Is a recession coming? Sell stocks?

Payback

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The "Fed" is the World's only Central money-printing Bank that can turn toilet paper into currency, by corresponding that currency to other peoples' commodities.
That's why poor Americans, (as soldiers), are called upon to kill other people on a number of occasions (I would do roughly the same in their shoes).
You can't possibly rule the world without ever killing anybody. :)
Take it to the politics forum.

This thread is for taking paper money and turning it into no ads on PCF.
 

Coyote

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Take it to the politics forum.

This thread is for taking paper money and turning it into no ads on PCF.
This thread is not about what you 're saying, but it's already inevitably highly political, so it should have been originally posted in the politics forum.
I have nothing more to say for the moment, but if people are interested, we could continue in the politics section, for sure.
 

BGinGA

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I'm bought my first house 5 years ago for $325k, it went up to $400k when it was finally built 2 years later, and now about 3 years later is worth $280k. Lame
Moral: Don't build houses in AUS. USA okay (same letters, different order).
 

MrCatPants

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The last time I tried to time (not that I've done it on the scale any other time), I was looking at the 2016 polls the morning of the election, and saw in the battleground states that there was more undecided voters than in past day before polls by a good margin than in any past election, and saw the wide majority of those late deciders going for Trump. Sold everything, shorted the major indexes, and at like 1 am declared myself a genius when everything was down close to 10%. Then the premarket happened and I ended up losing 1.5% and got everything back in.
 

Perthmike

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Moral: Don't build houses in AUS. USA okay (same letters, different order).
Its worked out ok because I'm buying my parents rental now that prices have stopped, which is much bigger, but I just have to hold onto mine until the prices rise again.
 

gopherblue

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Long term believer in long term investing in the stock market. Don’t get cute and don’t try to time the market. Yes, there will be a recession. And another. But you’re not concerned because you are a long term investor.

Pay yourself first out of every paycheck—put aside as much as you can spare and do it every time, forever. Skip the lattes. Invest via discount online brokers like E*TRADE or Schwab and buy low fee index ETFs, preferably from Vanguard.

I’ve said this before here and it bears repeating:

If you want to buy stocks, do so only after you’ve got diversification through ETFs and again, don’t get cute. Buy solid boring stocks with solid boring dividends, and set up the dividends for automatic reinvestment. Like Coca-Cola? Me too. Think they’ll ever go out of business? Me either. Is it sexy? No. But your future self will laugh all the way to the bank.

If you want sexy stocks, buy a couple, but only after you’ve bought mostly ETFs and a solid portfolio of dividend paying stocks. Do not chase and don’t try to market time. You can’t beat the big boys at that game.

Gold, bitcoin and commodities? No. Unless you want a lesson in real risk and possibly lose your shirt.
 

Payback

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This thread is not about what you 're saying, but it's already inevitably highly political, so it should have been originally posted in the politics forum.
I have nothing more to say for the moment, but if people are interested, we could continue in the politics section, for sure.
Alright so I thought this was the supporting member thread, hence my response, and thought this was way out of context....Now that I know what thread I'm in it makes a lot more sense. My bad.
 

tabletalker7

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To try to get back on the starting topic here, I sold all my stocks but leaving it in cash is not intelligent at all. Find some municipal bonds (not issued by Detroit) and ride it out. Cash gives you zero return. Bonds don't offer much, but a little is better than none
 

jcooper911

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There are a few people who can and do accurately time the market. I can't do it, perhaps someone else here can. I believe in a widely diversified approach with little active investing beyond an annual rebalance between asset classes. There is little need to pay for professional management - a minimal fee general market based investment works well for me. Very few investment managers can out perform the market well enough to cover their costs.

What I can evaluate is my apatite for risk vs my need for security. Someone with decades of time horizon before money is needed can prudently ignore market fluctuations. On the other hand, people who can foresee the need for money in the next few years, say a just entering college student, should not be taking the risk no matter how good they feel about the market.

Retired people need to take on more risk than they might think. Someone sixty years old is a solid favorite to live past eighty unless they have specific medical knowledge. Moving the nest egg to a "safe, zero percent rate of return" asset is leaving a lot of money on the table. Money that most retirees would find a good use for.

DrStrange
This guy gets it.

at 30 I can just pile money into the market now and ride it out until 60, but even when I do retire, I wont be doing as others have said and cashing everything - i still want that 40/60 mix so i get some market exposure and my money can still grow.
 
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Darson

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This post confuses me. Why would he not buy up a ton of puts like the rest of the hedge fund managers in 2007? The point of a hedge fund is to aggressively push gains. His strategy was cash? Seems fishy to me. Okay, he's retired and it was his personal accounts. I would still shrug, whatever. Do you know his fund's AUM? My opinion is that holding large M1 shows uncertainty. Meaning you FEEL your current holdings might decrease in value or remain constant. It does NOT show confidence, bullish or bearish, or expertise.

Would you not expect Brexit to be currently priced into the market? It's not like it is going to be a big surprise, just saying.

Don't mind me, I'm just here plotting how to maximize gains when fearful, panicky people start to sell. Then I'll be looking long for the biggest discounts; just like last time.
So the first part of your question is impossible for me to answer as I don't understand it! :) That's more a question for him than me. He used to work for Balyasny but retired in 2016. But this is his personal money and he's no longer working.

As for cash, I would guess that as the UK bond yields are a fraction of a % and German bonds are negative, so cash would seem to make sense. UK savings accounts are giving better returns.

A soft Brexit is almost certainly priced into the market although it looks increasingly likely that a hard Brexit will happen. The FTSE 100 has dropped 8% since Boris Johnson took over so that's probably being priced in now. But my friend sold well before this.

Anyway, for me personally, I've decided to stand pat. I agree that for someone like me it's a fool's errand to try and time the market. I'm also happy that my property assets are spread over three countries so there is some diversification there. What I will say is that my house in Texas is far from an "investment". I don't expect any returns. I bought my first house west of Houston in 2007 for $305k and sold it for $325k in 2015 - after realtor fees and closing costs I'm barely break even. I don't expect any different with my current house. The only benefit is that instead of paying rent, I'm paying off debt so I guess the money is at least staying put.
 

timinater

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I bought my first house west of Houston in 2007 for $305k and sold it for $325k in 2015 - after realtor fees and closing costs I'm barely break even. I don't expect any different with my current house. The only benefit is that instead of paying rent, I'm paying off debt so I guess the money is at least staying put.
I wish more people understood this. Your primary residence is so rarely an investment in the $ return sense. Good on you for realizing it. You make money in real estate by owning someone else's house.

Edit: Can one of these danish banks finance my house? Negative interest rates! https://www.bloomberg.com/news/articles/2019-05-23/bankers-stunned-as-negative-rates-sweep-across-danish-mortgages
 

Marius L

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I wish more people understood this. Your primary residence is so rarely an investment in the $ return sense. Good on you for realizing it. You make money in real estate by owning someone else's house.

Edit: Can one of these danish banks finance my house? Negative interest rates! https://www.bloomberg.com/news/articles/2019-05-23/bankers-stunned-as-negative-rates-sweep-across-danish-mortgages
That's nice. In Norway we pay around 2-3% on a mortgage for something like 25 years. What's the common rate in the US?
 

Darson

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I wish more people understood this. Your primary residence is so rarely an investment in the $ return sense. Good on you for realizing it. You make money in real estate by owning someone else's house.
Real estate is also highly location variant. For example, my first property has appreciated 358% in the time I've owned it - the Dow has risen 292% over the same period - but the rental returns, after taxes and expenses, are practically zero. In the greater Houston area there is so much land they just keep building - no shortage of supply hence the prices stay broadly flat but rental returns are reasonable, especially at the lower end of the market.
 

timinater

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That's nice. In Norway we pay around 2-3% on a mortgage for something like 25 years. What's the common rate in the US?
About the same in Canada but not typical to lock that rate in for the entire 25 year mortgage term. 5 year terms on the rate are common.
 

MrCatPants

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Real estate is also highly location variant. For example, my first property has appreciated 358% in the time I've owned it - the Dow has risen 292% over the same period - but the rental returns, after taxes and expenses, are practically zero. In the greater Houston area there is so much land they just keep building - no shortage of supply hence the prices stay broadly flat but rental returns are reasonable, especially at the lower end of the market.
Definitely true. I'm in town and have have the other experience...my property tax protest next monday. :)
 

Alex Lundstrum

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Recently, the wife and I rolled old 401ks into an ira to do a first time home buyer withdrawal (merits and detractors of this could be discussed). As we were in a bit of a time crunch, we just rolled it to a money market ira, with plans to reinvest once the purchase was final. I'm typically in the boat of riding everything out in stride, but being that we seem to have got it out good before the present tanking, what should I be looking for to dive back in?
 

jcooper911

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Recently, the wife and I rolled old 401ks into an ira to do a first time home buyer withdrawal (merits and detractors of this could be discussed). As we were in a bit of a time crunch, we just rolled it to a money market ira, with plans to reinvest once the purchase was final. I'm typically in the boat of riding everything out in stride, but being that we seem to have got it out good before the present tanking, what should I be looking for to dive back in?
Present tanking? S&P is 15% up on the year... don't confuse volatility/noise for a nosedive.

Put your money back in the market at whatever asset mix you like, hold 10% cash if you want short term reserves (in addition to an emergency fund) and chill out. It really isn't hard - stop trying to time the market unless you need the money in the next 5-7 years.
 
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mike32

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Way over my head but this up and down lately is interesting. So today a recession "marker" has shown up in the bond market and it's currently a huge selloff. Yesterday delayed tariffs had everyone elated! It seems the prudent thing to do is buy an S and P 500 mutual fund at 3:50 every day the market is down then simply sell the next day for huge profits! J/K of course.
 

CantSpellPoker

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Way over my head but this up and down lately is interesting. So today a recession "marker" has shown up in the bond market and it's currently a huge selloff. Yesterday delayed tariffs had everyone elated! It seems the prudent thing to do is buy an S and P 500 mutual fund at 3:50 every day the market is down then simply sell the next day for huge profits! J/K of course.
I actually did this for a while before I knew anything about anything. I'm heavily indexed as it is, so every time the market had a big day in the red, I'd scoop up a couple hundred bucks worth of shares in whatever fund or ETF I had that was mirroring the S+P... then I'd dump basically an equivalent amount the next time the market had a big day, thinking I was averaging down each time I did it.

I know better now, and simply invest the same amount each month no matter what. No more attempting to be an ETF day trader lol.
 

DrStrange

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We are late in the business cycle < i.e. the current expansion has lasted longer than the average expansion > There has been a sizable tax increase < the tariffs > which is strongly correlated with short term weakening in the economy. <tax cuts stimulate the economy, tax increases depress the economy.> The mere existence of this thread is itself a sign of bad times coming. <you will not find a comparable thread at chip talk from 2009/2010 asking if it is time to buy the market.>

The end of a bull market is often characterized by high levels of volatility - - - noting that lots of other high volatility moments do not lead to market declines.

There are a lot of technical and fundamental reasons to fear a market correction. On the other hand, people ALWAYS made money "buying the dip" the last decade.

It is no surprise to me that the market is really choppy, but I can't say what that means about the future -=- DrStrange

PS but do count me as highly skeptical of a theory suggesting a market manipulation conspiracy targeting an event to take place fifteen months in the future.
 

Darson

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@DrStrange you mentioned re-balancing earlier - currently I have about 10% of my 401k in a bond fund - this % is now increasing slowly with the equities markets slowing. At what point do you re-balance to buy the dip? I've read many articles about re-balancing with some suggesting that over the long term it makes no difference and others recommending up to an annual re-balance but no more frequent. I would be very interested to hear your thoughts.
 

DrStrange

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I rebalance once a year at best, it can be several years between rebalancings. Often I did that by changing the mix of my new contributions rather than selling from an over weight asset and buying an under weight asset. Now I am much older, so my existing balances are much higher than incoming contributions ( if any ) so I have to sell one asset to pay for the purchase of another.

The mere fact you are participating in this discussion is a sign that it might be a good time to rebalance. Your <USA> equity accounts have likely grown far larger/faster than your other investments. Keep in mind that in most cases your first $70,000 in long term gains + qualified dividends is tax free for that year, so rebalancing might not incur a tax liability - it might turn out to be high tax efficient.

Just as a reference, my current mix is 25% bonds / preferred, 25% income producing assets < reported on schedules C or E >, 50% equities < 80% USA markets, 20% international markets > We are both 61 years old and have a "live longest" target of 95 years. Note that some of my most volatile holdings are income properties - they don't perform anything like the "milk toast" bond + preferred part of my portfolio.

DrStrange
 

One Eyed Dollar

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I love the target retirement year funds with Vanguard. That's where I put almost everything, and I don't have to think about it. At my last job the retirement fund advisers would come visit once a year and share their tips for the upcoming year, and they'd go around and talk to us individually about our allocation. My conversation was brief. "You still have the low-fee Vanguard target retirement funds?" "Yes." "OK, keep putting my money in that, thanks." "But we think this year that foreign stocks in these markets--" "I don't care, go away."
 

Darson

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If there is one thing this thread has done, it's forced me to actually calculate the current value of my assets. My exposure is currently 45% USA, 45% Europe and 10% Asia. Of that 70% is property, 27% equities and 3% bonds. I can't touch the non-USA assets without large tax exposures so they have to stay as is. My US assets are 50% property, 44% equities and 6% bonds. These %s will remain broadly constant as I pay off the house and contribute to my 401k/HSA. I'm looking at earliest 12 years before retirement at which time both kids will be done with college and the house will be paid off.

Overall, I think I'm doing the right things and not taking too much risk while still having my money work for me. The more I think about it, the less I see need for change.
 
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