TEN STOCK MARKET MYTHS THAT JUST WON'T DIE

Read this article by Brett Arends in the Wall Street Journal. Sometimes we assume that since a principle is usually true, that it is always true. These ten myths will knock the props out from under your assumptions.

CENTRAL OREGON

Lin took this photo on the hillside above our campsite. We were hiking to the top of the ridge when she noticed this snag. The terrain is amazing. The view of the surrounding mountains is breathtaking.

SLIDING TOWARD DEFLATION

Read this article by Paul Krugman. Deflation happens when prices start going down. You would think that would be a good thing. However, it's not. When prices go down, people put off purchases, knowing that next month the price will be lower. A reduction in purchases causes higher unemployment, and it becomes a self-fulfilling prophecy. My recommendation is to be prudent, but not over-react.

THE 4 PERCENT RULE

Here is some more information on the 4 percent rule I discussed several months ago. The only suggestion I have to add is that your annual withdrawal each year should be 4% of the remaining principle, not 4% of the initial amount. There is a big difference. The worst case scenario would be a gradually decreasing nest egg. Theoretically you would never run out of money, because if your retirement reduces to just a few dollars, you are still removing only 4% of that amount each year. In the best case, your nest egg will return over 4% annually, which would allow your annual withdrawals to gradually increase.