Comments on: Limiting Investment Losses http://gotoretirement.com/2010/07/limiting-investment-losses/?utm_source=rss&utm_medium=rss&utm_campaign=limiting-investment-losses A Baby Boomer's Journey from Retirement Planning to Retirement Living Mon, 21 May 2012 17:39:02 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Jim Peluso http://gotoretirement.com/2010/07/limiting-investment-losses/comment-page-1/#comment-2815 Jim Peluso Mon, 23 Aug 2010 14:05:03 +0000 http://gotoretirement.com/?p=5137#comment-2815 I think it is an interesting suggestion to target TIPS, I Bonds and SS to cover basic retirement living expenses. If you do that and invest the rest of your nest egg in the market (age appropriate allocation to equities, bonds, cash) you shouldn't be AS concerned about sudden market drops. You are correct that stop loss orders on EFTs will mitigate sudden big losses. My concern is that most people panic too easily and cash out too early and then don't know when or don't ever get back in. They miss the bounce back gain and stay stuck in low yielding CDs. One point about EFTs that bothers me is in a panic there may be no buyers whereas with an open ended mutual fund the mutual fund company has to buy your shares by law. I think it is an interesting suggestion to target TIPS, I Bonds and SS to cover basic retirement living expenses. If you do that and invest the rest of your nest egg in the market (age appropriate allocation to equities, bonds, cash) you shouldn’t be AS concerned about sudden market drops.

You are correct that stop loss orders on EFTs will mitigate sudden big losses. My concern is that most people panic too easily and cash out too early and then don’t know when or don’t ever get back in. They miss the bounce back gain and stay stuck in low yielding CDs. One point about EFTs that bothers me is in a panic there may be no buyers whereas with an open ended mutual fund the mutual fund company has to buy your shares by law.

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