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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (119089)	8/10/2009 1:36:44 PM
From: Tommaso	Read Replies (1) \| Respond to of 132070

In May of 1999 I posted: "It's not just companies. Millions (I think it's millions) of non-profit employees who contribute to TIAA-CREF have the option to switch their entire pension contributions to stock funds, and many of them are 100% in equities. Some have been extremely lucky. Those who have switched out and into a fixed annuity for the rest of their lives in the last year or two (as did my next-door neighbor, who knows and cares nothing about economics or individual stocks)are very well fixed. Their incomes are well above what they were making before they retired. But those who are presently about ten years from retirement and who are 100% in equities may be terribly disappointed. There are some very complacent persons aged 50-60 in the educational system. They were badly frightened last fall, but gleeful since then, and still confident that 15-20% increases in their accumulations will continue to the limits of their working horizons. " Incidentally, at that time I put most of my wife's CREF into the inflation-protected bond fund, which has had a 94.20% total return since 1999, as opposed to CREF Stock (total return of -19% for the same period), the CREF Growth Fund down an incredible -44.71% for cumulative total rate of return, and even the bond fund with a total return of positive 65%. Money market sort of broke even with 37.54% positive total return. This is all for the last 10 years. These results completely explode the complacent buy-and-hold advice. But I think I recall that you and I both thought in 1999 that there were millions of "investors" who really did not understand what they were into or why they had done so well for the previous seven years. The situation for retired holders of the CREF stock funds is even worse than it appears from the numbers above, because their payments have been reduced by 40% to 50% from what they were a year ago.

To: Knighty Tin who wrote (119089)	8/11/2009 5:13:13 AM
From: Madharry	Read Replies (1) \| Respond to of 132070

Getting debt under control Commentary: U.S. consumers are putting their affairs in order View all MarketWatch First Take › ‹ Previous Column Microsoft is now top of newsletters' most popular First Take › Debt is Americans' hot new investment Story Comments Screener (75) Alert Email Print Share By MarketWatch BOSTON (MarketWatch) -- Even as analysts debate whether the stock market's five-month rally is nearing its end, it's clear that consumers are more interested in paying down their own debts than they in betting on the market. June marked the fifth consecutive month in which consumers paid down credit cards and shaved other debt, according to the Federal Reserve. In a depressing economy, reducing debt is no surprise, but the Fed's big news was that the amount Americans put into debt reduction was twice as much as economists expected. All told, the Fed says that Americans cut $10.3 billion off of the wrong side of their balance sheet, or more than 4% of the $2.5 trillion consumers owe. Analysts expected the debt reduction to be closer to $5 billion. With fear of a violent, sharp market downturn fresh in their minds and with cash and ultra-safe bond investments earning next to nothing, debt-reduction is the best investment most consumers are comfortable making. Every dollar they pay off now, the interest they don't have to pay in the future represents an investment return. I THOUGHT THE ABOVE WAS PARTICULARLY AMUSING BECAUSE OF THE SLIGHT MATH ERROR. THE REDUCTION IS .4% A DROP IN THE BUCKET.