Stock market...buckle up!

Don M.

Don M.

SF VIP
Location
central Missouri
The stock market has been taking some serious hits this year....the Ukraine mess, and now the Fed planning on increasing the rates. The losses today are among the worst in years, and the CBOE VIX took the biggest jump in months. Some of the "experts" are predicting a recession by the end of the year.

Personally, I think raising the Fed Funds rate is a good thing...may finally give Savers a bit of decent return on their money in the bank.

Anyone who is "invested" should be watching their portfolio closely in coming weeks/months.
 

Absolutely right. I don't plan on seeing my retirement savings in the stock market increase at any time this year. It has been pretty bleak. Since the market typically looks ahead by 6 months I'm hoping the Recession will happen soon (if it happens) and we can move on.
 
I was waiting for yesterday! It was what I call a "buy day". I set my alarm for 3:30 every weekday then check my watchlist to see how my investments are doing. Of course I can't tell about the mutual fund prices in real time but when all the benchmarks take a big hit like yesterday, I know it's time to do some buying. Last time I took advantage of a big dip, one of the funds rebounded by $20 a share, another by $2 a share. With the drop, I lost something like 2.2%, no biggie. I'm a buy and hold investor who doesn't need to take distributions (except my RMDs), so I never panic when the market dips like this. Even with today's downturn, the NAV of the fund I take my RMDs from has doubled it's original purchase price.
 

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When the recession hits, it is not going to be trivial. Typically, a government responds to a recession by increased spending and lowering the interest rate to stimulate investment. Both of those options are pretty much already maxed out. Couple that with a possible ongoing pandemic, unsecured border problems, broken supply chains, uncertain energy supplies, international chaos, etc, etc, etc
 
HarryHawk said:
When the recession hits, it is not going to be trivial. Typically, a government responds to a recession by increased spending and lowering the interest rate to stimulate investment. Both of those options are pretty much already maxed out. Couple that with a possible ongoing pandemic, unsecured border problems, broken supply chains, uncertain energy supplies, international chaos, etc, etc, etc
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Yes, it looks like we may be headed for a repeat of 2008. The government has exhausted any options it may have, and would be flirting with a collapse of the Dollar if they tried to throw any more money at the problems.
 
Since the collapse in 2008, my portfolio has more than doubled, but my purchasing power has remained about the same.

tax-day-indicates-irs-reminder-and-planner.jpg


I'm not concerned with the numbers as much as being able to maintain a comfortable standard of living with the resources I have.
 
OneEyedDiva said:
I was waiting for yesterday! It was what I call a "buy day".
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Yes, as long as you have some cash to invest. I'm going nuts because I feel like I need the cash I have to live on (since I retired last month), but if I do sell my house in a few weeks I will look back and be frustrated I didn't use my cash to invest.

Don M. said:
Anyone who is "invested" should be watching their portfolio closely in coming weeks/months.
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My personal preference is not to look and hope it is back up by the time I peek at it again. But, so far I can't resist watching it.

HarryHawk said:
Typically, a government responds to a recession by increased spending and lowering the interest rate to stimulate investment. Both of those options are pretty much already maxed out.
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My opinion, they need to pass the infrastructure bill, that would boost the economy and we really need to invest in our infrastructure. Wasn't infrastructure spending what helped during the depression?
 
OneEyedDiva said:
I was waiting for yesterday! It was what I call a "buy day". I set my alarm for 3:30 every weekday then check my watchlist to see how my investments are doing. Of course I can't tell about the mutual fund prices in real time but when all the benchmarks take a big hit like yesterday, I know it's time to do some buying. Last time I took advantage of a big dip, one of the funds rebounded by $20 a share, another by $2 a share. With the drop, I lost something like 2.2%, no biggie. I'm a buy and hold investor who doesn't need to take distributions (except my RMDs), so I never panic when the market dips like this. Even with today's downturn, the NAV of the fund I take my RMDs from has doubled it's original purchase price.
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MDS
LOL, you are a "gutsy" lady.
 
HoneyNut said:
My opinion, they need to pass the infrastructure bill, that would boost the economy and we really need to invest in our infrastructure. Wasn't infrastructure spending what helped during the depression?
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I seem to recall during the Obama administration a trillion-dollar infrastructure bill that was going to fix things once and for all. Remember all the shovel ready jobs? I can't say I've noticed many improvements from the last trillion spent. Does anyone know where it went?
 
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Don M. said:
Yes, it looks like we may be headed for a repeat of 2008. The government has exhausted any options it may have, and would be flirting with a collapse of the Dollar if they tried to throw any more money at the problems.
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Personally, I think you are being optimistic to think it will only be another 2008. The economy was humming along before 2008, unlike today. Doing a google search regarding 2008 --

The Fed has reduced its key policy rate from 5.25% to barely above zero in little more than a year.

The inflation rate was in the mid 3.00%s

The current Fed interest rate is between 0 - .25 (again from google). Big difference, that is where we are starting from. Plus the national debt has grown SIGNIFICANTLY since 2008 (thanks to both Dems and Reps), servicing that debt becomes more and more difficult as the Fed raises interest rates.
 
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Don't think we'll be in recession this year - if we have a recession it will probably be in late 2023. If these supply chain issues could get somewhat rectified it would sure help. My fav etf fund is still up for the year, but that won't last with the present market tantrums. Everything can be going good and a Fed opens up their mouth about rate increases and the free fall starts again.

TS Elliot said "April is the cruelest month of the year (The Waste Land)"...who knew he
was talking about the stock market, LOL!
 
HarryHawk said:
I can't say I've noticed many improvements from the last trillion spent. Does anyone know where it went?
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Sure, into the same rathole as much of our government spending...
Aunt Bea said:
Since the collapse in 2008, my portfolio has more than doubled, but my purchasing power has remained about the same.
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Yep, hope mine does that well over the next 20 years or so... I try to be optimistic.
 
I've often hear we seniors are susceptible to short term memory loss. The $1.4 Trillion Infrastructure Investment and Jobs Act was signed into law on 11-15-2021. It was deemed a once-in-a-generation investment in our nation’s infrastructure and competitiveness.

It should not be overlooked that the current banking system in the U.S. has excess reserves near $4 Trillion. Excess reserves were unheard of the U.S. prior to 2008, when the FED was permitted to pay interest on both required and excess reserves. When the FED raises interest rates, these are what is being discussed. I stated "these", but the FED no longer differentiates between the two and just says interest on reserve balances. In any case this is the reserves of depository institutions.

As for the common man seeing higher interest on bank savings... not seeing much of that taking place.
 
Alligatorob said:
Sure, into the same rathole as much of our government spending...
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Back in 2009, former President Barack Obama made some lofty promises about the infrastructure overhaul that his $800 billion economic stimulus plan would provide. Obama used the phrase “shovel-ready projects” in reference to construction projects that could begin right away.

In the end, however, only $98.3 billion of the $800 billion stimulus was dedicated to transportation and infrastructure. Of that $98.3 billion, only about $27.5 billion was actually spent on transportation infrastructure projects.

https://finance.yahoo.com/news/happened-shovel-ready-infrastructure-projects-212123861.html
 
Lara said:
I feel like Monday's going to be a bad day.

The futures are all in the Red for Monday....especially NASDAQ. Between Ukraine, rampant inflation, and now, the Fed stirring the pot, I expect a rather disappointing Summer....maybe longer. After some nice gains in late 2021, things went down rapidly a couple of months ago. I moved most of my funds into the Money Market in Early February, and they may stay there until the markets begin to show some stabilization. I'm not making any gains, but I'm not losing a bundle either.
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I use the CBOE VIX as my "clue" as to where the markets may be headed....the Higher the VIX, the more volatility we can expect. In good times, the VIX is 18, or lower. Today, its showing a bit over 28....which means that more declines are expected.
 
HoneyNut said:
Yes, as long as you have some cash to invest. I'm going nuts because I feel like I need the cash I have to live on (since I retired last month), but if I do sell my house in a few weeks I will look back and be frustrated I didn't use my cash to invest.


My personal preference is not to look and hope it is back up by the time I peek at it again. But, so far I can't resist watching it.


My opinion, they need to pass the infrastructure bill, that would boost the economy and we really need to invest in our infrastructure. Wasn't infrastructure spending what helped during the depression?
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Well, actually I have cash sitting around in my Roth waiting for days like Friday. @Pecos Not so much gutsy MDB, as strategic. That tactic has served me well several times. The market always bounces (or crawls) back. I don't need that money to live on since my monthly expenses take up only half of my monthly income. Also, if I ever need (preferably) at home care, my Medicare plan via retiree benefits pays for 35 hours a week for an unlimited time, the rest I can cover.
 
HarryHawk said:
I seem to recall during the Obama administration a trillion-dollar infrastructure bill that was going to fix things once and for all. Remember all the shovel ready jobs? I can't say I've noticed many improvements from the last trillion spent. Does anyone know where it went?
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I didn't pay attention in the past, but I think 1 trillion is not much, something like $3k per person in the US? My property taxes every year are almost twice that. No wonder infrastructure is failing!
 
HoneyNut said:
I didn't pay attention in the past, but I think 1 trillion is not much, something like $3k per person in the US? My property taxes every year are almost twice that. No wonder infrastructure is failing!
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Since if you take the U.S. population estimate in 2021 of 332.8 million people (U.S. Census Bureau), $28.43 trillion would be equivalent to more than $86,000 for every individual in the U.S, I guess another $3k won't make much difference.

With the current rate of inflation, that will be a drop in the bucket for our kids, grandkids, and great grandkids. I'm sure they will all be more than happy to pick up the tab.
 
Liberty said:
Does anyone know anything about crypto banks paying interest? Got a friend who says he's earning 30% a year!
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If it sounds too good to be true, it probably is. The IRS is going after crypto owners too. But to answer your question, no I don't know anything about that. I found this article and there are more if you search.
https://theconversation.com/crypto-...ter-than-high-street-but-are-they-safe-163026
This is an article about the IRS and crypto owners.
https://www.cnbc.com/2021/07/14/irs-new-rules-on-bitcoin-ethereum-dogecoin-trading.html
I will add that no matter what, when dealing with crypto...stay away from Coinbase!
 

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