conceding defeat

User Forum Topic
Submitted by kev374 on February 2, 2017 - 10:57am

So, since 2009 i've always been pessimistic about the markets - both the housing market and the stock market. Primarily this was due to what I considered immense fiscal irresponsibility of our government, reckless deficit spending, unfunded liabilities, malinvestment and rampant speculation in real estate etc.

However, looking at the staggering market runup of this bull market (holy crap batman 26% return in 2016 for the DJIA) I am finally thinking that I am wrong about all of this.

I think housing and stocks will continue to do well. I am finally entering the market, albeit at a much higher level. I've stayed out since 2009 due to fears of an imminent crash but even I have to admit that this run up in both housing and stocks is just stunning and a crash does not looks like it's in the cards as the rest of the world is in shambles and the US looks like it's the most rock solid.

Submitted by livinincali on March 3, 2017 - 12:04pm.

The-Shoveler wrote:
Yep, kind of looks like the 2000 blow off a little,

But I think the main difference is the record amount of money sitting on the side lines.

Maybe the market is pricing in all that infrastructure spending.

Not saying it is going to happen but what if after 4 years the DOW is at 35K etc...?

Why do people keep bringing on this money on the sidelines fallacy. If there's 2 trillion dollars out in the economy somebody has to hold them at any given time on the sidelines. If that number goes up to 3 trillion then there's 3 trillion on the sidelines. There's record money on the sidelines because there's record money in the economy. This isn't a reason for the stock market to keep going up.

Submitted by The-Shoveler on March 3, 2017 - 12:57pm.

Maybe., but besides something horrible (like WAR etc..)
I do think it mitigates the downside.

Anyway IMO.

Submitted by FlyerInHi on March 4, 2017 - 12:18am.

The stock market represents the connected, international creative classes of the world's top metro areas. An economic system that transcends borders and interlinked by the global supply chain. So expected lower US taxes is good. Trade wars or a disruption in the supply chain or movement of money would be bad.

So far the business community is expecting lower taxes. They don't think Trump will start trade wars.

Submitted by Coronita on March 4, 2017 - 10:04am.

spdrun wrote:
Higher it goes, the harder the crash. Wonder if lots of small-time Trumpet investors are buying now -- if they lose their retirement savings, the 2018/20 elections will be blue as the sky.

Trumpists looking for those manufacturing jobs in those rust belt states probably aren't really affected by the stock market. When you are desperately looking for a job because.your factory has closed for years, I doubt the first thing that comes to mind is how well or not well the stock market is doing...

This is the entire irony of the situation we are in. What is happening benefits the net wealthier...Even all the folks who don't really like Trump.

Submitted by spdrun on March 4, 2017 - 12:04pm.

Negative to profiting off police overreach.

I'd sooner buy the home of an ICE agent who got into some deep trouble :) And happily buy a home of a Trump supporter affected by high interest rates and rent it to immigrants.

I dislike authority too much to want to profit from their abuses. And I prefer most immigrants to locally-born Americans, less of an entitled, provincial attitude.

As far as the Trumpets whom I've met, a lot of them aren't unemployed. They're employed and whine about having to pay taxes to support those pesky blacks and immigrants (they think that "those people" get everything for free), and are deathly afraid of losing their children in a terrorist attack. In their eyes, the people who protest police brutality are rioters and children who should respect authority more.

Submitted by FlyerInHi on March 4, 2017 - 6:45pm.

An H1B from Bangalore working in California is more likely to own US stocks than a Trump supporter in Ohio.

When the Indian guy goes home, he will continue to trade US stocks and belong to the global creative class.

Spdrun, i agree that Trumpists are entitled whiners. i used to feel compassion for them and understand their grievances, but not anymore after they voted for Trump. Trump can take care of them.

Submitted by flyer on March 5, 2017 - 7:12pm.

I understand why people are focused on the Trump whiners, but most of the whiners we've encountered over the past several years actually seem to be from both sides of the aisle.

It seems this group of whiners either can't afford to stay in CA when they retire (and these are/were educated people of all ages making big bucks) and/or their kids can't get the jobs they want or buy a house in CA. Different problems, different issues, same whining.

Submitted by harvey on March 5, 2017 - 9:52pm.

I agree.

The only thing worse than an whiner is a braggart.

Submitted by flyer on March 6, 2017 - 8:06am.

Actually, I can think of far worse things than either of the above, but the only intention of my previous post was to mention that, from the people I've talked to on both sides of the aisle, it's clear there are a lot more whiners out there other than just "Trumpists." Looking forward, perhaps, one day, we will find that whining is actually a nonpartisan activity, and that does at least give us some hope.

Submitted by FlyerInHi on March 6, 2017 - 9:44am.

Whining generally is non partisan. I don't mind whiners who are consistent whiners. It's ok gripe about inequalities or unfairness.

But whiners who contradict themselves all the time are losers. For example, some people bitch about not being able to afford to live in California. They bitch that immigrants are lazy and ruining the state. Well, immigrants can afford to live in California... they manage which makes them hard workers; more resilient and hardworking than the whiners.

The whiners who look for that other to demonize should called upon and made to feel like losers.

Submitted by harvey on March 6, 2017 - 11:47am.

Anybody that is less successful than me is a whiner.

Submitted by flyer on March 6, 2017 - 11:36pm.

FlyerInHi wrote:
Whining generally is non partisan. I don't mind whiners who are consistent whiners. It's ok gripe about inequalities or unfairness.

But whiners who contradict themselves all the time are losers. For example, some people bitch about not being able to afford to live in California. They bitch that immigrants are lazy and ruining the state. Well, immigrants can afford to live in California... they manage which makes them hard workers; more resilient and hardworking than the whiners.

The whiners who look for that other to demonize should called upon and made to feel like losers.

I've seen many boom and bust cycles in CA, and whiners seem to vary depending on which industries are booming and which are declining at any given time in the state.

Of course those whose industries are booming at the moment are not whining right now (I'm sure those whose industries were booming in the past weren't whining then either)--but, nothing lasts forever, so if/when certain industries go bust--as we have seen happen many times before--I think you'll see a whole new set of whiners emerge when their services are no longer needed--just as we have with those who came before them. In an at-will employment state like CA, there are no guarantees.

Submitted by FlyerInHi on March 7, 2017 - 11:03am.

Flyer, you make a good point about the boom and bust cycles.

Good financial and life management is investing the resources from the peaks to smooth out the valleys.

It's really not forgivable for people of means and privilege to whine when other people make do fine.

The Trump supporters had it good during the industrial era. They didn't "save" and build their human capital by investing in themselves and the education of their children for the Information Age. So they weren't able to seamlessly join the creative class.

People bitch about the decline of the White middle class. But they always had the voting power and therefore the resources of the state (as evidenced by Trump's election). So why are they in the rustbelt and not in Silicon Valley or New York?

They bitch about immigrants, skilled and low-skilled. But they won't get off their asses to acquire the top skills.

I would posit that they are in their predicament because they arent that bright and they voted for the wrong policies, policies that worked against their own interests. So they bear responsibility for their shit.

I'm being more than a little facetious and I know it's a lot more complex than that. But people who espouse simplistic ideas of personal responsibility and bootstrapping with a good dose of nationalism should really apply those virtues to themselves.

Submitted by flyer on March 7, 2017 - 8:51pm.

Understand your thoughts, but whether people are educated or uneducated, dwell in the rustbelt or Silicon Valley, in the final analysis, imo, the survival of individuals and families boils down to net worth--regardless of political affiliation.

To that point, when you see stats that indicate only 9 percent of ALL US households have a net worth greater than $1M, and that the median net worth for ALL families in the US went from $102,500 in 1998 to $81,200 in 2014--and I won't even get into the retirement savings stats--it's crystal clear than far more than one particular demographic have some major life and financial challenges ahead.

Submitted by harvey on March 8, 2017 - 7:55am.

flyer wrote:
--it's crystal clear than far more than one particular demographic have some major life and financial challenges ahead.

They won't even be able to afford a golf club membership!

Submitted by flyer on March 8, 2017 - 5:56pm.

If only it were that simple that would be great, but these indicators point to bigger problems like a retirement crisis across all generations, and other more serious concerns.

Submitted by no_such_reality on March 9, 2017 - 8:00am.

flyer wrote:
Understand your thoughts, but whether people are educated or uneducated, dwell in the rustbelt or Silicon Valley, in the final analysis, imo, the survival of individuals and families boils down to net worth--regardless of political affiliation.

To that point, when you see stats that indicate only 9 percent of ALL US households have a net worth greater than $1M, and that the median net worth for ALL families in the US went from $102,500 in 1998 to $81,200 in 2014--and I won't even get into the retirement savings stats--it's crystal clear than far more than one particular demographic have some major life and financial challenges ahead.

It gets even worse, Millenials are better educated, carry far more debt (in the form of student loans), work more hours and make 20% less than their baby boomer counterparts at the same point in their lives.

The last hundred years have been an anomaly of subdued might makes right. The robber barrons of the gilded age wielded their dollars like clubs, in the case of the Carnegie, Frick & Pinkerton, likely actual clubs and guns in the Homestead strike breaking.

Submitted by harvey on March 9, 2017 - 9:09am.

flyer wrote:
To that point, when you see stats that indicate only 9 percent of ALL US households have a net worth greater than $1M, and that the median net worth for ALL families in the US went from $102,500 in 1998 to $81,200 in 2014--and I won't even get into the retirement savings stats--it's crystal clear than far more than one particular demographic have some major life and financial challenges ahead.

About one in ten households are millionaires. And that's a problem?

Net worth stats over the long term don't tell us much. Sure, middle class net worth has plateaued as measured in dollars, but that's to be expected in a developed country. Arguments that we are "poorer" than we were 20 or 50 years ago are ridiculous. Our homes are bigger, our cars are better, we enjoy so many things that didn't even exist back then, and nobody - except the elderly - is any more wanting for basic necessities.

Which brings us to core problem on this subject: the demographics of aging. Life expectancy now far exceeds our productive working years. One solution for individuals is to amass wealth throughout one's early life and retire with a big pile of money. But that's never going to happen for everyone, or even a majority of the population. There are too many forces working against universal individual financial independence.

We can, and eventually will, have government-provided basic income for the elderly. It's already happening; it started in the 1930s with social security, in the 1960s with medicare, and the trend is continuing despite the vocal political protests of a minority. It's the only pragmatic and humane solution. There will be minor "first-world" hardships for some during the transition, but ultimately old people are going to vote themselves more and more wealth distribution.

So don't fret about the retirement saving stats and enjoy the big pile of money that you claim to have. Everyone is going to be fine.

Submitted by flyer on March 10, 2017 - 6:22am.

Agree many of us don't have to worry about a retirement crisis, and, hope that will be true for everyone, but the stats cited by experts concerning this issue are thought provoking. Guess only time will tell how it all plays out.

Submitted by kev374 on March 13, 2017 - 10:30am.

I think I still did not get an answer to the question - if you had $300,000 sitting in the bank in CASH, what you would do with it now???

How would you diversify? What type of funds would you buy?

I want to get neutral advice from regular people without vested interests because I DO NOT TRUST financial advisers, I think they are scam artists.

Submitted by plm on March 13, 2017 - 4:34pm.

Well, what I did was put a lot of money in the stock market last year which is working out very well. Putting some money in this year as well but not as much.

I've been following a different stock strategy (buy stocks that are trending up than what I did in the past which is working out well. Tried diversifying by buying stocks in sectors other than semis and internet but those stocks aren't doing as well. I'm not going to worry about diversifying going forward.

But really I'd suggest you make your own decisions. I'm not experienced in the stock market at all, making mistakes all the time. As long as the market keeps going up, more than likely the stock you pick will go up as well. So its kind of hard not to make money.

Submitted by millennial on March 13, 2017 - 5:36pm.

kev374 wrote:
I think I still did not get an answer to the question - if you had $300,000 sitting in the bank in CASH, what you would do with it now???

How would you diversify? What type of funds would you buy?

I want to get neutral advice from regular people without vested interests because I DO NOT TRUST financial advisers, I think they are scam artists.

If you are putting it all in the market it would probably depend a lot on your personal financial situation (age/personal liquidity etc.) and what you are planning on using it for (extra income/retirement/day to day living expenses/gamble).

I'm not a professional, but my strategy is to put it into low fee index funds that are based on the S&P 500. Personally I would put in about 5% or so a week (dollar cost avg) until I reach the amount that I feel comfortable with. Again depending on your age, you will want to diversify you funds with more/less in bonds, international, small cap/large cap etc.. For investment firms, I personally like Vanguard funds. They have a lot of no load options.

Submitted by Coronita on March 13, 2017 - 6:36pm.

Investing is not a one night stand... As I mentioned before, if you don't trust your timing, then slowly buy no frills index funds every month 2-3k/month. In fact if you have been doing this for the past decade, you would have done ok.

Never too late to start, and less risk than deciding to move one huge chunk into the market all at once...

It's no different than an regular 401k plan or any other time based plan....

small cap, mid cap, large cap, and international index.

My 2 cents.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.