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Author: telegraph Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19483  
Subject: Re: Early retirement Date: 5/7/2000 2:57 PM
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re: 6-9 month stock market rebound

The Nikkei in Japan hit 40,000 in early 90s. Nothing could go wrong. Today it is sitting at 18,000 or so. Not only did a lot of people lose a lot of money on a 'sure thing', they also lost the opportunity to earn income with their savings. Getting a guaranteed 7.5% (today's 5 yr CD rate), on 40,000 would have been a lot better for a lot of people, rather than a more than 50% drop and effective income of >-12% yr(lost the interest and lost the principle).

Having a diversified portfolio, maybe some REITs (nice income), some utilities FPL, Dominion Resources, TXU, and some CDS/Bonds, as well as a small percentage of high tech, would let me sleep a whole lot better.

If you want to have your fun for the next five years, you are taking a big chance on the returns over the next few years. Just keep staring at the Nikkei, where everything was going right, and think it could happen here. Where would you be at that point? Could you really sleep well with a 50% loss that stayed that way for 10 years?
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