The mother of all dead cat bounces?

[aasdfadsf]

Okay. Is it me, or is the market about to incinerate (checks calendar) right about now? I normally would never do this, because I'm of the opinion that you should never try to call these things, but I am a little beside myself about how the markets have tried heroically to bounce back after their recent "correction", except that wasn't much of a correction. They were seriously overvalued to begin with. And now nothing that sent them into a tailspin has been solved. We still don't know if, or what, or how much we're going to be subjected to massive tariffs, or if the weirdo guy pulling this shit will ever stop fucking with the world economy like it's a voodoo doll. Consumer sentiment is in the pits. Container ships have stopped moving. Businesses don't want to invest. Every indicator is terrible. And the market keeps whistling past the graveyard. I cannot see how this gets better before it gets massively worse.   

Someone talk me off the cliff (metaphorically speaking; I'm okay personally). I'd like to hear informed opinions about why we are, or are not, about to get fucked in the goat ass and why. None of this makes sense to me. I just cannot see this going on without a serious, and very large, downward move in the coming months. I won't say it's this month or the next or even six, but I have run away from the market and that is something I would normally not do. Every time I look at the market, I see plague. Am I the crazy one?   

[Juan Ponce de León]

Yes this is the moment where all the people who panic sold the bottom begin losing the plot.  Happens every time.

[aasdfadsf]

Let me clarify something. I am not asking for advice. I divested most of my domestic stock back in February and am primarily in money market funds.

I am asking if anyone else is seeing the very bad things that the markets don't seem to want to price in. And if not, your thoughtful explanations as to why not.

[vand]

I normally would never do this, because I'm of the opinion that you should never try to call these things

I divested most of my domestic stock back in February and am primarily in money market funds.

imo you just need to find a way of investing that you can stick with without trying to dance in and out whenever there is something happening in the world. Otherwise you talk the talk but don't walk the walk...

[AuspiciousEight]

The price of any particular stock or stock index fund is determined just like the price of anything else. It's ultimately a matter of what investors who currently own the investment are willing to sell it for, and what investors who want to own the investment are willing to pay to purchase it.

The extent that the price is impacted by any external thing like the economy or geo-political matters is based on how investors feel collectively about said thing or event.

In a lot of cases when deeply horribly things occur - thinking back in the spring of 2020 during covid panic - when it isn't completely clear what the impact will be on any particular investment investors who are more cautious tend to panic sell from the fear of what could happen. Since they don't actually know what will occur imagination and a need for safety is what drives their decisions.

This happens with pretty much every calamity. Even if it is still ongoing, most of the people who are the most worried get out early. There is basically always a period of panic selling at the beginning.

The full effects of the tariffs on the economy is yet to be seen, but it's always important to keep in mind that the price of investments is driven by what investors are willing to pay for it, and this may be very divorced from underlying fundamentals like the assets or earnings of a company.

[Metalcat]

I normally would never do this, because I'm of the opinion that you should never try to call these things

I divested most of my domestic stock back in February and am primarily in money market funds.

imo you just need to find a way of investing that you can stick with without trying to dance in and out whenever there is something happening in the world. Otherwise you talk the talk but don't walk the walk...

Exactly, there are no magic buttons you can press in your brokerage account to drastically out perform the market in good times or bad. Cash may feel "safe," but it's just a different risk profile than being invested.

The biggest risk is being reactive and thinking that you can somehow outperform everyone else based on your gut.

[reeshau]

We still don't know if, or what, or how much we're going to be subjected to massive tariffs, or if the weirdo guy pulling this shit will ever stop fucking with the world economy like it's a voodoo doll.

You said it yourself; no one knows.  Whether the correction itself or the bounce back, the short-term volatility is speculation.  We will know what was right come July--assuming nothing changes until then.  The Fed will have met, and either confirmed or denied the rate cut that many believed was due in June.  The 90 day delay on the "reciprocal" tariffs will have passed.  The water-borne supply chain will have emptied, or not.

Will this change the world forever?  Did the pandemic supply chain issues change the world forever?  Yes, and often in ways nobody could predict.  And no, it was not the end of the world, and neither will this be.

The problem with successfully timing getting out of the market is that you then have to get back in.  If you aren't right, twice in a row, then you weren't right at all.  And the best time to get back in the market will have been the very scariest time, in the moment.  But, that can only be judged after the fact, and too late to act.

It would be better, instead, if you pictured yourself 20 or 30 years from now, and ask yourself how crucial 2025 will have been to your life then.

It probably won't be that crucial to anyone else's life, either.

[ATtiny85]

I am asking if anyone else is seeing the very bad things that the markets don't seem to want to price in. And if not, your thoughtful explanations as to why not.

Uh, no, nothing. The market will do its thing, companies will do their things. I recently retired from a F100 company that makes big machines. All the poor suckers I left behind are still working to develop and launch products. The stock market can and will whip up and down in short sighted reactions, but a lot of products take five or more years to develop and launch. That gives my continued long term confidence.

Obligatory comment about how there are thousands of people working “in the business” who individually know more about what’s really going on in the markets, what’s fully priced in, what’s not quite, etc., than the collective knowledge of this entire board. Of course, not all of them (maybe any?) have the same objectives as I do, which was to save and live in a way that let me achieve freedom somewhat early.

[GilesMM]

I agree. This is a massive dead cat bounce.  The tariffs were enacted but nothing happened so panicked markets jumped up again.  Nothing happened because everyone had pre-bought ahead of tariffs and because there was enough pre-tariff inventory to smooth things over. IF the tariffs remain in place and the costs actually ever flow into actual sales prices THEN the SWHTF.  The timing will vary by product/industry but I'm guessing around June we will hit the iceberg.


My guess is staying out of the market until things return to normal is what a lot of people are doing.  That may take four years but probably less.

[vand]

You don't HAVE to just invest in US stocks, you know??

There's a huge universe of other markets that you can invest it.  VEU covering the rest of the world is solidly HIGHER than it was on Apr 1st... missing that is what you get for waiting and for tunnel-visioning on such a narrow investment thesis.

[Sibley]

I've shifted a decent chunk of my portfolio from US to international. The stock market is not rational. People are not rational. And it can take quite some time for big issues to actually tank the market. Look at the meltdown in 2008. When did the markets ACTAULLY crash? And when did the problems ACTUALLY begin? Because those are not the same dates.

Realistically, it's going to take months or years for everything to play out. Do a good hard think about your investment policy, risk tolerance, plans, etc. Get everything set accordingly. Then just take the ride.

[ChpBstrd]

I like to respond to these inquiries as an exercise to sharpen my own thinking and see the big picture. However, I DO NOT agree that "Every indicator is terrible." Maybe the ones on the news, but not if you have a broad range of things you look at.

Bearish Arguments

• GDP was just reported as -0.3%.
• Tariffs could reduce aggregate demand and raise prices.
• Government layoffs could raise unemployment and reduce aggregate demand.
• High inflation could necessitate rate hikes, not rate cuts.
• I'm hearing a lot about private sector layoffs!
• The national debt is out of control and we are heading for a bond market collapse.
• Consumer sentiment is tanking, and most of the economy is consumer driven.
• Trump is doing awful things.

Bullish Arguments

• The GDP report reflects increased gold imports, not mass layoffs and a shutdown of consumption. The Atlanta Feds GDPNow nowcasting tool actually had to adjust their model to reflect this factor, and they correctly predicted GDP. Anyone who thinks we're in recession should think it over while waiting for a restaurant table.
• Tariff policy has yet to be consistent in the first 3 months of this administration, so good luck forecasting where it will be six or twelve months from now. Plus we have the EXACT SAME PRESIDENT who scared us all with tariffs in his first term and then quickly negotiated a "deal" on almost all of them soon after the stock market corrected and his ratings went down. If it was at least a different person, the future wouldn't be so obvious. Does anyone wish they'd sat out 2016-2019?
• Government layoffs have yet to show up in the unemployment insurance numbers because most of these people are getting months of severance while they hunt for their next jobs in a market with a historically low 4.2% unemployment rate. In other words, many/most of them will never appear to be unemployed or go without income.
• It is unclear whether the Fed will change monetary policy when price changes have obviously come from tariffs. Most communications have indicated a "wait and see" approach that could mean flat rates for the next 12 months. I'm sure they're studying how to attribute price changes to tariffs versus baseline inflation, and will be looking at models to adjust for on-again, off-again tariffs.
• Purported layoffs are simply not showing up in the data as of last week. Initial claims are still near rock-bottom. Continuing claims are similarly nothing but good news, and are at lower levels than the booming 20-teens.
• If the Treasury market was running out of buyers, why are 10 year yields only 4.1%? It seems like a bold bet that inflation will be under control too.
• Find the correlation with GDP or stock prices and consumer sentiment. I can't. If anything, consumers deal with their poor sentiment by consuming even more. Maybe that's why the latest PCE report shows a +0.7% increase in spending in March.
• Trump also did awful things in 2016-2020. He engaged in bribery and corruption. He broke the law. He enacted tariffs that damaged the economy. He worked against public health efforts in the wake of a pandemic, contributing to the death of 1.2 million Americans and the developed world's worst fatality rate. And the stock market boomed despite it all.

[roomtempmayo]

They were seriously overvalued to begin with. And now nothing that sent them into a tailspin has been solved. We still don't know if, or what, or how much we're going to be subjected to massive tariffs, or if the weirdo guy pulling this shit will ever stop fucking with the world economy like it's a voodoo doll. Consumer sentiment is in the pits. Container ships have stopped moving. Businesses don't want to invest. Every indicator is terrible. And the market keeps whistling past the graveyard. I cannot see how this gets better before it gets massively worse.   

One of the interesting parts of this downturn-bounce sequence is that institutional money is running while retail investors are staying in the market.  It's not being driven by evidence.  It's vibes.  And for now, the American retail investor class (very disproportionately white Boomer men) think the vibes are friken great.

[dividendman]

Is what you're saying that Top is in? I think there is a thread for that already.

[TheAnonOne]

"The market can remain irrational longer than you can remain solvent" - possible paraphrase from memory

End of the day, the money printer is ON from a deficit spending standpoint, and that money has to go somewhere. IMO it's a SOMEWHAT overlooked component to the insane bull market of the last decade and a half.

[MustacheAndaHalf]

When two sources both lie frequently, it can be hard to distinguish who is lying.  Trump claims meetings with China, and China's foreign ministry denies it.  When Trump was questioned on the phone call he had with China's President Xi, his answer sounded evasive and made up to me.  I think Trump is lying about meetings with China in order to put a positive spin on something that is going badly.

Trump will lose this trade war with China.  China can stop selling rare earths to the U.S., halting production of numerous advanced products - including weapons made by the U.S. military.  China has a large number of U.S. treasuries it can start dumping, to push prices lower and yields higher.  When China and other countries did this for one day, Trump's reaction was to pause tariffs owing to problems in the bond market.  Finally, China can visit countries and point to U.S. instability, and urge countries to make stronger trading relationships with China.  This whole situation favors China, even if they simply wait.

I suspect Europe will use the 90 day pause to build a unified front against Trump.  Instead of letting Trump negotiate with individual countries, he'll have to deal with the whole EU.  Other countries might join this coalition, since they're in a much stronger position negotiating together.  That makes it harder for Trump to get anything he wants with his tariffs.

What I think the market is missing is the ill will generated by Trump's actions around the world.  Tourism is down sharply, and won't recover quickly if Trump makes policy changes.  Similarly, trading partners who shift trade away from the U.S. may be reluctant to shift it back while Trump is still in power.  Both of these drive down growth in the U.S. in a way that won't recover when Trump reverses his policies.

[GuitarStv]

What I think the market is missing is the ill will generated by Trump's actions around the world.  Tourism is down sharply, and won't recover quickly if Trump makes policy changes.

All those illegal ICE deportations . . . and Trump ignoring the Supreme Court about bringing people back to have fair trials?  Yeah, that's having at least as much of an impact on tourism.  Coming to a democratic country that's implementing an unchecked immigration Gestapo and a constitutional crisis is a lot less appealing than coming to a country with rule of law.

[MustacheAndaHalf]

What I think the market is missing is the ill will generated by Trump's actions around the world.  Tourism is down sharply, and won't recover quickly if Trump makes policy changes.

All those illegal ICE deportations . . . and Trump ignoring the Supreme Court about bringing people back to have fair trials?  Yeah, that's having at least as much of an impact on tourism.  Coming to a democratic country that's implementing an unchecked immigration Gestapo and a constitutional crisis is a lot less appealing than coming to a country with rule of law.

I doubt foreign tourists are following that specific case closely (a man mistakenly deported with hundreds of MS13 gang members), but the U.S. has also been increasing scrutiny of everyone at the border.  Tourists are being harassed and interrogated more than before, and they tell their friends.  The attitude ICE has towards tourists is likely making a bigger contribution.

[Metalcat]

What I think the market is missing is the ill will generated by Trump's actions around the world.  Tourism is down sharply, and won't recover quickly if Trump makes policy changes.

All those illegal ICE deportations . . . and Trump ignoring the Supreme Court about bringing people back to have fair trials?  Yeah, that's having at least as much of an impact on tourism.  Coming to a democratic country that's implementing an unchecked immigration Gestapo and a constitutional crisis is a lot less appealing than coming to a country with rule of law.

I doubt foreign tourists are following that specific case closely (a man mistakenly deported with hundreds of MS13 gang members), but the U.S. has also been increasing scrutiny of everyone at the border.  Tourists are being harassed and interrogated more than before, and they tell their friends.  The attitude ICE has towards tourists is likely making a bigger contribution.

The fact that our countries have travel advisories against the US is a massive factor.

[kei te pai]

In NZ our main print and other media have almost daily reports of travellers from a number of countries having problems at the US borders.
Some Universities have issued cautions for academic staff planning travel to US.
There is a high awareness of the current political climate in the US, and at least amongst my friends and family, a preference to avoid travel to or through the US at this time.

[ChpBstrd]

In NZ our main print and other media have almost daily reports of travellers from a number of countries having problems at the US borders.
Some Universities have issued cautions for academic staff planning travel to US.
There is a high awareness of the current political climate in the US, and at least amongst my friends and family, a preference to avoid travel to or through the US at this time.

For the same reasons, I wonder how long it will be until the doors to escape are closed.
Not to mention the antivaxxer attitudes here have led to the community spread of measles. Who would take us? We're disease-ridden friggin' idiots.

[Heckler]

You don't HAVE to just invest in US stocks, you know??

There's a huge universe of other markets that you can invest it.  VEU covering the rest of the world is solidly HIGHER than it was on Apr 1st... missing that is what you get for waiting and for tunnel-visioning on such a narrow investment thesis.

I did this 16 years ago with a globally diversified portfolio, when everyone here was saying how US companies are globally diversified. How’d that turn out for y’all?

[HPstache]

You don't HAVE to just invest in US stocks, you know??

There's a huge universe of other markets that you can invest it.  VEU covering the rest of the world is solidly HIGHER than it was on Apr 1st... missing that is what you get for waiting and for tunnel-visioning on such a narrow investment thesis.

I did this 16 years ago with a globally diversified portfolio, when everyone here was saying how US companies are globally diversified. How’d that turn out for y’all?

Uh... it probably turned out better than your portfoliio.

[the_gastropod]

You don't HAVE to just invest in US stocks, you know??

There's a huge universe of other markets that you can invest it.  VEU covering the rest of the world is solidly HIGHER than it was on Apr 1st... missing that is what you get for waiting and for tunnel-visioning on such a narrow investment thesis.

I did this 16 years ago with a globally diversified portfolio, when everyone here was saying how US companies are globally diversified. How’d that turn out for y’all?

To my own detriment, I pretty much did the same as you: 50:50 VTSAX/VTIAX split. VTSAX is up ~155% over the past 10 years. VTIAX is up 20%.

[bacchi]

You don't HAVE to just invest in US stocks, you know??

There's a huge universe of other markets that you can invest it.  VEU covering the rest of the world is solidly HIGHER than it was on Apr 1st... missing that is what you get for waiting and for tunnel-visioning on such a narrow investment thesis.

I did this 16 years ago with a globally diversified portfolio, when everyone here was saying how US companies are globally diversified. How’d that turn out for y’all?

They're probably still way up compared to a 70/30 US/international allocation. :) It definitely is nice to see gains in my VXUS/VEA though.

Having a chaos monkey in charge is one of those unknown unknowns.

[41_swish]

The current pump in the market makes ZERO sense to me. We are basically in limbo until the 90 days pause on tariffs comes to an end. I get that the Mega-Cap tech. stocks had good earnings, but that industry seems the least impacted by the tariffs. Oh well. I guess I will just keep buying forever

[MustacheAndaHalf]

The current pump in the market makes ZERO sense to me. We are basically in limbo until the 90 days pause on tariffs comes to an end. I get that the Mega-Cap tech. stocks had good earnings, but that industry seems the least impacted by the tariffs. Oh well. I guess I will just keep buying forever

You're in limbo, but WSJ is not: they broke a story that China is considering how to limit fentanyl precursors.  That move shows a willingness to meet with the U.S. and negotiate an end to tariffs.  That's a change from the prior situation of Trump saying his administration was talking with China, and China denying it.  It's an improvement in a huge trade relationship.  But so far, WSJ has that story and others haven't confirmed it.

Before the market opened, the April jobs report was much better than expected.  More jobs added, and a higher overall labor participation rate.  Hours worked went up, which is not something employers normally do if they're considering job cuts.

Even before this, China was secretly dropping import tariffs on key goods.  So the stated tariffs and actual tariffs had a gap opening up.  I think that news getting out, plus the U.S. claiming to be in talks with all other major trade partners, brought China to the negotiating table.  There's a level of politics here I don't follow, where China joins the crowd even if it could negotiate harder for itself.

[TheAnonOne]

The current pump in the market makes ZERO sense to me. We are basically in limbo until the 90 days pause on tariffs comes to an end. I get that the Mega-Cap tech. stocks had good earnings, but that industry seems the least impacted by the tariffs. Oh well. I guess I will just keep buying forever

So, if the largest portion of the market is least impacted, it makes sense that it's up then, realistically.

[Juan Ponce de León]

This is one of the most hated rallies of all time as all the panic sellers squirm.

[HPstache]

This is one of the most hated rallies of all time as all the panic sellers squirm.

It's actually kind of entertaining to watch it happen

[41_swish]

I am not selling until never. I am going to ride or die with this economy

[VanillaGorilla]

I did this 16 years ago with a globally diversified portfolio, when everyone here was saying how US companies are globally diversified. How’d that turn out for y’all?

I love a good joke.

[BicycleB]

This is one of the most hated rallies of all time as all the panic sellers squirm.

It's good to see you back! You always make interesting pointed quips.

My gut has been squirming but my portfolio's mostly invested, so - I hope you're right.

[Fru-Gal]

I think the market’s divorced from reality, and always has been. Consider that even after terrible events that impacted people for many years, the market recovered relatively quickly. Perhaps it’s only now that retail investors are part of the market that we struggle with the cognitive dissonance that was always there.

Not saying this isn’t a dead cat bounce either. No one knows.

[Fru-Gal]

I am not selling until never. I am going to ride or die with this economy

If you keep DCA at your age you will experience the incredible power of compound interest. It’s gonna take 20+ years so meanwhile get out there and enjoy life. Set it and forget it.

Even more fun, you can apply compounding to many other areas of life, not just numbers in accounts.

[Dicey]

We're not changing anything. We're also doing our best to ignore market volatility. We built our retirement with multiple income streams. We're not yet collecting SS, though we are old enough. We're not dependent on our investment portfolio either. We have a multi-year supply of dry powder, so we're just going to ride it out. It's darn nice to have options.

[Juan Ponce de León]

This is one of the most hated rallies of all time as all the panic sellers squirm.

It's good to see you back! You always make interesting pointed quips.

My gut has been squirming but my portfolio's mostly invested, so - I hope you're right.

Thank you sir.  We all must play our own cards as best we can!

[aasdfadsf]

Even before this, China was secretly dropping import tariffs on key goods.  So the stated tariffs and actual tariffs had a gap opening up.  I think that news getting out, plus the U.S. claiming to be in talks with all other major trade partners, brought China to the negotiating table.  There's a level of politics here I don't follow, where China joins the crowd even if it could negotiate harder for itself.

Yeah...we have sort of a problem here. China thus far has signaled its willingness to play hardball, but that's not even the bad part. Trump doesn't know what he's doing, and more importantly, he doesn't know enough to know that he doesn't know what he's doing. We currently have 100%+ tariffs on Chinese imports. That has strangled everything. The markets have reacted as if the tariffs have been called off when they haven't! Could a deal be worked out to stop this? Maybe! Except it hasn't. Trump has ludicrously declared that he has made 200 deals in a couple of weeks, when it turns out that the actual number is zero. Countries that have not tried to play hardball and have sincerely come to the negotiating table have found that there isn't a negotiating table. They can't figure out what the hell they're even being asked to do. I'm sure this will end well.

[MustacheAndaHalf]

Even before this, China was secretly dropping import tariffs on key goods.  So the stated tariffs and actual tariffs had a gap opening up.  I think that news getting out, plus the U.S. claiming to be in talks with all other major trade partners, brought China to the negotiating table.  There's a level of politics here I don't follow, where China joins the crowd even if it could negotiate harder for itself.

Yeah...we have sort of a problem here. China thus far has signaled its willingness to play hardball, but that's not even the bad part. Trump doesn't know what he's doing, and more importantly, he doesn't know enough to know that he doesn't know what he's doing. We currently have 100%+ tariffs on Chinese imports. That has strangled everything. The markets have reacted as if the tariffs have been called off when they haven't! Could a deal be worked out to stop this? Maybe! Except it hasn't. Trump has ludicrously declared that he has made 200 deals in a couple of weeks, when it turns out that the actual number is zero. Countries that have not tried to play hardball and have sincerely come to the negotiating table have found that there isn't a negotiating table. They can't figure out what the hell they're even being asked to do. I'm sure this will end well.

I agree Trump lies to the point of distraction.  But given those are lies, they shouldn't be used to predict his behavior.  When Trump was wrong, and the bond market signaled a crisis, he claimed he didn't want people to feel "ick" or something like that.  It made no sense - but he paused tariffs 90 days.  His actions mattered even when his comments didn't make sense.

And the same goes here.  Both China and the U.S. will have significant economic damage if the tariffs continue.  Both countries benefit from negotiating lower tariffs.  I mentioned up above China is already preparing to stop fentanyl precursor production in China, if the U.S. will drop the 20% tariffs related to it.  And that initial success can lead to further lowering of tariffs.  My expectation is that two motivated parties will both want a deal, and get a deal.  And since Trump doesn't care about the details, just the victory lap, pretty much any deal will do.

[vand]

Everybody thinks this is a sucker's rally but I wouldn't bet against the market at the moment.

The AAII sentiment survey has collapsed back to contrarian level bearish: https://www.aaii.com/sentimentsurvey/sent_results

[reeshau]

Even before this, China was secretly dropping import tariffs on key goods.  So the stated tariffs and actual tariffs had a gap opening up.  I think that news getting out, plus the U.S. claiming to be in talks with all other major trade partners, brought China to the negotiating table.  There's a level of politics here I don't follow, where China joins the crowd even if it could negotiate harder for itself.

Yeah...we have sort of a problem here. China thus far has signaled its willingness to play hardball, but that's not even the bad part. Trump doesn't know what he's doing, and more importantly, he doesn't know enough to know that he doesn't know what he's doing. We currently have 100%+ tariffs on Chinese imports. That has strangled everything. The markets have reacted as if the tariffs have been called off when they haven't! Could a deal be worked out to stop this? Maybe! Except it hasn't. Trump has ludicrously declared that he has made 200 deals in a couple of weeks, when it turns out that the actual number is zero. Countries that have not tried to play hardball and have sincerely come to the negotiating table have found that there isn't a negotiating table. They can't figure out what the hell they're even being asked to do. I'm sure this will end well.

Very true.  The delegation from Japan came to negotiate.  They asked the US "What do you want?"  The answer was, "What are you offering?"  They went home.

[roomtempmayo]

Even before this, China was secretly dropping import tariffs on key goods.  So the stated tariffs and actual tariffs had a gap opening up.  I think that news getting out, plus the U.S. claiming to be in talks with all other major trade partners, brought China to the negotiating table.  There's a level of politics here I don't follow, where China joins the crowd even if it could negotiate harder for itself.

Yeah...we have sort of a problem here. China thus far has signaled its willingness to play hardball, but that's not even the bad part. Trump doesn't know what he's doing, and more importantly, he doesn't know enough to know that he doesn't know what he's doing. We currently have 100%+ tariffs on Chinese imports. That has strangled everything. The markets have reacted as if the tariffs have been called off when they haven't! Could a deal be worked out to stop this? Maybe! Except it hasn't. Trump has ludicrously declared that he has made 200 deals in a couple of weeks, when it turns out that the actual number is zero. Countries that have not tried to play hardball and have sincerely come to the negotiating table have found that there isn't a negotiating table. They can't figure out what the hell they're even being asked to do. I'm sure this will end well.

Very true.  The delegation from Japan came to negotiate.  They asked the US "What so you want?"  The answer was, "What are you offering?"  They went home.

Not to mention that the current administration has a very narrow window before functionally becoming a lame duck.  China isn't going to remake its economy based on the whims of a guy who is very likely to get hosed in the midterms and followed by a president who promises a return to the status quo.  They can just wait.

There's also the open question of how long business is going to keep quietly playing ball with this nonsense.  I'd give a privately held company like Cargill no longer than the 4th of July before they start openly organizing business to bring the administration to heel.

[mistymoney]

I think the market’s divorced from reality, and always has been. Consider that even after terrible events that impacted people for many years, the market recovered relatively quickly. Perhaps it’s only now that retail investors are part of the market that we struggle with the cognitive dissonance that was always there.

Not saying this isn’t a dead cat bounce either. No one knows.

so true!

But 2000 did not recover quickly. nor did 1929.  1966 through 1980 was a teeter totter.

Anyone eles noticing how hard it is to just find a generic chart of the stock market that goes back farther than like 1990? Seems they used to pop up with a quick google, but now  I get result after result that just doesn't meet the query. strange.

[Fru-Gal]

I think the market’s divorced from reality, and always has been. Consider that even after terrible events that impacted people for many years, the market recovered relatively quickly. Perhaps it’s only now that retail investors are part of the market that we struggle with the cognitive dissonance that was always there.

Not saying this isn’t a dead cat bounce either. No one knows.

so true!

But 2000 did not recover quickly. nor did 1929.  1966 through 1980 was a teeter totter.

Anyone eles noticing how hard it is to just find a generic chart of the stock market that goes back farther than like 1990? Seems they used to pop up with a quick google, but now  I get result after result that just doesn't meet the query. strange.

Personally I don’t care what “number” the stock market is at… All I care about is my returns/reinvestment, and maintenance of my principal (at least, the principal that I’m not already drawing down in FIRE). From this perspective, after a crash, recovery is often faster than has been historically described. Here’s an example:

“ The stock market crash of 1929 had a profound impact on the global economy, contributing to the Great Depression. The recovery of the stock market was a lengthy process, taking over 25 years to regain its pre-crash levels in nominal terms. However, when accounting for deflation, the recovery was more rapid, with investors reaching break-even within four-and-a-half years. ”

Remember, too, if you are drawing down your invested savings at 4% a year, you are not panic selling.

[vand]

I think the market’s divorced from reality, and always has been. Consider that even after terrible events that impacted people for many years, the market recovered relatively quickly. Perhaps it’s only now that retail investors are part of the market that we struggle with the cognitive dissonance that was always there.

Not saying this isn’t a dead cat bounce either. No one knows.

so true!

But 2000 did not recover quickly. nor did 1929.  1966 through 1980 was a teeter totter.

Anyone eles noticing how hard it is to just find a generic chart of the stock market that goes back farther than like 1990? Seems they used to pop up with a quick google, but now  I get result after result that just doesn't meet the query. strange.

Personally I don’t care what “number” the stock market is at… All I care about is my returns/reinvestment, and maintenance of my principal (at least, the principal that I’m not already drawing down in FIRE). From this perspective, after a crash, recovery is often faster than has been historically described. Here’s an example:

“ The stock market crash of 1929 had a profound impact on the global economy, contributing to the Great Depression. The recovery of the stock market was a lengthy process, taking over 25 years to regain its pre-crash levels in nominal terms. However, when accounting for deflation, the recovery was more rapid, with investors reaching break-even within four-and-a-half years. ”

Remember, too, if you are drawing down your invested savings at 4% a year, you are not panic selling.

That's a very rose-tinted view of the stock market during that era - the sort of permabull mentality that only someone who has never lived through such an experience would write. 

Although the market did rally back in a couple of cyclical bull markets the total return peaks of 1936 and again in 1945 weren't sustained and the new highs marked the end of the cyclical bull.

It wasn't until about 1954-1955 that the new high in stock returns was sustained and to go on to make meaningful gains above the 1929 peak.   

25 years is a long time to be invested and underwater for 99% of it.


https://awealthofcommonsense.com/2018/10/the-worst-kind-of-bear-market/

(of course this is also assuming you could invest in the S&P index for 0% fees during the era, which isn't even possible today..).

[Juan Ponce de León]

I think it is not really comparable to think about stock market returns from 70+ years ago vs today.  Pre 1971 the currency inflation of the USD was tied to the amount of gold reserves held by federal reserve, as opposed to nowadays where we've seen almost 50% of all USD in existence printed in the last 5 years.  So yes in USD nominal terms, it is much easier now for stock markets to kick on and make new highs and higher highs because they are being measured in rapidly devaluing fiat.

[Heckler]

I did this 16 years ago with a globally diversified portfolio, when everyone here was saying how US companies are globally diversified. How’d that turn out for y’all?

I love a good joke.

And yet, panic sellers are creating threads such as this when there’s a -3% YTD on VOO.

[firemane]

I had to take step back from this forum and others for the time being... first time checking it in a bit.. Some are letting their dislike of the orange man guide their thinking about the stock market too much. Time for an annual reading of Random Walk Down WallStreet.

[roomtempmayo]

I think the market’s divorced from reality, and always has been. Consider that even after terrible events that impacted people for many years, the market recovered relatively quickly. Perhaps it’s only now that retail investors are part of the market that we struggle with the cognitive dissonance that was always there.

Not saying this isn’t a dead cat bounce either. No one knows.

so true!

But 2000 did not recover quickly. nor did 1929.  1966 through 1980 was a teeter totter.

Anyone eles noticing how hard it is to just find a generic chart of the stock market that goes back farther than like 1990? Seems they used to pop up with a quick google, but now  I get result after result that just doesn't meet the query. strange.

Personally I don’t care what “number” the stock market is at… All I care about is my returns/reinvestment, and maintenance of my principal (at least, the principal that I’m not already drawing down in FIRE). From this perspective, after a crash, recovery is often faster than has been historically described. Here’s an example:

“ The stock market crash of 1929 had a profound impact on the global economy, contributing to the Great Depression. The recovery of the stock market was a lengthy process, taking over 25 years to regain its pre-crash levels in nominal terms. However, when accounting for deflation, the recovery was more rapid, with investors reaching break-even within four-and-a-half years. ”

Remember, too, if you are drawing down your invested savings at 4% a year, you are not panic selling.

That's a very rose-tinted view of the stock market during that era - the sort of permabull mentality that only someone who has never lived through such an experience would write. 

Although the market did rally back in a couple of cyclical bull markets the total return peaks of 1936 and again in 1945 weren't sustained and the new highs marked the end of the cyclical bull.

It wasn't until about 1954-1955 that the new high in stock returns was sustained and to go on to make meaningful gains above the 1929 peak.   

25 years is a long time to be invested and underwater for 99% of it.

We don't have to even go that far back for perspective.  The Nasdaq didn't surpass its 1999 peak until 2017.  18 years was/is a long time to wait.

[vand]

I think it is not really comparable to think about stock market returns from 70+ years ago vs today.  Pre 1971 the currency inflation of the USD was tied to the amount of gold reserves held by federal reserve, as opposed to nowadays where we've seen almost 50% of all USD in existence printed in the last 5 years.  So yes in USD nominal terms, it is much easier now for stock markets to kick on and make new highs and higher highs because they are being measured in rapidly devaluing fiat.

True enough, but Nasdaq isn't really a broad market index.