How has the stock market been treating you?

[manaboutown]

Throughout May and now into June after receiving a large chunk of change from the sale of a commercial real estate property at the end of March I have been dipping my toe into the water so to speak, buying a little of this here and a smidgeon of that there. I am in no rush to dive in. On one hand if the market turns up I do not want to be left behind; on the other hand if it dives further I don't want to have placed too much in it. Rising interest rates and a recession seem to be on the near horizon but Mr. Market appears to be oblivious.

Anyone have any thoughts about taking action on the buy or sell side at this time and if so on which sectors?

[Stu from NYC]

Throughout May and now into June after receiving a large chunk of change from the sale of a commercial real estate property at the end of March I have been dipping my toe into the water so to speak, buying a little of this here and a smidgeon of that there. I am in no rush to dive in. On one hand if the market turns up I do not want to be left behind; on the other hand if it dives further I don't want to have placed too much in it. Rising interest rates and a recession seem to be on the near horizon but Mr. Market appears to be oblivious.

Anyone have any thoughts about taking action on the buy or sell side at this time and if so on which sectors?

I do believe that all info available is factored into the stock market pricing and kind of think the market is near or close to a bottom so started to invest into mutual funds that have done well for me over the years.

[Chi-Town]

Just one word: Plastics

[rjm1cc]

Timing the market is very very hard. So figure out how much you want to put in the market. Not sure if I recall correctly but I think some studies say put in all in now as opposed to waiting and see what happens. I think I would dollar cost average into the market over say the next 6 to 9 months. That way if it goes down you won't feel so bad. l But assuming you are a long term investor you should be up in 10 years no matter how you got in the market.

[tophcfa]

As Norm from Cheers once said, “It’s a dog eat dog world out there, and I’m wearing milk bone underwear”.

[Boomer]

Throughout May and now into June after receiving a large chunk of change from the sale of a commercial real estate property at the end of March I have been dipping my toe into the water so to speak, buying a little of this here and a smidgeon of that there. I am in no rush to dive in. On one hand if the market turns up I do not want to be left behind; on the other hand if it dives further I don't want to have placed too much in it. Rising interest rates and a recession seem to be on the near horizon but Mr. Market appears to be oblivious.

Anyone have any thoughts about taking action on the buy or sell side at this time and if so on which sectors?


As a follow-up to the OP’s June 7 post……..

Well, the market certainly is not oblivious this morning.

It’s days like this when the two rules of investing that I have used for years are coming through loud and clear:

1. Know thyself
2. Know what you buy……..
And, also……Rule # 3: Always, always, always maintain a moat of cash to protect stocks — even if the cash is paying nada, zero, zip, zilch. The cost of sleep is worth it.

I think some serious buying opportunities will be coming soon. It could be a good time for investors to study up on the lists of Dividend Aristocrats and Dividend Kings and see if any of them look interesting and then delve into their div safety — FCF, payout ratio, pe, beta, etc. And then decide whether to do a little shopping.

Even those stalwart, boring stocks can be booted off the list though.

I will say that I think this is going to be with us for a while.

The Fed meeting is looming over the market this week. It is rumored to be a big increase. And yet, CD rates will not get real any time soon, if ever.

I have seen a lot of markets. This one is in the shadow of two Black Swan events — Covid and the war. Add inflation to that and a bat-sheet crazy housing market — and a rocky ride this will be.

This is when I am especially happy that we do not have a financial advisor — who will get paid whether the clients do or not. I prefer to make my own decisions — and my own mistakes. But I understand that others have other approaches and prefer to turn over the responsibility. Not judging…..I realize they are just following my Rule #1.

Boomer

[Stu from NYC]

As a follow-up to the OP’s June 7 post……..

Well, the market certainly is not oblivious this morning.

It’s days like this when the two rules of investing that I have used for years are coming through loud and clear:

1. Know thyself
2. Know what you buy……..
And, also……Rule # 3: Always, always, always maintain a moat of cash to protect stocks — even if the cash is paying nada, zero, zip, zilch. The cost of sleep is worth it.

I think some serious buying opportunities will be coming soon. It could be a good time for investors to study up on the lists of Dividend Aristocrats and Dividend Kings and see if any of them look interesting and then delve into their div safety — FCF, payout ratio, pe, beta, etc. And then decide whether to do a little shopping.

Even those stalwart, boring stocks can be booted off the list though.

I will say that I think this is going to be with us for a while.

The Fed meeting is looming over the market this week. It is rumored to be a big increase. And yet, CD rates will not get real any time soon, if ever.

I have seen a lot of markets. This one is in the shadow of two Black Swan events — Covid and the war. Add inflation to that and a bat-sheet crazy housing market — and a rocky ride this will be.

This is when I am especially happy that we do not have a financial advisor — who will get paid whether the clients do or not. I prefer to make my own decisions — and my own mistakes. But I understand that others have other approaches and prefer to turn over the responsibility. Not judging…..I realize they are just following my Rule #1.

Boomer

Starting to more or less dollar average into the market now. Think info is already factored into price to a large extent.

[Babubhat]

Let technical analysis guide you. Like Trendspider. No emotion involved. All indicators point to further decline. The big short has bet 20 percent of his portfolio against Apple and been printing money.

Check this site out.

https://twitter.com/Jake__Wujastyk

[Tvflguy]

Grrrrrrr. Soon the Dow will be under 30k. There is no good stable comforting news to strengthen the markets. Downdowndown. And appears simply nothing from DC is in the wings to limit the drops. Grrrrr.

[retiredguy123]

Grrrrrrr. Soon the Dow will be under 30k. There is no good stable comforting news to strengthen the markets. Downdowndown. And appears simply nothing from DC is in the wings to limit the drops. Grrrrr.
That's the problem. Too many people expect the Government to control the stock market, interest rates, gas prices, and everything else. I would rather have the Government leave things to the free market.

[manaboutown]

Over the last two months I have slowly put about 20% of my after tax sale proceeds into the market in what I believe to be good solid mostly dividend paying stocks. I agree with the prior posts seeing this market as continuing to soften and possibly drop significantly for several reasons.

[fgaba1949]

COULDNT BE HAPPIER with fossil fuel stocks like devon and playing natural gas futures

[Babubhat]

Oil stocks getting hammered today. Nothing is safe in this environment. Little liquidity

[Stu from NYC]

That's the problem. Too many people expect the Government to control the stock market, interest rates, gas prices, and everything else. I would rather have the Government leave things to the free market.

Very true. Not to mention I am from the govt and here to help.

Run Forrest Run.

[tophcfa]

Not very well, but better than the Crypto market.

[Boomer]

COULDNT BE HAPPIER with fossil fuel stocks like devon and playing natural gas futures


DVN is my newest holding, bought in earlier this year. It’s the first stock I have added in a very long time.

Bought it for the sector and for the dividend.

Sure got pounded yesterday. But so did everything else.

I’ll hold.

Boomer

[Boomer]

Just one word: Plastics



Darn it, Chi. You’re giving me flashbacks. :)

Back in the 1990s when I was a bubble-dancer — dancing with that dotcom bubble — thinking I knew oh so very much — thinking I could see the future — thinking I could not lose………

“Plastics” was the word I whispered to Mr. Boomer, as I smiled and showed him those returns………

(He still loves me though.)

Boomer

[PugMom]

:1rotfl::1rotfl::clap2:Just one word: Plastics

[Babubhat]

COULDNT BE HAPPIER with fossil fuel stocks like devon and playing natural gas futures

Nat gas plummet 16 percent today

[DAVES]

Just one word: Plastics

Mrs Robinson is still young in the movie. Real life probably 6 feet under.

[Boomer]

The fat lady has not sung……….

In fact, I can’t even see her limo approaching the opera house — yet.

Boomer

[DAVES]

We are all very uncomfortable. Few understand MATH. The S&P has lost roughly 16% from it's peak. To get back to what you had it needs to rise 19%. 10,000-16%=8400. 8400 plus 19% is 9996. My brokerage acct prevents my lying to myself. My 15 year history has been up every year EXCEPT THIS ONE.

Holdings, what you paid for them does not matter the question is or should be would you buy them at today's price.

I find it interesting that Buffet listed as the greatest stock picker is 86 and says he is buying stocks for long term. Buffet has also stated he does not often beat the s&p.
I am not in Buffet's league. I am not beating the s&p so I am not batting even average.

So many wise sayings. Hind sight is always 20-20 but foresight is far more profitable.
No one is right all the time. To make money you just need to be right more times than you are wrong.

Back to Buffet. I recall him saying I lost 44 million on that trade it was a mistake. Was I to loose 44 million on a trade there would be a lot of people wondering how they were so stupid as to LEND me that much money.

[Stu from NYC]

We are all very uncomfortable. Few understand MATH. The S&P has lost roughly 16% from it's peak. To get back to what you had it needs to rise 19%. 10,000-16%=8400. 8400 plus 19% is 9996. My brokerage acct prevents my lying to myself. My 15 year history has been up every year EXCEPT THIS ONE.

Holdings, what you paid for them does not matter the question is or should be would you buy them at today's price.

I find it interesting that Buffet listed as the greatest stock picker is 86 and says he is buying stocks for long term. Buffet has also stated he does not often beat the s&p.
I am not in Buffet's league. I am not beating the s&p so I am not batting even average.

So many wise sayings. Hind sight is always 20-20 but foresight is far more profitable.
No one is right all the time. To make money you just need to be right more times than you are wrong.

Back to Buffet. I recall him saying I lost 44 million on that trade it was a mistake. Was I to loose 44 million on a trade there would be a lot of people wondering how they were so stupid as to LEND me that much money.

If I can double our money every 6-8 years I am a very happy camper. All you need to do is refer to the rule of 72 to see what rate of return you need on average to double your money in a particular time frame.

[manaboutown]

I find it interesting that Buffet listed as the greatest stock picker is 86 and says he is buying stocks for long term. Buffet has also stated he does not often beat the s&p.
I am not in Buffet's league. I am not beating the s&p so I am not batting even average.


"From 1965 through the end of 2021, Berkshire shares have generated a compound annual return of 20.1% against 10.5% for the S&P 500. Most of Berkshire's outperformance versus the index came earlier in Buffett's tenure as Berkshire's CEO when Buffett, now 91, racked up huge gains in the stock market.Apr 29, 2022"

From: Berkshire Hathaway Stock Could Drop 99% and Buffett Would Still Beat the Stock Market | Barron's (https://www.barrons.com/articles/warren-buffett-berkshire-hathaway-stock-sp500-51651154636)

[manaboutown]

If I can double our money every 6-8 years I am a very happy camper. All you need to do is refer to the rule of 72 to see what rate of return you need on average to double your money in a particular time frame.

"According to Standard and Poor's, the average annualized return of the S&P index, which later became the S&P 500, from 1926 to 2020 was 10%.  At 10%, you could double your initial investment every seven years (72 divided by 10)."

From: How To Double Your Money Every 6 Years (https://www.investopedia.com/financial-edge/0711/how-to-double-your-money-every-6-years.aspx)

[Stu from NYC]

"According to Standard and Poor's, the average annualized return of the S&P index, which later became the S&P 500, from 1926 to 2020 was 10%.  At 10%, you could double your initial investment every seven years (72 divided by 10)."

From: How To Double Your Money Every 6 Years (https://www.investopedia.com/financial-edge/0711/how-to-double-your-money-every-6-years.aspx)

There have been some periods where this did not happen but long term it can be done.

[Blueblaze]

I wouldn't touch this market with YOUR ten foot pole. Does this seem like a minor downturn to anyone? I've lived through three market crashes, and never have I seen an economy so bad that we had empty shelves and moms driving to Mexico for baby formula.

The three crashes I've lived through hit 50% before they turned around. The worst in history was 90%. We aren't even getting started.

Yes, I'm in cash, living it up on my 0.01% money market returns. Meanwhile, mortgage rates are over 5%, T-bills are 3%, and still we wait for the nation's crooked MM fund managers to notice. SSDD. Life in the Banana Republic of America.

[Babubhat]

Past performance is not a predictor of future performance. Market now ruled by algorithms and momentum. It doesn’t care what anyone thinks. Use technical analysis like they do,

Six month treasury bills paying 2 percent

[manaboutown]

Well, I have now mostly "invested" the sales proceeds I finally received in April. I took my time putting about 25% of it into blue chip stocks and ETFs. Most I kept for a while in old fashioned saving and brokerage bank accounts but since they pay so little I have been moving it into T-bills. Most are 6 month and will reward me with about 3% if I keep them until early 2023. I will definitely keep what I need for income taxes April 15, 2023 in T-bills.

My conundrum now is are we in a bear market rally?

[PugMom]

idk, it's so hard to guess what will happen over the next 2 years. i've been staying put for now, waiting to see what crisis happens next, lol. i've left it in the advisors' hands

[Stu from NYC]

Well, I have now mostly "invested" the sales proceeds I finally received in April. I took my time putting about 25% of it into blue chip stocks and ETFs. Most I kept for a while in old fashioned saving and brokerage bank accounts but since they pay so little I have been moving it into T-bills. Most are 6 month and will reward me with about 3% if I keep them until early 2023. I will definitely keep what I need for income taxes April 15, 2023 in T-bills.

My conundrum now is are we in a bear market rally?

I believe all info is factored into current market pricing. As a result I think that the odds of a recession are in current pricing.

From my economic and grad school days always taught that 2 negative GNP quarters in a row indicate we are in a recession and believe we are in one now.

Having said this and with market increase in July thinking that I will shortly invest additional funds into the mutual funds I favor

[coralway]

Been in AAPL since June 1986, and added more recently. Expecting it to go to about $200 before they do another 3;1 split. Market is doing ok, but we have to stop doing these unpaid for multi trillion dollar tax cuts for the top 1%.

We are on the right path now.

[MrFlorida]

Wall Street Roulette

[RPDaly]

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[RPDaly]

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[Plinker]

Absolutely in a bear market rally. Not uncommon. Happened during the Tech Bubble and 2008 Financial Collapse bear markets multiple times. Might even be labeled a dead cat bounce

I agree with those that suggest we are in a bear-market rally.
Our government has flooded our economy with trillions of dollars and has just added another $700+ billion. To label the most recent helicopter money as the “Inflation Reduction Act “ is pure folly.
Households in the lower income quartile and those on a fixed income (some retirees) are always the hardest hit when inflation spikes. Especially, if it runs red-hot at 8-9%. The next quartile of lower middle class to middle class households have or are on the verge of depleting any savings they may have been able to accumulate during the pandemic. At some point, the upper middle class will follow suit. Many potential homebuyers are finding it difficult, if not impossible, to purchase a new home as the interest portion of their new proposed mortgage has doubled. The housing industry has recently declared that they are in a recession. Walmart disclosed that their wealthier clientele are now price-shopping.
Ultimately, inflation will become the tail that is wagging the dog (equities) as more and more income will be devoted to essentials. Yes, incomes are up but it can’t keep up with inflation running at at 40-year high. I don’t believe we have tested the lows as the Fed has no choice but to continue to raise rates substantially to tame the inflation beast. Unfortunately, this often leads to a recession and a hard landing.
IMO, defense is the game to play as opposed to chasing a bear-market rally.
One caveat: I could be way off base and completely wrong. Time will tell.

[Stu from NYC]

Ask 10 experts their opinion and you will get 11 opinions.

[CoachKandSportsguy]

Ask 10 experts their opinion and you will get 11 opinions.

The market is torn between slowly declining product inflation and continuing to incline service inflation. Product declining inflation is due to over deliveries of pandemic related goods to retailers. Service inflation is stickier due to rent equivalent / rent increases as a result of house price increases and slum lords not getting rent payments for about a year, yet utilities and taxes still payable, so they aren't going to let tenants get away with that again. . along with labor shortages pushing up wages.

From that tug of war, the risk is for continued increase in interest rates uncertainty from the FED. Only the very optimistic think that the FED is completely done. Remember that as interest rates rise government debt interest payments starts to crowd out investment and govt operating needs.

Secondarily, the geo political environment is very uncertain, with China practicing war games with Russia, Putin waiting to squeeze europe by shutting off gas during the winter, if he remains alive that long, and China wanting to subjugate Taiwan by one thousand cuts, which could cause the semi conductor goods delivery to collapse

I am still long XLU, utilities, long bonds with occasional hedging using TLT puts, long some hospital reits in the retirement account, as well as short some ****cos in the taxable account, Short MTCH, RUN, and AN.

most all positions are up except my long term TSLA puts, waiting on the outcome of the delaware chancery court, and the NTSA investigations to all the deaths. SpaceX lost its starlink govt funding, so doubtful that continues. my shorts are slightly underwater in this rally.

So no, not all information is currently priced into the market, from the uncertainties listed above. That's a theory which can't be proven true or false, so it remains along with efficient market hypothesis which depends upon that theory in the preeminent U of Chicago dogma.

but YMMV

everyone should have bought bbby in late june at below $5. . . .
better than a lottery ticket in an IRA

finance troglodyte

[Viperguy]

Use the same advisor your Congressman uses.

[Caymus]

Glad I don't own Bed Bath and Beyond. They recently took a beating, and I don't see how they can compete against Target and Amazon. The CFO probably couldn't handle the stress and recently committed suicide.

Bed Bath & Beyond exec Gustavo Arnal ID'd as NYC 'Jenga Building' jumper: source (https://nypost.com/2022/09/04/bed-bath-beyond-exec-gustavo-arnal-idd-as-nyc-jenga-building-jumper-source/)

[CoachKandSportsguy]

BBBY has has a negative return on equity for over 10 years, poor business model and management failure with share buybacks, etc. . poor allocation of financial resources.

The aren't the only ones, there is class of financial zombies, such that operating cash flow is negative and therefore requires continual additional equity funding. . . CVNA is a picture perfect example, and I started shorting it in the high 300's and continued in and out and stopped when it hit $20, look at stocks with >100 P/Es in the past year or two and very high P/R ratios or start with negative cash flows, and you will see lots of spectacular short opportunities. I personally am short a zombie with questionable accounting (RUN), a very high multiple stock (MTCH), and a consumer interest rate sensitive company, inventory constrained company, (AN).

BYND is another I tried to short but there was no float available. They are all around, and one can make more money per investment with shorts, than with longs. . unless you go with some chinese manipulated pick. . .

These companies are where balance sheet and cash flow statement analysis is very important, but not a focus of media headlines, because there is not one number involved. Also important is a fundamental forecast to see when companies will have to change or to go back into the market for additional funding, as there are several different ways of doing so, and each has its own hills to die upon

good luck

[tophcfa]

Might even be labeled a dead cat bounce

Been a long time since I heard that one : )

[manaboutown]

September is historically the worst month for stocks. That and given The Fed is likely to continue to pump up interest rates I do not expect the market to rise soon. We will see more bear market bounces I imagine.

[Stu from NYC]

September is historically the worst month for stocks. That and given The Fed is likely to continue to pump up interest rates I do not expect the market to rise soon. We will see more bear market bounces I imagine.

Since everyone expects the fed to continue to raise interest rates have to figure that is already factored into the market.

[melpetezrinski]

Since everyone expects the fed to continue to raise interest rates have to figure that is already factored into the market.



You are probably correct in that "everyone expects the fed to continue to raise interest rates" but I'm 100% certain that "everyone" doesn't agree on how much to raise, how fast you get there, how long you keep them there and what to do next. Many were thinking that we would actually see rate cuts in 2023, which I think is now off the table. In my opinion, the Fed needs to get rates close to 4% as fast as possible, so 2 more 75 bps and pause.

[justjim]

I have not been a regular trader for about 20 years. That said, my IRA’s, 457b plan and stocks are invested in diversified mutual funds with T. Rowe Price. I am happy with that decision and have “prospered” with this arrangement. Occasionally I adjust my portfolio accordingly with professional help. Yes, the “market”
Is down but I don’t lose any sleep over it and I stay active doing other things with the time I have left. I have a couple of friends who spend a lot of their time “in the market” and I say more power to them. Doing what you want to do with your time is what retirement is all about IMHO.

[GreySkies]

How has the stock market been treating me, lately I have seen a downturn, profits from investments have evaporating a bit but overall, for me, I am still in pace for a comfortable retirement at the end of this year. As for the stock market, I feel I get back in results based on the amount of effort I put in. Over the last 15 years I have invested an average of 1 hour a day / 6 days a week reviewing my finances, making moves as I feel are required and it has paid off. I am retiring at 63 but will not need to file for SS till I am 70.

The Internet can be a sea of misinformation for those who want to find an easy fix to their money situation. However, with the right amount of effort on your part such as doing REAL research, practicing due diligence, and avoiding the most common financial investment mistakes, you can successfully navigate this ocean of info successfully.

Don’t know the most common financial investment mistakes....? well there you go, your FIRST research homework topic for improving your finances!

if your idea of Internet based research starts with “YouTube” ... start over.

“We are living in an interminable succession of absurdities imposed by the myopic logic of short-term thinking.” ~ Jacques Yves Cousteau

[CoachKandSportsguy]

if your idea of Internet based research starts with “YouTube” ... start over.



:highfive:

:1rotfl:

or CNBC or any show on CNBC, especially listening to Jim Cramer

[Caymus]

:highfive:

:1rotfl:

or CNBC or any show on CNBC, especially listening to Jim Cramer

I always considered Cramer to be an entertainer. Some of his rants are amusing. I wonder how much money he makes directly from his CNBC "Investing Club" fees?

jim cramer rants - Bing video (https://www.bing.com/videos/search?q=jim+cramer+rants&docid=608012682033569281&mid=DBDEBB7A40085BAAB4C3DBDEBB7A40085BAAB4C3&view=detail&FORM=VIRE)

[44Apple]

The energy stocks continue to go up. Is anyone considering pumping money into energy stocks, ETFs, etc?

[Babubhat]

Don’t understand why more don’t bet it to go down. ETFs for that.also need to pay attention to natural gas. Trend is strongly positive

[manaboutown]

The energy stocks continue to go up. Is anyone considering pumping money into energy stocks, ETFs, etc?

Yes, and I have done so starting over a year ago. CVX, COP, SHEL, VDE, PAA, ET and bought some more BRK for OXY and Berkshire Hathaway Energy - Wikipedia (https://en.wikipedia.org/wiki/Berkshire_Hathaway_Energy)

[Babubhat]

Is anyone satisfied with their advisor now? An endless abyss

[Woodbear]

I am using this period to act upon some "tax-loss harvesting." It is my goal to keep more in my pocket and less going to the Government. Because of the Wash Rule, most sales will sit out till I can go back in and repurchase some of the more favored stocks back.

[Rainger99]

The Dow was 33,180 on June 7. It closed at 30,183 yesterday. That is down slightly over 9%.

[Babubhat]

Dow is 30 stocks. Irrelevant and not diversified. Just buy Berkshire instead

Sp is

Year Total Return
2022 -19.56

[Stu from NYC]

The Dow was 33,180 on June 7. It closed at 30,183 yesterday. That is down slightly over 9%.

S & P 500 is more reflective of the market.

Goes up goes down and in the long run confident will go up. Nobody can time the market on a consistent basis.

[retiredguy123]

The Dow was 33,180 on June 7. It closed at 30,183 yesterday. That is down slightly over 9%.
The S&P 500 is down about 8 percent during the same period.

[Rainger99]

Goes up goes down and in the long run confident will go up. Nobody can time the market on a consistent basis.

The long run was a lot longer when the market crashed in 1987.

[retiredguy123]

The long run was a lot longer when the market crashed in 1987.
True, but a lot of people lost almost their entire retirement savings by selling low in the 1987 crash, and were afraid to go back into the stock market when it started to go back up. Trying to time the market is a bad idea. I have always invested in the stock market using the "dollar cost averaging" method and with a "buy and hold" plan, and I never had more than about 40 percent of my investments in stocks.

[Stu from NYC]

True, but a lot of people lost almost their entire retirement savings by selling low in the 1987 crash, and were afraid to go back into the stock market when it started to go back up. Trying to time the market is a bad idea. I have always invested in the stock market using the "dollar cost averaging" method and with a "buy and hold" plan, and I never had more than about 40 percent of my investments in stocks.

I keep more than 40% as I can deal with risk and think of the long term. Dollar cost averaging is a great way to invest.

[55&Out]

I'm mostly in cash however my long-term bond holdings are getting killed. I believe this market has room to fall much further. The Fed has clearly voiced they will continue to implement QT. My strategy is patience and defense. I'm thinking it's a bear market for another 8-12 months, possibly longer. Wage slaves are getting killed by inflation, retail inventories are high, big-ticket purchases are down, car repos are extremely high... Think it's bad now? Just wait until layoffs start and the banks stop lending. Regular folks will be ground to a nub.

That said, wake me up when home prices in The Villages drop 40% or more...

[CoachKandSportsguy]

The one wild card, which is unknowable, due to a human decision, (humans mess all good things up) is a nuclear missile hit/use by Putin. probability very low, but not zero, and slowing increasing if Putin's war continues to make no progress or goes in reverse in Putin's mind. Our minds makes no difference to a man determined to have irrational goals. For that reason, people in retirement should NOT have 100% in stocks, but if aggressive in retirement 2/3 to 3/4 is a maximum in my opinion, and have a small hedging program to temper losses.

There will be signs for buying near the bottom, the Atlanta fed has a GDP forecast model, which is currently near 0 or negative, and one can watch that for some nation wide growth.

GDPNow -
Federal Reserve Bank of Atlanta (https://www.atlantafed.org/cqer/research/gdpnow)

This interest rate action will kill off zombie companies, and those are the ones which there is more debt service than cash flow / earnings, and they will go bankrupt due to the cost of debt is too high borrow to continue operations. The big caps with a good balance sheet will survive.

Once the bankruptcies start, we are near a bottom.

Once a big bankruptcy happens, there is a contagion fear which will cause an emotional sell off, and then when it stops falling for a week to a month, that is a quiet cow bell.

There are interest rate spreads which will stop widening and then start to close.

There are market technical analysis which can easily identify market corners. . . new high/ lows is less than 0.5% and then ticks back up with prices rise above the 10, then 50 then 200 day moving average.

There is the historical 50% correction off the top, which I will buy at least 1/2 of my cash / bonds, no matter what because the downside is so limited from there, unless there is nuclear winter. My target from the start has been 1800/2000 SP500 go all in and mortgage the house, which is combination of earnings forecast and low P/E ratio applied.

There will be the price of oil will bottom due to minimal economic activity, and then start to rise. The fed publishes highway milage usage by vehicles, and that will stop falling and tick up.

Vehicle Miles Traveled (TRFVOLUSM227NFWA) | FRED | St. Louis Fed (https://fred.stlouisfed.org/series/TRFVOLUSM227NFWA)
A downturn in travel of pandemic proportions | FRED Blog (https://fredblog.stlouisfed.org/2021/03/a-downturn-in-travel-of-pandemic-proportions/)


There are measures of sentiment, which highly correlates with major tops and bottoms. The farther the price falls, sentiment just measures the emotional duration of the trend, the longer the trend the stronger the belief in persistence. high prices causes me to fear loss, low prices has a small probability of loss and a high probability of gain, but that is not the emotional measurement of trend, that is a proper investment mind set, no different that high/low prices at the grocery store for your favorite food, such as steak. $50 per pound for rib eye is a pass for me, $20 per pound is an occasional purchase. $5 per pound I buy a freezer and fill it up. Same theory applied to stocks.

Still short MTCH from about 67, RUN is flat but looks more profitable by the end of year and AN is closed out with a 2 point gain. I would have shorted CVNA above 40, but my job is cray-cray at the moment, with 8 out of 10 being new people in my department. AN is still a good short, but there are other better zombies. BYND had no short shares available, so I had to pass months ago. still none

Had an order for SPY puts several weeks ago but the price was above the current market, and it never filled . . now I hate my 9-5 job which I could care less about if they fire me. .

FYI, my idol, Cassandra, aka last name Burry, you can figure me out from there.

finance guy,

and yes people time the market for a living all the time. People with whom I am acquainted have perfected timing models with 10-20 years of data, where the returns are huge. However, the model doesn't scale to fund size dollars, so its for the little guy to make serious money, going long and short.

[Stu from NYC]

The one wild card, which is unknowable, due to a human decision, (humans mess all good things up) is a nuclear missile hit/use by Putin. probability very low, but not zero, and slowing increasing if Putin's war continues to make no progress or goes in reverse in Putin's mind. Our minds makes no difference to a man determined to have irrational goals. For that reason, people in retirement should NOT have 100% in stocks, but if aggressive in retirement 2/3 to 3/4 is a maximum in my opinion, and have a small hedging program to temper losses.

There will be signs for buying near the bottom, the Atlanta fed has a GDP forecast model, which is currently near 0 or negative, and one can watch that for some nation wide growth.

GDPNow -
Federal Reserve Bank of Atlanta (https://www.atlantafed.org/cqer/research/gdpnow)

This interest rate action will kill off zombie companies, and those are the ones which there is more debt service than cash flow / earnings, and they will go bankrupt due to the cost of debt is too high borrow to continue operations. The big caps with a good balance sheet will survive.

Once the bankruptcies start, we are near a bottom.

Once a big bankruptcy happens, there is a contagion fear which will cause an emotional sell off, and then when it stops falling for a week to a month, that is a quiet cow bell.

There are interest rate spreads which will stop widening and then start to close.

There are market technical analysis which can easily identify market corners. . . new high/ lows is less than 0.5% and then ticks back up with prices rise above the 10, then 50 then 200 day moving average.

There is the historical 50% correction off the top, which I will buy at least 1/2 of my cash / bonds, no matter what because the downside is so limited from there, unless there is nuclear winter. My target from the start has been 1800/2000 SP500 go all in and mortgage the house, which is combination of earnings forecast and low P/E ratio applied.

There will be the price of oil will bottom due to minimal economic activity, and then start to rise. The fed publishes highway milage usage by vehicles, and that will stop falling and tick up.

Vehicle Miles Traveled (TRFVOLUSM227NFWA) | FRED | St. Louis Fed (https://fred.stlouisfed.org/series/TRFVOLUSM227NFWA)
A downturn in travel of pandemic proportions | FRED Blog (https://fredblog.stlouisfed.org/2021/03/a-downturn-in-travel-of-pandemic-proportions/)


There are measures of sentiment, which highly correlates with major tops and bottoms. The farther the price falls, sentiment just measures the emotional duration of the trend, the longer the trend the stronger the belief in persistence. high prices causes me to fear loss, low prices has a small probability of loss and a high probability of gain, but that is not the emotional measurement of trend, that is a proper investment mind set, no different that high/low prices at the grocery store for your favorite food, such as steak. $50 per pound for rib eye is a pass for me, $20 per pound is an occasional purchase. $5 per pound I buy a freezer and fill it up. Same theory applied to stocks.

Still short MTCH from about 67, RUN is flat but looks more profitable by the end of year and AN is closed out with a 2 point gain. I would have shorted CVNA above 40, but my job is cray-cray at the moment, with 8 out of 10 being new people in my department. AN is still a good short, but there are other better zombies. BYND had no short shares available, so I had to pass months ago. still none

Had an order for SPY puts several weeks ago but the price was above the current market, and it never filled . . now I hate my 9-5 job which I could care less about if they fire me. .

FYI, my idol, Cassandra, aka last name Burry, you can figure me out from there.

finance guy,

and yes people time the market for a living all the time. People with whom I am acquainted have perfected timing models with 10-20 years of data, where the returns are huge. However, the model doesn't scale to fund size dollars, so its for the little guy to make serious money, going long and short.

Since the last paragraph is directed at my previous comments (no problem I enjoy the discussion) I find it hard to believe. If timing models were accurate it would be an indicator for getting into the market and would be readily available for people to buy. In other words sorry do not believe it.

[CoachKandSportsguy]

Since the last paragraph is directed at my previous comments (no problem I enjoy the discussion) I find it hard to believe. If timing models were accurate it would be an indicator for getting into the market and would be readily available for people to buy. In other words sorry do not believe it.

The reason is that it doesn't scale as finance doesn't scale well at all.
That's fine, everyone is entitled to their opinions, and Stu and I have a future dinner date,
maybe this October as we will be down for three weeks.

:blahblahblah: :blahblahblah: :blahblahblah: guy

[PugMom]

I always considered Cramer to be an entertainer. Some of his rants are amusing. I wonder how much money he makes directly from his CNBC "Investing Club" fees?

jim cramer rants - Bing video (https://www.bing.com/videos/search?q=jim+cramer+rants&docid=608012682033569281&mid=DBDEBB7A40085BAAB4C3DBDEBB7A40085BAAB4C3&view=detail&FORM=VIRE)

not for nothing, but i always preferred Stu Varney. i've followed his advice a couple times & it turned out well. he's less of an entertainer, but pretty accurate nonetheless

[manaboutown]

Well, I am about 40% cash (short term T-bills), 60% stocks, 80% of which I bought years ago for far less than I could sell them for today. Most of my investment portfolio remains in commercial real estate the value of which is also affected although I have been able to increase rental income each year. Interesting times...

[Bay Kid]

My TIPS is doing real well. I don't look at the others. They are long term strong companies.

[Boomer]

So….any thoughts on what bricks-and-mortar banks will be doing with CD rates? And when?

I sure would like to see some kind of return on money in the bank.

Thoughts? Theories? Anyone?

Boomer

[retiredguy123]

So….any thoughts on what bricks-and-mortar banks will be doing with CD rates? And when?

I sure would like to see some kind of return on money in the bank.

Thoughts? Theories? Anyone?

Boomer
To me, bank CDs don't make sense and they haven't for at least 20 years. My "go to" place to check on the highest current rates is Penfed.org. It is a credit union that is always competitive with bank CDs. Their current rate for a 3-year or 5-year CD is 3.25 percent. I would rather take a small risk and invest in the Vanguard short term bond index fund that is paying 3.81 percent, and has more liquidity than a CD. The Vanguard money market fund, with no risk, is paying 2.52 percent. I stay away from bank CDs altogether because, unlike 30 years ago, the banks will not give you a good deal because they don't need your deposit.

[melpetezrinski]

Since the last paragraph is directed at my previous comments (no problem I enjoy the discussion) I find it hard to believe. If timing models were accurate it would be an indicator for getting into the market and would be readily available for people to buy. In other words sorry do not believe it.

"timing models" ARE fairly accurate and are certainly "available for people to buy". Just research chart patterns or technical analysis. The question is how reliable are these tools. My guess would be 75% of the time if you were very experienced but that still leaves the other 25% as being inaccurate, which could obviously result in huge losses. Either way, you are correct in being skeptical when people purport to have "perfected" the process or guarantee huge returns for the "little guy".

[Aces4]

To me, bank CDs don't make sense and they haven't for at least 20 years. My "go to" place to check on the highest current rates is Penfed.org. It is a credit union that is always competitive with bank CDs. Their current rate for a 3-year or 5-year CD is 3.25 percent. I would rather take a small risk and invest in the Vanguard short term bond index fund that is paying 3.81 percent, and has more liquidity than a CD. The Vanguard money market fund, with no risk, is paying 2.52 percent. I stay away from bank CDs altogether because, unlike 30 years ago, the banks will not give you a good deal because they don't need your deposit.

That does appear to be the better deal and there are no fees or cost associated with stock choices?

I did find online rates for cds including 3.65%/5 yrs and 3.55%/3 yrs. It’s not enough to cover inflation but better than a sharp stick in the eye, (stock loss). It will be interesting to see what cd rates due after October 1st.

[Stu from NYC]

That does appear to be the better deal and there are no fees or cost associated with stock choices?

I did find online rates for cds including 3.65%/5 yrs and 3.55%/3 yrs. It’s not enough to cover inflation but better than a sharp stick in the eye, (stock loss). It will be interesting to see what cd rates due after October 1st.

Seems like banks neither need or want our short term money right now so they pay accordingly. Tying up our money long term at much lower than inflation rates does not appeal to me so we are still mostly in mutual funds but rather conservative ones like value and dividend growth.

[Aces4]

Seems like banks neither need or want our short term money right now so they pay accordingly. Tying up our money long term at much lower than inflation rates does not appeal to me so we are still mostly in mutual funds but rather conservative ones like value and dividend growth.

We ladder our cds, have no fees, no investment people with which to deal and we love the FDIC. It works for us but we all have different tolerances for investing.

[Boomer]

……………….

[rmd2]

I went through the dot-com bust and would never do it again. I put my money into plain old CDs an have done much better than I did with the market. Until just recently I had 6% CDs that matured after 10 years. I now have 3% to 4% CDs and they are doing well. Making money each month and compounding so I'm happy. I have the "pillow factor" under control. All these market problems are of no concern to me. In fact when the Feds raise the rates the CD rates go up so it a win-win for me.
Also CDs have zero cost - no management fees, buy/sell fees, and many other fees that stock/bond places charge investors. My go to places for CDs are Pentagon Federal and Navy Federal Credit Unions. These 2 credit unions have the highest ratings.

[Pairadocs]

I do believe that all info available is factored into the stock market pricing and kind of think the market is near or close to a bottom so started to invest into mutual funds that have done well for me over the years.

Similar here. I never panic. Of the many books I'v read on the markets and investing, one of the first left quite an impression. (if I could remember the title I'd mention it... think it was about Jessy Livermore). Sometimes ONE thing, idea, fact, strategy, or in a book will hit an individual deeply. For me it was a chart that showed the immense wealth that those who committed suicide during the great "crash" would have eventually enjoyed if only they had not taken their own lives. That influenced my investing from the onset. I always look at every "drop" as a buying opportunity, especially when a major "correction" comes. It has always paid off, big time, but yes, I certainly have friends who would question my mental health if they knew the more my portfolio looses value "on paper", the more stocks, and even index funds, I buy ! :ohdear:

[Pairadocs]

I have not been a regular trader for about 20 years. That said, my IRA’s, 457b plan and stocks are invested in diversified mutual funds with T. Rowe Price. I am happy with that decision and have “prospered” with this arrangement. Occasionally I adjust my portfolio accordingly with professional help. Yes, the “market”
Is down but I don’t lose any sleep over it and I stay active doing other things with the time I have left. I have a couple of friends who spend a lot of their time “in the market” and I say more power to them. Doing what you want to do with your time is what retirement is all about IMHO.

Definitely the right attitude ! Live and let live !

[Two Bills]

Have not touched stocks for 25 years, just played a little with currency rates.
Anyone who travels, or plans to in near future to Europe, and specially to UK, now is a very good time to purchase £ and Euros.
US$ is strong against both, in fact the £ has tanked!

[retiredguy123]

I never try to time the stock market because I admit that I don't understand it. I have always been a buy and hold investor and have done well. They say that the stock market responds to predictions of future events. If that is so, then why is the market going down now when everything that has happened with interest rates and the economy was totally predictable at least 6 months ago? Also, they say that owning stock means that you actually own part of a profitable company. So, if I own shares in McDonald's, that sells millions of hamburgers every day at a profit, why does the stock value decline when other stocks decline in a single day? Just because some stocks go down, should have no effect on the number of hamburgers that McDonald's sells that day, and the value of the company. Can one of you stock market timers explain these things?

[tvbound]

I never try to time the stock market because I admit that I don't understand it. I have always been a buy and hold investor and have done well. They say that the stock market responds to predictions of future events. If that is so, then why is the market going down now when everything that has happened with interest rates and the economy was totally predictable at least 6 months ago? Also, they say that owning stock means that you actually own part of a profitable company. So, if I own shares in McDonald's, that sells millions of hamburgers every day at a profit, why does the stock value decline when other stocks decline in a single day? Just because some stocks go down, should have no effect on the number of hamburgers that McDonald's sells that day, and the value of the company. Can one of you stock market timers explain these things?

" Can one of you stock market timers explain these things?"

I always find it interesting at how many claim (while being anonymous) how well they've done - 'timing' the market(s). Sorry, if I don't believe 90% of ya.

While the last month has been a bit rough, I personally will continue with my (relatively conservative) investment allocations and will sleep comfortably knowing that I don't need to sell/draw down anything, as I am fortunate to have defined benefit pensions for my retirement income. Recognizing that not everyone is as lucky, I would still caution against panicking and selling at such a low point, since history shows that doing so puts you at risk of missing out on some significant gains in a very short period - 'when' (not 'if') the markets rebound.

Good luck to all.

[Stu from NYC]

Have not touched stocks for 25 years, just played a little with currency rates.
Anyone who travels, or plans to in near future to Europe, and specially to UK, now is a very good time to purchase £ and Euros.
US$ is strong against both, in fact the £ has tanked!

How much stronger can the dollar get against pounds and euros? At some point it will not drop any further.

Not for me as I do like to at least see some dividends coming my way.

[Stu from NYC]

I never try to time the stock market because I admit that I don't understand it. I have always been a buy and hold investor and have done well. They say that the stock market responds to predictions of future events. If that is so, then why is the market going down now when everything that has happened with interest rates and the economy was totally predictable at least 6 months ago? Also, they say that owning stock means that you actually own part of a profitable company. So, if I own shares in McDonald's, that sells millions of hamburgers every day at a profit, why does the stock value decline when other stocks decline in a single day? Just because some stocks go down, should have no effect on the number of hamburgers that McDonald's sells that day, and the value of the company. Can one of you stock market timers explain these things?

I am definitely not a timer but the answer I would give you is that when people think the economy will decline they assume less burgers will be sold.

[Two Bills]

How much stronger can the dollar get against pounds and euros? At some point it will not drop any further.

Not for me as I do like to at least see some dividends coming my way.

I haven't a clue.
I just stated that anyone considering a trip to Europe or UK, now is a very good time to buy the currency.
Tomorrow could be better, or worse, but now is a bargain.

[Caymus]

Another horrible CPI report today. How high will interest rates rise?

[55&Out]

According to traditional economic definitions we are already in a RECESSION, however upcoming midterm elections (with associated rhetorical devices) prohibits the open use of the word. My bet is that the next 12-18 months (possibly longer) will be tough economically. Not a good time to be selling a home...

[CoachKandSportsguy]

Can one of you stock market timers explain these things?

First daily volatility swings is not investing, but the results of very large trading positions unwinding or the collision with huge funds reallocating funds or the collision with monthly 401K inflows positioning into equities

Second, market valuation movements is due to investor preference between real treasury bond interest and capital gain rates and stock potential real cash flow growth and dividends.

Macdonalds might has a terminal growth rate of 3 pct over inflation, but still subject to human management mistakes or other event risks to the company. if bonds have a 5 percent return over inflation, where would you put new money for the moment? bonds would be where one would get a better yield at the moment.

So in reality, its the competition between future stock company uncertainty of cash growth rates, and the relative certainty of bond real interest rate and capital gains certainty by the return of capital at the bond life end.

simple, but portfolio implementation is very difficult with the uncertainty of the future in any particular equity.

current recent long for me, though underwater, are long treasury bonds and XLE

posing CFA guy

[retiredguy123]

First daily volatility swings is not investing, but the results of very large trading positions unwinding or the collision with huge funds reallocating funds or the collision with monthly 401K inflows positioning into equities

Second, market valuation movements is due to investor preference between real treasury bond interest and capital gain rates and stock potential real cash flow growth and dividends.

Macdonalds might has a terminal growth rate of 3 pct over inflation, but still subject to human management mistakes or other event risks to the company. if bonds have a 5 percent return over inflation, where would you put new money for the moment? bonds would be where one would get a better yield at the moment.

So in reality, its the competition between future stock company uncertainty of cash growth rates, and the relative certainty of bond real interest rate and capital gains certainty by the return of capital at the bond life end.

simple, but portfolio implementation is very difficult with the uncertainty of the future in any particular equity.

current recent long for me, though underwater, are long treasury bonds and XLE

posing CFA guy
My point about McDonald's is that some people buy a stock because they think that, if the company sells a product and makes a profit, they will share in that profit. But, it is not nearly that simple or logical. It's pretty clear that McDonald's makes a profit on every hamburger they sell. But, when the overall stock market declines, the McDonald's stock will also decline, even though they are still making a profit on every hamburger. That is why I don't pick stocks or time the market.

[Stu from NYC]

First daily volatility swings is not investing, but the results of very large trading positions unwinding or the collision with huge funds reallocating funds or the collision with monthly 401K inflows positioning into equities

Second, market valuation movements is due to investor preference between real treasury bond interest and capital gain rates and stock potential real cash flow growth and dividends.

Macdonalds might has a terminal growth rate of 3 pct over inflation, but still subject to human management mistakes or other event risks to the company. if bonds have a 5 percent return over inflation, where would you put new money for the moment? bonds would be where one would get a better yield at the moment.

So in reality, its the competition between future stock company uncertainty of cash growth rates, and the relative certainty of bond real interest rate and capital gains certainty by the return of capital at the bond life end.

simple, but portfolio implementation is very difficult with the uncertainty of the future in any particular equity.

current recent long for me, though underwater, are long treasury bonds and XLE

posing CFA guy

As interest rates continue to rise your long treasury will also lose money so would think you would be better off in short term instruments.

What is XLE?

[Stu from NYC]

My point about McDonald's is that some people buy a stock because they think that, if the company sells a product and makes a profit, they will share in that profit. But, it is not nearly that simple or logical. It's pretty clear that McDonald's makes a profit on every hamburger they sell. But, when the overall stock market declines, the McDonald's stock will also decline, even though they are still making a profit on every hamburger. That is why I don't pick stocks or time the market.

I agree and think that dollar cost averaging into well run stocks or funds makes the most sense

[CoachKandSportsguy]

As interest rates continue to rise your long treasury will also lose money so would think you would be better off in short term instruments.

What is XLE?

TLT was a trade and not a good one, was playing for some good news, but the bad just keeps coming
XLE is the oil/energy ETF

finance hack

[melpetezrinski]

I never try to time the stock market because I admit that I don't understand it. I have always been a buy and hold investor and have done well. They say that the stock market responds to predictions of future events. If that is so, then why is the market going down now when everything that has happened with interest rates and the economy was totally predictable at least 6 months ago? Also, they say that owning stock means that you actually own part of a profitable company. So, if I own shares in McDonald's, that sells millions of hamburgers every day at a profit, why does the stock value decline when other stocks decline in a single day? Just because some stocks go down, should have no effect on the number of hamburgers that McDonald's sells that day, and the value of the company. Can one of you stock market timers explain these things?


Interest rates were NOT "totally predictable at least 6 months ago". Many thought inflation would peak and even start to decline giving the Fed an easy out of their aggressive rate hiking policy. Even if inflation stayed constant, many smart Wall Street people thought the Fed would at least communicate the possibility of pausing in the near future and actually, when they might even LOWER rates. Basically, many thought the Fed would revert back to their extremely accommodative rate policy that is IMO, 70% of the reason we are on the brink of another financial crisis. Surprisingly, the Fed has stayed the course and continues to not only raise rates in significant chunks but more importantly and speaks to your "predictions of future events", they continue to communicate that fighting inflation is still their #1 goal and that they need to see consecutive points of data that suggest inflation has been controlled and that might take 3-6 months. Remember the Fed proclaiming inflation is "transitory"? Well, they were dead wrong. Inflation is sticky and infectious. Companies are raising prices not only because THEIR input prices are also rising but BECAUSE THEY CAN.

[valuemkt]

The problem with bond funds is that they have no end or maturity date. T-bills, or corporate CDs have an end date. T-bills are bought at a discount.. meaning you might pay 980, 990 or even 995 for a 1000 par value bill. At maturity..and I'm talking 3 month to one year bills, you receive the face value. New Issue CDs, are bought at par, and depending on the type pay interest and then return the face value upon maturity. CDs have a variety of "bond ratings".. investment grade is considered BBB or better. Most are FDIC insured. T-bills are backed by the US (no need for political jabs). Current CDs are running 3.3 for six month thru 4.2 for some one years. T-bills and soon to be maturing T-notes are yielding very close to that. You can create your own ladder or have a online brokerage take you thru it. Obviously, with one or two more 75 basis point hikes in the works, and assuming this is in lieu of cash, you might want to put more on the short term side.. or ladder 3, 6, 9 and 12 months. FWIW

[retiredguy123]

The problem with bond funds is that they have no end or maturity date. T-bills, or corporate CDs have an end date. T-bills are bought at a discount.. meaning you might pay 980, 990 or even 995 for a 1000 par value bill. At maturity..and I'm talking 3 month to one year bills, you receive the face value. New Issue CDs, are bought at par, and depending on the type pay interest and then return the face value upon maturity. CDs have a variety of "bond ratings".. investment grade is considered BBB or better. Most are FDIC insured. T-bills are backed by the US (no need for political jabs). Current CDs are running 3.3 for six month thru 4.2 for some one years. T-bills and soon to be maturing T-notes are yielding very close to that. You can create your own ladder or have a online brokerage take you thru it. Obviously, with one or two more 75 basis point hikes in the works, and assuming this is in lieu of cash, you might want to put more on the short term side.. or ladder 3, 6, 9 and 12 months. FWIW
I don't consider it a problem for bond funds to not have a maturity or end date. You can buy and sell shares at any time. I use bond index funds for the bond portion of my portfolio. It is split between a short term bond index fund (average maturity of about 3 years) and an intermediate term bond index fund (average maturity of about 8 years).

I don't like CDs because it is much easier to invest in a bond fund, usually with a higher yield. I use "Penfed.org" as a gauge of current interest rates. They are always competitive. Their current CD rates are:

TERM and APY
6 Month, 1.70%
12 Month, 3.15%
15 Month, 3.20%
18 Month, 3.40%
2 Year, 3.50%
3 Year, 3.60%
4 Year, 3.50%
5 Year, 3.60%

I don't know where you can get 3.3% for 6 months or 4.2% for 12 months, unless there is some risk or deposit limit involved. Can you name the company that provides these rates?

[manaboutown]

I don't consider it a problem for bond funds to not have a maturity or end date. You can buy and sell shares at any time. I use bond index funds for the bond portion of my portfolio. It is split between a short term bond index fund (average maturity of about 3 years) and an intermediate term bond index fund (average maturity of about 8 years).

I don't like CDs because it is much easier to invest in a bond fund, usually with a higher yield. I use "Penfed.org" as a gauge of current interest rates. They are always competitive. Their current CD rates are:

TERM and APY
6 Month, 1.70%
12 Month, 3.15%
15 Month, 3.20%
18 Month, 3.40%
2 Year, 3.50%
3 Year, 3.60%
4 Year, 3.50%
5 Year, 3.60%

I don't know where you can get 3.3% for 6 months or 4.2% for 12 months, unless there is some risk or deposit limit involved. Can you name the company that provides these rates?

Just checked. My Schwab account trade platform shows one year T-bills at 4.58%.

After getting a huge capital gain in May I put 30% of it in stocks a little at a time. When 9 month T-bills topped 3% I put the rest there. That is the best I could do at the time. Stocks scare me right now.

[Stu from NYC]

Interest rates were NOT "totally predictable at least 6 months ago". Many thought inflation would peak and even start to decline giving the Fed an easy out of their aggressive rate hiking policy. Even if inflation stayed constant, many smart Wall Street people thought the Fed would at least communicate the possibility of pausing in the near future and actually, when they might even LOWER rates. Basically, many thought the Fed would revert back to their extremely accommodative rate policy that is IMO, 70% of the reason we are on the brink of another financial crisis. Surprisingly, the Fed has stayed the course and continues to not only raise rates in significant chunks but more importantly and speaks to your "predictions of future events", they continue to communicate that fighting inflation is still their #1 goal and that they need to see consecutive points of data that suggest inflation has been controlled and that might take 3-6 months. Remember the Fed proclaiming inflation is "transitory"? Well, they were dead wrong. Inflation is sticky and infectious. Companies are raising prices not only because THEIR input prices are also rising but BECAUSE THEY CAN.

Agree with most of what you said but do think that 6 months ago or even longer it was obvious that interest rates would be going up with bond prices going down.

The Fed is mandated to control inflation and even though they took longer than they should have they are now trying to get it under control.

Now if only the Feds would do the same

[Michael G.]

What about Treasury's?

Don’t Even Think About Buying Bank CDs. Here’s Why. (https://www.moneytalksnews.com/dont-even-think-about-buying-bank-cds-heres-why/?utm_campaign=the-best-streaming-service-for-live-tv&utm_source=newsletter&utm_medium=email)

[retiredguy123]

Just checked. My Schwab account trade platform shows one year T-bills at 4.58%.

After getting a huge capital gain in May I put 30% of it in stocks a little at a time. When 9 month T-bills topped 3% I put the rest there. That is the best I could do at the time. Stocks scare me right now.
So, T-bills pay a higher interest rate than CDs. I didn't know that, but I wouldn't buy either product. The Vanguard short term bond index fund is paying 4.38 percent, and you don't need to tie up your money for 12 months.

Their high yield fund (junk bonds) is paying 7.46 percent, which is a good way to increase your overall yield with a small percentage of your bond portfolio.

[valuemkt]

I don't consider it a problem for bond funds to not have a maturity or end date. You can buy and sell shares at any time. I use bond index funds for the bond portion of my portfolio. It is split between a short term bond index fund (average maturity of about 3 years) and an intermediate term bond index fund (average maturity of about 8 years).

I don't like CDs because it is much easier to invest in a bond fund, usually with a higher yield. I use "Penfed.org" as a gauge of current interest rates. They are always competitive. Their current CD rates are:

TERM and APY
6 Month, 1.70%
12 Month, 3.15%
15 Month, 3.20%
18 Month, 3.40%
2 Year, 3.50%
3 Year, 3.60%
4 Year, 3.50%
5 Year, 3.60%

I don't know where you can get 3.3% for 6 months or 4.2% for 12 months, unless there is some risk or deposit limit involved. Can you name the company that provides these rates?

Fidelity and merrill Lynch (Etrade and a score of others). Sorry, but your information is out of date. You may be quoting BANK Cds, similar to bank savings accounts that tie up your money. They will nearly always be less than corporate CDs bought from brokerage firms.. You can buy T-bills from brokerages or from TreasuryDirect. Regarding BondFunds, yes, you can sell at any time, and get the MARKET price, which fluctuates throughout the day and goes down as rates go up. That is the problem, as I see it, with bond funds. To reiterate, when you buy an individual corporate CD or Tbill, you know exactly when it matures and you know exactly how much you;ll be receiving. There is no market risk. Nearly all bond funds have been exposed to market risk this year.. You may have received some interest, but your principal has deteriorated.

[retiredguy123]

Fidelity and merrill Lynch (Etrade and a score of others). Sorry, but your information is out of date. You may be quoting BANK Cds, similar to bank savings accounts that tie up your money. They will nearly always be less than corporate CDs bought from brokerage firms.. You can buy T-bills from brokerages or from TreasuryDirect. Regarding BondFunds, yes, you can sell at any time, and get the MARKET price, which fluctuates throughout the day and goes down as rates go up. That is the problem, as I see it, with bond funds. To reiterate, when you buy an individual corporate CD or Tbill, you know exactly when it matures and you know exactly how much you;ll be receiving. There is no market risk. Nearly all bond funds have been exposed to market risk this year.. You may have received some interest, but your principal has deteriorated.
I was quoting credit union CDs from penfed.org, which are similar to bank CDs. I didn't think that corporate CDs came with FDIC insurance, or the insurance offered for credit union CDs.

[Jack58033]

Just one word: Plastics

Is that you Mrs. Robinson?
.

[melpetezrinski]

So, T-bills pay a higher interest rate than CDs. I didn't know that, but I wouldn't buy either product. The Vanguard short term bond index fund is paying 4.38 percent, and you don't need to tie up your money for 12 months.

Their high yield fund (junk bonds) is paying 7.46 percent, which is a good way to increase your overall yield with a small percentage of your bond portfolio.


26 week bills are paying low 4's. High yield junk bonds ARE a "good way to increase your overall yield" but there is definitely some risk associated with this product.

[Stu from NYC]

26 week bills are paying low 4's. High yield junk bonds ARE a "good way to increase your overall yield" but there is definitely some risk associated with this product.

If you are going to invest in junk bonds and I have, better to do it with a fund to mitigate risk.

[Kenswing]

Treasury yields at Fidelity right now are 4.5% for one and two year bonds and 4.3% for six month.

[Boomer]

The last time the market truly tanked like this, 5% CDs were still around in bricks and mortar banks for backup.

Not only were they there, but if you owned a CD in an IRA but had reached 59 and 1/2, you could get money out, early, penalty free, under certain circumstances — like with some community banks.

But (sigh) it looks like those days are gone forever. The money is there for you, but that’s pretty much it. Banks are holding all the cards while depositors get zero, zilch, nada.

Banks doing nothing for depositors — not even giving so much as a toaster (said Boomer showing her age) — has been another driver of that old bull market we have seen running like crazy since about 2008 — with a stumble here and there — but nothing of any real consequence until now. (YIKES!)

As a boring, buy and hold, dividend investor, I shopped too soon, a couple+ months ago, and added a few companies that have been getting pounded along with the overall market, but I chose companies with (I hope) sustainable dividends, paid and increased annually for decades. Had I waited, the yields would have been even better.

Oh well, I’ll hold……and planning to maybe shop again soon.

I think this is going to be a looooong one, but what do I know…. zero, zilch, nada.

Covid and the War in Ukraine have been Black Swan events, unlike the 2007 mess which even I, bumpkin though I may be, could see coming.

I have long thought — that for this entire century — the Fed rate has been stupidly low — and now we are paying the piper. Too much. Too late.

If the dependable, boring, long time dividend payers go belly up, we are all #%*@&$ anyway, so what the heck — I am thinking about taking another chance soon by shopping again. But I have never, and will not, bet the farm — just the butter and egg money.

Meanwhile. it’s times like these, when I am especially glad that there is no advisor between me and the money. I am a seasoned woman, perfectly capable of taking responsibility for my own mistakes. Advisors I have interviewed still get 1% of the total portfolio value — whether the investor is winning or losing. That just does not work for me.

My two rules:

Know what you buy.

Know yourself.

(Btw, I don’t think the fat lady is even warming up to sing yet, but I will just cling to my decades old “Dividends pay you to wait” philosophy of investing……….I think I like that little thrill of the possibility of share price increases in the future, too. Well…. I don’t just “think” that, I know that’s just how I am.)

Boomer

[Caymus]

Just checked. My Schwab account trade platform shows one year T-bills at 4.58%.

After getting a huge capital gain in May I put 30% of it in stocks a little at a time. When 9 month T-bills topped 3% I put the rest there. That is the best I could do at the time. Stocks scare me right now.

Plus, T-Bills are exempt from state income taxes if you pay taxes in another state.

[Aces4]

The last time the market truly tanked like this, 5% CDs were still around in bricks and mortar banks for backup.

Not only were they there, but if you owned a CD in an IRA but had reached 59 and 1/2, you could get money out, early, penalty free, under certain circumstances — like with some community banks.

But (sigh) it looks like those days are gone forever. The money is there for you, but that’s pretty much it. Banks are holding all the cards while depositors get zero, zilch, nada.

Banks doing nothing for depositors — not even giving so much as a toaster (said Boomer showing her age) — has been another driver of that old bull market we have seen running like crazy since about 2008 — with a stumble here and there — but nothing of any real consequence until now. (YIKES!)

As a boring, buy and hold, dividend investor, I shopped too soon, a couple+ months ago, and added a few companies that have been getting pounded along with the overall market, but I chose companies with (I hope) sustainable dividends, paid and increased annually for decades. Had I waited, the yields would have been even better.

Oh well, I’ll hold……and planning to maybe shop again soon.

I think this is going to be a looooong one, but what do I know…. zero, zilch, nada.

Covid and the War in Ukraine have been Black Swan events, unlike the 2007 mess which even I, bumpkin though I may be, could see coming.

I have long thought — that for this entire century — the Fed rate has been stupidly low — and now we are paying the piper. Too much. Too late.

If the dependable, boring, long time dividend payers go belly up, we are all #%*@&$ anyway, so what the heck — I am thinking about taking another chance soon by shopping again. But I have never, and will not, bet the farm — just the butter and egg money.

Meanwhile. it’s times like these, when I am especially glad that there is no advisor between me and the money. I am a seasoned woman, perfectly capable of taking responsibility for my own mistakes. Advisors I have interviewed still get 1% of the total portfolio value — whether the investor is winning or losing. That just does not work for me.

My two rules:

Know what you buy.

Know yourself.

(Btw, I don’t think the fat lady is even warming up to sing yet, but I will just cling to my decades old “Dividends pay you to wait” philosophy of investing……….I think I like that little thrill of the possibility of share price increases in the future, too. Well…. I don’t just “think” that, I know that’s just how I am.)

Boomer

As I provided earlier, brick and mortar bank CDs are only one piece of the pie. Online, FDIC insured CDs can be found for a much better rate but they won’t throw in a toaster either.

[Tyrone Shoelaces]

Not Too Bad :wave:

[OrangeBlossomBaby]

My Intel stock is still doing fine. From August 2003 through 2018, it's wavered between $25-35 per share. It's currently at $29.07. It had a huge drop recently but it also had a huge spike. Back in the late 1990's it had a huge spike as well, and then it split and I ended up with twice as many shares as I started with. Each share is now worth around thirty times what I paid for them, with twice as many of them. So I'm doing just fine.

[Boomer]

And here we go again……

I assume today will be another huge hike………

Too much. Too late.

I cannot comprehend why the Fed let things run amok for so long, so now, we are being slammed as the Fed tries to catch what they let go.

OK…..I’m not an econ major, I’ll give you that……but would somebody who gets this, please explain how this entire stupid century of basically giving away money at insanely low interest rates was not supposed to backfire.

Boomer

[Stu from NYC]

And here we go again……

I assume today will be another huge hike………

Too much. Too late.

I cannot comprehend why the Fed let things run amok for so long, so now, we are being slammed as the Fed tries to catch what they let go.

OK…..I’m not an econ major, I’ll give you that……but would somebody who gets this, please explain how this entire stupid century of basically giving away money at insanely low interest rates was not supposed to backfire.

Boomer

They were dealing in the short term and for whatever reason did not change their approach when economy started opening back up.

Now they are playing catchup. Why in the world is govt running huge deficit at same time?

Econ 101,
Run deficits during time of recession and surplus when economy is at full employment.

This economics major has been seeing what was going to happen a while ago.

[manaboutown]

Well, as we likely all know by now The Fed increased its rate another 3/4%.

It is still T-Bill time for me whether at tee time or tea time.

[Boomer]

Well, as we likely all know by now The Fed increased its rate another 3/4%.

It is still T-Bill time for me whether at tee time or tea time.

Well, manaboutown, looks like it’s time for me to buy some T-Bills, too, but I have never done that before.

There are some limitations aren’t there, like amount that can be bought and time they must be held?

How do I buy T-Bills? I want to put some cash to work in a safe way. Are T-Bills it?

(Cliff’s Notes instructions or a link would be appreciated if someone would not mind doing a tutorial.)

Boomer

[manaboutown]

Well, manaboutown, looks like it’s time for me to buy some T-Bills, too, but I have never done that before.

There are some limitations aren’t there, like amount that can be bought and time they must be held?

How do I buy T-Bills? I want to put some cash to work in a safe way. Are T-Bills it?

(Cliff’s Notes instructions or a link would be appreciated if someone would not mind doing a tutorial.)

Boomer

I used Schwab.

All of the T-bills I bought mature early next year so owning them will not increase my income this year. As I previously mentioned I received a huge LTCG earlier this year and am trying to avoid any unnecessary additional income through the remainder of the year.

What Are Treasury Bills (T-Bills) and How Do They Work? (https://www.investopedia.com/terms/t/treasurybill.asp)

Fixed Income Pricing - Fixed Income | Charles Schwab (https://www.schwab.com/fixed-income/pricing)

[Babubhat]

Hammer time. Sso the way to go

[retiredguy123]

Well, manaboutown, looks like it’s time for me to buy some T-Bills, too, but I have never done that before.

There are some limitations aren’t there, like amount that can be bought and time they must be held?

How do I buy T-Bills? I want to put some cash to work in a safe way. Are T-Bills it?

(Cliff’s Notes instructions or a link would be appreciated if someone would not mind doing a tutorial.)

Boomer
You can buy T-bills from Vanguard, Fidelity, Schwab, or directly from the U.S. Treasury. I would recommend one of the first three. There is no limit on the amount you can purchase.

I prefer to use the Vanguard Short Term Bond Index fund for that type of investment, not individual notes, bills, or bonds. The current yield is 4.65 percent. Very safe, but your principal can go up or down.

[manaboutown]

Through Vanguard you can purchase but not sell treasury instruments which is why I used Schwab.

"Vanguard Brokerage doesn't make a market in Treasury securities. If you wish to sell your Treasury securities prior to maturity, Vanguard Brokerage can provide access to a secondary over-the-counter market. In general, the secondary market for outstanding Treasuries provides liquidity, and the spread between bid and offer is usually narrower than for other fixed income securities. Nevertheless, liquidity will vary depending on a specific bond's features, lot size, and other market conditions. Treasuries sold prior to maturity may be subject to substantial gain or loss."

From: Vanguard - Treasury Securities (https://personal.vanguard.com/us/content/Funds/FixIncTreasuriesContent.jsp)

From Schwab: Fixed Income Pricing - Fixed Income | Charles Schwab (https://www.schwab.com/fixed-income/pricing)

Treasuries - new issues and secondary trades $0. Broker assisted trades $25

Treasury bills, notes, bonds
Treasury inflation-Protected Securities (TIPS)
Treasuries Floating Rate notes

[keepsake]

I followed some of the mentions in a thread back in February, right here on totv. The discussion was about etf in the market. I took some dough and bought some. Lost nearly 30% since then.

[Stu from NYC]

I followed some of the mentions in a thread back in February, right here on totv. The discussion was about etf in the market. I took some dough and bought some. Lost nearly 30% since then.

When the market goes down the etf will do the same. If you think the market will recover hold on.

[manaboutown]

I followed some of the mentions in a thread back in February, right here on totv. The discussion was about etf in the market. I took some dough and bought some. Lost nearly 30% since then.

Don't know what ETF you bought but 2/1/22 the S&P 500 was almost 4500 and is today about 3760. That is a drop of only 16.44%.

[keepsake]

The etf's seem to be exponentially hit. CIM, CRF, OXLC are all way over 30% down.

[manaboutown]

The etf's seem to be exponentially hit. CIM, CRF, OXLC are all way over 30% down.

Although I own few ETFs I have VDE which was about 94 in 2/22 and today was 124.

[Stu from NYC]

although i own few etfs i have vde which was about 94 in 2/22 and today was 124.

vde??

[Kenswing]

vde??

A simple Google search would indicate that it’s a Vanguard energy fund.

Vanguard Mutual Fund Profile | Vanguard (https://investor.vanguard.com/investment-products/etfs/profile/vde)

[Boomer]

Does anybody else think the Fed is myopic and has been for the past 20+ years of too low interest rates?

When the housing crisis hit, the Fed had been lowering rates and propping up unqualified buyers for overpriced houses.

This time, buyers were more qualified, but the housing market had a nutty emotional component brought on by one of the two Black Swan events. (Covid) I never thought Covid would sell houses, but it sure did.

I don’t think housing prices are going to tank like they once did, but the market will slow. Supply and demand issues are going to be with us for a while. The frenzy is probably coming to an end across the country, but people are still buying houses.

As people see their overall net worth shrink with the market, many might decide to sit tight in their current house for a while. Others will jump right in with a now-or-never philosophy and decide to put some money into buying a house, a hard asset, to be seen every day and enjoyed.

But these draconian interest rate increases are putting me in mind of a neighbor who used to holler at his kids, “STOP IT OR I AM GOING TO GROUND YOU FOR A YEAR — OR EVEN LONGER!”

Boomer

[manaboutown]

Does anybody else think the Fed is myopic and has been for the past 20+ years of too low interest rates?

When the housing crisis hit, the Fed had been lowering rates and propping up unqualified buyers for overpriced houses.

This time, buyers were more qualified, but the housing market had a nutty emotional component brought on by one of the two Black Swan events. (Covid) I never thought Covid would sell houses, but it sure did.

I don’t think housing prices are going to tank like they once did, but the market will slow. Supply and demand issues are going to be with us for a while. The frenzy is probably coming to an end across the country, but people are still buying houses.

As people see their overall net worth shrink with the market, many might decide to sit tight in their current house for a while. Others will jump right in with a now-or-never philosophy and decide to put some money into buying a house, a hard asset, to be seen every day and enjoyed.

But these draconian interest rate increases are putting me in mind of a neighbor who used to holler at his kids, “STOP IT OR I AM GOING TO GROUND YOU FOR A YEAR — OR EVEN LONGER!”

Boomer

Yes! Interest rates were held foolishly low for way too long. I hope mortgage rates moderate at their historic averages and we do not replicate the 1970s and 1980s..

In the early 1980s I had an incredible opportunity to buy a commercial property due to the owner having a variable rate mortgage on it when the interest rate he was paying hit 21%!

"The Federal Home Loan Mortgage Corporation, more commonly known as Freddie Mac, began tracking average annual rates for mortgages starting in 1971. In the first few years of recording, rates started out between 7% and 8%, but by 1974, they climbed up to 9.19%. We finished out the decade by finally entering double digits with 1979’s annual average of 11.2%.
As we headed into the 80s, it’s important to note that the country was in the middle of a recession, largely caused by the oil crises of 1973 and 1979. The second oil shock caused skyrocketing inflation. The cost of goods and services rose, so fittingly, mortgage rates did too. To jumpstart a flailing economy, the Federal Reserve increased short-term interest rates. Thanks to their efforts, more people were saving money, but that meant it was also more expensive to buy a home than at any point in recent time.
The annual rate reached 13.74% in 1980, and in 1981, the 16.63% rate was and still is Freddie Mac’s largest recorded figure. Luckily, we’ve generally been on a downward trend ever since that fateful year. The rest of the 80s were a steep hike down from the decade’s peak. We rounded out the 80s just under the last recorded rate of the 70s at a hefty 10.32%."

From: A History of Mortgage Rates (https://www.atlanticbay.com/knowledge-center/history-of-mortgage-rates/)

[manaboutown]

I regularly record Consuelo Mack's show "Wealthtrack" and watched this interview yesterday. He makes some good points about the history of the stock market with its up and downs, how far it went each way and how long the trends lasted. Of course his professional history is mostly managing fixed income portfolios but he makes some good points about having treasuries in one's portfolio, especially for seniors. THE FINANCIAL MARKETS ARE PERILOUS, WARNS ROBERT KESSLER : WealthTrack (https://wealthtrack.com/the-financial-markets-are-perilous-warns-robert-kessler/)

[Caymus]

Always amazed how fast the market can move. Stock futures shot up this morning on lower CPI. See what happens after Powell's talk tomorrow.

[Boomer]

Always amazed how fast the market can move. Stock futures shot up this morning on lower CPI. See what happens after Powell's talk tomorrow.



And here we are — the day after…….

Powell was appointed Head of the Fed in 2018. Since then we have seen two Black Swans (Covid and the War in Ukraine) and a housing market that was out of control to the point of pure insanity.

In my not-an-economist opinion, money has been too cheap for most of this entire century and now we are all caught in a catch-up game.

I am not naive enough to think that prices will go down on everyday purchases and services any time soon — or ever.

Why didn’t the Fed get a hold on what was happening before now? It has been like the Fed has been asleep at the switch for years and now it’s a mess they’ve got us in…..with no right answers. (I hope I’m wrong.)

Boomer

[melpetezrinski]

And here we are — the day after…….

Powell was appointed Head of the Fed in 2018. Since then we have seen two Black Swans (Covid and the War in Ukraine) and a housing market that was out of control to the point of pure insanity.

In my not-an-economist opinion, money has been too cheap for most of this entire century and now we are all caught in a catch-up game.

I am not naive enough to think that prices will go down on everyday purchases and services any time soon — or ever.

Why didn’t the Fed get a hold on what was happening before now? It has been like the Fed has been asleep at the switch for years and now it’s a mess they’ve got us in…..with no right answers. (I hope I’m wrong.)

Boomer

You are definitely correct in saying that "money has been too cheap" but I don't think for "most of this entire century". Remember, we came out of the closest thing to the depression back in 2008-2009. The fed DID need to make money accessible and cheap. However, they pulled back on it too slowly and then reversed course during the pandemic, which was obviously, the wrong decision. They could have realized that early enough in the pandemic but stuck with the opinion of a "transitory" inflation thesis. That was their real BIG mistake. They are now trying to get ahead of what is "sticky" inflation and stop sugar coating the outcome to the American people. There is no soft landing in these dire situations. It's only how hard of a recession we will incur and how high unemployment will grow. Yes, it's not easy to tell millions of people that you WILL lose your job and you WILL suffer economic hardship due to our mistake.

[Stu from NYC]

You are definitely correct in saying that "money has been too cheap" but I don't think for "most of this entire century". Remember, we came out of the closest thing to the depression back in 2008-2009. The fed DID need to make money accessible and cheap. However, they pulled back on it too slowly and then reversed course during the pandemic, which was obviously, the wrong decision. They could have realized that early enough in the pandemic but stuck with the opinion of a "transitory" inflation thesis. That was their real BIG mistake. They are now trying to get ahead of what is "sticky" inflation and stop sugar coating the outcome to the American people. There is no soft landing in these dire situations. It's only how hard of a recession we will incur and how high unemployment will grow. Yes, it's not easy to tell millions of people that you WILL lose your job and you WILL suffer economic hardship due to our mistake.

Very true

[CoachKandSportsguy]

So why was money so cheap for so long? Because when inflation gets very low, there is the threat of deflation, and the deflationary spiral is much more difficult to manage than the inflation spiral. If the velocity of money goes negative, which the economy was trending towards, and had a few months of it, that very dangerous.. . .

But don't fall into the trap of resulting, which is what a lot of people do when high probability strategy is successful for a long time, and then hits the low probability outcome. People will describes the entire strategy as bad, because there is a period of the low probability negative outcome. Binary thinking, as well as dunning kruger effect. The banking system and managing an economy this size is a lot more complex with all the political influences and the uncertainties of outcomes with long and variable lags.

So the avoidance of a really disastrous outcome, which can't be proven as there is no A/B testing reality on the economy. . . for many years, always has the potential for a future mistake. Its easy to blame the goverment for all the mistakees, but there are other more subtle, barely visible long term trends which are increasing the risk of economic instability, and that's all in the corporate world, which the government is trying so manage the unfortunate social effects. . .

I just try to invest / trade to take advantage of the results, without judging the difficulty of the jobs with always incomplete information about the future, which is always uncertain.

[tophcfa]

So why was money so cheap for so long? Because when inflation gets very low, there is the threat of deflation, and the deflationary spiral is much more difficult to manage than the inflation spiral.

Sportsguy, I usually concur with your opinions on these matters, but not on this one.

Money became cheap after the self inflicted housing market crash in 07/08. During that crisis, it became necessary for the government to step in and utilize the tools in their tool bag to stimulate the economy during a difficult time. Unfortunately, short term thinking politicians learned a dangerous lesson when the stimulus quickly turned the economy around. The lesson was that cheap money makes voters happy and gets them easily re-elected. Dam the long term consequences, keep the cheap money flowing and pop another bottle of Dom Perignon. Ultimately, that short sightedness created an economy which became addicted to cheap money and unsustainable debt. Now here we are with out of control inflation and dangerous debt because of many years of irresponsible and unnecessary cheap money, paying the price for shortsighted rather than long term thinking.

[chrissy2231]

Throughout May and now into June after receiving a large chunk of change from the sale of a commercial real estate property at the end of March I have been dipping my toe into the water so to speak, buying a little of this here and a smidgeon of that there. I am in no rush to dive in. On one hand if the market turns up I do not want to be left behind; on the other hand if it dives further I don't want to have placed too much in it. Rising interest rates and a recession seem to be on the near horizon but Mr. Market appears to be oblivious.

Anyone have any thoughts about taking action on the buy or sell side at this time and if so on which sectors?
I'm 76 & decided to preserve money. I sold everything and went into laddered CD's.

[chrissy2231]

I'm 76 & decided to preserve money. I sold everything and went into laddered CD's.

[retiredguy123]

I'm 76 & decided to preserve money. I sold everything and went into laddered CD's.
CDs were a good investment 30 to 40 years ago. But, since then, the Government's policy to punish savers and reward borrowers and spenders has turned them into a bad investment. Very sad.

[Boomer]

CDs were a good investment 30 to 40 years ago. But, since then, the Government's policy to punish savers and reward borrowers and spenders has turned them into a bad investment. Very sad.


Exactly…….but I am now spending some sideline cash on brokered CDs. I had never bought those before. I did not know that they are bought at $1000, so the number of CDs I needed to buy were in the number of 1000s I wanted to put in.

I have not laddered at this point. I just put some money in for 9 months at 4.70 (or was it 4.75?) annualized rate, FDIC insured, call protected.

Now…..watch for it……there will be at least one poster who will pop in to tell me I am not keeping up with inflation. (sigh) I know that, of course. But I also know it’s better than nothing like bricks-and-mortar banks think they can still get by with.

I do not sell long held dependable dividend stocks because we have been through this together before and I understand the companies enough to think they’ll be OK. Besides, if a dividend stock has been held for a very long time and the company is still doing well and has been increasing its dividend annually, without interruption, for a very long time, the math works nicely to see the dividend yield based on the original share price paid decades ago.

Boomer Whipple

[manaboutown]

I have been picking up some more 6 mo. T bills. The Fed is expected to continue raising rates so I am feeling defensive.

[melpetezrinski]

Exactly…….but I am now spending some sideline cash on brokered CDs. I had never bought those before. I did not know that they are bought at $1000, so the number of CDs I needed to buy were in the number of 1000s I wanted to put in.

I have not laddered at this point. I just put some money in for 9 months at 4.70 (or was it 4.75?) annualized rate, FDIC insured, call protected.

Now…..watch for it……there will be at least one poster who will pop in to tell me I am not keeping up with inflation. (sigh) I know that, of course. But I also know it’s better than nothing like bricks-and-mortar banks think they can still get by with.

I do not sell long held dependable dividend stocks because we have been through this together before and I understand the companies enough to think they’ll be OK. Besides, if a dividend stock has been held for a very long time and the company is still doing well and has been increasing its dividend annually, without interruption, for a very long time, the math works nicely to see the dividend yield based on the original share price paid decades ago.

Boomer Whipple

Many people don't fully understand the "keeping up with inflation" theory. It's not as simple as inflation is 10%, so I need to find an investment that matches or exceeds that rate of return. That is a flawed belief that helps financial advisors push equities. It's better to ask yourself, what has been the increase to all my expenses for a specific given time. Let's say you lived on $50,000/year and now it costs $60,000. That's YOUR specific inflation rate, which is 20%. Now, you must find an investment that covers that $10,000 increase NOT 20% to "keep up with inflation". If you had $300,000 in CD's earning 1% (yes that low and even lower!) a year ago, you were earning $3,000. CD's were earning 4% weeks ago, which would have provided you with that extra $10,000 of income and you would have "kept up with inflation". Now, this is NOT the entire picture or that I'm recommending CD's but please keep this concept in the back of your mind. Don't go chasing yield to beat inflation if it doesn't align with your risk/reward profile.

[retiredguy123]

Many people don't fully understand the "keeping up with inflation" theory. It's not as simple as inflation is 10%, so I need to find an investment that matches or exceeds that rate of return. That is a flawed belief that helps financial advisors push equities. It's better to ask yourself, what has been the increase to all my expenses for a specific given time. Let's say you lived on $50,000/year and now it costs $60,000. That's YOUR specific inflation rate, which is 20%. Now, you must find an investment that covers that $10,000 increase NOT 20% to "keep up with inflation". If you had $300,000 in CD's earning 1% (yes that low and even lower!) a year ago, you were earning $3,000. CD's were earning 4% weeks ago, which would have provided you with that extra $10,000 of income and you would have "kept up with inflation". Now, this is NOT the entire picture or that I'm recommending CD's but please keep this concept in the back of your mind. Don't go chasing yield to beat inflation if it doesn't align with your risk/reward profile.
It sounds like your analysis only addresses your current spending level. But, if you have a substantial portfolio, you need to get a return that matches the inflation rate to maintain the buying power of your portfolio. For example, if you plan to buy a $500K house in 3 years, and you have a $500K portfolio today, your portfolio needs to grow to match the inflated price that the house will cost in 3 years. Otherwise, you won't have enough money to buy the house.

[Stu from NYC]

Many people don't fully understand the "keeping up with inflation" theory. It's not as simple as inflation is 10%, so I need to find an investment that matches or exceeds that rate of return. That is a flawed belief that helps financial advisors push equities. It's better to ask yourself, what has been the increase to all my expenses for a specific given time. Let's say you lived on $50,000/year and now it costs $60,000. That's YOUR specific inflation rate, which is 20%. Now, you must find an investment that covers that $10,000 increase NOT 20% to "keep up with inflation". If you had $300,000 in CD's earning 1% (yes that low and even lower!) a year ago, you were earning $3,000. CD's were earning 4% weeks ago, which would have provided you with that extra $10,000 of income and you would have "kept up with inflation". Now, this is NOT the entire picture or that I'm recommending CD's but please keep this concept in the back of your mind. Don't go chasing yield to beat inflation if it doesn't align with your risk/reward profile.

Need to consider your tax rate in regard to what you are earning and agree 100%

[melpetezrinski]

It sounds like your analysis only addresses your current spending level. But, if you have a substantial portfolio, you need to get a return that matches the inflation rate to maintain the buying power of your portfolio. For example, if you plan to buy a $500K house in 3 years, and you have a $500K portfolio today, your portfolio needs to grow to match the inflated price that the house will cost in 3 years. Otherwise, you won't have enough money to buy the house.

Yes, my somewhat short sighted "analysis" was basically just stating what you replied in that your "substantial portfolio" needs to "get a return that matches the inflation rate to maintain the buying power". Isn't that what keeping up with inflation is all about? Many smart, wealthy people welcome a little healthy inflation, as they can still maintain their buying power with less risky assets.

[Babubhat]

More people need to understand you can make good money betting against the market. Piece of cake the last year

[tvbound]

For those who still have investment money, after betting/losing against Tesla for so many years by shorting them, 2022 finally paid off. A lot of analysts say that Musk has been too enamored with his new toy Twitter and isn't paying enough attention to Tesla and his other companies, so we'll see if he really steps away from what seems like an obsession with him.


Tesla's largest-ever decline has short sellers sitting on $15 billion in profits: Morning Brief (https://finance.yahoo.com/news/teslas-largest-ever-decline-has-short-sellers-sitting-on-15-billion-in-profits-morning-brief-110021261.html)

[Bay Kid]

TIPS is still doing good thanks to all the inflation.

[CoachKandSportsguy]

Need to consider your tax rate in regard to what you are earning and agree 100%

Thats cost / expense minimization strategy versus the wealth income maximization strategy described here

The more money you make to keep up, the more taxes you pay, so keeping up with higher inflation with higher returns will increase your taxes. .

taxes are a byproduct of doing well, and you want to do well? the only tax strategy for increased income/wealth is income gains versus capital gains. . . that balance is the key. .

I have never sat in a growth investment corporate meeting and the tax strategy was the guiding strategy. . . just a foot note. . .

[CoachKandSportsguy]

Exactly…….but I am now spending some sideline cash on brokered CDs. I had never bought those before. I did not know that they are bought at $1000, so the number of CDs I needed to buy were in the number of 1000s I wanted to put in.

I have not laddered at this point. I just put some money in for 9 months at 4.70 (or was it 4.75?) annualized rate, FDIC insured, call protected.

Now…..watch for it……there will be at least one poster who will pop in to tell me I am not keeping up with inflation. (sigh) I know that, of course.

Boomer Whipple

Great strategy, same as I doing with our money and my parents' estate.

You are correct in blue as the inflation was supply driven and very sudden, and there aren't any instruments to "buy" to keep up. However, the answer to higher prices is higher prices where capitalism wants to take advantage of it and join in the production / sales of same.
and that's where prices will fall. There were plenty of opportunities for short sales to hedge/offset increased rates.

I predict that inflation with a basis issue, will suddenly fall, and that's when very low coupon t bonds will make out tremendously with high capital gains vs interest.

There are dividend income equity ETFs which offer diversification without having to buy individual stocks to get the diversification risk reduction which i recommend as the best "simple" strategy, looking at large cap stocks + utility industry with guaranteed rates of return.

finance professional in the utility industry and formerly mergers/acquisition analyst at an investment industry supplier buying and selling investment companies.

[manaboutown]

Although Schwab's is not yet available I just downloaded yearend statements from a couple of other brokerage houses in which I hold accounts. The damage is not as bad as I feared. Yippee!

Here comes 2023!

[Babubhat]

Housing prices are only going down. You have the option of staying put. Fix your major costs. The rest can be managed.

The optimal way to pass is being deeply in debt. Let someone else hold the bag

[rsmurano]

We are not close to a bottom. You could say that we are getting closer to the bottom everyday, but nobody knows what the bottom will be.
Look at apple which is the most held stock in the world and it’s been going down almost every day. My friends have been asking me for months is it time to buy apple and I tell them wait a week and it will be cheaper, then wait another week and it will be cheaper.
I ignore these bear market rallies. You have to think about the broken system/government we have and we need changes before the market will change for the better. Passing of the omnibus bill last week will not help the stock market.

[Babubhat]

Fix your cash flows and minimize risk. The rest is noise. You can’t take it with you