Holy Trump Market

[echappist]

Originally Posted by likebikes

i'm in my 20s and just started a 401k a couple years ago. (roth ira with vanguard, 2050 target retirement iirc) it has only lost money since i started it, despite of the stock market gains/losses? am i or vanguard doing something wrong ?

i did a bit more sleuthing and have the following thoughts (note i'm not a financial professional, merely a JSG on the interwebs):

-If you bought two years ago, it would have gone down in value, just slightly. However, return in the last year is 13%, and avg. return in the last 3 years is 7%. Anyone who started contributing about two years ago wouldn't have seen much gain as 2014 represents the previous peak for US stock indices.

-The composition of your fund is 36% international stock. That's a lot of exposure to volatility without as high of a return. If you are more active, and you can do rebalancing, this sort of fund would allow you to pump money when the fund takes a dive, and convert to cash when the value reaches a high. The value of your fund got dragged down largely thanks to the international component. Only you can answer how much of a risk you are willing to tolerate there.

[SlackMan]

Originally Posted by echappist

i did a bit more sleuthing and have the following thoughts (note i'm not a financial professional, merely a JSG on the interwebs):

-If you bought two years ago, it would have gone down in value, just slightly. However, return in the last year is 13%, and avg. return in the last 3 years is 7%. Anyone who started contributing about two years ago wouldn't have seen much gain as 2014 represents the previous peak for US stock indices.

-The composition of your fund is 36% international stock. That's a lot of exposure to volatility without as high of a return. If you are more active, and you can do rebalancing, this sort of fund would allow you to pump money when the fund takes a dive, and convert to cash when the value reaches a high. The value of your fund got dragged down largely thanks to the international component. Only you can answer how much of a risk you are willing to tolerate there.

The point of having international exposure is to provide diversification. With diversification, the overall portfolio (U.S. + international) should have lower volatility over time than a pure U.S.-based portfolio. Moreover, international stocks are much cheaper relative to U.S. stocks right now.

[unterhausen]

Originally Posted by bobswire

I doubt they'll mess around with SSI at the oufset since a lot of those who voted for Trump and helped to secure a Rep congress depend on SSI. If they do those voters will switch alliance in a heartbeat next election. Those folks have a tendency to vote agains their own self interests.

After Bush tried to kill SS, I have no idea why any old person votes for Republicans. At least make sure that there are enough Democrats around to kill these sorts of ideas.

Personally, I'm more worried about the fact that Ryan desperately wants to kill medicare. That is a real chunk of change that I wasn't planning on having to come up with. Old people are uninsurable, and if any of us thought that $5mil was enough before, it's going to be a minimum if we have to figure in medical care. Pretty sure we have enough money to live without SSI, not so sure if we have to do without SSI and medicare. And Medicaid is also an issue because I have a brother that lives off of SSDI and Medicaid.

[Ray]

Yeah, kill ACA and Medicare all at once. Some people see this as a dream come true. A whole lot more people will die from it... Some of them are the same people...

[avalonracing]

Originally Posted by Ray

Yeah, kill ACA and Medicare all at once. Some people see this as a dream come true. A whole lot more people will die from it... Some of them are the same people...

I'd like to nominate this as off-topic Comment of the Year.

[saab2000]

I'd be shocked if this market bubble doesn't burst at some point. Meanwhile I too am enjoying looking at my balance.

Keep on keeping on with the contributions to the ol' 401k and Roth IRA.

[93legendti]

Funny thread.

[echappist]

Originally Posted by SlackMan

The point of having international exposure is to provide diversification. With diversification, the overall portfolio (U.S. + international) should have lower volatility over time than a pure U.S.-based portfolio.

theory often differs from practice, especially when it comes to economics. You are assuming that events that lead to volatility is evenly distributed whereas this isn't valid. Historical performance of the EAFE (what many foreign equity indices seeks to emulate) in the last 15-20 years isn't nearly as high as that of S&P 500 or small cap, and the historical trend has been quite a bit more volatile. It goes through corrections (-10%) a lot more often compared to S&P, though you could argue that the latter has been recently propped up by investors pumping money into the U.S. stock market in search of better returns. It still hasn't recovered the value of the index pre 2007.

With the future of the eurozone uncertain, Japan continuing in its slumber, and three of the BRICs reeling, you get the feeling it's troubling times ahead.

Moreover, international stocks are much cheaper relative to U.S. stocks right now.

What good does cheap do when it can't generate positive returns? People aren't buying index funds shares in order to accumulate enough shares to influence the direction of a company. People invest in index funds in the hope that the increase would hopefully be the equivalent of 7-8% annualized.

[rnhood]

Originally Posted by avalonracing

I'd like to nominate this as off-topic Comment of the Year.

And the dumbest.

[fuzzalow]

Originally Posted by Ray

Yeah, kill ACA and Medicare all at once. Some people see this as a dream come true. A whole lot more people will die from it... Some of them are the same people...

Originally Posted by avalonracing

I'd like to nominate this as off-topic Comment of the Year.

Originally Posted by rnhood

And the dumbest.

No way man, Ray was dead-on.

Being this flow of conversation is already all over the map, I'll toss in my goofy remark: If there was ever a success in privatizing SS, The Street would be all over it, like white on rice, working through ways, using guys like me, to figure a way to steal it from you.

Totally nuts. Richest & most powerful nation-state in the world that looks to throw much of its citizenry, many of which don't know how things work and what will happen, to the wolves. Sure, elitism is detestable. But so is stupidity, connivance, avarice and immorality. Which one is you?

[unterhausen]

to answer the OP's question, I can't watch. Never does me any good unless I'm actively trading, and I haven't done that in a long time. I expect it will take some time before the crash happens. I compounded some really stupid investing decisions by pulling the money out, so as long as my current adviser is happy, I'm leaving things the way they are. I'm in relatively safe things.

[regularguy412]

Originally Posted by unterhausen

to answer the OP's question, I can't watch. Never does me any good unless I'm actively trading, and I haven't done that in a long time. I expect it will take some time before the crash happens. I compounded some really stupid investing decisions by pulling the money out, so as long as my current adviser is happy, I'm leaving things the way they are. I'm in relatively safe things.

I kinda 'watch', but rarely make any moves. I have an IRA that has a bit in it and it's pretty benign -- meaning that this year's return is around 4%. I have a 401(k) with only a little in it and I've got it slightly more aggressive -- so it's return this year is around 6.8%, so far.

Probably gonna watch things a bit more closely after Jan.1 cuz by the 20th,, mebbe the trend will be set a bit better. (fingers crossed).

Mike in AR

[gemship]

Originally Posted by 93legendti

Funny thread.

Over here we like to play a little game called Trump.

[tommyrod74]

Originally Posted by fuzzalow

No way man, Ray was dead-on.

Being this flow of conversation is already all over the map, I'll toss in my goofy remark: If there was ever a success in privatizing SS, The Street would be all over it, like white on rice, working through ways, using guys like me, to figure a way to steal it from you.

Totally nuts. Richest & most powerful nation-state in the world that looks to throw much of its citizenry, many of which don't know how things work and what will happen, to the wolves. Sure, elitism is detestable. But so is stupidity, connivance, avarice and immorality. Which one is you?

All true.

[soulspinner]

Originally Posted by tommyrod74

All true.

Abso fricken lootely