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Getting anxious about social instability
Old 07-21-2020, 09:41 PM   #1
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Getting anxious about social instability

This last year I have done very well, YTD better than most but..

I won't list the issues that concern me because the mods may think it is political BUT....

my dump it all trigger finger is itchey.

Does anyone else feel likewise?
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Old 07-21-2020, 09:48 PM   #2
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I'm not ready to dump it all, but I see a likely financial crisis on the horizon.
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Old 07-21-2020, 09:49 PM   #3
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Understand the feeling, and don't think it's wrong to be defensive.

At 60-ish, I have seen a lot, yet with 2 kids still to get through school and a new wife, I've had my moments of concern recently.

I raised a few years of cash for expenses a few months back, and decided to ride it out. Have found myself telling my kids both (both under 20) that the US has seen worse and we'll get through it. Hope my optimism proves to be correct.
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Old 07-21-2020, 09:50 PM   #4
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I could see how you might feel particularly uncomfortable in Portland these last few days, but honestly I think the world has always been going to hell in one way or another - and always seems to keep on going after a few fits and starts.

In other words, plenty to be concerned about in the modern world, but without a crystal ball I'm not planning any radical investment changes.
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Old 07-22-2020, 12:33 AM   #5
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If one digs into enough history, both US and world history, current events are nothing in comparison. Corrections, recessions, even depressions, happen of course, but I have zero concerns that current unrest will have anything to do with the next one of these to occur.

A weak recovery from the pandemic is another story as we do seem to already have a slow rolling recession from that.
And that too will pass, eventually.
I'm not changing anything in my financial plans even because of it.
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Old 07-22-2020, 04:24 AM   #6
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If I had made any attempt at market timing this year I would have screwed up big time. I recommend no market timing.
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Old 07-22-2020, 05:01 AM   #7
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If one digs into enough history, both US and world history, current events are nothing in comparison.
I actually look at it the other way around - past history is nothing compared to what we have today.

When was the last time world economies shut down? The US economy almost completely shut down for 6 months or longer? Essentially forced lay off of 25% of the entire population? Essentially forcing millions of businesses into bankruptcy by not allowing them to operate?

It's going to get significantly worse going forward. Once the extra $600/week ends we'll likely see rioting and looting pick up. We've already had those portable light up traffic signs going up in some neighborhoods advising residents to lock their cars because break-ins are on the rise.

I don't see unemployment falling below 10% over the next year.

The same way the Fed is unable to raise interest rates, I see the government getting pushed to the point where they cannot end the helicopter money and will have to keep paying folks more than basic unemployment who are out of work. Without doing that, the economy will contract significantly and GDP will fall a lot.

We ain't seen anything yet.
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Old 07-22-2020, 05:03 AM   #8
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Guns and bullets are sold out all around here. What does that tell you?
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Getting anxious about social instability
Old 07-22-2020, 05:12 AM   #9
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Getting anxious about social instability

Iíve been hearing about the end of society as we know it for the last 12 years yet here we are.

I think with military boots already in our streets, there is less a risk of loosing control and more risk of too much control.

As to the recession, sure. Could or could not. Those suffering most contributed the least (from a pure $ perspective) but I think we are seeing how much the upper class relied on them to provide services.

What I see is those who are getting hit are the more paycheck to paycheck crowd so they can recover quickly once work starts again. They certainly didnít have an opportunity to improve but it isnít hard to get back to paycheck to paycheck.
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Old 07-22-2020, 05:28 AM   #10
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Guns and bullets are sold out all around here. What does that tell you?
You better obey the law?
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Old 07-22-2020, 05:39 AM   #11
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I actually look at it the other way around - past history is nothing compared to what we have today.

When was the last time world economies shut down? The US economy almost completely shut down for 6 months or longer? Essentially forced lay off of 25% of the entire population? Essentially forcing millions of businesses into bankruptcy by not allowing them to operate?
I don't know, but the potential for total nuclear annihilation or losing to the Axis powers were up there. I'm not sure about the US economy completely shutting down - we just couldn't attend restaurants, baseball games, gambling, bars and cruises. The rest of the economy was fine working from home and wearing those darn masks when we're outside. Also the number of bankruptcies appears to be closer to 240k, and we'll see how see how the rest of the year goes.

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

I think the biggest unknown right now is, will there be a vaccine or not. Looking at the current levels, it seems like investors are "voting" that there will be, but who knows.
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Old 07-22-2020, 06:03 AM   #12
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I'm not sure about the US economy completely shutting down - we just couldn't attend restaurants, baseball games, gambling, bars and cruises. The rest of the economy was fine working from home and wearing those darn masks when we're outside. Also the number of bankruptcies appears to be closer to 240k, and we'll see how see how the rest of the year goes.
With 40 million unemployed and almost 70% of GDP based on consumer spending, I think things are pretty clear.

There are 30 million small businesses in the US. They weren't working from home. They took their PPP money, and when it runs out a good portion will close the doors for good.
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Old 07-22-2020, 06:03 AM   #13
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I never believe any of the narratives spouted by the media or whomever....doom and gloom or exuberance or whatever. I have heard so much of this over the years that to me it's just pure bunk. Everything from peak oil to Miami will be underwater in 12 years, to Bill Ackman's rant...it's all just nonsense. As Kahneman says "the safe thing to do is not to believe them" The world itself is not regular enough to draw conclusions about the future state.
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Old 07-22-2020, 06:07 AM   #14
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I've never been a market timer, just buy and hold.

In mid February I thought the market seemed overvalued and thought about selling, but didn't.

Then starting in late Feb I watched my 401K slide all the way to the bottom, then watched it recover unbelievably quickly.

On June 9th when I thought the recovery made no sense I moved 20% of my 401K from stock to money market. From all the news I'm reading I believe that we still have difficult times to come in terms of virus, deaths, failed small businesses, hammered tourism/hospitality and retail industries, and continued high unemployment. Then with the election this fall who knows how the market will react to either outcome.

Time will tell whether my decision to sell was smart or stupid. I know that I need to map out a "get back in" plan to dollar cost back in when/if the next drop happens.
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Old 07-22-2020, 06:31 AM   #15
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There has always been social instability. It's just been amped up a little lately. But it doesn't affect my investment strategy. The markets go up and down all the time for no apparent reason. I'm not even going to attempt market timing.
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Old 07-22-2020, 06:32 AM   #16
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From all the news I'm reading I believe that we still have difficult times to come in terms of virus, deaths, failed small businesses, hammered tourism/hospitality and retail industries, and continued high unemployment. Then with the election this fall who knows how the market will react to either outcome.

Everybody already has all this information, there is nothing to be gleaned from it.....down the road you will get the results of a "lucky" or "unlucky" guess. Hopefully you get lucky.
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Old 07-22-2020, 06:34 AM   #17
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With 40 million unemployed and almost 70% of GDP based on consumer spending, I think things are pretty clear.

There are 30 million small businesses in the US. They weren't working from home. They took their PPP money, and when it runs out a good portion will close the doors for good.
How do you get 40M? The total population is 330M and I believe half are those who are eligible to work and the unemployment rate is 11.1%, or about 20M. It's about a tick higher than the great recession.

I think bankruptcies will tick higher, especially in the services industry. We'll see what the facts are once it is published, and it'll be interesting to see how much of the new stimulus will be able to mitigate that.

I agree that it's a tough time in history but I don't see it as badly as many here, and my AA will remain.

Quote:
There has always been social instability. It's just been amped up a little lately.
I actually view some of the social unrest as a good thing. It helps motivate change. Some of the new accountability policies coming out of NY and here in MN are beneficial.
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Old 07-22-2020, 06:47 AM   #18
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How do you get 40M? The total population is 330M and I believe half are those who are eligible to work and the unemployment rate is 11.1%, or about 20M. It's about a tick higher than the great recession.
https://www.washingtonpost.com/busin...s-coronavirus/

Quote:
Americans have filed more than 40 million claims for jobless benefits in the past 10 weeks, according to new Labor Department data, laying bare a tremendous and sudden disruption in the U.S. economy that is already changing the types of jobs desperate workers are looking to fill.
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Old 07-22-2020, 06:55 AM   #19
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This last year I have done very well, YTD better than most but..

I won't list the issues that concern me because the mods may think it is political BUT....

my dump it all trigger finger is itchey.

Does anyone else feel likewise?
Yes, potentially a political discussion, and some are taking that direction.

To answer your question directly, no I do not feel any reason to dump it all, by which I assume you meant go to 100% cash. We are comfortable with 50/50 asset allocation (AA), and the recent drop did not convince me to change anything.

Now that it has semi-recovered, I watch the AA meter, and re-balance as this next stock bubble inflates.
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Old 07-22-2020, 07:05 AM   #20
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