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?
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.