Running_Man
Thinks s/he gets paid by the post
- Joined
- Sep 25, 2006
- Messages
- 2,844
I get back in at 3100, be interesting to see if we get there.
For the first time ever I sold all my stocks
- Thread starter harllee
- Start date
I get back in at 3100, be interesting to see if we get there.
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Dunno... my crystal ball broke a short while ago and replacement parts are backordered.
However, the pre-COVID economy was 70% consumer spending IIRC and we have 23 million people unemployed.
Last edited:
Many of whom are making more in unemployment than their normal pay.
brewer12345
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Mar 6, 2003
- Messages
- 18,085
23MM is a massive underestimate. The reported labor force shrank by 8MM people between the Feb and May reports.
Mountain skier
Recycles dryer sheets
- Joined
- Dec 26, 2018
- Messages
- 129
I too sold most of my equities (S&P500) and my FIRECALC numbers are just fine. I sure sleep better at night and no longer have market anxiety. I just calmly watch the market now
My AA is 12/88 equities/cash
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
until July anyway or unless they decline to return to work and their employer or a neighbor rats them out.
HI Bill
Thinks s/he gets paid by the post
- Joined
- Dec 26, 2017
- Messages
- 2,556
FIRECALC and Monte Carlo both rely on historic returns. My big concern with 0/100 is twofold:
1) Historic bond returns were much higher than they are now, and likely much higher than they ever will be again. There's too much liquidity in the system now, and ever-increasing debt will make it impossible to raise the rates back to the ~8% range we saw in the 1970s (our national debt might become unserviceable, and Congress would have to live with a neutral budget, which I just don't see happening). Therefore, the models are over-relying on bond returns to counter inflation.
2) Inflation has been kept at bay by the Fed, primarily. Is it realistic to believe that we'll never encounter >>>3% inflation in the future?
Dtail
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Rises in inflation can be partly offset by higher CD yields, even though might still be negative real returns.
More importantly, one's personal inflation rate could be lower than the official CPI.
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
You might want to reconfirm your understanding of a Monte Carlo simulation.
HI Bill
Thinks s/he gets paid by the post
- Joined
- Dec 26, 2017
- Messages
- 2,556
Right, thanks, I had forgotten it can also look at:
- Historical Returns - Simulate future returns by randomly selecting the returns for each year based on available historical returns
- Forecasted Returns - Simulate future returns based on any forecasted mean and standard deviation of assets
- Statistical Returns - Simulate future returns based on the mean, volatility and correlations of portfolios assets
- Parameterized Returns - Simulate future returns based on the specified statistical distribution
I assumed that most Monte Carlo runs used Historical Returns, randomly utilized by each year.
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I'm not concerned at all for a number of reasons.
1. 0/100 is not my forever AA (though it could be if I wanted to). I'll likely put money back in equities through LEAPs if valuations ever come down to earth. In the meantime I have 39% parked in 3-5 year CDs yielding 3.3% and 61% are in various fixed income instruments yielding 3.7% with negligible interest rate risk.
2. Mid-term (5-year) CDs and Treasury rates typically beat inflation.... after all, the base for composing interest rates is the expected rate of inflation. You may be able to find short periods of time when the real return on 5-year treasuries were negative, but they were not negative by much.
3. Even if we do encounter 3% inflation in the future it is likely that it will be accompanied by higher interest rates.
About the only thing I agree with you on is that it is unlikely that we'll see 8% bond yields for a long time, but that's ok because those 8% bond yields were accompanied by higher inflation.
I'm much more worried about a Depression-like economy and stock market crash than inflation.
Exactly. I don’t get this issue. DS’s girlfriend was making more because she was furloughed and getting the $600/week extra. Her work called her back and now she’s working, making less. If she quit, she loses the benefit and job.
She would have loved to stay unemployed longer and collect benefits. Who wouldn’t?
Is the concern that people are quitting their jobs and collecting unemployment?
If so, that’s not legal. Who knows what enforcement is like right now, but when you file a claim in my state, it clearly asks if you were offered work and if you declined, no more benefits. I’m also pretty sure they check with your employer.
COcheesehead
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I am 3% higher today than my highest point before the correction. May not last, but ....
Sunset
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Tiger8693
Full time employment: Posting here.
Companies are having a hard time getting folks to return to, or even start work. Our company has sent notices of return, and those that refuse (without sufficient reason) are reported to the unemployment office for turning down work and removed from unemployment.
Our contract (temp) agency is doing the same as we are going through 5 people to retain 1 person. So those that refuse the opportunity, or only stay for 1-2 days and don't return, likewise are reported to unelployment office to stop benefits.
Tiger8693
Full time employment: Posting here.
Yes. If we are going to show how much loss we "avoided" by jumping out, we should also show how much "gain" we missed.
njhowie
Thinks s/he gets paid by the post
- Joined
- Mar 11, 2012
- Messages
- 3,931
I have to side with the employees here. (Most) Companies really have little loyalty or compassion when it comes to employees these days, maybe yours is one of the few who are different. Most treat them as bodies and nothing more. Replaceable, disposable, give them a hard time when it comes to benefits and paid time off, give them a guilt trip when they want to take earned vacation time or family leave, expect they are available 24x7, and they jettison them immediately at the first sign of trouble. Now that companies want to start up again they expect everyone they furloughed to just return with no push back? When many are getting paid more being on the sidelines?
If I were the employee, I would push back and stay on the side lines as long as possible. I'd say that I didn't feel comfortable/safe returning to the workplace at this time.
Tiger8693
Full time employment: Posting here.
It's a shame you feel that way, or had that experience. I don;t know about (most) companies, but I have worked for 3 different companies over the last 25+ years, I large 100k plus international employees, and 2 smaller 5k or so total employees. In all of these cases, I did not experience what you outlined in your post. If I had, I certainly would not have lasted as long as I did with each of them.
Also, in our case the employee is not making more on the sidelines, but they are making close enough. Unfortunately, we cannot wait for them to come back as our customers (people like you) won't wait for us to get them products. That means that some of these folks will not have income once the subsidy stops. They are getting letters infomring them of the referral of not accepting employment to the state emplyment office, and encouraging them to come back and be a productive member of our organization. Otherwise, their tenure and employment will be terminated. In the same letter, they are informed of the numerous steps that our company is taking to provide a safe work environment. Hopefully most choose to return.
If everyone took the approach you sugggest above, the unemployment impact, impact to companies, and therefore the overall economy (which by the way is paying for these benefits through taxes, along with the rest of working people) would be such that this help could not be continued.
youbet
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
It's a state by state issue. Some states are much stricter than others.
In Illinois, the employer is contacted and can either accept or challenge the claim. If there is a challenge, typically a phone meeting is held with the employer, employee and the unemployment comp folks. If the employee was offered work but won't go because of what he/she considers unsafe conditions, it gets sticky for the employer unless they have a very solid, documented COVID-19 safety program installed and operating. Therefore, some employers aren't challenging claims.
Generally, here in Illinois, many employers would describe the unemployment compensation system as being "employee friendly."
youbet
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Bold mine.
Be careful sorting out employees between those you challenge and those you consider having "sufficient reason" to not return. If you accept a reason like the employee needing a few weeks longer on unemployment benefits to get childcare arranged (or similar), then you must accept that reason for all employees as you have set a precedent. No matter how heartfelt the "sufficient reason" seems, don't make exceptions. If you offer work and the employee refuses, report it consistently for all.
Don't ask me how I know!
Tiger8693
Full time employment: Posting here.
Bold mine.
Be careful sorting out employees between those you challenge and those you consider having "sufficient reason" to not return. If you accept a reason like the employee needing a few weeks longer on unemployment benefits to get childcare arranged (or similar), then you must accept that reason for all employees as you have set a precedent. No matter how heartfelt the "sufficient reason" seems, don't make exceptions. If you offer work and the employee refuses, report it consistently for all.
Don't ask me how I know!
Good points! And the attorneys have already set out our "sufficient reasons" definitions. If something undefined comes up, we have to go back to them, but they have a pretty extensive list.
I am glad we sold our hospitality business in 2017 and retired. Even then , it was difficult getting qualified and motivated line level employees. Many would join, work a few days and then not show up just to collect public assistance which was almost equal to what they would make after taxes at work. I can only imagine how difficult it would be now to get line level employees back to work. I have noticed the State Departments of Employment Security tend to favor the employees in the event employer disputes the employees' unemployment claim. These are tough times indeed for the economy.
Dtail
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I would guess it might matter depending on the type of business.
Yes, employees are used for the most part, but in my former Wall Street industry, I can't imagine anyone not returning to work, perhaps an exception here and there.
They know any movement upwards could be affected and there are always folks who want these jobs.
My 60 year old SIL is making more on unemployment than she did in her entire working career. She was working 15 hours a week at $7.25/hr, so around $110 gross. Now she's getting $670/week. She'll be thrilled if she isn't asked back (at least until the $600 goes away).
