OT: Stock and Investment Talk
- Thread starter RU-05
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There is a bipartisan bill to raise the I bond limit to $30,000
I bonds were crap for a decade. People need to be careful with these. You get a penalty for withdrawing prior to 5 years.
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You’re only locked in for a year. The penalty for withdrawal in years 2-5 is only 3 month of interest. If the interest drops very low due to a lack of inflation that is a get of jail free card. I like TIPS right now. They’re yielding 1-2% over inflation.
How about VFC slashed their 2023 forecast dropped 6% today dividend rate is 6.5% and has raised their dividend annually every year for 49 years. I just added some more.
2008 was a wild ride for sure. And due to what my job was at the time I remember it like it was yesterday. Today is certainly different than ‘08 but it also isn’t just a run of the mill bear equity market either.
At this point isn’t this very much a run of the mill bear market?
I had to go back to the charts in 2008 and I see the S&P went from high of 1560 to the low of 700 which is about 55% drop. The current market S&P can easily hit 3,000 from the high of 4,800 which is a drop of 38%. It can go down to 50% since capitulation may drop the market by 10% for just a couple of hours.
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In 2008, the entire financial system almost collapsed. Nothing nearly that serious is happening now.
Yet! With a dementia patient in the whitehouse, this could get bad real quick.
These markets also are a valuable teaching lesson for individuals that go into the stock market without a plan because they believe it’s easy money and stocks never lose value. Add the fact some get their confidence so high because they bought the in stock.
Some never return to the market while others start to learn some basic truths about investing
My first go round of a market crash was the Friday and Monday in October of 1987. It was my luck that my assets were limited and time was on my side.
Some never return to the market while others start to learn some basic truths about investing
My first go round of a market crash was the Friday and Monday in October of 1987. It was my luck that my assets were limited and time was on my side.
There are plenty of "investors" out there who started around 2010 and slowly and surely became assured that they were very good at this. Arrogance. Ignoring the fundamentals. Enhancing returns with leverage. Same thing in the mid to late 90's with tech. Financial crisis in 2008 with Lehman wiped and Bear humbled. The market can teach some brutal lessons that are not soon forgotten. Depending on where you are in your life, a large loss may not be able to be overcome. But with every down market, opportunities are created and younger investors can grow their portfolios from a lower base. The business/economic cycle has not disappeared. Pigs get slaughtered.
T2K fits your first sentence and that’s why he’s so gung-ho. He might have some investment before 2008 but he was just starting his career. I stopped using margin in 1987 when I was in graduate school. I am always cautious and feel safer when I’m in cash. It gives you the opportunity when something bad happens..
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The market will rally when the Congress becomes divided. Wall Street loves gridlock!
Started investing in late 2005, so I experienced 2008/2009. Also, never used margin and never will. I just know the math and what works best. Buying on the way down is better than buying on the way up.....over the long run.
Talking ETFs and funds. Stocks are another animal and something I only dabble with.
The market also teaches patience and perspective. Is a paper loss really a loss if you don't need the money and won't for 15+ years? I say no. Markets like this are amazing opportunities to build wealth.....if you don't freak-out.
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Hotter than expected but the market, at least as of now in the pre-market, seems to be shrugging it off.
MoM shows significant cooling of inflation. 0.3% gives an annualized rate of 3.6%. Getting better.
The Fox Network viewers will call this fake news.
The righties need the fear mongering to try and regain power.
But it is very good news.
Unfortunately, the Fed places higher weighting on the year over year headline reading. As long as employment is strong and inflation is above the 2% target, they are going to keep raising.
Yes they have finally and if you look at a lot of their charts, they're practically the same. Still not enough yield for me as they stand now though. Some aren't even at 4% yet but they're getting there. Even that's not enough IMO.
My first job out of Rutgers was at Bear Stearns in 1990. Peter Lynch was a legend at that time. A name everyone knew.
you're a moron, it's the left that put us in the spot to begin with the over the top hysteria from covid and abandoning sound budget principles. I could go on but anyone supporting the left right now needs their head examined.
How is this good news when the numbers released today show inflation is growing in both month over month or year over year? Headline and Core inflation are not showing any signs of slowing.
I was an economics major at Rutgers. Economic theory has remained a part of my job and is still a "hobby". Personally, I don't think the Fed is doing a great job right now, but the major role of the Federal Reserve revolves around employment and inflation. The Fed influences these measures with monetary policy. The performance of the stock market has no bearing on Federal Reserve policy. None.
That written where I believe the Fed is "missing the mark" relates to inflation. The chart below is the US Household Savings rate for the last 60 years. Notice anything? From 2020-early 2022 US households were saving at anywhere from 3x-6x historical rates. Rich, poor, middle income... doesn't matter. No one was spending money.
Easily explained (imo) as during the pandemic folks weren't taking trips, not going out for dinners, no business travel, etc. etc. And the Savings rate soared. So what happens when there is a (relatively speaking) ton of money in personal bank accounts and the country "reopens"? Folks spend. Look at stocks that have outperformed the market over the last 9 months: airlines, casinos, leisure, automotive...Demand has risen quickly, supply was cut way back during the pandemic so cannot keep up with demand and costs rise (inflation).
I saw posts earlier about the costs of eggs or milk or other food stuffs. So what happens when restaurants (for example) haven't ordered these items for two years, suppliers cut back supply and labor associated with these items and then see, almost overnight, demand soar?
It is my opinion that as that excess money that has been saved for almost two years by US households "burns off" we should see some return to a "normal" supply/demand relationship which by itself should/could slow inflation. The Feds aggressive policy on interest rates with the goal of slowing inflation (again imo) is not properly taking the below in to account and is (imo) overshooting as it relates to their efforts to slow inflation. There is a part of this that should/could normalize on its own.
Just my $0.02
That written where I believe the Fed is "missing the mark" relates to inflation. The chart below is the US Household Savings rate for the last 60 years. Notice anything? From 2020-early 2022 US households were saving at anywhere from 3x-6x historical rates. Rich, poor, middle income... doesn't matter. No one was spending money.
Easily explained (imo) as during the pandemic folks weren't taking trips, not going out for dinners, no business travel, etc. etc. And the Savings rate soared. So what happens when there is a (relatively speaking) ton of money in personal bank accounts and the country "reopens"? Folks spend. Look at stocks that have outperformed the market over the last 9 months: airlines, casinos, leisure, automotive...Demand has risen quickly, supply was cut way back during the pandemic so cannot keep up with demand and costs rise (inflation).
I saw posts earlier about the costs of eggs or milk or other food stuffs. So what happens when restaurants (for example) haven't ordered these items for two years, suppliers cut back supply and labor associated with these items and then see, almost overnight, demand soar?
It is my opinion that as that excess money that has been saved for almost two years by US households "burns off" we should see some return to a "normal" supply/demand relationship which by itself should/could slow inflation. The Feds aggressive policy on interest rates with the goal of slowing inflation (again imo) is not properly taking the below in to account and is (imo) overshooting as it relates to their efforts to slow inflation. There is a part of this that should/could normalize on its own.
Just my $0.02
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Certainly part of the equation as most personal balance sheets were in good shape even through the worst of the pandemic (various stimulus programs and forbearance also helping the cause). Political hacks fail to mention, among other things, that basically all of ‘45’’s tariffs remain intact.I was an economics major at Rutgers. Economic theory has remained a part of my job and is still a "hobby". Personally, I don't think the Fed is doing a great job right now, but the major role of the Federal Reserve revolves around employment and inflation. The Fed influences these measures with monetary policy. The performance of the stock market has no bearing on Federal Reserve policy. None.
That written where I believe the Fed is "missing the mark" relates to inflation. The chart below is the US Household Savings rate for the last 60 years. Notice anything? From 2020-early 2022 US households were saving at anywhere from 3x-6x historical rates. Rich, poor, middle income... doesn't matter. No one was spending money.
Easily explained (imo) as during the pandemic folks weren't taking trips, not going out for dinners, no business travel, etc. etc. And the Savings rate soared. So what happens when there is a (relatively speaking) ton of money in personal bank accounts and the country "reopens"? Folks spend. Look at stocks that have outperformed the market over the last 9 months: airlines, casinos, leisure, automotive...Demand has risen quickly, supply was cut way back during the pandemic so cannot keep up with demand and costs rise (inflation).
A saw posts earlier about the costs of eggs or milk or other food stuffs. So what happens when restaurants (for example) haven't ordered these items for two years, suppliers cut back supply and labor associated with these items and then see, almost overnight, demand soar?
It is my opinion that as that excess money that has been saved for almost two years by US households "burns off" we should see some return to a "normal" supply/demand relationship which by itself should/could slow inflation. The Feds aggressive policy on interest rates with the goal of slowing inflation (again imo) is not properly taking the below in to account and is (imo) overshooting as it relates to their efforts to slow inflation. There is a part of this that should/could normalize on its own.
Just my $0.02
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I was an economics major at Rutgers. Economic theory has remained a part of my job and is still a "hobby". Personally, I don't think the Fed is doing a great job right now, but the major role of the Federal Reserve revolves around employment and inflation. The Fed influences these measures with monetary policy. The performance of the stock market has no bearing on Federal Reserve policy. None.
That written where I believe the Fed is "missing the mark" relates to inflation. The chart below is the US Household Savings rate for the last 60 years. Notice anything? From 2020-early 2022 US households were saving at anywhere from 3x-6x historical rates. Rich, poor, middle income... doesn't matter. No one was spending money.
Easily explained (imo) as during the pandemic folks weren't taking trips, not going out for dinners, no business travel, etc. etc. And the Savings rate soared. So what happens when there is a (relatively speaking) ton of money in personal bank accounts and the country "reopens"? Folks spend. Look at stocks that have outperformed the market over the last 9 months: airlines, casinos, leisure, automotive...Demand has risen quickly, supply was cut way back during the pandemic so cannot keep up with demand and costs rise (inflation).
A saw posts earlier about the costs of eggs or milk or other food stuffs. So what happens when restaurants (for example) haven't ordered these items for two years, suppliers cut back supply and labor associated with these items and then see, almost overnight, demand soar?
It is my opinion that as that excess money that has been saved for almost two years by US households "burns off" we should see some return to a "normal" supply/demand relationship which by itself should/could slow inflation. The Feds aggressive policy on interest rates with the goal of slowing inflation (again imo) is not properly taking the below in to account and is (imo) overshooting as it relates to their efforts to slow inflation. There is a part of this that should/could normalize on its own.
Just my $0.02
I have heard for years that the US needed to increase our savings rate. As soon as we do it there are other consequences.
Somewhere there is a sweet spot
Per Bloomberg earlier today, "BofA strategists said to “bite” into the S&P 500 at the 3,300 level -- about a 9% decline from the latest close, “nibble” at 3,600 and “gorge” at 3,000. Hartnett and his team added that a drop of 20% below 200-day moving average has been a good entry point back into stocks in the past 100 years."
I attached an article with those levels earlier. Have you been nibbling?
Here’s the article.
Bonds are in the midst of their worst crash since 1949, and the fallout could unravel some of the market's most crowded trades, Bank of America says
"Bond crash in recent weeks means highs in credit spreads, lows in stocks are not yet in," Bank of America's Michael Hartnett said.markets.businessinsider.com
Specifically, Hartnett said the ongoing bond market crash can lead to a credit event that would effectively unwind the long US dollar, long US tech, and long private equity trades, which have been widely held by investors for years.
Those crowded trades have helped catapult mega-cap tech companies like Apple, Amazon, Alphabet and Microsoft into trillion-dollar behemoths that make up nearly 20% of the S&P 500.
"True capitulation is when investors sell what they love and own," Hartnett said.
Aside from investor capitulation, one more sign that a bottom in the stock market has arrived is when interest rates peak, but given the Fed's hawkish commentary at Wednesday's FOMC meeting, that may not happen anytime soon.
"Fed funds, Treasury yields, US unemployment rate all heading into 4-5% range next 4-5 months/quarters," Hartnett said, adding that investors want policy coordination and credibility from governments and central banks, and "until they get it are likely to press shorts."
Despite the bearish view, Hartnett is constructive on US stocks if they continue to fall lower. "Nibble at 3,600 [on the S&P 500], bite at 3,300, gorge at 3,000," Hartnett said. But until those levels are reached, cash and commodities are likely to outperform stocks and bonds, according to the note.
A decline to Hartnett's 3,000 scenario on the S&P 500 represents potential downside of 18% from current levels. The S&P 500 hit a low of 3,663 during Friday's steep sell-off
Just with 4.25% 2-year Treasuries. I "think" waiting a bit is prudent.
I’m normally an impatience person and have been more patience in investing. I know I should wait more. I now purchase 5 shares to start off the process instead of the 100 shares and hope the market moves faster before I get the urge to purchase larger quantities. It also helps in tracking the stocks I want to buy but at lower prices.
Like food and energy don't matter. Core is crap (unless it better supports my point!).
