Stocks At All Time Highs, Time to Rebalance

The stock markets in the USA are hitting new records again, 21,000+ for the Dow Jones etc.  This happens about once a decade or so, and is unpredictable.  It means your stocks, ETFs, Equity Mutual Funds are probably at all time highs as well.

You probably have a desired portfolio allocation for stocks, bonds, international stocks, cash, etc.  Check your holdings and you will likely find you are over-weighted in stocks because of the market's performance.

So now is a good time to rebalance your portfolio if your allocation is out of balance by more than a few percent.  Sell some of those winning domestic equity holdings, buy bonds or international stocks or whatever you are underweight.  This means "take some of your winnings off the table."

This technique of keeping a balanced portfolio is recommended by Warren Buffet, Vanguard, Fidelity, and most other respected investment authorities.

Disclaimer: this is not professional investment advice and should be used at your own risk. The author is not a licensed financial advisor. You should not believe everything on the Internet including this blog and should check multiple sources possibly including a professional financial advisor before making decisions.

Photo credit: flickr

Russia and Putin are Winning

Getting your opponent taken over by a radical leader has worked in Russia.  Lenin was actually sent by train to Russia by Germany during WW1 to undermine the government and get the Russians out of the war.  The German plan worked perfectly as Russia devolved into a civil war and withdrew from WW1, freeing many German troops to go to the Western front to fight the English and French.

Helping Trump get elected is not quite as powerful and will not result in an immediate civil war in the USA, but it is paying big big dividends in terms of weakening the world's superpower.  We are lucky that Trump is not as smart as Lenin or as charismatic.

Not all of this can be directly tied to the Russians but they certainly helped:

1. Reduce the USA's stature in the world by getting an obvious blowhard, lying, racist narcissist elected President.
2. Make democracy look bad as Trump lost the popular vote, won the election, and he does not care about the people who did not vote for him.
3. Undermine the free press by having the President and his supporters call it "Fake News".  Kudos also to Rupert Murdoch for destroying trust in the press while running a company that considers itself part of the press.
4. Undermine the judicial system by having the President and his supporters attack judges, defendants, free speech, and the courts.
5. Undermine the US intelligence agencies (CIA, FBI, NSA) by having Trump accuse them of criminal acts and lying.
6. Making the USA look silly as they know the Russians manipulated the election, but cannot do anything about it since Trump is President.
7. Split the USA into two camps that detest each other:
1. Conservatives
2. Liberals

So the Russians are certainly winning at this point, we can only hope that this stops soon.

Retirement spending thoughts

How your frugality can sabotage your retirement http://flip.it/rNiZe9

Why Boomers Are Not Downsizing

There are numerous news reports that Baby Boomers are not selling their houses and downsizing to condos or smaller dwellings.  As a boomer who has downsized to a condo, this intrigues me.  Why is this happening?  Perhaps some anecdotal evidence from friends and acquaintances will shed some light on this.

Downsizing Requires Foresight

Typically, you will become physically unable to maintain a house and handle a move in your mid 60's to early 70's.  If you are going to downsize, you should really do it in your early to late 60's based on foresight that you will be physically unable to handle your house or a move later.  It is easy to overlook your coming infirmity and stay in your lovely house until you are too old to move without major disruption.  We know a 75 year old couple who are now too infirm (she has cancer, he is too weak) to ever move out of their 3000 square foot suburban house.

Inertia

It is easy to stay in your current situation, enough said.

"I Will Never Pay Condo Fees Like That!"

After 30 or 40 years of owning a home and paying for maintenance of the home, it is hard to swallow the idea that you will pay a fixed monthly fee for condo fees or rent.  These folks religiously believe that it is better to buy than rent and condo fees seem too much like rent.  We know a couple of 60 year olds who balk at the idea of $500 a month for condo fees but they are OK with getting a new roof installed for $10,000 and paying $400 a month for utilities.

We Need The Space

I have some sympathy for this idea as downsizing means that you cannot keep all that "stuff" that you accumulated over your 45 years as an adult.  You cannot put all that junk you own or buy in the basement or garage.  The alternative of spending $200 to $300 a month for a storage unit brings them back to the issue of spending money on rent.  We know a few couples with this hangup.

We Like the Neighborhood

This is a very valid reason to not move assuming you cannot find a condo or smaller dwelling close to your current home.  It is harder to make friends and settle in a new area when you are older.  If you lived in a place for 10 years, it is easier to stay than move.

photo credit: flickr