With markets higher than any time in history

[street]

In the last week what is your thought on what the markets are telling us. I know economy and stock market are two different things and each can go their separate ways from each other.

With prime dropping last week and inflation not rising what do you see for the future of equity funds and bonds?

I would guess equity shares will be worth less and bonds doing well.

With money tied up in long range accounts CD's what happens to CD futures? I have money tied up for 8 more years getting 5.89% is that a good deal going forward or could I have done better just staying in the markets?

Looking for any opinions or views. The question is very wide open so wonder the direction it takes.

 

[GrayHare]

My sense is Mr. Market likes less regulation and thinks import tariffs won't have significant negative effects for the US.

 

[audreyh1]

My crystal ball filled with mud years ago……

 

[harllee]

I just rebalanced

 

[disneysteve]

If we get the tariffs that have been threatened, that will cause inflation to spike resulting in an economic slowdown as people rein in their spending due to higher costs. That would also lead to unemployment rising. If mass deportation happens and immigration is sharply decreased, the labor shortage will worsen which will put an additional strain on employers. All around, the economic outlook isn’t great for the next few years IMO.

 

[Car-Guy]

Yes I know conventional wisdom says to just stay in the market, but there is also an old saying, what goes up, must come down. How far down, and when, and for how long? Heck if I know.

 

[Closet_Gamer]

Certainly can’t predict. This feels to me like an emotion driven rally.

For a bunch of reasons I think inflation will be very hard to keep in check and we will likely see higher rates than people are hoping for.

 

[Winemaker]

I trimmed equities from 75 to 65%. Will trim again if this rally keeps up. We've won the game, so I don't want to be a pig. Pigs get slaughtered.

 

[disneysteve]

Yes I know conventional wisdom says to just stay in the market, but there is also an old saying, what goes up, must come down. How far down, and when, and for how long? Heck if I know.

With a long term outlook, I think "stay in the market" is always the right answer. So if you're 50 or younger, that's different than if you're 80. If you're somewhere in between and already retired, I think Winemaker's answer is the best one: if you've won the game, it's okay to stop playing, or at least to take some chips off the table.

 

[jebmke]

Markets hit all-time highs very frequently. That said, my personal all-time high was in the 1970s

 

[Al18]

5.89% in CD sounds excellent. I’m happy at an asset allocation of 53%/47%, and not getting anywhere near 5.89% on my CD’s.

 

[Koolau]

I'm staying the course. Things are a bit unsettled, but that doesn't tempt me to do anything at this point. I figure "doing" something gives me a 50% chance of being wrong - just like doing "nothing" gives me a 50% chance of being wrong.

street, if you're getting 5.89% in your fixed income, I'd be happy with that as long as it's in your asset allocation plan.

 

[chemEguy]

I fail to see how anything good will come from the tariffs we are hearing about. It’s not going to shift manufacturing from China to the US. I work for a US multinational and other companies will do what we did, shift from China to other places like Vietnam or Malaysia. Those jobs will not come to the US because, a) the infrastructure is not in place for a rapid on-shoring, and b) companies will not be competitive if they have to pay US labor wages when competition is not. Or, if they do, you will have price increases as a result of the higher manufacturing costs paying US wages.

And then what happens? China retaliates with their own new policies? They stop selling to the US? They prevent US companies from operating in or selling to China? Existing JV partnerships lose IP or other rights in China?

It all sounds good on paper until you start to live it. The 25% manufacturing tariffs are already a problem.

So if this happens, I expect inflation and supply chain disruption and a global slowdown.


I’ll do what we’ve always done…stay the course.

 

[Koolau]

Most of the "tariff" talk is bargaining language. Most will not be needed IMHO.

 

[chemEguy]

Most of the "tariff" talk is bargaining language. Most will not be needed IMHO.

Maybe.

But I seem to recall similar sentiment about the current tariffs up until they were signed into effect.

 

[Koolau]

Maybe.

But I seem to recall similar sentiment about the current tariffs up until they were signed into effect.

Once in a while you do have to pull the trigger on a "threat." Depends on your bargaining position. I think we (USA) are still in good bargaining position but I'm no expert so YMMV.

 

[marko]

I'm staying the course. But what do I know?!

I view the market as a slow, ever rising tide. Sometimes barriers are put up but eventually those barriers fall and we get a small rush like we're seeing now.

Markets go up and down but the 2008/09 debacle and subsequent recovery has made me quite fearless. Maybe to a fault?

Regardless, we live on dividends, interest and MF CapGains (which have been fairly consistent (~6%) over the past 20 years) which are paid on the number of shares and not on the price of those shares.

Short story: there's always hiccups but I don't see any great catastrophe ahead. Famous last words!

But what do I know?!

 

[FREE866]

I'm staying invested, probably always will.

New highs are historically extremely bullish for stocks. Any correction that occurs would be normal and healthy. Trying to trade around them is a fools game IMO.

 

[UpQuark]

I've decided to buy the max amounts for i-bonds for 2024 and 2025 (previously I had decided not to).

I'm still chewing on how much extra do I want to pay in taxes right now in order to sell equity positions.

I'm leaning toward not taking more than the RMD for 2024 and 2025 from my inherited IRA so that I have more tax bracket room to reduce the equity positions. Previously (before the election results) my plan was to empty the inherited IRA in even chunks for the next four years before regular IRA RMDs start up for me in 5 years.

But, between worrying that the market will go down significantly in a year or so, and hope that they'll stop taxing Social Security, I'm thinking to kick the inherited IRA withdrawals down the road a bit.

I grew up in a Midwest city that had been controlled by the mafia for a while, and although I was little at the time my lasting impression is that the buddies of the mayor got lucrative contracts (regardless of the ecological destruction caused). So probably the best investments now would be the buddies of the new government.

Maybe investing in liquor companies would be a good idea too.

 

[Koolau]

I'm staying the course. But what do I know?!

I view the market as a slow, ever rising tide. Sometimes barriers are put up but eventually those barriers fall and we get a small rush like we're seeing now.

Markets go up and down but the 2008/09 debacle and subsequent recovery has made me quite fearless. Maybe to a fault?

Regardless, we live on dividends, interest and MF CapGains (which have been fairly consistent (~6%) over the past 20 years) which are paid on the number of shares and not on the price of those shares.

Short story: there's always hiccups but I don't see any great catastrophe ahead. Famous last words!

But what do I know?!

For me, I guess it's not only years of experience, watching the markets go up, down and sideways (but mostly up in the long run) but also the question occurs: Where else would I put my "growth money?" PMs? Bonds? REITs? Collectibles? CDs? Other? I think not. My AA has been w*rking for me for quite a while, the "new" (well, maybe not so new) gummint is just one more stressor of my plan. Ask me in a few years if I was right or wrong to stay the course. Oh, and YMMV.

 

[aja8888]

I'm getting too old to even care about guessing at this.

 

[audreyh1]

I'm getting too old to even care about guessing at this.

I’m 15 years younger but have joined your apathy.

 

[whatnot]

Due to the equity bull run this year, our asset allocation has drifted above our desired 60/40. I rebalanced in my IRA last week and my DH’s IRA today.
I was going to let his ride out, but Winemaker’s post re: Pigs get slaughtered, resonates with me.
I feel things may be very chaotic for a while.
We are 67 (DH) and 63. Both retired in 2018. So, back to 60/40.

 

[target2019]

I've been watching my equity slices ratchet up in the last few years, from 50% to 65%. My feeling today is that we'll go no further than that, and re-balance as necessary. That is because I'm expecting market and economy turbulence. Our needs are met by SSA and pension, with small withdrawals as required.

 

[frayne]

The markets like certainty, and with the election behind us, there is a path forward. I’m sticking with the strategy that brought me to the dance: a 60/40 asset allocation and staying the course. I’m neither bullish nor bearish, just a casual observer.