Stock market predictions

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Submitted by kev374 on October 24, 2017 - 1:49pm

We are at amost 24,000 DOW and 2600 SP500, the growth has been staggering. I know this is hard to predict but to me it's seems like we are at the very tail end of this bull market. How much higher can it go? Economic fundamentals are strong right now but when do you think the next recession will begin? Will the upcoming rate hike in Dec cause the market to throw a fit like it did the last time?

Additionally, has anyone pulled out of the market and just kept in savings in anticipation of a crash?

Personally, made some bad bets on the market, I stepped out before Trump was elected thinking he will totally tank the market, except the exact opposite has happened, I can't find any logical explanation of it but that is what is happening. Markets are irrational I guess. I know that there is no way in hell Trump is going to pass anything, he just has too much friction with too many people in Washington including his own party. Looks like the market feels differently. If healthcare and tax cuts do not come to fruition the system could be in for a shock.

Submitted by CA renter on October 24, 2017 - 4:03pm.

IMHO, the stock market has been rising under Trump because capital is getting exactly what they wanted with Trump -- lower taxes for capital and higher taxes for labor, in general.

Outside of the free-trade vs. fair-trade skirmish (globalization and the free movement of goods, services, capital, and labor), Trump is a capitalist's dream president.

Submitted by kev374 on October 24, 2017 - 4:55pm.

CA renter wrote:
IMHO, the stock market has been rising under Trump because capital is getting exactly what they wanted with Trump -- lower taxes for capital and higher taxes for labor, in general.

except they have not got it yet, it's an anticipation.. and my guess is that the way Trump is feuding with virtually everyone around him it's a tall order he will accomplish anything besides stroking his own ego.

How will the market react when they realize that Trump is an Emperor with no clothes.

Submitted by The-Shoveler on October 24, 2017 - 6:15pm.

Everyone is looking in the wrong direction IMO.

The Prez really cannot do much (other than start a war, now that can really mess things up).

Demographics rule IMO
The millennials (the largest population bulge EVER) are just starting their peak earning and spending cycle.

That could keep things going a lot higher and longer than
almost anyone is thinking is possible IMO.

Submitted by spdrun on October 24, 2017 - 6:26pm.

Countries with population bulges still enter recession... It wasn't exactly smooth sailing through the boomers entering their 30s and 40s either.

Also, none of this justifies the kind of rise in the markets that we've seen in the last year.

The rally is also becoming increasingly narrow-based. DOW is climbing and setting records, other indices much less or not at all.

Submitted by svelte on October 24, 2017 - 8:26pm.

kev374 wrote:

Additionally, has anyone pulled out of the market and just kept in savings in anticipation of a crash?
.

My son suggested I pull out last summer when we were having dinner in SF. I said hell no pedal to the metal. I was right, but now I'm getting very frightened.

One weekend in Sept I was lined up to go all cash when markets opened Tue (so mustve been holiday weekend), missed the opening bell and market started tanking so I changed my mind and stayed in figuring it was just a blip and I'd be selling at the bottom of the blip. Right again.

Now I'm worried that the market has already factored in a tax cut so (a) if the cut comes there is not much upside left, and (b) if the cut doesn't go through folks will pull out and it'll drop. Using that logic, and the chance something unpredicted and narly will happen, I'm again mulling pulling out.

That's a hard hard thing to do when things are going up and up and up. Very hard. We shall see what I end up doing...

Submitted by poorgradstudent on October 27, 2017 - 4:38pm.

svelte wrote:

Now I'm worried that the market has already factored in a tax cut so (a) if the cut comes there is not much upside left, and (b) if the cut doesn't go through folks will pull out and it'll drop. Using that logic, and the chance something unpredicted and narly will happen, I'm again mulling pulling out.

This is close to where I'm at. I feel like there's a very good chance the market doesn't get the tax cuts it wants. The best case is their dreams come true and stocks stay high. The worst case is it all falls apart and the market throws a big tantrum.

Submitted by moneymaker on October 28, 2017 - 7:55pm.

Other than a little speculation on T, I'm out. My plan is increasing 401 k contributions to cut my own taxes.

Submitted by Escoguy on October 29, 2017 - 9:31pm.

About a month ago, I allocated 11% to cash.

Not reinvesting dividends for now.

Fresh money is going to projects like painting houses, bought a new car and paid it off in a few months.

I do add $500/month to one fund.

Shifted a few accounts like 529's to a higher intermediate term bond/short term allocation.

I'm not frightened but I know it's not a straight line up. When a portfolio is up 15-20K/month every month for over a year, it's just prudent to be a little cautious, but I'm still about 65-70% equities.

Side effect, the higher stocks rise, the less likely I am to sell real estate as it seems to be the better relative value.

2/3 of assets in real estate now. I did think that we are coming up on the 10 year anniversary of the financial crisis starting. Still not seeing the signs that things will turn dramatically soon. Perhaps if the tax cut takes effect then Trump might learn what Clinton did about the the bond market.

Still really hard to see the bond market vigilantes taking over soon. But for anyone not familiar with the concept, not bad real about.

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