We Are in Bear Market


#323

Exactly I feel the same, it was down before elections and then jumped crazily.


#324

Down before 2016 elections? The major slump was in Spring 2016 and it was because of fear of impact of QE withdrawal.


#325

It was down from Spring 2016 all the way until the elections. Then the markets jumped.


#326

Really? Dow was 16500 in Feb and 18000 in Oct. Yes, the big jump came after the elections, because Trump got elected.

You are saying there is something in the elections this time similar to Presidential elections of 2016?


#327

If you are big fund manager holding hundreds of billions of dollars worth of stocks, you need to hedge against the case of democrats winning both the senate and the House. Most likely case is that democrats win House and republicans keep the senate. Then funds will reinvest their cash again because the risk is gone. Trump will also kick off his reelection campaign and will announce some popular schemes (right or wrong for the economy in the long run). If democrats win both houses then the selling will intensify.


#328

This is my guess, no proof.

Whatever may be the outcome of elections, market will jump. Now, market is using election uncertainty as a scapegoat to bring down.

My guess is based on economic strength (factory reports) and fed feedback ( beige book fed ).


#329

Market usually decline when there are macro uncertainty. In any case, the Santa Claus rally usually starts around mid Nov. So the timing for decline till midterm election and then a rally after seem “right”.


#330

My own feeling is that economic cycle is finally catching up with us leading to the regular cyclical decline. So it’s a start of a longer term bear market. Ideally this should have been with us in 2016 when the free money started drying up but Trumps election and his policies led to a great frenzy.

Lets see what happens in next few weeks. I am keeping my powder dry.


#331

How long is long term?

Buy shares or RE rental?


#332

The last recession was so bad that some people became permanent bears. End of bull market is preceded by unbridled enthusiasm which we have not seen in the current cycle. That’s what causes the big correction - sort of what happened with bitcoin. Tech stocks, housing still have not seen madness. So this cycle will drag on for a while with minor corrections here and there. You need to be a stock picker to win this game, index funds will tend to be flat. That’s why I feel bay area real estate with leverage is a better bet.


#333

RE price fall would be shallow, it may be flat for 5-7 years. I see a pretty consistent RE market with nothing to get excited about. Flippers will retire early or go back to work a full time job. Renters and homebuyers would be happy and consume housing just like consume electricity. I’m not sure whether this forum can still attract you guys in 5 years :rofl:

Stock can have dramatic falls and rises. It’s going to be tremendous fun for traders.


#334

The house building industry has never recovered from the 2008 recession. May never recover. Meanwhile there is a growing shortage of housing


#335

Oh hell no. Sky’s the limit… :rofl:


#336

Good. Lack of supply means much more demand… :rofl:


#337

Definitely will keep prices high


#338

Flat and then down or up? If flat then resume rally, is a good time to accumulate for long term. Actually, there is no need to time index fund, blindly DCA purchasing is fine. Btw, index fund got dividends too :slight_smile: Currently, I am DRIPping them. Long term (decades :slight_smile: I mean accumulate for your children and grand children ) yield 7% (no DRIP), 11% (DRIP). IMHO is very good for no effort investment. If you’re thinking of buying index fund and then liquidate later to buy house or other stocks, index fund is not a good choice because the return may not high short term. Index fund is a multi-generational investment tool :slight_smile:


#339

Here is your chance, princess Harriet.


#340

Since RE went up crazily, between 2012 and Jun-2018, flat 5-7 years is with on going mortgage rate hikes. Meanwhile, we may also see some corrections which will pull easy flat years until exuberance comes back.

Not only bitcoin, but also cannibal industry was crazy like bitcoin, HMNY kind of stocks. More than this, I have seen crazy option bets which are waning now.

I do not know whether we are going to meet recession in next 2-3 years, but this kind of fall will happen (This is my guess) when yield curve is positive.

We will likely get into recession when yield curve inversion happens.


#341

Monday: :scream: or :rofl: ?


#342

Monday big rally