The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Jamese20 on May 01, 2020, 01:39:20 AM
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Hi all,
I know we should not time the market... but I really struggle to see how the markets are as high as they are when there is very little economic activity and with the S&P500 only 10% off its high.... do we even need to do any number crunching to see if the market is in crazy mode?
I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets.
I see years of decline ahead due to this virus and i do not see any sense in pumping fresh money in with markets so blatantly high vs the current climate? i know this is against the strategy we have bought into... but extreme conditions require different thinking.. and this virus has halted everyone
thoughts? and what are you all doing regarding this investment wise?
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I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets.
If you're waiting for this, you'll be waiting forever.
Yes, the markets are only down 10%...now...but they were down 30% at the end of March. Where was your money then? Were you also waiting at that point? If that didn't trigger you to invest *something*, you will never get off the starting blocks.
You are struggling with looking at economic conditions now, outside your window and on the news. But the market is looking forward one year, to what it collectively thinks the recovery will look like. Only, that's not a very long time either. The wisdom of the approach not to time the market is to instead think: "in a decade, none of this will have mattered." Which is not to say things won't change over time, or that we will naively go back exactly to how things were in 2019. But there are plenty of scary / world-changing events in the past, and it was the wrong move, long term, to have held off investing while they were in progress.
But...
You also need to be able to sleep at night. Maybe you aren't cut out for investment in the markets. Or, at least, maybe you aren't cut out to go in 100%, and then ride your ulcers through to the fastest path to FI. Consider these thoughts more about your asset allocation than a market timing question. For your own mental and physical health, you might need to slow down your on-paper FI path, and get into something safer with some of your money. How much? Enough that you can sleep at night during events like this.
If you are absolutely frozen, put in 50% of your money now, and wait until Q2 earnings are in at the end of July to invest the other half. But understand, the market will likely be higher then, because whatever the recovery looks like, it will be 3 months closer by then. Or find the right size of buckets to commit to doing it, but do it this summer. Your alternative is to use the free time you've gained by being at home to become a full-time market analyst / economist, only you need a few years' seasoning to be any good, so that's probably not going to happen in time, either.
Many people have had the same feelings. It happens every downturn. It's a good thing--you need to have your convictions tested, in order to find out your true feelings. Invest as you will--stocks, real estate, bonds, CD's--but waiting for the perfect moment is a fool's errand. It's likely to pass you by before you ever recognize it.
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I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets.
If you're waiting for this, you'll be waiting forever.
Yes, the markets are only down 10%...now...but they were down 30% at the end of March. Where was your money then? Were you also waiting at that point? If that didn't trigger you to invest *something*, you will never get off the starting blocks.
You are struggling with looking at economic conditions now, outside your window and on the news. But the market is looking forward one year, to what it collectively thinks the recovery will look like. Only, that's not a very long time either. The wisdom of the approach not to time the market is to instead think: "in a decade, none of this will have mattered." Which is not to say things won't change over time, or that we will naively go back exactly to how things were in 2019. But there are plenty of scary / world-changing events in the past, and it was the wrong move, long term, to have held off investing while they were in progress.
But...
You also need to be able to sleep at night. Maybe you aren't cut out for investment in the markets. Or, at least, maybe you aren't cut out to go in 100%, and then ride your ulcers through to the fastest path to FI. Consider these thoughts more about your asset allocation than a market timing question. For your own mental and physical health, you might need to slow down your on-paper FI path, and get into something safer with some of your money. How much? Enough that you can sleep at night during events like this.
If you are absolutely frozen, put in 50% of your money now, and wait until Q2 earnings are in at the end of July to invest the other half. But understand, the market will likely be higher then, because whatever the recovery looks like, it will be 3 months closer by then. Or find the right size of buckets to commit to doing it, but do it this summer. Your alternative is to use the free time you've gained by being at home to become a full-time market analyst / economist, only you need a few years' seasoning to be any good, so that's probably not going to happen in time, either.
Many people have had the same feelings. It happens every downturn. It's a good thing--you need to have your convictions tested, in order to find out your true feelings. Invest as you will--stocks, real estate, bonds, CD's--but waiting for the perfect moment is a fool's errand. It's likely to pass you by before you ever recognize it.
for clarity i have pensions all in stocks etc... i wont be budging or making any changes and continuing... i have not been waiting i have been setting myself to begin investing onto the 2nd phase and build my pot. once i start i will just go along every month and will barely look. This situation is not like any other.. this isnt a failing market this is entire frozen economy, something that i do not even think has even closely happened before and the biggest market has only dropped 10%? even jl collins says in his big ugly event post that if you see some crazy things happening its good to take your chips off the table.... i think he is talking about this moment right here to be honest.
i wont be waiiting forever but i really dont see any validity in dumping my cash into a crazy bubble right now that i can only see bursting and bursting over a period of years not months... stocks in the long run are based on earnings increasing.. what business is going to have improved earnings like the market is showing in this current crisis? countries have decided to actively shutdown and i do not think there are many smart people on the levers of power who understand just what they have done
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countries have decided to actively shutdown and i do not think there are many smart people on the levers of power who understand just what they have done
Well, I've said my piece. You certainly aren't the only one asking these questions. In the end, you will do what you are comfortable with.
Regarding the line above, though: by the same token, this economic crisis could be over tomorrow as countries decide to turn things on again. There is no underlying economic problem preventing economic growth: it is a side effect of the health management decisions. You are right in that this time is different, in this way. Perhaps 9/11 or SARS are the closest analogs, but still far away. But it could deviate positively (in recovery) as well as it could negatively. The market is where people place their bets on which way it will go.
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countries have decided to actively shutdown and i do not think there are many smart people on the levers of power who understand just what they have done
Well, I've said my piece. You certainly aren't the only one asking these questions. In the end, you will do what you are comfortable with.
Regarding the line above, though: by the same token, this economic crisis could be over tomorrow as countries decide to turn things on again. There is no underlying economic problem preventing economic growth: it is a side effect of the health management decisions. You are right in that this time is different, in this way. Perhaps 9/11 or SARS are the closest analogs, but still far away. But it could deviate positively (in recovery) as well as it could negatively. The market is where people place their bets on which way it will go.
appreciate your thoughts mate.. the idea tomorrow we can turn the economy on like a tap seems abit naive to me i have to say... i dont believe economy works in this way
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Many people have had the same feelings. It happens every downturn. It's a good thing--you need to have your convictions tested, in order to find out your true feelings. Invest as you will--stocks, real estate, bonds, CD's--but waiting for the perfect moment is a fool's errand. It's likely to pass you by before you ever recognize it.
What actually happens practically every big downtown is there's an initial drop, then a short-lived bounce-back, then another big drop. It happened in 01-02 and 08-09. I'm not saying it'll happen this time, but food for thought. The market does seem a little irrational to me too, but mainly because there's so much uncertainty with the path forward. How many bankruptcies will we see? How many foreclosures will we start seeing later this year especially once the CARE Act unemployment stuff expires in July? Will there be another wave over the fall/winter spooking everyone again? The problem is this stuff will play out very slowly over a period of months and the market can't just do nothing, so right now it's reacting to the short-term good news coming out: massive fed stimulus, getting past the virus peak hopefully, possible effective medical treatments, etc
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Set up those automatic purchases and move on. Buy some now, buy some at 50% down, buy some along the way, buy some when the Top Is In, buy, buy ,buy.
If "Now" makes you uncomfortable, then make the purchases smaller and more frequent - every day even, why not? How much do you want to invest this year, divide that by the number of weekdays in a year, and set up an auto purchase for each day of the week. Set it up and forget about it. Spend less time thinking about investing, that is my goal anyway.
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Set up those automatic purchases and move on. Buy some now, buy some at 50% down, buy some along the way, buy some when the Top Is In, buy, buy ,buy.
If "Now" makes you uncomfortable, then make the purchases smaller and more frequent - every day even, why not? How much do you want to invest this year, divide that by the number of weekdays in a year, and set up an auto purchase for each day of the week. Set it up and forget about it. Spend less time thinking about investing, that is my goal anyway.
+1
Always always always have regular purchases set up at set frequencies that you don't have to think about that will buy in at the 30% drop at times, the 10% drop at others, higher at times. If you really want to time things, set aside maybe 10% or 25% or what you'd like of that to time, but keep things going while you're hesitant. Ideally, you'd do 95% or 100% like this, but if saving some of it to allow you to feel some control helps you to do that, then go for it. Keep investing, though. Don't hold all of your money, or you'll end up like our friend thorstach.........
https://forum.mrmoneymustache.com/investor-alley/top-is-in/
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"This time is different"... you say, every time there's a significant market drop/war/world changing event.
And hey, guess what? You're right! The world is different every freaking day! It's been different every day for thousands of years, with all sorts of crazy bad and good stuff happening all the time.
And yet, civilization basically keeps trudging forward. People live longer healthier lives, with more fun things to do and less work. It's somehow, despite pandemics, world wars, nuclear weapons, etc, etc *still the best time ever to be alive*.
If you believe in humanity, and you want to get rich, you just invest for the long run and don't worry about the noise.
If you really think Covid19 is the end of civilization, you quit your job to move to Idaho with as much dried food and ammo as you can buy with your liquidated investments.
-W
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Required reading:
https://ofdollarsanddata.com/why-market-timing-can-be-so-appealing/
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Reminder: equities markets don’t stop at the US border. If you think the valuations for the US market are bat**** crazy, then there is a whole, big world of equities out there where the valuations measured by CAPE and PE ratios are a lot lower.
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Dude, seriously.
You are one of the most fortunate people in the world. You have no idea how many other people would kill to have their biggest regret to be missing out on a stock rally right now.
The markets don't owe you anything at all.
In my experience there are two types of investor in this world:
Those who unflinchingly accept the going price, put their money where their mouth and patiently wait for the long term growth can expect their investments to compound and their mistakes to shrink over time.
Those who are always looking for a better deal, always trying to short change the market or feels entitled to outwit the market at each turn can expect their mistakes to compound and their investments returns to shrink over time.
Choose which type of investor you want to be.
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Think most everyone has done a pretty good summary.
either A) Stay out, and like that say in May, go away (from the market that is)
B) Invest steadily (Pick a frame, and just start tossing cash in, however much you want, just be consistent)*
C) Learn value(or another investment) strategy(ies), and Invest (much like B but not quite as steady, but you still, more often then not, have something in or going in.)
Me personally I do a bit of B and C. Why wait when you could be missing out on a golden opportunity?
*Most popular method on this forum and highly recommended!
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"This time is different"... you say, every time there's a significant market drop/war/world changing event.
And hey, guess what? You're right! The world is different every freaking day! It's been different every day for thousands of years, with all sorts of crazy bad and good stuff happening all the time.
And yet, civilization basically keeps trudging forward. People live longer healthier lives, with more fun things to do and less work. It's somehow, despite pandemics, world wars, nuclear weapons, etc, etc *still the best time ever to be alive*.
If you believe in humanity, and you want to get rich, you just invest for the long run and don't worry about the noise.
If you really think Covid19 is the end of civilization, you quit your job to move to Idaho with as much dried food and ammo as you can buy with your liquidated investments.
-W
im not saying its the end of civilisation my friend.. i am simplky suggesting that it is depression time for us in this climate and the next 3-5 years the returns i feel will go south not up... i see another dotcom type or worse scenario of 3-4 declining years... the reality has not hit the markets yet and 10% below the highs seems evidently obsurd... why give myself a handicap? i accept its market timing but i also can see how obvious this is a japan style bubble... unless someone can explain how a frozen economy is in the same shape as may 2019?
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im not saying its the end of civilisation my friend.. i am simplky suggesting that it is depression time for us in this climate and the next 3-5 years the returns i feel will go south not up... i see another dotcom type or worse scenario of 3-4 declining years... the reality has not hit the markets yet and 10% below the highs seems evidently obsurd... why give myself a handicap? i accept its market timing but i also can see how obvious this is a japan style bubble... unless someone can explain how a frozen economy is in the same shape as may 2019?
Have fun working forever then. There will always be plenty of bad news to freak out about.
Hell, even Bob made money... https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/
-W
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im not saying its the end of civilisation my friend.. i am simplky suggesting that it is depression time for us in this climate and the next 3-5 years the returns i feel will go south not up... i see another dotcom type or worse scenario of 3-4 declining years... the reality has not hit the markets yet and 10% below the highs seems evidently obsurd... why give myself a handicap? i accept its market timing but i also can see how obvious this is a japan style bubble... unless someone can explain how a frozen economy is in the same shape as may 2019?
Have fun working forever then. There will always be plenty of bad news to freak out about. Describing yourself as an "aggressive" investor is hilarious.
As BB points out, too, you can always buy VXUS/VTIAX. Much more reasonable valuations in general.
Hell, even Bob made money... https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/
-W
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im not saying its the end of civilisation my friend.. i am simplky suggesting that it is depression time for us in this climate and the next 3-5 years the returns i feel will go south not up... i see another dotcom type or worse scenario of 3-4 declining years... the reality has not hit the markets yet and 10% below the highs seems evidently obsurd... why give myself a handicap? i accept its market timing but i also can see how obvious this is a japan style bubble... unless someone can explain how a frozen economy is in the same shape as may 2019?
Have fun working forever then. There will always be plenty of bad news to freak out about.
Hell, even Bob made money... https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/
-W
so it appears you cannot explain how may 2019 is in the same state as now? no other time has the globel frozen their economy... each downturn still had the economy up and running trying to get out of the decline...
i am not freaking out either fyi... just working out the reality... blind close my eyes type false optimism doesnt seem that useful at this moment in my opinion
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I'm indifferent to the current state of the economy, because I'm investing for 20+ years. It sounds like you are just starting your investing journey, so presumably your time horizon is equally long. What will your 2050 self want to tell you today? Mine is telling me "thanks for sticking with the consistent investing, bro."
Go read about Bob.
-W
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unless someone can explain how a frozen economy is in the same shape as may 2019?
It won't be, and honestly who cares. If the economy took a dump that's not a bad thing (for investing anyway). Look at Buffet, or any of the other investors (not traders) they are starting to see DEALS. They KNOW it's not time to get all the way in, but they are ALSO nibbling here and there.
If the market dropped 90% and the economy was just as wacky would you invest? (Sarcastic Answer: but stocks could drop MORE!)
What if the market jump back 150% 2 months later. Would you invest then? (Sarcastic Answer: But what if they drop tomorrow, I'd lose it all!)
If not now WHEN? That is the question you are answering by saying never. So my suggestion is to just not invest. You obviously won't find the right time, and never will.
Or you could take the advice here and just start putting money in. You don't know what will happen tomorrow. Or the next day, or two years from now. Your better off with something in the market then not..
(https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/)
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I'm indifferent to the current state of the economy, because I'm investing for 20+ years. It sounds like you are just starting your investing journey, so presumably your time horizon is equally long. What will your 2050 self want to tell you today? Mine is telling me "thanks for sticking with the consistent investing, bro."
Go read about Bob.
-W
it feels you are not really reading my overall point, i am not intending to sit on any sidelines.. but i cannot think of any realistic scenario where we dont have declining few years in terms of stocks... the unrerlying assets are going to suffer in the short term for a couple of years and unemployment levels will be testing depression time
once i start thats it.. i may even just think "fuck it" and start investing any point this year and when I do that will be it.. off i go each month and wont even look. I still think it is wise to consider that at this clear and evident foolish level of pricing at the moment... to consider getting maximum value for my buck
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Again, with that attitude, you will never be able to bring yourself to invest (I mean, you didn't invest when stocks were 20% cheaper just a few weeks ago, right?)
You're not going to predict the short term fluctuations of the market (meaning, under 5 years). So don't try. Make an IPS and figure out an asset allocation you can sleep at night with and just start going.
-W
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unless someone can explain how a frozen economy is in the same shape as may 2019?
Your better off with something in the market then not..
not if the market drops continiously for the next few years.. i will be considerably worse off - i dont see how it cannot go anywhere but down right now... 10% off the top during this time and we dont if it will go down or not? really? i think we do tbh... earnings will be battered and therefore what choice does it have then?
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Again, with that attitude, you will never be able to bring yourself to invest (I mean, you didn't invest when stocks were 20% cheaper just a few weeks ago, right?)
You're not going to predict the short term fluctuations of the market (meaning, under 5 years). So don't try. Make an IPS and figure out an asset allocation you can sleep at night with and just start going.
-W
i wasnt ready a few weeks ago.. i still have to wait another 2 weeks at this current time...
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I'll phrase it another way, then. A month ago, did you predict that the market would rise ~20% in April?
If not, why not?
-W
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I'll phrase it another way, then. A month ago, did you predict that the market would rise ~20% in April?
If not, why not?
-W
i have been predicting since jan the markets wil go down as i listened about wuhan and it was clear to me then this would spread worldwide.. what i am amazed about is the bull run that is currently going on based on nothing in reality
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what i am amazed about is the bull run that is currently going on based on nothing in reality
Exactly. The markets are not predictable in the short term. At all. In the long term, they go up.
Invest accordingly.
-W
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so it appears you cannot explain how may 2019 is in the same state as now?
here you have made the assumption that the market was correctly valued in May 2019. Why?
For perspective, in May 2019 the market value was about equal to what it was in Jan 2019. So did we have zero growth in those five months, or was it over-valued in January? or maybe undervalued in may?
We have far moer money flowing into the economy from government (which basically just magics it out of thin air), and less from businesses making things. where's the balance?
..point is we can only know in hindsight, and only after years more data and analysis is done. markets are forward looking, estimating what things might look like 6-24 months from now. They don't look backward to tether their current price on previous valuations.
i have been predicting since jan the markets wil go down as i listened about wuhan and it was clear to me then this would spread worldwide.. what i am amazed about is the bull run that is currently going on based on nothing in reality
Not to put too fine a point on it, but basically after initially being right, you were wrong for the month of April. What makes you so sure you are right now? And what time frame are you talking about? Will May plummet, or will the market wait to fall until June. Maybe go sideways for a while?
April was a really good month for the market, ironically.
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so it appears you cannot explain how may 2019 is in the same state as now?
here you have made the assumption that the market was correctly valued in May 2019. Why?
For perspective, in May 2019 the market value was about equal to what it was in Jan 2019. So did we have zero growth in those five months, or was it over-valued in January? or maybe undervalued in may?
We have far moer money flowing into the economy from government (which basically just magics it out of thin air), and less from businesses making things. where's the balance?
..point is we can only know in hindsight, and only after years more data and analysis is done. markets are forward looking, estimating what things might look like 6-24 months from now. They don't look backward to tether their current price on previous valuations.
i have been predicting since jan the markets wil go down as i listened about wuhan and it was clear to me then this would spread worldwide.. what i am amazed about is the bull run that is currently going on based on nothing in reality
Not to put too fine a point on it, but basically after initially being right, you were wrong for the month of April. What makes you so sure you are right now? And what time frame are you talking about? Will May plummet, or will the market wait to fall until June. Maybe go sideways for a while?
April was a really good month for the market, ironically.
my point was not about may 2019 being a fair valuation.. my point was the globe was functioning as it always does... even in downtimes.... we have the opposite of that now so why would the prices stay the same or go up over the next couple of years? business are going bust unemployment is going to keep going up and the world is heading towards decline obviously.. as people are not producing anything or being creative.... how does all that work out to higher stock levels over the next 2 years? i think we do know what is coming
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You’re not crazy, the markets are being very weird. This global pandemic is unlike anything we’ve seen in our lifetimes, it is not in any way under control yet, it has already had sweeping effects that will continue to ripple over the next few years, so it doesn’t warrant the V recovery we’ve seen to date.
While the other commenters are not wrong that continuing to consistently buy regardless of the price is all you need to get to retirement, you’re likely not wrong that you will be able to buy more shares for your dollars in the near future. I’m betting on that as well. But I’ll be fine if my bet doesn’t pay off, and my re-entry into the market is not based off share price but instead based on when the number of US covid recoveries are consistently outpacing the number of new US covid cases enough that I can be reasonably confident that the pandemic portion of this crisis is under control. We’re currently sitting on more than 880,000 active *confirmed* cases in the US (and likely an order of magnitude more of undetected active cases, based off preliminary community testing in LA and others). We are not ready to be reopening and getting back to business, but the market is acting like we are.
I’ve been investing in index funds and continuing the buy regardless of price for my whole investing career since 2002. This time is different. No other time was different, because no other time did I have access to definitive pandemic outbreak numbers to see that things were not only not under control, but worse than they were when they were so bad we had to initiate the shut downs in the first place. I stayed in the market during the first initial drop, when things could go either way. I even reallocated heavier into stocks near the bottom (when the whole country was taking the pandemic seriously and acting aggressively to mitigate it) and would have reallocated heavier again if it hit another drop trigger mark, according to my IPS.
If timing the market now is going to make you time the market later, then this will likely be a net negative for your future net worth. But if timing the market now is a one time thing based on extraordinary circumstances that we actually have data for, then this will likely be a net positive for your future net worth. This is why I wouldn’t recommend doing this to most people.
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Claiming that the whole market is now delusional cannot be ruled out. And it is true that throughout history it has gone through periods of overvaluation and undervaluation. However, it is also an act of arrogance to decide that the market is presently overvalued. The market is composed of many millions of individual buy, sell, and options transactions and is in a state of perpetual price discovery caused by millions of individuals who have an extraordinary amount of computing power and capital at their disposal. So to say that the market is delusional is to suggest that a majority of the participants are also delusional..Essentially that you are right and most everyone else is wrong.
You can either put your money where your mouth is and wait until you feel that the market price is an accurate reflection of value, or seek out individual undervalued stocks. Or just buy the index fund.
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Let us know how it goes 20 years from now.
I'm FI because I ignored the tech bubble, the second Iraq war, SARS, North Korea doing a variety of crazy stuff, the great recession, the election of Donald Trump, and lots of other weird stuff. Many of those things were, at the time, just as scary as Covid19.
-W
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thoughts? and what are you all doing regarding this investment wise?
I just bought more stocks yesterday...emerging markets if that matters. If I found a spare $5K today I'd invest it as well. I've been hearing "...this time is different.." as long as I have paid any serious attention to investing my money. If you think you should stay in cash and wait for some future stock market valuation that will be more favourable...okay. If you want to invest in real estate or a business instead of stocks....okay. I won't be doing that, but we each have to be comfortable with our investment decisions. If you don't feel good about buying stocks right now then don't do it.
There is always a reason not to buy stocks and occasionally some of those reasons even turn out to be correct. Since I can't tell in advance which ones are right and which ones are wrong I just invest every chance I get. So far I am much further ahead for doing so over many years. In any given instance it may well turn out doing something else might have been better, but I don't see an actionable path for my personal investments that involves me predicting the future accurately. So I don't try.
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You’re not crazy, the markets are being very weird. This global pandemic is unlike anything we’ve seen in our lifetimes, it is not in any way under control yet, it has already had sweeping effects that will continue to ripple over the next few years, so it doesn’t warrant the V recovery we’ve seen to date.
While the other commenters are not wrong that continuing to consistently buy regardless of the price is all you need to get to retirement, you’re likely not wrong that you will be able to buy more shares for your dollars in the near future. I’m betting on that as well. But I’ll be fine if my bet doesn’t pay off, and my re-entry into the market is not based off share price but instead based on when the number of US covid recoveries are consistently outpacing the number of new US covid cases enough that I can be reasonably confident that the pandemic portion of this crisis is under control. We’re currently sitting on more than 880,000 active *confirmed* cases in the US (and likely an order of magnitude more of undetected active cases, based off preliminary community testing in LA and others). We are not ready to be reopening and getting back to business, but the market is acting like we are.
I’ve been investing in index funds and continuing the buy regardless of price for my whole investing career since 2002. This time is different. No other time was different, because no other time did I have access to definitive pandemic outbreak numbers to see that things were not only not under control, but worse than they were when they were so bad we had to initiate the shut downs in the first place. I stayed in the market during the first initial drop, when things could go either way. I even reallocated heavier into stocks near the bottom (when the whole country was taking the pandemic seriously and acting aggressively to mitigate it) and would have reallocated heavier again if it hit another drop trigger mark, according to my IPS.
If timing the market now is going to make you time the market later, then this will likely be a net negative for your future net worth. But if timing the market now is a one time thing based on extraordinary circumstances that we actually have data for, then this will likely be a net positive for your future net worth. This is why I wouldn’t recommend doing this to most people.
thanks for this - yes this is one time only..im already invested in pensions all in stocks havent touched them due to any factors here.. but i have been doing that for years so what is the point? my 2nd stage is coming upon me and it is a new pot.. a pot i want to get the most of growth out of. the act of shutting down the economy is a suicidal one which i dont see how any well reasoned person cant see the market is in crazytown..... people are saying we dont know.. we really do know... in my view
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Let us know how it goes 20 years from now.
I'm FI because I ignored the tech bubble, the second Iraq war, SARS, North Korea doing a variety of crazy stuff, the great recession, the election of Donald Trump, and lots of other weird stuff. Many of those things were, at the time, just as scary as Covid19.
-W
none of those times involed global freezing of the economy.. i dont see how your comparison relates
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Let us know how it goes 20 years from now.
I'm FI because I ignored the tech bubble, the second Iraq war, SARS, North Korea doing a variety of crazy stuff, the great recession, the election of Donald Trump, and lots of other weird stuff. Many of those things were, at the time, just as scary as Covid19.
-W
none of those times involed global freezing of the economy.. i dont see how your comparison relates
"This time it's different!"
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If you are worried about the markets now when you are just starting and have only $5000 or so invested, you are going to be really worried when you are FI and have $900k riding the irrational roller coaster.
I have sold off $180k of stocks but only because I want to buy a dream retirement property in the next few years and there is a chance there could be some bargains if the RE market tanks. I understand that is timing markets but I have actually had pretty good success timing the local real estate market in the past. The rest is staying in the stock market and I sleep fine.
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Let us know how it goes 20 years from now.
I'm FI because I ignored the tech bubble, the second Iraq war, SARS, North Korea doing a variety of crazy stuff, the great recession, the election of Donald Trump, and lots of other weird stuff. Many of those things were, at the time, just as scary as Covid19.
-W
none of those times involed global freezing of the economy.. i dont see how your comparison relates
The 2007 crisis was essentially a global freeze of the economy. If you don't remember it, it was a total freakout. People lining up to buy rice at Costco and everything.
-W
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i cannot think of any realistic scenario where we dont have declining few years in terms of stocks... the unrerlying assets are going to suffer in the short term for a couple of years and unemployment levels will be testing depression time
once i start thats it.. i may even just think "fuck it" and start investing any point this year and when I do that will be it.. off i go each month and wont even look. I still think it is wise to consider that at this clear and evident foolish level of pricing at the moment... to consider getting maximum value for my buck
Could you envision a realistic scenario where the a pandemic would be spreading around the globe, unemployment would hit levels not seen since the great depression, forecast suggested that by the end of June the US economy would be at least 12% smaller than at the start of the year and the stock market would be only down 10%?
If not, why do you have confidence in your predictions for what is or isn't a realistic scenario in the future when your concern about the present is specifically the result of us living through in what would have sounded like a completely unrealistic scenario six months ago?
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Let us know how it goes 20 years from now.
I'm FI because I ignored the tech bubble, the second Iraq war, SARS, North Korea doing a variety of crazy stuff, the great recession, the election of Donald Trump, and lots of other weird stuff. Many of those things were, at the time, just as scary as Covid19.
-W
none of those times involed global freezing of the economy.. i dont see how your comparison relates
"This time it's different!"
it literally is different... we have actively closed down... closed... no money is being made... business going bust at rates faster than i can imagine.. still not in the fall out stages... ive not seen any sensible argument that stocks will go up in the next 2 years from anyone other than silly remarks like this one
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Let us know how it goes 20 years from now.
I'm FI because I ignored the tech bubble, the second Iraq war, SARS, North Korea doing a variety of crazy stuff, the great recession, the election of Donald Trump, and lots of other weird stuff. Many of those things were, at the time, just as scary as Covid19.
-W
none of those times involed global freezing of the economy.. i dont see how your comparison relates
"This time it's different!"
it literally is different... we have actively closed down... closed... no money is being made... business going bust at rates faster than i can imagine.. still not in the fall out stages... ive not seen any sensible argument that stocks will go up in the next 2 years from anyone other than silly remarks like this one
Every crash is "different" for one reason or another.
You do you.
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it literally is different... we have actively closed down... closed... no money is being made... business going bust at rates faster than i can imagine.. still not in the fall out stages... ive not seen any sensible argument that stocks will go up in the next 2 years from anyone other than silly remarks like this one
How about this argument:
If things stay bad, the US government will continue to spend money to support the economy and the fed will likely continue to buy treasury bonds, creating money out of thin air and then hanging it off to the population either directly (more stimulus checks) or indirectly (more paycheck protection program). At some point the increase in the money supply would be large enough that it starts to trigger significant inflation.
If that happens, our stock market will start to look more like that of Argentina's which has returned a jaw dropping 27% per year over the last 18 years ... denominated in Argentinian pesos.*
If you really think the long term economic outlook as so grim, I'd much rather have my money in stocks (which will ultimately rise with inflation) that dollars (which will not).
*Actually defaulting on their national debt has been pretty good for Argentina, but once you correct for inflation their stock market gains since the 2002 crash have been closer to 10%/year rather than 27%/year. And it was quite bad in the early years.
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i cannot think of any realistic scenario where we dont have declining few years in terms of stocks... the unrerlying assets are going to suffer in the short term for a couple of years and unemployment levels will be testing depression time
once i start thats it.. i may even just think "fuck it" and start investing any point this year and when I do that will be it.. off i go each month and wont even look. I still think it is wise to consider that at this clear and evident foolish level of pricing at the moment... to consider getting maximum value for my buck
Could you envision a realistic scenario where the a pandemic would be spreading around the globe, unemployment would hit levels not seen since the great depression, forecast suggested that by the end of June the US economy would be at least 12% smaller than at the start of the year and the stock market would be only down 10%?
If not, why do you have confidence in your predictions for what is or isn't a realistic scenario in the future when your concern about the present is specifically the result of us living through in what would have sounded like a completely unrealistic scenario six months ago?
I can envision a realistic scenario... here’s what I attributed it to a couple weeks ago when I got out of the market:
...
I want to speculate further on what is causing the disconnect between the reality on the ground and the market’s performance. I think it’s a few things that are all combining to make this irrational exuberance:
1. The effects of this covid outbreak are felt less the higher up the income bracket you are. Most lowest income earners have lost their jobs, and if they still have a job then they’re getting exposed and getting sick at it. And since poor people don’t have the level of access to healthcare and prevention that rich people have, they’ve got higher rates of negative health conditions that result in them dying at a higher rate when they get the virus. And since 38% of the stock market is owned by the richest 1% of Americans (https://www.financialsamurai.com/what-percent-of-americans-own-stocks/), the market is underestimating the severity of outbreak’s effects.
2. Half of the country is getting their info from the president’s daily Coronavirus task force briefings, which are basically rambling campaign rallies full of misinformation to get him re-elected. The state of economy is a huge part of re-election chances, and the president has repeatedly confused the stock market performance with the state of the economy, so these briefings are all about propping up the stock market.
3. Stock market investors and analysts are used to making investment decisions based on financials and obvious first order effects. So they’re overly weighting a big congressional bailout while ignoring that the virus is still not under control and will cause a massive global recession (https://blogs.imf.org/2020/04/14/the-great-lockdown-worst-economic-downturn-since-the-great-depression/). This is likely also being ignored because half the US actively distrusts any international organization.
4. Stock market investors are not worried about food security, because they’ve been able to continue getting their food through delivery apps and online shopping. They aren’t going to the stores themselves so they might not even be aware of the continuously empty shelves. They also have plenty of money to buy extra to stock up. And if (or more likely, when) we have food shortages in the fall, they’ll be the few who are able to afford to buy food at high prices when demand far outstrips supply. Meanwhile, there’s been a massive increase in new people needing food bank assistance while food banks are struggling to even maintain their pre-covid level of supplies.
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BECABECA, a fair point.
I should have constrained that question to "could you have envisioned a realistic scenario where .... before it actually happened."
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This thread needs some appropriate music!
https://www.youtube.com/watch?v=eFTLKWw542g
https://www.youtube.com/watch?v=j2r2nDhTzO4
-W
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Let us know how it goes 20 years from now.
I'm FI because I ignored the tech bubble, the second Iraq war, SARS, North Korea doing a variety of crazy stuff, the great recession, the election of Donald Trump, and lots of other weird stuff. Many of those things were, at the time, just as scary as Covid19.
-W
none of those times involed global freezing of the economy.. i dont see how your comparison relates
"This time it's different!"
it literally is different... we have actively closed down... closed... no money is being made... business going bust at rates faster than i can imagine.. still not in the fall out stages... ive not seen any sensible argument that stocks will go up in the next 2 years from anyone other than silly remarks like this one
Well that's just blatantly wrong. By most estimates ~80% of people who had a job in February continue to work. There's still an awful lot of GDP. Granted it's experienced its largest dip in living memory, but if you are adhering to the idea that everythjing is closed you are missing quite a bit.
Further, one of the expectations (indeed, probably one of the core reasons why the markets haven't fallen further) is because much of the normal spending that's fallen off is delayed, not gone. Maybe that will come to pass, maybe it won't... but it's clear that we cant' continue to not spend like we have indefinitely.
Sure, ***every time*** is different, but that doesn't mean we disregard everythin we know or have learned.
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Let us know how it goes 20 years from now.
I'm FI because I ignored the tech bubble, the second Iraq war, SARS, North Korea doing a variety of crazy stuff, the great recession, the election of Donald Trump, and lots of other weird stuff. Many of those things were, at the time, just as scary as Covid19.
-W
none of those times involed global freezing of the economy.. i dont see how your comparison relates
"This time it's different!"
it literally is different... we have actively closed down... closed... no money is being made... business going bust at rates faster than i can imagine.. still not in the fall out stages... ive not seen any sensible argument that stocks will go up in the next 2 years from anyone other than silly remarks like this one
Well that's just blatantly wrong. By most estimates ~80% of people who had a job in February continue to work. There's still an awful lot of GDP. Granted it's experienced its largest dip in living memory, but if you are adhering to the idea that everythjing is closed you are missing quite a bit.
Further, one of the expectations (indeed, probably one of the core reasons why the markets haven't fallen further) is because much of the normal spending that's fallen off is delayed, not gone. Maybe that will come to pass, maybe it won't... but it's clear that we cant' continue to not spend like we have indefinitely.
Sure, ***every time*** is different, but that doesn't mean we disregard everythin we know or have learned.
80%? come off it mate
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Let us know how it goes 20 years from now.
I'm FI because I ignored the tech bubble, the second Iraq war, SARS, North Korea doing a variety of crazy stuff, the great recession, the election of Donald Trump, and lots of other weird stuff. Many of those things were, at the time, just as scary as Covid19.
-W
none of those times involed global freezing of the economy.. i dont see how your comparison relates
"This time it's different!"
it literally is different... we have actively closed down... closed... no money is being made... business going bust at rates faster than i can imagine.. still not in the fall out stages... ive not seen any sensible argument that stocks will go up in the next 2 years from anyone other than silly remarks like this one
Well that's just blatantly wrong. By most estimates ~80% of people who had a job in February continue to work. There's still an awful lot of GDP. Granted it's experienced its largest dip in living memory, but if you are adhering to the idea that everythjing is closed you are missing quite a bit.
Further, one of the expectations (indeed, probably one of the core reasons why the markets haven't fallen further) is because much of the normal spending that's fallen off is delayed, not gone. Maybe that will come to pass, maybe it won't... but it's clear that we cant' continue to not spend like we have indefinitely.
Sure, ***every time*** is different, but that doesn't mean we disregard everythin we know or have learned.
80%? come off it mate
https://www.cnbc.com/2020/04/30/us-weekly-jobless-claims.html
Nonfarm payrolls for April are expected to show a decline of 2.25 million, with an unemployment rate of 15.1%, according to preliminary estimates from FactSet.
If you have a source showing unemployment having increased by 20%, please share!
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Ammo and penicillin, dude. Hedge with MREs.
Oh, and I gotta leave this here for Maizeman:
https://www.youtube.com/watch?v=dQw4w9WgXcQ
-W
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Look, I'm trying to provide you with some reasonable commentary. You are alleging there's 0 people employed, 0 work being done, which is obviously bogus. I'm suggetings its close to 80%, which is in line with what most economists are saying. We can quibble a few points but it's clear your are using hyperbole to avoid looking at some very real arguments to your underlying premise, which seems to be "of course the markets will be lower ___ days/weeks/months from now"
Let's look at this from a different tack (and simlar to what @maizeman was getting at).
In mid March what percentage of people do you think would have estimated that the markets would be much lower at the end fo April? Now imagine you had told them that 22MM additional people would have filed for unemployment, oil would drop to around $20/barrel and that shutdowns would have been extended through May for ahlf the country. I'm guessing at least 9/10 would have placed wagers that the market would have continued to drop.
Guess waht? It didn't. In part because of massive government intervention. In part due to hope and scientific progress. In part because of rainbow dust and fairy farts. The why doesn't matter nearly as much as the fact that it did.
So now we are at another crossroads. Will we bounce back in 12 months or will we be lower than we are now? FWIW I'm in the camp that thinks the rest of 2020 will be rough indeed. But I'm not arrogant enough to assume it *will* happen. Because like Walt I remember 2007/08 when the entire financial system was on teh verge of metldown and >70% of economists predicted a much greater fall and a dreaded "w" recession... precisely when we had hit bottom.
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You’re not crazy, the markets are being very weird. This global pandemic is unlike anything we’ve seen in our lifetimes, it is not in any way under control yet, it has already had sweeping effects that will continue to ripple over the next few years, so it doesn’t warrant the V recovery we’ve seen to date.
While the other commenters are not wrong that continuing to consistently buy regardless of the price is all you need to get to retirement, you’re likely not wrong that you will be able to buy more shares for your dollars in the near future. I’m betting on that as well. But I’ll be fine if my bet doesn’t pay off, and my re-entry into the market is not based off share price but instead based on when the number of US covid recoveries are consistently outpacing the number of new US covid cases enough that I can be reasonably confident that the pandemic portion of this crisis is under control. We’re currently sitting on more than 880,000 active *confirmed* cases in the US (and likely an order of magnitude more of undetected active cases, based off preliminary community testing in LA and others). We are not ready to be reopening and getting back to business, but the market is acting like we are.
I’ve been investing in index funds and continuing the buy regardless of price for my whole investing career since 2002. This time is different. No other time was different, because no other time did I have access to definitive pandemic outbreak numbers to see that things were not only not under control, but worse than they were when they were so bad we had to initiate the shut downs in the first place. I stayed in the market during the first initial drop, when things could go either way. I even reallocated heavier into stocks near the bottom (when the whole country was taking the pandemic seriously and acting aggressively to mitigate it) and would have reallocated heavier again if it hit another drop trigger mark, according to my IPS.
If timing the market now is going to make you time the market later, then this will likely be a net negative for your future net worth. But if timing the market now is a one time thing based on extraordinary circumstances that we actually have data for, then this will likely be a net positive for your future net worth. This is why I wouldn’t recommend doing this to most people.
thanks for this - yes this is one time only..im already invested in pensions all in stocks havent touched them due to any factors here.. but i have been doing that for years so what is the point? my 2nd stage is coming upon me and it is a new pot.. a pot i want to get the most of growth out of. the act of shutting down the economy is a suicidal one which i dont see how any well reasoned person cant see the market is in crazytown..... people are saying we dont know.. we really do know... in my view
if you are so convinced you 'know' then why are you asking a message board to confirm?
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James,
I just saw this thread and read through it and one thing is clear. You have already made up your mind, so can you share what your goal is? To try to convince the rest of us?
You've been told you are suffering from "this time it is different"itis and you insist, "but no! This time it is different!". We've told you it's not. Every time people feel the same way. They know what is going to happen. With that crystal ball you've already telegraphed to us that you will clearly be sitting on your hands. That's your choice. I and it seems many others will continue to invest according to our plan.
Will the market drop for two years? Maybe. When my father and others were screaming at me that I was a fool for investing as this started I said I doubt it will go much below 20,000. Seemed I was right. Am I know an expert who can open up a hedge fund with my stellar powers of reading the market and make you all rich? No. I am a blind squirrel who happened to find an acorn. And so may you be sir if in two years you are right. If you let it get to your head, you'll then make the next call, and it has a 85-90% chance of being wrong, just as the call you already missed, the run up we are in right now. By your own evidence you have proven at this point in history to be 100% wrong. The only prediction you made, that the market could not go up on this news is what has you here. 0 for 1. Will you be 1 for 2 or 0 for 2 in two years with the other prediction, that "we can only go down for 2 years"? In either case 50% accurate is not a great track record to pontificate from.
ETA: And my company of 10,000+ employees is still operating, albeit all working from home, so there is at least one company running. Oh, and the 5 grocery stores in my town, and the 50 restaurants providing take out, and the 3 home improvement stores. Seems to be a lot open in my neck of the woods. Sorry everything closed in yours. How is the hunting for rabbits for dinner going?
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if you are so convinced you 'know' then why are you asking a message board to confirm?
I really hope the OP (and others reading this thread) take a moment to contemplate what confirmation bias really looks like. We have a bunch of people in effect saying "we can never be sure, markets often aren't rational see all these historical examples and reasons why", and the OP instead thanking people who agree with him/her and aruing with people who aren't actually disagreeing (merely pointing out the inherent uncertainty and poor record in general calling how deep a bear market with go).
One more thought: The market is not the economy, and its often not even a very good reflection of the economy.
Counter-intuitively, small businesses (which are overwhelmingly NOT publicly traded and therefor not reflected in the market) can fail en masse and the result can actually be good for the larger publicly held companies. And if these companies get public assistence (which is currently happening, as it did under TARP 1&2), their share price won't fall as much as one otherwise might expect it to. Historically markets start to rally long before the unemployment bottoms out
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Look, I'm trying to provide you with some reasonable commentary. You are alleging there's 0 people employed, 0 work being done, which is obviously bogus. I'm suggetings its close to 80%, which is in line with what most economists are saying. We can quibble a few points but it's clear your are using hyperbole to avoid looking at some very real arguments to your underlying premise, which seems to be "of course the markets will be lower ___ days/weeks/months from now"
Let's look at this from a different tack (and simlar to what @maizeman was getting at).
In mid March what percentage of people do you think would have estimated that the markets would be much lower at the end fo April? Now imagine you had told them that 22MM additional people would have filed for unemployment, oil would drop to around $20/barrel and that shutdowns would have been extended through May for ahlf the country. I'm guessing at least 9/10 would have placed wagers that the market would have continued to drop.
Guess waht? It didn't. In part because of massive government intervention. In part due to hope and scientific progress. In part because of rainbow dust and fairy farts. The why doesn't matter nearly as much as the fact that it did.
So now we are at another crossroads. Will we bounce back in 12 months or will we be lower than we are now? FWIW I'm in the camp that thinks the rest of 2020 will be rough indeed. But I'm not arrogant enough to assume it *will* happen. Because like Walt I remember 2007/08 when the entire financial system was on teh verge of metldown and >70% of economists predicted a much greater fall and a dreaded "w" recession... precisely when we had hit bottom.
i did not say anything of a sort... i said we have frozen the economy globally.. which is pretty accurate - only essentials are open.. sometimes you dont need ecomonists to tell you what is out your front door and on the job boards.. have you been out lately and taken a look around? nobody is doing anything...
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have you been out lately and taken a look around? nobody is doing anything...
Yes I have been out as I and everyone I know is still working and shopping, etc... Where I am there is no lock down and the few businesses that are closed are restaurants, bars, salons, barber shops and large mass gathering events like sports and concerts. There is less going on than usual, but "nobody is doing anything" is not accurate.
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James,
I just saw this thread and read through it and one thing is clear. You have already made up your mind, so can you share what your goal is? To try to convince the rest of us?
You've been told you are suffering from "this time it is different"itis and you insist, "but no! This time it is different!". We've told you it's not. Every time people feel the same way. They know what is going to happen. With that crystal ball you've already telegraphed to us that you will clearly be sitting on your hands. That's your choice. I and it seems many others will continue to invest according to our plan.
Will the market drop for two years? Maybe. When my father and others were screaming at me that I was a fool for investing as this started I said I doubt it will go much below 20,000. Seemed I was right. Am I know an expert who can open up a hedge fund with my stellar powers of reading the market and make you all rich? No. I am a blind squirrel who happened to find an acorn. And so may you be sir if in two years you are right. If you let it get to your head, you'll then make the next call, and it has a 85-90% chance of being wrong, just as the call you already missed, the run up we are in right now. By your own evidence you have proven at this point in history to be 100% wrong. The only prediction you made, that the market could not go up on this news is what has you here. 0 for 1. Will you be 1 for 2 or 0 for 2 in two years with the other prediction, that "we can only go down for 2 years"? In either case 50% accurate is not a great track record to pontificate from.
ETA: And my company of 10,000+ employees is still operating, albeit all working from home, so there is at least one company running. Oh, and the 5 grocery stores in my town, and the 50 restaurants providing take out, and the 3 home improvement stores. Seems to be a lot open in my neck of the woods. Sorry everything closed in yours. How is the hunting for rabbits for dinner going?
i havent made my mind up... just because i dont see very good answers back at me doesnt mean i have made my mind up.. i think my argument that due to the obvious elephant in the room right now that seemingly alot dont want to look at is there for all to see... i have yet to see a compelling argument for why the market will continue to stabilise and the current bull will continue... unless i have missed an amazing answer somewhere
I accept that in the long run i will be fine... this is not the premise of my point...my point is.. it seemingly is very obvious based on the current climate the affect is alot more than a 10% decline in markets... business wont be making alot of money this year or possibly a number of years Q1 results alrdy look worse than predicted - isnt the markets about shareholder value? so what is the compelling reason for the markets to continue to go up in the next couple of years? that is the answer i am looking for that outweighs the elephant in the room
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have you been out lately and taken a look around? nobody is doing anything...
Yes I have been out as I and everyone I know is still working and shopping, etc... Where I am there is no lock down and the few businesses that are closed are restaurants, bars, salons, barber shops and large mass gathering events like sports and concerts. There is less going on than usual, but "nobody is doing anything" is not accurate.
ok, if you want to knit pick.. people are out buying the bare minimums to survive only...
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i did not say anything of a sort... i said we have frozen the economy globally.. which is pretty accurate - only essentials are open.. sometimes you dont need ecomonists to tell you what is out your front door and on the job boards.. have you been out lately and taken a look around? nobody is doing anything...
No... what you said was "no money is being made" and "nobody is doing anything". I quoted the relevant portion of your post below. That is flat out wrong. Again, even though front-facing businesses may be closed the majority of people who had a job are still working, still producing, still making money. Even though we likely have unemployment in the 15-20% range, we still have ~80% of our workforce doing work. What you see as "only the essentials" being open misses a huge swatch of the economy which can and is being done remotely. Retail is actually a small portion of our (or any developed country's) economy.
Importantly global TRADE is still ongoing, with goods flowing to/from one region to another. It's dropped in some sectors, but it's far from 'shut down'. In fact, trade is one exception to the closed borders that so many countries (including the US) have placed. Trucks, trains and cargo ships are still going to/fro the US filled with all sorts of goods.
it literally is different... we have actively closed down... closed... no money is being made... business going bust at rates faster than i can imagine.. still not in the fall out stages... ive not seen any sensible argument that stocks will go up in the next 2 years from anyone other than silly remarks like this one
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OP - do you have an account with an investment company set up? Vanguard? Schwab? I know you said you had your pension fund.
In *my* experience it does take a while from the time you apply to open an account to when you can invest. At least in does it you do it on-line (like a week) but may be more immediate if you go to one of their physical locations.
I would recommend opening up an account. Get that out of the way.
Yes, I would even recommend starting to dollar cost average even $100 a month into some index funds /ETFs.
This will at least get rid of the “inertia” component of not investing. I’m not advocating lump sum investing. I am recommending dipping your toe in. Then when you are ready to invest it is just a click away ... not a week away after security processing.
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have you been out lately and taken a look around? nobody is doing anything...
Yes I have been out as I and everyone I know is still working and shopping, etc... Where I am there is no lock down and the few businesses that are closed are restaurants, bars, salons, barber shops and large mass gathering events like sports and concerts. There is less going on than usual, but "nobody is doing anything" is not accurate.
ok, if you want to knit pick.. people are out buying the bare minimums to survive only...
Really? Wish I knew that before seeing UPS, Amazon, etc trucks coming around to every door. Doesn't look like 'bare minimum' to me. Heck I know I've even bought some 'fluff' here and there for the last few months. Guess your town is REALLY empty ritght now.
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i did not say anything of a sort... i said we have frozen the economy globally.. which is pretty accurate - only essentials are open.. sometimes you dont need ecomonists to tell you what is out your front door and on the job boards.. have you been out lately and taken a look around? nobody is doing anything...
No... what you said was "no money is being made" and "nobody is doing anything". I quoted the relevant portion of your post below. That is flat out wrong. Again, even though front-facing businesses may be closed the majority of people who had a job are still working, still producing, still making money. Even though we likely have unemployment in the 15-20% range, we still have ~80% of our workforce doing work. What you see as "only the essentials" being open misses a huge swatch of the economy which can and is being done remotely. Retail is actually a small portion of our (or any developed country's) economy.
Importantly global TRADE is still ongoing, with goods flowing to/from one region to another. It's dropped in some sectors, but it's far from 'shut down'. In fact, trade is one exception to the closed borders that so many countries (including the US) have placed. Trucks, trains and cargo ships are still going to/fro the US filled with all sorts of goods.
it literally is different... we have actively closed down... closed... no money is being made... business going bust at rates faster than i can imagine.. still not in the fall out stages... ive not seen any sensible argument that stocks will go up in the next 2 years from anyone other than silly remarks like this one
if you want to be literal... fine... ill even take your 80% as gospel for this for now.. 20% unemployment was the great depression figuree was it not? so on what basis are we not looking at another using your own numbers? 20% unemployment contributed to stocks down 90% and suffering for many years did it not? if my history is right inititially? i am not advocating this will repeat... i am merely saying buying at these levels if i am just about to ramp up my investing seems maybe premature considering the current saga
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OP - do you have an account with an investment company set up? Vanguard? Schwab? I know you said you had your pension fund.
In *my* experience it does take a while from the time you apply to open an account to when you can invest. At least in does it you do it on-line (like a week) but may be more immediate if you go to one of their physical locations.
I would recommend opening up an account. Get that out of the way.
Yes, I would even recommend starting to dollar cost average even $100 a month into some index funds /ETFs.
This will at least get rid of the “inertia” component of not investing. I’m not advocating lump sum investing. I am recommending dipping your toe in. Then when you are ready to invest it is just a click away ... not a week away after security processing.
thanks for that - yes mate i am all setup ready to rock n roll
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i havent made my mind up... just because i dont see very good answers back at me doesnt mean i have made my mind up.. i think my argument that due to the obvious elephant in the room right now that seemingly alot dont want to look at is there for all to see... i have yet to see a compelling argument for why the market will continue to stabilise and the current bull will continue... unless i have missed an amazing answer somewhere
You won't get an amazing answer Jamese20 (no offence everyone, my post won't be amazing either). No one can provide such an answer. If someone could then they would be able to predict exactly what will happen in the markets and they would be too busy making a fortune to post on here.
A bear market does feel like the end of the world or else it wouldn't have been a bear market. If no one ever panicked then markets wouldn't drop 20-30% in short periods. They would just plod along. The rise after that initial fall has been a bit crazy to say the least but if anyone was waiting for it to fall 50% then they may be disappointed. However there is nothing to say it won't fall 50% in the coming months. The point is you don't know.
I believe you are a UK poster? Why not keep going with your monthly payments and just feed any lump sum into something like Vanguard LifeStrategy 40 or 60 (% stocks) over the next twelve months if you've got access. That at least gets you started and underway. You can always make it more aggressive in the future.
This is a time for asset allocation and sticking with your plan. Whether someone is just starting out, accumulating or FIRE'd you've got to know your asset allocation and stick to the plan.
-
so what is the compelling reason for the markets to continue to go up in the next couple of years? that is the answer i am looking for that outweighs the elephant in the room
Here's a more direct answer to your question (a few people have said things on similar lines... I'm just highlighting it here)
The market is composed of publicly traded companies. Many of those companies are getting financial aid ("bailouts"). From a shareholders' perspective, it doesn't matter if profits come from sales or from a government grant. Right now many of these businesses are effectively being given grants (not loans) to stay solvent and retain their workforce. That's a big reason why the share price of many corporations went UP even as sales went DOWN. As restrictions are lifted the hope is that there will be a surge in spending from pent up demand. If better treatments do indeed come on the market in a few months (optimistic but possible timeline) and a vaccine around next January (ditto) these companies could be just fine. It certainly won't be universal across all sectors but it could happen to enough businesses to avoid the crash you seem certain is inevitable.
Along the same lines -- unlike, say, the great recession, the causal factor of this was external, not systemic. There's no underlying reason why businesses should fail once they can get back to their normal levels of production. It isn't like in 2007/08 (or 2001) when so much was built on top of bad debt and utterly unrealistic projections. Businesses - and the financial sector in particular - remain stronger today than they were a decade ago. Technology has allowed a lot of businesses to shift operations remotely, which wasn't feasible previously.
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i havent made my mind up... just because i dont see very good answers back at me doesnt mean i have made my mind up.. i think my argument that due to the obvious elephant in the room right now that seemingly alot dont want to look at is there for all to see... i have yet to see a compelling argument for why the market will continue to stabilise and the current bull will continue... unless i have missed an amazing answer somewhere
You won't get an amazing answer Jamese20 (no offence everyone, my post won't be amazing either). No one can provide such an answer. If someone could then they would be able to predict exactly what will happen in the markets and they would be too busy making a fortune to post on here.
A bear market does feel like the end of the world or else it wouldn't have been a bear market. If no one ever panicked then markets wouldn't drop 20-30% in short periods. They would just plod along. The rise after that initial fall has been a bit crazy to say the least but if anyone was waiting for it to fall 50% then they may be disappointed. However there is nothing to say it won't fall 50% in the coming months. The point is you don't know.
I believe you are a UK poster? Why not keep going with your monthly payments and just feed any lump sum into something like Vanguard LifeStrategy 40 or 60 (% stocks) over the next twelve months if you've got access. That at least gets you started and underway. You can always make it more aggressive in the future.
This is a time for asset allocation and sticking with your plan. Whether someone is just starting out, accumulating or FIRE'd you've got to know your asset allocation and stick to the plan.
well amazing is probably not the right word... but any logical reasonable answer that makes reasonable logical sense... ive yet to see one i have to say... i know i will be fine in the long run but i maybe pushing water uphill if my current beliefs are in anyway accurate... i want to be in a global fund... amercia is almost 60% of it... so their market effects it alot... at 10% below highest points i really think this is crazy in this current time and fail to see anything other than decline for some time
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im not saying its the end of civilisation my friend.. i am simplky suggesting that it is depression time for us in this climate and the next 3-5 years the returns i feel will go south not up... i see another dotcom type or worse scenario of 3-4 declining years... the reality has not hit the markets yet and 10% below the highs seems evidently obsurd... why give myself a handicap? i accept its market timing but i also can see how obvious this is a japan style bubble... unless someone can explain how a frozen economy is in the same shape as may 2019?
Have fun working forever then. There will always be plenty of bad news to freak out about.
Hell, even Bob made money... https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/
-W
so it appears you cannot explain how may 2019 is in the same state as now? no other time has the globel frozen their economy... each downturn still had the economy up and running trying to get out of the decline...
i am not freaking out either fyi... just working out the reality... blind close my eyes type false optimism doesnt seem that useful at this moment in my opinion
OP: I agree with you. There is a terrible reality occurring. Sadly the markets have not paid too much attention to the carnage on Main St (market has last 2 days finally). 10% off record high- seriously? Market is WAY over priced.
I wish the market would just drop already, be done with it, and move on so we investors can start making $ again.
OP I agree with you. Putting a significant % of one's $ into the market now would be a very regrettable decision.
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so what is the compelling reason for the markets to continue to go up in the next couple of years? that is the answer i am looking for that outweighs the elephant in the room
Here's a more direct answer to your question (a few people have said things on similar lines... I'm just highlighting it here)
The market is composed of publicly traded companies. Many of those companies are getting financial aid ("bailouts"). From a shareholders' perspective, it doesn't matter if profits come from sales or from a government grant. Right now many of these businesses are effectively being given grants (not loans) to stay solvent and retain their workforce. That's a big reason why the share price of many corporations went UP even as sales went DOWN. As restrictions are lifted the hope is that there will be a surge in spending from pent up demand. If better treatments do indeed come on the market in a few months (optimistic but possible timeline) and a vaccine around next January (ditto) these companies could be just fine. It certainly won't be universal across all sectors but it could happen to enough businesses to avoid the crash you seem certain is inevitable.
Along the same lines -- unlike, say, the great recession, the causal factor of this was external, not systemic. There's no underlying reason why businesses should fail once they can get back to their normal levels of production. It isn't like in 2007/08 (or 2001) when so much was built on top of bad debt and utterly unrealistic projections. Businesses - and the financial sector in particular - remain stronger today than they were a decade ago. Technology has allowed a lot of businesses to shift operations remotely, which wasn't feasible previously.
the aid in usa i havent really looked at... but our basic aid i estimate covered about a months running costs maybe slightly more nationally only... i dont expect usa to be all that much different.. now it may just be usa opens up and goes nuts... but in my country the opposite seems to be happening -
there is also the lagging effect of people not wanting to go out and about due to the fear factor...
-
i havent made my mind up... just because i dont see very good answers back at me doesnt mean i have made my mind up.. i think my argument that due to the obvious elephant in the room right now that seemingly alot dont want to look at is there for all to see... i have yet to see a compelling argument for why the market will continue to stabilise and the current bull will continue... unless i have missed an amazing answer somewhere
You won't get an amazing answer Jamese20 (no offence everyone, my post won't be amazing either). No one can provide such an answer. If someone could then they would be able to predict exactly what will happen in the markets and they would be too busy making a fortune to post on here.
A bear market does feel like the end of the world or else it wouldn't have been a bear market. If no one ever panicked then markets wouldn't drop 20-30% in short periods. They would just plod along. The rise after that initial fall has been a bit crazy to say the least but if anyone was waiting for it to fall 50% then they may be disappointed. However there is nothing to say it won't fall 50% in the coming months. The point is you don't know.
I believe you are a UK poster? Why not keep going with your monthly payments and just feed any lump sum into something like Vanguard LifeStrategy 40 or 60 (% stocks) over the next twelve months if you've got access. That at least gets you started and underway. You can always make it more aggressive in the future.
This is a time for asset allocation and sticking with your plan. Whether someone is just starting out, accumulating or FIRE'd you've got to know your asset allocation and stick to the plan.
well amazing is probably not the right word... but any logical reasonable answer that makes reasonable logical sense... ive yet to see one i have to say... i know i will be fine in the long run but i maybe pushing water uphill if my current beliefs are in anyway accurate... i want to be in a global fund... amercia is almost 60% of it... so their market effects it alot... at 10% below highest points i really think this is crazy in this current time and fail to see anything other than decline for some time
Well, I hope for your sake you didn't pull out of the market in March.
(https://i.imgur.com/J6Y71FK.png)
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i havent made my mind up... just because i dont see very good answers back at me doesnt mean i have made my mind up.. i think my argument that due to the obvious elephant in the room right now that seemingly alot dont want to look at is there for all to see... i have yet to see a compelling argument for why the market will continue to stabilise and the current bull will continue... unless i have missed an amazing answer somewhere
You won't get an amazing answer Jamese20 (no offence everyone, my post won't be amazing either). No one can provide such an answer. If someone could then they would be able to predict exactly what will happen in the markets and they would be too busy making a fortune to post on here.
A bear market does feel like the end of the world or else it wouldn't have been a bear market. If no one ever panicked then markets wouldn't drop 20-30% in short periods. They would just plod along. The rise after that initial fall has been a bit crazy to say the least but if anyone was waiting for it to fall 50% then they may be disappointed. However there is nothing to say it won't fall 50% in the coming months. The point is you don't know.
I believe you are a UK poster? Why not keep going with your monthly payments and just feed any lump sum into something like Vanguard LifeStrategy 40 or 60 (% stocks) over the next twelve months if you've got access. That at least gets you started and underway. You can always make it more aggressive in the future.
This is a time for asset allocation and sticking with your plan. Whether someone is just starting out, accumulating or FIRE'd you've got to know your asset allocation and stick to the plan.
well amazing is probably not the right word... but any logical reasonable answer that makes reasonable logical sense... ive yet to see one i have to say... i know i will be fine in the long run but i maybe pushing water uphill if my current beliefs are in anyway accurate... i want to be in a global fund... amercia is almost 60% of it... so their market effects it alot... at 10% below highest points i really think this is crazy in this current time and fail to see anything other than decline for some time
Well, I hope for your sake you didn't pull out of the market in March.
(https://i.imgur.com/J6Y71FK.png)
have you read my actual original thread? you come on to disagree without even understanding my current position..
-
i havent made my mind up... just because i dont see very good answers back at me doesnt mean i have made my mind up.. i think my argument that due to the obvious elephant in the room right now that seemingly alot dont want to look at is there for all to see... i have yet to see a compelling argument for why the market will continue to stabilise and the current bull will continue... unless i have missed an amazing answer somewhere
You won't get an amazing answer Jamese20 (no offence everyone, my post won't be amazing either). No one can provide such an answer. If someone could then they would be able to predict exactly what will happen in the markets and they would be too busy making a fortune to post on here.
A bear market does feel like the end of the world or else it wouldn't have been a bear market. If no one ever panicked then markets wouldn't drop 20-30% in short periods. They would just plod along. The rise after that initial fall has been a bit crazy to say the least but if anyone was waiting for it to fall 50% then they may be disappointed. However there is nothing to say it won't fall 50% in the coming months. The point is you don't know.
I believe you are a UK poster? Why not keep going with your monthly payments and just feed any lump sum into something like Vanguard LifeStrategy 40 or 60 (% stocks) over the next twelve months if you've got access. That at least gets you started and underway. You can always make it more aggressive in the future.
This is a time for asset allocation and sticking with your plan. Whether someone is just starting out, accumulating or FIRE'd you've got to know your asset allocation and stick to the plan.
well amazing is probably not the right word... but any logical reasonable answer that makes reasonable logical sense... ive yet to see one i have to say... i know i will be fine in the long run but i maybe pushing water uphill if my current beliefs are in anyway accurate... i want to be in a global fund... amercia is almost 60% of it... so their market effects it alot... at 10% below highest points i really think this is crazy in this current time and fail to see anything other than decline for some time
Well, I hope for your sake you didn't pull out of the market in March.
(https://i.imgur.com/J6Y71FK.png)
have you read my actual original thread? you come on to disagree without even understanding my current position..
Yes, I have.
You come here to tell us how market timing is OK when you think it's OK, despite literally every piece of market history we have showing otherwise.
It's your money - do what you want. You don't have to convince me.
and this virus has halted everyone
The S&P 500 is up ~26% in less than six weeks. That doesn't sound like "halted" to me.
Even if it does, what makes you so sure that you will know when to get in? If you were as good as you think you are, you'd be a billionaire.
-
i havent made my mind up... just because i dont see very good answers back at me doesnt mean i have made my mind up.. i think my argument that due to the obvious elephant in the room right now that seemingly alot dont want to look at is there for all to see... i have yet to see a compelling argument for why the market will continue to stabilise and the current bull will continue... unless i have missed an amazing answer somewhere
You won't get an amazing answer Jamese20 (no offence everyone, my post won't be amazing either). No one can provide such an answer. If someone could then they would be able to predict exactly what will happen in the markets and they would be too busy making a fortune to post on here.
A bear market does feel like the end of the world or else it wouldn't have been a bear market. If no one ever panicked then markets wouldn't drop 20-30% in short periods. They would just plod along. The rise after that initial fall has been a bit crazy to say the least but if anyone was waiting for it to fall 50% then they may be disappointed. However there is nothing to say it won't fall 50% in the coming months. The point is you don't know.
I believe you are a UK poster? Why not keep going with your monthly payments and just feed any lump sum into something like Vanguard LifeStrategy 40 or 60 (% stocks) over the next twelve months if you've got access. That at least gets you started and underway. You can always make it more aggressive in the future.
This is a time for asset allocation and sticking with your plan. Whether someone is just starting out, accumulating or FIRE'd you've got to know your asset allocation and stick to the plan.
well amazing is probably not the right word... but any logical reasonable answer that makes reasonable logical sense... ive yet to see one i have to say... i know i will be fine in the long run but i maybe pushing water uphill if my current beliefs are in anyway accurate... i want to be in a global fund... amercia is almost 60% of it... so their market effects it alot... at 10% below highest points i really think this is crazy in this current time and fail to see anything other than decline for some time
Well, I hope for your sake you didn't pull out of the market in March.
(https://i.imgur.com/J6Y71FK.png)
have you read my actual original thread? you come on to disagree without even understanding my current position..
Yes, I have.
You come here to tell us how market timing is OK when you think it's OK, despite literally every piece of market history we have showing otherwise.
It's your money - do what you want. You don't have to convince me.
if you did, your queation would now would not be asked would it.. so on that basis i dont believe you
i have not said that either... and since you also cannot put a reason up for the opposite.. il let you continue with other peoples cliches as your responses
-
i havent made my mind up... just because i dont see very good answers back at me doesnt mean i have made my mind up.. i think my argument that due to the obvious elephant in the room right now that seemingly alot dont want to look at is there for all to see... i have yet to see a compelling argument for why the market will continue to stabilise and the current bull will continue... unless i have missed an amazing answer somewhere
You won't get an amazing answer Jamese20 (no offence everyone, my post won't be amazing either). No one can provide such an answer. If someone could then they would be able to predict exactly what will happen in the markets and they would be too busy making a fortune to post on here.
A bear market does feel like the end of the world or else it wouldn't have been a bear market. If no one ever panicked then markets wouldn't drop 20-30% in short periods. They would just plod along. The rise after that initial fall has been a bit crazy to say the least but if anyone was waiting for it to fall 50% then they may be disappointed. However there is nothing to say it won't fall 50% in the coming months. The point is you don't know.
I believe you are a UK poster? Why not keep going with your monthly payments and just feed any lump sum into something like Vanguard LifeStrategy 40 or 60 (% stocks) over the next twelve months if you've got access. That at least gets you started and underway. You can always make it more aggressive in the future.
This is a time for asset allocation and sticking with your plan. Whether someone is just starting out, accumulating or FIRE'd you've got to know your asset allocation and stick to the plan.
well amazing is probably not the right word... but any logical reasonable answer that makes reasonable logical sense... ive yet to see one i have to say... i know i will be fine in the long run but i maybe pushing water uphill if my current beliefs are in anyway accurate... i want to be in a global fund... amercia is almost 60% of it... so their market effects it alot... at 10% below highest points i really think this is crazy in this current time and fail to see anything other than decline for some time
Well, I hope for your sake you didn't pull out of the market in March.
(https://i.imgur.com/J6Y71FK.png)
have you read my actual original thread? you come on to disagree without even understanding my current position..
Yes, I have.
You come here to tell us how market timing is OK when you think it's OK, despite literally every piece of market history we have showing otherwise.
It's your money - do what you want. You don't have to convince me.
if you did, your queation would now would not be asked would it.. so on that basis i dont believe you
i have not said that either... and since you also cannot put a reason up for the opposite.. il let you continue with other peoples cliches as your responses
ok...as I said before...it's your money...why you think you need to prove this to us...I don't know...
-
i havent made my mind up... just because i dont see very good answers back at me doesnt mean i have made my mind up.. i think my argument that due to the obvious elephant in the room right now that seemingly alot dont want to look at is there for all to see... i have yet to see a compelling argument for why the market will continue to stabilise and the current bull will continue... unless i have missed an amazing answer somewhere
You won't get an amazing answer Jamese20 (no offence everyone, my post won't be amazing either). No one can provide such an answer. If someone could then they would be able to predict exactly what will happen in the markets and they would be too busy making a fortune to post on here.
A bear market does feel like the end of the world or else it wouldn't have been a bear market. If no one ever panicked then markets wouldn't drop 20-30% in short periods. They would just plod along. The rise after that initial fall has been a bit crazy to say the least but if anyone was waiting for it to fall 50% then they may be disappointed. However there is nothing to say it won't fall 50% in the coming months. The point is you don't know.
I believe you are a UK poster? Why not keep going with your monthly payments and just feed any lump sum into something like Vanguard LifeStrategy 40 or 60 (% stocks) over the next twelve months if you've got access. That at least gets you started and underway. You can always make it more aggressive in the future.
This is a time for asset allocation and sticking with your plan. Whether someone is just starting out, accumulating or FIRE'd you've got to know your asset allocation and stick to the plan.
well amazing is probably not the right word... but any logical reasonable answer that makes reasonable logical sense... ive yet to see one i have to say... i know i will be fine in the long run but i maybe pushing water uphill if my current beliefs are in anyway accurate... i want to be in a global fund... amercia is almost 60% of it... so their market effects it alot... at 10% below highest points i really think this is crazy in this current time and fail to see anything other than decline for some time
Well, I hope for your sake you didn't pull out of the market in March.
(https://i.imgur.com/J6Y71FK.png)
have you read my actual original thread? you come on to disagree without even understanding my current position..
Yes, I have.
You come here to tell us how market timing is OK when you think it's OK, despite literally every piece of market history we have showing otherwise.
It's your money - do what you want. You don't have to convince me.
if you did, your queation would now would not be asked would it.. so on that basis i dont believe you
i have not said that either... and since you also cannot put a reason up for the opposite.. il let you continue with other peoples cliches as your responses
ok...as I said before...it's your money...why you think you need to prove this to us...I don't know...
here was me thinking this was called investor alley.. i think my post is just as valid as any investment forum discussion
-
Hi all,
I know we should not time the market... but I really struggle to see how the markets are as high as they are when there is very little economic activity and with the S&P500 only 10% off its high.... do we even need to do any number crunching to see if the market is in crazy mode?
I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets.
I see years of decline ahead due to this virus and i do not see any sense in pumping fresh money in with markets so blatantly high vs the current climate? i know this is against the strategy we have bought into... but extreme conditions require different thinking.. and this virus has halted everyone
thoughts? and what are you all doing regarding this investment wise?
Also, for the record - your original post did not answer the single question I have posed in this thread:
The S&P 500 is up ~26% in less than six weeks. That doesn't sound like "halted" to me.
Even if it does, what makes you so sure that you will know when to get in?
What determines when you will "see some remote sense in the markets"? What's your determining factor to decide when to buy in?
-
Hi all,
I know we should not time the market... but I really struggle to see how the markets are as high as they are when there is very little economic activity and with the S&P500 only 10% off its high.... do we even need to do any number crunching to see if the market is in crazy mode?
I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets.
I see years of decline ahead due to this virus and i do not see any sense in pumping fresh money in with markets so blatantly high vs the current climate? i know this is against the strategy we have bought into... but extreme conditions require different thinking.. and this virus has halted everyone
thoughts? and what are you all doing regarding this investment wise?
Also, for the record - your original post did not answer the single question I have posed in this thread:
The S&P 500 is up ~26% in less than six weeks. That doesn't sound like "halted" to me.
Even if it does, what makes you so sure that you will know when to get in?
What determines when you will "see some remote sense in the markets"? What's your determining factor to decide when to buy in?
"I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets." - i would have thought it was obvious from this...
-
Hi all,
I know we should not time the market... but I really struggle to see how the markets are as high as they are when there is very little economic activity and with the S&P500 only 10% off its high.... do we even need to do any number crunching to see if the market is in crazy mode?
I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets.
I see years of decline ahead due to this virus and i do not see any sense in pumping fresh money in with markets so blatantly high vs the current climate? i know this is against the strategy we have bought into... but extreme conditions require different thinking.. and this virus has halted everyone
thoughts? and what are you all doing regarding this investment wise?
Also, for the record - your original post did not answer the single question I have posed in this thread:
The S&P 500 is up ~26% in less than six weeks. That doesn't sound like "halted" to me.
Even if it does, what makes you so sure that you will know when to get in?
What determines when you will "see some remote sense in the markets"? What's your determining factor to decide when to buy in?
"I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets." - i would have thought it was obvious from this...
What determines when you will "see some remote sense in the markets"? What's your determining factor to decide when to buy in?
-
Hi all,
I know we should not time the market... but I really struggle to see how the markets are as high as they are when there is very little economic activity and with the S&P500 only 10% off its high.... do we even need to do any number crunching to see if the market is in crazy mode?
I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets.
I see years of decline ahead due to this virus and i do not see any sense in pumping fresh money in with markets so blatantly high vs the current climate? i know this is against the strategy we have bought into... but extreme conditions require different thinking.. and this virus has halted everyone
thoughts? and what are you all doing regarding this investment wise?
Also, for the record - your original post did not answer the single question I have posed in this thread:
The S&P 500 is up ~26% in less than six weeks. That doesn't sound like "halted" to me.
Even if it does, what makes you so sure that you will know when to get in?
What determines when you will "see some remote sense in the markets"? What's your determining factor to decide when to buy in?
"I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets." - i would have thought it was obvious from this...
What determines when you will "see some remote sense in the markets"? What's your determining factor to decide when to buy in?
something that resembles proportionate to the current mess we are all in... when it went down 30%... like other recessions (cosndering others are using these to back up their points) i expected it to go down further as time goes on considering most areas are in lockdown... didnt the us suffer 10% unemployment in the first 3 weeks?
-
This thread needs some appropriate music!
https://www.youtube.com/watch?v=eFTLKWw542g
https://www.youtube.com/watch?v=j2r2nDhTzO4
-W
We need some Leonard Cohen to set the mood
https://www.youtube.com/watch?v=Lin-a2lTelg
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We need some Leonard Cohen to set the mood
https://www.youtube.com/watch?v=Lin-a2lTelg
That makes the whole thread worth while. :-)
-
We need some Leonard Cohen to set the mood
https://www.youtube.com/watch?v=Lin-a2lTelg
That makes the whole thread worth while. :-)
I am now convinced this entire thread was an elaborate set up for this song. Well done, BB.
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if you want to be literal... fine... ill even take your 80% as gospel for this for now.. 20% unemployment was the great depression figuree was it not? so on what basis are we not looking at another using your own numbers? 20% unemployment contributed to stocks down 90% and suffering for many years did it not? if my history is right inititially? i am not advocating this will repeat... i am merely saying buying at these levels if i am just about to ramp up my investing seems maybe premature considering the current saga
Oh I'll bite it's Friday and I have not been on the forums in weeks. Just to be clear this is all my thinking and viewpoint.
Demand has not gone away it is simple "frozen" to use your term. That is vastly different than the Great Depression (GD). People are not spending on certain things because they do not want to or are not personally financially able to, they are not because those things are closed, but when they open they will have business again and likely relatively quickly. When the markets look ahead, this is what they understand. The GD unemployment was likely much more spread out as the current figures are largely from retail, restaurants and other areas that had to shutter and could not be remote. For others, if I use my personal situation as an example, we can work from home 100% effectively and the only thing that has changed is where I sit. The same work is getting done. Now certainly aspects of our business that require face to face customer interaction are impacted and I am not saying our revenues are down, but what I am saying is not one of our customers has said "COVID-19 has given me time to think and I realized I am not interested in your product after all". They are all just waiting for when we can resume business and that demand can be acted on. I believe this is the case for the vast majority of the operating businesses. Will there be a period of lost earnings? Of course. Could the recovery of demand in certain segments be slower than anticipated? Of course. Could the demand in certain segments be faster than anticipated? Of course. The point it, we do not know and I think going through the exercise comparing a global pandemic in a era when technology allows do much commerce to happen remotely anyway to an era when everything had to be done in person because none of that technology was even possible or thought of seems like a fool's errand.
We are all telling you the same thing, and even though you tell me you have not made up your mind, I challenge you sir that you are nit picking. You are just arguing about exactly what you have made up your mind about, so I will go macro on you. You have made up your mind that the upside/downside ratio of the current situation is weighed very heavily on the downside and you want us to agree with you. You seem also to have made up your mind that if you just explain yourself properly we will all have the same aha moment you have had and agree with you. Perhaps you have not gotten down to the micro level of your investments in a made decision, so that's where I tripped you up in my earlier post, but it is abundantly clear that you feel this is a bad time.
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This topic has great promise! We already have accusations of market timing, strongly held opinions, rick-rolling, and graphs. All we need are accusations of illegitimacy, a guest visit from @sol , complaints of how this was all an evil plot by _____ politician followed by @arebelspy smacking us all upside the head and shutting the topic down.
Will this topic become one of MMM Forum Legend?
Stay tuned.
-
Hi all,
I know we should not time the market... but I really struggle to see how the markets are as high as they are when there is very little economic activity and with the S&P500 only 10% off its high.... do we even need to do any number crunching to see if the market is in crazy mode?
I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets.
I see years of decline ahead due to this virus and i do not see any sense in pumping fresh money in with markets so blatantly high vs the current climate? i know this is against the strategy we have bought into... but extreme conditions require different thinking.. and this virus has halted everyone
thoughts? and what are you all doing regarding this investment wise?
Also, for the record - your original post did not answer the single question I have posed in this thread:
The S&P 500 is up ~26% in less than six weeks. That doesn't sound like "halted" to me.
Even if it does, what makes you so sure that you will know when to get in?
What determines when you will "see some remote sense in the markets"? What's your determining factor to decide when to buy in?
"I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets." - i would have thought it was obvious from this...
What determines when you will "see some remote sense in the markets"? What's your determining factor to decide when to buy in?
something that resembles proportionate to the current mess we are all in... when it went down 30%... like other recessions (cosndering others are using these to back up their points) i expected it to go down further as time goes on considering most areas are in lockdown... didnt the us suffer 10% unemployment in the first 3 weeks?
Yes and those are all sectors that were shutdown or heavily curtailed and make up about 10% of the labor force so this is not a mystery and completely expected by the actions taken and therefore understood and not causing any market panic.
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This topic has great promise! We already have accusations of market timing, strongly held opinions, rick-rolling, and graphs. All we need are accusations of illegitimacy, a guest visit from @sol , complaints of how this was all an evil plot by _____ politician followed by @arebelspy smacking us all upside the head and shutting the topic down.
Will this topic become one of MMM Forum Legend?
Stay tuned.
Your avatar fits very well with this post. I can see you wringing your hands in gleeful anticipation just like the character as you wrote this. :)
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have you been out lately and taken a look around? nobody is doing anything...
Yes I have been out as I and everyone I know is still working and shopping, etc... Where I am there is no lock down and the few businesses that are closed are restaurants, bars, salons, barber shops and large mass gathering events like sports and concerts. There is less going on than usual, but "nobody is doing anything" is not accurate.
ok, if you want to knit pick.. people are out buying the bare minimums to survive only...
I know plenty of people making s***loads of money now. In Feb. they were making peanuts at their regular job. Now they're earning stupid money. It's not fair, but it's what some people are doing. YMMV.
-
This topic has great promise! We already have accusations of market timing, strongly held opinions, rick-rolling, and graphs. All we need are accusations of illegitimacy, a guest visit from @sol , complaints of how this was all an evil plot by _____ politician followed by @arebelspy smacking us all upside the head and shutting the topic down.
Will this topic become one of MMM Forum Legend?
Stay tuned.
THIS!!!!
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We need some Leonard Cohen to set the mood
https://www.youtube.com/watch?v=Lin-a2lTelg
Damn, I knew what song this was going to be before I clicked ont he link.
Well played Buffaloski Boris!
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if you want to be literal... fine... ill even take your 80% as gospel for this for now.. 20% unemployment was the great depression figuree was it not? so on what basis are we not looking at another using your own numbers? 20% unemployment contributed to stocks down 90% and suffering for many years did it not? if my history is right inititially? i am not advocating this will repeat... i am merely saying buying at these levels if i am just about to ramp up my investing seems maybe premature considering the current saga
Oh I'll bite it's Friday and I have not been on the forums in weeks. Just to be clear this is all my thinking and viewpoint.
Demand has not gone away it is simple "frozen" to use your term. That is vastly different than the Great Depression (GD). People are not spending on certain things because they do not want to or are not personally financially able to, they are not because those things are closed, but when they open they will have business again and likely relatively quickly. When the markets look ahead, this is what they understand. The GD unemployment was likely much more spread out as the current figures are largely from retail, restaurants and other areas that had to shutter and could not be remote. For others, if I use my personal situation as an example, we can work from home 100% effectively and the only thing that has changed is where I sit. The same work is getting done. Now certainly aspects of our business that require face to face customer interaction are impacted and I am not saying our revenues are down, but what I am saying is not one of our customers has said "COVID-19 has given me time to think and I realized I am not interested in your product after all". They are all just waiting for when we can resume business and that demand can be acted on. I believe this is the case for the vast majority of the operating businesses. Will there be a period of lost earnings? Of course. Could the recovery of demand in certain segments be slower than anticipated? Of course. Could the demand in certain segments be faster than anticipated? Of course. The point it, we do not know and I think going through the exercise comparing a global pandemic in a era when technology allows do much commerce to happen remotely anyway to an era when everything had to be done in person because none of that technology was even possible or thought of seems like a fool's errand.
We are all telling you the same thing, and even though you tell me you have not made up your mind, I challenge you sir that you are nit picking. You are just arguing about exactly what you have made up your mind about, so I will go macro on you. You have made up your mind that the upside/downside ratio of the current situation is weighed very heavily on the downside and you want us to agree with you. You seem also to have made up your mind that if you just explain yourself properly we will all have the same aha moment you have had and agree with you. Perhaps you have not gotten down to the micro level of your investments in a made decision, so that's where I tripped you up in my earlier post, but it is abundantly clear that you feel this is a bad time.
i dont really care you agree or not... i just have yet to see any sensible case for how these current market levels are in anyway resembling the reality ... you talk about certain sectors.. it took one sector to create 3 years of decline did it not? we are talking about major multiple sectors..big retailers in my country already are 30% down on usual monthly demand and have been open all the way through the current crisis... the idea that just because your open the business wont struggle seems naive to me... there are very rare exceptions in any situation but demand is so low right now the effects are big in a negative way.
i am trying to see the case for why the market will stabilise and go up even ... sorry but folks havent really put up anything with any weight. you can say i have made my mind up... fine think what you like but i am telling my mind isnt made up otherwise i wouldnt pose the question... just because i am struggling to see a convincing argument from anyone including you doesnt mean i have made my mind up.. i am merely saying... your points dont seem convincing to me for reasons i just outlined
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Hi all,
I know we should not time the market... but I really struggle to see how the markets are as high as they are when there is very little economic activity and with the S&P500 only 10% off its high.... do we even need to do any number crunching to see if the market is in crazy mode?
I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets.
I see years of decline ahead due to this virus and i do not see any sense in pumping fresh money in with markets so blatantly high vs the current climate? i know this is against the strategy we have bought into... but extreme conditions require different thinking.. and this virus has halted everyone
thoughts? and what are you all doing regarding this investment wise?
Also, for the record - your original post did not answer the single question I have posed in this thread:
The S&P 500 is up ~26% in less than six weeks. That doesn't sound like "halted" to me.
Even if it does, what makes you so sure that you will know when to get in?
What determines when you will "see some remote sense in the markets"? What's your determining factor to decide when to buy in?
"I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets." - i would have thought it was obvious from this...
What determines when you will "see some remote sense in the markets"? What's your determining factor to decide when to buy in?
something that resembles proportionate to the current mess we are all in... when it went down 30%... like other recessions (cosndering others are using these to back up their points) i expected it to go down further as time goes on considering most areas are in lockdown... didnt the us suffer 10% unemployment in the first 3 weeks?
That's not a plan, at least not one you could write into your IPS.
I really, really hope you think a bit deeper at this, because the hallmark of investors who hold cash expecting the markets to drop further and yet wind up missing the ride back up is the don't have a clear, defined plan on when to get back in. Will you get back in if it matches the low on mid-march? Does it need to fall further? If so, by how miuch? What if it drops 10% and then goes sideways for a while... what then? If there's a sudden uptick of cases do you readjust your 'buy-in' point? Conversely if a new treatment comes out that cuts mortality in half do you change your position?
You've mentioned markets in other recessions dropping 30%. Ok, first no true that's been the case for all recessions, but to a broader point we **have already seen a 30% drop, followed by a modest rebound. So... how does this fall into that?
how are you inputting new information, and how can you account for new information faster than the hedge fund managers that do it in miliseconds?
Just full disclosure, I'm of the opinion that we are likely to see a drop from today's market value of ~2800 (SP500). How much, how far, and by when.... ::shrug::
-
Hi all,
I know we should not time the market... but I really struggle to see how the markets are as high as they are when there is very little economic activity and with the S&P500 only 10% off its high.... do we even need to do any number crunching to see if the market is in crazy mode?
I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets.
I see years of decline ahead due to this virus and i do not see any sense in pumping fresh money in with markets so blatantly high vs the current climate? i know this is against the strategy we have bought into... but extreme conditions require different thinking.. and this virus has halted everyone
thoughts? and what are you all doing regarding this investment wise?
Also, for the record - your original post did not answer the single question I have posed in this thread:
The S&P 500 is up ~26% in less than six weeks. That doesn't sound like "halted" to me.
Even if it does, what makes you so sure that you will know when to get in?
What determines when you will "see some remote sense in the markets"? What's your determining factor to decide when to buy in?
"I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets." - i would have thought it was obvious from this...
What determines when you will "see some remote sense in the markets"? What's your determining factor to decide when to buy in?
something that resembles proportionate to the current mess we are all in... when it went down 30%... like other recessions (cosndering others are using these to back up their points) i expected it to go down further as time goes on considering most areas are in lockdown... didnt the us suffer 10% unemployment in the first 3 weeks?
That's not a plan, at least not one you could write into your IPS.
I really, really hope you think a bit deeper at this, because the hallmark of investors who hold cash expecting the markets to drop further and yet wind up missing the ride back up is the don't have a clear, defined plan on when to get back in. Will you get back in if it matches the low on mid-march? Does it need to fall further? If so, by how miuch? What if it drops 10% and then goes sideways for a while... what then? If there's a sudden uptick of cases do you readjust your 'buy-in' point? Conversely if a new treatment comes out that cuts mortality in half do you change your position?
You've mentioned markets in other recessions dropping 30%. Ok, first no true that's been the case for all recessions, but to a broader point we **have already seen a 30% drop, followed by a modest rebound. So... how does this fall into that?
how are you inputting new information, and how can you account for new information faster than the hedge fund managers that do it in miliseconds?
Just full disclosure, I'm of the opinion that we are likely to see a drop from today's market value of ~2800 (SP500). How much, how far, and by when.... ::shrug::
Hi, isn't this here me showing I am thinking deeply? I have also stated once I start thats it...i have done nothing with my pension pots for instance its all in stocks. I feel at this moment in time the current levels are just delusional and not in reality.. Therefore why handicap the start of my second pot? Maybe they can stay delusional until they are no longer delusional? But I doubt it when business earnings are generally going to be terrible therefore the current evidence suggests a decline of alot lower than it is now..
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...well I've done my best. Anyone else?
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Nah, you tried. The rest of us gave up and started with the Rick-Rolling and general shenanigans a ways back.
I always sort of shake my head at these threads where people say "well it just seems overvalued" and when you ask them what value they'd buy back in they don't even know/haven't thought about it. As if somehow so far in life *not having a plan* has generally worked out.
Innumeracy and paranoia are a bad combination.
-W
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If you think the stocks are currently overvalued, what did you think back in January, when the PE ratios were higher? Weren't you putting your money in via your pension then?
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If you think the stocks are currently overvalued, what did you think back in January, when the PE ratios were higher? Weren't you putting your money in via your pension then?
Covered this already.. Still waiting for a reason for why this market won't go down that adds up... Instead it's just overbearing patronising high horse type responses.. Mainly because they don't have a response that adds up other than finance blog owners clichés
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If you think the stocks are currently overvalued, what did you think back in January, when the PE ratios were higher? Weren't you putting your money in via your pension then?
Covered this already.. Still waiting for a reason for why this market won't go down that adds up... Instead it's just overbearing patronising high horse type responses.. Mainly because they don't have a response that adds up other than finance blog owners clichés
Well, excuse me if "the entire history of investing" is not good enough for you.
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If you think the stocks are currently overvalued, what did you think back in January, when the PE ratios were higher? Weren't you putting your money in via your pension then?
Covered this already.. Still waiting for a reason for why this market won't go down that adds up... Instead it's just overbearing patronising high horse type responses.. Mainly because they don't have a response that adds up other than finance blog owners clichés
I am throwing in the towel. No one is giving you a reason because that's something you think about if you are trying to time the market. Since we do not, we do not waste brain cycles on figuring out the future as that is impossible. I can only speak for myself. I do not care if it crashes and burns or if it goes gang busters, I am comfortable with my version of "aggressive investing" which is the same thing I have done for thirty years and not going to stop now. I continue to put money in every week.
Sorry you feel we are partonizing. We are offering sound advice based on historical studies that are talked about on these forums over and over. If you are interested they are there for you to find. There are also financial forums that cater to this speculation that might feel less patronizing to you, but in this case we are not going to give you what you want.
-
Hi all,
I know we should not time the market... but I really struggle to see how the markets are as high as they are when there is very little economic activity and with the S&P500 only 10% off its high.... do we even need to do any number crunching to see if the market is in crazy mode?
I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets.
I see years of decline ahead due to this virus and i do not see any sense in pumping fresh money in with markets so blatantly high vs the current climate? i know this is against the strategy we have bought into... but extreme conditions require different thinking.. and this virus has halted everyone
thoughts? and what are you all doing regarding this investment wise?
Also, for the record - your original post did not answer the single question I have posed in this thread:
The S&P 500 is up ~26% in less than six weeks. That doesn't sound like "halted" to me.
Even if it does, what makes you so sure that you will know when to get in?
What determines when you will "see some remote sense in the markets"? What's your determining factor to decide when to buy in?
"I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets." - i would have thought it was obvious from this...
What determines when you will "see some remote sense in the markets"? What's your determining factor to decide when to buy in?
something that resembles proportionate to the current mess we are all in... when it went down 30%... like other recessions (cosndering others are using these to back up their points) i expected it to go down further as time goes on considering most areas are in lockdown... didnt the us suffer 10% unemployment in the first 3 weeks?
That's not a plan, at least not one you could write into your IPS.
I really, really hope you think a bit deeper at this, because the hallmark of investors who hold cash expecting the markets to drop further and yet wind up missing the ride back up is the don't have a clear, defined plan on when to get back in. Will you get back in if it matches the low on mid-march? Does it need to fall further? If so, by how miuch? What if it drops 10% and then goes sideways for a while... what then? If there's a sudden uptick of cases do you readjust your 'buy-in' point? Conversely if a new treatment comes out that cuts mortality in half do you change your position?
You've mentioned markets in other recessions dropping 30%. Ok, first no true that's been the case for all recessions, but to a broader point we **have already seen a 30% drop, followed by a modest rebound. So... how does this fall into that?
how are you inputting new information, and how can you account for new information faster than the hedge fund managers that do it in miliseconds?
Just full disclosure, I'm of the opinion that we are likely to see a drop from today's market value of ~2800 (SP500). How much, how far, and by when.... ::shrug::
Hi, isn't this here me showing I am thinking deeply? I have also stated once I start thats it...i have done nothing with my pension pots for instance its all in stocks. I feel at this moment in time the current levels are just delusional and not in reality.. Therefore why handicap the start of my second pot? Maybe they can stay delusional until they are no longer delusional? But I doubt it when business earnings are generally going to be terrible therefore the current evidence suggests a decline of alot lower than it is now..
Can you answer this simple question: What metric will you use to trigger you that it's time to buy?
If you can't answer that question, then you need to admit that you have no metric to trigger you getting into the market, and you might as well get in now, even if you could get better returns by waiting a little bit. The alternative is indefinite waiting, which is losing money becuase you're money is devaluing from inflation.
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If you think the stocks are currently overvalued, what did you think back in January, when the PE ratios were higher? Weren't you putting your money in via your pension then?
Covered this already.. Still waiting for a reason for why this market won't go down that adds up... Instead it's just overbearing patronising high horse type responses.. Mainly because they don't have a response that adds up other than finance blog owners clichés
I am throwing in the towel. No one is giving you a reason because that's something you think about if you are trying to time the market. Since we do not, we do not waste brain cycles on figuring out the future as that is impossible. I can only speak for myself. I do not care if it crashes and burns or if it goes gang busters, I am comfortable with my version of "aggressive investing" which is the same thing I have done for thirty years and not going to stop now. I continue to put money in every week.
Sorry you feel we are partonizing. We are offering sound advice based on historical studies that are talked about on these forums over and over. If you are interested they are there for you to find. There are also financial forums that cater to this speculation that might feel less patronizing to you, but in this case we are not going to give you what you want.
Not everyone is but clearly some are patronising and trying to be cute.. Mainly because they don't have a response that mitigates the one I originally pointed out... Economic coma and ma's unemployment vs... Well nothing other than cliches
I see very little risk in seeing what transpires and once I start investing I won't think anymore on it
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This topic has great promise! We already have accusations of market timing, strongly held opinions, rick-rolling, and graphs. All we need are accusations of illegitimacy, a guest visit from @sol , complaints of how this was all an evil plot by _____ politician followed by @arebelspy smacking us all upside the head and shutting the topic down.
Will this topic become one of MMM Forum Legend?
Stay tuned.
Your avatar fits very well with this post. I can see you wringing your hands in gleeful anticipation just like the character as you wrote this. :)
You know it! There's not much more that I look forward to than a MMM thread that goes completely off the rails. This one has promise. Hopefully the mods are off getting drunk doing something great for humanity.
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Hi all,
I know we should not time the market... but I really struggle to see how the markets are as high as they are when there is very little economic activity and with the S&P500 only 10% off its high.... do we even need to do any number crunching to see if the market is in crazy mode?
I have got myself setup and ready to go investing big each month to kick start my plans.. but i really feel like building my cash position until i see some remote sense in the markets.
I see years of decline ahead due to this virus and i do not see any sense in pumping fresh money in with markets so blatantly high vs the current climate? i know this is against the strategy we have bought into... but extreme conditions require different thinking.. and this virus has halted everyone
thoughts? and what are you all doing regarding this investment wise?
OP, below are my thoughts and actions.
1. I think (but do not know) the United States is in the nascent stage of an economic depression due to the COVID-19 pandemic, a black swan event.
2. If my thinking is correct I know that I do not know how protracted or deep the economic depression will be.
3. I do know that 50-60% of the time the stock market's highest surges occur within just weeks of its deepest plunges.
4. I also know that since ~1930 the total return of the S&P 500 is ~14,962%.
5. And I know that an investor's total return would be an unimaginably paltry ~91% if they were not invested in the S&P 500 on its 10 best days in each decade since ~1930.
Based on the uncertainty of 1 and 2, and the factuality of 3, 4, and 5, I continue to buy stock (FSKAX) every month according to my "regular" investment plan.
And I've also been buying "extra" stocks on days of extraordinary stock market plunges.
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OP- Q2 business earnings will be horrible. Yes the market could very well start another nosedive. Our market might be sideways for the next 10-15 which will end FIRE for those in the lower percentages of the retirement goals. But nobody here wants to even think of that dreadful scenario. But this scenario is a very likely outcome. The market does not go up decade after decade like the last 10 years. Probably won't again for awhile.
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OP- Q2 business earnings will be horrible. Yes the market could very well start another nosedive. Our market might be sideways for the next 10-15 which will end FIRE for those in the lower percentages of the retirement goals. But nobody here wants to even think of that dreadful scenario. But this scenario is a very likely outcome. The market does not go up decade after decade like the last 10 years. Probably won't again for awhile.
Market could be sideways for the next 10-15 years
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so what is the compelling reason for the markets to continue to go up in the next couple of years? that is the answer i am looking for that outweighs the elephant in the room
@Jamese20 - In an attempt to answer your question directly: Action by the fed and by congress. The fed is going to do everything in its power to prevent widespread economic damage. Here is a read on some of the existing steps they've taken https://www.brookings.edu/research/fed-response-to-covid19/
I'm less sure about congress, as I haven't been reading up on where they stand in regard to further stimulus beyond the CARES act.
But it is entirely possible that a combination of monetary policy and direct stimulus could prop up the economy for a long while. It would probably require drastic, unprecedented measures, but it doesn't seem outside of the realm of possibility. And it may just kick the bucket down the road 5-10 years for an even bigger crash, but that's outside the scope of the next couple years.
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i am trying to see the case for why the market will stabilise and go up even ... sorry but folks havent really put up anything with any weight. you can say i have made my mind up... fine think what you like but i am telling my mind isnt made up otherwise i wouldnt pose the question... just because i am struggling to see a convincing argument from anyone including you doesnt mean i have made my mind up.. i am merely saying... your points dont seem convincing to me for reasons i just outlined
Please be gentle. This is a fun topic and we don't want it to get shut down prematurely. Let it have time to ripen, like a really stinky cheese.
I'm game. I'll give it a go. Looks like you're UK based? My rationale is more US based because I'm an American Russian bot. It's actually pretty simple as to why the markets are up so high. There are a few reasons. Most importantly is central banks. They've essentially backstopped the markets. No, that's an understatement. They've given the markets a liquidity enema. They're printing money like there's no tomorrow. They're printing money till their fingers have worn to nubs from hitting "P" on the keyboard. Throw a few trillion dollars at it and I have no doubt you could raise the dead, let alone equities markets. So based on that I think the question to be asked is not why the markets are where they are, but why aren't they higher? The upshot is the central banks know who they work for, and it isn't the unfortunate sods who just got laid off. New central bank slogan: No part of the 1% left behind!
Another reason is that after the recovery comes inflation. Maybe. We don't really know but it's a pretty fair guess. Most of the folks posting here are too young to remember living under significant inflation. Amongst financial assets other than commodities, equities are almost always better than bonds when it comes to inflation. So, investors are piling into equities rather than taking the whole .5% (if you're lucky) that you'll get on government bonds. Supply and demand.
Finally, the reason that you've already alluded to. There are a lot of folks who believe in the Efficient Markets Hypothesis. I'm not one of them. At least in the short term. I believe that markets are a reflection of human behavior. Which is to say that the the reason why the markets are bat**** crazy is because PEOPLE are bat**** crazy! If you're trying to put a veneer of logic on this, you're frankly kidding yourself. You might as well use horoscopes or a voodoo priest to predict short term market moves. It'll probably work out better.
All that said, in the very long run, markets do seem to go up and offer returns above inflation.
You're in the UK so I'm a little mystified at the concern. The PE ratios and CAPE ratios for the UK market are actually rather attractive as compared to other markets. The US market is very pricey. YMMV.
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more stimulus
https://www.brookings.edu/blog/up-front/2020/04/30/we-can-afford-more-stimulus/
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If you think the stocks are currently overvalued, what did you think back in January, when the PE ratios were higher? Weren't you putting your money in via your pension then?
Covered this already.. Still waiting for a reason for why this market won't go down that adds up... Instead it's just overbearing patronising high horse type responses.. Mainly because they don't have a response that adds up other than finance blog owners clichés
Sounds like you are waiting for us to affirm what you already believe, and are rejecting out of hand any suggestions that runs counter to that. Which is, in a neat little package, confirmation bias.
The irony here is most of the posters involved in this thread (at least the ones that I know) share similar feelings that the market will be rocky for the next several quarters, myself included. Yet few of us are running from our ISP and AAs. Those are not contradictory actions.
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more stimulus
https://www.brookings.edu/blog/up-front/2020/04/30/we-can-afford-more-stimulus/
Expanding the money supply To Infinity and Beyond!
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OP: You sound like a pessimistic and fearful person. Might I suggest not investing on the long side where the optimists triumph the most but being a short seller or long volatility trader instead.
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@Jamese20 I agree with you that little has been offered here except cliches and the story of how going 100% long has worked great for over a decade so far and proves that past performance predicts future results. No doubt there is a lot of wishful thinking digging people into their opinions, both on the side of people who are 100% long and people who sold everything to wait for the next shoe to drop. You are wise to ask experienced investors for counterarguments.
Your critics make a good point when they ask at what level you would be willing to buy back in. You DO need a buy-in criteria and you HAVE NOT talked value yet. There are some traps in doing so:
Trap #1 is that if the market falls further, that fall might be accompanied by more bad news, which might cause a cautious person to lower their buy-in price even further. E.g. One might say "I'll buy in at 15% lower than today's price". If millions are infected in India and Latin America, stock prices might fall another 15%. Is that the buy point, or is the buy point now 15% lower because of the damage in India and Latin America? If one keeps lowering their buy-in price with every drip of bad news and every drop in the market, eventually they never get in.
Trap #2 is setting your buy-in criteria as a metric based on current numbers. Trailing twelve month PE ratio is a good example. In May 2009, the S&P 500's TTM PE ratio hit an astronomical 123 because so many companies had shrunken earnings or were reporting huge losses. I remember people in 2009 shaking their heads at stocks and saying they needed to fall further to have reasonable PE ratios before they would buy in. Ooopsie. I'm anchoring my earnings assumptions at 2019 levels because they will probably return to those levels in about 2-3 years. 2020 and probably 2021 earnings will be anomalies just like 2009.
Trap #3 is stubbornness from being right. If 3 months from now stocks have fallen 40%, I will perfectly understand your decision to review this thread and contemplate your steadfastness with great satisfaction. However, it will be very, very hard at that moment to reverse your position. Humans like to continue doing what was rewarding. If choosing the bearish path is making you feel smart, it will be nearly impossible to reverse that decision, especially while in the grip of traps #1 and #2.
What do I know? My pedigree is having been an investor through 2000-2003 and 2007-2009. I know what bad economic conditions look like, and these are the worst yet. I remember all the above exact same internet forum arguments from back then, except for @nereo 's astounding idea that the bankruptcy of millions of small businesses and the loss of all those jobs will be good for large businesses - prize winner for wildest bull argument! I fell into each and every one of the traps listed above. I've seen bull traps at the beginning of severe recessions and I've been faked out by bad news and crystal-ball narratives I told myself a few times. I now know never to bet everything on a particular narrative coming to fruition, no matter how convinced I am. Hedge thyself!
I too think the market is overpriced compared to the reduction in economic growth potential. The S&P should have a PE ratio of about 14-15 instead of 20. Why reach for an earnings yield of (1/20 =) 5% when the downside potential of the current crisis is probably another 60-70%? Why buy junk bonds (HYG) for yields under 6%, when the majority of these companies are likely to default in the next 24 months? Those are shitty odds, even using 2019 numbers. I am unmoved by the claims I should overpay for stocks because treasury rates are near zero.
I've been happily hedging SPY and QQQ with put options since 2018, but that strategy is too expensive at this moment. Instead I've been looking for volatile and hard-hit value stocks like SBRA and GEO which can be relied upon to deliver >10% ROE from mostly government revenue streams and which can be bought for fat discounts by selling overpriced put options. When assigned, I might sell calls and keep repeating this process while volatility remains high and options premiums remain fat. I'll go 100% long in the S&P again when the price over 2019 earnings is 15. If that never happens, I will have sold so much options premium that I might FIRE on bonds in a couple of years. If it does happen, there's a case to be made for retiring on a 5% WR because so much SORR risk will be over with, as it was for other cohorts where >5% was a safe withdrawal rate.
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OP: You sound like a pessimistic and fearful person. Might I suggest not investing on the long side where the optimists triumph the most but being a short seller or long volatility trader instead.
i dont think so, i sound logical in my own view... and the weight of reasoning for market declines seems to drastically and heavily outweigh the reasons for why markets have stabilised and will continue to march upwards in the current climate. for examples the stimulus package hasnt saved the unemployment figures .. it may have prevented a total disaster scenario but thats about it.. as the numbers are showing (other than the stock market metric)
this is not about optimism or pessimism, it is about logic and reason and 99% of the time its really extremely difficult to see how a market overall is cheap or expensive.....ive said this before but each economic downtuirn has had one underlying thing....people out there trying to create and generate business and overcome the downturn... most economic activity is in a coma and the ones running are seeing massive declines because most people are not doing their usual thing, this will hurt earnings hard and take time to recover and should be reflected in the markets...
So, on that basis... i will think i will wait for Q2 earnings and take a view..if it is still at these strange levels i will just start to invest slowly into markets that appear better value like my own country... and if after that the market still looks nuts i will just bite the bullet and go on my main plan of investing aggresssively each month and accept what comes my way assuming life is back to a more normal mode.
i dont think 3-6 months of building up more cash wealth is going to hurt me or my plans, after all - anything could happen at this stage with any of our jobs.
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When I read your this topic's title I thought: finally, someone who understands me! Every private individual I know thinks the recent stock rally is absolutely crazy. It seems to me that you are looking for confirmation that you are making the right decision by delaying investing.
I can confirm that many people agree with you that the recent rally is absolutely delusional and that such high PE ratios make little sense in the current situation (see the Top is in! thread). I'm still wondering who is pushing the prices up. However, no one can confirm that you are on the right track, only time will tell.
Even though you might not gain much long term by following this strategy, I don't think you will loose much either by delaying your investments a few months.
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OP: You sound like a pessimistic and fearful person. Might I suggest not investing on the long side where the optimists triumph the most but being a short seller or long volatility trader instead.
i dont think so, i sound logical in my own view... and the weight of reasoning for market declines seems to drastically and heavily outweigh the reasons for why markets have stabilised and will continue to march upwards in the current climate. for examples the stimulus package hasnt saved the unemployment figures .. it may have prevented a total disaster scenario but thats about it.. as the numbers are showing (other than the stock market metric)
this is not about optimism or pessimism, it is about logic and reason and 99% of the time its really extremely difficult to see how a market overall is cheap or expensive.....ive said this before but each economic downtuirn has had one underlying thing....people out there trying to create and generate business and overcome the downturn... most economic activity is in a coma and the ones running are seeing massive declines because most people are not doing their usual thing, this will hurt earnings hard and take time to recover and should be reflected in the markets...
So, on that basis... i will think i will wait for Q2 earnings and take a view..if it is still at these strange levels i will just start to invest slowly into markets that appear better value like my own country... and if after that the market still looks nuts i will just bite the bullet and go on my main plan of investing aggresssively each month and accept what comes my way assuming life is back to a more normal mode.
i dont think 3-6 months of building up more cash wealth is going to hurt me or my plans, after all - anything could happen at this stage with any of our jobs.
This has been a great topic as your question has drawn out some really passionate posters who have tried to explain why they think the way they do. And I've gotten a better insight to some folks way of thinking. We have some really, really smart and wealthy people who post here, and the back and forth has put them on the top of their game. So I'm thankful for that. And I appreciate your posts that drew it out of them. Now I'd be more thankful if this topic really went into the ditch like they sometimes do, but that's just my preference.
This is investing and very, very few people have figured out the "secret sauce" of the markets. I'm aware of only one group out there that seems to have consistently beaten the markets*. And they aren't letting us in on it! The rest of us are applying our best guesses.
I don't like to give specific investing advice but I do think your position of staying in cash in the short term is logical and defensible. Cash is still king. It's also where I (mostly) happen to be. I can't wrap my head around the idea of paying sky-high PE ratios for US equities. So I gave up trying. I buy international equities indexes with significantly lower PE and CAPE ratios and will continue to do so slowly in accordance with my IPS. At the point where I think US equities are fairly priced, I'll happily dive in. I've also defined that point in my IPS. In doing so I'll hopefully avoid some of the traps that @ChpBstrd identified above.
Having an IPS to guide my decisions is important as it has forced me to calmly think through my strategy and what is important to me and to put those thoughts down in one place. Revisiting it when the markets are being more crazy than usual does help.
*(Renaissance Technologies)
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I'll take a crack at this. A lot of unsettling emotion is going around here and in my friend circles that is weighing me down as well. So I'm mainly writing this to myself to keep me sane.
I work for a company that is not in the SP500, but is 30 billion+ market cap. Our main product is data. Our business has increased 950% since the virus started. We live in the data age. Data is the new oil and this virus has sprung a massive new leak of the stuff.
Looking at all the top companies in the SP500, I can see how a lot of them would greatly benefit from this.
the top 5 companies are Facebook, Alphabet, Amazon, Apple and Microsoft. They account for 17.5% of the SP500 (https://www.cnbc.com/2020/01/28/sp-500-dominated-by-apple-microsoft-alphabet-amazon-facebook.html) Can you see how this virus is a huge boon to every single one of those? Not just in a "doubling" factor, but in a 950% increase in business way? I can see looking back on this how every tech company benefits, and a lot of B2B consumers of tech as well. Costco getting more online shopping, more personal data from that? Check. People becoming more willing to buy things online instead of physical forms thus increasing margins? Check.
This virus has the potential to leap us forward 20 years into where we would otherwise be in terms of society. Yes, just like every other transition it will be painful, and we are getting a nice 10% discount right now for that pain. This is offset by the potential opportunity being far greater than it was a mere few months ago.
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I'll take a crack at this. A lot of unsettling emotion is going around here and in my friend circles that is weighing me down as well. So I'm mainly writing this to myself to keep me sane.
I work for a company that is not in the SP500, but is 30 billion+ market cap. Our main product is data. Our business has increased 950% since the virus started. We live in the data age. Data is the new oil and this virus has sprung a massive new leak of the stuff.
Looking at all the top companies in the SP500, I can see how a lot of them would greatly benefit from this.
the top 5 companies are Facebook, Alphabet, Amazon, Apple and Microsoft. They account for 17.5% of the SP500 (https://www.cnbc.com/2020/01/28/sp-500-dominated-by-apple-microsoft-alphabet-amazon-facebook.html) Can you see how this virus is a huge boon to every single one of those? Not just in a "doubling" factor, but in a 950% increase in business way? I can see looking back on this how every tech company benefits, and a lot of B2B consumers of tech as well. Costco getting more online shopping, more personal data from that? Check. People becoming more willing to buy things online instead of physical forms thus increasing margins? Check.
This virus has the potential to leap us forward 20 years into where we would otherwise be in terms of society. Yes, just like every other transition it will be painful, and we are getting a nice 10% discount right now for that pain. This is offset by the potential opportunity being far greater than it was a mere few months ago.
i see the exact opposite for those... especially facebook and apple in particular and amazon didnt make any money q1 this year already - creative thinking none the less
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i see the exact opposite for those... especially facebook and apple in particular and amazon didnt make any money q1 this year already - creative thinking none the less
Apple made money in Q1. (https://www.apple.com/newsroom/2020/04/apple-reports-second-quarter-results/)
Apple today announced financial results for its fiscal 2020 second quarter ended March 28, 2020. The Company posted quarterly revenue of $58.3 billion, an increase of 1 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.55, up 4 percent.
Facebook made money in Q1 (https://www.cnbc.com/2020/04/29/facebook-fb-earnings-q1-2020.html) too.
Even amazon, notorious for trying to never report a net profit, made money in Q1 (https://www.nytimes.com/2020/04/30/technology/amazon-stock-earnings-report.html).
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i see the exact opposite for those... especially facebook and apple in particular and amazon didnt make any money q1 this year already - creative thinking none the less
Apple made money in Q1. (https://www.apple.com/newsroom/2020/04/apple-reports-second-quarter-results/)
Apple today announced financial results for its fiscal 2020 second quarter ended March 28, 2020. The Company posted quarterly revenue of $58.3 billion, an increase of 1 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.55, up 4 percent.
Facebook made money in Q1 (https://www.cnbc.com/2020/04/29/facebook-fb-earnings-q1-2020.html) too.
Even amazon, notorious for trying to never report a net profit, made money in Q1 (https://www.nytimes.com/2020/04/30/technology/amazon-stock-earnings-report.html).
amazon is having to spend 4bn on corona related things... so although the q1 states operating profit... its going to be wiped out essentially
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You’re not crazy, the markets are being very weird. This global pandemic is unlike anything we’ve seen in our lifetimes, it is not in any way under control yet, it has already had sweeping effects that will continue to ripple over the next few years, so it doesn’t warrant the V recovery we’ve seen to date.
While the other commenters are not wrong that continuing to consistently buy regardless of the price is all you need to get to retirement, you’re likely not wrong that you will be able to buy more shares for your dollars in the near future. I’m betting on that as well. But I’ll be fine if my bet doesn’t pay off, and my re-entry into the market is not based off share price but instead based on when the number of US covid recoveries are consistently outpacing the number of new US covid cases enough that I can be reasonably confident that the pandemic portion of this crisis is under control. We’re currently sitting on more than 880,000 active *confirmed* cases in the US (and likely an order of magnitude more of undetected active cases, based off preliminary community testing in LA and others). We are not ready to be reopening and getting back to business, but the market is acting like we are.
I’ve been investing in index funds and continuing the buy regardless of price for my whole investing career since 2002. This time is different. No other time was different, because no other time did I have access to definitive pandemic outbreak numbers to see that things were not only not under control, but worse than they were when they were so bad we had to initiate the shut downs in the first place. I stayed in the market during the first initial drop, when things could go either way. I even reallocated heavier into stocks near the bottom (when the whole country was taking the pandemic seriously and acting aggressively to mitigate it) and would have reallocated heavier again if it hit another drop trigger mark, according to my IPS.
If timing the market now is going to make you time the market later, then this will likely be a net negative for your future net worth. But if timing the market now is a one time thing based on extraordinary circumstances that we actually have data for, then this will likely be a net positive for your future net worth. This is why I wouldn’t recommend doing this to most people.
thanks for this - yes this is one time only..im already invested in pensions all in stocks havent touched them due to any factors here.. but i have been doing that for years so what is the point? my 2nd stage is coming upon me and it is a new pot.. a pot i want to get the most of growth out of. the act of shutting down the economy is a suicidal one which i dont see how any well reasoned person cant see the market is in crazytown..... people are saying we dont know.. we really do know... in my view
if you are so convinced you 'know' then why are you asking a message board to confirm?
i think this is the last time i will respond to a waste of time response... if you are not going to come forward with anything sensible then why post a response? see anyone can answer anything with a question instead of a good counter argument
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BB, it's happening! The rails are getting slick! OP is asserting things that he/she didn't actually check and getting snippy, Maizeman is fact-checking, we're getting there!
Jamese20, seriously? If you're trolling, chapeau! If not, claiming that you're getting only garbage responses while simultaneously ignoring people fact-checking your erroneous claims is pretty rich.
-W
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BB, it's happening! The rails are getting slick! OP is asserting things that he/she didn't actually check and getting snippy, Maizeman is fact-checking, we're getting there!
Jamese20, seriously? If you're trolling, chapeau! If not, claiming that you're getting only garbage responses while simultaneously ignoring people fact-checking your erroneous claims is pretty rich.
-W
the irony of this response
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I thought you weren't going to respond to garbage?
-W
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I thought you weren't going to respond to garbage?
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you said it.. and i did say "i think"
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The next big question: will OP insist on having the last word?
Even if it's just $50 a week, start investing, dude.
-W
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I'll take a crack at this. A lot of unsettling emotion is going around here and in my friend circles that is weighing me down as well. So I'm mainly writing this to myself to keep me sane.
I work for a company that is not in the SP500, but is 30 billion+ market cap. Our main product is data. Our business has increased 950% since the virus started. We live in the data age. Data is the new oil and this virus has sprung a massive new leak of the stuff.
Looking at all the top companies in the SP500, I can see how a lot of them would greatly benefit from this.
the top 5 companies are Facebook, Alphabet, Amazon, Apple and Microsoft. They account for 17.5% of the SP500 (https://www.cnbc.com/2020/01/28/sp-500-dominated-by-apple-microsoft-alphabet-amazon-facebook.html) Can you see how this virus is a huge boon to every single one of those? Not just in a "doubling" factor, but in a 950% increase in business way? I can see looking back on this how every tech company benefits, and a lot of B2B consumers of tech as well. Costco getting more online shopping, more personal data from that? Check. People becoming more willing to buy things online instead of physical forms thus increasing margins? Check.
This virus has the potential to leap us forward 20 years into where we would otherwise be in terms of society. Yes, just like every other transition it will be painful, and we are getting a nice 10% discount right now for that pain. This is offset by the potential opportunity being far greater than it was a mere few months ago.
That’s a really cool insight. Thanks for posting it.
I’m an optimist so I really like this perspective. As well as the tech companies may do, I wonder if that will pale compared to what we’ll see as a result of a sudden shift to more use of tech? This whole shut down has been illuminating for me. I’ve thought of myself as a Luddite, generally a late adopter or tech stuff. But I’m coming to realize that compared to most people, I adopt tech fairly quickly. Terrifying as that may be. So there is a huge potential as there really isn’t much of a choice but to adopt more remote tech solutions.
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i see the exact opposite for those... especially facebook and apple in particular and amazon didnt make any money q1 this year already - creative thinking none the less
Apple made money in Q1. (https://www.apple.com/newsroom/2020/04/apple-reports-second-quarter-results/)
Apple today announced financial results for its fiscal 2020 second quarter ended March 28, 2020. The Company posted quarterly revenue of $58.3 billion, an increase of 1 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.55, up 4 percent.
Facebook made money in Q1 (https://www.cnbc.com/2020/04/29/facebook-fb-earnings-q1-2020.html) too.
Even amazon, notorious for trying to never report a net profit, made money in Q1 (https://www.nytimes.com/2020/04/30/technology/amazon-stock-earnings-report.html).
amazon is having to spend 4bn on corona related things... so although the q1 states operating profit... its going to be wiped out essentially
So stranger on the internet advice, take it for what it is worth, but I'd suggest it might be a good time to sit back and think for a moment about what just happened.
1) You thought that three of the biggest companies in the USA didn't make a profit in Q1. This belief played into you reaching the conclusion: "i cannot think of any realistic scenario where we dont have declining few years in terms of stocks."
2) I pointed out that all three of the companies you listed actually did make a profit in Q1.
3) Instead of pausing to reflect on a piece of the data you thought you knew being incorrect and thinking about whether this new data might change your conclusion, based at least in small part on that incorrect belief about apple, amazon, and facebook, you instead immediately jumped to new, different, assertion support the same conclusion: amazon might not report a net profit in the future (Q2).
Without saying that this is what you personally are doing, the pattern above is one a lot of folks exhibit when people start out with a conclusion they feel must be true and then reason backwards to try to find evidence or logical arguments to back up that feeling. And people who do this, finding ways to convince themselves gut feelings are supported by evidence and reasoning, then to do really poorly in the stock market, selling low when they and everyone around them feel pessimistic, and buying high when they and everyone around them feel optimistic.
Again, I'm not saying you're one of those people. Just that it's a very easy trap to fall into, so it's worth taking a little time to think and reflect.
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i see the exact opposite for those... especially facebook and apple in particular and amazon didnt make any money q1 this year already - creative thinking none the less
Apple made money in Q1. (https://www.apple.com/newsroom/2020/04/apple-reports-second-quarter-results/)
Apple today announced financial results for its fiscal 2020 second quarter ended March 28, 2020. The Company posted quarterly revenue of $58.3 billion, an increase of 1 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.55, up 4 percent.
Facebook made money in Q1 (https://www.cnbc.com/2020/04/29/facebook-fb-earnings-q1-2020.html) too.
Even amazon, notorious for trying to never report a net profit, made money in Q1 (https://www.nytimes.com/2020/04/30/technology/amazon-stock-earnings-report.html).
amazon is having to spend 4bn on corona related things... so although the q1 states operating profit... its going to be wiped out essentially
So stranger on the internet advice, take it for what it is worth, but I'd suggest it might be a good time to sit back and think for a moment about what just happened.
1) You thought that three of the biggest companies in the USA didn't make a profit in Q1. This belief played into you reaching the conclusion: "i cannot think of any realistic scenario where we dont have declining few years in terms of stocks."
2) I pointed out that all three of the companies you listed actually did make a profit in Q1.
3) Instead of pausing to reflect on a piece of the data you thought you knew being incorrect and thinking about whether this new data might change your conclusion, based at least in small part on that incorrect belief about apple, amazon, and facebook, you instead immediately jumped to new, different, assertion support the same conclusion: amazon might not report a net profit in the future (Q2).
Without saying that this is what you personally are doing, the pattern above is one a lot of folks exhibit when people start out with a conclusion they feel must be true and then reason backwards to try to find evidence or logical arguments to back up that feeling. And people who do this, finding ways to convince themselves gut feelings are supported by evidence and reasoning, then to do really poorly in the stock market, selling low when they and everyone around them feel pessimistic, and buying high when they and everyone around them feel optimistic.
Again, I'm not saying you're one of those people. Just that it's a very easy trap to fall into, so it's worth taking a little time to think and reflect.
when you post misrepresentations of what i said i stopped reading at this very misrepresentation
"1) You thought that three of the biggest companies in the USA didn't make a profit in Q1. This belief played into you reaching the conclusion: "i cannot think of any realistic scenario where we dont have declining few years in terms of stocks.""
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It's a word for word quote from your post on the first page of this thread:
i cannot think of any realistic scenario where we dont have declining few years in terms of stocks... the unrerlying assets are going to suffer in the short term for a couple of years and unemployment levels will be testing depression time
Edit: Although upon reflection I guess I don't know that your belief about Apple, Facebook, and Amazon's earnings played into reaching the conclusion I quoted. Are you saying they are completely independent of each other?
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It's a word for word quote from your post on the first page of this thread:
i cannot think of any realistic scenario where we dont have declining few years in terms of stocks... the unrerlying assets are going to suffer in the short term for a couple of years and unemployment levels will be testing depression time
no... this part "You thought that three of the biggest companies in the USA didn't make a profit in Q1" - is it a lie or just not properly reading?
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It's a word for word quote from your post on the first page of this thread:
i cannot think of any realistic scenario where we dont have declining few years in terms of stocks... the unrerlying assets are going to suffer in the short term for a couple of years and unemployment levels will be testing depression time
no... this part "You thought that three of the biggest companies in the USA didn't make a profit in Q1" - is it a lie or just not properly reading?
Oh your quote on that statement is here:
especially facebook and apple in particular and amazon didnt make any money q1 this year already
I assumed you wouldn't be confused about this one since it was actually quoted and linked in the post you just responded to while your other statement was simply put in quotation marks.
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It's a word for word quote from your post on the first page of this thread:
i cannot think of any realistic scenario where we dont have declining few years in terms of stocks... the unrerlying assets are going to suffer in the short term for a couple of years and unemployment levels will be testing depression time
no... this part "You thought that three of the biggest companies in the USA didn't make a profit in Q1" - is it a lie or just not properly reading?
Oh your quote on that statement is here:
especially facebook and apple in particular and amazon didnt make any money q1 this year already
I assumed you wouldn't be confused about this one since it was actually quoted and linked in the post you just responded to while your other statement was simply put in quotation marks.
yes it clearly states i mention amazons earning only nothing about facebooks or apples
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I'll take a shot since I didn't yet. Here is a post I made about a six weeks ago:
This is why it is a good idea for new investors to set their investments on autopilot. What we have here is a chart of an investor who invested $1,000 into Vanguard Total Stock Market (VTSAX) every month starting in January, 2008. You can't tell from the chart, but that was exactly the right timing for when the economy drove off a cliff.
(https://i.imgur.com/P5zeL6a.jpg)
Over these three years, the market lost value at an annualized rate of -1.63% as seen in the Time Weighted Rate of Return (TWRR). Wowza!
Our intrepid investor made money on their investments at an annualized rate of 14.48% as seen in the Money Weighted Rate of Return (MWRR)
Just by making regular contributions this person beat the market by 16.1% annualized over three years! They have an amount of money nearly equal to four years of contributions after just three years! That is the kind of return that would make even Warren Buffet proud. Anybody using any method of market timing would have been very unlikely to have made a higher rate of return. People who sold their investments at any point in this cycle almost certainly did much worse.
The important thing to understand is that a new investor making regular contributions without stopping is the closest thing that exists to magic in the investing world. It is guaranteed to reduce investment risk and increase returns during the worst times, and the worse things get the better it works. And yet it is so simple that you can literally set it up once and then walk away for a decade.
Realize that stocks do not become cheap without a strong reason. What we are seeing now is one of those strong reasons. Any time that stocks become cheap, there will always be a feeling in the air at least a little bit similar to this (though maybe not with as much concern for personal health). Not everybody will remain employed to do this, but that is how the world goes. If you are able to invest and fear getting caught up in events, now is the best time to follow a set-it-and-forget-it investing strategy.
Link to this back test at PortfolioVisualizer:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2008&firstMonth=1&endYear=2010&lastMonth=12&calendarAligned=true&initialAmount=1000&annualOperation=1&annualAdjustment=1000&inflationAdjusted=true&annualPercentage=0.0&frequency=2&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSAX&allocation1_1=100
Another source:
Even if you have perfect knowledge of when the bottom will happen, by delaying investing you will only come out ahead by 0.4% annually: https://ofdollarsanddata.com/why-market-timing-can-be-so-appealing/
If you live in the UK, maybe you'd feel more comfortable not investing in the US at market weight, and instead prefer the cheap ol' UK. Use 25% UK stock, 25% US stock, 25% Ex-US Ex-UK stock, 25% bonds. Not only will that underweight the US (which is also probably a good risk reduction move for someone not living there), it will also put you on a sound theoretical footing for currency risk.
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Oh your quote on that statement is here:
especially facebook and apple in particular and amazon didnt make any money q1 this year already
I assumed you wouldn't be confused about this one since it was actually quoted and linked in the post you just responded to while your other statement was simply put in quotation marks.
yes it clearly states i mention amazons earning only nothing about facebooks or apples
You said that facebook and apple and amazon didn't make any money in q1. It is right there in your own words.
Look, I'm not going to keep arguing with you about what you did or didn't say when there is a written record.
Particularly when even if we ignore what you originally said, what you are now saying you said "amazon didnt make any money q1" would still be incorrect, since they made 2.5B in profit in Q1.
And frankly, your writing in this thread as been unclear enough I could even believe that you wrote that without intending to mean what you actually said.
Good luck to you.
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Oh your quote on that statement is here:
especially facebook and apple in particular and amazon didnt make any money q1 this year already
I assumed you wouldn't be confused about this one since it was actually quoted and linked in the post you just responded to while your other statement was simply put in quotation marks.
yes it clearly states i mention amazons earning only nothing about facebooks or apples
You said that facebook and apple and amazon didn't make any money in q1. It is right there in your own words.
Look, I'm not going to keep arguing with you about what you did or didn't say when there is a written record.
Particularly when even if we ignore what you originally said, what you are now saying you said "amazon didnt make any money q1" would still be incorrect, since they made 2.5B in profit in Q1.
And frankly, your writing in this thread as been unclear enough I could even believe that you wrote that without intending to mean what you actually said.
Good luck to you.
i dont care what you believe.. its just a fact i am only referring to amazons earnings... i call out 2 companies in particular that i thought the opposite to the gentlemans response... and i mention on the end about amazon earnings in Q1.. you misinterpreted and misread what i said to suit your narrative and are simply incorrect
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Just to note 10% off the market high keeps getting mentioned and that's incorrect. The SP 500 is 17% off its market high.
International stocks are 21% off their 52 week high and even more than that off their all time high.
So stocks are significantly cheaper than all time highs.
Of course people argue they should be down more with the economy catering but essentially stocks are priced for long term earnings, terrible economic performance for the next year is priced into stocks already.
We could see stocks drop further but no one knows for sure.
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I call troll. Nobody else would look at a quote of their own post and deny they said it.
Either that, or OP has actual mental health problems and probably *shouldn't* be investing in anything on their own.
-W
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BB, it's happening! The rails are getting slick! OP is asserting things that he/she didn't actually check and getting snippy, Maizeman is fact-checking, we're getting there!
-W
Beautiful, isn't it? This topic has all the potential to go Jerry Springer on us!
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I call troll. Nobody else would look at a quote of their own post and deny they said it.
Either that, or OP has actual mental health problems and probably *shouldn't* be investing in anything on their own.
-W
show me where i talk about q1 earning relating to apple and facebook.. i dont know them for a start so cannnot comment.... i read about amazons hence i mention them last... so a troll is anyone who doesnt align with your thinking? sounds more like a twitter mob on here by the day
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i dont care what you believe.. its just a fact i am only referring to amazons earnings... i call out 2 companies in particular that i thought the opposite to the gentlemans response... and i mention on the end about amazon earnings in Q1.. you misinterpreted and misread what i said to suit your narrative and are simply incorrect
Look, you can keep arguing with your own quote all you want. I cannot know what goes on inside of your head, just the words you chose to write down. People can read what you wrote for themselves and decide if were just using unclear english which resulted in a different meaning from what you intended it to mean or if you were really intending to refer to all three companies.
But put all that side. Even you agree that you said amazon didn't make any money in q1. And we have their own data stating they made billions of dollars in q1 (2.5B in profit, substantially more than that in free cash flow).
So if you'd like to read:
"You thought that three of the biggest companies in the USA Amazon didn't make a profit in Q1. This belief played into you reaching the conclusion: "i cannot think of any realistic scenario where we dont have declining few years in terms of stocks."
The entire rest of my post (https://forum.mrmoneymustache.com/investor-alley/delusional-markets-stalling-my-start-to-aggressive-investing/msg2618579/#msg2618579) continues to stand: you had a false belief that supported a conclusion. When you realized that belief was false, you didn't question your conclusion, you switched to a new belief (about what amazon's profits or loses might be in Q2) in order to continue with the same conclusion.
Then when this pattern was pointed out to you, instead of considering what that pattern might indicate about your overall reasoning about the future of the stock market and how accurately you can predict its certain course over the next several years, you decided to focus on a point where you disagreed with what you yourself had previously said (and I will freely admit it is at least possible you may not have realized you were saying at the time) that didn't effect the overall pattern you were exhibiting either way.
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show me where i talk about q1 earning relating to apple and facebook.. i dont know them for a start so cannnot comment....
You quoted a post containing apple's Q1 earning information (https://forum.mrmoneymustache.com/investor-alley/delusional-markets-stalling-my-start-to-aggressive-investing/msg2618543/#msg2618543) and responded to it.
Now it's certainly possible that you don't read the posts that you're quoting, but it's considered somewhat bad forum etiquette to admit to not having read what you replied to.
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BB, it's happening! The rails are getting slick! OP is asserting things that he/she didn't actually check and getting snippy, Maizeman is fact-checking, we're getting there!
-W
Beautiful, isn't it? This topic has all the potential to go Jerry Springer on us!
Happy I could entertain.
(https://www.theamericanconservative.com/wp-content/uploads/2018/07/Jerry-Spring-Show.jpg)
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i dont care what you believe.. its just a fact i am only referring to amazons earnings... i call out 2 companies in particular that i thought the opposite to the gentlemans response... and i mention on the end about amazon earnings in Q1.. you misinterpreted and misread what i said to suit your narrative and are simply incorrect
Look, you can keep arguing with your own quote all you want. I cannot know what goes on inside of your head, just the words you chose to write down. People can read what you wrote for themselves and decide if were just using unclear english which resulted in a different meaning from what you intended it to mean or if you were really intending to refer to all three companies.
But put all that side. Even you agree that you said amazon didn't make any money in q1. And we have their own data stating they made billions of dollars in q1 (2.5B in profit, substantially more than that in free cash flow).
So if you'd like to read:
"You thought that three of the biggest companies in the USA Amazon didn't make a profit in Q1. This belief played into you reaching the conclusion: "i cannot think of any realistic scenario where we dont have declining few years in terms of stocks."
The entire rest of my post (https://forum.mrmoneymustache.com/investor-alley/delusional-markets-stalling-my-start-to-aggressive-investing/msg2618579/#msg2618579) continues to stand: you had a false belief that supported a conclusion. When you realized that belief was false, you didn't question your conclusion, you switched to a new belief (about what amazon's profits or loses might be in Q2) in order to continue with the same conclusion.
Then when this pattern was pointed out to you, instead of considering what that pattern might indicate about your overall reasoning about the future of the stock market and how accurately you can predict its certain course over the next several years, you decided to focus on a point where you disagreed with what you yourself had previously said (and I will freely admit it is at least possible you may not have realized you were saying at the time) that didn't effect the overall pattern you were exhibiting either way.
you can argue and make your own made up conslusions all you want about my main point.. the point your clinging onto represents one comment relating to someone who made a case about about 4 tech companies. my whole point has nothing to do with just 4 tech companies on its own... or q1 earnings of 1 of those companies.. i stand by what i was trying to say. the q1 earning although show some profit.. bezos alluded to a rocky road due to covid 19 costs of 4bn... so i came to the conclusion that in essence q1 profits were therefore not money making if he already has costs that are not factored in.
maybe instead of obsessing over what you hoped i have said.. maybe just focus on what outweighs my main point as i dont think you have even addressed it or made a strong case for it. please make your case why the market is stabilising and will likely not go down as a result. If you say you dont know, fine but dont be on the apposing side with a "i dont know" answer
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James, I agree that you should definitely not be investing. So in that sense, you have won the argument!
-W
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maybe instead of obsessing over what you hoped i have said.. maybe just focus on what outweighs my main point as i dont think you have even addressed it or made a strong case for it. please make your case why the market is stabilising and will likely not go down as a result. If you say you dont know, fine but dont be on the apposing side with a "i dont know" answer
I made my case twice on the first page of this thread that you started. In summary:
Firstly (https://forum.mrmoneymustache.com/investor-alley/delusional-markets-stalling-my-start-to-aggressive-investing/msg2618006/#msg2618006), not being able to envision a reason for stocks to go up isn't a good argument that they may not go up. After all before this whole coronavirus situation happened, none of us would have envisioned that the events of the last two months would produce the stock market valuations we see today.
Secondly (https://forum.mrmoneymustache.com/investor-alley/delusional-markets-stalling-my-start-to-aggressive-investing/msg2618015/#msg2618015), I presented one example* of what I think is a quite plausible scenario for why stock market valuations might go up, rather than down over the next several years. This particular example of what the future might hold doesn't even require you to question your certainty about the poor state of the economy, and how long that poor state will last, at all!
As far as I can tell, so far you haven't had any answer so far to dangers of inflation in your argument that stocks are absolutely certain to decline rather than increase for the next few** years and therefore there isn't a risk to keeping your money in cash rather than stocks. Have you posted an answer to the inflation scenario that I missed?
Just in general, I find that it is a lot easier to have productive discussions about people's main points and big ideas if we first resolve misunderstandings about the facts that underlying those conclusions***. I realize this can feel silly (why focus on the details instead of jumping right to the main idea?)
However, trying to have a discussion about big ideas with a person who doesn't agree about the actual facts on the group is just a recipe for frustration and impass. This thread for example. ... Unless you feel like you've gotten a lot of valuable big ideas discussion out of insisting people not focus on the details of what you are claiming about the world.
*Certainly not the only one.
**As an aside, I'm reading "few" as meaning "three or more" is that how you intended it to be meant?
***Big tech companies are profitable, apple, facebook and amazon made money in Q1, you either are aware of apple's Q1 earnings or are quoting and replying to posts you haven't even read.
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James, I agree that you should definitely not be investing. So in that sense, you have won the argument!
-W
its not about winning or losing.. so far your responses and some others are just patronising merely because i dare to question - i have already stated i already index regular and dont change my position in term sof my pensions that i have been in for a while.
frankly.. id rather "lose" to use your way of putting it... then i would have more understandings and learning... but i have not seen alot of substance for why in a current economic coma where lots of economists and 1 or 2 billionares are using words like great depression to describe what is coming... I read this in an article recently.. do you agree with it out of interest?
"If consumers can't borrow money, they can't spend it. When consumers can't spend money, companies can't sell products; low sales means lessened value, and so the company's stock price per share declines. Businesses trim costs by laying off workers, so unemployment increases and consumers spend even less."
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Whether I agree or not with short term economic projections is meaningless, because the market does not always respond the way I think it will, and things have a way of working out differently than I project. It's a shame, I could be even richer if I could predict the future!
Actually, come to think of it, I'm not sure I'd need money at all if I could predict the future. I would just happen to show up to the Thai place when they made an extra tofu curry and strike up a conversation with a lady I know will drive me to a hotel where they'll mistake me for Peter Fonda and give the the fanciest room in the place... and so on.
I think Teela Brown was sort of like that in the later Ringworld Novels.
But I digress.
We have lots of data on what happens if you market time *as badly as possible* - but stick with regular investing. Go read the world's worst market timer article. Dude ended up filthy rich anyway.
But hey, I know you're not going to. So BB will keep laughing and Maizeman will keep earnestly and pleasantly making you look incredibly foolish I suppose.
-W
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maybe instead of obsessing over what you hoped i have said.. maybe just focus on what outweighs my main point as i dont think you have even addressed it or made a strong case for it. please make your case why the market is stabilising and will likely not go down as a result. If you say you dont know, fine but dont be on the apposing side with a "i dont know" answer
I made my case twice on the first page of this thread that you started. In summary:
Firstly (https://forum.mrmoneymustache.com/investor-alley/delusional-markets-stalling-my-start-to-aggressive-investing/msg2618006/#msg2618006), not being able to envision a reason for stocks to go up isn't a good argument that they may not go up. After all before this whole coronavirus situation happened, none of us would have envisioned that the events of the last two months would produce the stock market valuations we see today.
Secondly (https://forum.mrmoneymustache.com/investor-alley/delusional-markets-stalling-my-start-to-aggressive-investing/msg2618015/#msg2618015), I presented one example* of what I think is a quite plausible scenario for why stock market valuations might go up, rather than down over the next several years. This particular example of what the future might hold doesn't even require you to question your certainty about the poor state of the economy, and how long that poor state will last, at all!
As far as I can tell, so far you haven't had any answer so far to dangers of inflation in your argument that stocks are absolutely certain to decline rather than increase for the next few** years and therefore there isn't a risk to keeping your money in cash rather than stocks. Have you posted an answer to the inflation scenario that I missed?
Just in general, I find that it is a lot easier to have productive discussions about people's main points and big ideas if we first resolve misunderstandings about the facts that underlying those conclusions***. I realize this can feel silly (why focus on the details instead of jumping right to the main idea?)
However, trying to have a discussion about big ideas with a person who doesn't agree about the actual facts on the group is just a recipe for frustration and impass. This thread for example. ... Unless you feel like you've gotten a lot of valuable big ideas discussion out of insisting people not focus on the details of what you are claiming about the world.
*Certainly not the only one.
**As an aside, I'm reading "few" as meaning "three or more" is that how you intended it to be meant?
***Big tech companies are profitable, apple, facebook and amazon made money in Q1, you either are aware of apple's Q1 earnings or are quoting and replying to posts you haven't even read.
I'll focus on your plausible answer... Doesn't feel very plausible to me, already 10% unemployed so more to come which is leading to at least a hard recession as a result at the very least... Also the unemployment figures hit 10% way quicker than the great depression did.
That leads me to the conclusion this will be another major recession like other major historic ones.. I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it.
The stimulus packages haven't saved jobs or lay offs or pay cuts already so I fail to see how the stimulus argument stacks up in that sense.
I feel it doesn't outweigh job losses which are real.. Lack of overall confidence in going out and about resulting in less spending and less earnings for businesses across the globe.
20% unemployment during the great depression and it already is 10% and rising.. The stock market crashed like crazy.. 2008 deeper crash than now just based on 2 sectors. Most sectors are suffering not thriving at the moment.
How does one country set of metrics also relate to the global crisis we are in now?
Let's say your point is very plausible and possible for arguments sake, I still don't see how it outweighs the current facts at hand and trumps what we have seen each time in history to such global severe events
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Whether I agree or not with short term economic projections is meaningless, because the market does not always respond the way I think it will, and things have a way of working out differently than I project. It's a shame, I could be even richer if I could predict the future!
Actually, come to think of it, I'm not sure I'd need money at all if I could predict the future. I would just happen to show up to the Thai place when they made an extra tofu curry and strike up a conversation with a lady I know will drive me to a hotel where they'll mistake me for Peter Fonda and give the the fanciest room in the place... and so on.
I think Teela Brown was sort of like that in the later Ringworld Novels.
But I digress.
We have lots of data on what happens if you market time *as badly as possible* - but stick with regular investing. Go read the world's worst market timer article. Dude ended up filthy rich anyway.
But hey, I know you're not going to. So BB will keep laughing and Maizeman will keep earnestly and pleasantly making you look incredibly foolish I suppose.
-W
Well people who have weak arguments and nothing much to counter do tend to try to make fun and patronise.. It doesn't mean they are superior in their views believe it or not
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I'll focus on your plausible answer... Doesn't feel very plausible to me, already 10% unemployed so more to come which is leading to at least a hard recession as a result at the very least... Also the unemployment figures hit 10% way quicker than the great depression did.
The more severe the recession the greater the risk of sustained inflation, not less.
I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it.
Off the top of my head 1987 bear market -- during which stocks declined 34% peak to trough -- lasted a little less than 3.5 months before stocks started rising again, never to hit those same lows.
Now you can certainly argue about differences between today and 1987. But again you are stating a belief ("I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it." (see your own quoted text above if you're worried I'm twisting your words, although the emphasis on "any" is mine) which is not backed up by the facts.
The stimulus packages haven't saved jobs or lay offs or pay cuts already so I fail to see how the stimulus argument stacks up in that sense.
The case I made on the first page of the thread (https://forum.mrmoneymustache.com/investor-alley/delusional-markets-stalling-my-start-to-aggressive-investing/msg2618015/#msg2618015) does not assume that the stimulus package saves a single job. In fact the fewer jobs the stimulus successfully saves, the longer and deeper the recession, and the more pressure on the Fed to create more money to both fight the recession and keep the federal government funded.
People disagree about how much money the Fed can create without creating significant inflation (from zero to lots). But everyone, I think, agrees that if enough new USD enter circulation, we will see inflation. And if we do see a prolonged period of inflation, you don't want to be sitting on a big pile of cash. Nor does anyone else.
Let's say your point is very plausible and possible for arguments sake, I still don't see how it outweighs the current facts at hand and trumps what we have seen each time in history to such global severe events
It doesn't have to outweigh anything. You stated "i cannot think of any realistic scenario where we dont have declining few years in terms of stocks... "
All it should take to make you change your mind about that statement -- if you're open rationally reevaluating your beliefs in the face of new ideas or new information -- is at least one realistic scenario where stocks would not continue declining for a few years.
You never answered my question so I'll go ahead and assume that by "a few" you mean three or more years.
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I really like my Argentina example but I decided I needed another. It might actually be fun to make a collection of these.
Let's look at Turkey.
Turkey's GDP peaked at the end of 2013 at $950B dollars. In the next four years the economy of declined 19% (~5%/year) in US dollar terms. (Source (https://tradingeconomics.com/turkey/gdp))
Must be a terrible time to own stocks, right? Yet from 2014 to 2018 the turkish stock market returned 14%/year (denominated in turkish lira). In USD terms the value of those stocks were essentially flat. But people who stayed out of the market and saved cash lost 8.4% per year for four years (29.6% total decline in purchasing power).
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I'll focus on your plausible answer... Doesn't feel very plausible to me, already 10% unemployed so more to come which is leading to at least a hard recession as a result at the very least... Also the unemployment figures hit 10% way quicker than the great depression did.
The more severe the recession the greater the risk of sustained inflation, not less.
I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it.
Off the top of my head 1987 bear market -- during which stocks declined 34% peak to trough -- lasted a little less than 3.5 months before stocks started rising again, never to hit those same lows.
Now you can certainly argue about differences between today and 1987. But again you are stating a belief ("I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it." (see your own quoted text above if you're worried I'm twisting your words, although the emphasis on "any" is mine) which is not backed up by the facts.
The stimulus packages haven't saved jobs or lay offs or pay cuts already so I fail to see how the stimulus argument stacks up in that sense.
The case I made on the first page of the thread (https://forum.mrmoneymustache.com/investor-alley/delusional-markets-stalling-my-start-to-aggressive-investing/msg2618015/#msg2618015) does not assume that the stimulus package saves a single job. In fact the fewer jobs the stimulus successfully saves, the longer and deeper the recession, and the more pressure on the Fed to create more money to both fight the recession and keep the federal government funded.
People disagree about how much money the Fed can create without creating significant inflation (from zero to lots). But everyone, I think, agrees that if enough new USD enter circulation, we will see inflation. And if we do see a prolonged period of inflation, you don't want to be sitting on a big pile of cash. Nor does anyone else.
Let's say your point is very plausible and possible for arguments sake, I still don't see how it outweighs the current facts at hand and trumps what we have seen each time in history to such global severe events
It doesn't have to outweigh anything. You stated "i cannot think of any realistic scenario where we dont have declining few years in terms of stocks... "
All it should take to make you change your mind about that statement -- if you're open rationally reevaluating your beliefs in the face of new ideas or new information -- is at least one realistic scenario where stocks would not continue declining for a few years.
You never answered my question so I'll go ahead and assume that by "a few" you mean three or more years.
1987 was a singular panic event with no underlying issues.. It was only significant in the amount it dropped in a single day if my memory of the history serves me well due to mass panic...didn't gdp growth grow by something like 5% in the USA? I don't put that down as one of the major economic recessions.. Bad example
There is not much proof that the stimulas leads to increased inflation far too many examples across the globe for that.. It is more in theory than a reality..
It does have to outweigh the clear and obvious though.. I dunno why you keep constantly knit picking quotes selectively to spin a narrative.
Did turkey and Argentina shutdown their economic outputs? If the answer is no then your comparison doesn't match the current situation
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Ladies and gentlemen, the goalposts have been successfully moved!
_W
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I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it.
Off the top of my head 1987 bear market -- during which stocks declined 34% peak to trough -- lasted a little less than 3.5 months before stocks started rising again, never to hit those same lows.
Now you can certainly argue about differences between today and 1987. But again you are stating a belief ("I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it." (see your own quoted text above if you're worried I'm twisting your words, although the emphasis on "any" is mine) which is not backed up by the facts.
1987 was a singular panic event with no underlying issues.. It was only significant in the amount it dropped in a single day if my memory of the history serves me well due to mass panic...didn't gdp growth grow by something like 5% in the USA? I don't put that down as one of the major economic recessions.. Bad example
Note that the response to this was already written in my previous post that you quoted.
"Now you can certainly argue about differences between today and 1987. But again you are stating a belief ("I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it." (see your own quoted text above if you're worried I'm twisting your words, although the emphasis on "any" is mine) which is not backed up by the facts."
Also, you're moving the goal posts (as Waltworks observed). Before you stated "I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it." Nothing about only major recessions.
What criteria make a recession major in your mind and which recessions (whether here in the USA or internationally) qualify?
There is not much proof that the stimulas leads to increased inflation far too many examples across the globe for that.. It is more in theory than a reality..
Creating money new money, not the federal government stimulus itself. The fed has committed to creating something like $4T so far. That may not be enough to create inflation because the velocity of money has declined a LOT (as it frequently does when the economy isn't doing well). Inflation results not only from the size of the money supply but the product of the money supply * the velocity of money. But if the fed has to create enough new money, yes we will have inflation. I don't know if we'll reach that point or not. But it's well within the realm of possibility. Enough so that I'm more worried about my cash on hand than my stocks (and glad I don't have bunch of my net worth in long term bonds).
Here are some examples of countries where central banks creating additional money to deal with an existing economic crisis produced substantial inflation: Italy (1975) Mexico (1995), Russia (1998), Argentina (2001), Turkey (2014). <-- And I'm not putting any of the fun hyperinflation examples on this list.
It does have to outweigh the clear and obvious though.. I dunno why you keep constantly knit picking quotes selectively to spin a narrative.
Because I'm trying to illustrate to anyone reading this how otherwise reasonable people can arrive at complete confidence in ideas that aren't actually at all certain.
A person says to themself that "stocks never go down for only a few months, it lasts a few years". Then when people point out that's not true, they say to themselves "well those examples don't count because the circumstances are different." But they don't really appreciate how different those two statements are.
They say to themself "amazon isn't making any money" and when it's pointed out that they actually made money "well I bet they'll lose enough money in the future that'll cancel out the money they just made." But they don't really appreciate how different those two statements are.
They say "I cannot imagine any outcome but stocks going down for the next three years" and when other possible outcomes are pointed out "well I think my outcome is still more likely than the one that other person proposed." But they don't really appreciate how different those two statements are.
And all those mistaken data points and ignored uncertainty compound upon each other until a person is convinced that they can see future and are surprised and angry and frustrated that nobody agrees with them that the course of the future is so clearly predictable.
Did turkey and Argentina shutdown their economic outputs? If the answer is no then your comparison doesn't match the current situation
As far as I know, no country anywhere in the world has ever shut down their economy before in the manner we're seeing right now.
So you're right. If that is your threshold for examples that are useful to understanding and predicting our current situation, we have zero precedent and the future could hold anything. We just don't know for sure. And we won't until we live through it.
Which has been my entire point all along.
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@Jamese20 - so what is your current amount invested, and how much are you looking to start “aggressively investing”?
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Let us know how it goes 20 years from now.
I'm FI because I ignored the tech bubble, the second Iraq war, SARS, North Korea doing a variety of crazy stuff, the great recession, the election of Donald Trump, and lots of other weird stuff. Many of those things were, at the time, just as scary as Covid19.
-W
none of those times involed global freezing of the economy.. i dont see how your comparison relates
"This time it's different!"
it literally is different... we have actively closed down... closed... no money is being made... business going bust at rates faster than i can imagine.. still not in the fall out stages... ive not seen any sensible argument that stocks will go up in the next 2 years from anyone other than silly remarks like this one
Well that's just blatantly wrong. By most estimates ~80% of people who had a job in February continue to work. There's still an awful lot of GDP. Granted it's experienced its largest dip in living memory, but if you are adhering to the idea that everythjing is closed you are missing quite a bit.
Further, one of the expectations (indeed, probably one of the core reasons why the markets haven't fallen further) is because much of the normal spending that's fallen off is delayed, not gone. Maybe that will come to pass, maybe it won't... but it's clear that we cant' continue to not spend like we have indefinitely.
Sure, ***every time*** is different, but that doesn't mean we disregard everythin we know or have learned.
80%? come off it mate
maybe instead of obsessing over what you hoped i have said.. maybe just focus on what outweighs my main point as i dont think you have even addressed it or made a strong case for it. please make your case why the market is stabilising and will likely not go down as a result. If you say you dont know, fine but dont be on the apposing side with a "i dont know" answer
I made my case twice on the first page of this thread that you started. In summary:
Firstly (https://forum.mrmoneymustache.com/investor-alley/delusional-markets-stalling-my-start-to-aggressive-investing/msg2618006/#msg2618006), not being able to envision a reason for stocks to go up isn't a good argument that they may not go up. After all before this whole coronavirus situation happened, none of us would have envisioned that the events of the last two months would produce the stock market valuations we see today.
Secondly (https://forum.mrmoneymustache.com/investor-alley/delusional-markets-stalling-my-start-to-aggressive-investing/msg2618015/#msg2618015), I presented one example* of what I think is a quite plausible scenario for why stock market valuations might go up, rather than down over the next several years. This particular example of what the future might hold doesn't even require you to question your certainty about the poor state of the economy, and how long that poor state will last, at all!
As far as I can tell, so far you haven't had any answer so far to dangers of inflation in your argument that stocks are absolutely certain to decline rather than increase for the next few** years and therefore there isn't a risk to keeping your money in cash rather than stocks. Have you posted an answer to the inflation scenario that I missed?
Just in general, I find that it is a lot easier to have productive discussions about people's main points and big ideas if we first resolve misunderstandings about the facts that underlying those conclusions***. I realize this can feel silly (why focus on the details instead of jumping right to the main idea?)
However, trying to have a discussion about big ideas with a person who doesn't agree about the actual facts on the group is just a recipe for frustration and impass. This thread for example. ... Unless you feel like you've gotten a lot of valuable big ideas discussion out of insisting people not focus on the details of what you are claiming about the world.
*Certainly not the only one.
**As an aside, I'm reading "few" as meaning "three or more" is that how you intended it to be meant?
***Big tech companies are profitable, apple, facebook and amazon made money in Q1, you either are aware of apple's Q1 earnings or are quoting and replying to posts you haven't even read.
I'll focus on your plausible answer... Doesn't feel very plausible to me, already 10% unemployed so more to come which is leading to at least a hard recession as a result at the very least... Also the unemployment figures hit 10% way quicker than the great depression did.
That leads me to the conclusion this will be another major recession like other major historic ones.. I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it.
The stimulus packages haven't saved jobs or lay offs or pay cuts already so I fail to see how the stimulus argument stacks up in that sense.
I feel it doesn't outweigh job losses which are real.. Lack of overall confidence in going out and about resulting in less spending and less earnings for businesses across the globe.
20% unemployment during the great depression and it already is 10% and rising.. The stock market crashed like crazy.. 2008 deeper crash than now just based on 2 sectors. Most sectors are suffering not thriving at the moment.
How does one country set of metrics also relate to the global crisis we are in now?
Let's say your point is very plausible and possible for arguments sake, I still don't see how it outweighs the current facts at hand and trumps what we have seen each time in history to such global severe events
Ah, so your post quoted above was claiming that the 80% figure should be closer to 90%?
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Jamese20 - where do you get this notion that the economy has "closed down"?
I know by "closed down" you don't mean everything, but like.... it's not even half or close to half "closed down".
Anecdotally, I don't even see that much of an impact on my own life.
Sure I can't go to restaurants or on a trip. But literally everything I've ordered off of Amazon and other sites is somehow being created and arriving to my door. My internet, electricity, garbage collection, water, etc. all seems to be fine. There's gas in the gas stations.
Grocery stores were a bit sparse a week or two ago but now seem to have everything. My kid has his teacher doing video classes for school.
I have done unmustachian things and ordered from various restaurants using uber eats and other platforms and it all seems to come. All of my favorite websites work.
Maybe it's a lot worse in other areas. But in my view it seems like the vast majority of the economy is functioning, and the data seems to support that.
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I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it.
Off the top of my head 1987 bear market -- during which stocks declined 34% peak to trough -- lasted a little less than 3.5 months before stocks started rising again, never to hit those same lows.
Now you can certainly argue about differences between today and 1987. But again you are stating a belief ("I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it." (see your own quoted text above if you're worried I'm twisting your words, although the emphasis on "any" is mine) which is not backed up by the facts.
1987 was a singular panic event with no underlying issues.. It was only significant in the amount it dropped in a single day if my memory of the history serves me well due to mass panic...didn't gdp growth grow by something like 5% in the USA? I don't put that down as one of the major economic recessions.. Bad example
Note that the response to this was already written in my previous post that you quoted.
"Now you can certainly argue about differences between today and 1987. But again you are stating a belief ("I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it." (see your own quoted text above if you're worried I'm twisting your words, although the emphasis on "any" is mine) which is not backed up by the facts."
Also, you're moving the goal posts (as Waltworks observed). Before you stated "I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it." Nothing about only major recessions.
What criteria make a recession major in your mind and which recessions (whether here in the USA or internationally) qualify?
There is not much proof that the stimulas leads to increased inflation far too many examples across the globe for that.. It is more in theory than a reality..
Creating money new money, not the federal government stimulus itself. The fed has committed to creating something like $4T so far. That may not be enough to create inflation because the velocity of money has declined a LOT (as it frequently does when the economy isn't doing well). Inflation results not only from the size of the money supply but the product of the money supply * the velocity of money. But if the fed has to create enough new money, yes we will have inflation. I don't know if we'll reach that point or not. But it's well within the realm of possibility. Enough so that I'm more worried about my cash on hand than my stocks (and glad I don't have bunch of my net worth in long term bonds).
Here are some examples of countries where central banks creating additional money to deal with an existing economic crisis produced substantial inflation: Italy (1975) Mexico (1995), Russia (1998), Argentina (2001), Turkey (2014). <-- And I'm not putting any of the fun hyperinflation examples on this list.
It does have to outweigh the clear and obvious though.. I dunno why you keep constantly knit picking quotes selectively to spin a narrative.
Because I'm trying to illustrate to anyone reading this how otherwise reasonable people can arrive at complete confidence in ideas that aren't actually at all certain.
A person says to themself that "stocks never go down for only a few months, it lasts a few years". Then when people point out that's not true, they say to themselves "well those examples don't count because the circumstances are different." But they don't really appreciate how different those two statements are.
They say to themself "amazon isn't making any money" and when it's pointed out that they actually made money "well I bet they'll lose enough money in the future that'll cancel out the money they just made." But they don't really appreciate how different those two statements are.
They say "I cannot imagine any outcome but stocks going down for the next three years" and when other possible outcomes are pointed out "well I think my outcome is still more likely than the one that other person proposed." But they don't really appreciate how different those two statements are.
And all those mistaken data points and ignored uncertainty compound upon each other until a person is convinced that they can see future and are surprised and angry and frustrated that nobody agrees with them that the course of the future is so clearly predictable.
Did turkey and Argentina shutdown their economic outputs? If the answer is no then your comparison doesn't match the current situation
As far as I know, no country anywhere in the world has ever shut down their economy before in the manner we're seeing right now.
So you're right. If that is your threshold for examples that are useful to understanding and predicting our current situation, we have zero precedent and the future could hold anything. We just don't know for sure. And we won't until we live through it.
Which has been my entire point all along.
It's easy to select a snippet of someones posts isn't it to try and change the context... I'll post the full quote instead of the underhand tactics at play...
I thought it was fairly obvious that I am relating the drops of stock prices to major recessions in history based on my conclusion that this is another one of these times..
That leads me to the conclusion this will be another major recession like other major historic ones.. I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it.
I didn't bother to read any of the rest of the above as result of this.
Actually.. Using Argentina and Turkey is about as weak as anything i can think of too which proves my point. I mean those 2 powerhouses relating to those tinpot tiny global countries in the west and across the globe
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Jamese20 - where do you get this notion that the economy has "closed down"?
I know by "closed down" you don't mean everything, but like.... it's not even half or close to half "closed down".
Anecdotally, I don't even see that much of an impact on my own life.
Sure I can't go to restaurants or on a trip. But literally everything I've ordered off of Amazon and other sites is somehow being created and arriving to my door. My internet, electricity, garbage collection, water, etc. all seems to be fine. There's gas in the gas stations.
Grocery stores were a bit sparse a week or two ago but now seem to have everything. My kid has his teacher doing video classes for school.
I have done unmustachian things and ordered from various restaurants using uber eats and other platforms and it all seems to come. All of my favorite websites work.
Maybe it's a lot worse in other areas. But in my view it seems like the vast majority of the economy is functioning, and the data seems to support that.
I'm not sure what data you are looking at... Even supermarkets here are - 30% below usual trade. I keep hearing the mentioning amazon and buying stuff, I tried to buy a whole bunch of things and it was saying 2 months to get them. Amazon have said already to prepare for a hell of a ride, so the idea that everything is normal other than going to restaurants is baffling.
Maybe in the USA your lockdowns are the least severe.. In Europe there really is lockdowns going on and economys shutdown in the main other than shops and the manufacturers supplying them.. But 10% unemployment already and rising - buffet no longer holding airlines stocks and faster employment losses than the great depression - I do have to genuinely ask what planet are you currently living on if you think "life is pretty normal, not that bad nothing to see here" mindset
Do you also know what is going on with oil right now? My own circumstances are very fortunate too by the way but that doesn't make me want to be blind and ignorant to what is currently going on - the amount of job losses are frankly heart breaking and with the economic slump ahead how will these people pay their bills and feed their kids? This is going to make 2008 look like a picnic considering in USA alone there are more job losses currently than the whole of 2008 saga managed to achieve apparently according to one article I read.
It's that normal there is not even an argument about global recession and to make my pont absolutely without doubt clear ..what global recession caused stock pricing to go up or get close to its previous highs and stabilise?
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Let us know how it goes 20 years from now.
I'm FI because I ignored the tech bubble, the second Iraq war, SARS, North Korea doing a variety of crazy stuff, the great recession, the election of Donald Trump, and lots of other weird stuff. Many of those things were, at the time, just as scary as Covid19.
-W
none of those times involed global freezing of the economy.. i dont see how your comparison relates
"This time it's different!"
it literally is different... we have actively closed down... closed... no money is being made... business going bust at rates faster than i can imagine.. still not in the fall out stages... ive not seen any sensible argument that stocks will go up in the next 2 years from anyone other than silly remarks like this one
Well that's just blatantly wrong. By most estimates ~80% of people who had a job in February continue to work. There's still an awful lot of GDP. Granted it's experienced its largest dip in living memory, but if you are adhering to the idea that everythjing is closed you are missing quite a bit.
Further, one of the expectations (indeed, probably one of the core reasons why the markets haven't fallen further) is because much of the normal spending that's fallen off is delayed, not gone. Maybe that will come to pass, maybe it won't... but it's clear that we cant' continue to not spend like we have indefinitely.
Sure, ***every time*** is different, but that doesn't mean we disregard everythin we know or have learned.
80%? come off it mate
maybe instead of obsessing over what you hoped i have said.. maybe just focus on what outweighs my main point as i dont think you have even addressed it or made a strong case for it. please make your case why the market is stabilising and will likely not go down as a result. If you say you dont know, fine but dont be on the apposing side with a "i dont know" answer
I made my case twice on the first page of this thread that you started. In summary:
Firstly (https://forum.mrmoneymustache.com/investor-alley/delusional-markets-stalling-my-start-to-aggressive-investing/msg2618006/#msg2618006), not being able to envision a reason for stocks to go up isn't a good argument that they may not go up. After all before this whole coronavirus situation happened, none of us would have envisioned that the events of the last two months would produce the stock market valuations we see today.
Secondly (https://forum.mrmoneymustache.com/investor-alley/delusional-markets-stalling-my-start-to-aggressive-investing/msg2618015/#msg2618015), I presented one example* of what I think is a quite plausible scenario for why stock market valuations might go up, rather than down over the next several years. This particular example of what the future might hold doesn't even require you to question your certainty about the poor state of the economy, and how long that poor state will last, at all!
As far as I can tell, so far you haven't had any answer so far to dangers of inflation in your argument that stocks are absolutely certain to decline rather than increase for the next few** years and therefore there isn't a risk to keeping your money in cash rather than stocks. Have you posted an answer to the inflation scenario that I missed?
Just in general, I find that it is a lot easier to have productive discussions about people's main points and big ideas if we first resolve misunderstandings about the facts that underlying those conclusions***. I realize this can feel silly (why focus on the details instead of jumping right to the main idea?)
However, trying to have a discussion about big ideas with a person who doesn't agree about the actual facts on the group is just a recipe for frustration and impass. This thread for example. ... Unless you feel like you've gotten a lot of valuable big ideas discussion out of insisting people not focus on the details of what you are claiming about the world.
*Certainly not the only one.
**As an aside, I'm reading "few" as meaning "three or more" is that how you intended it to be meant?
***Big tech companies are profitable, apple, facebook and amazon made money in Q1, you either are aware of apple's Q1 earnings or are quoting and replying to posts you haven't even read.
I'll focus on your plausible answer... Doesn't feel very plausible to me, already 10% unemployed so more to come which is leading to at least a hard recession as a result at the very least... Also the unemployment figures hit 10% way quicker than the great depression did.
That leads me to the conclusion this will be another major recession like other major historic ones.. I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it.
The stimulus packages haven't saved jobs or lay offs or pay cuts already so I fail to see how the stimulus argument stacks up in that sense.
I feel it doesn't outweigh job losses which are real.. Lack of overall confidence in going out and about resulting in less spending and less earnings for businesses across the globe.
20% unemployment during the great depression and it already is 10% and rising.. The stock market crashed like crazy.. 2008 deeper crash than now just based on 2 sectors. Most sectors are suffering not thriving at the moment.
How does one country set of metrics also relate to the global crisis we are in now?
Let's say your point is very plausible and possible for arguments sake, I still don't see how it outweighs the current facts at hand and trumps what we have seen each time in history to such global severe events
Ah, so your post quoted above was claiming that the 80% figure should be closer to 90%?
erm you highlight 10% and 10%? the 20% which you havent bolded out is me very clearly talking the great depression 20% unemployment rate - i would say nice try but it really wasnt
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@Jamese20 - so what is your current amount invested, and how much are you looking to start “aggressively investing”?
well i have over 6 figures invested in the markets... +£100k roughly i think.
my ISA is ready to start and i plan to invest £1,200 - £1,400 a month plus any bonus i get on top each year to top it up. I just bought my new house so this all stalled my initial plans by about 2 years and still have to pay for things for the house unfortunately but i think ill either try things myself (even though i am not experienced much on diy) and do it over time.
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It's easy to select a snippet of someones posts isn't it to try and change the context... I'll post the full quote instead of the underhand tactics at play...
I thought it was fairly obvious that I am relating the drops of stock prices to major recessions in history based on my conclusion that this is another one of these times..
That leads me to the conclusion this will be another major recession like other major historic ones.. I can't see any examples of that history where stocks pricing have suffered less than a few months of decline only and continued to go back up after it.
I didn't bother to read any of the rest of the above as result of this.
Actually.. Using Argentina and Turkey is about as weak as anything i can think of too which proves my point. I mean those 2 powerhouses relating to those tinpot tiny global countries in the west and across the globe
For someone would spent a lot of the first two pages of this thread complaining that you weren't reading any convincing arguments for stocks being flat or increasing, you sure are going out of your way to avoid having to admit having read some, aren't you?
Prior to this discussion I hadn't run into the "I don't have a good counter to this argument, so I'll just say something about it offends me and therefore I didn't even read it" tactic. You've now deployed it twice in two pages of a single thread.
You're also starting to deploy angrier and more aggressive language (normally I'd pull a bunch of quotes, but given your stated concerns that showing your own words is an underhanded tactic, anyone who is interested can watch how your done has changed from page 2 to page 3 to page 4) and I don't really understand why.
I am not from either Turkey or Argentina so I'm not going to be offended on their behalf. I do think it is funny that your statement would seem to imply, mistakenly, that Argentina isn't part of "the west." Are you trying to prompt an angry response back from me? If so, why?
Break
(This is where I'd quote your last paragraph separately so it was clear what I was replying to, but again, apparently showing you your own words is underhanded. Who knew?)
You're welcome to argue that Italy (1975) Mexico (1995), Russia (1998), Argentina (2001) and Turkey (2014) aren't informative because none of those are economies as big as the USA. However, if you do that, it seems only fair for me to also be able to rule out references to any recessions/depressions/stock market declines which aren't the result of the government shutting the economy down for a month aren't informative.
After all, if you're complaining about a difference in size is bad, a difference in kind is so much worse when it comes to using the past to predict the future.
And, since no government has ever forceably shut down its economy of a month or more, we're left with no models and no way to confidently predict the future.
(This is where I'd normally go pack to pull your quotes about either being confident that stocks will continue to decline for a few (3+) years and/or being unable to see any possible outcome other than stocks declining for a few (3+) years. I guess we'll all have to remember your prior statements in this thread for ourselves.)
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MOD NOTE:
This thread is contentious and--at times--downright rude.
Enough seems to have been said here, I don't think anyone's minds are changing.
Tensions are high. Quarantine is rough. If possible, everyone should take a step back from the computer, get outside for a socially distant walk, and enjoy the spring.
Locking thread.
PM me or another mod with concerns.
Cheers!