Summarization of current investment landscape. . .
 

The case for a prolonged bear market in stocks. .
aka perma-bear porn:

1. China real estate in crisis
2. Pandemic excess savings gone
3. Lagging effects of rate hikes starting to bite credit availability - residential housing
4. Jobs creation mainly in low pay service areas
5. CRE distressed
6. New COVID variant making the rounds
7. real interest rates rising to highest in many, many years
8. Size of national debt interest payments requiring huge treasury increase in bond offerings
9. Student loan payments start up again after two+ years of suspension
10. Russian roulette by Putin with agriculture and energy and lives. .

lots of historically first time events which are very hard to predict the outcomes. .
makes market investing less certain of the outcome in the next 5 years for sure

good luck!

Regarding No. 7, being a saver, not a spender, the rise in interest rates has resulted in a huge increase in my income. My Vanguard money market fund went from earning 0.02 percent to 5.28 percent.

Warren Buffet once said "Never bet against the US economy". Over time the market always goes up. Remember, the rich own most of the market, they will do whatever it takes to make money over the long term.

Long term still have faith in US economy but better to stick with high quality equities.

Great post Coach!!!

Rates will eventually come back down. Now is a great time to purchase those equities with decent yields and perhaps upside potential. Any suggestions for consideration??

I will throw in a few to start the list: 1) Utility stocks are down about 30% with very decent and safe yields. 2) If you want to take some risk look at CVS and HE as both have had recent events that resulted in pull-backs.

I hope we do not see another Black Monday (Oct. 19, 1987). A Black Swan event is possible. For now I am keeping half of my securities portfolio in six month T -Bills. 5.47% recently.

Real estate remains my largest holding, both residential and commercial. I remain comfortable with that mix.

Our remaining savings are all in cash bonds, pretty much tax free, tracking inflation or RPI.
Doing very nicely thank you very much.

I used to believe there were rules to the economy. No longer. The Government has learned that they can spent infinite money, build an infinite debt and pay for everything with infinite borrowed money.

Math wise the current debt can not actually be repaid. But it can grow to any number and interest on debt paid by making that number even higher. And just add any new spending in the mix keeping Corporations profitable.

Just pretend the National Debt is $500 Trillion instead of $30 something trillion. Just borrow as many trillions as needed to pay interest on the $500 trillion adding to the existing debt of $500 trillion. Repeat every year forever.

Are you implying that the market "Climbs a wall of worry"?:angel:

HE is a very high risk investment. . . most likely looking for a buyer of distressed assets.
Utility stocks as a diversified ETF makes the most sense, as any single stock has a much higher event risk . . . such as HE
CVS and many of the corporate self funded benefit plan managers are starting to get questioned about the growth in claims and total cost, as its been growing faster than inflation. The benefit managers are claiming patient privacy laws as a way to stonewall giving out information to review management effectiveness.

The SP500 has evolved into mostly near monopoly and oligopoly economic players, so the mega cap stawks of the SP500 will perform the best over time.
Avoid high debt laden corporations.


David Rosenberg @EconguyRosie typed:

Bob Farrell’s Market Rule #8:
Bear markets have three stages –
1. sharp down
2. reflexive rebound
3. a drawn-out fundamental downtrend.

We just moved into the third stage.


Personally, I am researching how to identify market rotation between ETF sectors. . I am in the middle of creating a server database with all the financials from EDGAR stocks for the past 10 years, courtesy of their quarterly extracts of filings, so that I can look at sector fundamental information as well . . .

I am threatening the TV stocks club with my presence!

Coach K, you noted...Personally, I am researching how to identify market rotation between ETF sectors. . I am in the middle of creating a server database with all the financials from EDGAR stocks for the past 10 years, courtesy of their quarterly extracts of filings, so that I can look at sector fundamental information as well . . .


Very interesting, keep us posted on the summary!!

Buy Disney now

Too hard to beat the market.

IMHO rather go with a basket of good no load mutual funds that have excellent track records in good and bad markets over a good number of years.

Good afternoon to all you money-talkin’ guys,

Here’s my advice to you:

Keep in mind that in actuality the stock market is exactly like that crazy girlfriend you had in high school…..

Remember……

There were days when you could do no wrong.

And there were days when you could do no right.

But you could never figure out in advance if what you were doing was going to turn out to be right or wrong.

That’s it.

Boomer

PS: No! I am NOT that crazy girlfriend you had in high school. ;)

Sounds like my ex-wife and yes I am happily divorced from her!

From ChatGPT on sportguy’s points:

Economic Uncertainty Amidst Unprecedented

Personally, I always went for The crazy ones. Never a dull moment! I am all in on equities

I think the one thing that is keeping the market going right now is the spending of the baby boomers. The Boomers for the most part, lived during the best economic times in America and have accumulated a lot of wealth. The Boomers are in the fourth quarter of life and are not holding back in their spending in retirement. When this cycle ends, watch out. No political party is going to solve the problem, we are too far gone.

Well, the market returns have usually beat my mattress's returns, though it seems for the last 24 months I am down 10% after expenses. Might be time to change horses.

We all know that another major financial dislocation is coming and most likely you will not be given a heads up by watching CNBC.

Remember Cramer?
Bear Stearns is fine. Do not take your money out. If there’s one takeaway, Bear Stearns is not in trouble. I mean, if anything, they’re more likely to be taken over. Don’t move your money from Bear. That’s just being silly. Don’t be silly.

Question is what tell-tale signs should we be looking for? Credit Card delinquencies, 401K borrowing, advance decline line? Are there analysts that have a good record on timing the market? Permabears and Permabulls are really useless.

In hindsight it is always obvious but is it possible to predict it beforehand in time to get out or short the market? The Fed does make it difficult since they have several ways to prop it up.

Even when I've accurately assessed the big picture, "certainty" was ultimately wiped away by "timing" issues.

John Maynard Keynes – “Markets can remain irrational longer than you can remain solvent”

Over the long haul, I have done very well investing in the stock market. It all depends on how soon you need the money. I will not need to increase my earnings in the next 5 years so I am willing to keep my money in equities (low cost no load mutual funds). It will be hard to predict when the rebound will come but when it comes, it is usually significant. Of course, if I die before the uptick comes, then I will have chosen poorly.

And now after a tone of cautious uncertainty, ChatGPT writes on sportsguy’s same points in the tone of Jim Cramer.

(Click link and scroll toward the bottom)

Economic Uncertainty Amidst Unprecedented

Thing is depending on one’s bias, they can spin the same economic information in opposite ways.

In my opinion, listen to what Jim Cramer says and do the opposite.

To paraphase Allan King, if that happens your loved ones will have good reason to be unhappy.

A few comments if your considering locking in returns with utilities with stock prices down due to higher rates. Thus possibility of picking up good rates and future growth when rates come back down:
Some ETF's: VPU, XLU, IDU,
Short list of stocks (but many others) ETR, AEP, DUK.
Also look at holding in VPU

The famous line 1.5 years ago: even a 12 year old could have seen this downturn coming. I sold out most everything 1/1/2022 and got back into oil fund last year for a few months, money market fund that pays over 5%, got into apple late last year and got out a couple months ago, in a tech index fund, and bought into an AI company. Most of our money is in 5.x% money market.
IMO, we are heading for a crash, just as big as 2007/2008. Consumer debt, China downturn, insolvent banks, only 7 stocks supporting the whole market, federal reserve is clueless, corrupt administration.

Everybody has been saying a recession is coming "soon". It's like "for sure". It's "obvious". So of course I'm looking to see some upside.

Joe

One of the best funds I have had for many years is Contrafund. It does the opposite of what the prevailing opinion of the market says will happen.

Fly first class or your kids will.

Boomer

Interesting, The FED has piled into mortgage backed securities since COVID started. About 1.4 trillion. Now they are starting to unwind.

Assets: Securities Held Outright: Mortgage-Backed Securities: Maturing in over 10 Years: Wednesday Level (MBS10Y) | FRED | St. Louis Fed

I wonder what that means for the housing market if anything. They first started purchasing during the 2008 housing crisis. Higher rates?

Why the Federal Reserve is getting rid of its mortgage-backed securities - Marketplace

Cannot read article but they will lose a lot of money selling these securities

Fixed-rate mortgages are tied to the 10-year Treasury yield. When that goes up or down, fixed-rate mortgages follow suit.
How The Fed's Rate Decisions Move Mortgage Rates | Bankrate

10-year Treasury yield hits highest level since 2007
Access Denied

Let me know one week before the 10 year peaks. ;);)

Big, fat dividend stocks???
 

T v. MO? Interesting video from fool.com a couple of days ago……

Not much growth expected from either. Other factors come into play, too. And one, of course, is a sin stock — however that makes you feel.

(Believe you me, this is not a recommendation. I don’t do that — ever. The size of those dividends right now just happened to catch my attention.)

“Never forget that yield is not all there is to dividend investing,” said Boomer, stating the obvious.

Boomer

Yes but the age old question that has never been answered for the long run...how do you know when a specific stock or even segment will make a move? Without insider information you are only guessing. Regardless how accurate your rear view mirror is, it is still a rear view which has no bearing on the future. If all the super computers on the planet cannot predict where the market will be tomorrow, how can we?

Not sure, but I played golf with a local mortgage broker on Saturday, and in the very old, highly developed suburbs of New England, housing inventory is so low due to 3% refinancing and working from home, that prices are still increasing, even at these rates. .

However, this is not the entire market nor the entire country, just largely east coastal and old, well developed sections. .

higher rates will come from the treasury re-funding of an additional $1T for trillion of treasury bills and notes sales over the next three months or so. . this is already planned and announced, as well as china selling some holdings in order to prop up their currency in the FX market, which is waste of money.

maoist communism and consumer / free markets can't coexist together in harmony because of the basic inherent conflicts between the two philosophies. . .

good luck. .

LOL! i have tried to get some programming logic out of it, and it took several attempts. . and some of the answers are flat out wrong, but some will find it helpful as they better learn prompt design to get the best answer out of it. .

The ChatGPT financial portfolio is NOT doing well, last i read and looked. . so again, its very early stages, but also a very dangerous piece of software. It will enable people who want to perform evil to do so more easily, as well as give Dunning Kruger types information which they won't know how to use properly. .

Well, it seems best to do it in a strong housing market.

And you can thank General George Marshall for single handedly ensuring that Mao Zedong would defeat the Nationalists and rule China until he died. All because he hated Chiang Kai-shek.

Because you generally don't "invest" in the markets to catch a short term "move". You invest for the long term and that "age old question" has been answered time and time again, in that, the markets will be higher in the future.