Makes you optimistic about the singularity, doesn’t it?
One suspects that there’s a reason that the people in Star Trek generally avoid all the people back home, who are just enjoying every day with infinite replicator food and unending holodeck orgies.
Inflation will increase. It may or may not be accompanied with recession to produce “stagflation,” but do expect inflation. Therefore any cash should be kept very liquid; do not buy bonds. The world economy is dependent on the U.S.A. so do not expect foreign stocks to perform well.
Inflation normally leads to high interest rates, but politics may prevent that. Small-cap stocks outperform under inflation. Smart stock picking will pay off, but even ETFs like VBR might be good ideas.
It seems to me that you are implying (rather circumspectly, and I can’t blame you for that) is that the ratings agencies were not mere cats-paws in the subprime scam. In fact they were active participants in it.
Aye, there’s the rub. He who pays the piper calls the tune.
I guess were were naively thinking that they performed some sort of independent and even regulatory function.
One would have hoped that some REAL regulatory body (SEC?) should have come down on them like a ton of bricks for aiding what was essentially fraud. But never happened, as far as I can see.
I don’t think I’m “implying” so much as “stating outright”.
I wouldn’t characterize it as a “scam”. At least in theory there’s nothing wrong with packaging up a bunch of loans. It was more like layer upon layer of reckless incompetence and lack of oversight because of a mistaken belief of “housing prices only go up” and “people always pay their mortgage”.
More like degenerate gambler logic than an outright scam IMHO.
I suspect there is still a lot of this in the finance world.
Some things seem to be regarded rather like Monopoly money… a debt that will never actually be called.
Much like the US or UK national debt: nobody seriously expects those to ever be ‘repaid’.
There are probably a few more time bombs ticking under the surface.
But there is no way to easily see them from the information which legally has to be publicly disclosed.
I’ve been asked to look at the 401k of some relatives. They’re bright kids–they understand the issue with index-vs-managed, and management fees (I taught them).
But one thing I want to determine is whether they have any of those derivative things buried in the mix.
Can someone tutor me on the terminology to look for? TIA.
I just wanted to say that I’m feeling smart right now.
I’m not sure I’ve felt smart in the last few years about anything, but I sold my QQQ last week (along with some smaller holdings in miscellaneous equities) and moved it into JAAA. I feel good about that move, for sure. It isn’t a long-term move, but it may take months (optimistically) for things to become stable-ish.
I still have no confidence which direction things will go from here. Next week he may announce a tariff reset deal that is the best deal ever made in history some people say and everything goes nuts up. Or we lose half the value of both stocks and bonds in the month. The whole thing is seemingly less rational now than ever.
Over in the compendium of horrors thread I make my case for a recession. That will override any walkback on tariffs.
Link to your post please?
Like this:
(Click the paper clip copy and paste.)
I wouldn’t mess with the magic of compound interest. It’s hard to be smarter than magic.
Unless you have a very short time horizon.
I’m very glad I sold my QQQ (Nasdaq 100) about 10 days ago; it was my only sizable pure growth equity holding.
I’m also content (can’t be happy under the circumstances) that my dividend/income-focused portfolio is doing comparatively well; at this moment, S&P 500 down 2.78%, Nasdaq down 4.2%, my portfolio down 1.4%.
Not pleasant, but fewer flames than equities as a whole. I recently moved a lot into either money market or various good-yielding but stable ETFs, so that helps.
My largest position is SCHD, which is UP 0.4% after being much higher earlier in the day.
Well, one can’t always time the market, but that was probably a wise move.
I have a substantial position in Vanguard’s VOO (S&P500 ETF) in a non-retirement account, and I’d really like to move some of that into less volatile instruments.
BUT of course it’s heavily appreciated from the cost basis & doing so would trigger a lot of capital gains tax. Still, there’s the saying: nobody ever went broke by taking profits.
Maybe I should just bite the bullet…
Let me be clear: I’m not giving up on US equities; I’m holding all that cash/equivalents for the purpose of buying back in when…well, that’s the hard part, ain’t it?
Timing the market is one of those mythical things. Some people seem to ‘get it right’ for a while, but it is probably just random. Just as many studies have shown that actively managed funds mostly underperform the indexes over the long term.
I don’t think anyone has a really good understanding or model of the global economic system.
There seems to be a lot of chaos (in the mathematical sense) involved?
You’ll always find a few people who get lucky for a while.
But I’m not aware of anyone who can consistently time markets over the long haul.
If someone could, he could literally make billions.
But I will reiterate what I’ve said all along in this thread: Trump was broadcasting what he would do, and as far as I know you can’t find an economist (who doesn’t work for Trump) would wouldn’t tell you this will tank the economy.
So is it really timing the markets, or is it being early to react to news?
By the time it’s public news, it’s probably too late?