Read? Should you follow the 3% or 4% retirement rule? (2)
She is 62 and Uncle8888 is 61+
After every market cycles; we are older; and after a few market cycles we are already or nearly senior citizens. When we have enough net worth to last our lifetime; do we still want to ride the BULK of our net worth in the stock market cycles of vulgarities without the support of earned income from our human asset.
Although, some of us may continue to work free lance, part-time or pastime when our health still allow us to be active; but we are likely to be on lower income which may be just enough to cover our own personal allowances e.g. Uncle8888's One Year After Retirement From Full-time Job As Employee.
His 8 HWW (Hours Work Week) can cover his own personal allowance for daily meals, monthly transportation cost and mobile plan; and hopefully he is qualified for next year Workfare MA top up to cover his Medi-shield premium.
After the last Bull Market in 2007; he has learnt something from Mr. Market about the true value of our net worth. How much of our net worth is exposed to Mr Market's moods and vulgarities?
We can be millionaire at Point X with large exposure to the stock market; but when Mr Market changed his mood after Point X; we may just lose that title in term of months if not weeks!
How do we define our success in investing after Point X in our lifetime of investing in the stock market?
Posts
CW,
ReplyDeleteLOL!
After the sound and fury of our debates, at the end of the day, we both come back to boring square 1 - we see eye to eye again :(
Let's hope iron-teeth temperament will continue to play the opposition for the sake of opposition role!
I wonder what he will say about this post in relation to your legacy to children post?
Aren't we supposed to HOLD forever and never sell? Even pass on to children as part of our legacy?
Hee, hee.
Its good to create a bit of confusion and doubt for those who are still climbing up the mountain.
A bit of "grey" will make people pause and think for themselves.
If its sure win, 100% "bao chiak, what's there to think? Just monkey see and monkey do lor!
Even pros like Peter Lynch & George Soros know when enough is enough to walk away. Soros vey recently moved the bulk of his personal wealth into his charity trust.
ReplyDeletePeter Lynch may have missed the huge 90's boom where he might have increased his fame & fortune by 10X. But so what?? He might have got too caught up & crashed & burn after 2000 too. Or during GFC.
Bill Miller & Bill Gross comes to mind.
As retail investors, even more we need wisdom to know when enough is enough. Of course that wisdom includes knowing *how much* to risk (war chest) if stock market comes crashing down to irresistible levels. Or limiting to 5%-10% "play money" for those who know their hands too itchy with trading or gambling. Hahaha!!!
As for the 3% or 4% drawdown from portfolio during retirement ... it's mainly for those who haven't quite achieved enough retirement sum. Which is to say the majority of the population. Remember that most people only save 5%-10% of their income for retirement. The rest goes into a single property & lifestyle. LOL!
The academics are trying to calculate how much can safely withdraw without exhausting the portfolio too early. BTW this is for portfolios containing only 30% risk assets like stocks. If you're talking 100% stocks portfolio, even 3% annual drawdown will have high chance of blowing up the account.
For legendary traders; we have Jesse Livermore and Richard Dennis who didn't know how to walk away to maintain their record performance somewhere near their peak.
DeleteSpur and CW,
DeleteI myself am quite impressed with the business acumen of Li-Ka Shing.
He took profit and diversified his investments in China to overseas long before 2016 when the world suddenly took notice of China's credit excesses and flight of capital overseas...
Through out our 5,000 years of China history, how many heroes have wished they had quitted when they were ahead? 急流勇退.
Overstaying their welcome has cost many of them their heads...
Read? When you have enough money
ReplyDeleteHi Uncle CW,
ReplyDeleteDon't mind me 没大没小.
When I read the "market" and "vulgarities", I tio stunned. How can market go @##!#!@#4^%&
LOL!
It's more of "vagaries of the markets" ... but I know what Uncle8888 meant ;)
DeleteHey, sometimes the markets make me go !@#$%^&*!!! too ... Hohoho!!!