Investing

[gehringer_2]

35 minutes ago, Edman85 said:

I don't necessarily endorse anything else on that site... I just like the market timing exercise. It generally doesn't pay off.

If you are 40 you can probably always hold and wait out wait the downturns, and in recent decades the downturns have been sharp but short, so holding on through those wasn't terrible either, but if we were to get into a period of sustained upward creep in inflation, an older investor might not out live the kind of long downturn we had in the late 60's-70's when for years inflation creep just keep hammering down stocks. So there is never a one-size fits all answer.

If there is one piece of wisdom, it's that the herd tends to be driven by the (relatively) young who haven't lived through any history and there is always a (too) wide belief in the broad market that everything always was and always will be the way it has been for less than the last ten years. 🤔

Edited Friday at 11:30 PM by gehringer_2

[Edman85]

59 minutes ago, gehringer_2 said:

If you are 40 you can probably always hold and wait out wait the downturns, and in recent decades the downturns have been sharp but short, so holding on through those wasn't terrible either, but if we were to get into a period of sustained upward creep in inflation, an older investor might not out live the kind of long downturn we had in the late 60's-70's when for years inflation creep just keep hammering down stocks. So there is never a one-size fits all answer.

If there is one piece of wisdom, it's that the herd tends to be driven by the (relatively) young who haven't lived through any history and there is always a (too) wide belief in the broad market that everything always was and always will be the way it has been for less than the last ten years. 🤔

Invest in bonds and money market anyways, independent of the downturns. I've already started to reposition in that direction, being 17ish years from retirement (But not nearly as heavy as many recommend). Trying to time the market though is a different deal and normally self defeating.

[Screwball]

This is one of the great conversations on the markets. How do you play them, how do you invest? It's the biggest casino in the world, and even more punitive. Let's look at some chart porn just for fun. This is as far back as my software can go. A chart of the S&P going back to around 1930. It is obvious, that over all those years (almost 100) the candles go from the bottom left to the top right. That's a good thing. 

That also makes a case that you put your money in and it goes up and up and up. Sure looks like it. How old are you? When are you planning on retiring, with enough money to live the life you want to live, and how much does that need to be? Sure, I have a 401k, I'll be fine. That's what my Edward Jones guy tells me, or my personal banker.

Below is the chart porn from 1930. The yellow circle is from around 1990 to 2013ish.

As you can see the run-up from the 30s until the Dot-com bubble blew up it was as good as it gets. The greatest bull market in history. If you became working age around 1940 and invested you made a killing. The next chart gets us a little closer to today.

 

The great bull market ended on March 1, 2000 and peaked at $1552.87. By the week of October 10, 2002, it was at 768.63. We then went another 5 years to the week of October 10, 2007 when it took another ****. Isn't that wild? So from October it went from 1550 to 666. You can do the math. Same with the first one.

Now look at it. Up and to the right. How long you think that is going to go on? Timing matters. There isn't much anyone can do about it, you are stuck with what is available, and most importantly, how old you are. Some are lucky, and some aren't. I know people from both crashes that had to work more years because they lost their ass in their 401ks.

Edited yesterday at 01:45 AM by Screwball

[gehringer_2]

4 minutes ago, Screwball said:

This is one of the great conversations on the markets. How do you play them, how do you invest? It's the biggest casino in the world, and even more punitive. Let's look at some chart porn just for fun. This is as far back as my software can go. A chart of the S&P going back to around 1930. It is obvious, that over all those years (almost 100) the candles go from the bottom left to the top right. That's a good thing. 

That also makes a case that you put your money in and it goes up and up and up. Sure looks like it. How old are you? When are you planning on retiring, with enough money to live the life you want to live, and how much does that need to be? Sure, I have a 401k, I'll be fine. That's what my Edward Jones guy tells me, or my personal banker.

Below is the chart porn from 1930. The yellow circle is from around 1990 to 2013ish.

As you can see the run-up from the 30s until the Dot-com bubble blew up it was as good as it gets. The greatest bull market in history. If you became working age after 1940 and invested you made a killing. The next chart gets us a little closer to today.

 

The great bull market ended on March 1, 2000 and peaked at $1552.87. By the week of October 10, 2002, it was at 768.63. We then went another 5 years to the week of October 10, 2007 when it took another ****. Isn't that wild? So from October it went from 1550 to 666. You can do the math. Same with the first one.

Now look at it. Up and to the right. How long you think that is going to go on? Timing matters. There isn't much anyone can do about it, you are stuck with what is available, and most importantly, how old you are. Some are lucky, and some aren't. I know people from both crashes that had to work more years because they lost their ass in their 401ks.

it's sort of funny how much 65-75 looks like 2000-2009 -- same bactrian camel over almost the same time span.

[Screwball]

When the banksters blew up the world in 2008/2009 the market went from 1550 to 666. A loss of 57% in five months. You need 133% to get it back. How long is that going to take? 

[Screwball]

31 minutes ago, gehringer_2 said:

it's sort of funny how much 65-75 looks like 2000-2009 -- same bactrian camel over almost the same time span.

That's why this looks nuts. Since the March 2009 low to where we are today, the market (S&P) has went up 939%. Annual return (CAGR) is over 15%. They put Bernie Madoff in jail for promising 13.

[Edman85]

14 hours ago, Screwball said:

When the banksters blew up the world in 2008/2009 the market went from 1550 to 666. A loss of 57% in five months. You need 133% to get it back. How long is that going to take? 

In my case, at 40, somebody fully invested in the market at that age would be fully recovered by now in their late 50's, especially after being able to buy low with new investments on the way back up.

Regardless, if that is a risk you are afraid of, just be in bonds/money market/etc. My point is timing when to jump off is foolhardy.

[Screwball]

7 hours ago, Edman85 said:

In my case, at 40, somebody fully invested in the market at that age would be fully recovered by now in their late 50's, especially after being able to buy low with new investments on the way back up.

Regardless, if that is a risk you are afraid of, just be in bonds/money market/etc. My point is timing when to jump off is foolhardy.

This is where we disagree. Timing is everything. The math is indisputable. Wall Street banks make billions of dollars because of timing the markets every quarter proven by their earnings release.

That said, that doesn't necessarily apply to us. Most of us don't have the ability to manage the money we contribute to our retirement account, whatever flavor they may be, and take advantage of the market if what they they call "fiduciary duty"  was what it should be. 

The guy you are sitting across the table at your local Edward Jones spent $75 to pass a test and now gives you lifetime investment advice. How ****ed up is that?

Nothing in the world is more corrupt that Wall Street and the money behind them. 

It's a dog eat dog world and we are wearing dogbone underwear.

 

[Screwball]

Example; the last big ticker I worked for had Vanguard. I liked them, Jack Bogle, and their thesis on investing.

The problem was, I could only change it every 3 months. I was probably one of few who cared about that. If you didn't change your positions each quarter, they would put it all in their stock. Don't want that.

Some of the guys there were buying the snot out of our stock because it was going up like a rocket. While they where doing this, and you did your homework, the top 10 executives who must report buy/sell had been selling the **** out of it. Ding, ding, ding.

In March when they reported earning the stock shot up over $200 bucks. A month later it hit $211. Everybody was happy as a bunch of pigs in the mud. Until they weren't. Mid July, it was $142.

Edited 10 hours ago by Screwball