Thursday, February 11, 2016

Hold on. We are in for a ride.

I've been in and out of the stock market since I was but a boy. That's good. But, I didn't really pay the market and investing the attention both deserve until progressive rounds of layoffs and buyouts hit the company at which I worked.

When a gentleman whom I considered at the very top of his profession was given his walking papers to simply save the company a salary, I knew it was time to prepare to leave. At the time, I wished I could step forward and say that I would take the buyout and my friend and better stay but I didn't have the resources to live in retirement

I went to the library and got some books on investing and others on preparing for retirement. The library was a great resource.

I prepared an investment allocation plan and I began following it. My goal was income and I never took my eyes off that goal. By the time the next round of layoffs and buyouts hit, I was ready. A young man with a stay-at-home wife and mother, the two had two little boys, was given the pink slip.

I was able to step forward and lay my head down on the chopping block. I took the buyout package and suffered about a 25 percent cut in my retirement income from my pension and CPP. I felt confident that my work had prepared me to suffer such a cut and still keep my financial head above water.

All that was some seven years ago. During the early part of that time period I did incredibly well. I earned better than ten percent per year on my investments. I earned so much that I couldn't spend all the money. I bought more stock.

Then, about three years ago, may be a little less, all began to unravel. The value of my portfolio dropped and it took a jagged up and down path to where I find myself today. I have lost an amount well into the six figures.

If I was writing this for the paper, I'd have a great story with lots of pathos. But I'm not and the story has not turned too ugly as of yet. Sure I've lost a lot but I have way more than when I retired - way more! And that is after I taken out a six figure amount in order to live. Remember: my pension plus my CPP, OAS and my wife's CPP and OAS does not give us enough money to live. We need the income from our portfolio in order to balance our books.

The way I see it, the market collapses now and then. This may be a deeper and longer lasting collapse than usual but it will come to an end as they all do. Until then my wife and I will be spending as little as possible. The renovation of our ensuite bathroom will be the last big housing expense for the foreseeable future.

We won't be buying a new car. We won't be taking any expensive trips. We will be enjoying our grandchildren. We will be enjoying a night out at fine restaurant once a month. We will be seeing more movies at the Hyland Theatre, our local movie palace specializing in smaller, independent films.

I have a budget as part of the spread sheet that tracks the ups, downs and income of our portfolio. If the spread sheet shows us moving into the red, I rejig our budget. The truth is I haven't had to do much rejigging but I am also not adding as much to our portfolio as  I was in the past.

That said, there is still a little money available for buying more stock. I'm not going to miss this buying opportunity. If all goes well, my wife and I will come out of this dip, this recession, with more income than we entered it.

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