Personal Finance and Investing

I'm not at all certain how to interpret the Dow prior to 1929. But I am constantly astonished here on DU that so many will proudly say they sold everything at some particular date -- most recently any date since November 8, 2016. Although there are plenty who sold off at various earlier dates. They are all losers. Buying and holding for the long term is a winning strategy. Especially if you include dividends.

For those who are uber cautious, buying utility stocks, or funds that invest in utility stocks is an excellent conservative strategy. Putting all your money into CDs or bonds of any kind is dumb. Yes, some of your money should be in those, but not all of it.

Oh, and can we discuss annuities? They have a completely undeserved bad rap. No, you should absolutely not put all of your money into an annuity, no matter how truly good it is. Diversification needs to be at the heart of any financial strategy. But here's my story: in 2012 my financial advisor persuaded me to purchase two annuities. That took about half of my money. But only half. Last December I started collecting income from those annuities. It's definitely more than I could be taking if I'd never purchased them but instead had all of my money in the other investments that same advisor has me in. I hope that sentence makes sense. Another way to put it is that the annuities have appreciated far above my other investments, and now I'm reaping the rewards.

So now I have a stable source of income: Social Security, a small pension, two annuities, and additional income from the rest of my investments. I actually have more income than ever before. Wow. It feels good. And I could actually be taking more money from those investments and still be secure. Here's the best part. Those first four sources (SS, pension, annuities) are guaranteed. The amount from investments could go down if the stock market has a serious crash. But even a crash won't send those investments to zero. I honestly think my worst case scenario is that I'd have to cut in half what I'm currently taking from those investments. Which wouldn't be fun, but we're talking a cut of maybe 15% in my income. I could easily manage that. I'd certainly have to make some changes, but luckily for my I am not living on every single penny. I have a fair amount of slack. It wouldn't be fun to have to cut back on some of my travels, but it's not as though I'd need to make a choice between paying the electric bill or buying groceries.

I do appreciate my relative affluence.

Again, thanks for your overview of the early stock market.