The problem here, James, is you are much more interested in trying somehow to prove your right rather than get to the truth. There are several issues here that you conveniently choose to ignore or mix together, hopefully, because you are just confused rather than intentionally trying to confuse and deceive.
First, you either don't understand or choose to ignore the most fundamental problem with privatizing SS, and that is asset inflation. This little quirk in your privatization scheme will at first make investors feel rich but devastate them later, particularly investors that buy in later, i.e., "the bag holders." Whether it be tulips in 1600 Holland, the dot.coms in 2000, the current housing bust or the likely coming commodities bust, these things are not pretty and can be devastating to someone who got caught wrong-footed. And by definition, that is going to be a lot of people caught wrong footed; just be sure, its not going to be those folks who "go to work" in lower Manhattan or in the pits in Chicago.
You have yet to address this issue of asset inflation in any meaningful and logical macro-economic manner since the very first post of our exchange; I do not hold out any hope that is going to change. So lets both ignore this most fundamental point, and instead play in Jimboy land --
Basically, your argument is confined to the relative return one could get by investing their own SS monies (ignoring the impact of asset inflation noted above, i.e., lets live in Jimboy land for the moment) rather than have it go to the government to provide you SS benefits in your retirement.
For long-term investing, there are three basic strategies based on three different assumptions. The first assumption, based on historical data, is that stocks, on avergae, eventually outperform all other investment vehicles and that one can expect a 7-10% annualized return (including dividends) on average. The problem with this assumption and strategy is that if you had invested at or near the top, just prior to a major bear market, you would be one of those digging your way out of a big hole for some segment of your working life and would fall short to way-short of that 7-10% return, i.e., you are on the left side of the bell shaped curve. So even with a "buy and hold" strategy, timing is key, not only when you start to invest but when you go to buy that annuity or tiered set of bonds and/or CDs, or rental real estate - what are the markets going to be in 10, 20, 30, 40 years? And timing is what leads us to the next basic approach.
Your second basic approach is based on the assumption that investment vehicles reflect the economy and as such reflect various cycles in the economy (e.g., production, consumption, productivity, housing, consumer/investor confidence) AND that you personally can take competitive advantage of these cycles by "buying low and selling high," rinse and repeat.
Your third basic approach is based on the assumption that some segment of the market is always doing better than other segments of the market AND that you personally can take competitive advantage and rotate to the right segment at the right time, buy-low, sell-high, rinse and repeat.
Now what one needs to realize for all of these strategies, but particularly the latter two, is that its not just about being smart about the markets, its also knowing that you are competing with countless other investors and institutions some of which are so powerful that they can actually manipulate the markets (and that certainly includes your own government that makes perfect decisions every time
) at least over some period of time to their advantage and very very often to your disadvantage.
Banks and brokerage firms have thousands of analysts on their roles tracking and analyzing investment vehicles. And there are hedge fund managers that are paid billions (and that is with a 'B') in this business to make the right investment decisions. However, in this arena, the vast majority of professional fund managers do worst than brainless indices. What I mean by "financial advice emanating from a trailer park" is that your information, your experience, your capabilities just might not be on par with these other players whose own track records are sub-par more often than not.
Its real nice that you made some money in your bonds since 1995. You would have certainly done much better if you had been in stocks for those first five years, out for a couple, back in for about four more, and out since Oct 2007. Its also possible that you could have lost your entire investment egg, it you had done much in the way of the opposite. You also need to measure your windfalls against what inflation has been eating away at, and I suggest not using the phoney government inflation reports. But, you feel you did okay, and that's just fine by me. However, you need to take a deep breath, and stop and realize that your principle let alone your returns are basically "lunch money" to a lot of other players, and some day, they might just take it from you with as much indifference as stepping on a clueless ant.
Posse Comitatus
Originally Posted by Marx & Lennon
) has to say.
