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jp4lsu
LSU Fan
Member since Sep 2016
3264 posts

Advice to my Dad

So I was talking with my dad last night, and voiced my opinion of how I think things are going to get much worse in the economy. So much of what I read points to that and then you add in the geo politics of Europe/Russia/Ukraine, energy costs, OPEC cutting production, and economic hit in the EU that will affect the US as well.
I suggested he gets real conservative in his investments. He is 73 and said he is about 70% in stocks.
What do you guys suggest for retired folks to invest in and diversify into?
My first reaction is a money market, precious metals, and such to ride this out and see what happens in the next 6-12 months.
This post was edited on 10/5 at 7:30 am


slackster
Stanford Fan
Houston
Member since Mar 2009
79004 posts

If your dad is in diversified stocks he probably doesn’t need you scaring the shite out of him and forcing him out down 20%+.

If the money he needs for the next 3-5 years is in relatively stable investments, leave him alone. He’s gone through many stock market downturns in his life, he’ll be fine.


PlanoPrivateer
LSU Fan
Frisco, TX
Member since Jan 2004
2659 posts

I'm about the same age and retired. I'm about 60% stock and 40% bonds. I'm letting my current IRA and Roth Ira's ride. If I move from any of these to cash, then I am locking in a loss on the hope of avoiding further decline. I'm in a position (knock on wood) where I don't need to tap into these retirement accounts.

Any money I have left over after living expenses are going into a money market account. I've begun small purchases of beat-up stocks and mutual funds / ETF's. Examples are: INTC, MU, DOW and SPYG. Nobody knows when the market will turn around.



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Joshjrn
LSU Fan
Baton Rouge
Member since Dec 2008
22674 posts

quote:

If your dad is in diversified stocks he probably doesn’t need you scaring the shite out of him and forcing him out down 20%+. If the money he needs for the next 3-5 years is in relatively stable investments, leave him alone. He’s gone through many stock market downturns in his life, he’ll be fine.


So much this.


footballdude
LSU Fan
BR
Member since Sep 2010
1047 posts

(no message)
This post was edited on 10/26 at 9:18 am


Niner
Auburn Fan
Member since Apr 2019
1868 posts

quote:

I suggested he gets real conservative in his investments.
You will do more to hurt his long-term financial well-being if he follows your advice than drops in the market will.

Is he withdrawing from his assets on a regular basis? What's his withdrawal rate based on his total portfolio? How much of his assets will he need in the next 5 years? These are just some of the questions I'm asking before suggesting a certain level of risk.

Keep in mind, too, what you read and how the economy is doing does not directly translate to market performance all the time. As has been stated 1,000 times on this board, markets will start recovery before (sometimes well before) the economy does. If you're trying to time the market based on news/headlines, you're going to fail miserably.


jp4lsu
LSU Fan
Member since Sep 2016
3264 posts

You're right Joshjrn and Slackster. I probably am worrying for am more than I should. We've had a 30% drop so far and things continue to look worse. I just worry about him losing another 40% at his age.
But he is on top of the news, economy and geo politics and I should leave him alone.


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jp4lsu
LSU Fan
Member since Sep 2016
3264 posts

Yeah, you're cprrect Niner.
He is withdrawing the required minimum. I believe their pensions and SS are keeping them afloat sufficiently. I had actually forgot about their pensions. So maybe I'm getting worked up over nothing.
But yes, what are you suggesting Niner?
This post was edited on 10/5 at 9:09 am


TigerDeBaiter
LSU Fan
Member since Dec 2010
10001 posts

Awful advice on the surface, without knowing much else.

I would stay out of your dads finances to begin with. If you want to help, hire a professional for him.


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Niner
Auburn Fan
Member since Apr 2019
1868 posts

quote:

But yes, what are you suggesting Niner?
If they can stomach staying put, I'd stay put - only because markets are at lows (may get worse before it gets better). But like I said, those questions only scratch the surface of what I'd be figuring out.

If they withdraw the RMD every year, and nothing more, how long would their assets last with zero growth?

Are they building cash? If so, have they considered simply investing part, or all, of the RMD in a taxable brokerage account instead of spending it?


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TD SponsorTD Fan
USA
Member since 2001
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REB BEER
Laffy Yet
Member since Dec 2010
14620 posts

quote:

precious metals


Please don't


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Fat Bastard
Atlanta Braves Fan
Member since Mar 2009
62437 posts

DO YOU NOT CELSIUS BRO?!?!?!?!?!?


jp4lsu
LSU Fan
Member since Sep 2016
3264 posts

100% Celsius. Thats the way to go.
Alright, you guys are right, I'll stay out of it. They are doing fine and have their pensions and aren't needing the investments at this time. Hopefully the markets are have done them well by the time they need to tap into it.
Thanks for the common sense and putting me in my place. I can always count on TD doing that.


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Turf Taint
LSU Fan
New Orleans
Member since Jun 2021
4855 posts

73yo, retired and 70% stocks does not require advice. It requires Bourbon.

Kidding aside, hope he used more conservative strategy to cover his critical fixed expenses (health, food, clothing, shelter, etc). Add bourbon to that list.


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TooSober
AA Meeting
Member since Oct 2015
312 posts

Exactly... If you or he are not following it closely enough to have gotten out when the trend broke in January, then now is not the time to try and start that.


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Jag_Warrior
Virginia Fan
Virginia
Member since May 2015
3001 posts

quote:

He is 73 and said he is about 70% in stocks.


For his age, that is a pretty skewed portfolio allocation. But we don’t know what sectors he’s in. Is that equity allocation 80% tech or high beta growth stocks or a more conservative mix of div payers? And how has his portfolio performed during this downturn?

I agree with the other replies that now is probably not the time to blow out of equity positions en masse (unless he sees a fundamental breakdown in a particular stock). And the absolute worst thing for any longer term investor (not trader) to do is stay glued to the news or get emotional about daily fluctuations. But if he wants to diversify with new money, maybe pick up some shorter term T-notes or bills.


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Upperdecker
US Space Force Fan
St. George, LA
Member since Nov 2014
27406 posts

A 73 year old that’s retired should be at a lower risk level than 70% stocks


Texas Tea 123
Member since Sep 2017
142 posts

Look the stock market is forward looking. In the present, it represents expectations about the future. Expectations are pretty grim right now, therefore the market is pricing in a lot of bad news. Is there still downside? Of course, but now probably not the time to be selling everything (retail generally pukes at the bottom, have to resist the urge and just stomach volatility).

If he owns meaningful $ amounts of individual stocks, it may be worth sharpening the pencil. If diversified in mutual funds, ETFs, etc, then I wouldn't touch it IF he doesn't need significant money in near term.

As one post said, 70% is probably not the right allocation to stocks right now at his age BUT now is not the time to change that. Give it a year then start repositioning.
This post was edited on 10/5 at 1:55 pm


slackster
Stanford Fan
Houston
Member since Mar 2009
79004 posts

quote:

A 73 year old that’s retired should be at a lower risk level than 70% stocks


Just depends on his reliance rate really.


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JohnnyKilroy
New Orleans Pelicans Fan
Cajun Navy Vice Admiral
Member since Oct 2012
31654 posts

quote:

A 73 year old that’s retired should be at a lower risk level than 70% stocks


Says who?



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