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Old 11-05-2018, 07:31 AM   #61
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Yes. But not many of us still have 50 years left to live.

In fact, having to "sell low" to get money to cover our living expenses kind of sucks.
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That's one of the reasons we like to keep 2+ years expenses in MM
I have about 8 years of living expenses in safe funds. However, in the high inflation period of 1965-1980, cash, stocks, bonds all got pummeled. There was no place to hide. People piled into gold.

Let's hope we will not have to go through that again, but this awful period was still in recent memory.
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Old 11-05-2018, 07:33 AM   #62
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I have about 8 years of living expenses in safe funds. However, in the high inflation period of 1965-1980, cash, stocks, bonds all got pummeled. There was no place to hide. People piled into gold.

Let's hope we will not have to go through that again, but this awful period was still in recent memory.
Couldn't one have hid in CD Ladders during this period?
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Old 11-05-2018, 07:37 AM   #63
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Couldn't one have hid in CD Ladders during this period?
CDs are not materially different from nominal bonds. High inflation eats up the value quickly.



A TIPS ladder today might hedge some of the inflation risk.
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Old 11-05-2018, 07:42 AM   #64
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Agreed.
This year has been completely flat and October has been horrible, but taken over a longer view it's 'just a bad year' IMO.

More worrisome times ahead? Possibly, but I just don't see Armageddon on the horizon (but what do I know!)

Corrections, slowdowns and recessions come and go as a part of market life. 2015 was a similarly flat year, at least for me, but '16 and '17 made up for it and then some.

I supervised salesmen most of my career who might make $700K one year and $70K the next. They learned quickly how to balance out the lumpiness and tended to talk in 3 year chunks rather than what they made Jan to Dec.
To me a recession is defined as all of a sudden everyone knows someone who has been laid off recently. I don't see that. In fact even with all this online shopping, malls around here are packed. Gas stations are packed. Movie theaters are packed.

I live on near a UNP rail line. That thing has definitely picked up this quarter compared to last. Not so much building supplies but tons of export...probably like hearding the cattle on the ranch before first snow.

Mid term rally, followed by Santa Rally, followed by strong Q1 reports, with some bumps along the way during earnings and FOMC meetings.

With the exception of housing. That is like what 30-40% US GDP. Soo, as that slows domestically the markets too will slow.
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Old 11-05-2018, 07:48 AM   #65
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I live on near a UNP rail line. That thing has definitely picked up this quarter compared to last.
This sort of information could be one of those soft indicators that hedge fund folks like to monitor.

You might be able to make a few bucks as a 'watcher'!
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Old 11-05-2018, 07:52 AM   #66
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I have about 8 years of living expenses in safe funds. However, in the high inflation period of 1965-1980, cash, stocks, bonds all got pummeled. There was no place to hide. People piled into gold.

Let's hope we will not have to go through that again, but this awful period was still in recent memory.
IIRC I was into CDs paying 15%-16% at the time. Krugerrands were hot too.
Yeah, lets hope we don't see a replay ever again.
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Old 11-05-2018, 09:04 AM   #67
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To step back for a moment, here's some information on the national debt, by year.

https://www.treasurydirect.gov/govt/...ebt_histo5.htm

The national debt in 2012 was $15.8 Trillion

The current national debt is $21.7 Trillion

The projected national debt for the year 2022, is $25 Trillion.

The current interest-only part of the annual debt today, is over a half trillion dollars.
.................................................. ............................

Ups and downs in between, but a trillion here, a trillion there, and the first thing you know, some of this must be paid.

The 2017 tax bill cost to the National Debt over 10 years (depending on how it has been calculated) has been estimated to be from $1.5 Trillion to $2.2 Trillion. Just a side note on how large expenditures like stimulus and military costs compound.

While these are ethereal numbers, they do matter. The timing? Who knows?, but all of this affects the international confidence in the US Dollar, which in turn will have a major influence in our own stock market.
https://russellinvestments.com/us/gl...ook/currencies

(opinion)... I'll be looking at those numbers at the bottom of the Bloomberg channel for clues. No vested interest, but a fascination with finance.
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Old 11-07-2018, 02:05 PM   #68
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All the anxiety must be gone now. New record highs by turkey day.
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Old 11-13-2018, 09:17 PM   #69
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I was reading one article that said for the last 18 mid-term elections, the markets went up for a year. 18 out of 18. Can't find the article again but this is from an article in the NY Times:

"So here’s a tidbit that may be diverting and even mildly comforting: The midterms have consistently been good for the stock market.

Remarkably, this has been true for every midterm election since World War II.

The data shows that it hasn’t mattered who won or lost or which party controlled the White House or Congress, either before the voting or as a result of it. Whatever the political configuration or the election results, the midterm election season has been an excellent one for stocks.

The numbers tell the story. Since 1946, in years with midterm elections, the Standard & Poor’s 500-stock index has gained a median of 18.4 percent in the nine-month period from Sept. 30, just ahead of voting, through June 30 of the following year, according to data compiled by Ned Davis Research. In that same period in nonvoting years, the index gained 4.9 percent."

Just hope the trend continues!
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Old 11-13-2018, 10:16 PM   #70
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A foolish consistency is the hobgoblin of little minds adorded by statesmen philosophers & divines. Or something like that
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Old 11-13-2018, 10:49 PM   #71
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I was reading one article that said for the last 18 mid-term elections, the markets went up for a year. 18 out of 18. Can't find the article again but this is from an article in the NY Times:

"So hereís a tidbit that may be diverting and even mildly comforting: The midterms have consistently been good for the stock market.

Remarkably, this has been true for every midterm election since World War II.

The data shows that it hasnít mattered who won or lost or which party controlled the White House or Congress, either before the voting or as a result of it. Whatever the political configuration or the election results, the midterm election season has been an excellent one for stocks.

The numbers tell the story. Since 1946, in years with midterm elections, the Standard & Poorís 500-stock index has gained a median of 18.4 percent in the nine-month period from Sept. 30, just ahead of voting, through June 30 of the following year, according to data compiled by Ned Davis Research. In that same period in nonvoting years, the index gained 4.9 percent."

Just hope the trend continues!
An investment strategy that is dependent upon correctly picking out what will happen in the future, such as after a mid-term election, is not really a good idea. It is better to have a portfolio that is built for the ups and downs that is the natural rhythm of the market. Be well diversified, have an AA you believe in and can stick to, be patient, and ignore the chaos and noise.
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Old 11-14-2018, 04:51 AM   #72
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The market will go up, the market will go down, and do all this over and over. I plan to do nothing and just live my life.
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I tape the 50 year Dow trend on one wall of my living room.
Then I walk across to the opposite wall.
My eyesight isn't great but what I see is a steady upward trend with what I think are ups and downs along the way.
+1. I don't tape up the chart, but I see it from time to time and it gives perspective.
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Old 11-14-2018, 09:32 AM   #73
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I'm not a chart person. I like to look at the Nikkei chart for more perspective. From 1950 to 1989 things were fun & games. Since 1989 to present it has been less fun.
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Old 11-14-2018, 09:48 AM   #74
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Someone mentioned fear of the potential double top on the charts.
Someone else mentioned the bullishness of the reverse head and shoulders.
Today I see small caps are about to enter the "death cross".

Pick an AA that you can live with and stick to it.

If you are concerned, you probably have too much in equities.
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Old 11-14-2018, 11:16 AM   #75
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Sometimes we have experiences that affect our outlook over the long term. Life and death experiences probably affect us most of all, but there are other things that can form our attitudes.

In my case, the decision to avoid the stock market was influenced by the experience of a very close friend. It was late 2008, when my best friend Jim, retired from AT&T @ 58, with a total of $800,000 as a nest egg. He moved with his wife to my over 55 Park in Florida to snowbird... happy and confident in the future.
By March or April in 2009, we watched as the market changed, to see the upset, near to panic... knowing that there was no job to go back to. This made a lasting impression on us.

The market did recover, and Jim was okay, but those interim months are etched in my memory.
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Old 11-14-2018, 11:38 AM   #76
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Sometimes we have experiences that affect our outlook over the long term. Life and death experiences probably affect us most of all, but there are other things that can form our attitudes.

In my case, the decision to avoid the stock market was influenced by the experience of a very close friend. It was late 2008, when my best friend Jim, retired from AT&T @ 58, with a total of $800,000 as a nest egg. He moved with his wife to my over 55 Park in Florida to snowbird... happy and confident in the future.
By March or April in 2009, we watched as the market changed, to see the upset, near to panic... knowing that there was no job to go back to. This made a lasting impression on us.

The market did recover, and Jim was okay, but those interim months are etched in my memory.


Do you happen to know what your friends AA was at the time? Many didnít know until it was too late that their equity exposure was uncomfortably high. The folks that lost in the long run were the ones that sold in panic. My takeaway is your friends were OK because they held on until the market came back. He likely also had a good DB pension so that helps tremendously.
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Old 11-14-2018, 12:02 PM   #77
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Sometimes we have experiences that affect our outlook over the long term. Life and death experiences probably affect us most of all, but there are other things that can form our attitudes.

In my case, the decision to avoid the stock market was influenced by the experience of a very close friend. It was late 2008, when my best friend Jim, retired from AT&T @ 58, with a total of $800,000 as a nest egg. He moved with his wife to my over 55 Park in Florida to snowbird... happy and confident in the future.
By March or April in 2009, we watched as the market changed, to see the upset, near to panic... knowing that there was no job to go back to. This made a lasting impression on us.

The market did recover, and Jim was okay, but those interim months are etched in my memory.
Etched in my memory as well. Like many others, we lived through this. And like many others, I did not adjust my spending one iota. I had an AA I was comfortable with, and a conservative WR, future pension/SS, and history showed 'there would be days like this'. I could have been scared and cut back, or sold at the bottom out of fear, and all those things would have had a seriously negative impact on my quality of life.

Anyone near panic was not prepared. That's not a reason to avoid the stock market.

-ERD50
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Old 11-14-2018, 12:16 PM   #78
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Etched in my memory as well. Like many others, we lived through this. And like many others, I did not adjust my spending one iota. I had an AA I was comfortable with, and a conservative WR, future pension/SS, and history showed 'there would be days like this'. I could have been scared and cut back, or sold at the bottom out of fear, and all those things would have had a seriously negative impact on my quality of life.

Anyone near panic was not prepared. That's not a reason to avoid the stock market.

-ERD50
Agreed on all points! However, while not 'near panic' I was starting to get a little jittery by early February; but we held the course.

If there was any bad news in '08 is that the subsequent recovery has made me near fearless, which likewise is not always a good thing.
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Old 11-14-2018, 12:24 PM   #79
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Do you happen to know what your friends AA was at the time? Many didnít know until it was too late that their equity exposure was uncomfortably high. The folks that lost in the long run were the ones that sold in panic. My takeaway is your friends were OK because they held on until the market came back. .
I've mentioned a few times about my smarter-than-you neighbor who proudly announced that she 'sold everything' on the last Friday of February '09.

Those that held the course were well rewarded. Unless one sold, AA and equity exposure was pretty much irrelevant; there was little time to do anything but hold on, batten down the hatches and wait the storm out.
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Old 11-14-2018, 12:32 PM   #80
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All the anxiety must be gone now. New record highs by turkey day.
This I would like to see.
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