odds of bear market highest since 2007_ (anyone buying this?) Hi Dex,
Your interpretation of BobC’s 50/50 market odds is very naïve. Formally, your reading might be called a Probit (PROBibility unIT) statistical measure. That form of measurement reduces the stats to an overly simplistic either/or positive/negative final judgment. Based on your post, you are satisfied with an equally weighted outcomes probability. The historical data does not support that weighting.
Either/or results need not be equally weighted. When a baseball hitter makes an official plate appearance, he can register either a hit or make an out. Extending your assessment, he has a 50/50 likelihood of either outcome, batting averages notwithstanding. You will surely go bankrupt if you accept the hit side of that wager.
Allow me to recite another extreme example of the problems assigning an equal probability to a bifurcation event for the mistaken reason that there are merely two possible happenings. Weather serves as a terrific illustration.
In my part of the Southern California landscape, any weather forecaster would lose his license to practice if he assigned a 50/50 odds for rain or clear on any given day. The proper odds likely hover at the 2/98 level against rain. Bifurcation does not typically translate into equally probable events.
From a Franklin Templeton market summary, over the past 88 years, the S&P 500 recorded 64 Up and 24 Down years. That is a 73% likelihood of a positive annual return. For the 64 positive return years, the annual average return was slightly North of 22%. For the 24 negative return years, the annual average loss was just South of -13% . So, not only do the odds favor a positive annual year, the returns for the positive years swamp the less likely negative years. That’s a double positive.
These favorable equity return stats are the basis for investing in stocks. The historical data shows that fixed income investments (like Bonds) have a higher likelihood of a positive annual return than stocks, but the payoffs are more muted. That’s why most portfolios that seek growth emphasize its stock components.
I’m sure you are familiar with these commonplace statistics. Given that familiarity, I’m puzzled by your submittal. You are just plain wrongheaded if you really believe that, without further mitigating circumstances, the odds are 50/50 that equities will deliver a positive or a negative reward/penalty in any given year.
Of course you’re free to assign whatever probabilities you like to the markets, but that’s being more than naïve; that’s completely ignoring the available database at your investment peril.
Good luck, and you will certainly need all of it if that’s your understanding and use of market statistics. I hope you were just joking or that I misread your post.
Best Wishes.
Where Are The Female Fund Managers?
Upside Reversal Day — Will The Momentum Continue? FYI: S&P 500 futures were higher prior to the open this morning, but things quickly turned south once the market opened for trading. At its lows this morning, the S&P 500 was down
1.2%. But afternoon trading brought an upside reversal, and by the end of the day, the index closed higher by 0.6
1%.
So what might today’s upside reversal mean for trading in the coming days? Does the positive momentum seen into the close today continue into the days ahead?
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/upsidereversal/
odds of bear market highest since 2007_ (anyone buying this?)
BBRG: The Hugely Profitable, Wholly Legal Way to Game the Stock Market
Are You Afraid to Spend Money? Junkster and I ...
I'll scrimp on unnecessary expenses (e.g, I pay about $10-$30/year for cellphone service, depending on my limited usage). But I won't cut corners on essentials, like health care, or on family (stop smirking, all you people thinking of Greece :-)).
That looks great, at least worth trying - you can't beat free.
Mine is a legacy plan, no longer offered: T-Mobile prepaid (the old one). When I was doing more traveling for consulting work, I'd pay $
100 for
1000 minutes which would usually last me the year. Now, I'm hardly using any minutes. Just need the line.
For that, all I need to do is top it off with $
10/year (30 minutes airtime) - that keeps the account active and retains all unused minutes. If I ever get close to zero minutes left, I'll pay $
100 for another thousand minutes, which will last me several years at my current usage rate.
Here's a page describing the old prepaid plan and the new one:
http://www.prepaidphonenews.com/2014/08/good-news-bad-news-changes-coming-to-t.htmlThe new one isn't that much worse than what I have, depending on your usage pattern.
Are You Afraid to Spend Money? Junkster and I ... QLAC Primer:
understanding-and-implementing-qlacs-in-a-retirement@Junkster...The author suggests:
You could divide the $125,000 limit into three policies, enabling withdrawals at ages 75, 80 and 85, respectively. It wouldn't provide as large a distribution as if it all came at age 85, but this staggered approach provides flexibility and hedges against life's "what ifs." and,
Similarly, you could craft a staggered, multi-QLAC arrangement, each with different benefits and payout timing. One could have a COLA, another a cash refund and a third could forgo the cash refund. This would provide varying income streams at different stages of retirement.
Are You Afraid to Spend Money? Junkster and I ... >>>This thread gets me back to a theme I've been posting on (some might say excessively) lately - guaranteed income streams. Whether from immediate annuities, SS, or longevity insurance, they do help to relieve concern about needing to save (hoard?) for lifelong needs. 'Nuff said.<<<<
I have 100% decided that when I turn 70 that I will purchase the newly approved QLAC (Qualified Longevity Annuity Contract) You can deduct up to $125,000 of your IRA to purchase such and they are *exempt* when figuring your RMD. I will take one that begins paying out at 80 and will get a bare bones version that has no death benefit etc. Presently only two or three insurance companies offer QLACs. More will join the bandwagon in the future. I will only deal with New York Life and they are expected to join the QLAC fray within the next year.
Are You Afraid to Spend Money? Junkster and I ...
I'll scrimp on unnecessary expenses (e.g, I pay about $10-$30/year for cellphone service, depending on my limited usage). But I won't cut corners on essentials, like health care, or on family (stop smirking, all you people thinking of Greece :-)).
I'm thinking about going to this one. Which do you use?
https://ringplus.net/
Q&A With Scott Burns: Paying Down Your Mortgage Is More Important Than Tax Deductions A few more details about medical expenses and taxes (to throw into your personal tax mix):
Also, if you have self employment income equal to or greater than your medical insurance premiums you can reduce self employment income dollar for dollar up to what was spent on medical insurance premium. This is an AGI, not an itemized deduction, so it's not necessary to itemize to take this deduction.
from link:
" If you are self-employed, you can also deduct the cost of your health insurance premiums regardless of how they compare to your adjusted gross income. Deduct the total amount of health insurance premiums paid for the previous year on line 29 of Form 1040. Fill out the "Self-Employed Health Insurance Deduction Worksheet" in the instructions for Form 1040 to calculate your deduction amount."deduct-medical-expenses-adjusted-gross-income-15960.html
Q&A With Scott Burns: Paying Down Your Mortgage Is More Important Than Tax Deductions A few more details about medical expenses and taxes (to throw into your personal tax mix):
- The
tax laws were changed so that medical expenses are deductible only to the extent that they exceed
10% (formerly 7.5%) of your AGI (Form
1040, line 37). That's net expenses, after ACA subsidies.
- There's a two year exception for people over age 65 (lasting through tax year 20
16); for these folks, the floor remains at 7.5%.
- If you use a special tax account (e.g. HSA) to pay for some medical expenses, then you can't use those particular expenses in calculating your medical deduction.
- Insurance premiums (other than Medicare, COBRA, and LTC) can not be paid out of an HSA (so the only place they can be used is in calculating medical itemized deductions).
- A person under age 65 may not pay for their spouse's Medicare premiums out of their own HSA. (You must be over 65 to pay for Medicare premiums from your HSA.)
