The 50 Plus Male

In early Spring 2009, I read an on-line article published on MSN.com written by John W. Schoen, entitled “Boomers Face Stark Choices in Bleak Economy.” I felt the piece was so acutely on-point in terms of clarity and my personal situation at the time that I composed a rather lengthy email to Mr. Schoen praising him for his efforts.

Mr. Schoen’s article is part of a series called Reinventing America. While I’ve provided you a link to his piece, I’ll list the salient points in broad brushstrokes for you:

1. The collapse of the financial, housing, and job markets is causing the American Dream to disappear and boomers now find themselves in unimaginable, inexplicable straits. Many of us will be working later in life than originally planned at stagnant or decreased compensation levels.

2. In addition to the blow of boomers facing losses in their retirement accounts due to Wall Street’s recent collapse, many are depleting them to meet basic living expenses.

3. Boomers, representing the generation born to post-war families who rejoiced in the “good times that lay ahead,” are experiencing a palpable shift away from similar expectations. Our currently woeful economic climate will last longer than anything we’re used to, forcing many of us to question whether we will ever return to prosperity.

4. Many of us may have already seen our peak earning years surprisingly fade away at a much younger age than ever anticipated.

5. Some job skills are no longer transferrable due to becoming obsolete.

6. Losing our jobs, even under exigent circumstances, has usurped much of our pride and caused people to isolate themselves and not want to reach out for help.

7. Many baby boomers are encountering age discrimination in the course of job-hunting and their experience and advanced skill-sets are not what many cost-conscious employers are seeking.

8. All of this is causing many of us to reinvent ourselves in the pursuit of new careers, and this was not in our original game plan. For many boomers, reinventing oneself is not only difficult, but practically impossible.

9. The financial advice we’ve received during the past couple of decades (investing in the stock market and holding for the long-term, sacrificing to feed your IRA’s and 401 K’s) has come with greater than anticipated risk

10. Anxiety and stress levels have shot through the roof and many of us feel that our upcoming/present “golden years” have become permanently tarnished.

In December 2009 Mr. Schoen wrote another article, “Bleak Job Scene Poses Challenge for Obama.” This article deals with the slight economic recovery coupled with the continuing bleak job outlook that is not likely to dissipate anytime in the near future. I touched on this perplexing phenomenon in a previous post, Calling for George.

Points discussed by Mr. Schoen include:

1. Don’t be fooled by the recent slowing of job losses; any kind of recovery is going to be a long, arduous process…particularly the rehiring of so many displaced workers.

2. The stimulus package is slowly impacting our economy favorably, but lingering questions remain…is it enough or are additional measures by our government needed?/is there much more the government can or should do to stimulate job creation?

3. Unemployment figures are misleading; they do not count discouraged workers (people who have given up looking for a job) or the underemployed. Count these groups and the unemployment figure dramatically rises.

4. The current recession outstrips the previous one in scope.

5. The belief that an increased demand for products and services will give reason for employers to hire is a key impetus behind the extension of unemployment benefits (even though extensions add to our federal debt).

6. Increasing access to credit for small businesses will be a chief component of any recovery, but there is debate over how to best accomplish this, be it through tax cuts or an additional stimulus package.

After reading this article, I once again got in touch with Mr. Schoen. I’m happy to report that Mr. Schoen nicely sent swift replies to both of my emails. I’d like to share some of his thoughts with you.

According to Mr. Schoen, “’Boomers Face Stark Choices…” was one of the toughest stories he’s had to write in 30 years of reporting; in fact a portion of it was autobiographical. Many of the men he spoke to while composing the article had similar feelings to what I had expressed in my reply email, “the deep need to provide for family and a feeling of profound failure when we are no longer able to do so—or at least in a manner we believe we should.”  Mr. Schoen calls this our “cave man” DNA.

Mr. Schoen also stated that “I heard from many couples that the experience has brought them closer together, partly out of necessity. But adversity does force you to ask questions you might not otherwise and forces choices you may have been avoiding. Maybe it’s because most couples who have made it this far come to the realization that they’re not in it for the money.”

Regarding the “Bleak Job Scene Poses Challenge…” article, Mr. Schoen wrote to me acknowledging “since our last correspondence, I had heard from hundreds more 50-somethings who report things are getting worse, not better. Some have burned through savings trying to ‘do the right thing’ by paying off an underwater mortgage, only to lose the house after many months/years trying to get a break from their lender. A few I’ve met are on the verge of homelessness and this prospect seems very real to many more.”

Mr. Schoen has found, however, that many of his readers seem to be moving ahead into this new, unexpected phase in their lives with renewed energy. “They have no choice” said Mr. Schoen. “They feel there’s no sense in letting themselves get depressed and bitter.”

He goes on to say that there is also a wider mood amongst his readers of what he calls “recession  fatigue.” There is a great desire on everyone’s part to see the glass half full, to acknowledge “things are bad but maintain hope that we’re all through the worst and life will be back to normal in a few months or years.” Unfortunately, this yearning seems to be hampering meaningful solutions to very real, persistent problems. The panic is over, but the long-term damage still requires serious repair.

In the end, echoing Mr. Schoen’s thoughts, no matter what happens, we’re all going to be profoundly changed; hopefully it will be for the better.

-Neal

In the wake of the recent collapse of the financial marketplace, many of us have naturally become more skittish about how to handle our investments. This is especially true for the 50 plus male, as the market downturn has made our upcoming retirement years uncertain, and in many cases simply vanish. Never before has the general investing public been made to feel as if they are being “gamed” by the big boys on Wall Street and suffering the resultant consequences of financial transactions made by the few causing irreparable harm to the masses.

In the past few weeks, a new area of concern has been getting increasing attention from the financial pundits. While I’m sure quite a few 50 plus males are aware of this technological innovation that has encroached upon the financial markets, many of you may not be as cognizant. I am not presenting myself as a financial expert or sounding any alarms; I’m just providing some exposure to an activity that until fairly recently stayed hidden from most of us.

I speak of “high-frequency trading,” a practice defined as making trades in microseconds (think of this as the ability to transact buy and sell orders thousands of times a second) through the use of supercomputers and highly sophisticated algorithms. This trading can include not just stocks, but commodities and currencies as well.  Why has this garnered so much attention lately? The answer is straightforward considering we’re addressing the financial marketplace…ever increasing profits, even in the midst of the recent market collapse, coupled with what is becoming an outsized share of daily trading volume (recent estimates have this at more than half of U.S. stock-trading volume). 

High-frequency trading isn’t just practiced by the remaining Wall Street behemoths or better-known hedge funds. Newer firms specializing in this trading as market makers have become major players. Without getting overly specific, high-frequency trading involves utilizing spreads of fractions of a penny per share in many thousands of trades a day while simultaneously restraining how much capital is being risked. The concerns center around whether this activity helps or hinders the market’s efficiencies (such as liquidity, spreads, etc,) and whether the average guy is getting the best pricing when buying and selling. Adding to this confusion are by-products of high-frequency trading such as flash orders, which is another high-speed type of trading where certain exchanges let traders quickly expose (no more than half a second) their orders to other players in the market.  This has raised red-flags of “front-running,” whereby the big boys get better pricing than you or I by trading ahead of the general public.

Many of us have a sizable proportion of our savings in mutual funds. Many of these funds are now using “dark pools,” yet another outgrowth of high-frequency trading to combat the marketplaces that cater to high-frequency traders. Dark pools are places where a fund’s managers can buy and sell large blocks of stocks ‘anonymously” so as to avert letting the market know about these big moves and hence altering prices.

There are many articles you can search for on the internet dealing with this subject matter. I have referenced “What’s Behind High-Frequency Trading” by Scott Patterson and Geoffrey Rogow in the Wall Street Journal. “Wall Streets New Masters,” written by Liz Moyer and Emily Lambert in the September 21st, 2009 edition of Forbes has provided another excellent information resource.

In sum, while all of this market activity has raised the antennae of the SEC and various politicians, the jury is still out on high-frequency trading activities. Once again, the rule of the day is “caveat emptor” (let the buyer beware) when determining how to handle the equity portion of your portfolio. I just pray we are not getting the short end of the stick.

-Neal  

Ahh, your first time…what man doesn’t remember who he was with, where he was, and how mind-blowing it was…just like you knew it would be.

Uh guys, I’m not talking about your first woman; no, I’m unfortunately referring to that first time you received a membership solicitation in the mail from AARP! When it happened to me, you could hear my groan from a hundred miles away. Turning fifty is a big enough event unto itself; seeing the AARP return address on that envelope even before opening it is being slapped in the face and that, my friends, is a whole other ballgame.

Here’s the dichotomy with this whole issue…I’m aware, as are most other 50 plus males, that AARP is a terrific organization. Upon reading that first appeal to join, you’re presented with a multitude of benefits “once they gotcha…” However, to this day (remember, as I compose this post, turning 57 years of age is quickly approaching), I have not pulled the trigger and joined. I know what you’re probably thinking; it’s just sheer vanity getting in the way of rational action. But hey, did I mention that I just cannot pull the trigger?

Give AARP credit: they know the meaning of “if at first you don’t succeed, try, try again!” While they take care not to overwhelm you with mailings, they are definitely following a model of periodic consistency. Deep down, in my heart of hearts, I know I’ll eventually come to my senses and take advantage of the privileges of membership, and that this day is coming sooner rather than later.

So here’s my question: Do you understand why I haven’t joined thus far? Am I just acting immaturely? Is it just plain foolishness? Please let me know your thoughts, because for a guy who prides himself on thinking through most situations in a concise and clear manner, I’m totally confused.

-Neal