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Anyone panicking? 

easychange
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11/28/2021
easychange
Posts: 1
njhowie wrote:
The stock market is now going separate the men from the boys (sorry, don't mean to be sexist, but that's the phrase).

I've contended for a long time that too many folks are in the market who shouldn't be, allocating too much of their net worth to the market. The masses do not appreciate the risks of "investing" and that you can lose money, potentially all of it. That realization is only just beginning.

...

The US markets could fall another 15% to 20% from where they sit today - possibly even another 50%...it's anyone's guess. What is assured, is that the path higher going forward will be long and difficult. The peak seen just a few weeks ago may not be seen for another 5 or 10 years.
...
As I feel some camaraderie with folks on this site, I hope that you are all well diversified in things not directly tied to the stock market and come out the other side of this better than where we are now.


Njhowie, and everyone. Hope you are all doing well! I totally see where you are coming from when you wrote this. I've snipped some pieces which I don't think are relevant to my points. In short the past two years has been a wild ride

1. Who would have guessed that Crypto was going to become such a force prior to the pandemic? Now they buy naming rights to ballfields?
2. Who would have guessed we'd see several FED officials resign over trading scandals?
3. Who would have thought we'd continue to see so many highs in the market? Even with an 800 point drop, it's nothing in terms of 20% like you mention. That statement alone is something that makes me take notice.

Question:
Would you be unhappy if we saw a 20% drop more-or-less across asset classes? I think that would be welcome from my perspective because it would create some room for growth upward and buying opportunities for folks like me who have cash on the sidelines.


I wonder what you and others are doing in light of preparing for increasing volatility/uncertainty:

What I'm Doing:
In short, I am dipping my toe into crypto. I'm also looking at Real Estate and other kinds of assets which are accessible now even without having the "accredited investor" label. You just have to look and keep learning.

Last question -- Is inflation impacting anything you're doing? I've personally bought some IBONDs with yields over 5% right now -- so I feel like that is a decent buy for my money that would otherwise sit in the bank.
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njhowie
Posts: 77

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4/15/2021
njhowie
Posts: 77
cdrfirestraight wrote:
the opposite of prescient: njhowie



In the near-term anything can happen. In the longer term, you cannot kick the can down the road indefinitely. The government cannot simply print money indefinitely making everyone millionaires while keeping interest rates low forever. Or, actually it can, but then the cost of a moderate home will be a million dollars or more, and who will be buying? A spike in inflation has only just begun. Government and personal debt is at all-time highs and going higher. Folks thought that $20T in federal debt was a lot, yet by the end of the new administration we'll be at $30T or higher! Folks who claim the economy is roaring back are pretty funny, in that it's with the free money that the government has showered upon everyone. What meaning does an increase in GDP mean when it's entirely the same money which the government has injected in to the economy? Seriously, if the government gives you $100 for absolutely nothing in return, and you spend it, is it of any importance to the economy that your spending went up by $100? That GDP went up as a result of you using the free money to purchase goods and services? What happens when all the free money stops and GDP drops by a similar amount?

We have a drive for a $15 minimum wage. How does that help things? It will simply drive inflation even higher, again hitting the hardest for those at the bottom of the economy. How does putting a $15/hour minimum wage in place effect others who currently earn, say, $15 to $20/hour in a job which you have to do real work? Will they continue to stay in their current position working hard if they see they can be earning $15/hour for sitting around doing a mindless job? Is this how a free-market Capitalist economy operates?

Then we have the housing and rental markets, where an artificial lack of inventory props up and inflates the market. We continue to have eviction and foreclosure moratoriums in place driving reduced inventory and inflating prices of both the housing and rental markets. What happens when those moratoriums end? How many folks are forced out of their homes and are still on the hook for back rent and mortgage payments? Who eats it when those back payments never come? Maybe, like the free money which will continue to be showered on the masses, the moratoriums will simply stay in place indefinitely and landlords and lenders will be required to continue providing free housing to millions of folks with no recourse?

We have a stock market at all-time highs being driven off a tale that things are really not bad at all, and we're (still) about to turn the corner. A stock market being driven by a central bank manipulating interest rates keeping them artificially low, while folks who didn't need their stimulus checks throw them in to the stock market (or bitcoin) making huge speculative wagers. SPACS and blank check companies racing in to the stock market at a pace never seen before to raise huge amounts of capital from those same folks speculating, throwing money at them even though there is no business which they are investing in. Companies "backdooring" themselves in to being public companies through the SPACs to avoid the vetting and regulatory requirements which takes place in the traditional IPO process. This is what happens when there is too much cheap money floating around in the system. There is no sense of or acknowledgement of risk. It's always ended badly, and will this time as well.

Hey, if you believe this is all just normal, nothing to be concerned with, and everything will work out just fine, more power to you.

The day of reckoning will come. Will it come next month or next year? Who knows? But it will come, and there will be pain when it does.
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cdrfirestraight
Posts: 2

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2/6/2021
cdrfirestraight
Posts: 2
the opposite of prescient: njhowie wrote:
The stock market is now going separate the men from the boys (sorry, don't mean to be sexist, but that's the phrase).

I've contended for a long time that too many folks are in the market who shouldn't be, allocating too much of their net worth to the market. The masses do not appreciate the risks of "investing" and that you can lose money, potentially all of it. That realization is only just beginning.

Unfortunately for many, this time it's going to be worse, as the government and the Fed have put us in a position which we have never been in, and we have a couple of Black Swans come along simultaneously to kick this downward spiral in motion. The US markets could fall another 15% to 20% from where they sit today - possibly even another 50%...it's anyone's guess. What is assured, is that the path higher going forward will be long and difficult. The peak seen just a few weeks ago may not be seen for another 5 or 10 years.

No matter what the president says, no matter where he looks to place blame (anywhere besides himself, of course), no matter what kind of stimulus he tries to throw at this economy - it's not going to work. He's lied for too long, shown that he is incapable of running a country, and he's about to wipe out a whole lot of retirement plans of folks in or approaching retirement.

As I feel some camaraderie with folks on this site, I hope that you are all well diversified in things not directly tied to the stock market and come out the other side of this better than where we are now.
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cdrfirestraight
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2/6/2021
cdrfirestraight
Posts: 2
Disagree and people such as yourself have voted in higher taxes, race wars, religious and freedom of speech suppression, abortion, and energy dependence and misguided climate change policies. I am saddened that the Administration did not get the accolades for all the great work that was done, I am saddened by the rewriting of history, and Voter misconduct and incompetence.

ote=azphx1972]I'm more saddened about the loss of lives than the economic impact. It's unfortunate that we have incompetent leadership that failed to act swiftly to contain this pandemic, leading to unnecessary strain on our healthcare system and needless deaths. Hopefully voters remember this when they go to the polls during the next election.

Stay well everyone!
edited by azphx1972 on 4/1/2020
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IntoTheFire
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2/2/2021
IntoTheFire
Posts: 5
Yes, I agree with JC's comment. Buy and hold. If you don't cash out, you never realize those losses! Of course, not everyone is young enough that they can wait long enough to hold (I think the recommended is ten years?)
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JC
Posts: 48

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11/13/2020
JC
Posts: 48
Well, it’s been a few months since this thread started.
Our retirement funds are again above their previous highs before this latest crash.
Once again, if you don’t do anything, if you don’t panic, you’ll be just fine in the long run.
Let’s see what happens after the new administration takes over.
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getagrip
Posts: 29

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5/4/2020
getagrip
Posts: 29
Back in January I was running some numbers and despite reading about projections for 2020 to be a good year of earnings I decided to capture a solid chunk of my gains, mainly because I wanted to pull money out of the market that I plan on using in five or so years. This amount would let me not worry what the market was doing when I stop the nine to five in the near future, kind of my personal bucket strategy. Besides, I've always said you shouldn't have money in the market you plan on using in five years. So I followed my own advice and pulled that trigger in early February. Saw the market go up for a week or two and sighed, figuring I'd missed out on some gains, oh well still had a good chunk gaining I thought. But now this market dive, and I look like I timed it versus just working my plan. I just feel really lucky.

My biggest problem now is wanting to take that money and go back in and buy on sale. Dang is it tempting to do that. But I'm good with what I've done and don't plan on touching it as it's my insurance. I'm also very fortunate that I'm in a job where I can telework and I've got a paycheck still coming. Not everyone is so lucky, like my spouse and one of my children.
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njhowie
Posts: 77

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4/4/2020
njhowie
Posts: 77
Of course - I'm sure most everyone feels the same.

However, my post was before things with the virus really took off in the US, and was not even considering that - it was solely looking at the stock market, which I had commented on in the past a few times.
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azphx1972
Posts: 44

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4/1/2020
azphx1972
Posts: 44
I'm more saddened about the loss of lives than the economic impact. It's unfortunate that we have incompetent leadership that failed to act swiftly to contain this pandemic, leading to unnecessary strain on our healthcare system and needless deaths. Hopefully voters remember this when they go to the polls during the next election.

Stay well everyone!
edited by azphx1972 on 4/1/2020
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girlnextdoor
Posts: 31

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3/16/2020
girlnextdoor
Posts: 31
Last year we bought a house, and went back and forth about whether to take out a mortgage. But we knew these high returns wouldn't go on forever, so in July we took out $160k from our investment accounts and combined it with $90k cash we had been sitting on and paid cash for our house.

So, no, we aren't panicking over here. No worries about paying a mortgage, and our current cash savings could last us a year if we need it to. So far, we are continuing to save and invest as usual - no changes to our normal routine. I feel a little like I've been punched in the gut when I log into our retirement accounts, but we weren't planning to touch the money for another 25-30 years anyway (we are mid-30s) so there's plenty of time for recovery .... and of course shifting to less risk investments as we get closer to needing the money.


Recently I read something suggesting that if you can lose 5 figures in a few days you should feel truly wealthy, and I think there is some truth to that.
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JC
Posts: 48

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3/13/2020
JC
Posts: 48
And, no, having a leader who lies constantly, distrusts science and the experts, thinks he’s better and smarter than everybody else, takes the credit when things go right, but blames others when things go wrong, and constantly stokes the political fires certainly doesn’t help things.
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JC
Posts: 48

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3/13/2020
JC
Posts: 48
Hey NJHowie,

It definitely is disheartening to see the numbers go lower and lower. But, I think most of us here have expected this for a while now. The market can’t just keep going up and up based on hot air alone. Sooner or later there was going to be a correction. I think regardless of which side of the political fence you sit on, most of knew it was time for another correction. All it took was that last straw. And that was one heavy straw.

Most of our money is in index funds. And our time horizon is still far out. So, we’re not worried.

We’ve been scrounging around, lowering our emergency fund (very inflated, overly conservative) in order to buy on the way down. And many stocks now nearly 1/2 off their peak, we’ve also thrown a few bucks at individual stocks as well.

Yes, this is where we separate the men from the boys, as you said. Those who live frugal lives and have disposable income will reap the benefits. It’s a once in a lifetime opportunity.
But, the vast majority of the population will either stay the same or get poorer. Hopefully this will wake some up and have them rethink their paycheck to paycheck lifestyles.
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njhowie
Posts: 77

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3/12/2020
njhowie
Posts: 77
The stock market is now going separate the men from the boys (sorry, don't mean to be sexist, but that's the phrase).

I've contended for a long time that too many folks are in the market who shouldn't be, allocating too much of their net worth to the market. The masses do not appreciate the risks of "investing" and that you can lose money, potentially all of it. That realization is only just beginning.

Unfortunately for many, this time it's going to be worse, as the government and the Fed have put us in a position which we have never been in, and we have a couple of Black Swans come along simultaneously to kick this downward spiral in motion. The US markets could fall another 15% to 20% from where they sit today - possibly even another 50%...it's anyone's guess. What is assured, is that the path higher going forward will be long and difficult. The peak seen just a few weeks ago may not be seen for another 5 or 10 years.

No matter what the president says, no matter where he looks to place blame (anywhere besides himself, of course), no matter what kind of stimulus he tries to throw at this economy - it's not going to work. He's lied for too long, shown that he is incapable of running a country, and he's about to wipe out a whole lot of retirement plans of folks in or approaching retirement.

As I feel some camaraderie with folks on this site, I hope that you are all well diversified in things not directly tied to the stock market and come out the other side of this better than where we are now.
link