Is the stock market going to tank?

[Danno]

This thing is going to bounce like a super ball if Boner caves and brings a vote. If.

Yeah, I agree, which is certainly counseling in favor of leaving my money where it is... Which is what I will probably do. Just thinking about potential alternatives.

[Timberridge]

A super ball never bounces as high as it falls, some of the kinetic energy is lost as heat during its compression phase.

[Benny Profane]

I dumped half of my stock market stuff into a mm fund when the shutdown started. I really wouldn't count on this getting resolved quickly. These tea baggers are fucking serious fanatics, and it seems that they could give a fuck about our or the world's economy.

[freeheelwilly]

A super ball never bounces as high as it falls, some of the kinetic energy is lost as heat during its compression phase.

Thanks for pointing out that the analogy may have some limitations.

[Hugh Conway]

Thanks for pointing out that the analogy may have some limitations.

you are defending Benny and giving serious answers to Danno? bwahahahaaha

[Benny Profane]

http://www.indexuniverse.eu/europe/n...lart=1&start=2

“You can create a diversified portfolio using just two securities: a government bond ETF to suit your maturity profile, and a world equity ETF. You then mix them according to your risk appetite. That’s a really simple, powerful combination and you’ll end up doing better that 99 percent of the world’s investors. But no one is going to get rich selling that product mix to you and so you probably won’t see it advertised.”

[Benny Profane]

The stock market is not the economy

http://www.thereformedbroker.com/201...-trading-desk/

[huckbucket]

http://www.indexuniverse.eu/europe/n...lart=1&start=2

“You can create a diversified portfolio using just two securities: a government bond ETF to suit your maturity profile, and a world equity ETF. You then mix them according to your risk appetite. That’s a really simple, powerful combination and you’ll end up doing better that 99 percent of the world’s investors. But no one is going to get rich selling that product mix to you and so you probably won’t see it advertised.”

I've heard it and believe it, but this strategy still requires a fundamental belief in buy and hold. I'm just not so sure about the 10 and 20 year.

[Benny Profane]

I've heard it and believe it, but this strategy still requires a fundamental belief in buy and hold. I'm just not so sure about the 10 and 20 year.

It's even more important for the long term, if you look at total expenses. Amazing how just paying 1% more over that period can add up. Google some of Bogle's writing about that.

And it's not entirely buy and hold. As Josh Brown stresses up there, read and pay attention to what's going on in the world, and don't get caught flat footed when the shit flies. It's never been easier to re allocate. Hell, all it takes is two minutes on a smartphone.

[huckbucket]

And it's not entirely buy and hold. As Josh Brown stresses up there, read and pay attention to what's going on in the world, and don't get caught flat footed when the shit flies. It's never been easier to re allocate. Hell, all it takes is two minutes on a smartphone.

Doesn't this advice fly in the face of your "The stock market is not the economy" link? Can we apply the concepts of sentiment, valuation and trend do a global ETF?

[Benny Profane]

Doesn't this advice fly in the face of your "The stock market is not the economy" link? Can we apply the concepts of sentiment, valuation and trend do a global ETF?

Sure. It's pretty generic, but, if you think stocks are going up, like now, with low interest rates, buy stock etfs. If you think stocks are overvalued or a political decision or non decision will tank them, switch to bonds or cash.
Try to follow trends. That isn't necessarily tied to logic. Hey, I thought the world was going to implode five years ago. There's still a lot of problems, but the S&P is up 140%. Gold is tanking. The rich are richer. Study what they are doing (the smart ones) and ride their coat tails.

[huckbucket]

^^
Being successful with this strategy (i.e. market timing) takes more effort than you describe. Easily more than 50% of instances where I was sure I was doing the right thing by taking either a more conservative or aggressive approach have been a bust. Case in point, gold. During the 2012 fiscal cliff fiasco, gold did really well. This was aided by the fed's bond buying program. The same scenario in 2013 (which also includes an uptick in interest rates) resulted in gold losing 15% of its value. Go figure.

Rather than agree with the whole "sentiment, valuation and trend" metrics, sometimes I think that the markets are just plain schizophrenic.

[Benny Profane]

Bill Gross agrees.

[4matic]

Study what they are doing (the smart ones) and ride their coat tails.

Most of the very high income people (not extremely wealthy) I know missed most of this 4 year stock market rally: "Obama, socialism, debt, dollar, deficits, blah, blah, blah."

[13]

Most of the very high income people (not extremely wealthy) I know missed most of this 4 year stock market rally: "Obama, socialism, debt, dollar, deficits, blah, blah, blah."

As soon as the rally goes flat, they'll say "told you so."

Whatthefuckever.

[Benny Profane]

Most of the very high income people (not extremely wealthy) I know missed most of this 4 year stock market rally: "Obama, socialism, debt, dollar, deficits, blah, blah, blah."

I was just thinking that, in 1931, the equivalent "high income" person would be bankrupt, most likely. These are dramatically different times. I'm pretty amazed at what happened the last five years, and is still happening, and looks like it may continue on a very slow and steady pace for years and years. I don't know if that's good or bad, but, it sure helps to have some assets right now. The biggest danger is our political civil war going on right now. It's far from over, and the next few election cycles are going to be nasty, along with the almost quarterly shutdown threats. The Tea Baggers could give a fuck about anybody's economy right now. When they finally get blessed by a telegenic, charming star who is friendly with big money on the side, that's your new Hitler.

[4matic]

The biggest danger is our political civil war going on right now.

"Don't fight the Fed." "The market loves gridlock." Same as it ever was I suppose. 2% growth is enough to sustain earnings for the multinationals. That said, I've been underweight equity since June. Small caps underperforming (IWM), financials flat to down (XLF) for the last six months, and Japan market rolling over are the warnings right now. Two year low in Gasoline today and looking very weak is a positive for the consumer. Gasoline could drop another .50c in a hurry.

[Toadman]

Are things about to go negative around here?

http://blogs.marketwatch.com/thetell...t-rate-anyway/

Wonder which bank in USA will announce they are charging you to keep money in a savings account?

[OldLarry]

Spidey sense tells me shits gonna crater soon. Probably just after year end window dressing...

[Benny Profane]

Jerermy Grantham thinks a year or two.

http://online.barrons.com/article/SB...bs_article%3D1

I'm reading this right now - quick stuff with minimal geek ness. Explains the giant pool of money still sloshing around the world very well.

http://www.amazon.com/Age-Oversupply...=daniel+alpert

[iceman]

Whatthefuckever.

QFT.

You literally couldn't pay me enough to worry about this shit. Every bet you make is either right or wrong, and if you think you're smarter than the market hey good luck with that.

Diversify, lower costs as much as possible, put money in when you can, and go think about something else. That's the plan.

edit: upon reflection I guess there is an amount you could pay me that would get me to worry about this shit. It's just that no one's offered.

[Benny Profane]

But, but, don't you worry that the trust fund will run dry?

[iceman]

But, but, don't you worry that the trust fund will run dry?

That happens not to be a concern of mine.

[bushman]

But, but, don't you worry that the trust fund will run dry?

Wait, they can do that?

[huckbucket]

I hate this market. I don't think logic/reason have been a factor for the past 10 years. While I'm in Ice's camp, I get sucked back in everything I see a nice short term return and go back for more. People (and by that I mean me) is stupid.