Yes, another one of these threads. What are you guys going to do? The market continues to keep plunge. I don't even want to say how much I've lost in the last few months. Will you guys pull out or are you going to stay in hoping it will turn around sooner or later?
If I was 7-8 years older i'd be bugging right now.
The big correction was coming, homes will be next to some capacity. Just be wise with your money and don't invest more than you can afford being tied up for a couple of years.
Everyone saying "recession is coming", so people say "you know what, I'm not going to... buy that new car, hire that contractor for my kitchen remodel, go on that big trip, etc, etc".. then boom, we're in a recession
If you really need to calm your nerves, I try and think of it as a sale.
I will continue to buy more at the sale price and be happy I can get this deal.
This country knows 2 things .... War and how to make money.
Leave it in ... matter of fact if you have a 401k plan or IRA - I would keep funding it as normal like I did in 2007 and 2010. Think of it as a sale - you will get more funds/stocks for your dollar today.
It will come back ... it always comes back. IN 10 - 15 years we will see a 50,000 point DOW.
+1
"Be fearful when every one else is greedy. Be Greedy when everyone else is Fearful"
-Warren Buffett
Buffett just increased his holdings this week that included Chevron, Apple, and a few other companies. Google it.
I think the only company he sold (and owned since 1989) was Wells Fargo?
Also IPOs that skyrocketed and then I’ve been steadily declining for six months or a year, get rid of those
Value stocks you should just hold and wait out the market they will come back up.
Buy more shares when the market is down, and once it comes back, you will be thrilled you did.
Also bonds are starting to get yieldy again, its a good place to park some money.
For a lot of people, this is their first real bear market. Its scary, but it will be okay.
Buy more shares when the market is down, and once it comes back, you will be thrilled you did.
+1
Absolutely right. It takes discipline sometimes though to practice this strategy but, without it everyone would be buying HIGH and selling LOW.
IF you are a long term investor (vs. a short term trader) - these are the times to stock up. There is a fire sale going on out there.
For a lot of people, this is their first real bear market. Its scary, but it will be okay.
Just had one two years ago, so you'd have to be a brand new investor for it to be the first.
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sound, sensible advice in here.
For a lot of people, this is their first real bear market. Its scary, but it will be okay.
Just had one two years ago, so you'd have to be a brand new investor for it to be the first.
Pandemic spurred a lot of interest. 15% of investors started during 2020
Link - ( New Window )
Also don't confuse the prospective, non-revenue earning high-tech stocks that are getting hammered, with the big tech stocks that are making money are have very strong businesses and cash flow. Stocks like Google, MSoft, Amazon, and Apple will all come out of this strong. The Robinhoods and Snowflakes will die.
We are no where near the bottom, the dow will go below 30,000. And the pain is going to continue for a couple of years. I cant point to anything that will turn this around.
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I’d love to see a rally by tomorrow
We are no where near the bottom, the dow will go below 30,000. And the pain is going to continue for a couple of years. I cant point to anything that will turn this around.
I think this advice can be dangerous to some people.
If people think it’s a guarantee that the market will go down more, they might sell now and try to buy at the bottom.
It might be safer to say it could go down and it could go up, just keep buying because long term the market will rise.
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I’d love to see a rally by tomorrow
We are no where near the bottom, the dow will go below 30,000. And the pain is going to continue for a couple of years. I cant point to anything that will turn this around.
How can you know that? It may not be "the bottom", but we are getting close. Stating speculation as fact is worse in financial suggestions than it is in stupid football threads.
Your 401k should still be buying stocks. And it might be a bit late to get a big return from re allocating to stable investments for the rest of the nest egg but you might consider it.
I feel like we are now where near the bottom. In 2008, we knew it was the housing bubble, in 2020, it was the covid lockdown.
Right now, there are too many factors contributing to this and not one thing thats going to fix all the problems going on right now. (the war, the supply chain problems with China lockdowns, the Fed printing money and chasing inflation)
So in my opinion, this thing is not going to turn around any time soon.
Just how I feel about it from what i'm reading and hearing and seeing. I'm not an expert on this.
Just like in my opinion Daniel Jones sucks, I HOPE I"M WRONG about that and this
All good! I say that you said that so I know your being smart.
I know your just bracing that things can get worse which is definitely true.
I just don’t want a new young investor to interpret that statement as it “will definitely go down some more so I should wait to buy then”
The way I had it structured I have 80% of my biweekly paycheck going to my securities account for my money guy to play around with and do with it as he sees fit and 20% going to my cash account (I live a somewhat quiet lifestyle. I'm not traveling during this pandemic. I'm not spending extravagantly. Money spent on rent, utilities, food, etc.). I only contribute to my IRA at the beginning of every year for the tax benefits. Since I received my year-end bonus, I've lost A LOT. I mean I am down A LOT. A ridiculous amount. In Mid-April, I decided to just bite the bullet, accept some of the loss and go 60-40. But it's still not helping that the market continues to tumble day in and day out.
If I was 7-8 years older i'd be bugging right now.
Also If you were 7-8 years older you would/should have had more of your assets in fixed income and wouldn't be freaking out.
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just because i said we're not near the bottom, I didnt tell anyone to sell anything, i said max out your 401k if you can in this down market.
All good! I say that you said that so I know your being smart.
I know your just bracing that things can get worse which is definitely true.
I just don’t want a new young investor to interpret that statement as it “will definitely go down some more so I should wait to buy then”
yeah yeah all good, if there are new investors out there my advice would be to dollar cost avg into a market like this, this way if there is more down pain you're not going all in at once.
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you haven't lost anything in the last few months. You only lose if you sell now. Ride it out, you have literally decades until you retire, looking at it as you've lost money in the last few weeks or months is silly.
The way I had it structured I have 80% of my biweekly paycheck going to my securities account for my money guy to play around with and do with it as he sees fit and 20% going to my cash account (I live a somewhat quiet lifestyle. I'm not traveling during this pandemic. I'm not spending extravagantly. Money spent on rent, utilities, food, etc.). I only contribute to my IRA at the beginning of every year for the tax benefits. Since I received my year-end bonus, I've lost A LOT. I mean I am down A LOT. A ridiculous amount. In Mid-April, I decided to just bite the bullet, accept some of the loss and go 60-40. But it's still not helping that the market continues to tumble day in and day out.
Again, you haven't lost anything unless you sell. Stop looking at this stuff every day or even every year. Now is the time to put more in not less. I know you're an intelligent guy and I'm young but you're a lot younger than I am. There is zero reason for you to "bite the bullet and accept some of the loss". That's the exact opposite of what you should be doing. You are turning this into a loss with pure stupidity. Stop that and stop worrying about it. This isn't rocket science. Sell high buy low. It's really that simple. Do you think the market is going to be below where it is now in 20-30 years? Of course not. And if it is, we're fucked anyways so who really gives a shit.
In your position you have absolutely zero reason to be selling anything or putting less money in right now. You have no reason to be talking about how much you've lost in the last few months. You haven't lost a penny.
I don't see much improvement in the economy in the next few years. There will be periods of rapid fluctuation until there is some fiscal discipline.
Rising interest rates, increasing energy costs (the current petroleum reserve is at the lowest level in 35 years), expansion of government spending, and inflation are the time-tested recipe for a recession. I think it's wise to buy if your young and preserve earnings if you're going to retire in the next 3-5 years.
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you haven't lost anything in the last few months. You only lose if you sell now. Ride it out, you have literally decades until you retire, looking at it as you've lost money in the last few weeks or months is silly.
The way I had it structured I have 80% of my biweekly paycheck going to my securities account for my money guy to play around with and do with it as he sees fit and 20% going to my cash account (I live a somewhat quiet lifestyle. I'm not traveling during this pandemic. I'm not spending extravagantly. Money spent on rent, utilities, food, etc.). I only contribute to my IRA at the beginning of every year for the tax benefits. Since I received my year-end bonus, I've lost A LOT. I mean I am down A LOT. A ridiculous amount. In Mid-April, I decided to just bite the bullet, accept some of the loss and go 60-40. But it's still not helping that the market continues to tumble day in and day out.
You are doing it right. Unreal that you can plow 80% of your money into investments. Keep doing it. Don't look at it as losing money. You are buying stocks on sale, which allows you to accumulate more shares of stock. Keep plowing money in. If the market is down another 10%, keep plowing money in. You are young. In five years, you will look at your portfolio and be thankful you did.
As for losing money, everyone has. I'm actually up on the year because of FL real estate, but I was down $23K or so just yesterday. It doesn't matter. It will eventually go back up. It always has.
I share this article every time I can. If you have a long-term time horizon, it is very risky to sell. "Looking at data going back to 1930, the firm found that if an investor missed the S&P 500′s 10 best days each decade, the total return would stand at 28%. If, on the other hand, the investor held steady through the ups and downs, the return would have been 17,715%."
Think about that. If you miss the 10 best market days each decade, your returns are 28% total since 1930. If you just stay in, your returns would have been 17,715%. In a volatile market like this is usually when those huge whiplash days are, and there is immense risk to missing those days.
Link - ( New Window )
Now I just don’t bother looking I feel better, less stress and the way I look at it I wasn’t retiring in the next few years anyway. If anything, find the deals available and take advantage of them.
Things will turn around they always do.
+1
Also IPOs that skyrocketed and then I’ve been steadily declining for six months or a year, get rid of those
Value stocks you should just hold and wait out the market they will come back up.
I am funding the crap out of my after tax mega Roth IRA plus maxing out 401k and catch up contribution.
Still averaging down on Apple and Nvidia those that I can hold my nose as hold when market tanks
I think they lead after whatever recession ( or asset revaluation)
Not touching acct till 15-20 yrs hopefully
As far as alternative energy, PLUG
Yes this is a PLUG. So do your own DD if remotely interested ( and it’s still a bit expensive. 9x 2022 sales. Caveat emptor
I think hydrogen is gonna dominate as infrastructure goes, really kicking in 2025 and on.
EU budget in 220 billion for alternative ( if it passes). We know they are moving away from oil/ gas. Expect US to do same. Cali doing it now.
PLUG super well positioned. Just did a billion dollar deal in Denmark for biggest hydrogen project ever. I expect a lot more over next few yrs
And of course if they stayed in and lost another 15%+ they would not have the cash needed for the other classic comment (usually made by those who stayed in and are getting killed) 'it's a great buying opportunity.'
Which it may be - except for those who stayed in because they were told you only lose when you sell and now have no cash and a portfolio down big.
I feel like we are now where near the bottom. In 2008, we knew it was the housing bubble, in 2020, it was the covid lockdown.
Right now, there are too many factors contributing to this and not one thing thats going to fix all the problems going on right now. (the war, the supply chain problems with China lockdowns, the Fed printing money and chasing inflation)
So in my opinion, this thing is not going to turn around any time soon.
Just how I feel about it from what i'm reading and hearing and seeing. I'm not an expert on this.
Just like in my opinion Daniel Jones sucks, I HOPE I"M WRONG about that and this
2008 I think will be a lot worse. Credit markets were frozen. This is more a revaluation of assets that got way ahead of ourselves. It’s not 1999 either. mega tech makes tons of cash. It’s basically do I think Apple should warrant a 25x p/e or. 15x P/E. Could definitely see another 10-20% downside. Issue is you will never get the upswing or time the bottom. So just keep dollar coat averaging in retirement accts if u have them. It could take 5 yrs to recover. 10 yrs from now you would be very happy u bought.
Some would argue that corrections are healthy, particularly when stocks have gone up so much so fast. Feb. 14, 2020, DJIA was at 29,398. March 20, 2020 it was at 19,173 when everything shut down. DJIA almost doubled since that time, and still a bit higher than Feb. 2020, even with all the host of issues. Market is pricing in a recession.
This how I feel. Correction triggered by weird economic conditions and aided by the fact that there are now going to be some other places to put your money and get a return. Before now, there really wasn't any other option but interest rates going up will change that. Zero interest rates made the market really the only game in town.
And of course if they stayed in and lost another 15%+ they would not have the cash needed for the other classic comment (usually made by those who stayed in and are getting killed) 'it's a great buying opportunity.'
Which it may be - except for those who stayed in because they were told you only lose when you sell and now have no cash and a portfolio down big.
Good luck timing the market. Smart move is to buy and hold quality companies. There will be huge years. There will be years you take a 50% haircut. But in the long run, you will beceome wealthy.
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In comment 15713221 Mook80 said:
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you haven't lost anything in the last few months. You only lose if you sell now. Ride it out, you have literally decades until you retire, looking at it as you've lost money in the last few weeks or months is silly.
The way I had it structured I have 80% of my biweekly paycheck going to my securities account for my money guy to play around with and do with it as he sees fit and 20% going to my cash account (I live a somewhat quiet lifestyle. I'm not traveling during this pandemic. I'm not spending extravagantly. Money spent on rent, utilities, food, etc.). I only contribute to my IRA at the beginning of every year for the tax benefits. Since I received my year-end bonus, I've lost A LOT. I mean I am down A LOT. A ridiculous amount. In Mid-April, I decided to just bite the bullet, accept some of the loss and go 60-40. But it's still not helping that the market continues to tumble day in and day out.
You are doing it right. Unreal that you can plow 80% of your money into investments. Keep doing it. Don't look at it as losing money. You are buying stocks on sale, which allows you to accumulate more shares of stock. Keep plowing money in. If the market is down another 10%, keep plowing money in. You are young. In five years, you will look at your portfolio and be thankful you did.
As for losing money, everyone has. I'm actually up on the year because of FL real estate, but I was down $23K or so just yesterday. It doesn't matter. It will eventually go back up. It always has.
I share this article every time I can. If you have a long-term time horizon, it is very risky to sell. "Looking at data going back to 1930, the firm found that if an investor missed the S&P 500′s 10 best days each decade, the total return would stand at 28%. If, on the other hand, the investor held steady through the ups and downs, the return would have been 17,715%."
Think about that. If you miss the 10 best market days each decade, your returns are 28% total since 1930. If you just stay in, your returns would have been 17,715%. In a volatile market like this is usually when those huge whiplash days are, and there is immense risk to missing those days. Link - ( New Window )
Heck. I am probably down 200k in retirement accts last few months
My retirement spreadsheet actually has a 500k haircut in it before I use very a 5.5 ROR and a 3.5 LT inflation rate in it. And we are blessed to have a pension down the road that should cover 70% of our total retirement expense in yr 1 ( not cola so that will decrease over time)
That being said, went back to my old job this week for some PT work. ( still do my own seasonal tax work)Purchasing power getting eroded. And it’s makes my projections look like crap. So if nothing else I fund vacations and house projects out of part time work. ( plus I am too young to retire, wife still works 8 yrs so I want to grind with here awhile longer)
And of course if they stayed in and lost another 15%+ they would not have the cash needed for the other classic comment (usually made by those who stayed in and are getting killed) 'it's a great buying opportunity.'
Which it may be - except for those who stayed in because they were told you only lose when you sell and now have no cash and a portfolio down big.
If the market went down another 15% why would we not have the cash needed to buy?
You don’t buy with money currently in the market, you buy with income. If you suggesting people won’t have jobs if the market drops more I say that that may be true but might not be. If you were told in January that the stock market would drop 20% by may you would probably think unemployment would increase but that was not the case.
The point is that these time are the most important times to stay in the market. Look at an S&P chart. Covid drop 3400 > 2100 (~35%) to current levels 3900 (90% rise). That’s why people are giving this advice.
Obviously, I have taken a hit the last few months. I am staying the course and still dumping 10% into my account every 2 weeks.
On the flip side, the last 4 years have been a dream world where the account just was going up every month by a ridiculous amount. That increase in the market was a mirage, and as someone said this is sort of the adjustment. Hopefully.
You're not taking 100% of your retirement savings on day one, and you're likely to live for a while longer (if you don't, having money in the bank isn't doing you any good, anyway) so you have time to recover. I've read that the retirement target plans should aim at middle of retirement, not first day of retirement.
If you're on the back end of retirement, there's so much social safety net in this country that you'll be ok even if you run out of money (and you'll be so old and decrepit, you won't notice).
Middle of expected retirement could be a time to worry.
This is a very good point. Dips are periodic fluctuations that keep a healthy market on-track. They're often traceble to events or sectors being re-ordered. The fundamentals of the US economy are bad and showing no signs of improvement. The market is reacting to serious issues that indicate a lack of stability in the forces that drive the market upward.
First we heard from economists (in late 2021) that current inflation was transitory, now many large businesses are bracing for a declining economy with longer duration impacts from inflation as a key driver for a recession. Until some fiscal fixes (fiscal discipline) is introduced, the current trend points to a deeper decline. Remember the early 80's and how we dug-out of that recession. The fix was made, but it was a painful medicine for 4-5 years, until the economy got back on track.
Look to invest in military/defensive stocks, I expect further trouble throughout the world.
I'm leaning this way, too.
The economy is in a squeeze - historical inflation getting ready to collide with the Fed intentionally moving the economy to a recession.
This will tamp down demand, reduce earnings, and likely increase unemployment.
Cash is king right now. The more liquid you are, the better.
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Big difference
This is a very good point. Dips are periodic fluctuations that keep a healthy market on-track. They're often traceble to events or sectors being re-ordered. The fundamentals of the US economy are bad and showing no signs of improvement. The market is reacting to serious issues that indicate a lack of stability in the forces that drive the market upward.
First we heard from economists (in late 2021) that current inflation was transitory, now many large businesses are bracing for a declining economy with longer duration impacts from inflation as a key driver for a recession. Until some fiscal fixes (fiscal discipline) is introduced, the current trend points to a deeper decline. Remember the early 80's and how we dug-out of that recession. The fix was made, but it was a painful medicine for 4-5 years, until the economy got back on track.
I agree about the spending. Targets earnings were pretty telling and how inflation is eating into its profits. The majority of companies can't do this and layoffs are coming imv. Layoffs, lower consumer spending (already happening as people have had to make tough choices) impacts growth/earnings.
Who knows for sure how deep the correction is but in past downturns its been almost half of its peak. Lots TBD still. The good companies always come back. The variable is time and how strong future growth will be.
The CPI inflation may be high, but the dollar index is super strong against other currencies. Lots of flight to US cash from global investors. There is a systematic unwind going on.
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Things are bad now, but only going to get much worse. Staying could be disaster for some.
I'm leaning this way, too.
The economy is in a squeeze - historical inflation getting ready to collide with the Fed intentionally moving the economy to a recession.
This will tamp down demand, reduce earnings, and likely increase unemployment.
Cash is king right now. The more liquid you are, the better.
Now that is some bad advice. Whatever you think about being in the stock market, cash is NOT king with "historical inflation" as you call it.
I just checked CD rates and they are climbing. Nowhere near the rate of inflation (~7%), but you can get a decent 16 month CD for 2.2 percent.
I just checked CD rates and they are climbing. Nowhere near the rate of inflation (~7%), but you can get a decent 16 month CD for 2.2 percent.
Bank Hapoalim just wrote an 18 month CD at 2.5%
For example. The 2year CD is paying 1.25% and the 5 year is paying 2.5.
Get the 5 year. After about year one the the extra interest is gravy.
You're welcome.
Thinking of buying back into it. LOL...
Thinking of buying back into it. LOL...
Stan... Is this a stock, or mutual fund? If fundamentals are good for the company or the portfolio/sector, reinvestment might be a good move.
Must be nice.
This country knows 2 things .... War and how to make money.
Leave it in ... matter of fact if you have a 401k plan or IRA - I would keep funding it as normal like I did in 2007 and 2010. Think of it as a sale - you will get more funds/stocks for your dollar today.
It will come back ... it always comes back. IN 10 - 15 years we will see a 50,000 point DOW.
Meanwhile the dollar has a big bid on it, look at the DXY index. Deleveraging ramping up and debt destruction is massive now
https://www.creditspreadalert.com/
https://mishtalk.com/economics/headwinds-of-de-globalization-are-inflationary-adam-taggart-and-mish-video
supply chain destruction is creating inflation - ( New Window )
For example. The 2year CD is paying 1.25% and the 5 year is paying 2.5.
Get the 5 year. After about year one the the extra interest is gravy.
You're welcome.
And thats a great return-as opposed to market casino
Crypto falling apart as well(dollar stable coins hilariously you cannot sell)
Its time to wipe out the hedge funds
Dollar index - ( New Window )
Meta, can be a bit controversial, but feel confident it is way oversold.
Appreciate any thoughts going forward and won’t take it as financial advise lol
Thanks
80% of your paycheck goes to someone else to play around with? This is not how you build wealth bud. I've worked for active managers pretty much my entire career and I can tell you that nobody can beat the market. Read up on a simple 3 fund lazy portfolios, reallocate as you get older (every 5 years) and see you at the finish line.
Don't care how 'good' your guy is - this is not a winning strategy
By having wealthy parents so you can afford to bank 80% of your income. Just rent/mortgage alone in NYC takes too much of your paycheck to put away 80%
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80% of my biweekly paycheck going to my securities account for my money guy to play around with and do with it as he sees fit
80% of your paycheck goes to someone else to play around with? This is not how you build wealth bud. I've worked for active managers pretty much my entire career and I can tell you that nobody can beat the market. Read up on a simple 3 fund lazy portfolios, reallocate as you get older (every 5 years) and see you at the finish line.
Don't care how 'good' your guy is - this is not a winning strategy
That 80% might've been an exaggeration on my part, but my money guy was pretty convincing. Essentially his main point is what good does having most of your assets be in cash that just sits there and doesn't accumulate anything. And when I got into the "game", it was a few months before the COVID pandemic hit. And I did hold tight for a while, but then a few weeks back I couldn't take the hits anymore so I pulled out some and converted them into cash. Now, I would say my net assets is like 60% in investments and 30% in liquid cash and 10% in an IRA I contribute to every January for the tax benefits.
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At $91 a share. Today, it's trading at $29.
Thinking of buying back into it. LOL...
Stan... Is this a stock, or mutual fund? If fundamentals are good for the company or the portfolio/sector, reinvestment might be a good move.
It's a mutual that's historically done well.
I'm leaning this way, too.
The economy is in a squeeze - historical inflation getting ready to collide with the Fed intentionally moving the economy to a recession.
This will tamp down demand, reduce earnings, and likely increase unemployment.
Cash is king right now. The more liquid you are, the better.
Now that is some bad advice. Whatever you think about being in the stock market, cash is NOT king with "historical inflation" as you call it.
What's the bad advice? I'm not suggesting anybody be in 100% in cash. But having cash to buy back when this finally bottoms isn't a bad position at all.
of course he is convincing - that's his job :)
I have no problem with the percentage of assets in the market, thats a risk tolerance and capital allocation strategy that YOU need to figure out based upon your financial goals. my concern is that you have 'financial advisor' or 'money manager' of sorts. if you have a complicated tax situation, are super wealthy or some other strange situation then maybe.
but ~99% of the people in this world don't need that (and I just ducked because I'm sure I offended a lot of people on this board). just read up on passive investment strategies, I'm telling you, nobody can beat/time the market.
Low Cost Index Funds
buy your age in bonds, most of the allocation in a total market fund (ie vtsax) and maybe ~10% intl or small cap. seriously a simple 3 fund portfolio is all you need
you will never know when correction is over but we are probably closer to the end than the beginning. at least mid way thru.
Sure , can nasdaq go 10k and dow 28k sure
but this isnt 1999 dot com bubble or CDO crisis this is a big time revaluation stocks are getting cheaper but as earnings compress they probably lose more. If your piling money in now monthly or bi weekly, when this turns , whenever it is you have bought more reasonably priced shares
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but my money guy was pretty convincing. Essentially his main point is what good does having most of your assets be in cash that just sits there and doesn't accumulate anything. And when I got into the "game",
of course he is convincing - that's his job :)
I have no problem with the percentage of assets in the market, thats a risk tolerance and capital allocation strategy that YOU need to figure out based upon your financial goals. my concern is that you have 'financial advisor' or 'money manager' of sorts. if you have a complicated tax situation, are super wealthy or some other strange situation then maybe.
but ~99% of the people in this world don't need that (and I just ducked because I'm sure I offended a lot of people on this board). just read up on passive investment strategies, I'm telling you, nobody can beat/time the market.
Low Cost Index Funds
buy your age in bonds, most of the allocation in a total market fund (ie vtsax) and maybe ~10% intl or small cap. seriously a simple 3 fund portfolio is all you need
Now your salesperson "money guy" might not be able to spot it but a good market economist and/or strategist should be able to identify inflection points and recommend shifts in allocation. Over the past 12 years with you could rather easily look at M2 money supply and real yields to understand that equities, and higher duration equities, were well positioned. Now not so much.
Anyway, returns normally skew positively for stocks as they follow nominal growth and economies move higher. With an elevated chance of recession coinciding with equities priced to perfection, the balloon was bound to deflate and tighter financial conditions are being discounted earlier than expected. Basically, financial conditions are doing the Fed's job for it via credit, policy rates, treasuries, and unconventional measures of financial conditions (mortgage rates). But Powell's job isn't done which makes me think that weighted distribution of potential returns is at least more balanced than usual if not negative. Not a bullish setup. I'm keeping skin in the game but for the first time in memory I'm holding some cash without deploying into equities.
I empathize with the sentiment that a loss isn't real until its realized. That said, buying an asset trading at $20 worth $100 is still better than buying that same asset at $90. It'll get realized at some point. In a perfect world you can time the entry and exit but good luck. To that point, I do agree with the sentiment that you stay invested for the long term and try to avoid the mental perturbations that follow.
"A stock down 90% was once a stock down 80% that got cut in half" - David Einhorn
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In comment 15713935 Anakim said:
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but my money guy was pretty convincing. Essentially his main point is what good does having most of your assets be in cash that just sits there and doesn't accumulate anything. And when I got into the "game",
of course he is convincing - that's his job :)
I have no problem with the percentage of assets in the market, thats a risk tolerance and capital allocation strategy that YOU need to figure out based upon your financial goals. my concern is that you have 'financial advisor' or 'money manager' of sorts. if you have a complicated tax situation, are super wealthy or some other strange situation then maybe.
but ~99% of the people in this world don't need that (and I just ducked because I'm sure I offended a lot of people on this board). just read up on passive investment strategies, I'm telling you, nobody can beat/time the market.
Low Cost Index Funds
buy your age in bonds, most of the allocation in a total market fund (ie vtsax) and maybe ~10% intl or small cap. seriously a simple 3 fund portfolio is all you need
Buying your age in bonds has been one of the more deleterious axioms in recent history. The S&P has produced a total return of about 450% since 2010 whereas the Barclays Age returned about 140%. If you're a 42 year old that has "bought their age" in bonds over the past +decade you've lost way more in opportunity cost than any management fee would have been.
Now your salesperson "money guy" might not be able to spot it but a good market economist and/or strategist should be able to identify inflection points and recommend shifts in allocation. Over the past 12 years with you could rather easily look at M2 money supply and real yields to understand that equities, and higher duration equities, were well positioned. Now not so much.
Anyway, returns normally skew positively for stocks as they follow nominal growth and economies move higher. With an elevated chance of recession coinciding with equities priced to perfection, the balloon was bound to deflate and tighter financial conditions are being discounted earlier than expected. Basically, financial conditions are doing the Fed's job for it via credit, policy rates, treasuries, and unconventional measures of financial conditions (mortgage rates). But Powell's job isn't done which makes me think that weighted distribution of potential returns is at least more balanced than usual if not negative. Not a bullish setup. I'm keeping skin in the game but for the first time in memory I'm holding some cash without deploying into equities.
I empathize with the sentiment that a loss isn't real until its realized. That said, buying an asset trading at $20 worth $100 is still better than buying that same asset at $90. It'll get realized at some point. In a perfect world you can time the entry and exit but good luck. To that point, I do agree with the sentiment that you stay invested for the long term and try to avoid the mental perturbations that follow.
"A stock down 90% was once a stock down 80% that got cut in half" - David Einhorn
not expecting any bullish rebound either once bottoming, we may churn for a couple yrs 2nd half of decade could be the next bull run it could be 10 yrs from now but we will have a couple 30% gain yrs and anyone who was buying all the time will love it key is next time take some off the table at that point as hard to do as knowing when to buy after 2008, didnt have a big yr till 2013
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Remember the end of the world in 2007/2008? And then again in 2010?
This country knows 2 things .... War and how to make money.
Leave it in ... matter of fact if you have a 401k plan or IRA - I would keep funding it as normal like I did in 2007 and 2010. Think of it as a sale - you will get more funds/stocks for your dollar today.
It will come back ... it always comes back. IN 10 - 15 years we will see a 50,000 point DOW.
Looks different now than back then. This inflationary rise is unlike other times. I got out in 2012 and went in real estate, multi family. Gov is prinitng money like there's no tomorrow. Not the same!
It is never ever ever the exact same ... and every time people will say
"but, it is different this time" implying we are really doomed (this time)
and it always comes back. Lets check in about 3-4 years from now and see where the DOW is.
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80% of my biweekly paycheck going to my securities account for my money guy to play around with and do with it as he sees fit
80% of your paycheck goes to someone else to play around with? This is not how you build wealth bud. I've worked for active managers pretty much my entire career and I can tell you that nobody can beat the market. Read up on a simple 3 fund lazy portfolios, reallocate as you get older (every 5 years) and see you at the finish line.
Don't care how 'good' your guy is - this is not a winning strategy
That 80% might've been an exaggeration on my part, but my money guy was pretty convincing. Essentially his main point is what good does having most of your assets be in cash that just sits there and doesn't accumulate anything. And when I got into the "game", it was a few months before the COVID pandemic hit. And I did hold tight for a while, but then a few weeks back I couldn't take the hits anymore so I pulled out some and converted them into cash. Now, I would say my net assets is like 60% in investments and 30% in liquid cash and 10% in an IRA I contribute to every January for the tax benefits.
Lol, sounds like you're being taken for a ride by your 'money guy'.
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The global economy has been pretty dead since the pandemic started and seems to be getting worse. Yet the market is still slightly higher now then just before the pandemic. If this is a correction, when do you know the correction is over? It seems like stocks are still overpriced to me but what do I know. I’m not much of an investor. I’m 55 with a very balanced 401K + a small amount of physical silver and crypto. Not enough crypto to get rich but if it goes to zero I won’t be too upset.
you will never know when correction is over but we are probably closer to the end than the beginning. at least mid way thru.
Sure , can nasdaq go 10k and dow 28k sure
but this isnt 1999 dot com bubble or CDO crisis this is a big time revaluation stocks are getting cheaper but as earnings compress they probably lose more. If your piling money in now monthly or bi weekly, when this turns , whenever it is you have bought more reasonably priced shares
I’m still contributing as much as I can to the 401K but I did re-balance a little when we were near the all-time high point earlier this year. I have about 20% in a money market that I can shift back later.
I feel that crypto is the new dot.com bubble. Blockchain and crypto is the future but way to many layer1 blockchains that basically do the same thing. Too many coins right now with no real purpose or utility.
My reasoning here is because companies like Walmart and Target for example have not passed on their supply costs to consumers yet. The current quarterly numbers and reports reflect that and I have read the same for about 100 other companies.
When these supply costs get passed on a snowball effect is going to happen very fast and this will be the catalyst for a recession along with rising interest rates.
An economical game of chicken is being played where the Fed is gauging when to aggressively hike interest rates knowing the real costs from retailers have not been totally passed on to consumers goods yet.
Bad times are coming and you ain't seen nothing yet. But remember, most of you guys voted for him. This is the result two years later.
Meanwhile the dollar has a big bid on it, look at the DXY index. Deleveraging ramping up and debt destruction is massive now
https://www.creditspreadalert.com/
https://mishtalk.com/economics/headwinds-of-de-globalization-are-inflationary-adam-taggart-and-mish-video supply chain destruction is creating inflation - ( New Window )
Meanbunny love your handle and totally agree with you.
This will be way worse than 2008. We are not even close to bottom
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I almost sold near the bottom. It would have been the worst decision I could have made.
This will be way worse than 2008. We are not even close to bottom
lol
Meta, can be a bit controversial, but feel confident it is way oversold.
Appreciate any thoughts going forward and won’t take it as financial advise lol
Thanks
BOA has a great dividend. Awesome defensive play!!
My reasoning here is because companies like Walmart and Target for example have not passed on their supply costs to consumers yet. The current quarterly numbers and reports reflect that and I have read the same for about 100 other companies.
When these supply costs get passed on a snowball effect is going to happen very fast and this will be the catalyst for a recession along with rising interest rates.
An economical game of chicken is being played where the Fed is gauging when to aggressively hike interest rates knowing the real costs from retailers have not been totally passed on to consumers goods yet.
Bad times are coming and you ain't seen nothing yet. But remember, most of you guys voted for him. This is the result two years later.
Put your money where your mouth is and buy USO calls or something…
Then you’ll more than double your money while we all lose money. I wish I could see the future as accurately as you do
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by March 2023, gas prices on average nationwide will be at $6.75 a gallon and Interest rates for a 30 year loan will be above 8%.
My reasoning here is because companies like Walmart and Target for example have not passed on their supply costs to consumers yet. The current quarterly numbers and reports reflect that and I have read the same for about 100 other companies.
When these supply costs get passed on a snowball effect is going to happen very fast and this will be the catalyst for a recession along with rising interest rates.
An economical game of chicken is being played where the Fed is gauging when to aggressively hike interest rates knowing the real costs from retailers have not been totally passed on to consumers goods yet.
Bad times are coming and you ain't seen nothing yet. But remember, most of you guys voted for him. This is the result two years later.
Put your money where your mouth is and buy USO calls or something…
Then you’ll more than double your money while we all lose money. I wish I could see the future as accurately as you do
I agree USO is a good play if a person has the diversity in their portfolio, but if you are the average investor and have mainly a 401k, the current environment and forthcoming downturn is a big hit.
The Age in Bonds Theory was debunked a few years ago, when bonds were paying peanuts. If you want bonds in your portfolio, buy US Treasury Bills Direct. 1 year term, no commission, State tax free and easy to roll over next year (likely at a higher rate).
Bank of America stock has declined 28% year to date. I don't care what kind of dividend they're paying. I noted Bank of NY Mellon mentioned in this thread....down 26% YTD.
If you haven't trimmed your Stock exposure by now, it's probably too late to bail out.
Dotcoms had no revenue and 80% of the business plans sucked.
most of the FAANGS just dominate at this point
so I cant see the correlation.
I do see some stagflation like the 70's, not as deep but its there for sure
I dont beleive it will be that bad but it still could suck.
We invest around 5.5k every month thru 401k and after tax roth contribution inside 401k most going into equities I may get killed the next 5 yrs in my mind, I have a 50% correction from peak priced in. But I have 15-20 yrs till I am touching this stuff. so even if its 7 yrs down the road and the whole decade stinks, i am still buying. eventually things will turn around and I am prety sure the USA will lead again.
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eventually things will turn around and I am prety sure the USA will lead again.
I agree that USA can lead again, but Im not investing my money in this stock market at this time. I dont mind being wrong, I have less time that many here on this board. But our Gov. is making things worse all around.
What's not factored in yet beside supply chain costs mentione earlier is the short labor market. People just dont want to work. Companies will eventually start slowing down becasue of this. So, you have high inflation, a Fed going to rasie rates, a housing shortage, and jobs unfilled with 8 straight weeks of the stock market dropping.
So Ill put my money somewhere else.
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By the way, the price decline and valuation decline of the DotCom, GFC, 1973 episodes were about 2.5x the current decline. So if you want to know how much worse it can get, try SPX >3000.
Dotcoms had no revenue and 80% of the business plans sucked.
most of the FAANGS just dominate at this point
so I cant see the correlation.
I do see some stagflation like the 70's, not as deep but its there for sure
I dont beleive it will be that bad but it still could suck.
We invest around 5.5k every month thru 401k and after tax roth contribution inside 401k most going into equities I may get killed the next 5 yrs in my mind, I have a 50% correction from peak priced in. But I have 15-20 yrs till I am touching this stuff. so even if its 7 yrs down the road and the whole decade stinks, i am still buying. eventually things will turn around and I am prety sure the USA will lead again.
dotcom companies have no revenue?
What are you counting as a dotcom?
If you use the same definition as most people dotcoms have trillions in revenue (combined) and are hoarding cash.
this isn't 2000 when people are inflating values of pets.com or global crossing - there are some start ups of course and probably many cases of ridiculous PE ratios, but the dotcom market is mature now and even morphing out of growth into demonstrating many qualities of brick and mortars.
dotcoms are google, apple, amazon, salesforce, meta (facebook), paypal, ebay, etc.
People are tired of getting paid slave wages by employers that call them lazy for filing for food stamps because they aren't paid a living wage
See, I can oversimplify to fit a narrative too.
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People just dont want to work.
People are tired of getting paid slave wages by employers that call them lazy for filing for food stamps because they aren't paid a living wage
See, I can oversimplify to fit a narrative too.
If everyone made $25 an hour.....what would happen to the cost of goods sans discretionary?
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In comment 15714013 BurberryManning said:
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eventually things will turn around and I am prety sure the USA will lead again.
I agree that USA can lead again, but Im not investing my money in this stock market at this time. I dont mind being wrong, I have less time that many here on this board. But our Gov. is making things worse all around.
What's not factored in yet beside supply chain costs mentione earlier is the short labor market. People just dont want to work. Companies will eventually start slowing down becasue of this. So, you have high inflation, a Fed going to rasie rates, a housing shortage, and jobs unfilled with 8 straight weeks of the stock market dropping.
So Ill put my money somewhere else.
Maybe employers should start offering better pay and better benefits. Maybe stop licking management’s boot.
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In comment 15714431 Payasdaddy said:
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In comment 15714013 BurberryManning said:
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eventually things will turn around and I am prety sure the USA will lead again.
I agree that USA can lead again, but Im not investing my money in this stock market at this time. I dont mind being wrong, I have less time that many here on this board. But our Gov. is making things worse all around.
What's not factored in yet beside supply chain costs mentione earlier is the short labor market. People just dont want to work. Companies will eventually start slowing down becasue of this. So, you have high inflation, a Fed going to rasie rates, a housing shortage, and jobs unfilled with 8 straight weeks of the stock market dropping.
So Ill put my money somewhere else.
Maybe employers should start offering better pay and better benefits. Maybe stop licking management’s boot.
Are people still getting paid by Uncle Sam to not work, or is that over now?
45 million people in 2021 voluntarily left their jobs - that is unprecedented. 4.5M in January 2022. How do they live? Some did leave for other jobs but many just left the workforce completely.
When people don't have money to live without working, they will work and if they do it on their terms they can force change. That is how the market is designed to work.
Just anecdotally, I think a lot of the ESG focus is part of this, but I do believe employees have more leverage (in many industries) than ever before.
45 million people in 2021 voluntarily left their jobs - that is unprecedented. 4.5M in January 2022. How do they live?
My best guess to explain how they would live.........Housing market moves (financial gain)....easy to move from one city to another, and disperse income(fixed) in a less expensive area (financial gain). Retirement/401K pulls and spending for "retirement" homes and quality of life.
=< Or they are just spending less because the need too.
Link - ( New Window )
I believe it ended September 30, 2021
I haven't dug into it, but I believe most of the people involved left their job for another job so it's not to be confused with the majority just sitting home.
but a lot are sitting home, more than normal - which is creating a squeeze on the labor market.
I also believe some industries are hit harder than others - and it is hitting lower paying jobs more, but not just some industries or just lower paying jobs - by any stretch.
It shows up for consumers though mostly in those industries with lower paying jobs. Even now that most COVID restrictions are gone, many restaurants can't open their stores all the hours they used to because they don't have people to work, many convenience stores and gas stations have adjusted hours because they can't get people to work. hotels have cut back on things like room cleaning- not just because of COVID, but because they don't have the staff, etc.
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with no job? Were they able to stockpile enough money from the covid unemployment benefits?
I haven't dug into it, but I believe most of the people involved left their job for another job so it's not to be confused with the majority just sitting home.
but a lot are sitting home, more than normal - which is creating a squeeze on the labor market.
I also believe some industries are hit harder than others - and it is hitting lower paying jobs more, but not just some industries or just lower paying jobs - by any stretch.
It shows up for consumers though mostly in those industries with lower paying jobs. Even now that most COVID restrictions are gone, many restaurants can't open their stores all the hours they used to because they don't have people to work, many convenience stores and gas stations have adjusted hours because they can't get people to work. hotels have cut back on things like room cleaning- not just because of COVID, but because they don't have the staff, etc.
All wondering the same thing. I have openings Ive been trying to fill for over 6 months paying 6 figures base + commission, good benefits. In the past I'd get 3-4 resumes a week sometimes more. Lately Ive received 2-3 over several months. Im cold-calling and head hunting directly (in addition to my HR department) directly finding competitors and interviewing.
Just saying, people are either scared to make a move, content with their current pay/job or leaving the workforce. I have not see it like this and Ive been a hiring manager for over 20 years.
Couple this with concerns on potential fuel and food shortages and its problematic. I lived though the gas rationing in the 70's, not fun. There's a formula shortage for babies right now. My pool store can't get 1 inch chlorine tabs, factories closing down. Just carzy random stuff like that.
Anyway, not looking to debate just giving information when people ask about investing in this market.
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In comment 15715379 Snablats said:
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with no job? Were they able to stockpile enough money from the covid unemployment benefits?
I haven't dug into it, but I believe most of the people involved left their job for another job so it's not to be confused with the majority just sitting home.
but a lot are sitting home, more than normal - which is creating a squeeze on the labor market.
I also believe some industries are hit harder than others - and it is hitting lower paying jobs more, but not just some industries or just lower paying jobs - by any stretch.
It shows up for consumers though mostly in those industries with lower paying jobs. Even now that most COVID restrictions are gone, many restaurants can't open their stores all the hours they used to because they don't have people to work, many convenience stores and gas stations have adjusted hours because they can't get people to work. hotels have cut back on things like room cleaning- not just because of COVID, but because they don't have the staff, etc.
All wondering the same thing. I have openings Ive been trying to fill for over 6 months paying 6 figures base + commission, good benefits. In the past I'd get 3-4 resumes a week sometimes more. Lately Ive received 2-3 over several months. Im cold-calling and head hunting directly (in addition to my HR department) directly finding competitors and interviewing.
Just saying, people are either scared to make a move, content with their current pay/job or leaving the workforce. I have not see it like this and Ive been a hiring manager for over 20 years.
Couple this with concerns on potential fuel and food shortages and its problematic. I lived though the gas rationing in the 70's, not fun. There's a formula shortage for babies right now. My pool store can't get 1 inch chlorine tabs, factories closing down. Just carzy random stuff like that.
Anyway, not looking to debate just giving information when people ask about investing in this market.
You didn't give any info about investing in this market, lol
Same with the other dude complaining about the cost of milk/formula
My reasoning here is because companies like Walmart and Target for example have not passed on their supply costs to consumers yet. The current quarterly numbers and reports reflect that and I have read the same for about 100 other companies.
When these supply costs get passed on a snowball effect is going to happen very fast and this will be the catalyst for a recession along with rising interest rates.
An economical game of chicken is being played where the Fed is gauging when to aggressively hike interest rates knowing the real costs from retailers have not been totally passed on to consumers goods yet.
Bad times are coming and you ain't seen nothing yet. But remember, most of you guys voted for him. This is the result two years later.
Oh pipe down. God there’s so much wrong in this I don’t even have the patience to start. Just shut it
My reasoning here is because companies like Walmart and Target for example have not passed on their supply costs to consumers yet. The current quarterly numbers and reports reflect that and I have read the same for about 100 other companies.
When these supply costs get passed on a snowball effect is going to happen very fast and this will be the catalyst for a recession along with rising interest rates.
An economical game of chicken is being played where the Fed is gauging when to aggressively hike interest rates knowing the real costs from retailers have not been totally passed on to consumers goods yet.
You raise some good points about WMT and TGT. They were hit hard by rising operating costs. And they will have to be very strategic, especially WMT, how they adjust their prices going forward. They can't continue to eat those costs without significant margin pressure.
I expect the bottom still hasn't been reached, but the Dow going down another 35% (you say < 20K), after already sliding 15%, would be a massive, historical drop. When recessions have hit since '29, the average drop in the S&P has been around 35%.
I agree a recession is inevitable. Powell will try to create a soft landing, but there are too many headwinds hitting at the same time.
I don't but the "you can't time the market" nonsense. Of course, you can. It happens all of the time. Investors are always looking to buy low. Smart ones, IMV, are building cash piles to get ready for the opportunity to buy back in.