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Originally Posted by Anja
Would you lend me some advice on the direction of the stock market?
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No...
and no one can. Do not, under any circumstance, let what others tell you factor into what you decide. No one knows.
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What are some perspectives on this?
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Keep in mind that I'm not offering any sort of sound financial advice. I can, however, generalise the following.
The sheer
minimum amount of time for you to be invested in the stock market is 10 years. You need to find out what funds you own (if you have penalties, you must own funds) and their asset mix. If you can name the fund, I can look it up for you. The nebulous ground is in the 10-30 year bracket. Ideally you could wait 30 years before taking your money out. I don't believe this is an option, so I won't consider it.
Next, you need to know how many years worth of money you have available to you. Take your total investments and divide it by your expenses. Here's roughly where you stand;
@20 years - you have enough forever
@17 years - you have enough for 38 years
@15 years - you have enough for 28 years
@13 years - you have enough for 21 years
@10 years - you have enough for 14 years
@5 years - You have enough for 5 years
For example, if I spend ~15,000 a year and have 150,000 in the bank, I'm at the "10 years - you have enough for 14 years". Keep in mind that at the end of that time,
there will be no money left to pass on.
These are all approximate, since the calculations are quite rough on such a simple calculation. However, it should give you a ballpark figure.
The current meltdown leaves
no safe place. I don't want to be alarmist, but that's the nature of a financial meltdown like this. If you have lost less than 50%, consider yourself lucky. That's roughly where I'm at, heh
So, for particular advice, I'd have to know actual numbers - but even given that, I couldn't really give you solid advice. This is a historical upset. The kind that is highly improbable.
Given the situation, and not knowing what you already have, the best bet is to find dividends and bonds (I'm assuming you need to live off the income already - if this is not the case, please disregard this part) that seem fairly solid.
If you have enough money to diversify properly (rule of thumb for the US, that'd be ~50,000 minimum, with major risk/cost breaks around 200,000/750,000), that'd be your best bet. That's the tricky part, unfortunately.
If any of this seems alarming at first, keep in mind that the two variables are "income" and "time". If you can spend less to get a lot more time. You can find alternative income to get a lot more time.
Please, feel free to ask anything at all/clarify.
** Edit: I took your OP to mean that you need to work out your retirement, and this puts it at risk. I may of misunderstood, on reflection. If this is not a risk for you at all, then it is only the time horizon that matters for your money. Anything less than 10 years should be low variation (bonds, dividends at most). If you plan on taking out more than a couple of percent of your money at any given time, that's what you need to look at.
I think I need you to clarify your particular needs, just so I can be clear.