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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Mike McFarland who wrote (14535)	3/1/1998 7:55:00 PM
From: Bonnie Bear	Respond to of 18056

Mike : 20% is enough. I'm about the same place: I've just saved so much I don't need much more to retire on, at age 40, without much help from the stock market. I ran some numbers and found that a kitty with 20-25% in value microcaps and value brokerage stocks (with historic yield of 14% a year) and the rest in cash at 5-6% works better than a mix of stocks and bonds, the only downside risk is that brokerage stocks get hit when interest rates rise, this is easy to watch for. So I'm letting the cash sit as money-market and keeping the at-risk portion small and in sectors I can manage easily. I get annoyed at the retirement calculators that all assume that we will have 4-5% inflation for the rest of our lives, it really skews the amount required to retire. I think a tax strategy is as important as the amount saved, you get more financial freedom when you're poorer than a church mouse in the eyes of the IRS because your assets are sheltered.

To: Mike McFarland who wrote (14535)	3/2/1998 12:34:00 AM
From: Bonnie Bear	Read Replies (1) \| Respond to of 18056

Mike: a suggestion for something I'm going to do: for retirement I am setting aside some money for buying the stocks of the people who manage the pension funds, rather than buying into their mutual funds. Here's my list: STT LM AVZ BEN BSC DLJ MER MWD WDR (an IPO) there's probably a few others but these are most of the biggest/best. Don't look at them for twenty years, add to them when things look terrible. Chances are quite good you'll do two-five times better than in a stock-bond mutual fund, and chances are quite good you'll only be holding three or four stocks when you're done as this industry is going to consolidate. If times are bad they'll be generating a huge dividend. They're all internationally diversified so it's better than trying to figure out what to buy or who to buy it from, you don't have to pay management fees, and you don't have to worry about buying overpriced stocks at the wrong time. The stocks of all these companies handily outform the best of their funds. :-)