Given the current environment, and actually pretty much most of the time since 2009 (negative real rates), that is impossible. I'm being forced into stocks just like pension funds.HomerJ wrote: ↑Wed Jun 23, 2021 8:41 amThen you should go 0/100.anoop wrote: ↑Wed Jun 23, 2021 12:07 amI'm most comfortable with 0/100. What do you suggest, chair Powell?Marseille07 wrote: ↑Tue Jun 22, 2021 11:58 pmI recommend to find some AA you're comfortable holding. 20/80(cash) is on the conservative side, but if that's what you want then stick with that.anoop wrote: ↑Tue Jun 22, 2021 10:46 pm stocks are on sale!
https://finance.yahoo.com/news/quality- ... 55120.html
If you can reach your retirement goal with 0/100, be 0/100....
U.S. stocks continue to soar!
Re: U.S. stocks continue to soar!
Re: U.S. stocks continue to soar!
There's your problem. Quit thinking about what you should do based on the "environment we are in". Mostly because you're incapable (ALL OF US are) of knowing what "environment we are in".anoop wrote: ↑Wed Jun 23, 2021 1:01 amThe thought it makes me very nervous even though I think it's the right thing to do given the environment we are in.Marseille07 wrote: ↑Wed Jun 23, 2021 12:15 amWell, I think 0/100(cash) is a bit crazy as you're almost certain to lose out vs inflation. Personally I'd go 100/0 in 401K and just forget it, unless you need to access the money. But this is unlikely as you have lots of cash elsewhere.
Pick something that you can hold through ALL environments, and then you don't have to successfully market-time anymore. You're obviously terrible at it (WE ALL are). You were in cash for the past 10 years during a raging bull market. You obviously cannot determine "the environment we are in" correctly.
Last edited by HomerJ on Wed Jun 23, 2021 8:49 am, edited 1 time in total.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: U.S. stocks continue to soar!
So if you can't reach your retirement goals with 0/100, then you certainly shouldn't be comfortable with it. It should make you nervous that you won't have enough money to retire with 0/100. And that's BEFORE considering the inflation risk.anoop wrote: ↑Wed Jun 23, 2021 8:44 amGiven the current environment, and actually pretty much most of the time since 2009 (negative real rates), that is impossible. I'm being forced into stocks just like pension funds.HomerJ wrote: ↑Wed Jun 23, 2021 8:41 amThen you should go 0/100.anoop wrote: ↑Wed Jun 23, 2021 12:07 amI'm most comfortable with 0/100. What do you suggest, chair Powell?Marseille07 wrote: ↑Tue Jun 22, 2021 11:58 pmI recommend to find some AA you're comfortable holding. 20/80(cash) is on the conservative side, but if that's what you want then stick with that.anoop wrote: ↑Tue Jun 22, 2021 10:46 pm stocks are on sale!
https://finance.yahoo.com/news/quality- ... 55120.html
If you can reach your retirement goal with 0/100, be 0/100....
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: U.S. stocks continue to soar!
[quoting removed content removed by moderator oldcomputerguy]
It's never safe to assume anything, and if you actually believed your own words, you'd be 100% in stocks.
Since you aren't, you don't.
It's never safe to assume anything, and if you actually believed your own words, you'd be 100% in stocks.
Since you aren't, you don't.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: U.S. stocks continue to soar!
[quoted post and reply removed by admin LadyGeek]
Go back to the rock-solid principles Adam Smith expounded and you will do much better. Adam Smith and Jack Bogle are far better guides to investing than the current fed chairman.
Go back to the rock-solid principles Adam Smith expounded and you will do much better. Adam Smith and Jack Bogle are far better guides to investing than the current fed chairman.
Answering a question is easy -- asking the right question is the hard part.
Re: U.S. stocks continue to soar!
It seems like the Fed has been expanding its powers now for decades. I am assuming the Fed will accommodate investors because they have the last two major stock market crashes (2008, 2020) and the major correct (2018 by backing off rate hikes after the 20% drop). They didn't so much in 2000 and we saw how long it took for the market and economy to recover. Perhaps I am wrong, but I am 100% stock because 1) I have a long horizon and 2) based on most recent history, the Fed has acted to accommodate investors.
Re: U.S. stocks continue to soar!
When did you go 100% stock?atdharris wrote: ↑Wed Jun 23, 2021 9:38 am It seems like the Fed has been expanding its powers now for decades. I am assuming the Fed will accommodate investors because they have the last two major stock market crashes (2008, 2020) and the major correct (2018 by backing off rate hikes after the 20% drop). They didn't so much in 2000 and we saw how long it took for the market and economy to recover. Perhaps I am wrong, but I am 100% stock because 1) I have a long horizon and 2) based on most recent history, the Fed has acted to accommodate investors.
Re: U.S. stocks continue to soar!
May 2020. I held 10% in TLT for a few years in my taxable account. When it spiked during the crash and the Fed dropped rates to 0%, I dumped it and went all in on VTI/VEA/VWO. My 401k and Roth have always been 100% stock. I don't see the upside in bond funds now with rates where they are. I see it as I will only lose money as the Fed hikes rates, if they even do that. For all we know, inflation may taper off and we're back to 0% rates for the foreseeable future.anoop wrote: ↑Wed Jun 23, 2021 9:39 amWhen did you go 100% stock?atdharris wrote: ↑Wed Jun 23, 2021 9:38 am It seems like the Fed has been expanding its powers now for decades. I am assuming the Fed will accommodate investors because they have the last two major stock market crashes (2008, 2020) and the major correct (2018 by backing off rate hikes after the 20% drop). They didn't so much in 2000 and we saw how long it took for the market and economy to recover. Perhaps I am wrong, but I am 100% stock because 1) I have a long horizon and 2) based on most recent history, the Fed has acted to accommodate investors.
Re: U.S. stocks continue to soar!
Tracking anoop's position is like the time my cat got a glue trap stuck to his tail. Pretty sure he went this way, but there is no true sign.
Now, isn’t it about time for some good old fashioned late morning climb?
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Re: U.S. stocks continue to soar!
I didn't say anything about the environment we are in. I'm 100/0 in 401K for just about a decade. In 2012 I ran into someone who recommended holding S&P500. I didn't know Bogleheads back then but that was my introduction to the idea, and I naively followed it. Turned out it was a good decision.anoop wrote: ↑Wed Jun 23, 2021 1:01 amThe thought it makes me very nervous even though I think it's the right thing to do given the environment we are in.Marseille07 wrote: ↑Wed Jun 23, 2021 12:15 amWell, I think 0/100(cash) is a bit crazy as you're almost certain to lose out vs inflation. Personally I'd go 100/0 in 401K and just forget it, unless you need to access the money. But this is unlikely as you have lots of cash elsewhere.
- xraygoggles
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Re: U.S. stocks continue to soar!
But the pension funds know something that you don't apparently: stonks only go up.anoop wrote: ↑Wed Jun 23, 2021 8:44 amGiven the current environment, and actually pretty much most of the time since 2009 (negative real rates), that is impossible. I'm being forced into stocks just like pension funds.HomerJ wrote: ↑Wed Jun 23, 2021 8:41 amThen you should go 0/100.anoop wrote: ↑Wed Jun 23, 2021 12:07 amI'm most comfortable with 0/100. What do you suggest, chair Powell?Marseille07 wrote: ↑Tue Jun 22, 2021 11:58 pmI recommend to find some AA you're comfortable holding. 20/80(cash) is on the conservative side, but if that's what you want then stick with that.anoop wrote: ↑Tue Jun 22, 2021 10:46 pm stocks are on sale!
https://finance.yahoo.com/news/quality- ... 55120.html
If you can reach your retirement goal with 0/100, be 0/100....
Simplicity is the key to brilliance - Vti & chill.
Re: U.S. stocks continue to soar!
That’s the point…something he can hold is 0/100 but it doesn’t get him to the end goal.HomerJ wrote: ↑Wed Jun 23, 2021 8:46 amThere's your problem. Quit thinking about what you should do based on the "environment we are in". Mostly because you're incapable (ALL OF US are) of knowing what "environment we are in".anoop wrote: ↑Wed Jun 23, 2021 1:01 amThe thought it makes me very nervous even though I think it's the right thing to do given the environment we are in.Marseille07 wrote: ↑Wed Jun 23, 2021 12:15 amWell, I think 0/100(cash) is a bit crazy as you're almost certain to lose out vs inflation. Personally I'd go 100/0 in 401K and just forget it, unless you need to access the money. But this is unlikely as you have lots of cash elsewhere.
Pick something that you can hold through ALL environments, and then you don't have to successfully market-time anymore. You're obviously terrible at it (WE ALL are). You were in cash for the past 10 years during a raging bull market. You obviously cannot determine "the environment we are in" correctly.
The whole thing about AA is over 30 years of accumulation 100/0 has the best historical results. Any other AA is subjective based on on “risk tolerance”.
If market timing makes him happy, as long as he doesn’t sell for a loss in a down market, he likely beats 0/100.
Re: U.S. stocks continue to soar!
Heh, that's an interesting point.
But I think that someone whose starting point is 0/100 is very likely to sell for a loss in a down market.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: U.S. stocks continue to soar!
Can you please go to the gym today?lostdog wrote: ↑Tue Jun 22, 2021 3:21 pmI pick the elliptical in front of the TV that is displaying CNBC. I was witnessing the melt up and upped the resistance from 8 to 10. I'm beat.Stinky wrote: ↑Tue Jun 22, 2021 2:53 pmMaybe we could get the Bogle Center to fund lostdog’s gym membership.Marseille07 wrote: ↑Tue Jun 22, 2021 2:43 pm What a great day. I'm starting to believe that the poster lostdog has something special here.
That seems to be the least we could do. I think that Boglehead Nation is richer because of lostdog’s exercise.
Re: U.S. stocks continue to soar!
I'm seeing a bit of a melt up, maybe lostdog is already in the gym.anoop wrote: ↑Wed Jun 23, 2021 12:26 pmCan you please go to the gym today?lostdog wrote: ↑Tue Jun 22, 2021 3:21 pmI pick the elliptical in front of the TV that is displaying CNBC. I was witnessing the melt up and upped the resistance from 8 to 10. I'm beat.Stinky wrote: ↑Tue Jun 22, 2021 2:53 pmMaybe we could get the Bogle Center to fund lostdog’s gym membership.Marseille07 wrote: ↑Tue Jun 22, 2021 2:43 pm What a great day. I'm starting to believe that the poster lostdog has something special here.
That seems to be the least we could do. I think that Boglehead Nation is richer because of lostdog’s exercise.
Re: U.S. stocks continue to soar!
A trolling member’s post was deleted. Please move along.
Re: U.S. stocks continue to soar!
Just arrived at the park. It's bike day. Chilling at the picnic table eating lunch.jarjarM wrote: ↑Wed Jun 23, 2021 12:42 pmI'm seeing a bit of a melt up, maybe lostdog is already in the gym.anoop wrote: ↑Wed Jun 23, 2021 12:26 pmCan you please go to the gym today?lostdog wrote: ↑Tue Jun 22, 2021 3:21 pmI pick the elliptical in front of the TV that is displaying CNBC. I was witnessing the melt up and upped the resistance from 8 to 10. I'm beat.Stinky wrote: ↑Tue Jun 22, 2021 2:53 pmMaybe we could get the Bogle Center to fund lostdog’s gym membership.Marseille07 wrote: ↑Tue Jun 22, 2021 2:43 pm What a great day. I'm starting to believe that the poster lostdog has something special here.
That seems to be the least we could do. I think that Boglehead Nation is richer because of lostdog’s exercise.
Stocks-80% || Bonds-20% || VTI/VXUS/AOR
Re: U.S. stocks continue to soar!
At least get back on the bike then -- we got barely 2 hours to go and there's been no movement. You can chill after the markets close.lostdog wrote: ↑Wed Jun 23, 2021 12:50 pmJust arrived at the park. It's bike day. Chilling at the picnic table eating lunch.jarjarM wrote: ↑Wed Jun 23, 2021 12:42 pmI'm seeing a bit of a melt up, maybe lostdog is already in the gym.
- Doom&Gloom
- Posts: 5398
- Joined: Thu May 08, 2014 3:36 pm
Re: U.S. stocks continue to soar!
Man, I'm beginning to hate Wednesdayslostdog wrote: ↑Wed Jun 23, 2021 12:50 pmJust arrived at the park. It's bike day. Chilling at the picnic table eating lunch.jarjarM wrote: ↑Wed Jun 23, 2021 12:42 pmI'm seeing a bit of a melt up, maybe lostdog is already in the gym.
Just keep following your regular schedule! It has been working like a charm. Let's not jinx it by getting too greedy and trying to manipulate the markets.
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Re: U.S. stocks continue to soar!
The poster lostdog didn't hit the gym today? What's going on here.
- Doom&Gloom
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Re: U.S. stocks continue to soar!
Consolidation.Marseille07 wrote: ↑Wed Jun 23, 2021 3:02 pm The poster lostdog didn't hit the gym today? What's going on here.
Re: U.S. stocks continue to soar!
No gym today. Rest day for the muscles. Bike day and chill day.
Stocks-80% || Bonds-20% || VTI/VXUS/AOR
Re: U.S. stocks continue to soar!
Fidelity has a link to this on their home page.
https://www.investor.gov/additional-res ... know-risks
This is a cool pic. Especially the post-it at the bottom right
https://www.investor.gov/sites/investor ... 0Board.jpg
What is 72 divided by 0?
https://www.investor.gov/additional-res ... know-risks
This is a cool pic. Especially the post-it at the bottom right
https://www.investor.gov/sites/investor ... 0Board.jpg
What is 72 divided by 0?
Last edited by anoop on Wed Jun 23, 2021 11:20 pm, edited 1 time in total.
Re: U.S. stocks continue to soar!
Maybe you should switch rest day to Saturday or Sunday.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: U.S. stocks continue to soar!
The answer is many Americans retirement portfolio.anoop wrote: ↑Wed Jun 23, 2021 11:03 pm...
This is a cool pic. Especially the post-it at the bottom right
https://www.investor.gov/sites/investor ... 0Board.jpg
What is 72 divided by 0?
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
Re: U.S. stocks continue to soar!
Yes, it takes a mighty long time to double your money when a “high yield” savings account pays 0.5% or less.anoop wrote: ↑Wed Jun 23, 2021 11:03 pm This is a cool pic. Especially the post-it at the bottom right
https://www.investor.gov/sites/investor ... 0Board.jpg
What is 72 divided by 0?
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: U.S. stocks continue to soar!
New highs this morning.
FOMO? TINA? Or something else?
The rally continues unabated.
FOMO? TINA? Or something else?
The rally continues unabated.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Re: U.S. stocks continue to soar!
Stonks
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
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Re: U.S. stocks continue to soar!
Actually, we had more jobless claims than expected. 411,000 vs 380,000 as expected. Remember, bad news is great news for the marketlazynovice wrote: ↑Thu Jun 24, 2021 9:19 amThe only thing I see in the news this morning is we have fewer jobless claims than expected.
Re: U.S. stocks continue to soar!
Fewer than last week, but moar than expected.lazynovice wrote: ↑Thu Jun 24, 2021 9:19 amThe only thing I see in the news this morning is we have fewer jobless claims than expected.
Re: U.S. stocks continue to soar!
Reinvested my dividends received from VXUS and I'll be heading to the gym around lunch time.
Stocks-80% || Bonds-20% || VTI/VXUS/AOR
Re: U.S. stocks continue to soar!
Some progress made towards bipartisan infrastructure bill.
70% Global Stocks / 30% Bonds
- xraygoggles
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Re: U.S. stocks continue to soar!
Rocketship, diamond-hands, moon smiling emojis.
That answer your question?
Simplicity is the key to brilliance - Vti & chill.
Re: U.S. stocks continue to soar!
FOMO and TINA for the win.
NASDAQ again leads the pack, and where NASDAQ goes, QQQ will surely follow.
Answering a question is easy -- asking the right question is the hard part.
Re: U.S. stocks continue to soar!
I know this is true, Ive seen it time and time again. But why is it true?atdharris wrote: ↑Thu Jun 24, 2021 9:22 amRemember, bad news is great news for the marketlazynovice wrote: ↑Thu Jun 24, 2021 9:19 amThe only thing I see in the news this morning is we have fewer jobless claims than expected.
Re: U.S. stocks continue to soar!
There is no danger of the punch bowl being taken away.oilrig wrote: ↑Thu Jun 24, 2021 10:56 amI know this is true, Ive seen it time and time again. But why is it true?atdharris wrote: ↑Thu Jun 24, 2021 9:22 amRemember, bad news is great news for the marketlazynovice wrote: ↑Thu Jun 24, 2021 9:19 amThe only thing I see in the news this morning is we have fewer jobless claims than expected.
Re: U.S. stocks continue to soar!
Because if the economic recovery is too strong, the market fears the Fed will be forced to raise rates and taper faster than anticipated.oilrig wrote: ↑Thu Jun 24, 2021 10:56 amI know this is true, Ive seen it time and time again. But why is it true?atdharris wrote: ↑Thu Jun 24, 2021 9:22 amRemember, bad news is great news for the marketlazynovice wrote: ↑Thu Jun 24, 2021 9:19 amThe only thing I see in the news this morning is we have fewer jobless claims than expected.
If we see slower growth and a weaker labor market, the market thinks the Fed will keep rates at 0 and continue with heavy QE.
Re: U.S. stocks continue to soar!
Well said. I struggle to understand this obsession with trying to beat the market. Time and time again people prove it is almost impossible to do. People lose much more money trying to beat it than they would if they just stayed in it.HomerJ wrote: ↑Wed Jun 23, 2021 8:46 amThere's your problem. Quit thinking about what you should do based on the "environment we are in". Mostly because you're incapable (ALL OF US are) of knowing what "environment we are in".anoop wrote: ↑Wed Jun 23, 2021 1:01 amThe thought it makes me very nervous even though I think it's the right thing to do given the environment we are in.Marseille07 wrote: ↑Wed Jun 23, 2021 12:15 amWell, I think 0/100(cash) is a bit crazy as you're almost certain to lose out vs inflation. Personally I'd go 100/0 in 401K and just forget it, unless you need to access the money. But this is unlikely as you have lots of cash elsewhere.
Pick something that you can hold through ALL environments, and then you don't have to successfully market-time anymore. You're obviously terrible at it (WE ALL are). You were in cash for the past 10 years during a raging bull market. You obviously cannot determine "the environment we are in" correctly.
BH Contests: 23 #89 of 607 | 22 #512 of 674 | 21 #66 of 636 |20 #253/664 |19 #233/645 |18 #150/493 |17 #516/647 |16 #121/610 |15 #18/552 |14 #225/503 |13 #383/433 |12 #366/410 |11 #113/369 |10 #53/282
Re: U.S. stocks continue to soar!
Everyone equates being out of the market with trying to time it. I was out of the market because I wanted to invest conservatively. It was possible to make it without investing in stocks prior to the GFC. That is what e.g. books like Worry Free Investing by Zvi Bodie were about. Post GFC, we entered major manipulation by the fed and the manipulation never went away. This means no matter how risk averse one is or how ethically conflicted one is about investing in stocks, TINA. The fed literally equates a 401k with stocks.sperry8 wrote: ↑Thu Jun 24, 2021 11:05 amWell said. I struggle to understand this obsession with trying to beat the market. Time and time again people prove it is almost impossible to do. People lose much more money trying to beat it than they would if they just stayed in it.HomerJ wrote: ↑Wed Jun 23, 2021 8:46 amThere's your problem. Quit thinking about what you should do based on the "environment we are in". Mostly because you're incapable (ALL OF US are) of knowing what "environment we are in".anoop wrote: ↑Wed Jun 23, 2021 1:01 amThe thought it makes me very nervous even though I think it's the right thing to do given the environment we are in.Marseille07 wrote: ↑Wed Jun 23, 2021 12:15 amWell, I think 0/100(cash) is a bit crazy as you're almost certain to lose out vs inflation. Personally I'd go 100/0 in 401K and just forget it, unless you need to access the money. But this is unlikely as you have lots of cash elsewhere.
Pick something that you can hold through ALL environments, and then you don't have to successfully market-time anymore. You're obviously terrible at it (WE ALL are). You were in cash for the past 10 years during a raging bull market. You obviously cannot determine "the environment we are in" correctly.
https://www.youtube.com/watch?v=dBTfIIm-sgU&t=3401s
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Re: U.S. stocks continue to soar!
It's OK to be conservative. You aren't timing the market.anoop wrote: ↑Thu Jun 24, 2021 11:14 am Everyone equates being out of the market with trying to time it. I was out of the market because I wanted to invest conservatively. It was possible to make it without investing in stocks prior to the GFC. That is what e.g. books like Worry Free Investing by Zvi Bodie were about. Post GFC, we entered major manipulation by the fed and the manipulation never went away. This means no matter how risk averse one is or how ethically conflicted one is about investing in stocks, TINA. The fed literally equates a 401k with stocks.
https://www.youtube.com/watch?v=dBTfIIm-sgU&t=3401s
Maybe your fear is that while you probably know deep down you've already missed out on a bull market, if you decide to enter now the Fed might stop the manipulation?
I'm DCAing myself because I want to limit the downside moreso than maximizing the upside. Investors have different priorities and that's perfectly fine.
Re: U.S. stocks continue to soar!
Okay, this makes more sense.
So 3%-4% from bonds or CDs was good enough for you to meet your goals in the past, but now that rates are so low, you feel you are being forced to invest in stocks.
Makes sense. You are now going to have to learn about how stocks work, so that you don't make behavioral mistakes that derail your retirement goals.
You've got 50% of your 401k in stocks now, and that's 20% of your entire portfolio?
20/80 is a good place for you to start... you're going to have to learn to not make large changes to your stock portfolio. Commit to the 20%.
The market may crash, the value may go down, but you'll need to stay the course, and wait for the market to recover and move on to new heights,
The long-term nominal 10% annual return of the stock market INCLUDES the crashes. In the past, you could hold right through them, and still make a lot of money over the long-run.
But if you're going to jump out the next time the market goes down 20% or because you read something on the Internet that scares you, you might end up LOSING money in the stock market. And that's even worse for your goals than low returns from bonds/CDs.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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Re: U.S. stocks continue to soar!
This is an absolutely perfect example of where contributing to a target date fund and completely ignoring one's portfolio is a good idea.HomerJ wrote: ↑Thu Jun 24, 2021 11:33 amOkay, this makes more sense.
So 3%-4% from bonds or CDs was good enough for you to meet your goals in the past, but now that rates are so low, you feel you are being forced to invest in stocks.
Makes sense. You are now going to have to learn about how stocks work, so that you don't make behavioral mistakes that derail your retirement goals.
You've got 50% of your 401k in stocks now, and that's 20% of your entire portfolio?
20/80 is a good place for you to start... you're going to have to learn to not make large changes to your stock portfolio. Commit to the 20%.
The market may crash, the value may go down, but you'll need to stay the course, and wait for the market to recover and move on to new heights,
The long-term nominal 10% annual return of the stock market INCLUDES the crashes. In the past, you could hold right through them, and still make a lot of money over the long-run.
But if you're going to jump out the next time the market goes down 20% or because you read something on the Internet that scares you, you might end up LOSING money in the stock market. And that's even worse for your goals than low returns from bonds/CDs.
Re: U.S. stocks continue to soar!
I was expecting the market to return to normal at some point but that doesn't look to be the case. Previously, at least they had a stated upper bound for inflation at 2% so I felt that worst case, I lose 2% purchasing power per year, and I was OK with that.Marseille07 wrote: ↑Thu Jun 24, 2021 11:22 am Maybe your fear is that while you probably know deep down you've already missed out on a bull market, if you decide to enter now the Fed might stop the manipulation?
Now they are letting inflation rip and saying it's transitory even though every CEO out there is saying otherwise. I don't want to find out I lost 10% purchasing power per year, with the fed acting "surprised".
Based on what I have seen so far, I don't think the manipulation will ever stop. On the contrary, congress is now stimulating so we have both monetary and fiscal stimulus. But who knows what will actually happen and I'm getting tired of trying to stay on top of what is going on. So I'm trying to get to a conservative allocation that at least keeps up with inflation.
As I posted elsewhere, I fear we are entering a phase where stocks go up, but inflation outpaces the gains in stocks (the big gains in stocks, at least for this bust cycle, are behind us). But that is to be seen. Keep in mind that most of the increase in stock prices has been via P/E expansion not via true earnings growth. If we remove stock buybacks things look even worse. Inflation won't be kind to earnings, so we will have to depend on further P/E expansion which will happen if the markets continue to be flush with liquidity.
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Re: U.S. stocks continue to soar!
This is patently false for Big Tech - FAANG and the like. Their PE ratios are commensurate with their earnings growth, and believe it or not, some people think they are currently cheap.anoop wrote: ↑Thu Jun 24, 2021 11:51 am As I posted elsewhere, I fear we are entering a phase where stocks go up, but inflation outpaces the gains in stocks (the big gains in stocks, at least for this bust cycle, are behind us). But that is to be seen. Keep in mind that most of the increase in stock prices has been via P/E expansion not via true earnings growth. If we remove stock buybacks things look even worse. Inflation won't be kind to earnings, so we will have to depend on further P/E expansion which will happen if the markets continue to be flush with liquidity.
Simplicity is the key to brilliance - Vti & chill.
Re: U.S. stocks continue to soar!
Ca. 2013 Apple's PE was around 10. Now it is around 30. Please check your data. Also, like I mentioned, please factor in stock buybacks.xraygoggles wrote: ↑Thu Jun 24, 2021 11:53 amThis is patently false for Big Tech - FAANG and the like. Their PE ratios are commensurate with their earnings growth, and believe it or not, some people think they are currently cheap.anoop wrote: ↑Thu Jun 24, 2021 11:51 am As I posted elsewhere, I fear we are entering a phase where stocks go up, but inflation outpaces the gains in stocks (the big gains in stocks, at least for this bust cycle, are behind us). But that is to be seen. Keep in mind that most of the increase in stock prices has been via P/E expansion not via true earnings growth. If we remove stock buybacks things look even worse. Inflation won't be kind to earnings, so we will have to depend on further P/E expansion which will happen if the markets continue to be flush with liquidity.
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Re: U.S. stocks continue to soar!
I think this is fine. If 20/80 is comfortable for you then just keep that allocation. It's much better to hold something conservative than to go aggressive then panic sell at the bottom later.anoop wrote: ↑Thu Jun 24, 2021 11:51 am Based on what I have seen so far, I don't think the manipulation will ever stop. On the contrary, congress is now stimulating so we have both monetary and fiscal stimulus. But who knows what will actually happen and I'm getting tired of trying to stay on top of what is going on. So I'm trying to get to a conservative allocation that at least keeps up with inflation.