*Boomer Bubble* I like the feedback here so far compared to over a
year ago elsewhere. For the benefit of those not interested I will
try to start with the subject so others can pass if not interested.
Bonnie, I agree completely. Your point is a keystone of my thoughts.
The tax laws have changed and people are investing their own money
and making their own decisions. We all have to do it in order to not
pay such high taxes on discretionary income. I just moved from CA in
1994 and felt I was "house poor" the entire time, even though my net
worth was inching up (actually roaring up during the housing boom, but
that's ancient history now).
Further, I say that people look at their investment options and they
choose the ones that show the best returns. Duhh!!!!! Nobody from
the 401(k) management firms tell people to watch out because norms of
investment returns WILL RETURN - MEANING THAT THESE FUNDS WILL DROP
IN VALUE AT SOME FUTURE TIME. They all say that there is risk, but
they are also well trained by their lawyers and know how to say risk
without ordinary people always knowing what they are saying. They
are sales people, so what do you expect them to say?
Could you imagine any financial management representative telling you
that you would be better off NOT investing with them? Of course they
want to manage your money. But if you determine that gold is where to
be, you are OUT OF LUCK because your 401(k) options are limited to
1-2 growth funds, 1-2 equity income funds, a lousy bond fund and the
money market fund. (Gold is just an arbitrary example. Substitute
your favorite option.) You can not directly buy bonds through these
programs. You can not hedge in gold or real estate. You can't start
your own business with your retirement funds.
When you look at the potential returns, there really is only stocks.
To have real choices you need non-401(k)/IRA money.
Since I am at the leading edge of the boomer generation, having hit
the big 50 I can see where the "boomer bubble" in investment might
be just beginning, in a relative (very long-term) sense. My worst
nightmare is that, in their infinite wisdom, our Beltway leaders will
manage to bail out the Asians (for now, in a way that makes people
not realize it's their money - as usual) in addition to the bailing
out of the Federal budget with Social Security trust funds only to
see all of these pyramid schemes collapse at once on our children.
Do we really know "how high is high"??
Ed Miller
P.S. I don't want to see a market crash so that OTHERS suffer.
I want to see sane market values and some pessimism return while
the huge boomer population is still at work, because I feel that
we have to be a big part of the solution (relating to the pyramid
references above). We can be part of a solution only if we are
still working and not when we are near the grave. This does not
reflect on the quality of the younger generation - it's just the
numbers. |
