Bear Market?
I've pretty much stuck with VTI and SPY over time for core holdings and done fine. Both are straight index. (And index funds outperform the great majority of managed funds over time.) Note that I'm talking long term here. Money needed within 3-5 years shouldn't be in equities. Too uncertain.
conandrob240 said:
Well, I haven't seen 7% per year growth and I most certainly am not looking for home runs. I pick the basic, well- rated retirement type funds. I'd be thrilled with 7% per year.
This too shall pass. My sense of this situation is that it's a short term blip. The economy is booming and will continue to get stronger despite China and the negative impact of low priced oil.
If Janet Yellen wakes up tomorrow and raises interest rates by 1/4 of a point, the market will regain a thousand points.
And she should.
sbenois said:
This too shall pass. My sense of this situation is that it's a short term blip. The economy is booming and will continue to get stronger despite China and the negative impact of low priced oil.
If Janet Yellen wakes up tomorrow and raises interest rates by 1/4 of a point, the market will regain a thousand points.
And she should.
Totally serious question. By what measure(s) is the economy booming?
These credit reflations, while fun for a while, always require additional credit to keep going. When it stops, things tend to get a bit dicey.
China had the largest slowdown in factory orders in (I think) seven years. That indicates weak demand. Also US firms are selling less, which increases storage costs and leads to layoffs. The stock market is an indicator of where the economy will be in the near future, not where it is now.
breal said:
Why is this happening?
It's been happening for months. Although the major indices held-up until last week, many of the underlying stocks were acting terribly. The breadth of the market, i.e., up vs. down, has been terrible.
Stocks were just plain overvalued. This was fueled by the Fed's QE and zero-interest policy, and the mindset that there was no other place to put your money. The uncertainty about when the Fed. was going to tighten has been a cloud over the market for several months. (sbenois is right - Yellen should raise the interest rate and get it out of the way.) The strong US dollar has hurt multi-national companies. The market is now focused on how bad the slowdown in China is, since most of the multi-national companies derive a large part of their income from China. And as much as we love low gasoline prices at the pump, and as much we hate the oil companies, the market has pretty much been mirroring the action in the crude oil market, and the major companies are in a bear market.
Why should Yellen raise rates now? I mean we've had ZIRP for what? 7 Years? Now's the time to raise them? What if she does and the markets don't like it? Does she lower them again? What will that do to the Fed's credibility? As an aside, if someone would explain to me why they have any credibility I'd appreciate it.
People on this thread were saying that the problem is that everyone focuses on the down days. The real problem is that all this QE and ZIRP makes it extraordinarily difficult for the little guys and gals to save. If they do, their money rots away earning no interest as the price of most things they need increase.
Save for a house? For college? Retirement? The things people save for will increase as their $$ just sits there. So, they are then forced to enter into the "Financial Markets". The vast majority of these people are ill equipped for this exercise. Thus, most will get fleeced by guys with PHD's and High Frequency Trading Systems.
And people wonder why there is wealth inequality.
Tyler - I agree. I'm a bond buyer (I'm of that age.) I've been waiting for interest rates to rise for years now.
It seems my perception is off. Past two years rate of return totaled 24%. I guess that's really good but when you lose 2% in a day or 5% in a day a few years ago, it seems like it evens out more than it should. It's scary eapecially for people close to a milestone like college or retirement
The pundits on the radio yesterday were saying that this correction might fuel a reason for the Federal Reserve NOT to raise rates the next time. Which is it?
This is the way equities work. You need to be in them for the long haul. Over time they always go up, but not smoothly, and the corrections are usually gut-wrenching.
I'm still working and contributing to 401k and stock plans. I feel great about my balances when the market is up, and feel good about my contributions when the market is down. Always looking on the bright side of life..
marcsiry said:
I'm still working and contributing to 401k and stock plans. I feel great about my balances when the market is up, and feel good about my contributions when the market is down. Always looking on the bright side of life..
That's a very good way of expressing it. People who are looking at many years before retirement and are contributing to 401k's should welcome stock market corrections.
A couple weeks ago I was contemplating adjusting my equities:bonds allocation because the equity portion was a bit higher than I wanted. Thanks to the market correction, now I don't have to bother. I guess that's looking at the bright side... 
We were babysitting for our 6 year-old grandson all of last week. By the time that Mrs. C brought him back to our house in the morning, the market was open and I had CNBC on. When the heat map of the S&P 500 was put on the screen, it was all red. I told him that we didn't like red, and we liked green. Too bad he's not here today, so that he could see that sometimes it is green.
TylerDurden said:
People on this thread were saying that the problem is that everyone focuses on the down days. The real problem is that all this QE and ZIRP makes it extraordinarily difficult for the little guys and gals to save. If they do, their money rots away earning no interest as the price of most things they need increase.
Save for a house? For college? Retirement? The things people save for will increase as their $$ just sits there. So, they are then forced to enter into the "Financial Markets". The vast majority of these people are ill equipped for this exercise. Thus, most will get fleeced by guys with PHD's and High Frequency Trading Systems.
And people wonder why there is wealth inequality.
Senior citizens who had accumulated substantial savings, and were planning to live on the interest after retirement, have taken a massive hit. This is what has turned my father into a single-issue voter, and he's saying his vote is going to Trump because Trump is the only candidate on either side who has mentioned this as a national problem... (BTW, I can't find any sources that actually quote Trump talking about this; if anyone else can find it, please share.)
With respect to this market, I am reminded of Track 9 on Born in the U.S.A., just replace "I'm" with "It's'.
bluepool said:
TylerDurden said:Senior citizens who had accumulated substantial savings, and were planning to live on the interest after retirement, have taken a massive hit. This is what has turned my father into a single-issue voter, and he's saying his vote is going to Trump because Trump is the only candidate on either side who has mentioned this as a national problem... (BTW, I can't find any sources that actually quote Trump talking about this; if anyone else can find it, please share.)
People on this thread were saying that the problem is that everyone focuses on the down days. The real problem is that all this QE and ZIRP makes it extraordinarily difficult for the little guys and gals to save. If they do, their money rots away earning no interest as the price of most things they need increase.
Save for a house? For college? Retirement? The things people save for will increase as their $$ just sits there. So, they are then forced to enter into the "Financial Markets". The vast majority of these people are ill equipped for this exercise. Thus, most will get fleeced by guys with PHD's and High Frequency Trading Systems.
And people wonder why there is wealth inequality.
As you approach retirement, good advisors will suggest a re-allotment of investments. It is basically foolish to NOT invest in equities when you are young and have a longer horizon, but there are many ways to do this. It doesn't have to mean investing in individual stocks although that is what higher-wealth investors (who can afford to diversify across a collection of stocks) generally do.
OTOH, it is foolish to have EVERYTHING in equities when you are older and near retirement. At that time, depending on the amounts involved, an increasing portion should be moved to more stable investments. It is similary foolish to have college funds heavy in equities when getting within a few years of college. But I think you will find that nearly all of the 1%-ers (and most other successful investors) have used equities as a major portion of their investments over the years and they don't go "in and out" trying to time the market. They buy for the long haul and "tweak" as markets and their personal situations evolve.
Right now or soon is the worst time to sell and likely a great time to buy if you have funds waiting to be invested.
Well that was quite a turn around as relief rally fizzled and turned negative.
cramer said:
LL - You can take a look. It's safe. Carpe diem.
Nah. Not gonna look more never ever. Ugh!!!
"> Very big disappointment with weak jobs report this morning. Caught everyone by surprise. Economy might be in worse shape than it seems. Gives some credibility to Fed. decision not to raise rates in Sept.
Whereas previously bad news was good news for the markets, since this meant Fed. wouldn't raise rates, bad news is being regarded as bad news, since concern now is US is experiencing economic slowdown. Stock futures had big reversal on release of jobs numbers.
eta - 10 yr. treasury 1.94%.
after the retest of the mid-high 1800s you have the low 1700s after that. could go lower than that with a fed rate hike, although i don;t see that actually happening.
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Well, I haven't seen 7% per year growth and I most certainly am not looking for home runs. I pick the basic, well- rated retirement type funds. I'd be thrilled with 7% per year.