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!