Nervous about 2020 election climate

[marlake]

I have, until now, pretty much ignored considerations of "risk tolerance". I have a portfolio far more aggressive than someone 73 yrs of age should have. Like many, I have enjoyed the long Bull market while nervously awaiting the next recession that all the Bears promised was right around the corner and wondering if I would have time to recoup my losses.Here's my thoughts for my investments for 2020. I have more money right now than I could ever spend, barring the unforeseen, in my lifetime. Others might not do so well on my nest egg but my simple needs can easily be met. I don't want a political debate but the investment community has indicated that an election win by any of the front running socialist candidates would have a devastating effect on the stock market. I've seen claims of from 25% to 35%.I realize the election is a year away but the uncertainty that will exist between now and then will no doubt create a drag on the market.I'm considering rolling all my investments into bonds or CD's at about 2% return for a year or two. If/when the dust settles I could reassess the market, my health, my current needs etc. and move accordingly. I understand the warnings surrounding trying to "time the market". and I agree in principal but I feel strongly that this is different. If what my instinct tells me is even some what accurate, I need to try to cut my losses. Not to over simplify but if your car is headed for a tree, hit the brakes to avoid disaster.I'd like very much to hear any ideas that might be a better approach to my desire to hold on to as much as I can.Thank you for your attention.

[JayLaw]

You are thinking correctly. Though I would say, given your age, by now you should already have a well diversified portfolio and should only be playing the stock markets with play money and let the rest make you modest gains in safer (less risk) options.

[marlake]

You are thinking correctly. Though I would say, given your age, by now you should already have a well diversified portfolio and should only be playing the stock markets with play money and let the rest make you modest gains in safer (less risk) options.

Thanks for the response. I tried to explain that I understood "risk tolerance" and the need for a less aggressive (diversified) portfolio. I watched closely for signs and signals that something was awry and bubbles were about to burst. The last recession taught many lessons, it seems, and they continue to influence business. Fundamentals are strong. Deregulation is allowing companies to see clearer and farther down the road as they plan their growth. A jittery Fed is diligently on the watch for any hint of inflation and adjusting rates accordingly. Consumers are making more and, hence, spending more which further fuels growth. One of the things that makes me feel my investments are safe is simply driving by any big city and looking at the skyline and counting the cranes involved in new or added construction. That indicates, to me, a strong confidence in the future.As hindsight is always 20/20, it seems that my instincts were correct. Had I diversified "when I should have" I would not have enjoyed the growth that I did. And, I would stay the course for next year were it not for the election.What causes my concern for 2020 is that sentiment rather than fundamentals will be in play in the market. Then it becomes a real "crap shoot".

[Bassin08]

I am very close to your age and went through the same thoughts in the fall of 2018. I was told with interest rates increasing that my bond funds would be dead money. I was also told that we we’re headed for a possible recession in 2019, or 2020. Given my age and time frame, I sold almost all of my risk and went into CD’s. The rates were acceptable being 2.5 to 3.1. I did keep my Roth IRA in high dividend paying stocks and have done well.

My problem now is, the FED dropping rates and having an affect on renewal rates on some of the CD’s. I did ladder them between one and five years. Some are callable at different durations and some are locked in for the term. Now at the beginning of 2020 I am going to have a large part of our investments earning less than the inflation rate. Also, what if the FED is put in the position of implementing negative rates?

I feel like I have painted myself into a corner. I felt a great relief in 2018 when I did this, but that is a waning feeling right now. I just read an article yesterday stating that the American public is carrying 14 trillion dollars in debt. Why would the FED keep lowering interest rates to increase this public debt? How safe are CD’s? To me I see a 2008 scenario where there isn’t a safe place for your money.

[ToyotaKev]

Funny, but I have similar fears as an individual who is looking at retirement in 2024...scared to death of losing gains over that period of time...fingers crossed!

[marlake]

Hey guys. What do you think about just selling off and leaving everything in your core or cash position till the storm clears. I believe that if the President is reelected the market will stabilize and resume its bullish momentum.Bassin08---CD renewal rates may shrink somewhat but you can't suffer a loss as great as the 25%/35% drop in the market I've heard predicted. I still think I'm going to do what you did with CD's. Cash is safe but no longer an "investment". I guess when you start to get scared you should get off the roller coaster. That's what I'm struggling with.God protect all us old farts. P.S. Jeffrey Epstein didn't kill himself

[Bassin08]

After a person has done what I did, how do you know when it’s safe to get back in? For me, I never planned on getting back in, but if CD rates go negative, I will start looking for way’s to grow our money to keep up with inflation. For what it’s worth, I’m 76 years old and we don’t use our investments for income.

[DanR]

I have, until now, pretty much ignored considerations of "risk tolerance". I have a portfolio far more aggressive than someone 73 yrs of age should have. Like many, I have enjoyed the long Bull market while nervously awaiting the next recession that all the Bears promised was right around the corner and wondering if I would have time to recoup my losses.Here's my thoughts for my investments for 2020. I have more money right now than I could ever spend, barring the unforeseen, in my lifetime. Others might not do so well on my nest egg but my simple needs can easily be met. I don't want a political debate but the investment community has indicated that an election win by any of the front running socialist candidates would have a devastating effect on the stock market. I've seen claims of from 25% to 35%.I realize the election is a year away but the uncertainty that will exist between now and then will no doubt create a drag on the market.I'm considering rolling all my investments into bonds or CD's at about 2% return for a year or two. If/when the dust settles I could reassess the market, my health, my current needs etc. and move accordingly. I understand the warnings surrounding trying to "time the market". and I agree in principal but I feel strongly that this is different. If what my instinct tells me is even some what accurate, I need to try to cut my losses. Not to over simplify but if your car is headed for a tree, hit the brakes to avoid disaster.I'd like very much to hear any ideas that might be a better approach to my desire to hold on to as much as I can.Thank you for your attention.

I don't think it's a bad plan if that's what will help you sleep at night and not worry. Remember there are ALWAYS going to be deals on the stock market so don't feel like you are missing out on important "once in a lifetime" swing opportunities or long term plays. When you're comfortable again, there will be plenty that will be available to you. That was something I had to get over... I would stress if I didn't have any available buying power that I would "miss a deal" but I eventually realized there are always deals to be had when I'm ready to build up my portfolio. I'm riskier in my investment strategy due to having to make up for lost time. I only started investing and saving in my 40s and a divorce set my finances way back... So I will continue to ride my long term plays and some small swings for as long as I can before I pull out on the recession card.

[dvl2700]

I was at a 80/20 portfolio at 60 and the wife wanted to go to a professional money manager. Went to Vanguard and they sold some of my favorite stuff and put me at a 60/40 ratio of stocks to bonds. Thinking I would now do a 40 percent stock, thirty percent bonds, ten percent real estate, ten percent commodities and ten percent cash equivalent. Question is mutual funds ? EFT ? CEF ? individual stocks and bonds ?
dvl2700

[marlake]

I'd like to ask someone in Venezuela how they made out with their diversified portfolio after their government implemented their radical socialist agenda.Remember, my fear is that we have candidates openly offering free every thing (education, health care, reparation, housing, wages etc.) to a growing number of people who want to believe that free is free. I can't imagine that when push comes to shove that the majority of us would consciously opt for socialism but the fact that there is even that option is terrifying. I used to not vote when I was younger. I didn't feel that I knew enough about the candidates to cast a meaningful vote and didn't want to take the time to learn. It was a time when I thought that whether a democrat or republican, they were both just good Americans looking out for our interests but coming from a different philosophical perspective.That's clearly not what we're faced with today. We can't take for granted that common sense will prevail. We have to get out and vote to protect the future of our offspring.Unfortunately, some of our offspring are the millennials that are clamoring for the "free stuff". As we normally do for our children, we can save them from themselves.Thanks for listening. Rant over.

[NitroZ7]

I started buying more defensive stocks earlier this year and some bonds to help smooth out the volatility. Maybe you can mix it up with some stocks like Johnson and Johnson, Clorox etc. The yields on these are over what you normally get with bonds so maybe you can still hold some stocks that will help you sleep at night or even maybe just put some into a dividend ETF in case rates drop further. My biggest fear isn't the election it is that we do something crazy and go to negative rates.

[Finlander]

I'd like to ask someone in Venezuela how they made out with their diversified portfolio after their government implemented their radical socialist agenda.Remember, my fear is that we have candidates openly offering free every thing (education, health care, reparation, housing, wages etc.) to a growing number of people who want to believe that free is free. I can't imagine that when push comes to shove that the majority of us would consciously opt for socialism but the fact that there is even that option is terrifying. I used to not vote when I was younger. I didn't feel that I knew enough about the candidates to cast a meaningful vote and didn't want to take the time to learn. It was a time when I thought that whether a democrat or republican, they were both just good Americans looking out for our interests but coming from a different philosophical perspective.That's clearly not what we're faced with today. We can't take for granted that common sense will prevail. We have to get out and vote to protect the future of our offspring.Unfortunately, some of our offspring are the millennials that are clamoring for the "free stuff". As we normally do for our children, we can save them from themselves.Thanks for listening. Rant over.

The folks in Venezuela did not believe it could or would happen and helplessly watched their escape opportunities dwindle to a point that there is only escaping with the shirt on their back. If by some chance the liberals regain a political majority in this country it may be prudent to cash out early rather than gamble on when everything dips. It would be prudent to consider an economic adjustment prior to the coming election, especially if we see a lowering of interest rates. Consolidation to less risky position and one that is more easily transferrable. Lastly, strategic relocation may not be an option for some folks but has always offered the best defense against a declining or hostile government.

Do I see this happening in the USA, not at this time but it is very possible. History has a way of repeating itself because most folks are not students of history or they choose to disbelieve the reality around them. Without getting political, there is an amazing number of folks who vote left based upon a single emotional issue and fail to see the bigger picture of where their party platform is heading. Based upon the current declared debate mantra, the Left will take us beyond the point of no return in this country. Based upon the Venezuelan time table, we will have about 10 years before total chaos grips the country so exercising an escape option would need to be implemented in the first year or two, with each successive year becoming more difficult and costly.

The irony in all this is how many years I have heard the Left deny their true intentions until now. They have finally laid their cards on the table for everyone to see. If they get back in, I predict they will change the rules to suit their continued succession.

[brnzbaklvr]

..

[Jamie]

The folks in Venezuela did not believe it could or would happen and helplessly watched their escape opportunities dwindle to a point that there is only escaping with the shirt on their back. If by some chance the liberals regain a political majority in this country it may be prudent to cash out early rather than gamble on when everything dips. It would be prudent to consider an economic adjustment prior to the coming election, especially if we see a lowering of interest rates. Consolidation to less risky position and one that is more easily transferrable. Lastly, strategic relocation may not be an option for some folks but has always offered the best defense against a declining or hostile government.

Do I see this happening in the USA, not at this time but it is very possible. History has a way of repeating itself because most folks are not students of history or they choose to disbelieve the reality around them. Without getting political, there is an amazing number of folks who vote left based upon a single emotional issue and fail to see the bigger picture of where their party platform is heading. Based upon the current declared debate mantra, the Left will take us beyond the point of no return in this country. Based upon the Venezuelan time table, we will have about 10 years before total chaos grips the country so exercising an escape option would need to be implemented in the first year or two, with each successive year becoming more difficult and costly.

The irony in all this is how many years I have heard the Left deny their true intentions until now. They have finally laid their cards on the table for everyone to see. If they get back in, I predict they will change the rules to suit their continued succession.

I agree 100%