General Investing and Economics Discussion - No Politics

[Jophish17]

A recession is a terrible thing to waste.

 

[LibertyTurns]

A recession is a terrible thing to waste.

We don’t need recessions, we need market corrections like this one followed by a nice strong recovery. I can’t speak for the rest of you but I want to retire with complete financial independence.

 

[Technut1990]

So I have about 80,000 in a 457. It’s starting to scare me because it was 87,000 before this correction started. What do I do ? Is there anyway to get out of a 457 without quitting my job ? The tax penalties are huge for early withdrawal and I have 10 months until I retire. I have moved my elections within the 457 to 80% bonds which is slowing the bleed but it’s still a bleed. If the FED does increase the rate it may ruin the bond market which in turn ruins my defense.

 

[Deleted member 2897]

So I have about 80,000 in a 457. It’s starting to scare me because it was 87,000 before this correction started. What do I do ? Is there anyway to get out of a 457 without quitting my job ? The tax penalties are huge for early withdrawal and I have 10 months until I retire. I have moved my elections within the 457 to 80% bonds which is slowing the bleed but it’s still a bleed. If the FED does increase the rate it may ruin the bond market which in turn ruins my defense.

Do you have any money market fund options within that plan? That's what I would do, is figure out what the most conservative option is and put your money there. I don't think you ever want to try and time the markets...but at the same time we're in like year 10 of a recovery, which is way past overdue for a recession. The markets, debt, everything is in another bubble again. I think now is the time to get as much ammunition as you can so if the markets drop another 20%-50% you can make a big move back in, and sleep well at night along the way.

 

[Northeast Stinger]

I do a mix of real estate investing as well as traditional (and at my age, very conservative) stock funds investing.

The real estate investing is something I do entirely on my own on properties and with people I believe I know personally, to minimize risk.

The stock fund investing I allow my brokerage account managers to handle on my behalf. We meet every six months and make sure strategy wise we ar eon the same page. But then my objectives are much more capital preservation than growth at my age, so if the market goes up 10% I expect to go up 5% and if the market goes down 10% I expect to go down 5%. Ergo, these investments are very widely spread.

I make more money on the real estate than the stocks in recent years, but fully expect that to change with market conditions. I assume NO debt in my real estate investing.

Pretty much how I do it. Hired a team that included personal financial planner and stock broker/investment strategist a few years ago. Was able to retire early as a result and have money to play with.

 

[Northeast Stinger]

I still like that old saying that you all probably know. "Bulls make money. Bears make money. Pigs get slaughtered."

 

[Deleted member 2897]

Inflation (using the idiotic formulas that they use) is below the Fed's target, the market is wobbly, and the Fed not only raised rates anyway yesterday, they said they're going to continue to raise rates a few more times.

For the long term health of our economy, interest rates should be miles higher than where they are today. That would require a very deep and short recession to affect that change. But the resulting flushing out of malinvestment would give us a much healthier economy going forward. That's a different thread for a different day. Going back to where we are today, this continual raising of interest rates when debt bubbles and spending levels were so high is exactly the same crap the Fed did the last time around. Then we ran into a debt crisis with subprime loans and everything else as people struggled to make payments. Then they start spending less and the downward spiral continues. The Fed is working very hard to cause that exact same problem again.

Hang on to your hats!

 

[Northeast Stinger]

Inflation (using the idiotic formulas that they use) is below the Fed's target, the market is wobbly, and the Fed not only raised rates anyway yesterday, they said they're going to continue to raise rates a few more times.

For the long term health of our economy, interest rates should be miles higher than where they are today. That would require a very deep and short recession to affect that change. But the resulting flushing out of malinvestment would give us a much healthier economy going forward. That's a different thread for a different day. Going back to where we are today, this continual raising of interest rates when debt bubbles and spending levels were so high is exactly the same crap the Fed did the last time around. Then we ran into a debt crisis with subprime loans and everything else as people struggled to make payments. Then they start spending less and the downward spiral continues. The Fed is working very hard to cause that exact same problem again.

Hang on to your hats!

Talked to my financial advisors today and they don't see much way around the crash that the market is going to go through given the artificial sugar high it was on. Similar problem is starting to happen in the housing market. Everywhere you look there are bubbles forming. This was inevitable and was predicted last year after the huge tax cut for the rich went into place. All that money resulted in, among other things, companies engaging in stock buy backs. When the tariffs hit and some business sectors had tangible pain, the high value that was on paper in the markets was exposed. Now the problem is going to be where to park your money. Those who go liquid will lock in their losses. Those who stay in the markets are going to have a rough ride which, hopefully, will last less than six years if the Fed can get the pain over with quickly.

 

[Deleted member 2897]

Talked to my financial advisors today and they don't see much way around the crash that the market is going to go through given the artificial sugar high it was on. Similar problem is starting to happen in the housing market. Everywhere you look there are bubbles forming. This was inevitable and was predicted last year after the huge tax cut for the rich went into place. All that money resulted in, among other things, companies engaging in stock buy backs. When the tariffs hit and some business sectors had tangible pain, the high value that was on paper in the markets was exposed. Now the problem is going to be where to park your money. Those who go liquid will lock in their losses. Those who stay in the markets are going to have a rough ride which, hopefully, will last less than six years if the Fed can get the pain over with quickly.

Almost everything you just wrote is completely backwards. You don’t create debt bubbles by letting people keep more of their money. You don’t create debt bubbles by increasing interest rates (people take out more debt when interest rates are low!). You can park your money in cash. Any crash will be quicker if the Fed stays out of the way.

I think that about covers it all.

 

[Northeast Stinger]

Almost everything you just wrote is completely backwards. You don’t create debt bubbles by letting people keep more of their money. You don’t create debt bubbles by increasing interest rates (people take out more debt when interest rates are low!). You can park your money in cash. Any crash will be quicker if the Fed stays out of the way.

I think that about covers it all.

Our two posts seem unrelated.

Oh well, don't go liquid unless you're buying me a big Christmas present.

 

[Jophish17]

Mnuchin - in sports terms - basically just gave a vote of confidence. Indices are down again today.

 

[Deleted member 2897]

Mnuchin - in sports terms - basically just gave a vote of confidence. Indices are down again today.

Not surprised. We are literally doing the exact same thing we did a decade ago - hold interest rates artificially low for a long period of time to incent people to spend money they can't afford to on things they can't afford to own. Then raise interest rates 50% so that many people can no longer afford the cars and homes and things they bought. We're doing the exact same thing again, so I would expect the exact same outcome.

 

[LibertyTurns]

The Fed seems to have moderated.
China negotiations appear to be firming up.
No wall so government workers are unpaid.

Are we going to get a V bottom recovery?

I do like making $$ swing trading but honestly I don’t have the time to do it all day every day.

My advice: Look both ways before you cross the street. You can get run over by a bus coming from either direction.

 

[LibertyTurns]

Talked to my financial advisors today and they don't see much way around the crash that the market is going to go through given the artificial sugar high it was on. Similar problem is starting to happen in the housing market. Everywhere you look there are bubbles forming. This was inevitable and was predicted last year after the huge tax cut for the rich went into place. All that money resulted in, among other things, companies engaging in stock buy backs. When the tariffs hit and some business sectors had tangible pain, the high value that was on paper in the markets was exposed. Now the problem is going to be where to park your money. Those who go liquid will lock in their losses. Those who stay in the markets are going to have a rough ride which, hopefully, will last less than six years if the Fed can get the pain over with quickly.

The handwriting is not on the wall yet, but sometimes you have to ask yourself why you’re paying people for advice. Below is a GT guy’s free analysis. It’s devoid of all the “feelings” I hear other people’s wealth managers/financial advisors talk about, just straight up facts and analysis. 5+ years of following this guy and my opinion it’s a great use of your spare time.

Please give us our wall so we can put the handwriting on it!

https://www.ccmmarketmodel.com/short-takes

 

[bravejason]

The handwriting is not on the wall yet, but sometimes you have to ask yourself why you’re paying people for advice. ...

Depends on what the advice is for. If I’m just looking for market performance and expectations, free analysis from a website may be adequate. For advice specific to my personal financial situation and goals, maybe I need a financial advisor.

 

[LibertyTurns]

Depends on what the advice is for. If I’m just looking for market performance and expectations, free analysis from a website may be adequate. For advice specific to my personal financial situation and goals, maybe I need a financial advisor.

Admittedly I have a heavy bias for self-education. There’s so many BS financial advisors out there either over trading in order to get large commissions or put heavy loads on funds to siphon a larger percentage off back to themselves & their companies. I read a lot of financial crap every day- those either predicting the market roaring to huge gains or teetering on the edge of collapse. I wish there was a grading system for these people. Make an outrageous prediction or a bunch of smaller predictions & they don’t pan out, you get a big fat F rating. You’re perpetually correct, you get a big A+. Put them on record & cast their vote publically. These guys buy & large hide their real track records, present themselves as experts, and bilk hundreds of thousand unsuspecting investors looking for legitimate advice out of hundreds of million dollars every year, bankrupt pension funds, etc.

 

[bravejason]

Admittedly I have a heavy bias for self-education. There’s so many BS financial advisors out there either over trading in order to get large commissions or put heavy loads on funds to siphon a larger percentage off back to themselves & their companies. I read a lot of financial crap every day- those either predicting the market roaring to huge gains or teetering on the edge of collapse. I wish there was a grading system for these people. Make an outrageous prediction or a bunch of smaller predictions & they don’t pan out, you get a big fat F rating. You’re perpetually correct, you get a big A+. Put them on record & cast their vote publically. These guys buy & large hide their real track records, present themselves as experts, and bilk hundreds of thousand unsuspecting investors looking for legitimate advice out of hundreds of million dollars every year, bankrupt pension funds, etc.

I have a plethora of mutual fund options in my 401k in which to invest. I don’t know how to pick the best one for me. Sure, I can try research them, but at the end of the day I’m basically stuck looking at historical returns because I don’t know how to weigh the relative importance of any other information I learn. Whether one fund is inherently a better fund or not for my financial goals I cannot say with any confidence. A financial advisor can advise on that because he’s got a career of experience with them.

 

[Northeast Stinger]

I have a plethora of mutual fund options in my 401k in which to invest. I don’t know how to pick the best one for me. Sure, I can try research them, but at the end of the day I’m basically stuck looking at historical returns because I don’t know how to weigh the relative importance of any other information I learn. Whether one fund is inherently a better fund or not for my financial goals I cannot say with any confidence. A financial advisor can advise on that because he’s got a career of experience with them.

Yep. I have pretty basic criteria for my certified financial planners. (1). They enable me to meet my goals. (2). They don't get paid unless they make money for me. (3). They make me a lot of money.

 

[Deleted member 2897]

I have a plethora of mutual fund options in my 401k in which to invest. I don’t know how to pick the best one for me. Sure, I can try research them, but at the end of the day I’m basically stuck looking at historical returns because I don’t know how to weigh the relative importance of any other information I learn. Whether one fund is inherently a better fund or not for my financial goals I cannot say with any confidence. A financial advisor can advise on that because he’s got a career of experience with them.

Its extremely hard for anybody to beat index funds. The management fee is so low, that 0.2% versus 1.0%+ can add up tremendously over time.

For example, if you put $100,000 into 2 different funds that both earned a 6% return over 15 years. The one with the 0.2% management fee would be worth $225,000 after those 15 years versus $196,000 for the other. You can view that as a $29,000 difference in cost...or said another way, the difference in return equaled 29% of the original investment!

 

[smathis30]

RIP to all of us who have invested in NovaVax lmao