Obama has now outperformed Reagan on jobs, growth and investing

[Mikey 16,597]

It is a great idea for a discussion of the two administrations. Amazing all the different variables both administrations faced, from economic turmoil, technology, foreign affairs, ect.

My tidbit would be to add the comparison of the actions made by the Federal Reserve. Interest rates the last 5-6 years and interest rates in Reagan's first 5-6 years. The different directions Paul Volcker and Ben Bernanke went.

Interest rates were so different when both started that I don't know how much can be learned. I clearly remember signing a note at 18% interest to finance my farming operations in 1980. Rates were much lower than that by the time Reagan left office. OTOH, rates were at historic lows when Obama took office and have continued near zero so far. Extremely low interest may be good for borrowers but for people living off the interest from bonds and CD's it pretty much sucks.

You're right. Just shows that diversification pays at any age. Only the ratios should change.

Hopefully one's stocks would compensate for those returns to some degree.

Conventional wisdom says that people of a certain advanced age should have no more than 10% of their funds in assets that can lose money. A couple retiring on their social security and 100k in CD's are pretty much in the same shape as welfare recipients without the food stamps.

[homersapien 11,373]

It is a great idea for a discussion of the two administrations. Amazing all the different variables both administrations faced, from economic turmoil, technology, foreign affairs, ect.

My tidbit would be to add the comparison of the actions made by the Federal Reserve. Interest rates the last 5-6 years and interest rates in Reagan's first 5-6 years. The different directions Paul Volcker and Ben Bernanke went.

Interest rates were so different when both started that I don't know how much can be learned. I clearly remember signing a note at 18% interest to finance my farming operations in 1980. Rates were much lower than that by the time Reagan left office. OTOH, rates were at historic lows when Obama took office and have continued near zero so far. Extremely low interest may be good for borrowers but for people living off the interest from bonds and CD's it pretty much sucks.

You're right. Just shows that diversification pays at any age. Only the ratios should change.

Hopefully one's stocks would compensate for those returns to some degree.

Conventional wisdom says that people of a certain advanced age should have no more than 10% of their funds in assets that can lose money. A couple retiring on their social security and 100k in CD's are pretty much in the same shape as welfare recipients without the food stamps.

Depends on how much money you have, how old is "certain age", how dependent you are on that money, what your estate goals are, your acceptance of risk, etc.

10% as a maximum seems way low to me. But again, it depends.

But you make an excellent case for your "test couple". It's frightening to see how little wealth most people have accumulated for retirement. It's one of the things I harp on to young people in my family and circle of friends: Start early with saving for retirement and take full advantage of the time value of money.

[Proud Tiger 4,261]

Mikey.......glad I haven't followed this wisdom

Anyone who kept their money on the sideline during the past year missed out on Obama's Wall St. economy.

[homersapien 11,373]

Mikey.......glad I haven't followed this wisdom

Anyone who kept their money on the sideline during the past year missed out on Obama's Wall St. economy.

Seriously

[Mikey 16,597]

Mikey.......glad I haven't followed this wisdom

Anyone who kept their money on the sideline during the past year missed out on Obama's Wall St. economy.

Hindsight is 20-20. Once I had what I deemed to be "enough" I left only 10% in the market and don't regret it one bit. As soon as interest rates show the slightest sign of ticking up, stocks will slide. In the meantime I hope those that need more make a killing and are lucky enough to pull out in time.

[japantiger 4,051]

It is a great idea for a discussion of the two administrations. Amazing all the different variables both administrations faced, from economic turmoil, technology, foreign affairs, ect.

My tidbit would be to add the comparison of the actions made by the Federal Reserve. Interest rates the last 5-6 years and interest rates in Reagan's first 5-6 years. The different Paul Volcker and Ben Bernanke went.

Both of these periods of hi stock market gains, job growth, etc., came at a cost...Reagan spent $1.8T...in other words, the increase in net gov't debt during his admin that paid for the stock market expansion, job growth, etc. During Obama's time, net government debt has increased over $7T and is still growing. The debt to GDP ratio has also increased roughly the same during both Reagan and Obama presidencies; that is, over 20%....but from fundamentally different places as our debt to GDP ratio now exceeds 100%. There is no free lunch when you artificially produce this much stimulus.

The question is, at the end of which period are we fundamentally in a healthier place which is really what this is all about. At present, we have higher poverty and less full time employment than at the end of the Reagan period (or any period in the last 60 yeras). HH incomes are down during the O admin vs the Reagan admin which saw double digit gains....and are down 3% from the end of the "great recession" as some on here love to call it. HH income down during the recovery. Hhmmm, now that typically would not be called a recovery. Also, HH income is down for those in the age cohort that usually represents peak earning years (aged 45-55) and every age group under 65. That is particularly painful given what that means for those raising the bulk of the children, paying for most of the education costs and really beginning to plan their retirements. By race; well, it's bad for every race; but particularly bad to be black with incomes down 8%. Lastly, the % of the population investing in stocks is lower than it was entering the century (hovering at 50%) so fewer people are sharing in the stock market increases. And the stock market outlook is almost 100% tied to what the Fed is going to do on interest rates...which, given they are at 0%; means they can only move one direction....up; and as they do, the only thing O can point to (increase stock market) starts to fall apart.

So, we have chronic high unemployment (in excess of 7% for most of the last 6 years; and still @ 6%), under-employment, all job growth going to part time work, lackluster econ growth @2% for the entire recovery period, incomes down and massive amounts of chronic long term government debt....and the stock market outlook; which is keeping people out of the market is not promising given the likelihood of Fed action to increase rates....and the main nest egg for most; social security, is likely insolvent; and unlike Reagan, no one wants to tackle that grim reality because it will require restructuring the spending priorities of the current admin.

Are we better off than 6 years ago? If you are over 65 years old; as you are likely a huge beneficiary of the stock market increase and less exposed to HH income declines thru employment; the answer may be yes. Those over 65 have seen HH income increase. For the the remaining 78% of US households; there's not really a stat moving in the right direction for you (income down, employment down, outlook down, debt up) . Hard to see what would make an objective observer answer yes for the majority of the population.