Is a recession coming? Sell stocks? (1 Viewer)

Maybe find a way to hedge your investment incase the stockmarket suddenly goes down?

I am just a novice investor, so take this with a grain of salt, but I believe that diversification within the stockmarket is not super helpful if something like 2008 happens again.

A small short position, or some sort of options strategy. I only have this in theory, and have no examples lol, but it's something you could look into.
 
I'm 50 and dont need the money in the near term (I hope!) so I have two strategies outside of my 401k for saving/investing:
1. every paycheck take a slice and invest; diversify across asset classes and industries. plan to hold long term - it will drop some day but it will recover owing to asset price inflation over time. Buying regularly helps insulate you from swings.
2. every paycheck put some money in savings. when the market drops use some or all to big buy on the way down - something blue chip or an index.

Neither of these slices needs to be very big to get some good returns. I managed to put half of my #2 savings fund into dow index etfs near the bottom of the last crash in March and that is up 53% today. That was a bit scary going in but I believed that in my lifetime the market would recover and I would see decent returns. Of course now I wish i had put it all in :)

The rest of my portfolio is creeping along - 50% of my equity investments are in individual stocks that return dividends or dividend-focused funds with reinvestment (definitely weighted towards funds with low expenses vs individual stocks). For a long term hold this is working well as the number of shares grows with the dividend reinvestment and maybe the price will go up over time as well. Sure I'm not tripling my money in the next tech startup but those are needle in the haystack scenarios and single stock picks lose more often than they win in that category IMHO.
 
Marius L said:
A small short position, or some sort of options strategy. I only have this in theory, and have no examples lol, but it's something you could look into.
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Years ago in my 20's I used to write covered calls and cash-secured puts to hedge. Never bought short. These types of transactions are complex, require a lot of research to find opportunities to make the highest premium and a decent amount of baby-sitting. Need to be ready to unwind as they often have limited windows/expiration dates so are more sensitive to short term volatility than buy and hold long term. I was always watching the market. Then doing taxes was a cluster owing to the volume of transactions that needed to be reported and reconciled. And I had a full time job. I got out of that when I hit 30. Just didnt have the time to dedicate to that anymore. Plus at my level it wasnt like i was going to be buying a Ferrari, just eking out an extra 1 - 2%. If you have the time and interest you can make more money than just buy and hold but its a lot of work IMHO.
 
Mr Musk's electric car company Tesla has surged in value this year, and hit a market value of $700bn (£516bn) for the first time on Wednesday.
That makes the car company worth more than Toyota, Volkswagen, Hyundai, GM and Ford combined.
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Its signs like this that tell me that a crash is coming. I liquidated half my portfolio a few months ago. Yes I lost out on some gains but I'm fully expecting a correction to happen and I have the cash on hand to buy back in. Am I right or wrong? If right, I'll buy back in post dip and pat myself on the back and pray I keep my job. If wrong, I've missed out on half the potential gains. For me, this is more about having some security rather than maximizing my gains...
 
I'm even more convinced now than 6 months ago that having cash is the way to go. There is going to be a big two-fer buying opportunity coming in real estate and stocks. In addition, there will be deflation of our currency prior to inflation. During the great depression, cash gained 40% buying power as it deflated, as people stopped buying goods and services because they no longer had disposable income. The real-estate market has insanely bubbled itself again and banks are again signing off loans like crazy. Although interest rates are low, they are lending on ARMs and allowing people to over leverage themselves in order to buy overpriced homes. The stock market is now hugely purchased on margin. More margin money is now in the stock market than ever before. We have printed 20% of all the U.S. dollars in circulation in the last year with more to come with further stimulus. You can't flood 20% more money into circulation with no inflation impact. All of these ships are converging at full speed.
 
And if you hold any kind of debt that does not have a fixed rate, I highly recommend your top priority should be consolidating your debt into a safe fixed rate that can't adjust on you. Take a look at what happened to interest rates prior to the great depression and it will look very familiar.
 
Trying to predict this market is like trying to predict the return of Jesus
 
My hedge fund manager buddy has sold out his principal and has only left his profits in the market.
 
I lost all my late parents' life-time savings (and a very big chunk of my property) in a Greek Government bond back in 2012.
I thought that Banks can go bankrupt before any Government does. I was wrong.
If I ever save any money in the near or distant future, would it be wise to keep it as US Government bonds?

Meaning that the US Government, due to its immense political and military power, can turn toilet paper into money by corresponding it to other Nations' wealth.
 
571CE387-9D35-416D-8D90-B7E421F5176E.jpeg
 
Taghkanic said:
Anyway, whatever one thinks will happen... If you are picking stocks (as some above appear to be), I think it is always a sound idea to remember to take some profit as you go up. It may be a bull market, but if it crashes you’ll want to have booked some of those gains.
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Bitcoin or bust.
 
Coyote said:
I lost all my late parents' life-time savings (and a very big chunk of my property) in a Greek Government bond back in 2012.
I thought that Banks can go bankrupt before any Government does. I was wrong.
If I ever save any money in the near or distant future, would it be wise to keep it as US Government bonds?

Meaning that the US Government, due to its immense political and military power, can turn toilet paper into money by corresponding it to other Nations' wealth.
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I wonder if inflation isn't on the way.

The world has just watched us conjure up $4 trillion in stimulus.

Why not just conjure up $20 trillion and pay off our national debt?
 
Biden’s stimulus plan with be another boom for stocks. This isn’t going to end well.
 
Coyote said:
I lost everything I had back in 2012 (180K of savings in Greek Government bonds) when my country went bankrupt.

Foreign banks were given back something; Greek citizens, having trusted their own Government got back bonds of way less than half the value, terminating in 2042, when every natural person would be dead.
I had thought, naively, that banks go bankrupt before the Government does (it was proved that this is only true of the Superpower, though, namely, the US Government).

Real estate here was badly depreciated, through a communist-stalinist policy of taxing everything, regardless ot it producing any income or not (basically, confiscation - and, interestingly, encouraged by the scoundrels of the European Commission), including un-rented appartments and un-used acres of land. Real estate rapidly turned from asset to liability.

My only asset to keep some good value was the one in my garage (911 Carrera GTS):(
I had given a good deal of my honest hard-earned money - mostly abroad-, through the latter purchase, to the German economy, only to be called a corrupt and lazy sub-human by the German gutter Press (Bild Zeitung having nothing to envy from the historical Volkischer Beobachter).

The morale of the story may be: keep moderate amounts of money in banks, or as prestige cars and poker chips; for the rest, keep them in gold bars or in US Treasury Bonds. The US will never go bankrupt, unlike any other nation on Earth.
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This is exactly what I fear happening in Canada. It already is to a large degree but signals from our government of finding ways to tap the untapped savings of Canadians has been ominous indeed. Our government no longer serves us but instead only foreign interests. This knowledge and information is heavily censored through state media with much of the population blissfully unaware.
 
nezara said:
If you believe this to be true, shouldn't you take out short positions? I'm considering shorting tesla myself, but was waiting for stimulus to settle down
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There is a difference between thinking something is going to happen and putting money on it.

If I think something is undervalued, I can buy and wait indefinitely to see it rise. If I think something is overvalued, I can’t short it indefinitely, I need to set a date for the contract to expire. So not only do I need to think that it’s gonna go down, I need to define when. To me this increases my risk of being wrong by an order of magnitude.
 
philhut said:
This is exactly what I fear happening in Canada. It already is to a large degree but signals from our government of finding ways to tap the untapped savings of Canadians has been ominous indeed. Our government no longer serves us but instead only foreign interests. This knowledge and information is heavily censored through state media with much of the population blissfully unaware.
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Everybody in every country is saying this.
When my first son was born we had a choice of two hospitals. One was in our town, and the other was 40 miles away. If you talked to anyone in our town they would tell you our hospital is a death trap and you should go to the other. So we did. And as we went back and forth preparing people in the other town started questioning why we didn’t use our hospital, since it was well known that the other hospital was a death trap but ours was the best! So each town was convinced their hospital was a death trap and the other was top notch care. Truth is they were both fine hospitals.
I guess the grass is greener but the buildings are uglier on the other side of the fence. All our governments are a mess and they are designed that way. They are institutions where people are supposed to argue and in reaching compromises to please everyone they usually please no one.
 
Please avoid exotic investment strategies without having a firm grasp of the risks vs rewards. Especially the risks.

Shorting the market or specific stocks is a high risk strategy. Not wrong or right, but it carries high levels of risk that likely isn't appropriate for many people posting / reading this thread.

For most people, buying broad based market index funds and never selling again is a fine strategy. Other people will have far better results, and some will lose everything trying to squeeze out the last couple of percentage points.

DrStrange
 
I don’t really understand it—and post the following in hopes that someone else does...

... But from what I’ve read, U.S. government economists tend to worry less about the inflationary effects of printing trillions of dollars because (a) the dollar stopped being tied to gold under Nixon and (b) our deal with OPEC for all global oil sales to be made in “petrodollars” forces the world to in effect float American debt and invest in us. It’s made the dollar the world’s “reserve” currency.

(Some add that that’s the real reason why we demonize certain oil-producing countries like Iraq, Venezuela, Syria and Iran, when they don’t consistently play along with the petrodollar arrangement.)

I don’t understand it; surely at some point one could print enough imaginary dollars to cause rapid inflation, right? But it doesn’t seem to be happening... at least not yet.

From the sound of it, it would be as if all poker chip sales had to be transacted via virtual trades of custom dice chips produced by Tommy in whatever quantities he chose. If sales lagged, he could inject a ton more dice chips into the system to instigate more trades? Anyway... the custom dice chips would have no actual intrinsic value, and yet would still be used and sought by members because there was no other way to purchase Paulson’s, TRKs, etc. And if someone tried to set up another way to buy and sell chips? Tommy’s goons invade your house and take all your chips.

Something like that.

Hopefully someone here understands this better. I am out of my depth but would like to grasp whether inflation concerns are warranted. Here is an article giving some background:

https://www.investopedia.com/articles/forex/072915/how-petrodollars-affect-us-dollar.asp
 
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Taghkanic said:
I don’t understand it; surely at some point one could print enough imaginary dollars to cause rapid inflation, right? But it doesn’t seem to be happening... at least not yet.
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The synchronized global shutdown and central bank policies are helping us to avoid this in the short term. The US 10-year just broke above 1% when the dems took the senate. Europe/Asia still at zero or close. This drives the demand for bonds/dollars and helps us to “export” inflation, at least for now. We benefit from cheap money and demand stays high thanks to other countries keeping pressure on the US yield from rising too fast and the dollar from rapid decline. But eventually, you may be right.
 
Darson said:
There is a difference between thinking something is going to happen and putting money on it.

If I think something is undervalued, I can buy and wait indefinitely to see it rise. If I think something is overvalued, I can’t short it indefinitely, I need to set a date for the contract to expire. So not only do I need to think that it’s gonna go down, I need to define when. To me this increases my risk of being wrong by an order of magnitude.
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By being in cash I think you are essentially putting money on it. Albeit a smaller amount of money.
 
nezara said:
By being in cash I think you are essentially putting money on it. Albeit a smaller amount of money.
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I read an interesting statement recently:
In fact, if you don't own Amazon, you are actually short the e-commerce giant, according to Parets.
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After selling some of my holdings, and missing out on subsequent gains, the only two I kept were Amazon and Tellurian which were about half my portfolio. I'm pretty glad I did that, especially today.
 
Taghkanic said:
P.S. I have not found a place where this can be watched in its entirety for free, but it can be rented for a month at Vimeo for $20 at the link below. The first episode may be out there for a free preview, but the entire series really needs to be seen in order to fully take stock of how effed up things are from top to bottom:

https://vimeo.com/ondemand/thecon

It’s devastating not only on the technical level, but in its storytelling. The filmmakers do a nice job of balancing the gory details of the mechanics of the con with personal stories which bring its effects into focus and hold viewers’ interest.
Click to expand...

Whistleblower says they are doing it again, now with commercial mortgages:

https://www.propublica.org/article/...-in-widespread-manipulation-of-mortgage-funds
 
Why six (as opposed to 5, or 7, or 12, or 18)? Not being a wiseass. Curious why that specific number.
 

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