Don’t Blame Yourself

I tried.  I really tried.

I did the best I could with what I was given:  A job, lots of bills, and just myself and my wits to depend on.  That’s pretty much the bulk of it.  I put as much money into investments as I could, with the idea that I could have been putting it somewhere else - like, oh I don’t know, prostitutes, drugs, expensive cars, or clothes.
I don’t crave sex, use drugs, drive expensive cars, or wear fancy clothes.  It’s a character flaw, I guess.

The thing I could never figure out is how people who earn the same salary as I can have shore homes or live in a better place than I.  I always figured it’s because they are more comfortable in debt than me.

So, this retirement thing is coming up, and coincidentally the stock market is tanking and the country is at full employment. Great timing.  I have less money than I had a year ago, and it’s going to be harder to find another job.
Yeah, right - I’m going to have to find another job. It’s not like I’m 80 years old with a fortune saved and can afford to put my feet up and watch the world go by ...
...unless I want to, I guess.

Two financial advisors told me that “you’re in good shape,” and I can afford to live off my meager (by my estimation) savings, Social Security, and my shitty pension.  I guess I should believe them, but my financial paranoia makes it difficult for me to believe that I can get by on what I have managed to save over the last 30 years.

I had planned on working another 5 years - so that I could get to the magic age of 65 and then put my feet up and enjoy the last 20-or-so years of my life.  The retirement offer came out of left field and I was put in the unenviable position of deciding that the risk of working another four years was less than the “bird in the hand” of taking what was given to me and leaving with a fistful of money.  Money that I wouldn’t leave with if I kept working.  It’s a long story, but trust me that it’s true. I would fear for my career if I decided to stay.

The worst thing of all of this is that, as timing would have it, the stock market is in what they call “a bear market” and my retirement fund has lost about twenty percent of its value over the last eight weeks - or roughly the time between when I was told about the retirement plan and — now.

So, I am scrambling.  I was planning on having another five years, but instead, I have perhaps six months.  I have moved money into conservative investments.  It pains me to give up investing, but since my financial future depends on it, pumping the brakes is the equivalent of security - so I pump.

Fresh money is going into cash.  Bonds are appealing. I am suddenly risk averse. The safety of dividends, fixed income, and bond yields are suddenly important.

The sad part is that there is no place to hide now. Other than inside my own mind.

Oh, What Now?

That’s a good question.  (I often ask myself questions)

The market is up 2% one day and down 2% another day - but mostly, it’s down.  Way more than 2%. Over the last six months, the S&P 500 is down from 2600 to 2300 - which is a 15% decline.  Most “experts” say that 2019 will be difficult for the stock market, since earnings will be tough to match and “The Fed” and China tensions will weigh on the index, making investors nervous.

If I was 25, I would be as happy as a pig in slop.  Markets are down, and I still have 40 years to invest.  I’d be giving up lifestyle enhancements to invest in this market.  Buy low, sell high and all.

However, I’m a year away from retirement, and my perspective has suddenly changed from someone who has five years left to one who has less than a year left and cannot risk losing his nest egg over a big market downturn.  So ...

If you have more than ten years before you will be tapping your investments, it’s full steam ahead.  Go forward with Square (SQ) and the others I have written about here and appreciate the downturn as a buying opportunity.  However, if you have less time left, consider ...

Bonds.  Geez.

BNDX is a worldwide bond ETF that has a five-star Morningstar rating, pays out 2.22% yield and a skinny 0.11% expense ratio.  That’s pretty cheap for international bond exposure.

BLV is a long-term bond ETR that invests in longer term US Treasuries and pays a 4% yield. It’s on Schwab’s Select List.

AOK is a nice conservative allocation stock/bond mix ETF if you are still transferring from stocks to bonds.

MINT is a short maturity bond fund that has a four-star Morningstar rating and pays a 2.4% yield.

MUB is a public works ETF that invests in municipal bonds in the United States.  If you believe that the national infrastructure initiative will happen, this might be the place to be.  It pays a 2.4% yield and is Federal tax free.

So - there you go.