Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 12-16-2015, 05:57 PM   #21
Full time employment: Posting here.
GravitySucks's Avatar
 
Join Date: Feb 2014
Location: Syracuse
Posts: 994
Quote:
Originally Posted by cyber888 View Post
No one except the Banks will benefit from the rate hike. All banks are going to increase their lending rates, and no one will increase their savings rate or their CD rate. The owners of the big rich banks are very happy. As usual, consumers with high debt are in the poor house.

So load up on Bank Equities.
__________________

__________________
“No, not rich. I am a poor man with money, which is not the same thing"
GravitySucks is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-16-2015, 06:00 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,459
Pretty sure some starlet with a wardrobe "malfunction" or a white college girl disappearing on an island holiday or some nutbag with a gun killing three in a MickyD 'cause he didn't get a toy with his kiddymeal will have as much effect. Or maybe it all depends on the gravity or breathless urgency with which things are reported.

From a personal standpoint, signing up for a CapOne Spark card a month ago, spending $5021 on it, and crediting the account with $598 in bonus and 2% cashback today had a much bigger effect. Pretty shortsighted though, just not focused on the big picture I guess.
__________________

__________________
calmloki is offline   Reply With Quote
Old 12-16-2015, 06:01 PM   #23
Thinks s/he gets paid by the post
nash031's Avatar
 
Join Date: Jun 2013
Location: Coronado
Posts: 1,488
Quote:
Originally Posted by doneat58 View Post
Now almost exactly one year out from FIRE, I would just LOVE to see my investments do SOMETHING. Seems they have been stuck in neutral for what, 4-8 months?
I'd almost prefer they not do anything or even go down rather than go up a bunch before I pull the plug. JMO. AFTER I'm out, yeah, a nice 30% year would be swell!
__________________
"So we beat to our own drummer in the sun;
We ask for nobody's permission to run.
I just wanna live in a world like that;
Now I'm gonna live in a world like that!" - World Like That, O.A.R.
nash031 is offline   Reply With Quote
Old 12-16-2015, 06:09 PM   #24
Full time employment: Posting here.
 
Join Date: Jan 2005
Location: northern Michigan
Posts: 732
Quote:
Originally Posted by Hamlet View Post
Anyone want to bet that we'll see zero again before we see 3% ?

Yep, that is my guess as well. There was really no justification for this increase, other than the fact that they've been talking about doing it for a long time. Inflation is non-existent (the way they measure it, anyway), and although unemployment has decreased, wages are still basically flat.
__________________
RAE is offline   Reply With Quote
Old 12-16-2015, 06:30 PM   #25
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 2,264
Can you someone explain to me why the market will be more bumpy because of the interest rate hike (which I heard people say more than a couple of occasions)?
__________________
tmm99 is offline   Reply With Quote
Old 12-16-2015, 06:59 PM   #26
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 3,061
Quote:
Originally Posted by cyber888 View Post
No one except the Banks will benefit from the rate hike. All banks are going to increase their lending rates, and no one will increase their savings rate or their CD rate. The owners of the big rich banks are very happy. As usual, consumers with high debt are in the poor house.
Exactly. Banks were clamoring to the Fed to raise rates. The Fed is a private bank, owned by it's member banks. The member banks wanted the extra revenue/profit, and they got it.

The economy is worse off than it was a few months ago, and they stayed put then.

You pay more interest, and yet the savings interest is the same.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline   Reply With Quote
Old 12-16-2015, 07:01 PM   #27
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 3,061
Quote:
Originally Posted by tmm99 View Post
Can you someone explain to me why the market will be more bumpy because of the interest rate hike (which I heard people say more than a couple of occasions)?
When rates are near 0 in a saving account, bond or CD, you have to put your money in the market to make money.

As rates rise, the choice become more difficult. Guaranteed 5%, or take a chance on the market?

People will be shifting back and forth base don their risk tolerance, and it creates a bumpy ride.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline   Reply With Quote
Old 12-16-2015, 07:15 PM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,384
Quote:
Originally Posted by jim584672 View Post
Who profits? Preferred stock holders.

An additional layer of safety, Jim! Ya, those greedy little CD people's interest doesn't pay our divi does it. Just bought me 5 of WFC-L yesterday...Still have some more cash to burn...May go back to that well again with another 5....


Sent from my iPad using Tapatalk
__________________
Mulligan is offline   Reply With Quote
Old 12-16-2015, 07:21 PM   #29
Thinks s/he gets paid by the post
RetireAge50's Avatar
 
Join Date: Aug 2013
Posts: 1,121
Here are my thoughts:
__________________
RetireAge50 is online now   Reply With Quote
Old 12-16-2015, 07:28 PM   #30
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 7,168
Quote:
Originally Posted by RetireAge50 View Post
Here are my thoughts:
I agree....
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Old 12-16-2015, 07:28 PM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,459
Quote:
Originally Posted by RetireAge50 View Post
Here are my thoughts:
Ah. clear thinking.
__________________
calmloki is offline   Reply With Quote
Old 12-16-2015, 07:33 PM   #32
Thinks s/he gets paid by the post
RetireAge50's Avatar
 
Join Date: Aug 2013
Posts: 1,121
Crystal clear. 😄
__________________
RetireAge50 is online now   Reply With Quote
Old 12-16-2015, 08:30 PM   #33
Full time employment: Posting here.
 
Join Date: Jan 2005
Location: northern Michigan
Posts: 732
Quote:
Originally Posted by Senator View Post
Banks were clamoring to the Fed to raise rates. The Fed is a private bank, owned by it's member banks. The member banks wanted the extra revenue/profit, and they got it.

The economy is worse off than it was a few months ago, and they stayed put then.

You pay more interest, and yet the savings interest is the same.
I agree. Yellen's conclusion that the data shows the economy is well along on the road to recovery is baloney. This move could backfire on them, though, as Jeffrey Gundlach explains:

Gundlach: Fed may have jumped the gun on 'mission accomplished'
__________________
RAE is offline   Reply With Quote
Old 12-16-2015, 08:52 PM   #34
Full time employment: Posting here.
 
Join Date: Oct 2009
Posts: 943
The substantive issue is not a 25 basis point increase in FFR. The real thing to watch is the Fed's intentions on its bloated balance sheet. Over the next three years, some $1.1 trillion in Treasurys could roll off the Fed’s balance sheet if reinvestments were to cease. Tack on the potential for mortgage backed securities (MBS) to prepay and/or mature and you’re contemplating a figure that approaches $2 trillion. This is where the real rubber meets the road...


Sent from my iPad using Early Retirement Forum
__________________
LARS is offline   Reply With Quote
Old 12-16-2015, 09:36 PM   #35
Full time employment: Posting here.
 
Join Date: Jan 2005
Location: northern Michigan
Posts: 732
Quote:
Originally Posted by LARS View Post
The substantive issue is not a 25 basis point increase in FFR. The real thing to watch is the Fed's intentions on its bloated balance sheet. Over the next three years, some $1.1 trillion in Treasurys could roll off the Fed’s balance sheet if reinvestments were to cease. Tack on the potential for mortgage backed securities (MBS) to prepay and/or mature and you’re contemplating a figure that approaches $2 trillion. This is where the real rubber meets the road...
Good point. But I don't think Yellen (or anyone else, for that matter) has any idea how to unwind that balance sheet at this point. They have never faced this kind of situation before. Here is what Ben Bernanke said recently:

“The Fed could leave the balance sheet where it is and that wouldn’t be a problem,” he told New York Economics Club last month, noting its size is “internationally normal” in relation to the economy’s output."

So I expect very little movement to address the balance sheet over the next few years. I think they will just continue to reinvest the principal of both classes of securities as they mature or are paid down, for the most part. As someone said in another article I was reading recently......"we may be basically looking at QE infinity".
__________________
RAE is offline   Reply With Quote
Old 12-16-2015, 10:14 PM   #36
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,423
Market was way up but what is up with Wellsley today?

VWIAX is down 2.84%.


I had another fund, MAPTX, go down over 10% on one day last week too.
__________________
explanade is offline   Reply With Quote
Old 12-16-2015, 10:19 PM   #37
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,134
Quote:
Originally Posted by explanade View Post
Market was way up but what is up with Wellsley today?

VWIAX is down 2.84%.
No more phone calls folks, we have a winner!

Year-end distributions for Vanguard funds and ETFs
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 12-16-2015, 10:24 PM   #38
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,423
I don't follow, dividend distributions make the fund share price drop?

Other VG funds are not dropping like that.
__________________
explanade is offline   Reply With Quote
Old 12-16-2015, 10:30 PM   #39
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,905
Quote:
Originally Posted by explanade View Post
I don't follow, dividend distributions make the fund share price drop?

Other VG funds are not dropping like that.
Yes, amazing phenomenon you've discovered today. Never have seen anything like it before.
__________________
ejman is offline   Reply With Quote
Old 12-16-2015, 10:32 PM   #40
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,515
Quote:
Originally Posted by explanade View Post
I don't follow, dividend distributions make the fund share price drop?

Other VG funds are not dropping like that.
Yes, in equity funds, balanced funds, and some bond funds, dividend distributions make the fund share price drop.

VWIAX payed out capital gains distributions as well. Those are responsible for most of the drop.

Part of what you are seeing is the difference between an actively managed fund and an index fund. Index funds tend to have much smaller cap gains distributions.
__________________

__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Fed member worried about "Violent reaction in the market to rate increase" Lakewood90712 FIRE and Money 15 03-25-2015 02:33 PM
Fed up Fed LuVul Hi, I am... 14 10-16-2014 09:24 AM
Fed Official Jeffrey Lacker says Fed Bond Buying Must End Quickly haha FIRE and Money 3 07-28-2013 05:08 AM
Organic, Grass-fed, Pasture-fed... tmm99 Other topics 24 06-24-2010 11:06 AM
Just Got My Rate Increase Notice. A Bit of Rant MJ Health and Early Retirement 19 09-15-2007 11:09 AM

 

 
All times are GMT -6. The time now is 12:49 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.