When should you retire? Today, tomorrow, never? The answer is both emotional and financial. The financial side of retirement is easy – you either have enough money to retire, or you don't. If you have more than enough money to cover your expenses, you can retire at any time regardless of your age.
The Miser is a classic Aesop Fable. It's a story about a man who buries his gold under a rock. He visits his gold stash so often that a thief follows him and steals it. The miser is distraught when he realizes it's gone, though he had no plans to use the gold to buy things. A lot of us are probably like the miser in the story. We check our investments daily to make sure they are safe and sound, but we don't intend on using them to purchase anything.
This decade is off to a tough start. The Coronavirus is disrupting global trade, travel, markets, and economies. The 2020 U.S. Presidential election will also add to the uncertainty and confusion. With increasing risk, should you buy, sell, or hold your existing investments?
Schwab dropped a bombshell on Tuesday when they announced they’ll reduce commission rates on stocks, ETFs, and options to zero! Not to be outdone, TD Ameritrade and E*Trade quickly followed suit. As a result of the announcement, Schwab’s stock fell 14%, TD Ameritrade slumped 28%, and E*Trade plunged 19%. The loss of trading commissions will result in a significant drop in revenue for these firms. Their pain is your gain.
Interest rates are falling, and investors are starving for income. Coupon rates on U.S. Treasuries are paying less than 2% except for the 30-Year U.S. Treasury bond, which is paying 2.25%. Corporate bonds, CD’s, and tax-free bonds aren’t paying much more. The Federal Open Market Committee recently lowered interest rates by a quarter of a point, and they’ll probably do it again at their next meeting.