3 tiered super bubble collapse… hope you guys have your affairs in order

[NitroZ7]

He has a point given where the S&P is in relation to its historical PE but there are stocks you can still buy at reasonable valuations. I keep hearing that the fed won't move fast enough to hurt the stock market because so many people are invested. However I have heard Jerome Powell on many occasion mention wealth inequality. I believe we had three periods where wealth was very concentrated and the wealth inequality problem was reduced each time by a market crash. So I guess the question to me is Jerome Powell more concerned about the market or inflation and will a steep decline in the market cause him to slow rate increases? I don't know but got some dry powder just in case. This is why I like quality dividend paying stocks. Much easier to hold on if you are still getting paid.

[Warpig556]

Close friend who was deeply involved in the last 3 economic crashes (ie closing banks) which included the agriculture crash of the 80’s, the S&L crash of the 90’s and the sub prime crises of the 2000’s, told me some sage advice before he retired.

The market never learns from its mistakes and bankers never learn from their mistakes. The allure of risky/bad investments and quick/large profits periodically pull them back into a situation where the market has to bust/reset. These market crashes are a business cycle. Invest approximately.

[NitroZ7]

On the bright side, if we rates go up in the next two years then those retiring may actually be able to hold some bonds again. I know for many retirees it would be a huge benefit to be able to get something from their cash and bonds.

[magfluker]

The rates need to go up and the money printing needs to quit. This change is needed. They will be as careful as they can be with it, one can hope. We will see what happens after the FOMC meeting today. Majority of the time, with a rate increase the markets respond well. We've already had our volatility from such rate increase announcements.

[boneil]

On the bright side, if we rates go up in the next two years then those retiring may actually be able to hold some bonds again. I know for many retirees it would be a huge benefit to be able to get something from their cash and bonds.

But with rates rising, wouldn't that mean bond prices would drop. Would return from rates be more than the drop in prices?

[TampaJim]

It's paper, just paper ... stocks, bonds, currency, etc.
Put your paper into better paper, that's it, no secret.
I'll continue to buy good companies, long term, easy.
Energy, core consumer, food, housing, healthcare.

[janky]

But with rates rising, wouldn't that mean bond prices would drop.

Yup.

Would return from rates be more than the drop in prices?

Not likely. Very few retail individuals will buy individual bonds. As you know, most will own some kind of bond fund which will not be a good place to be.

[Stein]

It wiped out my wife’s retirement, we never really recovered from that, but we adapted.

Why would that have happened and when was "it"? Had you done absolutely nothing it would have all come back plus more.

[NitroZ7]

But with rates rising, wouldn't that mean bond prices would drop. Would return from rates be more than the drop in prices?

I'm talking about once they hit a level where retirees could buy them for income. That would be when the yield exceeds the inflation level which may be a 2 years out or so depending on where inflation heads and where yields head. At. that point retirees can hold a portion of them in their portfolio if they are risk averse. I wouldn't lump sum into them now for sure but if you are in your 70's most people probably don't want to be 100% in stocks and would prefer principal protection to higher returns.

[barkleyhawggitter]

Why would that have happened and when was "it"? Had you done absolutely nothing it would have all come back plus more.

she probably had it in pork bellies and the Russian market.

[NitroZ7]

Yup.



Not likely. Very few retail individuals will buy individual bonds. As you know, most will own some kind of bond fund which will not be a good place to be.

They now make ETFS that liquidate on maturity so they are not perpetual. If you buy one of these that holds treasuries it is just like holding an individual treasury in that you will be paid back your principal (less whatever fee the ETF charges) at the maturity date. People can buy smaller amounts of these instead of buying an individual treasury bond. Like mentioned above, the yields are not compelling right now so they are not attractive unless you just want to park cash in something with a little more yield than a money market.

[acesover]

But Boneil says everything is going fine. It just costs a few more bucks to maintain your current lifestyle and the economy is booming. I mean, who could doubt the moderator of a stocks and bonds forum of a bass fishing forum.

[bngolfen]

He and his dad always negative nellies but one day he will be right.

[Tfall]

But Boneil says everything is going fine. It just costs a few more bucks to maintain your current lifestyle and the economy is booming. I mean, who could doubt the moderator of a stocks and bonds forum of a bass fishing forum.

[TampaJim]

Here's the hard skinny ... barring stupidity, greed, etc. nothing has changed.
If you were in the Top 5% pre-pandemic/inflation, you're in it today. Winning.
If you were dead in the middle pre-pandemic/inflation, you're still there too.
Sliding into first base face first? Bottom 10% own it, no change for you either.

With the rare exceptions for a few fortunate or unlucky souls, it's irrelevant.
Complaining about 6% inflation but not mentioning the 25% equity boost?
Or maybe fussing about 12% more for steak, while enjoying a big fat raise?

Elon, Jeff & Bill are still stinky rich and I'm not invited to dinner. Net zero.

[Orion922]

Here's the hard skinny ... barring stupidity, greed, etc. nothing has changed.
If you were in the Top 5% pre-pandemic/inflation, you're in it today. Winning.
If you were dead in the middle pre-pandemic/inflation, you're still there too.
Sliding into first base face first? Bottom 10% own it, no change for you either.

With the rare exceptions for a few fortunate or unlucky souls, it's irrelevant.
Complaining about 6% inflation but not mentioning the 25% equity boost?
Or maybe fussing about 12% more for steak, while enjoying a big fat raise?

Elon, Jeff & Bill are still stinky rich and I'm not invited to dinner. Net zero.

Jim--I read your posts and enjoy 90 percent of them and no doubt you are a smart man. However, then you make a comment I cannot understand at all. 25 percent equity boost? What does this mean? More so, how does an investment portfolio hedge paying 7-50 percent more on items on a daily basis? Fussing about steak??? You might be the only human on earth happy to be paying more.

[TampaJim]

Jim--I read your posts and enjoy 90 percent of them and no doubt you are a smart man. However, then you make a comment I cannot understand at all. 25 percent equity boost? What does this mean? More so, how does an investment portfolio hedge paying 7-50 percent more on items on a daily basis? Fussing about steak??? You might be the only human on earth happy to be paying more.

Home equity, portfolios, etc. even our owned autos have appreciated lately.
And I'm not "happy" to pay more for steak, but we CAN afford it with our "raises".
We both received COLA adjustments, share dividends, etc. It's self-balancing.

P.S. When steak is high, eat beans. When autos are high, hold off if possible.

[RJR]

I remember back in 1928 the bbc experts said don't worry, the market will be fine.

[Gsmith223]

I remember back in 1928 the bbc experts said don't worry, the market will be fine.

Dont worry 1928 was a long time ago. We got the "New Deal" now.

[NitroZ7]

I would love if Wallstreet Bets was around in 1929. That would be some awesome reading.