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Stock market fears over the past 10 years
03-20-2021, 12:29 PM
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#1
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Administrator
Join Date: Jan 2008
Location: Sheltered in place
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Stock market fears over the past 10 years
This chart is from BoA Global Research. It depicts the single greatest tail risk fear, expressed by global fund managers via bimonthly survey over the past 10 years, along with the % of managers sharing that fear.
None of the tail risk events have come to pass. Over the same period the SP500 has quadrupled.
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03-20-2021, 12:36 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: No Country for Old Men
Posts: 47,774
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Yeahbut one of these days...
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Numbers is hard
Retired in 2005 at age 58, no pension
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03-20-2021, 12:39 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 7,846
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Nobody knows nuthin.
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TGIM
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03-20-2021, 12:56 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 28,738
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TMI!
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Retired since summer 1999.
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03-20-2021, 03:12 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: Stuck in the mud somewhere in the NJ swamp
Posts: 7,048
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Black Swans are invisible to global researchers.
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03-20-2021, 03:31 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Posts: 1,675
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I remember way back when we used to think a pandemic would cause a market crash.
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Emancipated from wage-slavery since 2002
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03-20-2021, 04:33 PM
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#7
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Recycles dryer sheets
Join Date: Jan 2006
Posts: 266
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10 years and $7T in Fed balance sheet increases, $15T in deficit spending and artificially low interest rates would do that. America's wealth is an illusion.
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Seems to me that the corporation's race to the top is resulting in a race to the bottom for the employee's quality of life. FIRE can't come soon enough.
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03-20-2021, 04:36 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Jul 2003
Location: Pasadena CA
Posts: 2,985
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Quote:
Originally Posted by kjpliny
10 years and $7T in Fed balance sheet increases, $15T in deficit spending and artificially low interest rates would do that. America's wealth is an illusion.
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So where does one put their $?
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T.S. Eliot:
Old men ought to be explorers
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03-20-2021, 05:03 PM
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#9
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Recycles dryer sheets
Join Date: Jul 2011
Location: Reading, MA
Posts: 151
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Quote:
Originally Posted by twaddle
I remember way back when we used to think a pandemic would cause a market crash.
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If you sit and think about it, that seems like an eminently reasonable assertion...
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03-20-2021, 05:15 PM
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#10
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Full time employment: Posting here.
Join Date: Dec 2016
Posts: 510
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I've been following the market since the late 1980s and the wall of worry has been constantly climbing. The reality is that if you have the stomach for volatility the stock market is by far the greatest liquid asset investment there is. The historical numbers prove that.
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Retired 1/6/2017 at 50 years old
Immensely grateful
“The most important quality for an investor is temperament, not intellect.”—Warren Buffett
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03-20-2021, 05:25 PM
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#11
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Full time employment: Posting here.
Join Date: Dec 2016
Posts: 510
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Quote:
Originally Posted by kjpliny
10 years and $7T in Fed balance sheet increases, $15T in deficit spending and artificially low interest rates would do that. America's wealth is an illusion.
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Comments like this are usually made by people that have not participated in the stock markets returns over the years. I apologize if I'm wrong.
__________________
Retired 1/6/2017 at 50 years old
Immensely grateful
“The most important quality for an investor is temperament, not intellect.”—Warren Buffett
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03-20-2021, 06:49 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Jul 2017
Location: Long Island
Posts: 1,491
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I clicked to expand it. I still can't see it. (My eyesight is not the best.)
That being said, past performance is no guarantee of future results . . .
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Use it up, wear it out, make it do or do without.
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03-20-2021, 07:43 PM
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#13
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Recycles dryer sheets
Join Date: Feb 2021
Posts: 237
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The stock market has predicted 9 of the last 5 recessions.
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03-20-2021, 11:05 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Posts: 1,931
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Quote:
Originally Posted by MichaelB
None of the tail risk events have come to pass.
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Yeah but THIS time is different!
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And if I claim to be a wise man, it surely means that I don't know.
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03-20-2021, 11:59 PM
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#15
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Recycles dryer sheets
Join Date: Aug 2018
Location: STL
Posts: 103
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Quote:
Originally Posted by yakers
So where does one put their $?
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I know Korean started to buy US stock, because it is safer than Korean. Many experts are encouraging too. Korean is well developed country. They make youtube alot and Korea is the leader of the media business, so I would anticipate it would spread to other asian country's young generation to prepare their retirement or maybe FIRE too.
From my perspective, I have invested mine aggressively for now. I and others were wondering about why stock market kept going up, and I figured out from this perspective. Also, US young generation put to stock thru robinhood because it is like game.
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03-21-2021, 05:13 AM
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#16
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 1,544
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Quote:
Originally Posted by MarieIG
That being said, past performance is no guarantee of future results . . .
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And yet everyone one this board uses Firecalc which does exactly that?
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03-21-2021, 05:59 AM
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#17
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Location: Michigan
Posts: 3,486
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Quote:
I remember way back when we used to think a pandemic would cause a market crash.
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It did. March 2020 had one of the sharpest multi-day market dives in history. It just was followed by one of the fastest recoveries in history (with no retest).
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"The mountains are calling, and I must go." John Muir
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03-21-2021, 06:02 AM
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#18
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Recycles dryer sheets
Join Date: Jan 2006
Posts: 266
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Quote:
Originally Posted by FREE866
Comments like this are usually made by people that have not participated in the stock markets returns over the years. I apologize if I'm wrong.
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I've been participating in markets conservatively for about 30 years. My bond holdings have actually outperformed my stock holdings for most of that time. Since the GFC, I have been witnessing an alarming trend of central bank and government intervention in the markets, keeping stocks from correcting to any large degree. Anyone investing in the "market" for the past decade thinks they're brilliant. Why wouldn't they?
Had interest rates been allowed to find their natural levels, bonds would be much more enticing as investments than they currently are. Had the Fed and the government not bailed out everyone and everything this past year, we'd be looking at depression level losses in the stock market. America can't afford higher interest rates or regular functioning (and self-correcting) markets.
It is my belief that our markets have been fueled by corporate stock buybacks, deficit-fueled tax cuts, government/CB manipulation of interest rates and buying of corporate debt, junk bonds, treasury debt, leveraged speculation ("don't fight the fed"), and free money handouts to just about everyone. This is not the way free markets are supposed to work. It unfairly backstops excessive risk taking by removing the "risks" investors are supposed to be subjecting themselves to in order to get their just "rewards". It penalizes savers and those on fixed incomes by devaluing their dollars and paying them nothing for their less speculative investments.
None of this is ethical, or conducive to facilitating real price discovery. The bastardized and manipulated centrally planned system we have now is not what regular functioning free markets in a healthy economy should be. Frankly, it's disgusting. Printing and borrowing our way to perceived prosperity is not consequence free. No one knows how long this could go on. We're all going to pay the price one of these days for this profligacy.
So yes, I'm mostly out of the markets right now. I don't believe in their current value (PE ratios over 40) or their artificial nature. Organic corporate earnings have not been improving. I don't buy the hype, I don't believe all of the financial propaganda, and I don't trust the system. Strikes me as entirely corrupt. I'm willing to be "less rich" due to my position. In my opinion, unbridled greed is the root cause of most of the world's problems. It's just not my thing.
__________________
Seems to me that the corporation's race to the top is resulting in a race to the bottom for the employee's quality of life. FIRE can't come soon enough.
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03-21-2021, 06:14 AM
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#19
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Thinks s/he gets paid by the post
Join Date: May 2016
Location: Mid-Atlantic
Posts: 1,766
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Quote:
Originally Posted by twaddle
I remember way back when we used to think a pandemic would cause a market crash.
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Or unemployment spiking over 10%.
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-Looking to FIRE in the mid-2020s, which would be our mid-50s.
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03-21-2021, 06:39 AM
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#20
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Administrator
Join Date: Jan 2008
Location: Sheltered in place
Posts: 34,227
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Quote:
Originally Posted by MichaelB
None of the tail risk events have come to pass.
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I take that back. From January ‘20 to March ‘20 the SP500 lost 31%, which is tail risk territory for sure. The cause, however, was not any of the items on the list of leading fears. The entire decline was recovered within the subsequent 5 months.
People who believe some sort of financial crisis is imminent should probably not invest in equity markets. The reason for the thread - it’s just another reminder that many of the responses here are right on. No one knows nothing and black swans are not foreseen. The things we fear most don’t seem to be the things that actually happen, and the things that do happen are surprises no one expects.
I’m sticking with my diversified portfolio of equities and fixed income from around the world. My allocation is not rooted in some expectation of Fed or Gov’t action, it’s a reflection that despite all the concerns and fears, our modern society is a thing to marvel, people will find a way to increase prosperity, businesses will find a way to make a buck.
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