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Old 09-06-2020, 06:33 PM   #101
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If you don't want or need growth in your portfolio that's one thing, but if you do and have a long term investment horizon people should have a high stock allocation. Almost a century of returns have proven that. The long term return on stocks has been ~10%; what I think people don't realize is that INCLUDES bear markets.


Unless you're an incredible trader, which in case you can do even better. Haven't met anyone that can do that consistently though.
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Old 09-06-2020, 06:50 PM   #102
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If you don't want or need growth in your portfolio that's one thing, but if you do and have a long term investment horizon people should have a high stock allocation. Almost a century of returns have proven that. The long term return on stocks has been ~10%; what I think people don't realize is that INCLUDES bear markets. ...
Yes.


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Old 09-08-2020, 04:03 PM   #103
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One word to describe the market: Speculation.

Reminds me of the dot.com speculation era where people expected dot com companies to make "future" money even though the "current" earnings were almost nothing. People are now speculating with a similar mindset.

According to the following link which describe the overall market P/E ratio, the market is currently in a bubble.....

https://www.longtermtrends.net/price-earnings-ratio/

Whether it will crash or not or whether the bubble will pop is anybody's guess.
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Old 09-08-2020, 04:09 PM   #104
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One word to describe the market: Speculation.

Reminds me of the dot.com speculation era where people expected dot com companies to make "future" money even though the "current" earnings were almost nothing. People are now speculating with a similar mindset.

According to the following link which describe the overall market P/E ratio, the market is currently in a bubble.....

https://www.longtermtrends.net/price-earnings-ratio/

Whether it will crash or not or whether the bubble will pop is anybody's guess.
This time the tech companies do have real earnings, but time will tell to say the least.
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Old 09-08-2020, 04:16 PM   #105
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Yep. I'm up for the year despite having made my usual withdrawals, plus extra to replace my car. I pretty much stayed the course during the craziness but sold a few things less likely to profit form a recovery and bought others that would. I'd been at 70% equities, now at 60% and I'm more comfortable with that.

One advisor I know says he has clients in their mid-40s who sold it all in April. He's been trying to contact them about getting back in They won't return his calls.
The ones who sold off in April when they thought the sky was falling are really regretting it now. I've been saving and investing since college which was more than 30 years ago. Stay the course.
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Old 09-08-2020, 04:22 PM   #106
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I'm not making a prediction, but the market may be supported now and in the future by the essentially zero return on bonds & CDs.
Short term volatility but long term understanding that fixed income, after inflation and taxes, is essentially 0.
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Old 09-08-2020, 04:24 PM   #107
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... Whether it will crash or not or whether the bubble will pop is anybody's guess.
No one wants to leave the party until just before the cops show up.

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... I've been saving and investing since college which was more than 30 years ago. Stay the course.
Yup. I'll claim 45 years, though not all of them with the smartest investment tactics. But yes, stay the course.
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Old 09-08-2020, 09:17 PM   #108
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I "scraped gains" in Jan, Feb, late June and late July.
Don't regret one red dollar of it.

I need to get to SS FWR in 4 years and DW 4 years later. I don't mind leaving some apples on the tree as long as I don't cut it down right now.


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The ones who sold off in April when they thought the sky was falling are really regretting it now. I've been saving and investing since college which was more than 30 years ago. Stay the course.
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Old 09-08-2020, 09:24 PM   #109
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I mean..... As of 2 PM on 9/2, my investments are up mid five figures for the month of September and we only have 47% in Equities. I've blown past my goal for year end. Those who are fully invested, must be riding high!!!
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Old 09-08-2020, 09:28 PM   #110
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There are job losses and then there are permanent job losses. The COVID damage is probably worming its way into the economy, despite the ostensible "good" jobless numbers. Just saying. I do not know for certain this is true, but I suspect the small business closures and corporate right-sizing and now permanent lay-offs, after PPE.

I suspect this will go on for 2-4 years, but that's just me. One hopes some small business creation will start to offset this--but I doubt it, anytime soon at least. Once we figure out how to do what other countries have done--defeat the COVID--then the small business economic healing and job growth will begin. Right now, it's just us Richie Riches investing Monopoly cash in stocks, as opposed to the real economy.

https://www.politico.com/news/2020/08/06/coronavirus-permanent-unemployment-392022



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Jobless claims fell, maybe the market feels that if this trend continues there will not be a need for another $1T stimulus and since this was "baked" into the prices, now the cake is getting unbaked ?

Who knows...
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Old 09-08-2020, 09:30 PM   #111
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Frankly, I think this is the end of this rally and there's still even more room to fall, at least with the tech stocks. Just check the FMV for some of the big names on the NASDAQ and you can see a lot of the buys had to be unmitigated frenzy driven by non-institutional investors (my guess, anyway), much of which triggered by the splits in Apple and Tesla. The other indices fell in lock step with the NASDAQ.

How much is the political unrest (both inside and outside of the election) is playing a part is unknown. More likely, there is finally some reckoning from the underlying economic factors at play here. The market(s) have been moving in a direction contrary to the fundamentals. Eventually, the party has to break up, it always does.

Look at the real unemployment numbers (not the made up "jobs created" numbers, which dismisses all the jobs lost since COVID took hold). Too many people out of work results in defaults on mortgages, driving the real estate market. And though that market is hot right now, that's only because buyers who haven't been impacted by the pandemic are buying like crazy from sellers who have lost their jobs and have to unload their homes at fire sale prices. There's a definite wealth redistribution happening again and the uber-wealthy are the beneficiaries.

I retired in 2013 and have seen more boom/bust market cycles in the last seven years. I'll be curious how play out as we get closer to election day and beyond. Unless and until we (the US) get a handle on the COVID numbers, I would imaging the rollercoaster will continue.
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Old 09-08-2020, 09:34 PM   #112
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I do think rehirings will continue, as well as the permanent job loss conversions. Final effect is that employment likely will be stuck at a plateau considerably below 9 months ago.

I'm no longer sure what relation if any is between the larger macro economy (including small business and employment) and the "market." If there is a dislocation, I suspect this will not be to the long-term benefit of investors; short-term benefit, sure; hell, my portfolio benefited.
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Old 09-08-2020, 09:36 PM   #113
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The Feds virtually guaranteed zero to almost zero interest rates for at least 5 years. Stocks are where to park money.

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Originally Posted by Gearhead Jim View Post
I'm not making a prediction, but the market may be supported now and in the future by the essentially zero return on bonds & CDs.
Short term volatility but long term understanding that fixed income, after inflation and taxes, is essentially 0.
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Old 09-08-2020, 10:42 PM   #114
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This was overdue and necessary. I think a lot of Robinhood guys will feel the pain but we’ve seen all this before (most recently in March, lol) so I doubt anyone around this board is panicking. I’m not.
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Old 09-09-2020, 12:58 AM   #115
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Personally, I believe the market with all the uncontrolled and unregulated algorithmic trading, is completely unnatural. I look at P/E ratios and Tesla, just to name one example had a P/E ratio of 1,200. IMHO anything above 50 is risky. If you put it into perspective the market capitalization for Tesla was equal to all other automobile manufacturers combined which is, of course, ridiculous.Yet, it was still being listed as a buy and people are getting hammered as it retracts. The entire tech market is overblown and it will correct. It simply has to. However, we also have the issue of political motivations on the market and the PPP interfering added to the Feds use of IMHO ridiculous MMT and it all looks insane. I predict a major collapse but when is always the question. Because of the high risks involved of overnight corrections we go to cash every day. We have been doing this since 2016. Still, just trading 4 hours a day and not every day, we are earning around $12k a month which is fine by me. I do not trust this market and I believe it is completely out of control. We have been fortunate that the shorting was low, maybe on orders, but they are back. The tech market wants to make the economy look bad (not difficult) to push voters towards the liberals and the tech companies are all sworn to help them do that. Should Trump get re-elected there will be anti-trust efforts in revenge so in some ways these companies are betting the farm on Biden winning. But, this is just another factor in the equation.

Covid has not gone away and is in some ways getting much worse, particularly in the US but the second wave is emerging rapidly in those countries that either didn't have restrictions or relaxed them. More recent world-wide data now are showing mean age of deaths is now 37 and that men who are symptomatic roughly 50% have permanent testicle destruction with a loss of fertility and hormone production.

The economy is not better and the war drums are beating with multiple efforts by the US to topple governments we don't like at a time when we cannot afford it. Then we have the insane levels of US dollars being released into the markets increasing the debt to levels which are unbelievable which will cause massive inflation. Only the massive debt itself and the Fed purchasing equities and financial instruments directly is keeping this down. Mortgages are now 40% owned by the Fed as an example. How much of the market is owned by them is anyone's guess. All of it is unregulated and under the control of people with zero experience. Mnuchin was a Hollywood producer.
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Old 09-09-2020, 05:59 AM   #116
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DCA - Dollar Most Average, take advantage of the lower prices.

We might be about to hit a "big storm" but nobody knows. If we do, continue to buy the same percentage during the "storm."

Look at the market graph since the great depression. It's positive!

*Not a financial advisor and writing this from my phone in bed. Take what you like and leave what you don't.
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Old 09-09-2020, 06:57 AM   #117
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I find it funny that after a few days of a down market ( which is totally normal and typical ) that people start talking bubbles, PE ratios, what ifs about the election, changing asset allocation etc, etc




The reality is that the stock market is volatile, always has been and always will, and that volatility is the emotional price we pay for outstanding long term returns.
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Old 09-09-2020, 07:28 AM   #118
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DCA - Dollar Most Average, take advantage of the lower prices.

We might be about to hit a "big storm" but nobody knows. If we do, continue to buy the same percentage during the "storm.".

Look at the market graph since the great depression. It positive!

*Not a financial advisor and writing this from my phone in bed. Take what you like and leave what you don't.
Agreed , dollar cost average monthly for me before I FIRE'd. Every year I treated it as a game. Every year since getting out of school I increased my buying into the market every year. Also maxing my 401K every year over the years helped accumulate net worth. When money gets auto pay direct to investments it's not even noticeable if one lives within below ones means. The noticeable part is the portfolio grows long term.
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Old 09-09-2020, 07:36 AM   #119
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I find it funny that after a few days of a down market ( which is totally normal and typical ) that people start talking bubbles, PE ratios, what ifs about the election, changing asset allocation etc, etc




The reality is that the stock market is volatile, always has been and always will, and that volatility is the emotional price we pay for outstanding long term returns.
+1
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Old 09-09-2020, 12:12 PM   #120
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I find it funny that after a few days of a down market ( which is totally normal and typical ) that people start talking bubbles, PE ratios, what ifs about the election, changing asset allocation etc, etc

The reality is that the stock market is volatile, always has been and always will, and that volatility is the emotional price we pay for outstanding long term returns.

Because it's never after merely a few down days. There's always more to it. That's whats implied in the discussion.
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