Indices & ETFs

[hanera]

@Jil

This is your assumption market is not peaked, not mine

Is implied in your original statement about Fed that market has not peaked. Economy will falter 1.5 years later mean stock market will be 1 year later. Well documented stock lead economy by 6 months.

[marcus335]

2.75-3.25% rate increase before downturn based on the last 3 times. They are raising rates slower this time. We should have more time before downturn. Also, there’s never been a tax cut during an economic expansion. That’s a positive that’ll offset higher rates. M

The biggest thing holding back growth is the skill mismatch. There’s over 6M open jobs that could be adding to GDP. Companies can’t find people with the skills to fill them. People want to solve all these other problems that’d mostly go away if we fill those 6M jobs. Filling jobs is lifting people up though, so there’s less interest in it.

[Elt1]

There is a recession out there some day…I predicted on in 2017. Jil is saying this year or next…Just be prepared…Keep debt low…

[marcus335]

I figured 2019-2020. That’s one reason I targeted a company that kept hiring during the last recession and didn’t have layoffs. Revenue growth was still over 20% yr-yr during the Great Recession.

I think the tax cuts and lack of inflation should push back.

[Jil]

@hanera

@Jil

This is your assumption market is not peaked, not mine

Is implied in your original statement about Fed that market has not peaked. Economy will falter 1.5 years later mean stock market will be 1 year later. Well documented stock lead economy by 6 months.

I really doubt that we exceed Jan 29, 2018 peak ! Some companies do well and some not, but eventually market IMO, will be flat and volatile.

Most of the companies or people run with short term, less than 3 years, loans which will suffer. Marcus has provided further info.

@marcus335

2.75-3.25% rate increase before downturn based on the last 3 times. They are raising rates slower this time. We should have more time before downturn. Also, there’s never been a tax cut during an economic expansion. That’s a positive that’ll offset higher rates. M

The biggest thing holding back growth is the skill mismatch. There’s over 6M open jobs that could be adding to GDP. Companies can’t find people with the skills to fill them. People want to solve all these other problems that’d mostly go away if we fill those 6M jobs. Filling jobs is lifting people up though, so there’s less interest in it.

[Jil]

@wuqijun

If you were to invest in stocks exactly like RE, don’t go in and out of the market. Let your investment sit and ride the waves.

Agreed, Missed 2009 boat and it is scary to hold after 350% jump from 2009 !

[Elt1]

We may not see another peak for a while…But where do put your cash? Sitting at 1% interest in the bank money loses value even at 2% inflation…I am always looking for RE deals…But meanwhile cash is idle…I put some in stocks, some in trust deeds, some in short term spec development deals…Where else? Munis, Treasuries?

[Jil]

@Elt1

But where do put your cash? Sitting at 1% interest in the bank money loses value even at 2% inflation…I am always looking for RE deals…

This is what I am thinking exactly. Real estate is the best as we are in that area. Either Flip or Cash flow, we will be able to make it profitable even during the economic stress period.

If you have stronger dividend payers like BP or XOM, they are good to hold as they provide excellent cash flow.

[hanera]

@Jil

I really doubt that we exceed Jan 29, 2018 peak ! Some companies do well and some not, but eventually market IMO, will be flat and volatile.

That’s the same as saying economy would be faltering in 6 months time not 1.5 years. In any case, was just trying to understand the rationale that you close all your position. Thousand apologies for the cross-examination

[Jil]

@hanera

@Jil

I really doubt that we exceed Jan 29, 2018 peak ! Some companies do well and some not, but eventually market IMO, will be flat and volatile.

That’s the same as saying economy would be faltering in 6 months time not 1.5 years. In any case, was just trying to understand the rationale that you close all your position. Thousand apologies for the cross-examination

Right or wrong, I absorb it based on my own decision. As long as others are not swayed by my arguments, I am fine.

Tax cut is finished, but stocks went up higher expecting that. There is no major break through or benefits market is deriving now. The impact of tax cut growth is seen/will be seen this year (QTR 2 QTR).

Trump wants FoxConn to have factory here, but not import from FoxConn ! Even the tariff hike supposed to help US companies, but seen negative as market. It seem USA imports are very high that results negatively local businesses !

All now we have is rate hikes, fed balance sheet reduction which affects entire economy. Most of them short term loans which is directly proportional to FED rate while long term stays same. I am guessing every qtr to qtr changes will affect the market, yet to see how stocks going to run.

As I said, I will stay away from market one year.

[hanera]

Rate hikes - Cooling an overheated economy. Done well, boom can last a long time. But Fed always went a bridge too far. Hence, the saying, bull didn’t die of old age, is murdered by the Fed.

Fed balance sheet reduction - Reducing over stimulus also cool economy, just be careful not to do so too fast. Same effect as rate hikes.

Tariffs - Inflationary. Hopefully is just a ploy to pry open overseas market.

[Terri]

I should’ve gotten an economics degree. This is all over my head

[buyinghouse]

@hanera

@buyinghouse

Indexing is the best thing out there. They invest your money, you win. They lose, you stay put at 0.

Omitted one detail. Max for the year is capped which is usually less than the actual appreciation i.e. if they think it is going to appreciate 10% for the year, they would cap it at 5% so you only get max 5% appreciation for the year. My relationship manager tries to sell me this indexing product, I did a computation over 10 (or is it 20 years) based on their data, better off to just put your money into any index fund or ETF.

Oh boy!
But the concept I am talking about has 4 different strategies, one is uncapped, about 16% lately, the others aren’t but gets you up to 12.5%.

You get your money in your hands, while the same amount, which you can use to pay for any other investment opportunity is, redundantly, being “invested” in the stock market. Double your money!

[buyinghouse]

@Elt1

We may not see another peak for a while…But where do put your cash? Sitting at 1% interest in the bank money loses value even at 2% inflation…I am always looking for RE deals…But meanwhile cash is idle…I put some in stocks, some in trust deeds, some in short term spec development deals…Where else? Munis, Treasuries?

Use it as a collateral to fund a pension for you and your wife. I won’t cost you a penny. Literally, not a single penny. 20 x you and your wife’s income for a program I know, probably $350K a year tax free income in 15 years, no cost at all.

[tomato]

Futures are slightly down, but asian markets are up. Let’s see if @hanera is right

[manch]

What did @hanera say? He usually doesn’t expose himself to the possibility of being wrong publicly.

[tomato]

I think he’s leaning on “correction over”?

“We need a follow through day to confirm that the correction is over ”

Neutral statement with hope filled in.

[marcus335]

SPY is testing the waters below the 200-day. It’ll be interesting if it closes below it.

[wuqijun]

I’ve grown numb, just let it drop…

[Jil]

My 2 cents.

Be careful with all companies with no profits (loss making). They won’t withstand this storm. It takes long time for them to recover.

Hyped companies like LFIN or SNAP will face the issues.

Everything happening now are planned executions of big institutions, beyond our reach and control.