Sure I'll "buy" it.
Bear markets are as inevitable as the proverbial "death and taxes." What to do? Depends on age & circumstances. Youngsters can ride out several bears and still be fine - if history is a precedent.
But retirees are in a different boat and need to be very careful about the degree of risk they assume. This is always the case, whether you think a bear market is on the horizon or not. I take seriously the warnings (err ... rumblings) of David Snowball and Ed Studzinski and others in recent years. Of course, the problem with such warnings is they can be premature by years. That doesn't dismiss their validity.
I think what these persons are really concerned about is that many retirees who can't afford to lose much may be assuming too much risk. (And they're likely correct in their assessment.)
Oh - I took a 20% hit in 08 - but got it all back the following year. And, I'd weather another 20% hit just fine. But have grown more cautious with age and time - preferring to dwell mostly among conservative offerings like RPSIX, TRRIX, RPGAX and PRWCX. These will not prevent a loss - but they will help dampen the blow when the bear comes.
FWIW. - Thanks MJG

And copper damned well needs to fall, and by quite a bit. Anyone who works with copper, such as plumbing fittings, knows that in the last ten years the pricing has become totally absurd, undoubtedly due to China demand and market manipulation.

Yeah, "Edge of Night". Went on for years... Just like the problems with IE.

@bee and @msf
I did note previous in this thread about being able to itemize deductions for federal (which may also positively affect state taxes, too); and that this ability may have value with deducting mortgage interest and/or that mortgage interest may be the trigger for enough money to get into the itemized deduction section.
It has since been noted too about being able to deduct property tax, and other smaller items that would not otherwise be able to be used.
Another itemized dedcution that has become "more" important in the last year is for the medical expenses area. I will guess that this was not the case previously, except with special medical circumstances within a family's expenses.
NOW, with some families finding more extreme montetary expenses from compliance with ACA, I will again guess that more families now also have this area available for itemizing.
From experience with some friends and families, the following may now exist:
---much higher out of pocket costs for medical and dental plans
-including policy premiums
-co-pays (medical/dental)
-co-pays (meds)
I played devils advocate with several folks beginning the start period for new ACA rules to help determine previously unused/couldn't use itemized deductions for this area, due to percentage cut off points. Most of these people would not have considered these deductions in prior years.
Some were now able to include medical/dental expenses due to higher policy premiums, more out-of-pocket expenses for items related to medical and dental. There are many items available to include within this itemized area.
Obviously, everything will vary depending upon one's personal monetary circumstance.
However, this is another point of consideration for maintaining a mortgage to allow for this interest deduction that may allow for many other itemized deductions.
Lastly, as a method of testing whether all of this may be of value versus using the standard tax deduction; is to use tax software and create another "user" tax report as if it was going to be the "real thing". From my recall, the two most popular tax software programs let one create up to 6 tax returns. So, one may fill in the blanks to test if medical/dental deductions of all flavors would meet the cut-off percentage to be of value in reducing taxable income.
Sadly, as we know; tax things should not have to be so complex for regular folks, but this is how things are, eh?
Note: many years ago, we did move to a 15 year mortgage at something around 6.75%.
As has been noted here, we pretty much doubled up on the monthly payment. The only variable was that we funded retirement investments to the maximum first. The most important factor, as we here know; is that we did not live beyond our means and were and still are very good with money flows revolving around the wants and needs of human nature.
I think I rambled about what was in my mind an hour ago. :)
Take care,
Catch

Personally the best thing my wife and I have done financially was to convert our 30-year mortgage to a 15-year mortgage years ago. We will have no mortgage when we retire. That is huge.

One can accomplish this by making extra payments on a 30 year mortgage. The advantage of doing it this way is that if you ever need/want to not make the extra payment you don't have to. I often skip the extra payment around the holidays and make up the difference when I get my tax return. I like the flexibility of having a lower required payment (30 yr) that I choose

when to make extra payments (as if its a 15 yr).
Here's a calculator that help figure out what the extra payment would need to be:
what-if-i-pay-more-calculator

Years ago, I got a cold call from a mortgage broker, trying to convince me to refinance to a 15 year to pay it down faster. I said exactly what you wrote - that I could do that myself. His retort was that 98% of people who say they'll do this don't. I can't comment on the accuracy of his figure, but I'm sure that many people don't have the discipline to do this (not anyone here, of course :-)).
I did ultimately refinance, first to a 15 year, and later to a 15 year adjustable (first 5 years fixed) mortgage, figuring that I'd either refinance after 5 if rates were decent, or pay it off. I lost the flexibility you described, but gained lower rates. Again, no free lunch - I took on higher risk for better returns.

Personally the best thing my wife and I have done financially was to convert our 30-year mortgage to a 15-year mortgage years ago. We will have no mortgage when we retire. That is huge.

One can accomplish this by making extra payments on a 30 year mortgage. The advantage of doing it this way is that if you ever need/want to not make the extra payment you don't have to. I often skip the extra payment around the holidays and make up the difference when I get my tax return. I like the flexibility of having a lower required payment (30 yr) that I choose when to make extra payments (as if its a 15 yr).
Here's a calculator that help figure out what the extra payment would need to be:
what-if-i-pay-more-calculator

Paying off a 3% mortgage seems to me a very conservative/safe move. I'd liken it to owning a Treasury Bond netting holder a guaranteed 3% after taxes. As safe investments go, in an era of minuscule bond & CD rates, that 3% guaranteed return doesn't look bad.

Assuming you itemize deductions, you need to compare with a Treasury yielding 3% beforetaxes. It's a common mistake - one that Mr. Burns made as well, and that I commented on above.
The pretax cost of the mortgage is 3%. When you itemize, you get to reduce your taxable income. This results in a tax savings (and so lower net cost of the mortgage). So your aftertax cost of the mortgage is 3% x (1 -r%), where r% is your tax rate.
That's exactly the same equation and net yield on a Treasury with a 3% pretax rate. Same idea - income taxes reduce the magnitude of any figure - the yield of a mortgage or the cost of a mortgage.
The "lock" problem cuts both ways. In order to get a Treasury yielding 3% (pretax), you have to go out 30 years. Odds are, your mortgage has fewer years to go. The only way to get a better return on the cash is to take on more risk. As you suggested, rates might rise to 5-6%. In the meantime, you've put money into a lower yielding, shorter term Treasury, hoping (risk) that rates will rise soon enough and fast enough that you come out ahead. Or you've invested in a more risky vehicle to get a higher return.
TANSTAAFL.

Personally the best thing my wife and I have done financially was to convert our 30-year mortgage to a 15-year mortgage years ago. We will have no mortgage when we retire. That is huge.

Does it really matter? I look at it this way: every year the odds are 50-50 the markets will go up and 50-50 they will go down. Some years they might go up a lot (smaller odds), and other years they might go down a lot (also smaller odds). That's why I have a long-term view of things and have an allocation that will allow me to sleep at night. If I based my investing decisions on what bad things might happen, I would never get out of cash. Am I going to go to cash just because I plan to retire this year? Of course not. I would want to be sure, though, that I have set aside 3-5 years of portfolio cash flow needs in cash, CDs or short-term bonds.

http://money.usnews.com/money/personal-finance/articles/2013/09/05/are-you-afraid-to-spend-money
Junkster and I have been posting similar threads - money and retirement.
I'm wondering how many people here, in retirement, under-spend out of fear or some other issue - must see net worth grow, net worth must grow for ego issues?????????
I grew up poor but I always enjoyed life. I have a strange issue, I don' t like to spend money on thing that take up space. I don't care about cars, as long as they work. But, I'm OK with spending money on things like travel and food.
To be truthful, I have a spreadsheet projecting out my net worth out to 100 and even when adjusting for inflation I a great final net worth - something many would envy. That is with conservative spending and growth.
We all may remember people who lived through the Great Depression. In later years they might have a great deal of money but, they could not spend it. They were OK with giving it to other but they just could not spend it on themselves.
I'm in great health and plan to spend more. BUT, IT IS STILL A PURPOSEFUL EFFORT, TO SPEND.
I try to remember, will I be on my death bed wishing I spent less??
So, what is your story on spending?

Thanks to OJ & davidmoran for their thoughtful and considerate thoughts.
I agree a lot has to do with comfort level (the sleep factor as OJ put it).
We deal with a fine local bank. If anything changed in that regard, we'd pay them off and get out fast. The two "re-fi"s in recent years went to pay for a couple additions on the house. So our equity rose along with the debt. Also, I refuse to go out farther than 15 years on a mortgage no matter how attractive the rate.
Actually, have recently considered paying off all of the mortgage - as it's getting harder and harder to earn 3% in the bond/equity markets without going out there quite a bit on the risk curve. Am only around break-even YTD.
So it goes.

Second BobC. Explorer is the worst possible choice. As a longtime UNIX/Linux/etc user I have used Firefox for years without the kinds of problems that I hear of with Explorer. (And no desire to find out.)

@Hank- Yes, your position on this is perfectly logical, and was my original position also. What drove me to pay off the mortgage early was that after some years it got transferred to BofA due to banking consolidation here in SF. I refuse to be beholden to or associated with BofA for anything for any reason. Just a quirk on my part.

I don't have a mortgage either and it is a nice feeling.
I'm thinking that at some point it may be advantageous to take out a mortgage. With low interest rates AND a fixed rate mortgage AND the offing (I'm guessing in 10 years) might look good.
Think back to the 1960s when people had low interest rates; then in the 70s interest rates rose.

Accepting the conditions, whatever they are, will not have any efficacy. You cannot 'austere' (if that is what is meant) your way here to economic improvement or health.
Wolfgang Munchau in FT:
If you have been unemployed for five years, with no prospect of a job, it makes no difference whether the money you do not get is denominated in euros, or in drachma.

Tend to agree with bee. Assuming that money is money, it would appear to be a question of whether you want that money invested in the equity of your home or in some other productive asset like mutual funds.
We've always had a mortgage or rent payment of some sort. Guess we've grown used to it. The current one at 3% has about 10 years to run. I'll rather miss it when it's paid off. Think of a fixed rate mortgage as an "anti-bond" - or a bet on higher interest rates. It can serve as an inflation hedge by stabilizing housing costs during periods of rising prices.
I'd argue that you have more control over the money if it's in a highly liquid asset like a fund than in home equity. But, will admit that the home is the "safer" of the two investments and apparently (to many) has a greater emotional value.

Tax deductions (itemized deductions) can and/or will be altered if one's mortgage interest deduction is large enough to "help" move one into the itemized deductions portion of a tax return. This deduction then allows one to gather all of the other smaller deductions to become a larger value which may be a large enough dollar value to be of benefit to reduce taxable income.
'Course, everyone's circumstance will vary with this.
Many years ago, with the elimination (payoff) of our mortgage; we no longer had enough other deductions to itemize them on the 1040. But, the mortgage interest was gone and all is well.

One M* thread with respect to possible annoyances:
http://socialize.morningstar.com/NewSocialize/forums/p/347815/3634184.aspx#3634184
I have looked at it off and on for the past few years more for my grandchildren donations rather than my own account. It's actually simple and credible. If nothing else one can get a great number of potential ideas from looking at the portfolio's that the site and others have created.

Article by Craig L. Israelsen:
"So after six years of a surging bull market, I wanted to revisit that analysis to discover: Does value-oriented investing still win out? My goal was to find out whether the value premium has persisted among U.S. large-, mid- and small-cap equity indexes — and, if so, to quantify its impact."
and,
'These findings do not argue for eliminating growth-oriented assets from a portfolio. However, the analysis does suggest that a value “overweight” is justified in the long run — particularly among small-cap U.S. stock mutual funds."

Article:
can-value-investing-still-trump-growth?

Hi Scott,
Thank you for the superior summary of David Winters’ year long decision making slump. Given the quality of all your posts, I expect nothing less.
It seems like Winters has bumbled and fumbled from one bad decision immediately after another. Slumps happen.
That is definitely not the David Winters of 10 years ago when he abandoned Michael Price’s Mutual Series of funds. Winters had the opportunity to learn from two investment grandmasters, both from Price and for a short time from Max Heine. Considering the lapsed time, perhaps he is forgetting or misapplying the lessons and rules that they passed to him.
That’s especially why I am anxious to see the upcoming interview. It will allow us to contrast the high-riding star manager of yesteryear against the down-to-earth struggling manager of today.
Less importantly, I’m also intrigued by how Consuelo Mack will conduct the interview given that the Wintergreen funds are co-sponsors of her program. I anticipate she will do a competent, workwoman-like job. She is consistently polite, but does ask the tough questions.
Best Wishes.