When will asset prices come down?

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newyorker
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When will asset prices come down?

Post by newyorker »

Any guesses on when things will stabilize?

Everything is up right now. Collector cars are up 20 percent from what I know. Real estate is red hot as you guys already know. Even luxury watches are up like PP or AP and of course Rolexes.

How long do you guys foresee this to continue? Will it stay the same? Or will there be a point that they will decrease over time? Is this because of stimulus money? Or just low interest rate?
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Re: When will asset prices come down?

Post by chazas »

If we knew this we’d be magic. And rich. And not bogleheads.
sailaway
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Re: When will asset prices come down?

Post by sailaway »

My crystal ball isn't responding. Must be on weekend mode already.

I am confident that asset prices will go down at some point. I am not taking bets on whether or not that down will be lower than things are today.
regularguy455
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Re: When will asset prices come down?

Post by regularguy455 »

Fed says inflation is a temporary bump. We shall see if that is true.
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Re: When will asset prices come down?

Post by RickBoglehead »

7/23/21
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Re: When will asset prices come down?

Post by shess »

newyorker wrote: Fri May 07, 2021 6:16 pm Any guesses on when things will stabilize?

Everything is up right now. Collector cars are up 20 percent from what I know. Real estate is red hot as you guys already know. Even luxury watches are up like PP or AP and of course Rolexes.

How long do you guys foresee this to continue? Will it stay the same? Or will there be a point that they will decrease over time? Is this because of stimulus money? Or just low interest rate?
I once decided to take some money off the table because my position had tripled in value and I thought it was really unlikely to rise further. The rest of the position is up almost 5x since that time. If I knew how to predict these things, I wouldn't have sold Apple shares in 2001 at a split-adjusted $1. And other decisions, of course :-).

One of my investing challenges is that my objective mind thinks I should have a different asset allocation than my subjective mind does. I try to record my objective ideas periodically, so that when the market challenges my subjective thinking, I can take advantage of that to drive things closer to my recorded objective goals. So when the market gets me anxious, I'm able to use that feeling to get closer to a reasonable AA.
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Re: When will asset prices come down?

Post by snackdog »

Any time from now…
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txhill
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Re: When will asset prices come down?

Post by txhill »

I've become quite convinced by the argument that asset prices are directly correlated with the money supply and Fed balance sheet. And those aren't going down until the economy is really back on its feet and we have a government brave enough to let interest rates rise, increase taxes, and stop printing money. So maybe never!
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Re: When will asset prices come down?

Post by Snuffycuts99 »

RickBoglehead wrote: Fri May 07, 2021 6:30 pm 7/23/21
This is fantastic news. The day before our anniversary. The Mrs. will certainly be happy this year. The only question remains...shall it be a Rolex Pearlmaster or a '53 Corvette?
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Re: When will asset prices come down?

Post by adamthesmythe »

newyorker wrote: Fri May 07, 2021 6:16 pm Any guesses on when things will stabilize?

Everything is up right now. Collector cars are up 20 percent from what I know. Real estate is red hot as you guys already know. Even luxury watches are up like PP or AP and of course Rolexes.
Fortunately my personal rate of inflation is insensitive to the price of collectable cars and fine watches. And as I own my house I am just settin' back and watchin' the show.
thenextguy
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Re: When will asset prices come down?

Post by thenextguy »

newyorker wrote: Fri May 07, 2021 6:16 pm Any guesses on when things will stabilize?

Everything is up right now. Collector cars are up 20 percent from what I know. Real estate is red hot as you guys already know. Even luxury watches are up like PP or AP and of course Rolexes.

How long do you guys foresee this to continue? Will it stay the same? Or will there be a point that they will decrease over time? Is this because of stimulus money? Or just low interest rate?
The luxury watch market has been like this for years.
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Re: When will asset prices come down?

Post by retired@50 »

newyorker wrote: Fri May 07, 2021 6:16 pm Everything is up right now.
My bond index funds are down this year, aren't yours?

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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Re: When will asset prices come down?

Post by sailaway »

retired@50 wrote: Fri May 07, 2021 7:30 pm
newyorker wrote: Fri May 07, 2021 6:16 pm Everything is up right now.
My bond index funds are down this year, aren't yours?

Regards,
YTD, yes, YTY, no.
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Re: When will asset prices come down?

Post by txhill »

retired@50 wrote: Fri May 07, 2021 7:30 pm
newyorker wrote: Fri May 07, 2021 6:16 pm Everything is up right now.
My bond index funds are down this year, aren't yours?

Regards,
The only things that go up when the money printer goes wild are fixed or scarce assets— stocks, housing, precious metals, art, crypto. Bond funds aren’t scarce, they lose value as the currency is debased.
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newyorker
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Re: When will asset prices come down?

Post by newyorker »

thenextguy wrote: Fri May 07, 2021 7:29 pm
newyorker wrote: Fri May 07, 2021 6:16 pm Any guesses on when things will stabilize?

Everything is up right now. Collector cars are up 20 percent from what I know. Real estate is red hot as you guys already know. Even luxury watches are up like PP or AP and of course Rolexes.

How long do you guys foresee this to continue? Will it stay the same? Or will there be a point that they will decrease over time? Is this because of stimulus money? Or just low interest rate?
The luxury watch market has been like this for years.

It got worse though
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Re: When will asset prices come down?

Post by David Jay »

Snuffycuts99 wrote: Fri May 07, 2021 7:26 pmThe only question remains...shall it be a Rolex Pearlmaster or a '53 Corvette?
“or” ???

Embrace the healing power of “and” :happy
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Re: When will asset prices come down?

Post by smitcat »

David Jay wrote: Fri May 07, 2021 10:32 pm
Snuffycuts99 wrote: Fri May 07, 2021 7:26 pmThe only question remains...shall it be a Rolex Pearlmaster or a '53 Corvette?
“or” ???

Embrace the healing power of “and” :happy
In my opinion the C1 corvettes are fun as long as you don't try and drive them.
Tony Stark
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Re: When will asset prices come down?

Post by Tony Stark »

Not sure when asset prices will go down but I will say comic book prices are going crazy to. Golden, Silver, Bronze, Modern - everything in the comic book world has went bonkers to the upside.
Last edited by Tony Stark on Sat May 08, 2021 7:04 am, edited 1 time in total.
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Re: When will asset prices come down?

Post by Vanguard Fan 1367 »

I sold a stock in 2011 and put the cash in the money market yielding .01 or so. I was "waiting for asset prices to come down."

Thankfully someone recommended reading Bogle's books in 2014. I went all in with an asset allocation I was comfortable with. I am glad I didn't wait for the downturn of March 2020 to get back in.
John Bogle: "It's amazing how difficult it is for a man to understand something if he's paid a small fortune not to understand it."
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newyorker
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Re: When will asset prices come down?

Post by newyorker »

Im purchasing s&p via DCA but wondering if I should splurge on other luxury goods like cars or watches.
BogleFan510
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Re: When will asset prices come down?

Post by BogleFan510 »

Maybe never. Deflation has been a rare event in recent history.
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Re: When will asset prices come down?

Post by Firemenot »

newyorker wrote: Sat May 08, 2021 8:25 am Im purchasing s&p via DCA but wondering if I should splurge on other luxury goods like cars or watches.
I’d personally wait on that stuff as prices are likely to soften in future on that sort of thing. All goods seem to be in short supply these days — including mundane things like pool chlorine. Total guess on my part but I think it’s a combination of supply/manufacturing cutbacks during Covid and labor shortages. But what do I know really?
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Re: When will asset prices come down?

Post by txhill »

newyorker wrote: Sat May 08, 2021 8:25 am Im purchasing s&p via DCA but wondering if I should splurge on other luxury goods like cars or watches.
I will never understand the appeal of fancy watches. I can’t imagine not having my Apple Watch! Pretty much everyone in my field is at least fairly well off and no one I know wears fancy watches either. Just apple watches or none at all...
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Re: When will asset prices come down?

Post by midareff »

RickBoglehead wrote: Fri May 07, 2021 6:30 pm 7/23/21
You are off by 2 .... although crystal ball is not sure if that is days, months or years..... or combination thereof.
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Re: When will asset prices come down?

Post by midareff »

newyorker wrote: Sat May 08, 2021 8:25 am Im purchasing s&p via DCA but wondering if I should splurge on other luxury goods like cars or watches.
might be a better time to splurge on an asset that doesn't go down when stocks do, and then when the house of cards fall that is the time to shop.
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Re: When will asset prices come down?

Post by ClevrChico »

Maybe when crypto crashes and investment speculation cools down.
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anoop
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Re: When will asset prices come down?

Post by anoop »

They are never going down.
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Re: When will asset prices come down?

Post by midareff »

newyorker wrote: Fri May 07, 2021 6:16 pm Any guesses on when things will stabilize?

Everything is up right now. Collector cars are up 20 percent from what I know. Real estate is red hot as you guys already know. Even luxury watches are up like PP or AP and of course Rolexes.

How long do you guys foresee this to continue? Will it stay the same? Or will there be a point that they will decrease over time? Is this because of stimulus money? Or just low interest rate?
LOL, it will go on until it ends, which is a point no one knows. The things you aspire to are always dear to buy and depressed to sell. That is the way of the world. You set an asset allocation that you are comfortable with and maintain it within reasonable boundaries you are also comfortable with. When you feel you have a surplus beyond reason feel free to travel or splurge.
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newyorker
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Re: When will asset prices come down?

Post by newyorker »

anoop wrote: Sat May 08, 2021 8:47 am They are never going down.


Really? 🥲
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Re: When will asset prices come down?

Post by anoop »

newyorker wrote: Sat May 08, 2021 9:04 am
anoop wrote: Sat May 08, 2021 8:47 am They are never going down.


Really? 🥲
Not in the absence of a complete system collapse. Unlikely in my lifetime. UBI and further economic stimuli will continue to happen.
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newyorker
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Re: When will asset prices come down?

Post by newyorker »

anoop wrote: Sat May 08, 2021 9:16 am
newyorker wrote: Sat May 08, 2021 9:04 am
anoop wrote: Sat May 08, 2021 8:47 am They are never going down.


Really? 🥲
Not in the absence of a complete system collapse. Unlikely in my lifetime. UBI and further economic stimuli will continue to happen.


So is it ok to buy some luxury cars now?
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Re: When will asset prices come down?

Post by Tony Stark »

newyorker wrote: Sat May 08, 2021 8:25 am Im purchasing s&p via DCA but wondering if I should splurge on other luxury goods like cars or watches.
Personally, I would avoid luxury goods and instead, get the money into a diversified portfolio of stocks/bonds according to your own risk tolerance.
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Re: When will asset prices come down?

Post by anoop »

newyorker wrote: Sat May 08, 2021 9:18 am
anoop wrote: Sat May 08, 2021 9:16 am
newyorker wrote: Sat May 08, 2021 9:04 am
anoop wrote: Sat May 08, 2021 8:47 am They are never going down.


Really? 🥲
Not in the absence of a complete system collapse. Unlikely in my lifetime. UBI and further economic stimuli will continue to happen.


So is it ok to buy some luxury cars now?
Don’t know much about that market. I’m mainly referring to stocks and real estate but I think it pretty much extends to every asset. I don’t see how they can target only specific assets, but that doesn’t mean such a method doesn’t exist.
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Re: When will asset prices come down?

Post by MishkaWorries »

newyorker wrote: Sat May 08, 2021 9:18 am
anoop wrote: Sat May 08, 2021 9:16 am
newyorker wrote: Sat May 08, 2021 9:04 am
anoop wrote: Sat May 08, 2021 8:47 am They are never going down.


Really? 🥲
Not in the absence of a complete system collapse. Unlikely in my lifetime. UBI and further economic stimuli will continue to happen.


So is it ok to buy some luxury cars now?
Is this an investment or personal pleasure. If investment wait until a recession and you'll have your pick at great prices. If for pleasure, buy today. Why delay if you can afford to buy.
We plan. G-d laughs.
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newyorker
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Re: When will asset prices come down?

Post by newyorker »

MishkaWorries wrote: Sat May 08, 2021 9:37 am
newyorker wrote: Sat May 08, 2021 9:18 am
anoop wrote: Sat May 08, 2021 9:16 am
newyorker wrote: Sat May 08, 2021 9:04 am
anoop wrote: Sat May 08, 2021 8:47 am They are never going down.


Really? 🥲
Not in the absence of a complete system collapse. Unlikely in my lifetime. UBI and further economic stimuli will continue to happen.


So is it ok to buy some luxury cars now?
Is this an investment or personal pleasure. If investment wait until a recession and you'll have your pick at great prices. If for pleasure, buy today. Why delay if you can afford to buy.
For investment. I dont plan to drive it and persoanl pleasure just staring at it. Should I wait?
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Re: When will asset prices come down?

Post by Tony Stark »

newyorker wrote: Sat May 08, 2021 9:44 am
MishkaWorries wrote: Sat May 08, 2021 9:37 am
newyorker wrote: Sat May 08, 2021 9:18 am
anoop wrote: Sat May 08, 2021 9:16 am
newyorker wrote: Sat May 08, 2021 9:04 am

Really? 🥲
Not in the absence of a complete system collapse. Unlikely in my lifetime. UBI and further economic stimuli will continue to happen.


So is it ok to buy some luxury cars now?
Is this an investment or personal pleasure. If investment wait until a recession and you'll have your pick at great prices. If for pleasure, buy today. Why delay if you can afford to buy.
For investment. I dont plan to drive it and persoanl pleasure just staring at it. Should I wait?
Are you wanting a fully restored car from an auction, fully restored from private party or dealership. Or not restored and willing to restore yourself?
Last edited by Tony Stark on Sat May 08, 2021 9:56 am, edited 1 time in total.
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Re: When will asset prices come down?

Post by JoMoney »

There will be a point where prices come down... how much they'll come down, for how long they'll fall, and by how much they'll have further risen before they come down are the things I can't answer.

I don't have a lot of confidence in the future purchasing power of dollars, so in that regard, I'm not holding onto large amounts of cash for things I expect to need several years down the road. I also don't have confidence that investment assets will persistently be immediately liquid at new highs/plateaus... so I keep enough cash around for things I do expect to spend on in the next couple years.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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Re: When will asset prices come down?

Post by MishkaWorries »

newyorker wrote: Sat May 08, 2021 9:44 am
MishkaWorries wrote: Sat May 08, 2021 9:37 am
newyorker wrote: Sat May 08, 2021 9:18 am
anoop wrote: Sat May 08, 2021 9:16 am
newyorker wrote: Sat May 08, 2021 9:04 am



Really? 🥲
Not in the absence of a complete system collapse. Unlikely in my lifetime. UBI and further economic stimuli will continue to happen.


So is it ok to buy some luxury cars now?
Is this an investment or personal pleasure. If investment wait until a recession and you'll have your pick at great prices. If for pleasure, buy today. Why delay if you can afford to buy.
For investment. I dont plan to drive it and persoanl pleasure just staring at it. Should I wait?
Can you afford it? If the value drops tomorrow will it negatively affect your lifestyle or retirement plans. If no, then you have my permission. :beer
We plan. G-d laughs.
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Re: When will asset prices come down?

Post by willthrill81 »

If/when interest rates go up significantly.

If I could get a 4% guaranteed real return from TIPS right now, I wouldn't be 100% stock, and I suspect that a great many other investors would own less stock in such an instance.
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Re: When will asset prices come down?

Post by JoMoney »

willthrill81 wrote: Sat May 08, 2021 9:54 am If/when interest rates go up significantly.

If I could get a 4% guaranteed real return from TIPS right now, I wouldn't be 100% stock, and I suspect that a great many other investors would own less stock in such an instance.
4% "real" would seem like winning the lottery... There are many on here frothing over the 0% "real" return offered in limited amounts by Series I Savings Bonds.
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Re: When will asset prices come down?

Post by willthrill81 »

JoMoney wrote: Sat May 08, 2021 10:04 am
willthrill81 wrote: Sat May 08, 2021 9:54 am If/when interest rates go up significantly.

If I could get a 4% guaranteed real return from TIPS right now, I wouldn't be 100% stock, and I suspect that a great many other investors would own less stock in such an instance.
4% "real" would seem like winning the lottery... There are many on here frothing over the 0% "real" return offered in limited amounts by Series I Savings Bonds.
Indeed. And after taxes, their real return will still be below zero.

There was a brief period in late 2008 when 10 year TIPS were yielding above 3%.
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Re: When will asset prices come down?

Post by JoMoney »

willthrill81 wrote: Sat May 08, 2021 10:07 am
JoMoney wrote: Sat May 08, 2021 10:04 am
willthrill81 wrote: Sat May 08, 2021 9:54 am If/when interest rates go up significantly.

If I could get a 4% guaranteed real return from TIPS right now, I wouldn't be 100% stock, and I suspect that a great many other investors would own less stock in such an instance.
4% "real" would seem like winning the lottery... There are many on here frothing over the 0% "real" return offered in limited amounts by Series I Savings Bonds.
Indeed. And after taxes, their real return will still be below zero.

There was a brief period in late 2008 when 10 year TIPS were yielding above 3%.
In our current world, banks, and even investment grade corporate bonds, are offering negative "real" inflation adjusted returns. Nobody needs "money" when the monetary policy is to rain it down from helicopters.
I don't like it, but it's quite understandable why there is so much appeal in chasing the momentum of "crypto currencies".
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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Re: When will asset prices come down?

Post by newyorker »

MishkaWorries wrote: Sat May 08, 2021 9:54 am
newyorker wrote: Sat May 08, 2021 9:44 am
MishkaWorries wrote: Sat May 08, 2021 9:37 am
newyorker wrote: Sat May 08, 2021 9:18 am
anoop wrote: Sat May 08, 2021 9:16 am
Not in the absence of a complete system collapse. Unlikely in my lifetime. UBI and further economic stimuli will continue to happen.


So is it ok to buy some luxury cars now?
Is this an investment or personal pleasure. If investment wait until a recession and you'll have your pick at great prices. If for pleasure, buy today. Why delay if you can afford to buy.
For investment. I dont plan to drive it and persoanl pleasure just staring at it. Should I wait?
Can you afford it? If the value drops tomorrow will it negatively affect your lifestyle or retirement plans. If no, then you have my permission. :beer

Life is too hard for youngsters 🥺🥺🥺


Will fed keep printing money? How is this frenzy different from 00 and 08?
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Re: When will asset prices come down?

Post by namajones »

shess wrote: Fri May 07, 2021 7:06 pm

One of my investing challenges is that my objective mind thinks I should have a different asset allocation than my subjective mind does. I try to record my objective ideas periodically, so that when the market challenges my subjective thinking, I can take advantage of that to drive things closer to my recorded objective goals. So when the market gets me anxious, I'm able to use that feeling to get closer to a reasonable AA.
Makes sense. Does one's definition of "reasonable" change, though, over time, perhaps rendering the previous view of "reasonable" less relevant?
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Re: When will asset prices come down?

Post by anoop »

newyorker wrote: Sat May 08, 2021 10:22 am
MishkaWorries wrote: Sat May 08, 2021 9:54 am
newyorker wrote: Sat May 08, 2021 9:44 am
MishkaWorries wrote: Sat May 08, 2021 9:37 am
newyorker wrote: Sat May 08, 2021 9:18 am



So is it ok to buy some luxury cars now?
Is this an investment or personal pleasure. If investment wait until a recession and you'll have your pick at great prices. If for pleasure, buy today. Why delay if you can afford to buy.
For investment. I dont plan to drive it and persoanl pleasure just staring at it. Should I wait?
Can you afford it? If the value drops tomorrow will it negatively affect your lifestyle or retirement plans. If no, then you have my permission. :beer

Life is too hard for youngsters 🥺🥺🥺


Will fed keep printing money? How is this frenzy different from 00 and 08?
In 00 and 08 the fed was raising rates.
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Re: When will asset prices come down?

Post by anoop »

This time around raising rates is pretty much out of the question. Tapering bond purchases is also out of the question.

What is more interesting to watch is the size and frequency of stimuli from Congress. And possibly the introduction of yield curve control from the fed.
GregG3
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Re: When will asset prices come down?

Post by GregG3 »

OP, I bet than we will know more in 12 months.

But seriously, prior to Great Recession, the market reached the top around one year prior to the crash, it declined by around 25% just before the crash.
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JoMoney
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Re: When will asset prices come down?

Post by JoMoney »

anoop wrote: Sat May 08, 2021 10:41 am This time around raising rates is pretty much out of the question. Tapering bond purchases is also out of the question.

What is more interesting to watch is the size and frequency of stimuli from Congress. And possibly the introduction of yield curve control from the fed.
Seems that way, I imagine "tapering bond purchases" would have the same effect as raising rates.
I can't help but imagine this won't end well, but perhaps we'll pat ourselves on the back in how "equitably" everyone shares the burden of trying to dig ourselves out of the hole that's been dug. :annoyed
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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Re: When will asset prices come down?

Post by Robot Monster »

anoop wrote: Sat May 08, 2021 10:41 am This time around raising rates is pretty much out of the question. Tapering bond purchases is also out of the question.
...unless inflation goes too high. Powell has made reassurances we shouldn't pretend he hasn't:

"We understand our job we will do our job and we are focused as you seen for many years We have been focused on inflation "deviating" below 2%, and we used our tools aggressively to put it back up at 2% if we do see inflation moving materially above 2% persistent way the risks of inflation expectation drifting up then we will use our tools to guide inflation and expectation back down to 2% no one should doubt that we will do that this is not what we expect but no one should doubt that in the event we will be prepared to use our tools."
YouTube video link
Begins at the 4:30 mark.

"We do not seek inflation that substantially exceeds 2 percent, nor do we seek inflation above 2 percent for a prolonged period," Powell said in a five-page response to a March 24 letter in which the Florida Republican raised concerns about rising inflation and the U.S. central bank's bond-buying program. link

Edit: Just to be clear, I'm not saying the Fed keeping their word on this is assured. I'm only saying it's a possibility, at the least. The Fed might decide they want to change their inflation target. I have two sources that suggested it would be a good idea if the Fed raised its target to as far as 4%.

"Raising the long-term inflation target from the current 2% to a still-modest 4% would substantially increase the rate at which debt effectively vanishes." link

"One alternative to the Fed’s current approach would be to keep targeting the inflation rate, but to raise the target from the current 2 percent, perhaps to 3 percent or 4 percent." link

You may wonder, can the Fed really do this? Isn't their 2 percent target engraved in stone? It is not. "In 1996, Fed policymakers privately agreed that their target for inflation was 2 percent, but, at Greenspan’s insistence, they didn’t tell anyone. In 2012, at the urging of then-Chair Ben Bernanke, the Fed formally and publicly announced that they were targeting a 2 percent inflation rate." (same source as prior link)

Also, Paul Krugman appears to think the 2% target is too low:
"The old judgment was that 2% inflation was enough to ensure that you would never hit the zero lower bound. Nobody can believe that now. But I don't know if they're ready to go there, and it's not clear that there's any contemplation of an inflation target high enough that we can consider ourselves immune to the kinds of crises we've had." link
Last edited by Robot Monster on Sat May 08, 2021 1:53 pm, edited 1 time in total.
Topic Author
newyorker
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Re: When will asset prices come down?

Post by newyorker »

So... dont time the market?
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