Do you know the location of the blog post picture ? No…? My mom did travel to this beautiful isle.
Sicily, the largest Mediterranean island, is just off the “toe” of Italy’s “boot.” Its rich history is reflected in sites like the Valley of the Temples, the well-preserved ruins of 7 monumental, Doric-style Greek temples, and in the Byzantine mosaics at the Cappella Palatina, a former royal chapel in capital city Palermo. On Sicily’s eastern edge is Mount Etna (3323 m high), one of Europe’s highest active volcanoes.
I have never been to Sicily but it definitely is on my travel list.
During my current business travel, I read the opinion article of columnist Paul Brandus. In his column Paul states that today we experience a historic bull market, which could potentially enter its 11th year – 11 years! Some people have been able to build wealth thanks to this bull market.
But most Americans haven’t benefited much. 54% of middle-income households (defined as income ranging from $48,000 to $95,000) don’t have enough saved to maintain a decent retirement. That’s the same percentage as in 2010, when the stock run-up was in its early stages, according to a study by the Center for Retirement Research at Boston College.
Why have so many Americans been left out? The study blames the usual culprits: high debt, surging and often unforeseen health care costs, and investment mistakes. Paul focus in on the investment mistakes.
The market had an incredible run since 2009 but there were also two devastating crashes within the space of a decade: 2000 to 2002, when the S&P 500 fell 49% over 30 months and an even bigger disaster between 2007-09, when the S&P 500 plunged a staggering 56% in just 17 months.
Some investors got burned in the first crash (AOL, Webvan and Pets.com, anyone?); others, who loaded up on things like housing and mortgage lenders, got nailed by the second one. Some poor souls, no doubt, were hit twice.
In Belgium we had in the second crash many bank stocks (the so-called “safe” retail investor stocks) that plunged down or got delisted.
The net effect of this is that millions of retail investors, spooked by the market’s one-two punch, have stayed away—thus missing out on what may turn out to be a once-in-a-lifetime gain.
The question is, what now? Here’s the part where the mainstream media may hurt more than it helps. “Is it too late to jump back into the stock market?” a blaring CNN headline asks, suggesting that getting into stocks after they’ve soared—the S&P 500 is up some 335% since it bottomed out in March 2009—was worth considering. We have seen similar headlines in Belgian newspapers…
What are the smart and rich people doing? A survey of millionaires by Spectrem Group found that wealthy Americans “are more likely to increase cash and bonds than stocks in the next year,” and “may be amassing dry powder for better opportunities to buy into the market.” So the “smart crowd” is getting out…
In America retirement is considered to be a three-legged stool—comprised of a pension, Social Security and personal savings—but all three aren’t what they used to be. Just 9% of workers in their 50s have a pension, for example, down from about 25% three decades ago, and 46% don’t even participate in a retirement plan at work—not even an IRA or 401(k). Savings are meager, and as we’ve warned before, the Trump administration says unless something is done to shore up Social Security, payouts could be cut about 21% come 2034—which is closer than it sounds. That is not a rosy forecast for US retirees. In Belgium, the government can also not adjust the pensions with the inflation rate. So if this pension will not be raised, you actually also have a payout cut.
Paul concludes that uncomfortable choices loom on the horizon: working longer or accept a lower standard of living. Perhaps both. Don’t worry if the growing economy and stock market didn’t help you very much. Your retirement goal should focus on making sure you’ll be OK.
Personally I have a negative view on the whole pension system. Most governments simply don’t have a gameplan. Norway is a country where money has been invested for retirement of the population. Pension fund investors have done a phenomenal job there. In 2017 Norway’s giant pension fund was reported to be worth over $1 trillion. Yes, 1 followed by 12 zeros. What did the Belgian government do ? Basically nothing. They only increased the retirement age to the age of 67. By the time I need to go on retirement, they might change it again to the age of 70…who knows?
Now let’s see what our September 2018 cashflow was for my mom’s portfolio.
Passive Income in September 2018
During the month of September 2018, we received 122,4$ passive income. Only dividend income.
Here you find the overview of all dividend payouts during the year 2016, 2017 and first months of 2018.
The Options Trade Review
No options trades this past month.
Dividend & Options Income Growth
September was a month where we mainly focussed on our learning. We have 52% of our yearly objective. We achieved already more cash flow than last year too, let’s not forget that. We didn’t achieve our monthly goal of 290$.
With a monthly payout of around 120$ we would end around 2.300$. This would mean we are 1200 short on our yearly objective. Can we earn 1200$ in 3 months ? Let’s see. Anything is possible.
Going forward
The portfolio of my mom is currently 60% cash and 40% invested. This past week investors are buying more bonds. The stock market took a dip. We don’t think it’s time to buy more REIT or high price dividend ETFs.
We are currently focussing on how to make money in a downtrend market. We foresee a looming recession at the horizon. And when this occurs, you need to be prepared to make money. Most buy and hold retail investors just sit on their hands or wonder if they would take a loss on their position. Not a good strategy according to me !
Stay tuned and we will tell you all about it !
Thanks for reading.
Thanks for following us on Twitter and Facebook and reading this blog post. We end with a quote as always.
Source : Marketwatch
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