Reply To: Pension in a diversified portfolio
Thanks, the way I see things right now, long term: our economy is still in the process of improving and kicking-off; employment and salaries are still to improve; eventually the Fed will gradually increase the interest rates; stock equities are reflective of that improvement and so still have a ways to go till we collectively plateau. There is much upside in the stock equities. Sure, there will be the few hiccups – e.g. the Greek predicament, but that will eventually resolve itself and we be back on course. The market is fickle. Greenspan once used the term irrational exuberance, there too is irrational fear. I snicker to myself observing the market reactions when the Greek Prime Minister says one thing and then reverses himself and says another multiple times. Someone is making money in all that volatility. I’ll back off the stock equities once it seems that we have reached or come close to that economic plateau. However, what are the indications of that plateau – unemployment at 4%, 30 year mortgage interest rates at 7%, things humming smoothly, etc? Still trying to figure it out. What’s neat about the pension and social security is that it will be cash in hand regularly for as long as you live. You mess-up in one month, the next month starts fresh with another cash amount, unless the government changes the rules or the plan messes-up. Stay healthy, live long, and prosper.