Huge drop in stock market to start week. Several financial websites crash

Unlike what happens in Vegas stays in Vegas. The world reacts to bad news. And so does the U S stock markets.


U.S. stocks fell sharply on Monday as part of a global market sell-off centered around U.S. recession fears. Japan’s Nikkei 225
plunged 12% in its worst day since the 1987 Black Monday crash for Wall Street.

Fears of a U.S. recession were the main culprit for the global market meltdown after Friday’s disappointing July jobs report. Investors are also concerned that the Federal Reserve is behind in cutting interest rates to bolster an economic slowdown, with the central bank choosing instead to keep rates at the highest in two decades last week.

https://www.cnbc.com/2024/08/04/stock-market-today-live-updates.html

I'll be looking for a buy opportunity.
 
Hopefully by October things will be looking up again. Kids are headed back to school soon.
Thus the turnaround in the economy. Parents having to cost allow for all of that. The money
was made 2 weeks ago. Blown saving have a Summer of fun in the sun. Snowball bought the
kids Solar Powered Patio Shade Umbrellas too. Taxes keep on going up.

Parents getting kids back to school, after school sports practices, insurances, clothes, books, all that stuff.
College funds deplete, new ones approved, more bills and payments to make. Power washing properties.
Preschool and day care fires back up big time. Comes to a House Payment Road shock. Parts of the Economy
Benefit. Ford's loss. Private Schools gain. Sports become again. More to do. All in All's good time !
1st games of the season sold out.

The Early fall is beginning soon. Brush, tall grasses, weed mowing, more trimming prepping for a foot of
leaves everywhere for the Burrough and County areas. New mower blades, tune-up's, all the cold weather soon
to come stuff. Looking at a $300 + a month Energy property bill. Living in a high populus states incredible costs.
Crops, gardens all coming in at once. Millions of Acres. Are all those RR and Road bridges safe, ?????? Most
everywhere we go there are detours. Especially in the Rural, County Roads and stuff. Heavy Rains, high waters
and run offs wiping out bridge approaches, name it. One heck of a Summer it was, but days are shortening now.

All the Cash has been blown. What cha think ?
 
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papa tiger said:
All the Cash has been blown. What cha think ?
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Along with cash credit cards are used. With cash depleted & credit cards sure to be defaulting, what is next isn't looking to good. Could be world concern for America's financial stability is increasing. Kicking the can down the road when the road is in need of repair is getting harder.
 
I see spending Billions on the Roads to US military Bases is a fast-track Item. They all point to the West.
Sure easy to see China and N.K. + Iran and Russia are the Japan / Nazi of the late 30's. Same sort of deal, different weapons.
 
The severe market downturn was a direct result of a 12% decline in Japan's market. It was back up after a couple of days when Japan's market rose 10%.

Like @OneEyedDiva, I'm in it for the long haul. There will always be fluctuations in the market but over the past 50 years it has returned an average of 10% per year. And it has always bounced back significantly after a recession... even the Great Recession of 2008.
 
seadoug said:
I'm in it for the long haul
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OneEyedDiva said:
I'm in it for the long haul
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But are we really in it for the long haul? How many years is 'the long haul'?

If I consider 30 yrs to be the long haul, I only have an 8% chance of living that long, and since I'm retired the majority of my money will be spent sooner (if I was aiming to 'die with zero' I'd be spending 33% in the next 7 years I guess).

Plus I only have a few years of cash-equivalents, so I'm not in a position to significantly 'buy the dips', and at risk of having to sell in down markets.

Twice in my lifetime the stock market went 'sideways' (up and down but not exceeding the starting point), once it was sideways for 11 years and another time for 13 years.

If we enter a new decade of sideways market, that would be at least half of my remaining years.

Gee, I'm starting to think I need to change my asset allocation to a more conservative one.

flat years.jpg

no long haul for me.jpg
 
It’s different for each of us.

I plan to die with money in the bank and continue to invest for the long haul while gradually building a fund specifically for end of life care.

Do what feels right for you and your situation.
 
HoneyNut said:
But are we really in it for the long haul? How many years is 'the long haul'?

If I consider 30 yrs to be the long haul, I only have an 8% chance of living that long, and since I'm retired the majority of my money will be spent sooner (if I was aiming to 'die with zero' I'd be spending 33% in the next 7 years I guess).

Plus I only have a few years of cash-equivalents, so I'm not in a position to significantly 'buy the dips', and at risk of having to sell in down markets.

Twice in my lifetime the stock market went 'sideways' (up and down but not exceeding the starting point), once it was sideways for 11 years and another time for 13 years.

If we enter a new decade of sideways market, that would be at least half of my remaining years.

Gee, I'm starting to think I need to change my asset allocation to a more conservative one.

View attachment 361097

View attachment 361098
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HoneyNut, I've been retired for 26 years and have never stopped saving and investing. Wouldn't the long haul be until we die? That's my take on it. I am probably considered a moderately aggressive investor but I never lost nearly as much as others who I've read about or who told me personally what they lost. I do not invest in bonds due to Islamic rulings about that. We can collect dividends and capital gains but not Riba (interest), which is an entirely different thing. More progressive rulings now state that interest on 5% of our assets is an acceptable amount of interest. Given the way of the financial world today, not dealing with interest in some way can be difficult . We also are not supposed to charge interest.

Anyway, about 19% of my portfolio is liquid. The only withdrawals I have to make are RMDs, which are miniscule considering my traditional IRA makes up only 16% of my portfolio. I'm glad that I ignored the "expert" advice about not making enough to warrant investing in a Roth or doing a conversion when I first started investing (40 years ago), because now 67% of my portfolio and the growth on those investments is tax free.

Since my monthly income is more than enough to cover my expenses, even now that I'm helping with my granddaughters college tuition, the only reasons I would need to touch my retirement portfolio would be if I have to be in a nursing home long term or a catastrophic event happens that causes my son and I to have to move from our co-op. Even then, we could probably manage without me dipping into my investment portfolio. Another event would be if my son came down with a serious illness, couldn't work for a long time and needed special medical care (not covered by his insurance) to stay alive. He works for a good company but their health insurance coverage sucks.

I've advised my son to try home health care for me first before nursing home care if at all possible. My insurance covers 35 hours a week at no cost for an unlimited period of time (I'd be able to easily cover additional hours vs paying for a home). Aetna only cover 3 months of nursing home care per benefit period. I'd like for him to inherit most of my portfolio, rather than see it go to a nursing home.
 
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HoneyNut said:
But are we really in it for the long haul? How many years is 'the long haul'?

If I consider 30 yrs to be the long haul, I only have an 8% chance of living that long, and since I'm retired the majority of my money will be spent sooner (if I was aiming to 'die with zero' I'd be spending 33% in the next 7 years I guess).

Plus I only have a few years of cash-equivalents, so I'm not in a position to significantly 'buy the dips', and at risk of having to sell in down markets.

Twice in my lifetime the stock market went 'sideways' (up and down but not exceeding the starting point), once it was sideways for 11 years and another time for 13 years.

If we enter a new decade of sideways market, that would be at least half of my remaining years.

Gee, I'm starting to think I need to change my asset allocation to a more conservative one.

View attachment 361097

View attachment 361098
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We are all in different situations. I'm 66, and if I live to be 96 (which is unlikely) I will have enough money (supplemented with Social Security) to live on even if my portfolio stagnates. Our house is paid for, so in the event I need home health care or assisted living it will more than pay for that.

I will say that my portfolio is diversified. Much is in mutual funds and some in dividend-paying stocks. I've already spoken with my financial advisor about what changes need to be made in the event of a switch in political parties. There are some equities that typically do better under one party, some under another party.
 
I'm not a fan of direct exposure to the market, but I do still have some money in some 401(k) stock funds.

I only wish that I had converted pre-tax money into the Roth portion of my plan. While I don't fiddle with the funds or even rebalance often (despite warnings I'm too invested in high risk funds) I'm doing well so far. Almost too well considering the taxes I'll pay to do Roth Conversions now.

Taking a look with both eyes open I see nearly 20% gains YTD and 37% in gains over the last 12 months.

I assume others are doing as well or with their "hands on" have done even better. It all has costs of course but I see some tax windfalls coming for the Feds and States on all of the non-Roth investments out there.

So isn't there good news in this for paying down deficits and/or new spending near term?
 
dilettante said:
I'm not a fan of direct exposure to the market, but I do still have some money in some 401(k) stock funds.

I only wish that I had converted pre-tax money into the Roth portion of my plan. While I don't fiddle with the funds or even rebalance often (despite warnings I'm too invested in high risk funds) I'm doing well so far. Almost too well considering the taxes I'll pay to do Roth Conversions now.

Taking a look with both eyes open I see nearly 20% gains YTD and 37% in gains over the last 12 months.

I assume others are doing as well or with their "hands on" have done even better. It all has costs of course but I see some tax windfalls coming for the Feds and States on all of the non-Roth investments out there.

So isn't there good news in this for paying down deficits and/or new spending near term?
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I have a traditional tax sheltered IRA and I’m not sure that I understand the point that you are trying to make.

I don’t currently draw anything from the IRA and most likely won’t draw any more than the RMD so I’m not sure that I see a windfall for the government.

Even after my death, my beneficiary will have ten years to gradually draw down the inherited IRA.

At this point, converting to a Roth and paying taxes on the entire balance doesn’t seem to make sense. IMO the conversion ship has sailed and I’m better off the pay taxes as I draw in smaller increments over time.

I’m always interested in paying less taxes, what am I missing? 🤔
 
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Part of the puzzle is pension income, which you may well not have.

When one does... then taking Social Security, even delayed to 70, can mean a lot of your SS (if not all) being taxable. You not only pay this additional income tax, it may also kick you up into a higher bracket. Then you pay higher taxes on both your pension and your SS benefit.

Once RMDs are forced, just that much more taxable income must be taken. That can push you into a higher tax bracket as well. Now you are paying tax (potentially at a high rate) on your pension, Social Security, and RMDs from pre-tax IRAs (and 401(k)s, 457s, 403(b)s, etc.).

Not only that, we are on course for the tax cuts to expire after 2025. So both the marginal rates all increase and the Standard Deduction drops - making more income taxable.

At that point all you can do is try to direct the taxation via Qualified Charitable Distributions.


That's not whining about the taxes or suggesting any avoidance strategy, I was just saying that there is a windfall for Fed and State income taxation. A windfall a lot larger due to recent market performance. Surely all of that additional tax income has to be of benefit to the governments involved?
 
dilettante said:
Part of the puzzle is pension income, which you may well not have.

When one does... then taking Social Security, even delayed to 70, can mean a lot of your SS (if not all) being taxable. You not only pay this additional income tax, it may also kick you up into a higher bracket. Then you pay higher taxes on both your pension and your SS benefit.

Once RMDs are forced, just that much more taxable income must be taken. That can push you into a higher tax bracket as well. Now you are paying tax (potentially at a high rate) on your pension, Social Security, and RMDs from pre-tax IRAs (and 401(k)s, 457s, 403(b)s, etc.).

Not only that, we are on course for the tax cuts to expire after 2025. So both the marginal rates all increase and the Standard Deduction drops - making more income taxable.

At that point all you can do is try to direct the taxation via Qualified Charitable Distributions.


That's not whining about the taxes or suggesting any avoidance strategy, I was just saying that there is a windfall for Fed and State income taxation. A windfall a lot larger due to recent market performance. Surely all of that additional tax income has to be of benefit to the governments involved?
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About 3% of my SS is taxes, maybe less. My pension, though taxed by the IRS most of my state pension is not taxed by N.J., nor is SS. I'm not hit by a huge tax bite on either because I'm not in a high tax bracket. My traditional IRA represents only a small portion of my investments and since I use the RMDs for qualified charitable contributions, I'm not taxed on those either. It certainly pays for people to do their due diligence and find out what steps they can take to reduce their tax liabilities.
 
Yeah, it helps when you don't get taxed by your State.

We used to have that, but even though our State Constitution says State pensions "shall not be diminished" they went ahead and passed a Pension Tax to fund corporate tax breaks "for jobs" (uh, right). Change of parties, and well, the pension taxation is still there! So much for campaign promises and the courts.

I'm not in a high bracket either, but all that changes after 2025. The Standard Deduction drops and the tax bracket percentages rise. We'll all get a black eye except the very low income folks. SS and RMDs will just punch the other eye.

I forget to mention what a higher income on paper means for Medicare premiums due to IRMAA.

But as I said, my intent isn't to complain. This should be good news, i.e. governments should be getting a good slug of money because of recent market performance.
 
My state instituted an income tax on capital gains by callling it an excise tax. The backers think it will only affect rich people and not them. They are in for a big surprise down the road.
 
WhatInThe said:
A huge drop in the stock market this am. So much activity that several financial websites crash.

https://money.usnews.com/investing/...own-for-thousands-of-users-downdetector-shows

Now they're talking rate cuts.
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It’s three months since this first message was posted.

The S&P500 is up about 10% for those three months. Up nearly 21% year to date.
I don’t believe in getting worked up over short term market ups and downs. And both of the above are short term in my book. But, it’s a nice profit so far this year. Who knows what will happen next? Not me.

I did take some profits off the table in order to pay for some of next year’s expenses.
 

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