Wednesday, February 23, 2011

The Sarcasm Report v.91

February 22, 2011
5 funds that could kill your nest egg

Fidelity Freedom Income (FFFAX) is an interesting retirement fund. The problem is that no more than 20% can be invested in equities. While this may appear to be safe, it limits investors' upside. And as the average lifespan increases, the retirement savings that many baby boomers expect to see them through old age are falling short in many cases.

1. There's no better way to kill your nest egg than to limit your exposure to equities *after* they have doubled in price in just 2 years.

2. If you know you are a net seller of equities to fuel your retirement, as most baby boomers will be, then hold onto equities as long as possible. That way you can sell *after* everyone else does. Somebody needs to be the bag holder. Might just as well be you.

3. If you know your lifespan will increase past the point at which your retirement savings aren't enough, then you'll need to gamble in order to have any hope at all. Baby boomer needs new shoes! What could possibly go wrong?

7 comments:

mab said...

Stag,

Bailout queen Jamie Dimon gave a speech somewhat recently wherein he claimed capital was "portable". It was an empty bankster threat meant to deter CONgress from passing strict financial regulations.

Jamie's claim is wrong on so many levels especially since bank "capital" is now portapoo. In one sense (as shown in the linked video) portapoo is portable. Who knew?

Mr Slippery said...

But all the brilliant economists tell us that "Stocks for the Long Run" are the place to be.

What they forget is that long run means 150 years. If your time horizon is less, you might be out of luck.

getyourselfconnected said...

In the long run we are all dead as the saying goes. I hate that saying.

Stagflationary Mark said...

mab,

Jamie's claim is wrong on so many levels especially since bank "capital" is now portapoo.

Perhaps it is just an elaborate banking prank?

Mr Slippery,

If your time horizon is less, you might be out of luck.

The long run is great if you are running in the right direction.

GYSC,

In the long run we are all dead as the saying goes. I hate that saying.

In the long run we are all unfairly disqualified? Sigh.

Charles Kiting said...

And by all means, whatever you do, PUT YOUR ENTIRE NEST EGG INTO ONE AND ONLY ONE FUND.

Charles Kiting said...

And of course Fidelity's investment goals are enforced by law and punishable by death and forfeiture of all funds so they would never consider changing the fund's investment strategy if the returns were bad. No sir, no how.

Stagflationary Mark said...

Charles Kiting,

Excellent use of bonus sarcasm! :)