The big debate for baby-boomers these days is how large their "number" needs to be. How much do they need to save to earn a passive income which would allow them to "retire"? It seems once we get past a certain age we are supposed to stop investing in the stock markets, and live off the interest from what we have saved. That would make sense if we are simply passive investors, but what if we are actively managing our own portfolio?
The real question is how much can we earn, not how much do we need to have? I don't know all that many people who expect to hang up the gloves and invest in a rocking chair for thirty, or forty years! Besides, the quickest way to end one's retirement is to sit around and do nothing! Sure our retirement is likely to lead to more leisure time, but I don't buy the financial services version of it being an event which happens to us one day, after which we make no attempt to earn anything but interest on our savings.
Sure, they would love for every one of the baby boomers to have close to a million dollars salted away, earning service charges, fees, and investment income of their own. The truth is, only a small percentage will have that luxury. Most are going to have to make the most of what they have and, health permitting, continue to work as long as they can.
Having said all that, I never cease to be amazed by how few people want to take responsibility for their own investment portfolio. I get the fact they don't understand the issues, and don't have any interest in becoming an expert in financial markets. What I don't get is why they don't become more involved, and more educated. Why is it we can spend 80 hours a week at jobs we hate, but not be able to dedicate a few of those hours to improving our return on investment?
Maybe we can thank the financial services industry and all of those advertising dollars. I'm still having a tough time convincing many people the best returns come from timing the market - something the "experts" and sales people keep saying is impossible! Still, I'm going to keep telling people. We can improve our returns and even beat the market by spending only a few hours a week. In my mind, "you can't time the market" is the single largest urban myth robbing people of retirement savings. It is a myth perpetrated and perpetuated by the financial services industry, for their benefit. The sooner this myth is debunked, the better for anyone not in financial services.
Do you think there could be such a thing as timing the stock markets? If not, what would it take for you to change your beliefs?