Retirees lose in bear markets!

[archangel]

During the 2000-2002 bear market,investors lost about $8 trillion.Many reirement nest eggs were emasculated.Meanwhile,Wall street's assets-based strategy gave insiders a cushion.The average American fund investor lost more than 40 percent in the bear market,fund owners and managers took in more than $200 billion annually in fees,operating expenses,transfers and soft money and other hidden compensation from deals with brokers and silent third party investors.(quote from Paul B.Farrell,market watch)

This is why Wall street is so desperate to get it's hands on trillions in new private accounts ie:SSA...This would mean billions in new fees for Wall Street..This points to hidden costs, expensive funds and lower returns...

I for one think this is a bad idea..it will only help Wall Street and there is a great potential to lose ones royal ass...ie: Your retirement money!

 

[Comrade]

During the 2000-2002 bear market,investors lost about $8 trillion.Many reirement nest eggs were emasculated.Meanwhile,Wall street's assets-based strategy gave insiders a cushion.The average American fund investor lost more than 40 percent in the bear market,fund owners and managers took in more than $200 billion annually in fees,operating expenses,transfers and soft money and other hidden compensation from deals with brokers and silent third party investors.(quote from Paul B.Farrell,market watch)

This is why Wall street is so desperate to get it's hands on trillions in new private accounts ie:SSA...This would mean billions in new fees for Wall Street..This points to hidden costs, expensive funds and lower returns...

I for one think this is a bad idea..it will only help Wall Street and there is a great potential to lose ones royal ass...ie: Your retirement money!

The fees are modest as a proportion of total investing with funds of this size, and they exist to compensate the brokers and other parties involved in managing such funds, who you realize have to pay rent, their employees, eat, and other pesky things behind having a real job to do.

If you ask me the cost of administering such funds through the government instead of the private market, I'm willing go out on a limb here and say its massive compared to the more efficient and competitive fees on wall street.

So we either pay inefficient government workers, get less than 3% on our returns, and increase the government liability to pay future retirerees, or we provide jobs in the private market, get around 11% on average on our money, and help boost investment in the private economy directly with the immense capital that private SS funds would grant the economy of America.

Which do you think any rational person would choose?

 

[Avatar4321]

The fees are modest as a proportion of total investing with funds of this size, and they exist to compensate the brokers and other parties involved in managing such funds, who you realize have to pay rent, their employees, eat, and other pesky things behind having a real job to do.

If you ask me the cost of administering such funds through the government instead of the private market, I'm willing go out on a limb here and say its massive compared to the more efficient and competitive fees on wall street.

So we either pay inefficient government workers, get less than 3% on our returns, and increase the government liability to pay future retirerees, or we provide jobs in the private market, get around 11% on average on our money, and help boost investment in the private economy directly with the immense capital that private SS funds would grant the economy of America.

Which do you think any rational person would choose?

The problem is the left is far from rational most of the time. Give us freedom in our finances. Let us control our own money.

 

[KarlMarx]

During the 2000-2002 bear market,investors lost about $8 trillion.Many reirement nest eggs were emasculated.Meanwhile,Wall street's assets-based strategy gave insiders a cushion.The average American fund investor lost more than 40 percent in the bear market,fund owners and managers took in more than $200 billion annually in fees,operating expenses,transfers and soft money and other hidden compensation from deals with brokers and silent third party investors.(quote from Paul B.Farrell,market watch)

This is why Wall street is so desperate to get it's hands on trillions in new private accounts ie:SSA...This would mean billions in new fees for Wall Street..This points to hidden costs, expensive funds and lower returns...

I for one think this is a bad idea..it will only help Wall Street and there is a great potential to lose ones royal ass...ie: Your retirement money!

PFFFFTTTTTT!!!!!!!! Wow.... that was original! The old "greedy, Wall Street corporate" conspiracy theory... how trite! If you can manage to work in Elvis, aliens or the two headed wolf boy into that tripe, you'll probably be able to score a job writing for the "Midnight Star" or "National Enquirer".

The trillions lost in the 2000-2002 bear market has all been regained because of the upturn in the economy. I don't know how to break this to you, but it is now 2005, the economy has changed dramatically in the past 3 years. The Dow Jones Industial Average currently stands at about 10700.

Let's take a look at history, and not the distant past, either, just the past twenty years.

Fact: The Dow Jones Industrial Average (DJIA) has increased in value by a factor of over 10.
Fact: In addition, our economy has grown in size by at least that amount during the same time period.
Fact: 401(k)s, IRAs and other investments geared towards retirement were made available to people in order to supplement their income at the start of the 1980s.

The first two facts were caused by the third. And guess who was president then. The same things you are now claiming were said about Reagan and his ideas. Your claim that privitizing Social Security will only help Wall Street is true, because "Wall Street" is made up of those who invest in the markets, which is you, me and millions of other people..... exactly the reason why we should do this..... I want to make more money so I don't have to depend on some government beaureacrat for my monthly check! Furthermore, the money that I invest will be managed by a company or group of companies that will be overseen by the Securities and Exchange Commission, the Social Security fund is managed and overseen by no one except the government. That is like having the fox guarding the henhouse. And how many times have politicians "borrowed" from the Social Security fund in order to finance their latest pie in the sky liberal fantasy?

Privatizing Social Security will make investment capital available to the private sector and generate jobs for this country (did you stop to think about that?), it will provide a positive rate of return for those who invest and put the money to more efficient use (I believe that the Social Security fund gets less than 3% return on its funds) which would not be hard to do.

The Social Security system is a government run ponzi scheme, it only works so long as the number of people who contribute to it continues to grow. That is no longer the case, nor has been for over two decades.

From the tone of your post, it seems as if you're saying the corporations and those who run them are greedy but the government is not. Not True. Governments and politicians are greedy, for power. They are on a power trip and Social Security is their Nirvana. And what better way to control people than by contolling the retirement income of the fastest growing segment of society i.e. the elderly?

The government cannot manage the hard earned money of millions of workers better than the workers themselves can. After all, the government did not earn the money that goes into the system, the workers that contribute to the system did.

Under the current system, you have no say with what is done with your money.... none... at all. Under privitization, you would have the power to decide how part of the money the government takes from you is invested. You will be able to shift your money from one investment to another and that is Power To The People (Right On!)! And you know, that really irks government bureaucrats and liberal politicians, because they lose power.

LINK TO THOMAS SOWELL ARTICLE ON SOCIAL SECURITY

 

[archangel]

PFFFFTTTTTT!!!!!!!! Wow.... that was original! The old "greedy, Wall Street corporate" conspiracy theory... how trite! If you can manage to work in Elvis, aliens or the two headed wolf boy into that tripe, you'll probably be able to score a job writing for the "Midnight Star" or "National Enquirer".

The trillions lost in the 2000-2002 bear market has all been regained because of the upturn in the economy. I don't know how to break this to you, but it is now 2005, the economy has changed dramatically in the past 3 years. The Dow Jones Industial Average currently stands at about 10700.

Let's take a look at history, and not the distant past, either, just the past twenty years.

Fact: The Dow Jones Industrial Average (DJIA) has increased in value by a factor of over 10.
Fact: In addition, our economy has grown in size by at least that amount during the same time period.
Fact: 401(k)s, IRAs and other investments geared towards retirement were made available to people in order to supplement their income at the start of the 1980s.

The first two facts were caused by the third. And guess who was president then. The same things you are now claiming were said about Reagan and his ideas. Your claim that privitizing Social Security will only help Wall Street is true, because "Wall Street" is made up of those who invest in the markets, which is you, me and millions of other people..... exactly the reason why we should do this..... I want to make more money so I don't have to depend on some government beaureacrat for my monthly check! Furthermore, the money that I invest will be managed by a company or group of companies that will be overseen by the Securities and Exchange Commission, the Social Security fund is managed and overseen by no one except the government. That is like having the fox guarding the henhouse. And how many times have politicians "borrowed" from the Social Security fund in order to finance their latest pie in the sky liberal fantasy?

Privatizing Social Security will make investment capital available to the private sector and generate jobs for this country (did you stop to think about that?), it will provide a positive rate of return for those who invest and put the money to more efficient use (I believe that the Social Security fund gets less than 3% return on its funds) which would not be hard to do.

The Social Security system is a government run ponzi scheme, it only works so long as the number of people who contribute to it continues to grow. That is no longer the case, nor has been for over two decades.

From the tone of your post, it seems as if you're saying the corporations and those who run them are greedy but the government is not. Not True. Governments and politicians are greedy, for power. They are on a power trip and Social Security is their Nirvana. And what better way to control people than by contolling the retirement income of the fastest growing segment of society i.e. the elderly?

The government cannot manage the hard earned money of millions of workers better than the workers themselves can. After all, the government did not earn the money that goes into the system, the workers that contribute to the system did.

Under the current system, you have no say with what is done with your money.... none... at all. Under privitization, you would have the power to decide how part of the money the government takes from you is invested. You will be able to shift your money from one investment to another and that is Power To The People (Right On!)! And you know, that really irks government bureaucrats and liberal politicians, because they lose power.

LINK TO THOMAS SOWELL ARTICLE ON SOCIAL SECURITY

Vanguard's founder Jack Bogle says:"The costs of offering mutual funds to millions of small accounts making weekly or monthly contributions would be even larger than todays already excessive level of fund costs."The new layer of expenses will result in returns"even less than the current yield on the U.S.Treasury bond."

Also:"Everything points to hidden costs,expensive funds and lower returns.And that amounts to a backdoor tax increase.But nobody's talking about that.Instead,were being pitched a rosy scenario,just like last year with the grossly underestimated Medicare drug program.All other Social Security reform issues are only talking points in Wall Street's aggressive pro-privatization sales pitch...."

To be blunt Wall Street is acting like a desperate child acting on impulse and very self centered...again they are the ones who would gain by privatization not the small SSA investors... :duh3:


Oh yes jobs would be created by investment money...however they would just be outsourced to third world countries...and pray tell how would this help the average working man or woman?...humm who is being trite here? :bangheads

 

[KarlMarx]

Vanguard's founder Jack Bogle says:"The costs of offering mutual funds to millions of small accounts making weekly or monthly contributions would be even larger than todays already excessive level of fund costs."The new layer of expenses will result in returns"even less than the current yield on the U.S.Treasury bond."

Also:"Everything points to hidden costs,expensive funds and lower returns.And that amounts to a backdoor tax increase.But nobody's talking about that.Instead,were being pitched a rosy scenario,just like last year with the grossly underestimated Medicare drug program.All other Social Security reform issues are only talking points in Wall Street's aggressive pro-privatization sales pitch...."

To be blunt Wall Street is acting like a desperate child acting on impulse and very self centered...again they are the ones who would gain by privatization not the small SSA investors... :duh3:


Oh yes jobs would be created by investment money...however they would just be outsourced to third world countries...and pray tell how would this help the average working man or woman?...humm who is being trite here? :bangheads

Gee wiz.... how are IRAs and other mutual fund holdings handled (IRA contributions are $2000 or less --- isn't that true? Many mutual funds have small start amounts, and allow small contributions like $50 or less)? Where are the insurmountable costs for those hiding? Those are small accounts too! And there are millions of them! What are we missing here?

Also, money taken out of a person's paycheck can be placed in a temporary account until there is enough to purchase the minimum amount. That's what they do with Savings Bonds......

This isn't rocket science....

 

[no1tovote4]

Gee wiz.... how are IRAs and other mutual fund holdings handled (IRA contributions are $2000 or less --- isn't that true? Many mutual funds have small start amounts, and allow small contributions like $50 or less)? Where are the insurmountable costs for those hiding? Those are small accounts too! And there are millions of them! What are we missing here?

Also, money taken out of a person's paycheck can be placed in a temporary account until there is enough to purchase the minimum amount. That's what they do with Savings Bonds......

This isn't rocket science....

There are stockbrokers such as buyandhold.com that will allow you to purchase as little as $20 at a time. You can also purchase a fraction of a stock if the stock is worth more per share than you can invest at the time.

People think poorly of the Market because it is so misunderstood and they think it is difficult to invest, and that people with little money cannot invest directly in the Market and expect good results. I disagree entirely. I suggest people educate themselves and will suggest a site for that as well. www.fool.com

 

[Merlin1047]

I for one think this is a bad idea..it will only help Wall Street and there is a great potential to lose ones royal ass...ie: Your retirement money!

You don't have a single, solitary clue what the hell you're talking about. Increased investment in the stock market will NOT produce funds with higher fees. It has been historically proven that a proliferation of funds produces LOWER fees through competition.

Can market swings affect income? Well du-UH. Ya reckon? But of the mutual funds that I have had for over thirty years, the cash value is over twenty times what it would have been had I "invested" the same money in savings accounts with a bank.

And those investments are worth a whole lot more than the money I've paid into FICA. Because anything is worth more than zero - which is exactly what the government has in my name in my mythical social security account.

 

[rtwngAvngr]

During the 2000-2002 bear market,investors lost about $8 trillion.Many reirement nest eggs were emasculated.Meanwhile,Wall street's assets-based strategy gave insiders a cushion.The average American fund investor lost more than 40 percent in the bear market,fund owners and managers took in more than $200 billion annually in fees,operating expenses,transfers and soft money and other hidden compensation from deals with brokers and silent third party investors.(quote from Paul B.Farrell,market watch)

This is why Wall street is so desperate to get it's hands on trillions in new private accounts ie:SSA...This would mean billions in new fees for Wall Street..This points to hidden costs, expensive funds and lower returns...

I for one think this is a bad idea..it will only help Wall Street and there is a great potential to lose ones royal ass...ie: Your retirement money!

The current system is a guaranteed loser.

 

[Merlin1047]

Vanguard's founder Jack Bogle says:"The costs of offering mutual funds to millions of small accounts making weekly or monthly contributions would be even larger than todays already excessive level of fund costs."The new layer of expenses will result in returns"even less than the current yield on the U.S.Treasury bond."

Bullshit. It's all handled by computer - except the actual investing which is done by the fund manager and staff. The only increased costs are in the area of customer service and mailing. But if statements are sent by wire, even that cost can be minimized.

To be blunt Wall Street is acting like a desperate child acting on impulse and very self centered...again they are the ones who would gain by privatization not the small SSA investors...

Again, compare the earnings and increase in valuation of the average mutual fund over any five year period to the earnings which would have been received from a bank and see which comes out better. Then compare the earnings of the money paid into FICA to either of the previous. Oh - that's right - money sent to the government is simply SPENT - it doesn't EARN a damn thing. Or did you conveniently forget that?

Oh yes jobs would be created by investment money...however they would just be outsourced to third world countries...and pray tell how would this help the average working man or woman?...humm who is being trite here? :bangheads

Damn, I see that foretelling the future is numbered among your talents. I'd love to rebut that, but I can't. The vertical hold on my crystal ball is out.

 

[archangel]

Damn by all the oppostion ya all must be stockbrokers looking for more welfare checks...sorry can't have mine...lol

 

[no1tovote4]

Damn by all the oppostion ya all must be stockbrokers looking for more welfare checks...sorry can't have mine...lol

At least go to the site and educate yourself rather than directly contributing inaccurate statements that are shown to be incorrect and lacking in a foundation of understanding. You have repeatedly declared that you have not invested in the Markets and shown little direct knowledge of how they work. To better inform yourself you can go to this website:

www.fool.com

It will teach you how to invest personally in the stock market. Then rather than advising others to rely on such a sorry institution as the Government to "gaurantee" their retirement you can actually take an active role in helping yourself rather than contributing to the dis-incentivizing of the American Population. Even if you don't take it upon yourself to improve your own situation, as you seem satisfied, don't continue to use arguments that are shown to be factually incorrect and mathematically unsound.

When everybody points to the US as the richest country (Especially the former world powers) and the largest difference between us and them is the incentive we give for people to achieve rather than to remain dependant and reliant on the government, it is illogical to think that we are the ones doing the incorrect thing by providing such an incentive.

It is the Private Markets and the ability for people to make decisions that are good for company's etc and the incentive we provide for acheivement that has brought us so much success. To deny that and work to de-incentivize and create even more reliance on the Government is in direct denial and possibly deliberately ignorant of the things that actually have made this system work so well. To have the Government again incentivize better financial solvency for your future is a good thing, regardless of whether that incentive will "save" the system it is creating a better system with more choices and allowing you to take more of a role in your own retirement savings and setting aside a certain amount in a personal account that the Government cannot use to spend on water parks in Ohio or alpine slides in Jamaica.

 

[rtwngAvngr]

Damn by all the oppostion ya all must be stockbrokers looking for more welfare checks...sorry can't have mine...lol

Just people who believe in long term thinking and NOT partisan myopia.

 

[ScreamingEagle]

Damn by all the oppostion ya all must be stockbrokers looking for more welfare checks...sorry can't have mine...lol

Keep it! Under Bush's proposed plan you don't have to have a personal account. You don't have to invest in the scary badass stock market if you don't want to. Nobody (except politicians) is going to take your sorry-ass "social security" account away from you if that's what you want to continue to keep.

But when you retire you can then have lots of fun comparing your pitiful $1,000 per month SS check to the $5,000 per month (or more) the others are making from their "scary" stock market/bond investments...

...and then, I'm sure, you'll probably cry foul again - against those "rich" retirees getting more than you - like all typical Red Diaper Doper Babies who want Big Brother to wipe their widdle asses. :baby:

 

[Merlin1047]

Social security, in its present form, is the government version of three-card monty. You think there's an ace there somewhere, but by the time the shuffling starts, it's already up some politician's sleeve.

There is currently insufficient income to sustain social security entitlements. In three to six years the baby boomers will start hitting retirement age, placing even greater demand on the inadequate funding of the program. Even the "there is no crisis" Dimocrats will admit that the question is not whether social security will collapse, but when.

 

[archangel]

:chillpill Ok guys enough of the partisan politics...lets get real here...forget the vodoo math from Wall Street...Heres the facts..basic math 101:For those of you who have forgotten...If a working man or woman managed to save say$120,000.00 during their work life(after living expenses)...and could somehow find a bank that would pay 12%apr...well their annunity upon retirement would be some $1200.00 per-month....before taxes...now if you consider the SSA maximum benefit is $1200.00 per-month without taxes...I for one would say this is a pretty good investment!

Ya all are starting to sound like those great investors of times past..who jumped outta the windows after the great crash at the end of the roaring 20's....maybe...just maybe...this is why SSA was born...end of story old wise men!

 

[no1tovote4]

:chillpill Ok guys enough of the partisan politics...lets get real here...forget the vodoo math from Wall Street...Heres the facts..basic math 101:For those of you who have forgotten...If a working man or woman managed to save say$120,000.00 during their work life(after living expenses)...and could somehow find a bank that would pay 12%apr...well their annunity upon retirement would be some $1200.00 per-month....before taxes...now if you consider the SSA maximum benefit is $1200.00 per-month without taxes...I for one would say this is a pretty good investment!

Ya all are starting to sound like those great investors of times past..who jumped outta the windows after the great crash at the end of the roaring 20's....maybe...just maybe...this is why SSA was born...end of story old wise men!

If they saved it under their pillow that would be true. However if over 40 years of work they put it in a bank account that only paid an annuitized 2% in interest they would have over a million dollars with which to retire.

You try to play a zero sum game and you are losing.

 

[ScreamingEagle]

:chillpill Ok guys enough of the partisan politics...lets get real here...forget the vodoo math from Wall Street...Heres the facts..basic math 101:For those of you who have forgotten...If a working man or woman managed to save say$120,000.00 during their work life(after living expenses)...and could somehow find a bank that would pay 12%apr...well their annunity upon retirement would be some $1200.00 per-month....before taxes...now if you consider the SSA maximum benefit is $1200.00 per-month without taxes...I for one would say this is a pretty good investment!

Ya all are starting to sound like those great investors of times past..who jumped outta the windows after the great crash at the end of the roaring 20's....maybe...just maybe...this is why SSA was born...end of story old wise men!

Voodoo math? You need an education.

You fear a return to the 1920s which is nonsense.
You also fear a little risk.

What are the alternatives to private accounts?
Higher taxes, reduction of benefits, increased national debt - or all 3

Those are also very real risks to fear.

 

[archangel]

Voodoo math? You need an education.

You fear a return to the 1920s which is nonsense.
You also fear a little risk.

What are the alternatives to private accounts?
Higher taxes, reduction of benefits, increased national debt - or all 3

Those are also very real risks to fear.

I new if I played with words long enough in here i would catch ya with your foot in your mouth..."Voodoo math"...humm isn't this the word GW used in some of his rhetoric- Ya better tell his writers they need a education!

note:'The Tully Commission fundamentally restructured WallStreet's business model,shifting from commission based revenues to fees from assets under management.Privatization became a key element in this strategic shift,a shift once described as an annuity cushioning Wall Street from the roller-coaster ride of bull/bear cycles.'

'Investor advocacy groups resisted.Wall Street went behind the scenes lobbying.political donations,favorable think tank reports and a presidential campaign pledge..'Does this sound like they are trying to help the elderly with their retirement or just to make a killing from all the new revenue produced by fees associated with trading...humm I am not against anyone buying or trading in the stock market..I just say leave the SSA alone,it was created as a safe nest egg..you can flower up your opinion anyway you want..it still does not reflect the general publics view of a white wash by Wall Street!

 

[Comrade]

I new if I played with words long enough in here i would catch ya with your foot in your mouth..."Voodoo math"...humm isn't this the word GW used in some of his rhetoric- Ya better tell his writers they need a education!

note:'The Tully Commission fundamentally restructured WallStreet's business model,shifting from commission based revenues to fees from assets under management.Privatization became a key element in this strategic shift,a shift once described as an annuity cushioning Wall Street from the roller-coaster ride of bull/bear cycles.'

'Investor advocacy groups resisted.Wall Street went behind the scenes lobbying.political donations,favorable think tank reports and a presidential campaign pledge..'Does this sound like they are trying to help the elderly with their retirement or just to make a killing from all the new revenue produced by fees associated with trading...humm I am not against anyone buying or trading in the stock market..I just say leave the SSA alone,it was created as a safe nest egg..you can flower up your opinion anyway you want..it still does not reflect the general publics view of a white wash by Wall Street! :rolleyes

You still sound confused about the idea that Wall Street is going get to a windfall from all these 'fees' being charged on each account.

You ignore three factors which make you come off as an economic ignoramus in this argument.

1. As you have been reminded here again and again, the act of privitizing your funds instead of trusting them to the government is voluntary. Ergo, if you feel personally Wall Street is trying to rip me off (yeah, right), well YOU HAVE A CHOICE NOT TO INVEST ThAT WAY! What the hell is wrong with HAVING A CHOICE???

2. By replacing a portion of the current public program, you remove all the government wages, rent, and overhead involved in managing the funds related to that program. In return you pay the private market to the exact same equivalent task. The private market is more cost effecient than the public, and overall the fees which you whine about incessently will be less. This is because there is already an inplicit cost of the government managing these funds for us, a.k.a. a 'fee'. You imagine bizzarely that there is no underlying cost for the government to currently manage our SS funds for us.

3. Not surprisingly, the fees we would now pay for the private market to manage the funds, will be less than the overhead the government already burns up with our tax money to do the same. And as a bonus, the investment in the private market would create new jobs and more capital as a result of both streamlining the government and shifting investment management work to the private market, as well as making more capital available to the private market for economic growth and lower interest payments on your house, car, or business.

This is such a 'No-duh' slam dunk in terms of basic economics, I'm surprised you still can't get it. You must be very young.