Yes, that seems like a bullsh*t rally. Nikola up 11 %, Rivian up 7 %....
U.S. stocks in free fall
Re: U.S. stocks in free fall
Good points about farming costs. But if we're talking about going out two nights in a row vs every other night, the economy is still in pretty good shape. The Fed seems more concerned with low income individuals just trying not to starve at home.alfaspider wrote: ↑Thu May 26, 2022 9:30 amPart of the food price problem is the energy price problem. Farmers are getting hit hard by increases in fertilizer and diesel. That can be alleviated somewhat by lowering energy demand. That can happen when people shop less, carpool or switch to public transit, stop unnecessary trips, and adjust thermostats.bagastuff wrote: ↑Thu May 26, 2022 9:26 amHow are rate hikes going to do anything about food prices? I can modify my behavior to use less gas but I still need food to live. Actually maybe high food prices will help solve the obesity epidemic and healthcare crisis. Quick sell off XLV!alfaspider wrote: ↑Thu May 26, 2022 9:21 amI posted earlier that housing market shows signs of slowing down. That indicates that more rate hikes beyond those already planned are likely enough to tamp down the asset bubbles. But there's still going to be a big problem with food and energy costs. I don't think the fed can tame that without raising rates until we are in a pretty bad recession. I guess it's up to the fed how they want to balance that dilemma.
There's also still quite a bit of food waste. I know I've been guilty of tossing old leftovers in favor of making something fresh or going out. In a recession, people are more likely to be careful to avoid waste.
Re: U.S. stocks in free fall
I put a limit buy for fngd 2 QTY inverse 3x etn at 72$ to teach myself I can't time the market.
I know we are going to moon soon lol.
Gme went to 135$ seriously . Maybe it's getting ready to moass.
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Re: U.S. stocks in free fall
I'm leading the BH Contest (S&P @ 4048). STOP THE COUNT
https://www.lostoak.com/ls/diehards/contest/
https://www.lostoak.com/ls/diehards/contest/
Re: U.S. stocks in free fall
You should be able to see this in both Walmart and Target's financials. Historically, margins have been expanding. There should be a graph for this over on FRED at St. Louis Fed.RubyTuesday wrote: ↑Wed May 25, 2022 9:08 pmYou’ve stated that margins are getting crushed several times. Do you have a source for this? Most info I’ve read indicates margins are expanding beyond increases in input costs (look at energy for example). Some are accusing corporations of opportunistic gouging.rockstar wrote: ↑Tue May 24, 2022 12:30 pmNot if you're a business that can't raise prices. Then inflation is a problem debt wise. Wages are going up, so margins are getting crushed for businesses that can't raise prices without negatively impacting demand. Buffett did a great write-up on inflation and how it impact corporations in one of his letters to shareholders back in the early 80s. It's definitely worth reading.alfaspider wrote: ↑Tue May 24, 2022 12:24 pmBut inflation actually provides relief from debts because it cuts the real value of the debt. It's only a problem if you need new debt (which would have to be at a much higher interest rate). In fact, there's a huge disincentive against paying down existing debts right now because those loans are typically at sub-inflation rates.ClassII wrote: ↑Tue May 24, 2022 12:10 pm I guess if I want to predict the next "Bear Stearns" event (knowing full well what a fool's errand that is), I'd say corporate debt is going to be where things start to fall apart once this bear market and Fed tightening does it's thing. It's pretty well established that a lot of companies are completely up to their eyeballs in debt right now. Doing things like stock buy-backs and dividends on the backs of taking on low-interest loans and all before Covid, no less. Some companies did phenomenally in the last 2 years but quite a few did little to fix their debt load (or even took on more thanks to the government's covid programs). But now, with rates going up and the economy contracting it's going to make refinancing that debt extremely difficult. Those cows will come home to roost and we might start to see even some big name companies declare bankruptcy due to inability to refinance.
But again, if the next 2008 is coming we're still way back in 2007 at the moment. A truly boring, normal correction of the stock market. Whether it tips into something more severe and how exactly that'll happen is anyone's guess. But it is fun placing innocent bets (at least for now).
I expect this repricing of risk to continue. However, it does feel good that the 10 year has stabilized for now and that you can buy 10 year TIPS with positive real yields right now.
Re: U.S. stocks in free fall
Don't be stingy with links just because you went a little overboard with the hyperbole.rockstar wrote: ↑Thu May 26, 2022 12:52 pmYou should be able to see this in both Walmart and Target's financials. Historically, margins have been expanding. There should be a graph for this over on FRED at St. Louis Fed.RubyTuesday wrote: ↑Wed May 25, 2022 9:08 pm You’ve stated that margins are getting crushed several times. Do you have a source for this? Most info I’ve read indicates margins are expanding beyond increases in input costs (look at energy for example). Some are accusing corporations of opportunistic gouging.
Here's some:
https://www.yardeni.com/pub/sp500marginnipa.pdf
https://fred.stlouisfed.org/series/CP
https://fred.stlouisfed.org/series/CPATAX
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
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Re: U.S. stocks in free fall
Thanks for the links Beensabu. This looks like the opposite of margins getting crushed.Beensabu wrote: ↑Thu May 26, 2022 1:28 pmDon't be stingy with links just because you went a little overboard with the hyperbole.rockstar wrote: ↑Thu May 26, 2022 12:52 pmYou should be able to see this in both Walmart and Target's financials. Historically, margins have been expanding. There should be a graph for this over on FRED at St. Louis Fed.RubyTuesday wrote: ↑Wed May 25, 2022 9:08 pm You’ve stated that margins are getting crushed several times. Do you have a source for this? Most info I’ve read indicates margins are expanding beyond increases in input costs (look at energy for example). Some are accusing corporations of opportunistic gouging.
Here's some:
https://www.yardeni.com/pub/sp500marginnipa.pdf
https://fred.stlouisfed.org/series/CP
https://fred.stlouisfed.org/series/CPATAX
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
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Re: U.S. stocks in free fall
Elon musk forecasting 12 - 18 month recession. Keep your powder dry until Jan 1 ?
Re: U.S. stocks in free fall
And he's been forecasting "full self driving" for about 5 years.smooth_rough wrote: ↑Thu May 26, 2022 10:20 pm Elon musk forecasting 12 - 18 month recession. Keep your powder dry until Jan 1 ?
Re: U.S. stocks in free fall
Umm.. that guy hasn't forecast ANYTHING right...smooth_rough wrote: ↑Thu May 26, 2022 10:20 pm Elon musk forecasting 12 - 18 month recession. Keep your powder dry until Jan 1 ?
I mean he can't even forecast when his OWN COMPANIES will achieve stuff.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: U.S. stocks in free fall
I keep hearing this, and don’t really know what this means? Equities aren’t guaranteed to go down during a recession, so what are folks suppose to do?bagastuff wrote: ↑Thu May 26, 2022 10:29 pmAnd he's been forecasting "full self driving" for about 5 years.smooth_rough wrote: ↑Thu May 26, 2022 10:20 pm Elon musk forecasting 12 - 18 month recession. Keep your powder dry until Jan 1 ?
Re: U.S. stocks in free fall
So I'm headed out on vacation tomorrow...
So I did my monthly spreadsheet update a bit early.
After all the gnashing of teeth and grinding of gears (talk about mixing metaphors!) over the past few weeks, I find my portfolio is less than 0.5% different than it was on May 2nd, the last time I updated my spreadsheet.
Could have slept through the past month, and wouldn't have known anything had changed.
So I did my monthly spreadsheet update a bit early.
After all the gnashing of teeth and grinding of gears (talk about mixing metaphors!) over the past few weeks, I find my portfolio is less than 0.5% different than it was on May 2nd, the last time I updated my spreadsheet.
Could have slept through the past month, and wouldn't have known anything had changed.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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Re: U.S. stocks in free fall
I got my feet in both forums, lets see which one will win to close out the week.
Re: U.S. stocks in free fall
Where is everyone? Isn't the sky still falling?
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. |
(Avatar is the statue of Gen. Warren atop Little Round Top @ Gettysburg National Military Park.)
Re: U.S. stocks in free fall
Now that's buying the haystack!Keenobserver wrote: ↑Fri May 27, 2022 7:31 am I got my feet in both forums, lets see which one will win to close out the week.
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Re: U.S. stocks in free fall
And selling it also!Tamalak wrote: ↑Fri May 27, 2022 11:36 amNow that's buying the haystack!Keenobserver wrote: ↑Fri May 27, 2022 7:31 am I got my feet in both forums, lets see which one will win to close out the week.
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Re: U.S. stocks in free fall
Just a friendly Friday reminder. No one knows norhin.. or enough to do anything practical with it. Booglehead it all.
Re: U.S. stocks in free fall
Is this dead cat or live cat bounce?
Re: U.S. stocks in free fall
Oh no! Run to the hills!
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. |
(Avatar is the statue of Gen. Warren atop Little Round Top @ Gettysburg National Military Park.)
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Re: U.S. stocks in free fall
These dead cat bounces are getting so easy to pred...
Re: U.S. stocks in free fall
The ironic part that if I ask anyone if one believes that market will be higher in five years most will say “ yes” . This whole thread is a hamster wheel. Hamsters who like to play “ dead cat bounce “ nonsense game for decades already.
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
Re: U.S. stocks in free fall
So many dead cats getting thrown around these days!
Re: U.S. stocks in free fall
Re: U.S. stocks in free fall
Moass is MOASS even though it ends with something doesn't sound nice.
It is an acronym for Mother Of All Squeezes..
Which GME proponents if you genuinely don't know about still are saying it will do something similar to what VW stock did in 2000 for a brief moment it went from 50$ to 1000$ or more...
Something tells me GME IS STILL maybe gonna squeeze LOL..how ironic.
Re: U.S. stocks in free fall
To be fair, we also get the people that come out of the wood work at every 10% correction to declare the end of capitalism, the markets, or the world as we know it because of valuations, bond yields, or whatever.
It's like some people have no memory of markets actually going through various unpredictable ups and downs.
Once in a while you get shown the light, in the strangest of places if you look at it right.
Re: U.S. stocks in free fall
Hahaha you are so right. Everytime there is a crash, all these permabears wake up from hibernation and go on a length to explain correction with random graphs and stuff. Aint nobody got time to read thatmarcopolo wrote: ↑Fri May 27, 2022 9:01 pmTo be fair, we also get the people that come out of the wood work at every 10% correction to declare the end of capitalism, the markets, or the world as we know it because of valuations, bond yields, or whatever.
It's like some people have no memory of markets actually going through various unpredictable ups and downs.
Re: U.S. stocks in free fall
But...but...this time is different!newyorker wrote: ↑Fri May 27, 2022 9:15 pmHahaha you are so right. Everytime there is a crash, all these permabears wake up from hibernation and go on a length to explain correction with random graphs and stuff. Aint nobody got time to read thatmarcopolo wrote: ↑Fri May 27, 2022 9:01 pmTo be fair, we also get the people that come out of the wood work at every 10% correction to declare the end of capitalism, the markets, or the world as we know it because of valuations, bond yields, or whatever.
It's like some people have no memory of markets actually going through various unpredictable ups and downs.
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. |
(Avatar is the statue of Gen. Warren atop Little Round Top @ Gettysburg National Military Park.)
Re: U.S. stocks in free fall
+1 . I personally skip every post that contains more than 15 words. This guys just trying to blow out everything out of proportion , making nonsensical secret souse formulas how to “ invest “ , meanwhile economy goes ahead , not backwards , so is stock market.newyorker wrote: ↑Fri May 27, 2022 9:15 pmHahaha you are so right. Everytime there is a crash, all these permabears wake up from hibernation and go on a length to explain correction with random graphs and stuff. Aint nobody got time to read thatmarcopolo wrote: ↑Fri May 27, 2022 9:01 pmTo be fair, we also get the people that come out of the wood work at every 10% correction to declare the end of capitalism, the markets, or the world as we know it because of valuations, bond yields, or whatever.
It's like some people have no memory of markets actually going through various unpredictable ups and downs.
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
Re: U.S. stocks in free fall
I dunno this rally this week felt different. It had some conviction to it and wasn’t as volatile as other previous rallies. I just feel like everyone has been overly bearish and everything’s been doom and gloom lately, which might indicate a bottom. Yeah we have inflation, yeah there might be a recession coming, but people predicting a 70% drop in the S&P 500? Really? I’m usually wrong about this stuff, so 70% drop in the S&P 500 will certainly happen. As long as the Greenspan Put lives, I think we will be fine.
Last edited by Abalyon on Fri May 27, 2022 9:38 pm, edited 1 time in total.
Re: U.S. stocks in free fall
That is exactly what I was trying to point out.marcopolo wrote: ↑Fri May 27, 2022 9:01 pmTo be fair, we also get the people that come out of the wood work at every 10% correction to declare the end of capitalism, the markets, or the world as we know it because of valuations, bond yields, or whatever.
It's like some people have no memory of markets actually going through various unpredictable ups and downs.
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
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Re: U.S. stocks in free fall
Easier said than done. In the last 2 days we already went up 5%. So then you say well let me wait for a little dip cos I don’t want to buy now that it went up.TheoLeo wrote: ↑Thu May 26, 2022 4:12 amYou get back in when the Fed announces: "Post pandemic overstaffing and overfilling of inventories has led to significant deflationary pressures und a rise in unemployement. The comittee therefore decided to stop the balance sheet run off and to lower the federal funds rate."manatee2005 wrote: ↑Thu May 26, 2022 12:33 amThe problem is if you sell now when do you get back in?
Maybe never?
So for me the plan is just to be contributing every 2 weeks as I always had.
Read the March 2020 threads, there are still people in cash from them.
If you can time the market go ahead, but if you could wouldn’t you already be the richest man in the world?
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Re: U.S. stocks in free fall
Ok but how about April 1 to now?HomerJ wrote: ↑Fri May 27, 2022 12:52 am So I'm headed out on vacation tomorrow...
So I did my monthly spreadsheet update a bit early.
After all the gnashing of teeth and grinding of gears (talk about mixing metaphors!) over the past few weeks, I find my portfolio is less than 0.5% different than it was on May 2nd, the last time I updated my spreadsheet.
Could have slept through the past month, and wouldn't have known anything had changed.
Re: U.S. stocks in free fall
The market could reach a new ATH this summer, but still be down 20 % by December. I have a strong believe the trend for the next years is still down. But obviously I don't know. I guess it is hard for me to accept that I really don't know. Thats why I think it might be good for me to have an allocation like 50/50. Then whatever I think will happen is partially covered and I can relax. Have to think about it some more..manatee2005 wrote: ↑Fri May 27, 2022 11:56 pmEasier said than done. In the last 2 days we already went up 5%. So then you say well let me wait for a little dip cos I don’t want to buy now that it went up.TheoLeo wrote: ↑Thu May 26, 2022 4:12 amYou get back in when the Fed announces: "Post pandemic overstaffing and overfilling of inventories has led to significant deflationary pressures und a rise in unemployement. The comittee therefore decided to stop the balance sheet run off and to lower the federal funds rate."manatee2005 wrote: ↑Thu May 26, 2022 12:33 amThe problem is if you sell now when do you get back in?
Maybe never?
So for me the plan is just to be contributing every 2 weeks as I always had.
Read the March 2020 threads, there are still people in cash from them.
If you can time the market go ahead, but if you could wouldn’t you already be the richest man in the world?
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Re: U.S. stocks in free fall
This is why we keep repeating here "Nobody knows nothing" so we just keep invested and contribute every 2 weeks.TheoLeo wrote: ↑Sat May 28, 2022 4:18 amThe market could reach a new ATH this summer, but still be down 20 % by December. I have a strong believe the trend for the next years is still down. But obviously I don't know. I guess it is hard for me to accept that I really don't know. Thats why I think it might be good for me to have an allocation like 50/50. Then whatever I think will happen is partially covered and I can relax. Have to think about it some more..manatee2005 wrote: ↑Fri May 27, 2022 11:56 pmEasier said than done. In the last 2 days we already went up 5%. So then you say well let me wait for a little dip cos I don’t want to buy now that it went up.TheoLeo wrote: ↑Thu May 26, 2022 4:12 amYou get back in when the Fed announces: "Post pandemic overstaffing and overfilling of inventories has led to significant deflationary pressures und a rise in unemployement. The comittee therefore decided to stop the balance sheet run off and to lower the federal funds rate."manatee2005 wrote: ↑Thu May 26, 2022 12:33 amThe problem is if you sell now when do you get back in?
Maybe never?
So for me the plan is just to be contributing every 2 weeks as I always had.
Read the March 2020 threads, there are still people in cash from them.
If you can time the market go ahead, but if you could wouldn’t you already be the richest man in the world?
It's tempting to try to squeeze an extra few percent out from the investments, but I made that mistake in 2008 and it cost me dearly. That's why I didn't make the same mistake in 2020. 2022 can be rough, but also who knows, inflation could drop quicker than expected, Russia and Ukraine could sign a peace treaty, the administration could have a change of mind and open up oil drilling again. So it's not 100% certain that the stocks would keep dropping.
Re: U.S. stocks in free fall
In 2019, day after day on yahoo.com finance, the comments from the same people would be a drumbeat of negativity. They posted on why the markets were overpriced, yada yada yada. After a good year of this , we got the covid crash. All the way down 35%, these posters screamed that they were right and the market was going to crash some more.newyorker wrote: ↑Fri May 27, 2022 9:15 pmHahaha you are so right. Everytime there is a crash, all these permabears wake up from hibernation and go on a length to explain correction with random graphs and stuff. Aint nobody got time to read thatmarcopolo wrote: ↑Fri May 27, 2022 9:01 pmTo be fair, we also get the people that come out of the wood work at every 10% correction to declare the end of capitalism, the markets, or the world as we know it because of valuations, bond yields, or whatever.
It's like some people have no memory of markets actually going through various unpredictable ups and downs.
The market then doubled in value as they commented how the prices were infated all the way up apparently without ever buying in at the lows. Now the same thing is happening. Markets are down 20-30% and they are still screaming that prices are too high and will crash another 20-40%. Perhaps they are just shorting stocks or perhaps they don't have money to invest in stocks and don't want others to succeed.
Hang around with the people you want to emulate. Don't hang around or listen to folk who root for negative news. You will never see the silver lining in anything.
Re: U.S. stocks in free fall
Many folks, even BHs, don’t understand the market.
The correct BH answer is “I don’t know if it will be up in 5 years but it’ll probably be up in 20 years”.
Stock investment, even indexing, is a trade off in risks.
You mitigate the risk of not being able to directly save enough for retirement by accepting the risk the market might crash at the wrong time for you (SORR)
You mitigate inflation destroying the value of your nest egg by accepting that same SORR risk.
There is also the minor risk (for the US) that your stock value never recovers…like for the Nikkei investors in the 90s.
If you could save 30-40X in a “risk free” vehicle that kept up with inflation then why would do stocks?
It’s because most of us manage only a little above 25X…
Re: U.S. stocks in free fall
I never mitigate, whatever it means. My personal belief that every time you trying to mitigate your investment strategy you actually harming your long term performance. The biggest enemy of every investor is the impulse . My dollar cost average into equities doesn’t change, I never rebalancing, I put every extra dollar I get into equities as fast as I get in my hands. The actual risk is mitigation in my world. I invested in equities for more than 24 years. Our whole portfolio way over 30x of mine and my better half annual expenses. Our combined income barely 100k a year for decades in average. We are not doctors or lawyers, have very average jobs and yet we are on top of high net worth of this Country. My point is that I guess less you think you smarter than collective wisdom ( stock market) - better off you are as investornigel_ht wrote: ↑Sun May 29, 2022 7:03 amMany folks, even BHs, don’t understand the market.
The correct BH answer is “I don’t know if it will be up in 5 years but it’ll probably be up in 20 years”.
Stock investment, even indexing, is a trade off in risks.
You mitigate the risk of not being able to directly save enough for retirement by accepting the risk the market might crash at the wrong time for you (SORR)
You mitigate inflation destroying the value of your nest egg by accepting that same SORR risk.
There is also the minor risk (for the US) that your stock value never recovers…like for the Nikkei investors in the 90s.
If you could save 30-40X in a “risk free” vehicle that kept up with inflation then why would do stocks?
It’s because most of us manage only a little above 25X…
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
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Re: U.S. stocks in free fall
Most of my friends have maxed out mortgages with just enough savings to cover 4-6 months of expenses, and everything else is put in the stock market. It just seems crazy to me. That's hugely exposed to tail risk. I hear a lot that we quickly recover quickly from crashes as people point to 2008/2020. Both those times the Fed saved us. There might come a time where they can't do that.Ed 2 wrote: ↑Sun May 29, 2022 8:24 amI never mitigate, whatever it means. My personal belief that every time you trying to mitigate your investment strategy you actually harming your long term performance. The biggest enemy of every investor is the impulse . My dollar cost average into equities doesn’t change, I never rebalancing, I put every extra dollar I get into equities as fast as I get in my hands. The actual risk is mitigation in my world. I invested in equities for more than 24 years. Our whole portfolio way over 30x of mine and my better half annual expenses. Our combined income barely 100k a year for decades in average. We are not doctors or lawyers, have very average jobs and yet we are on top of high net worth of this Country. My point is that I guess less you think you smarter than collective wisdom ( stock market) - better off you are as investornigel_ht wrote: ↑Sun May 29, 2022 7:03 amMany folks, even BHs, don’t understand the market.
The correct BH answer is “I don’t know if it will be up in 5 years but it’ll probably be up in 20 years”.
Stock investment, even indexing, is a trade off in risks.
You mitigate the risk of not being able to directly save enough for retirement by accepting the risk the market might crash at the wrong time for you (SORR)
You mitigate inflation destroying the value of your nest egg by accepting that same SORR risk.
There is also the minor risk (for the US) that your stock value never recovers…like for the Nikkei investors in the 90s.
If you could save 30-40X in a “risk free” vehicle that kept up with inflation then why would do stocks?
It’s because most of us manage only a little above 25X…
Re: U.S. stocks in free fall
The primary point is nobody should claim the market will be up in 5 years. We have had 5 year periods that have gone down. So far I believe that 20 year periods have been positive.Ed 2 wrote: ↑Sun May 29, 2022 8:24 amI never mitigate, whatever it means. My personal belief that every time you trying to mitigate your investment strategy you actually harming your long term performance. The biggest enemy of every investor is the impulse . My dollar cost average into equities doesn’t change, I never rebalancing, I put every extra dollar I get into equities as fast as I get in my hands. The actual risk is mitigation in my world. I invested in equities for more than 24 years. Our whole portfolio way over 30x of mine and my better half annual expenses. Our combined income barely 100k a year for decades in average. We are not doctors or lawyers, have very average jobs and yet we are on top of high net worth of this Country. My point is that I guess less you think you smarter than collective wisdom ( stock market) - better off you are as investornigel_ht wrote: ↑Sun May 29, 2022 7:03 amMany folks, even BHs, don’t understand the market.
The correct BH answer is “I don’t know if it will be up in 5 years but it’ll probably be up in 20 years”.
Stock investment, even indexing, is a trade off in risks.
You mitigate the risk of not being able to directly save enough for retirement by accepting the risk the market might crash at the wrong time for you (SORR)
You mitigate inflation destroying the value of your nest egg by accepting that same SORR risk.
There is also the minor risk (for the US) that your stock value never recovers…like for the Nikkei investors in the 90s.
If you could save 30-40X in a “risk free” vehicle that kept up with inflation then why would do stocks?
It’s because most of us manage only a little above 25X…
The secondary point is would you have more than 30x without investing? If the answer is no then you accepted market risks to mitigate the risk of a shortfall during a 30 year retirement. The risk for a US investor is relatively low but not zero.
Re: U.S. stocks in free fall
Who was claiming??nigel_ht wrote: ↑Sun May 29, 2022 3:09 pmThe primary point is nobody should claim the market will be up in 5 yearsEd 2 wrote: ↑Sun May 29, 2022 8:24 amI never mitigate, whatever it means. My personal belief that every time you trying to mitigate your investment strategy you actually harming your long term performance. The biggest enemy of every investor is the impulse . My dollar cost average into equities doesn’t change, I never rebalancing, I put every extra dollar I get into equities as fast as I get in my hands. The actual risk is mitigation in my world. I invested in equities for more than 24 years. Our whole portfolio way over 30x of mine and my better half annual expenses. Our combined income barely 100k a year for decades in average. We are not doctors or lawyers, have very average jobs and yet we are on top of high net worth of this Country. My point is that I guess less you think you smarter than collective wisdom ( stock market) - better off you are as investornigel_ht wrote: ↑Sun May 29, 2022 7:03 amMany folks, even BHs, don’t understand the market.
The correct BH answer is “I don’t know if it will be up in 5 years but it’ll probably be up in 20 years”.
Stock investment, even indexing, is a trade off in risks.
You mitigate the risk of not being able to directly save enough for retirement by accepting the risk the market might crash at the wrong time for you (SORR)
You mitigate inflation destroying the value of your nest egg by accepting that same SORR risk.
There is also the minor risk (for the US) that your stock value never recovers…like for the Nikkei investors in the 90s.
If you could save 30-40X in a “risk free” vehicle that kept up with inflation then why would do stocks?
It’s because most of us manage only a little above 25X…
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
Re: U.S. stocks in free fall
Nobody should claim if US investor has relatively low risk. It’s kind of faze claim , don’t you think? No risk- no return. All this years of my experience I was throwing myself toward risk when it comes to investing. If you don’t invest at all and keeping cash only you automatically put your self into risk 100% to lose your principal due to inflation. Never underestimate the power of delusion.nigel_ht wrote: ↑Sun May 29, 2022 3:09 pmThe risk for a US investor is relatively low but not zero.Ed 2 wrote: ↑Sun May 29, 2022 8:24 amI never mitigate, whatever it means. My personal belief that every time you trying to mitigate your investment strategy you actually harming your long term performance. The biggest enemy of every investor is the impulse . My dollar cost average into equities doesn’t change, I never rebalancing, I put every extra dollar I get into equities as fast as I get in my hands. The actual risk is mitigation in my world. I invested in equities for more than 24 years. Our whole portfolio way over 30x of mine and my better half annual expenses. Our combined income barely 100k a year for decades in average. We are not doctors or lawyers, have very average jobs and yet we are on top of high net worth of this Country. My point is that I guess less you think you smarter than collective wisdom ( stock market) - better off you are as investornigel_ht wrote: ↑Sun May 29, 2022 7:03 amMany folks, even BHs, don’t understand the market.
The correct BH answer is “I don’t know if it will be up in 5 years but it’ll probably be up in 20 years”.
Stock investment, even indexing, is a trade off in risks.
You mitigate the risk of not being able to directly save enough for retirement by accepting the risk the market might crash at the wrong time for you (SORR)
You mitigate inflation destroying the value of your nest egg by accepting that same SORR risk.
There is also the minor risk (for the US) that your stock value never recovers…like for the Nikkei investors in the 90s.
If you could save 30-40X in a “risk free” vehicle that kept up with inflation then why would do stocks?
It’s because most of us manage only a little above 25X…
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
Re: U.S. stocks in free fall
... and yet how old your friends? Do they have secured jobs? It’s hard to provide proper answer not knowing this very important details. BUT , I personally believe if you over leveraging no matter what you invest in you put yourself into very uncomfortable position . In our life we have mortgage that we in no rush to paying off even when we retired because the payments are at minimum and no rush to paying off. The life is about moderation and reason.strummer6969 wrote: ↑Sun May 29, 2022 2:15 pmMost of my friends have maxed out mortgages with just enough savings to cover 4-6 months of expenses, and everything else is put in the stock market. It just seems crazy to me. That's hugely exposed to tail risk. I hear a lot that we quickly recover quickly from crashes as people point to 2008/2020. Both those times the Fed saved us. There might come a time where they can't do that.Ed 2 wrote: ↑Sun May 29, 2022 8:24 amI never mitigate, whatever it means. My personal belief that every time you trying to mitigate your investment strategy you actually harming your long term performance. The biggest enemy of every investor is the impulse . My dollar cost average into equities doesn’t change, I never rebalancing, I put every extra dollar I get into equities as fast as I get in my hands. The actual risk is mitigation in my world. I invested in equities for more than 24 years. Our whole portfolio way over 30x of mine and my better half annual expenses. Our combined income barely 100k a year for decades in average. We are not doctors or lawyers, have very average jobs and yet we are on top of high net worth of this Country. My point is that I guess less you think you smarter than collective wisdom ( stock market) - better off you are as investornigel_ht wrote: ↑Sun May 29, 2022 7:03 amMany folks, even BHs, don’t understand the market.
The correct BH answer is “I don’t know if it will be up in 5 years but it’ll probably be up in 20 years”.
Stock investment, even indexing, is a trade off in risks.
You mitigate the risk of not being able to directly save enough for retirement by accepting the risk the market might crash at the wrong time for you (SORR)
You mitigate inflation destroying the value of your nest egg by accepting that same SORR risk.
There is also the minor risk (for the US) that your stock value never recovers…like for the Nikkei investors in the 90s.
If you could save 30-40X in a “risk free” vehicle that kept up with inflation then why would do stocks?
It’s because most of us manage only a little above 25X…
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
-
- Posts: 978
- Joined: Tue Dec 15, 2020 10:59 am
Re: U.S. stocks in free fall
mid-late 30s. Many of them entered the job market post-2008. They have no idea what it feels like to have both earners laid off and stocks down by 50%. Jobs are secure until they aren't.Ed 2 wrote: ↑Sun May 29, 2022 4:49 pm... and yet how old your friends? Do they have secured jobs? It’s hard to provide proper answer not knowing this very important details. BUT , I personally believe if you over leveraging no matter what you invest in you put yourself into very uncomfortable position . In our life we have mortgage that we in no rush to paying off even when we retired because the payments are at minimum and no rush to paying off. The life is about moderation and reason.strummer6969 wrote: ↑Sun May 29, 2022 2:15 pmMost of my friends have maxed out mortgages with just enough savings to cover 4-6 months of expenses, and everything else is put in the stock market. It just seems crazy to me. That's hugely exposed to tail risk. I hear a lot that we quickly recover quickly from crashes as people point to 2008/2020. Both those times the Fed saved us. There might come a time where they can't do that.Ed 2 wrote: ↑Sun May 29, 2022 8:24 amI never mitigate, whatever it means. My personal belief that every time you trying to mitigate your investment strategy you actually harming your long term performance. The biggest enemy of every investor is the impulse . My dollar cost average into equities doesn’t change, I never rebalancing, I put every extra dollar I get into equities as fast as I get in my hands. The actual risk is mitigation in my world. I invested in equities for more than 24 years. Our whole portfolio way over 30x of mine and my better half annual expenses. Our combined income barely 100k a year for decades in average. We are not doctors or lawyers, have very average jobs and yet we are on top of high net worth of this Country. My point is that I guess less you think you smarter than collective wisdom ( stock market) - better off you are as investornigel_ht wrote: ↑Sun May 29, 2022 7:03 amMany folks, even BHs, don’t understand the market.
The correct BH answer is “I don’t know if it will be up in 5 years but it’ll probably be up in 20 years”.
Stock investment, even indexing, is a trade off in risks.
You mitigate the risk of not being able to directly save enough for retirement by accepting the risk the market might crash at the wrong time for you (SORR)
You mitigate inflation destroying the value of your nest egg by accepting that same SORR risk.
There is also the minor risk (for the US) that your stock value never recovers…like for the Nikkei investors in the 90s.
If you could save 30-40X in a “risk free” vehicle that kept up with inflation then why would do stocks?
It’s because most of us manage only a little above 25X…
Re: U.S. stocks in free fall
Re: U.S. stocks in free fall
If the risk isn’t low then why do you invest in the US market?Ed 2 wrote: ↑Sun May 29, 2022 4:38 pmNobody should claim if US investor has relatively low risk. It’s kind of faze claim , don’t you think? No risk- no return. All this years of my experience I was throwing myself toward risk when it comes to investing. If you don’t invest at all and keeping cash only you automatically put your self into risk 100% to lose your principal due to inflation. Never underestimate the power of delusion.
The risk of market failure or greater than 20 year downturn is low or we wouldn’t buy and hold.
Indexing into the US market pretty safe over the long haul and the risk of a Nikkei type event is low given our geopolitical advantages. Some day that may not be true and some other country will be the dominant empire.
The returns are commensurate with the risks…about 10% for most 20 year periods although for the rolling 20 year period ending in 2018 the CAGR was 5.52%.
Re: U.S. stocks in free fall
We bought the house right before 2005. Real estate is local. Paid 20% down payment. Fixed 30 years loan . We knew what we buy. We are in early 50’s , we just refinanced a year ago for 3% interest loan. Bear market of 2000-2010 was a wealth creator for those who was actually investing , not panicking. We were ones of those. Every bear market you should embrace not mitigate. Most successful investors made most money during bear market. So , I don’t get the point of those who trying to look for “ lessons “ from bear markets. Jobs secure or not , in this Country if you have both legs and arms and some brain can find any extra work to make more, anytime. I never had a single day without work and when we didn’t have enough to for our lifestyle I always found an extra gig to make to pay bills and invest.strummer6969 wrote: ↑Sun May 29, 2022 7:29 pmmid-late 30s. Many of them entered the job market post-2008. They have no idea what it feels like to have both earners laid off and stocks down by 50%. Jobs are secure until they aren't.Ed 2 wrote: ↑Sun May 29, 2022 4:49 pm... and yet how old your friends? Do they have secured jobs? It’s hard to provide proper answer not knowing this very important details. BUT , I personally believe if you over leveraging no matter what you invest in you put yourself into very uncomfortable position . In our life we have mortgage that we in no rush to paying off even when we retired because the payments are at minimum and no rush to paying off. The life is about moderation and reason.strummer6969 wrote: ↑Sun May 29, 2022 2:15 pmMost of my friends have maxed out mortgages with just enough savings to cover 4-6 months of expenses, and everything else is put in the stock market. It just seems crazy to me. That's hugely exposed to tail risk. I hear a lot that we quickly recover quickly from crashes as people point to 2008/2020. Both those times the Fed saved us. There might come a time where they can't do that.Ed 2 wrote: ↑Sun May 29, 2022 8:24 amI never mitigate, whatever it means. My personal belief that every time you trying to mitigate your investment strategy you actually harming your long term performance. The biggest enemy of every investor is the impulse . My dollar cost average into equities doesn’t change, I never rebalancing, I put every extra dollar I get into equities as fast as I get in my hands. The actual risk is mitigation in my world. I invested in equities for more than 24 years. Our whole portfolio way over 30x of mine and my better half annual expenses. Our combined income barely 100k a year for decades in average. We are not doctors or lawyers, have very average jobs and yet we are on top of high net worth of this Country. My point is that I guess less you think you smarter than collective wisdom ( stock market) - better off you are as investornigel_ht wrote: ↑Sun May 29, 2022 7:03 am
Many folks, even BHs, don’t understand the market.
The correct BH answer is “I don’t know if it will be up in 5 years but it’ll probably be up in 20 years”.
Stock investment, even indexing, is a trade off in risks.
You mitigate the risk of not being able to directly save enough for retirement by accepting the risk the market might crash at the wrong time for you (SORR)
You mitigate inflation destroying the value of your nest egg by accepting that same SORR risk.
There is also the minor risk (for the US) that your stock value never recovers…like for the Nikkei investors in the 90s.
If you could save 30-40X in a “risk free” vehicle that kept up with inflation then why would do stocks?
It’s because most of us manage only a little above 25X…
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
-
- Posts: 978
- Joined: Tue Dec 15, 2020 10:59 am
Re: U.S. stocks in free fall
Not everyone works in the gig economy. When you work for a corp in a very specialized area, it's not so easy when you get laid off. You can put all your money in the bank account and take no risk or leverage as much as possible and sink everything into the market, or somewhere in between. Whatever helps you sleep at night.Ed 2 wrote: ↑Sun May 29, 2022 8:03 pmWe bought the house right before 2005. Real estate is local. Paid 20% down payment. Fixed 30 years loan . We knew what we buy. We are in early 50’s , we just refinanced a year ago for 3% interest loan. Bear market of 2000-2010 was a wealth creator for those who was actually investing , not panicking. We were ones of those. Every bear market you should embrace not mitigate. Most successful investors made most money during bear market. So , I don’t get the point of those who trying to look for “ lessons “ from bear markets. Jobs secure or not , in this Country if you have both legs and arms and some brain can find any extra work to make more, anytime. I never had a single day without work and when we didn’t have enough to for our lifestyle I always found an extra gig to make to pay bills and invest.strummer6969 wrote: ↑Sun May 29, 2022 7:29 pmmid-late 30s. Many of them entered the job market post-2008. They have no idea what it feels like to have both earners laid off and stocks down by 50%. Jobs are secure until they aren't.Ed 2 wrote: ↑Sun May 29, 2022 4:49 pm... and yet how old your friends? Do they have secured jobs? It’s hard to provide proper answer not knowing this very important details. BUT , I personally believe if you over leveraging no matter what you invest in you put yourself into very uncomfortable position . In our life we have mortgage that we in no rush to paying off even when we retired because the payments are at minimum and no rush to paying off. The life is about moderation and reason.strummer6969 wrote: ↑Sun May 29, 2022 2:15 pmMost of my friends have maxed out mortgages with just enough savings to cover 4-6 months of expenses, and everything else is put in the stock market. It just seems crazy to me. That's hugely exposed to tail risk. I hear a lot that we quickly recover quickly from crashes as people point to 2008/2020. Both those times the Fed saved us. There might come a time where they can't do that.Ed 2 wrote: ↑Sun May 29, 2022 8:24 am
I never mitigate, whatever it means. My personal belief that every time you trying to mitigate your investment strategy you actually harming your long term performance. The biggest enemy of every investor is the impulse . My dollar cost average into equities doesn’t change, I never rebalancing, I put every extra dollar I get into equities as fast as I get in my hands. The actual risk is mitigation in my world. I invested in equities for more than 24 years. Our whole portfolio way over 30x of mine and my better half annual expenses. Our combined income barely 100k a year for decades in average. We are not doctors or lawyers, have very average jobs and yet we are on top of high net worth of this Country. My point is that I guess less you think you smarter than collective wisdom ( stock market) - better off you are as investor