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Author: 57andrew Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75809  
Subject: Up, down, sideways Date: 12/28/2010 8:44 AM
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An acquaintance of mine (it would be presumptuous to call him a friend)told me a few months back that for those of us approaching retirement life could be very different from how we had imagined. And not for the better. He forecast a lot of sideways movement with bouts of volatility that would make it, in his words, a great trader's market.
Philosophically I struggle with the idea of trading in my pension fund and the Trustees probably won't smile on it too much either. But how else do I preserve my "wealth" and generate enough to give me an income? If I believe the volatility will revert to the mean then dividend stocks are fine although arguably I miss out on buying at lower entry points if I buy now. As I trawl the web for ideas and insights I see only divergence. There is no consensus. China hits the wall, Peripheral-Europe implodes... we're all doomed. Valuations are reasonable, its all in the price, emerging markets are the place to be, plenty of room for growth. Inflation, deflation. Take your pick. The thing that amuses me most is the idea that all the bad news is in the price already. It always is until "it" happens and then the markets reprice again. Downwards. And markets seem to be increasingly correlated. Bad news rarely seems to be market specific. There are few places to hide. So currently I'm about 80% cash, 20% equities - no idea where gold is going, don't feel I understand the fixed income market well enough but intuitively feel wary and where I live residential real estate prices are so high they give a yield of about 2% after tax. I am long energy stocks but am being advised to buy uranium miners as well.

So after all that preamble, how do others see themselves protecting their pension nest egg? Do you see the world in a less confused way than I do? What is blindingly obvious that I am missing? I'm not looking for the earth - a real return of 5% would do me just fine and I'll take some capital volatility. But the world looks scary to me right now.

And I thought retirement was supposed to be the fun part of life.

Seasonal greetings to one and all.

Andrew
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