Recession over? Buy, buy, buy?

[NW-Bound]

Robert J. Gordon, one of seven members of the elite Business Cycle Dating Committee of the National Bureau of Economic Analysis, said that unemployment has peaked, and we are starting to climb out of this hole. Details are at the link below.

At 55% equity, I am licking my chops to deploy some more cash. Buy, buy, buy, anyone?

So many stocks so cheap, so little guts! I am talking about myself of course, having seen a few women on this forum more gutsy than myself.

The recession? It's over, economist says - MSN Money

PS. In the FOMC minute released a couple of days earlier, it was mentioned that the Fed research staff believed that the US economy will recover later this year, rather than in 2010 as the committee itself thought. The TV reporter said that the research staff was probably better informed than the honcho bosses, and therefore should be taken more seriously.

 

[ziggy29]

Unemployment has not peaked. No way. Even if the economy has bottomed -- and I'm not convinced of that, though it's possible the rate of collapse is slowing -- unemployment almost always lags the end of a recession by several months.

If in fact the economy has bottomed out, I'd expect unemployment to peak several months down the road. Having said that, from the stock market point of view, stocks usually start coming off bear market lows a few months *before* the economy bottoms, so in reality, it's clear as mud.

 

[W2R]

I would like to buy, buy, buy, but this morning my asset allocation is exactly the percentages specified in my plan.

Since my AA of 45:55 is determined by my risk tolerance, I hesitate to buy, buy, buy in the near future. My AA percentages were severely tested last October, and although I thought about it I did not sell low. So, I think they were about correct. If the market went south again, it would cause me unnecessary angst to do so.

I agree that it appears to be a good time to buy! The VIX is down and like so many others, I am not as worried as I was last October.

 

[wolfbay]

Let's hope the ''elite" business cycle dating committee is right.If they predicted the downturn you might consider believing them.IMHO with the low interest rates,trillions in stimulus and quantitative easing it's a miracle a recovery hasn"t started already.The question is , will there be a sustainable recovery going forward.If piling on even more debt and printing a bunch of paper leads to prosperity we have a golden age coming up.The majority of Americans believe in Angels so you never know -it could happen.

 

[Steve O]

Why not 100% stocks

Recession is over, BUY BUY BUY!!!

All this "irrational exuberance" makes me wanna SELL SELL SELL

The problem is where do you put it

 

[ziggy29]

The problem is where do you put it

I suspect that's part of the reason they're trying to get interest rates on cash to be as close to zero as possible. I suspect they'd rather people start spending or investing their hoarded cash.

 

[CuppaJoe]

.... I am licking my chops to deploy some more cash. Buy, buy, buy, anyone?

So many stocks so cheap, so little guts! I am talking about myself of course, having seen a few women on this forum more gutsy than myself.

....

Licking your chops to buy! seems the main problem (also for me) is inertia and constant re-evaluation of my overall situation. I have bought in small chunks in '08 and '09 but again am dragging my feet to buy more, I just keep saying "soon."

BTW, how do know which members are gutsy women? I'm always guessing wrong about gender and, again, would have to consider her entire situation.

YouTube - Peggy Lee:Manana.

 

[NW-Bound]

Why not 100% stocks

Recession is over, BUY BUY BUY!!!

All this "irrational exuberance" makes me wanna SELL SELL SELL

The problem is where do you put it

As I have said in other posts, the gummint printing money does not make me feel good at all. I have been looking to buy equities as a protection from inflation as much as anything else. I am not a gold bug, but believe in industrial metals, oil, fertilizers, potato chips, silicon chips, etc... I like things that are useful and take efforts to produce, not pieces of paper printed with green ink.

So, what should a guy or gal do?

 

[LOL!]

Sorry, we had our little run of buying since March 9th. It's always easy to write "buy" in hindsight. The market has gone up so much that it will need a few months to digest and dump this bull movement before another one occurs.

My 2 cent prediction: trading range between 8000 and 9000 for the DJIA for awhile.

 

[Robert the Red]

Historically, the rate of increase in unemployment peaks at the trough in GDP. That is, unemployment growth may start to slow now -- which is one sign that the economy will start growing -- but unemployment itself will continue to increase for a while. Also, being at the bottom doesn't say much about how fast the economy will start growing again.

Not going down farther is good. But going back up quickly -- that will take a while, is my guess. Most of the stimulus money has yet to be actually obligated to projects. For example, my wife is at the NIH, working on reviewing grant applications for some of that extra $10 billion the NIH has to spend. They won't be ready to shovel that money out the door until September. Meanwhile, she's working weekends (unpaid) to keep up with this stuff plus her normal work.

 

[NW-Bound]

OK, CJ, you asked for it by posting a youtube song!

Hey, it's my thread, so I can hijack it too! Here's a French pop singer idol of my youth: Sylvie Vartan. Just learned she was of Bulgarian origin; her family emigrated to France when she was 8 to escape from the Communists.

Never mind the lyrics. It's just some silly lines about taking a train ride.

YouTube - Sylvie Vartan - 1962 - " Le Locomotion "

Or you can listen to the original American version by Little Eva.

YouTube - Little Eva The Locomotion

From Wikipedia:

"The Loco-Motion" is a 1962 pop song written by American songwriters Gerry Goffin and Carole King. The song is notable for making the American Top 5 three times – each time in a different decade: for Little Eva in 1962 (U.S. #1); for Grand Funk Railroad in 1974 (U.S. #1); and for Kylie Minogue in 1988 (U.S. #3).​

 

[audreyh1]

ECRI WLI Level At 28-Week High predicts end of the recession some time this summer. They don't predict anything about stock market behavior though!

I'm hoping for a continued rally so that I can rebalance and thus lock in some equity gains.

Audrey

 

[CuppaJoe]

OK, CJ, you asked for it by posting a youtube song!

Hey, it's my thread, so I can hijack it too!....

Au contraire, NWB, you are staying right on point to distract us with upbeat music. Isn't that what the movies did during the worst part of The Depression? Shirley Temple, Busby Burkeley, etc. Just as I'm saying manana is soon enough to buy buy buy.

 

[NW-Bound]

I'm hoping for a continued rally so that I can rebalance and thus lock in some equity gains.

Audrey

What's your AA? Selling already? Hey, I am not done with buying yet.

About 3 weeks ago, when I was at 60% equity, decided to trim it to 50% to buy back on the "market correction" everyone was talking about. Then, 1 week later, made the mistake of computing how much more money I would have by not selling. It was $20K!!!

Whenever I tried to do some dirty timing, I regretted it. Well, perhaps I did OK some other times, but I tend to remember my failures more. Oh well.

The market continuing rally has put my AA back to 55%. I will not compute the forfeited gains from the stocks that I sold. I must remind myself not to time the daily or weekly fluctuations that are impossible to predict. I must concentrate on the longer economic cycles that are just a tad less difficult.

 

[NW-Bound]

Au contraire, NWB ...

We both know we are just having fun.

I must log off now to go have breakfast. We are still in LV. I have enough of the strip after just 1/2 day on LV Boulevard two days ago. Yesterday, we drove to Mt Charleston, and will take a short drive to Red Rock Canyon today. I am not sure we can go for a hike because of the heat. It's 95 degF today! Could have stayed home to enjoy the cooler 83 degF!

 

[Animorph]

I don't think I can bring myself to buy just now, near recent market highs. Hopefully we'll hit a nice dip.

 

[audreyh1]

What's your AA? Selling already? Hey, I am not done with buying yet.

My AA is 55% equities. As of a week ago, the portfolio was almost to 59% equities.

Audrey

 

[Meadbh]

My current asset allocation is 60% equities, so my monthly DCA of 25% of savings into more equities is enough for now.

Meadbh
(gutsy female)

 

[CuppaJoe]

My current asset allocation is 60% equities, so my monthly DCA of 25% of savings into more equities is enough for now.

Meadbh
(gutsy female)

Cool! I used to be gutsy. Oh, never mind, now it's my age that's over 60.

 

[Radiophilejapan]

I'm new here, so bear with me.
Do stocks protect form inflation? I always thought that the hard assets (commodities, real estate) and inflation adjusted securities did it but neither bonds or stocks. As economy turns around, inflation will likely come back and fast.
I'm doing bimonthly (twice a month) DCA and have been considering moving some lump sum from munis into stocks, but I think I'm not gutsy enough.

 

[Meadbh]

Do stocks protect form inflation?

Well, in the past, they did, over a long period of time. They didn't do so well over the past few years. Maybe it's different this time!

 

[ziggy29]

I'm new here, so bear with me.
Do stocks protect form inflation? I always thought that the hard assets (commodities, real estate) and inflation adjusted securities did it but neither bonds or stocks.

Historically stocks have provided some measure of inflation protection. But in reality it will depend on the ability of businesses to pass along higher costs. If wages remain stagnant relative to prices, they will have little to no power to pass higher costs to consumers (except some monopoly-type businesses) and earnings will not keep up with inflation.

Unfortunately, I see "stagflation" for a few years as the most likely outcome, which will result in a gradual decrease in standard of living for a while.

 

[Midpack]

Here is the unemployment projection (as of May) my MegaCorp is using for planning, FWIW.

 

[freebird5825]

...At 55% equity, I am licking my chops to deploy some more cash. Buy, buy, buy, anyone?

So many stocks so cheap, so little guts! I am talking about myself of course, having seen a few women on this forum more gutsy than myself.

Small potatoes investor here compared to most of you folks.

40/60 AA (reset in Jan 09) is full of chicken feathers.

However, most of monthly DCA is being used to buy stocks (VHDYX) until either a) major market recovery, or b) preset target stake is reached, or c) both happen at once. My rebalancing act will prove to be interesting.

If I had a big chunk of cash sitting around, who know what lurks in the mind of Freebird.

 

[NW-Bound]

Small potatoes investor here compared to most of you folks.

For people with pensions, multiply your annual payout by 25 (same as a 4%SWR), and it's not small potato anymore.

It's just that you do not "get" to ride the white-knuckled roller coaster that the early retirees like me have no choice but to take a seat in. I have fastened my seat belt and am hanging on for dear life.

OK, OK, I know. Buy some annuities, like Nords has said sarcastically...

PS. I am not having a case of envy here. Not at all. I am only pointing out to Freebird that she is richer than she claims.