Thursday, April 26, 2007

Retirement Musings

As I generally keep a pretty good eye on my retirement, I find it interesting now to see all of the stuff that is going on in terms of the markets. People acknowledge that the markets are doing much better than the economy. Last night I watched a news report that showed that the increase from 12k to 13k for the dow has only taken the last 7 months whereas the previous increase of 1k took 7 years. Now granted, I will give you the fact that compounding helps, but the power of compounding (in the short-run) for 11k is not all that different than 12k. So that is not the whole answer.

Should I be discounting?

What I am considering is actually padding my retirement spreadsheet by adjusting my retirement account figures down by 5% in order to "buffer" for the coming storm. Frankly, I am glad that the market is seeing all time highs, but I think in that sometime in the next 30 years there is going to be some kind of correction for this kind of growth. It's just a little too much, to fast, I think.

Are we catching up for lost time, maybe? I mean, we had 7 years of rather lackluster growth largely due to 9/11 and the dot com nonsense and the fear that housing is going to bust us all is not really materializing so far (thank goodness). So I am inclined to think that a large part of this growth is just making up for those bad years we had.

On the fence

As you can see, I am planted firmly on the fence about this. As for my roth money though, I am making my contributions but not investing them until I have a better sense. I put in a chunk last month anyway and I think it is far more likely that I am going to see things either stay flat or go down at some point before the end of the year rather than continue their astronomical growth. Plus, I'm dealing in hundreds, not thousands, of dollars. So a little bit either way doesn't really matter.


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