|
|
Post by Chahta on Mar 17, 2022 3:31:43 GMT
Better recession than inflation.
|
|
|
|
Post by richardsok on Mar 17, 2022 14:14:58 GMT
Better recession than inflation. Never thought about that before, but must reluctantly agree. Booms & recessions; dynamic economies wax and wane. But the erosion of money is one of many features of a country's decadence, causing people to lose faith in their leadership class, their institutions and in each other. The man on the street, blasted by propaganda and political 'spin' (It's PUTIN'S fault!") -- feels robbed. He has a dozen notions -- most of them wrong -- but never quite understands. I always told my daughter and nephews, your grandparents were the greatest generation. We parents will be remembered as the selfish generation. |
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Mar 17, 2022 15:03:49 GMT
Based on my reading, recession is better than stagflation (1970s). Seems like those are our two options now. really bad scenario would be if we get both.
|
|
|
|
Post by FD1000 on Mar 17, 2022 20:34:48 GMT
The bond traders do not believe Powell that he could raise rates 6 more times this year LINKThe 5 to 10 year segment of the yield curve inverted today. Recession is highly likely. These (inverted yield, recession, raising rates) and others are all interesting, but as you know, my decisions are based only on current markets and charts ( link).  |
|
|
|
Post by steadyeddy on Mar 17, 2022 22:49:45 GMT
The bond traders do not believe Powell that he could raise rates 6 more times this year LINKThe 5 to 10 year segment of the yield curve inverted today. Recession is highly likely. These (inverted yield, recession, raising rates) and others are all interesting, but as you know, my decisions are based only on current markets and charts ( link).  , that makes sense for traders. For those that hold positions for longer periods of time, having an investment thesis is (in my view) beneficial. |
|
|
|
Post by FD1000 on Mar 17, 2022 23:49:26 GMT
These (inverted yield, recession, raising rates) and others are all interesting, but as you know, my decisions are based only on current markets and charts ( link). , that makes sense for traders. For those that hold positions for longer periods of time, having an investment thesis is (in my view) beneficial. The question of course, can you define accurately what is longer term and what is a trader? |
|
|
|
Post by FD1000 on Jun 11, 2022 12:40:32 GMT
Should I say, I told you so? I warned you over 3 months ago, again 2 months ago ( link). Similar to Q4/2018 and 03/2020...YTD is unique and I explained it. Remember..."It's the economy, stupid" is a phrase that was coined by James Carville in 1992 FD is saying "it's oil and gas, stupid". This is a huge component of our economy. You solved that first and everything will follow. Easy to do, but this thread isn't about that. The usual, I'm in cash at 99+% for months and only trading very short term. Very easy and comfortable to watch from the side. |
|
|
|
Post by mozart522 on Jun 11, 2022 13:17:39 GMT
I'm in mostly cash myself, but those who stay invested and follow a plan will eventually be rewarded. Pretty sure we will pass the previous highs and move higher at some point, just like we have always done. A 3% FED rate is very good news, I believe. That means bonds will pay good yields, and eventually, the FED will likely drop rates again and those bond NAVs will rise. A win win in either direction.
|
|
|
|
Post by FD1000 on Jun 13, 2022 14:30:23 GMT
I'm in mostly cash myself, but those who stay invested and follow a plan will eventually be rewarded. Pretty sure we will pass the previous highs and move higher at some point, just like we have always done. A 3% FED rate is very good news, I believe. That means bonds will pay good yields, and eventually, the FED will likely drop rates again and those bond NAVs will rise. A win win in either direction. True for KISS investors, but they can lose 20-30%. I prefer to sell high and buy low.  We finally see panic. Give me VIX>40 and several days of 2-3% loss and I will get interested. Stocks+bonds are down. Bitcoins ares down 13-15%, so much for a DIFFERENT category. OIL -1.1% PDPC(Commodity) -1.7 GLD -2.4% But UUP(Dollar) +0.8% |
|
|
|
Post by mozart522 on Jun 13, 2022 15:59:02 GMT
FD1000, They don't lose 20-30%. They may have Their NAV drop 20-30% temporarily. But even that is dependent on their asset allocation. Their choice as it is their money. I chose cash. But other choices are not "wrong". There is no right strategy, just one that is right for you (or me, or others)
|
|
|
|
Post by FD1000 on Jun 13, 2022 17:04:33 GMT
FD1000, They don't lose 20-30%. They may have Their NAV drop 20-30% temporarily. But even that is dependent on their asset allocation. Their choice as it is their money. I chose cash. But other choices are not "wrong". There is no right strategy, just one that is right for you (or me, or others) I never said it's wrong and recommended KISS for years for most. |
|
|
|
Post by fishingrod on Jun 13, 2022 17:32:53 GMT
" FD1000 , said "True for KISS investors, but they can lose 20-30%" and "I never said it's wrong..." ____________________________________________________________________________________________________________________________ FD1000 , No you never said it was wrong. But what you said is wrong. "They can lose 20-30%" They do not lose 20 to 30%. The portfolio only fluctuates on paper. No loss until one sells. That is part of buy and hold vs. trading in and out at different times. You know this, yet choose to use the wrong words. Words have meanings and if you aren't going to correct your own statements, others' probably will. |
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Jun 13, 2022 18:17:00 GMT
Exactly - paper losses are just that. Advocating that paper losses can and should be avoided is not a good message and could lead to big real losses. There is risk in investing. You need to be able to invest at a risk level that is comfortable. I don't care what anyone says, there is a reason why there are all those studies that boil down to that well worn chestnut - time in the market instead of timing the market. Again, I don't care what anyone says or claims. Timing doesn't work. The best of the best can't do it. And it is ludicrous to talk about losing in terms of paper losses. Just like a house - real asset values fluctuate.
|
|
|
|
Post by FD1000 on Jun 13, 2022 19:08:25 GMT
" FD1000 , said "True for KISS investors, but they can lose 20-30%" and "I never said it's wrong..." ____________________________________________________________________________________________________________________________ FD1000 , No you never said it was wrong. But what you said is wrong. "They can lose 20-30%" They do not lose 20 to 30%. The portfolio only fluctuates on paper. No loss until one sells. That is part of buy and hold vs. trading in and out at different times. You know this, yet choose to use the wrong words. Words have meanings and if you aren't going to correct your own statements, others' probably will. Well, paper loss is a real loss at a specific time. There is no way to be sure it will come back and at what speed. If you owned the SP500 during 2000-2010, you lost about 1% annually, that's a long time to hold, making nothing. See the ( proof). There are other example: if you held QQQ vs HDV YTD. QQQ lost money while HDV made money ( link). Remember, if investor A is out while investor B portfolio goes down 20% and then investor A buy 20% lower. Investor B had a real 20% loss compared to investor A. That reminds me of a co-worker that held all his money in Lucent and told me that until he doesn't sell, it's only a paper loss. Well, he lost all his money. I also remember ElLobo who invest in several leveraged ETF and one lost over 90%. A loss is a loss, you can recover from a loss, but at a certain time, you have a loss, regardless if you sold or not. So, how can we be sure?
Back to square one, in most cases, we look at risk-adjusted performance. All I know, I timed the last 3 meltdown (-20% in 2018, -34% in 2020 and -20% YTD), in just 4 year, perfectly. |
|
|
|
Post by Chahta on Jun 13, 2022 19:18:21 GMT
I would never buy something that I thought would lose 20% permanently. A temporary loss is part of investing.
|
|
|
|
Post by FD1000 on Jun 13, 2022 19:19:34 GMT
I would never buy something that I was sure would lose 20% permanently. A temporary loss is part of investing. There are many investors using different choices. |
|
|
|
Post by fishingrod on Jun 13, 2022 19:19:59 GMT
One could go back day after day with different scenarios that favor whatever side you choose. It is pointless.
It is much better to identify, but not necessarily compare in most cases.
Compare like funds. Don't compare people's portfolio. At least not to criticize, but maybe to give praise.
|
|
|
|
Post by FD1000 on Jun 13, 2022 19:23:30 GMT
One could go back day after day with different scenarios that favor whatever side you choose. It is pointless.
It is much better to identify, but not necessarily compare in most cases.
The best way that most research papers are looking for, is risk-adjusted returns. There is a point to that, just my opinion. If risk-adjusted doesn't matter, that is why several investors own CEFs and disregard it. Risk-adjusted works for many goals. Years ago I helped a friend with goals such as.."I want to make 4-5% annually and never lose more than 3%" this was when MM,CD paid very low. She went to several financial advisers, they could not help her, I did. That's the difference between generic goals and portfolios with unique situations. |
|
|
|
Post by Chahta on Jun 13, 2022 19:30:43 GMT
"That reminds me of a co-worker that held all his money in Lucent"
That person was a fool not an investor. Not because of the particular stock but because he owned too much in 1 stock.
|
|
|
|
Post by FD1000 on Jun 13, 2022 19:50:42 GMT
Chahta, the Lucent guy is an extreme case. These boards are packed with unique investors. An easy example is someone who held ATT over 10 years and lag the stupid SP500 by so much. They will claim, it's only a paper loss. I have heard the paper loss claim for almost 15 years on different forums.
The most amazing fact is, that every trader, off the board, I talk with, sold everything correctly this year and in 03/2020. Each one of us have been doing their own analysis.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Jun 13, 2022 20:21:09 GMT
Exactly - paper losses are just that. Advocating that paper losses can and should be avoided is not a good message and could lead to big real losses. There is risk in investing. You need to be able to invest at a risk level that is comfortable. I don't care what anyone says, there is a reason why there are all those studies that boil down to that well worn chestnut - time in the market instead of timing the market. Again, I don't care what anyone says or claims. Timing doesn't work. The best of the best can't do it. And it is ludicrous to talk about losing in terms of paper losses. Just like a house - real asset values fluctuate. I am curious, is it based on experience or is it one of wall street myths (marketing tactic)? Examples of market myths/marketing: 1. We underperform during bull markets but do well over full cycle. (Typical Deep Value investors) 2. Longer term you would be fine. (Yeah sure. How many life times.) 3. This asset class has lagged for 5-10-15 years so it should do well now (EM, Japan) 4. Equity markets are efficient and they incorporate all known information right away. (Equity markets usually lag bond markets sometime by many months as in 2008) 5. Graham said value investing is awesome. (he made most of his money in growth stock. Go figure.) |
|
|
|
Post by FD1000 on Jun 13, 2022 20:32:11 GMT
Exactly - paper losses are just that. Advocating that paper losses can and should be avoided is not a good message and could lead to big real losses. There is risk in investing. You need to be able to invest at a risk level that is comfortable. I don't care what anyone says, there is a reason why there are all those studies that boil down to that well worn chestnut - time in the market instead of timing the market. Again, I don't care what anyone says or claims. Timing doesn't work. The best of the best can't do it. And it is ludicrous to talk about losing in terms of paper losses. Just like a house - real asset values fluctuate. I am curious, is it based on experience or is it one of wall street myths (marketing tactic)? Examples of market myths/marketing: 1. We underperform during bull markets but do well over full cycle. (Typical Deep Value investors) 2. Longer term you would be fine. (Yeah sure. How many life times.) 3. This asset class has lagged for 5-10-15 years so it should do well now (EM, Japan) 4. Equity markets are efficient and they incorporate all known information right away. (Equity markets usually lag bond markets sometime by many months as in 2008) 7. Graham said value investing is awesome. (he made most of his money in growth stock. Go figure.) +1. Nice list. This is why I documented several "brilliant experts" ( here). I figured over 20 years ago, that if I just invest in great risk/reward funds with longer term history but also ST(months) history + some flexibility, I can't go wrong too long. It proved itself. It's a mechanical exercise. |
|
|
|
Post by FD1000 on Jun 13, 2022 20:41:28 GMT
( link). BlackRock lists 3 reasons not to buy the dip...
1) Increasing downside risks for profit margins
2) Equities aren't much cheaper
3) Growing risk the Fed tightens too muchFD: where was BlackRock 3-4 months ago? |
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Jun 13, 2022 20:57:08 GMT
Exactly - paper losses are just that. Advocating that paper losses can and should be avoided is not a good message and could lead to big real losses. There is risk in investing. You need to be able to invest at a risk level that is comfortable. I don't care what anyone says, there is a reason why there are all those studies that boil down to that well worn chestnut - time in the market instead of timing the market. Again, I don't care what anyone says or claims. Timing doesn't work. The best of the best can't do it. And it is ludicrous to talk about losing in terms of paper losses. Just like a house - real asset values fluctuate. I am curious, is it based on experience or is it one of wall street myths (marketing tactic)? Examples of market myths/marketing: 1. We underperform during bull markets but do well over full cycle. (Typical Deep Value investors) 2. Longer term you would be fine. (Yeah sure. How many life times.) 3. This asset class has lagged for 5-10-15 years so it should do well now (EM, Japan) 4. Equity markets are efficient and they incorporate all known information right away. (Equity markets usually lag bond markets sometime by many months as in 2008) 5. Graham said value investing is awesome. (he made most of his money in growth stock. Go figure.) Waffle - are you saying timing is better than time in the market? Not sure why the focus on value investing in your items? Time vs timing is based on diversification among and within asset classes, I believe? You really messed up if you went in whole hog in EM or Japan - or if you invest in them based on some odd idea that now is the time. Better have other reasons - like growing middle class, economic cycles, concentration of commodities, percent of world gdp, etc.... I have heard that bond markets are less efficient and why they are easier to exploit inefficiencies. Don't know, but just state to show everyone says all kind of stuff - none of which is consistent. I have never read a thing about Graham, so don't know or follow what he says - relevance? Longer term - how many lifetimes - not sure what this means. I am 60 have been investing seriously for 15 years - so far so good. I didn't underperform in the bull market or this market so far. Again, not sure what your point is? Better to time than time in the market? As I said, I don't care who claims that, I don't believe it and good luck to them. Who are the great timers we can confirm? Last I checked, we are all pretty average here. Talk is cheap. Excuses are worse. Not sure this satisfies your curiosity, but the thought of trying to time the market would cause me to puke. |
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Jun 13, 2022 21:06:45 GMT
I don't know what "It" in the Subject refers to, but this Market correction/crash makes sense given the ridiculous prices of stocks, crypto, NFTs, metaverse, and stuff.
"It" (once again) is tough to be a buy and hold investor now if you and the spouse don't have pensions or fixed income annuities.
|
|
|
|
Post by mozart522 on Jun 13, 2022 22:44:12 GMT
"There are other example: if you held QQQ vs HDV YTD. QQQ lost money while HDV made money (link).
Remember, if investor A is out while investor B portfolio goes down 20% and then investor A buy 20% lower. Investor B had a real 20% loss compared to investor A."
"And if my Aunt had gonads she'd be my Uncle"...ElLobo
The entire investing community understands the difference between realized and unrealized losses and gains. Even if one sells QQQ when it is down 20% YTD, it isn't a real loss unless the sale price, including all dividends, is less than the purchase price. Someone who bought QQQ several years ago doesn't even have a paper loss right now.
Continually pointing out that your fellow posters are having their portfolio values decline right now is rather odd and kind of mean.
|
|
|
|
Post by Norbert on Jun 14, 2022 5:46:28 GMT
Exactly - paper losses are just that. Advocating that paper losses can and should be avoided is not a good message and could lead to big real losses. There is risk in investing. You need to be able to invest at a risk level that is comfortable. I don't care what anyone says, there is a reason why there are all those studies that boil down to that well worn chestnut - time in the market instead of timing the market. Again, I don't care what anyone says or claims. Timing doesn't work. The best of the best can't do it. And it is ludicrous to talk about losing in terms of paper losses. Just like a house - real asset values fluctuate. @slooow I don't know. It was you who accurately predicted inflation while most other posters scoffed at the notion. "Time in market" vs. "timing the market" is a meaningless question, though it sounds clever. If you accept that asset prices have been soaring largely thanks to very easy monetary and fiscal policy, then surely the prospect of inflation would raise concerns for a cautious investor, as the Fed would be forced to take away the proverbial punch bowl. And then the Biden administration signed an aggressive, insulting Memorandum of understanding with Ukraine in November 2021. That brought us closer to conflict with Russia. I concluded that there's an imbecile in the WH. So, many of us saw reasons to dial down risk exposure in 2022. As the technicals started to weaken, I decided it was time to take serious action. If that's "market timing", so be it. For me it was simple logic. I remember mentioning the atmosphere of "complacency" to you many months ago. You disagreed. I'm sure you'll be fine over time with your disciplined, patient focus on value and quality. But I disagree that's it difficult to sometimes dial risk exposure up or down based on market analysis. The issues had been on the table for months, including your prescient inflation call. N. |
|
|
|
Post by retiredat48 on Jun 14, 2022 6:20:33 GMT
@slooow ,Sorry Sara, but there are a couple posters in the Timer’s Hall of Fame. Here’s from a poster on Morningstar:
Post #3156028
"The Market Timers Hall of Fame is an empty room." -- Jane Bryant Quinn.
While this was accurate at the time, it is now obsolete with the recent induction of Norbert, Capecod and R48. More will join them in the coming months.
Jim (JimD2)
——————————————
R48
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Jun 14, 2022 10:17:54 GMT
Timing the market vs time in the market.
Fine line between the first and making an allocation decision.
Everyone here has different timelines, risk tolerance, income needs.
If I were older, didn't work, had less guaranteed income, I would allocate differently. But I would be in the market.
R48 - the Hall of Fame - is that tongue in cheek? Making some money on a trade isn't really what is called timing the market in my view. Timing is pulling one's principal out and in based on what the investor thinks of market conditions. I don't believe anyone does this well consistently. Does it put them in the poor house? Not saying that, but is it going to generate the best return over the long run? Only if your perfect.
Norbert - going to cash due to the writing on the wall isn't what I'm talking about - particularly for a retiree. My guess is you don't think you can jump in and out and come out so much better than the market average. You are protecting what you have and accepted that you can lose out on potential future upside...or downside.
So - say I have 1 million dollars. It became 1.4M as of Jan 1, 2022. I sell Jan 1. Pay my taxes. Now that 1.4M if left in the market would be 1.12M using round numbers. Let's say 1M was in taxable - so I paid $150K (not sure if I would pay 20%). So if in cash I have 1.25M. A 130K difference. Compounding is gone, buying low is gone. Now I need to make sure I get back in at the right time in a time of economic uncertainty that could boil and roil for years....or months...or days. This is why I say I would throw up from the anxiety. That money is my life. Hats off to those who do it consistently.
Edit - if I got my numbers wrong - apologies - it's early.
|
|
|
|
Post by Chahta on Jun 14, 2022 11:05:55 GMT
My take: It’s basically investors vs traders. Investors buy and strategically allocate and at times reallocate to different assets. Traders use shorter term (1 year or less) time frames for buying/selling assets.
I would surmise there are no financial advisors that advocate trading because 99.9% of us can’t. I do acknowledge there are successful traders.
Most portfolios are to provide money to use at some point. What works is a personal choice for each.
|
|
