’am with Powell here, 2022, more crystal ball articles, maybe no vaccine until next year and election season coming up. Oh boy. Try existing on MM income for 10 years. 

            


Seriously how could economists forecast the possibility of an unknown unknown like a covid 19 epidemic a year ago? that’s like predicting when a 10 KM meteor will strike the earth.


           Mr. Intruder I agree. I suppose my point is no one can foresee the future no matter how good or bad it may seem presently. I just look at the other countries that are further along then us and they seem to be improving slowly. I also like the Fed’s take since they’re closest to economic data worldwide with Powell as the expert as Fauci was looked upon as the expert with this medical situation. The Fed has a great deal of control over what happens. Any survey by anyone else is part of everyday random meaningless gobbledygook in my opinion.

            Those that truly believe it will take 10 years for markets to recover should exit and stay out. I know increased demand for goods and services from a rising world population should over time raise company values and I may benefit by investing in them. That doesn’t seem like much of a unknown risk to me.

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Re: Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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During the last two weeks of March I received several panicked e-mails, texts and phone calls from family and close friends asking me what they should do. "Shouldn't I sell and get out with what I've got left" was a common question. My answer each time was the same, and went something like...

"Right now you have paper losses that are not permanent. If you sell, you will convert those paper losses to real losses and those losses will then be permanent".

My coaxing seemed to work as fortunately, I don't think anyone sold. I told them the best way to weather this psychologically, do not look at any stock market news and do not read your monthly brokerage/IRA Custodian statements...just file them.

The takeaway reminder to all of us is the importance of asset class diversification (for total return investors) and the importance of income diversification for income investors which in addition to spreading dividend exposure to multiple sectors and also to limit income as a percent of total portfolio income per each income security. And I feel bad for the neophyte income investors who at the end of 2019 had been so happily chatting up their 10% to 15% yields on their favorite mREITs, BDCs and Closed End Funds. Whew!

BruceM

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Re: Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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Read between the lines....what they are really saying.... there's a ton of money on the sidelines!!  *IF* they haven't already gotten back in....

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Re: Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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Big market drops help me experience my personal risk tolerance reaction for real. I didn't sell anything during the maelstrom but it did cause me to further refine my goals and strategy going forward and I am grateful for that. It also further reinforced the dangerous nature of crowds (markets). For me that boils down to a 50/50 conventional stock/bond balance, good chunk of cash, and a small party room to cage the crazy investment animals that I occasionally want to play with. (Added by edit: Yeah, I'm >65.)

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Re: Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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I was planning on making an original post on the Fidelity info, when I saw xray had posted such.  I considered the Fido info interesting and revealing.

Here is the actual wording and data from WSJ:


"Individuals like Dr Sklar now face perhaps one of the most difficult investing decisions they will make in their lifetimes: whether to wait out a potentially long rebound or exit the market altogether.  Data from Fidelity Investments suggest millions of individuals have decided to do the latter (exit altogether).  Nearly a third of investors age 65 and up sold all of their stockholdings some time between Feb and May, compared to 18% of investors across all ages."

I was surprised at both stats...both above and below age 65.  BTW both Fidelity and Vanguard often track such info; is has a high believability factor.

I also noted on the M* forums a number of posters exited their stock based holdings; some for the first time ever.

Ponder what you may, but to me this is like a rubber band being stretched greatly, and it will spring up or down from here strongly.  The jury is still out; for as bear markets go, this is very early stage in the cycle.  The "old pro guru's" who so far are wrong on their bearish calls, still may win out.  Observe the steadfastness of Jeremy Grantham (who is often early, but right, on bear market calls) discussed yesterday his thesis of "a clear-cut stock market bubble."  Google him.  Time will tell.

Disclosure...I did not go to a 0% stock based allocation.  But my trigger is on the sell button to exit some more, at any time....depends on the market direction.  It will tell me what to do.

R48

 

 

 

 

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Re: Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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@retiredat48 Do you think Grantham is credible? I don’t find him so. He’s been a permabear for too long now, bordering on the Hussmanesque. He’s also gotten increasing political, which is a red flag for me (politics and investing don’t mix well). And his forecasts have been all over the place and not very accurate.

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Re: Fidelity Data: Approximately 1/3 of investors >65 of age sold out between Feb/May

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@chang wrote:

@retiredat48 Do you think Grantham is credible? I don’t find him so. He’s been a permabear for too long now, bordering on the Hussmanesque. He’s also gotten increasing political, which is a red flag for me (politics and investing don’t mix well). And his forecasts have been all over the place and not very accurate.


What you post is true.

But I still follow his rationale on things...he is one of many I listen to.  Grantham went bullish on commodities about three years ago, and it was completely off the mark.  His dire global warming concerns are very one-sided analysis, to me.  His seven year forecast are mostly based on return-to-the-mean analysis...sometimes spot on.  I think his current stock asset recommendation is Emerging Markets for best next 7 year return.

One thing to consider is that it is hard for mutual fund managers to go bearish.  Grantham long ago had large fund accounts he managed for Vanguard...until he went bearish publicaly one year.  He got fired, as monies fled; but he was only a little early!

But I decide in the final analysis.  Just be aware some other superstar fund gurus predict new lows, as the most likely course for the market.

R48

 

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