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#573
12-22-2018, 06:17 AM
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Chisholm's Custom Wheels Qui Si Parla Campagnolo 
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#575
12-22-2018, 10:39 AM
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I'm a value, buy and hold investor.
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#576
12-22-2018, 11:24 AM
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This is a terrible saying, and would be better framed to state that folks should periodically (at least annually) assess their portfolio allocation and risk tolerance. Many Americans have not recovered from the stock losses (realized and unrealized) they incurred from the Financial Crisis. That can be disastrous if combined with a job loss, particularly if you are or near 50 yrs old. You don’t have the time horizon to recover those losses and many older folks had a hard time finding new employment, much less a job that paid as well as their previous one. The economy is slowing and perhaps heading into a recession. Fundamentals (like shipping volumes, fixed machinery investment) are slowing; aging demographics alone will slow the economy. ‘Can you afford to lose 40% of your portfolio?’ is the question one needs to ask. And how certain is your job status and health - can you afford a large unplanned expense? How big is your rainy day fund - 6 months of living expenses? A prime example is my in-laws’ finances. They are near 80 and in good shape (also have pension and fixed annuities), but the last two weeks of October spooked them a bit. I reviewed their investments, and they had 45% to equities (mostly high quality) based on their financial advisor’s equity strategist outlook (one of the big firms like Schwab or Merrill). I told them to reallocate to very short-term bonds to reduce the volatility to equity and interest rate movements (since the Fed is hiking), which they did. They talked to their advisor and he replied that it’s “probably a good idea”. Geez! Equity markets are not what drives the economy - it’s the bond/credit markets. The hottest part of the market (leveraged loans) just went to $70 billion/month to zilch this month. No high yield bond issuance, either, which hasn’t happened since the financial crisis. That means companies that are not large, investment grade firms have no access to capital right now. The markets are fragile, and credit spreads (interest rate above treasuries) has increased sharply, which means new debt is much more expensive (also the new tax bill limits interest expense deduction for firms). So one can not time the market with precision, but there is some direction to which you should prepare. This retiring generation is the most vulnerable in history - as one must now fend for themselves with the near-extinction of pensions in the private sector. 401ks were not supposed to be full-on replacements for pensions and most folks don’t have much investment knowledge. With rising healthcare, safety nets (social security, Medicare benefits) at risk, and volatile markets, retirement is no longer “life on easy street”. Sent from my iPad using Tapatalk
__________________
My Bikes
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#577
12-22-2018, 11:41 AM
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One of the advice I adhere to (though I'm far from the stage in life where it's personally applicable) is "If you've won the game, stop playing." Advocating that clients nearing 80s should have 45% in equities, when the clients have other means of annual income stream, just seems careless at best and self-serving at worst. One wonders how much said "advisor" charges for AUM and for each trade. Good on you for pointing this out to them, and the story at least has a happy ending, as they listened to your advice. -------------------- ETA: I should add that most brokerage firm consumer-facing advisors (whose income is largely derived from asset under management fees, or AUM) don't have much more clue than the common joe. I think it was Buffett who said that he has no problem paying high fees to people who can actually make the right trades, but such people are far and few, and apparently not often found even at the hedge funds that charge 2 & 20... There's the old joke of tourists visiting the Boston Harbor. The guide first pointed to the banker's yachts, then those of the brokers. A tourist then asked, where are the yachts of the customers? Implication here being that the yachts are bought via commissions generated from transactions, as opposed to actual acumen that would serve to benefit both those giving advice and those obtaining advice. Last edited by echappist; 12-22-2018 at 12:09 PM.
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#578
12-22-2018, 11:42 AM
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#579
12-22-2018, 07:23 PM
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And now there is reporting that Powell may get the "You're fired." treatment.
I guess that is one way to ramp the stock market, just trash the dollar.
__________________
And we have just one world, But we live in different ones
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#580
12-23-2018, 06:43 AM
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__________________
Chisholm's Custom Wheels Qui Si Parla Campagnolo
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#581
12-23-2018, 10:27 AM
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I think the risk here with the market shutdown is since it is happening during Christmas, the market may be quiet enough thinking it will be solved before business starts in the new year. Politicians may read a quiet market as meaning a shut gov is no big deal. If the shutdown becomes prolonged and both sides dig in, it can get ugly.
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#582
12-23-2018, 10:39 AM
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Interesting to note that those who happen to have hundreds of millions of $$ in outstanding bank debt will now pay a big premium in additional interest. Just saying...
__________________
“A bicycle is not a sofa” -- Dario Pegoretti
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#583
12-23-2018, 02:04 PM
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#584
12-23-2018, 02:06 PM
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No one takes better care of your money or children than you.
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__________________
***IG: mttamgrams***
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#585
12-23-2018, 02:26 PM
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__________________
And we have just one world, But we live in different ones
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