Chart of the Day

[ERD50]

Quote:

Originally Posted by pb4uski Not for me... that would be market timing.... I'm satisfied with just rebalancing to target and taking whatever the markets give me.

I guess it's really the same/similar thing. As INTL drops, rebalancing would have you buying more. So maybe it's just a matter of how far one lets things deviate before rebalancing?

-ERD50

[Dtail]

Quote:

Originally Posted by pb4uski Yeah, while I'm sticking to my 30% allocation of equities to international equities, it has taken some talking myself into it at times.

Same here but at 20%.

[Sunset]

Quote:

Originally Posted by Chuckanut +1 I think we can safely predict that at some point the regression will take place, but when is the big unknown.

We need to increase our foreign %, it's super low, probably around 2%
So I don't consider it market timing just trying to get the allocation to a better balance

[flintnational]

Quote:

Originally Posted by Sunset We need to increase our foreign %, it's super low, probably around 2% So I don't consider it market timing just trying to get the allocation to a better balance

I would call it buying low and selling high. It sounds better.

[target2019]

Quote:

Originally Posted by Sunset We need to increase our foreign %, it's super low, probably around 2% So I don't consider it market timing just trying to get the allocation to a better balance

I would call that a strategic asset allocation change...

[Running_Man]

I always liked the BDI index back in the day it was signaling great global trade then a glut of ships and a dropping of economic activity lead to a long term deflation in the index. The overall index, which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertiliser is signaling a slowdown in economic activity in early 2019.

[Running_Man]

OK so the BDI index I think was a good forecaster of the slowdown in economic activity that is causing great concern around the world. The charts are interesting as I like to think about things when I post them and they cause my mind to ruminate. I find this chart utterly fascinating and extremely worrisome:

[Lsbcal]

Quote:

Originally Posted by Running_Man OK so the BDI index I think was a good forecaster of the slowdown in economic activity that is causing great concern around the world. The charts are interesting as I like to think about things when I post them and they cause my mind to ruminate. I find this chart utterly fascinating and extremely worrisome:

I don't immediately see what you must see in this chart. There are only 2 recession instances here and in one case the index is going up heading into a recession while in the other it is going down into a recession. You must not be looking at the slope.

How is this predictive of a slowdown?

[Running_Man]

10 yr US Treasury Interest Rate Cycles
1981 15.82 1983 10.50
1984 13.00 1986 7.25
1987 9.63 1998 4.10
1999 6.59 2003 3.95
2007 5.20 2008 2.04
2011 3.40 2012 1.38
2013 3.00 2017 1.32
2018 3.26 ?2020? -0.65

I had thought the FED was ending the 37 year bear market in interest rates last September, but the attempt to lift rates failed as economic gravity proved too strong for interest rate escape velocity. In October 2018 I didn't know if the FED really understood the issue that was before them in regards to demographics and the economy. I thought it was more appropriate in Dec 2018 to cut rates not to raise them. In October expectation and business forecast was for 3 rate increases in 2019 and GDP growth of 3 percent, the December 2018 fiasco of a rate hike shocked the FED and they have been in full verbal defense of the S&P500 since. However, as the chart in the post above shows the FED signalling of stopping rate hikes and cutting of rates is not sufficient to keep the trade weighted dollar from increasing, and it is back to the level of Dec 18th 2018 when the pressure really caused the problems for the US stock market. This is very bad for multinationals Expect a collapse in interest rates in the US that has occurred in the long end to really hit the short end as the breakout of the end of the interest rate cycle failed.

I will on Monday:

Sell stocks to get back to 25% minimum holdings, has been a good year so far. I will be keeping the individual stocks I have purchased this year and sell the S&P500 to drop to the 25% range, investing 50% of the proceeds in 2 year US Treasuries and 50% in 5 year treasuries. The market has made a good run at a new high and may yet get there. FED is certainly on the average investor's side. However the stock market is not the economy, the FED I think is about to shock people with the level of interest rate cuts over the next year. I think the investment of choice right now is 2-5 year US treasuries, so that is what I am tilting towards.

A drop in the trade weighted dollar index accompanied by a rise to a new high for the stock market indexes would be a good sign the FED actions are accomplishing their goals. If the FED doesn't cut rates by 50 basis points in July I will be surprised, that is my expectation with the chart I am looking at.....

[Oz investor]

Quote:

Originally Posted by Running_Man I had thought the FED was ending the 37 year bear market in interest rates last September, but the attempt to lift rates failed as economic gravity proved too strong for interest rate escape velocity. In October 2018 I didn't know if the FED really understood the issue that was before them in regards to demographics and the economy. I thought it was more appropriate in Dec 2018 to cut rates not to raise them. In October expectation and business forecast was for 3 rate increases in 2019 and GDP growth of 3 percent, the December 2018 fiasco of a rate hike shocked the FED and they have been in full verbal defense of the S&P500 since. However, as the chart in the post above shows the FED signalling of stopping rate hikes and cutting of rates is not sufficient to keep the trade weighted dollar from increasing, and it is back to the level of Dec 18th 2018 when the pressure really caused the problems for the US stock market. This is very bad for multinationals Expect a collapse in interest rates in the US that has occurred in the long end to really hit the short end as the breakout of the end of the interest rate cycle failed. .....

i took the rate hikes as a desperate move to gain more 'wiggle room' before the next economic downturn .

time will tell , the yield curve inversion signals ( if you can believe that ) a recession within 18 months , but many nations are using unconventional policy already .

what i DON'T expect is a bull run based on solid fundamentals and growing company profits ( and i don't mean earnings per share , in this era of buy-backs )

good luck

it looks like interesting times ahead

[Running_Man]

[kgtest]

I may be late with this "chart", but I just snagged 15 yr refi for 2.75% I know there are some young dreamers that might want to tune into the historically low rates.

I just saved myself some $200k+ of future interest payments and dropped my interest rate 1.25% from 4%

[Running_Man]

The amount of negative yielding debt has doubled since last Oct 1st when the rise in rates came to an abrupt halt as the US stock market fell. Since then the market turned around but debt continues to go further negative.

[Running_Man]

http://www.crossingwallstreet.com/ar...1949-1955.html

[Running_Man]

[target2019]

Wages growth year-over-year is trending down.
https://tradingeconomics.com/united-states/wage-growth

[target2019]

This focuses more on wages, with core inflation for comparison.
The previous posts with charts got me thinking, in the data, how much is wage and how much benefits? On another chart at the site I found wages is 70% of the dataset US Wages and Salaries Growth. So the chart I posted is just showing the wages component.

https://tradingeconomics.com/united-states/wages

So, this chart shows the wages component only, and it's growing.

[Running_Man]

[Running_Man]

Sept 2017 Warren Buffet said at 2 % Bonds are a terrible investment, since then BRK up 17%, Austrian 100 year 2.1% bonds up 50%. These still will most likely underperform BRKA in my lifetime, but if long term treasuries go negative to where the rest of the world is - Long Term Bonds will be the best performer for the intermediate term.

[Running_Man]