Talk of The Villages Florida - Just a remainder that there are years of negative stock / index returns

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- - Just a remainder that there are years of negative stock / index returns (https://www.talkofthevillages.com/forums/investment-talk-158/just-remainder-there-years-negative-stock-index-returns-337690/)

I have been expecting a big time crash for a while now that has not YET materialized. Since we should be able to live fairly comfortably on our savings, the pension from my employer, and Social Security, I have our savings portfolio positioned very conservatively (cash, the equity in our two homes, three cars, three golf carts, tractor, ATV’s, motorcycle, and other assorted toys, and a health inventory of gold). With the benefit of hindsight, I definitely got out of equities prematurely but have no regrets as I sleep well at night with no worries, especially during 2022. Another reason I keep our savings portfolio so conservative is because the future viability of both my pension and social security are directly linked to the health of equities. I don’t wish financial pain on anyone, but I would very much welcome a big time market crash. First, it would bring inflation to its knees, and second, it would be very nice to get back into equities at much more reasonable levels that should provide long term lower risk growth.

On a side note, does anyone remember the days when a responsible Federal Reserve managed interest rates so that savers could buy risk free Treasuries and earn a real inflation adjusted rate of return of 3 or 4 percent? How nice would that be today, I’d buy a bunch of Treasure notes and bonds if I could earn 12 or 13%. Oh well, life is good, time to finish packing the car so we can hit the road first thing tomorrow morning and get to our home in the Villages for the rest of the winter : )

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Originally Posted by Fastskiguy (Post 2170439)

I'm not sure I remember a time when so many people were so sure a crash is coming. I mean, it's a given, right?

Joe

Well, there is the concept of, "self-fulfilling prophecy" which could come into play at any time. If enough people would suddenly THINK / BELIEVE that the market is going DOWN, then they would all rush to SELL their stock holdings ........and the stock market would drop and you have an instant recession.

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Originally Posted by OrangeBlossomBaby (Post 2170460)

The last time my Intel stock was this low was back in 2014. Thankfully, I acquired the initial shares somewhere around 1989/1990, when the shares were a fraction of their current value. And they've doubled, and split twice since then.

Not impressed with their current value. But I haven't lost anything and I'm still ahead of the game.

You don't completely lose until you would sell at a point below your initial price purchase. But, you could lose PARTIALLY from the recent high to IF you sold today. It is probably too late to SELL, so I would HOLD like apparently, you are doing. Intel should go back up after a likely recession, which is predicted to be a minor recession.

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Originally Posted by CoachKandSportsguy (Post 2170483)

I guess you missed the OP on that specific topic:

"The best thing that could happen to Equities is a CRASH
because we can just move on. Quickly, like in March 2020.

But no!

This time you have to suffer:
You have to pay for 10 years of federal reserve / government excesses
And by the end of this bear market, you will be begging for a Crash."

- Marquis de Shrub

What this means is that if the market went down 1/2% per day, the down would be relentless, day after day, and the human brain would extrapolate this trend to zero. .

The 70s had this type of bear market, 2000-2003 was similar. . .
looks like maybe every 20-30 years we have a relentless bear market

trading guy

I have one LITTLE disagreement. Many people believe that the FED "CONTROLS" the US economy. My meager self and many real US economists believe that the FED merely "nibbles" around the edges of the US economy. AND it certainly does NOT control the world economy. Now it IS true that many other world countries seem to pattern their prime rate similarly to the US - today Japan and China being the exceptions. Nevertheless, I still see that as merely other countries "nibbling" around the edges of their economies. As I mentioned in a prior post I believe that the US economy swims in a sea of the World Economy. The US and the US FED do NOT control that World Economy. World events and world psychology about future predictions of good or bad economies are in CONTROL, not the Fed.

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Originally Posted by rsmurano (Post 2170485)

If you don’t understand the stock market, you shouldn’t be in it and you shouldn’t pay someone to manage your money when you don’t have a clue what they are doing. Most financial advisors have a business model to make money whether you do or not. How many investors are paying advisors this year while you are losing big?
I’m a boglehead which means I mainly invest in a few (I think it was around 8) index funds mainly from vanguard that are low risk, high returns, low cost, high dividend, no loads, and very low turnover (for taxes) and I held some of these for 20 years until this year.
I also buy individual stocks that I know well like apple for example.
As for knowing what’s going on in the market, it’s not hard to know that you should have sold apple a year ago and you shouldn’t be in the Nasdaq this past year (in general terms). When apple gets into the $110-$120 area, I’ll buy, and if I miss it, I miss it.
Have you seen the multiple bear market rallies this year? You could have made good money if you got in and then got out before the market tanked again.
Timing the market: I will wait and will miss the early turnaround that will occur in the future (maybe wait for a 5% gain before getting back in) so I will not be able to sell at the all time high or buy at the all time lows, but it will be a few % either way before I react. Having cash gives you 2 benefits: you aren’t losing big right now (and when it gets bad you can kiss off dividends like what happened in the 2000 and 2008 downturns) and cash will give me the opportunity to buy funds/stocks at a much cheaper price than what I sold them for

I especially agree about MOST financial advisors. I agree about relying mainly on ETFs and Vanguard pioneered them. This is an EXCELLENT post that TV Landers should read and take to heart. It is "drop the Mike" material"!!!!!!

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Originally Posted by tophcfa (Post 2170500)

Good post and drive safely.