Market timing does not work. Most of us want it to work. It’s quite appealing to think that we could be invested when things are good and get out when things are bad. If only. If you’ve been with us long enough, you’ve heard us say over and over – or perhaps ad nauseum! – that only patience and discipline will win the day. Like anything we try to teach about investing, it’s rooted in science and data. Here’s some that demonstrates why market timing does not work: This graph from Morningstar shows the difference between the return that mutual …
Lesson Learned? Hopefully
Two years ago, just before the market hit its last peak, we met with a couple who were ready to retire. At age 52. Ah, the dream! Hey, if you can do it, then do it. They thought they could do it. All they needed was $300,000 per year from their investment portfolio. So what do you think they had saved to fund this withdrawal rate? 6 mil? 7 mil? $3,000,000, plus or minus. Much of it taxable. Even for you arithmophobes, that’s easy math. They needed 10% percent per year. That rate would generate the $300,000 they needed each …
Frequently “Oaked” Questions
You Asked, So We’ll Answer FOQ: The last market high was 17 months ago. Will it ever go up again? Short: Of course. Long: Sideways, down, bumpy, jumpy – whatever the market has thrown at us, since its very beginning many generations ago, it has always recovered and pushed onward to new highs. The current rut is of the sideways variety (at this point). Let’s put it into context: It’s certainly not a straight line…but it’s not as crooked as you might’ve thought, we bet. Nevertheless, every one of those bumps on the way up hurt, just like the …
What To Know: TD to Schwab Transition
Over three years ago, TD Ameritrade, the custodian of your investments, announced that it was being acquired by Charles Schwab. Finally, the day draws nigh when Schwab will retire the TD name, and your TD-green statements will turn Schwab-blue. The transition will be complete over Labor Day weekend. When we founded Great Oak, we chose TD as your custodian due to its low costs and superior technology. Fortunately, Schwab recognizes those qualities and will continue the good work begun at TD on your behalf. Not much will change. Visually, your statements and the Schwab website will look different (though most …