2Squirrels1Nut
Footballguy
Sold the last 2 AMC options at $1.97. Meh
I am fully expecting a moderate correction. My definition is anywhere from 10-20%. Typically it snowballs and with a lot of new young inexperienced money that has entered the market here recently I expect some panic and uneasiness when a moderate 7-10% sell off happens that snowballs to 12-15% sometimes 20% and it happens really fast. This has been a buy the dips market for going on 12 years and I expect that to continue. I, like you remain a long term bull.I think the short and mid term might be a roller coaster ride for the markets—but I think the fed stuff is being overblown. Looking at things in a long term/macro view—- even with tapering and rising rates—I don’t see how the taper and increasing our rates from effectively 0 percent to maybe 2.5-3% in the next 2-3 years will remotely offset the massive amount of liquidity the government pumped into the markets and circulation over the past few years. I see a moderate to high inflationary environment for a while—and we’ll be living in a world where everything is expensive—food, rent, cost of living, labor, energy, real estate—and equities. I’m personally hoping for a moderate correction as I like the idea of adding to my equities in this type of environment.
I am fully expecting a moderate correction. My definition is anywhere from 10-20%. Typically it snowballs and with a lot of new young inexperienced money that has entered the market here recently I expect some panic and uneasiness when a moderate 7-10% sell off happens that snowballs to 12-15% sometimes 20% and it happens really fast. This has been a buy the dips market for going on 12 years and I expect that to continue. I, like you remain a long term bull.
There is nothing wrong with a healthy correction and you typically see 1-2 10% corrections in bulls markets during good years. It is nothing new.
People forget about 2018......when the Fed did do a couple of raises from 0 and the market had a fit. Everyone forgot about that.
I did not. And I expect the same type of reaction.
The market will speak at some point. No matter what all these talking heads on CNBC and Fox Business, Bloomberg etc say.....”oh it’s priced in” “the market is expecting it already so no need to worry” yeah.....no need to worry long term but short term the volatility will happen and again we are so high that the speed and violence of algorithmic trading can send a jolt thru the market.
Long term investors should have 95% quality in the portfolio.....then you never have to worry about this stuff long term.
But people approaching (close or very close to retirement) or in retirement need to have a different approach. Rebalancing and reallocating out of a lot of growth and really getting a lot more defensive and dividend and income orientated is critical for those going into 2022 looking to retire soon.
If you are in retirement this is a great time to really analyze your income portfolio and making sure you move out of more interest rate sensitive stuff (cough cough high yield and corporate bond funds and high yield leveraged equites) into more staples, utilities and munis. Make sure your income can be stable and predictable but also making sure your capital won’t get jolted too much either. If the market corrects 20% you don’t need that kind of volatility anymore. You should want a standard deviation (a measure of implied volatility) of at least 35-40% than that of he S&P 500.
So some food for thought for anyone in that position.
It has been a great run.....and shaving off some growth here is prudent if you are very close or in retirement. In fact building cash for one years worth of expense’s is nice rule of thumb when you are expecting a lot more volatility because you can then re-deploy that into some great value dividend paying stocks that will be on sale or add to ones you already own (you are living off your dividends anyway). If it presents itself then that can be a great yield to cost situation and enhance the yield of your portfolio long term.
I approve this post.I am fully expecting a moderate correction. My definition is anywhere from 10-20%. Typically it snowballs and with a lot of new young inexperienced money that has entered the market here recently I expect some panic and uneasiness when a moderate 7-10% sell off happens that snowballs to 12-15% sometimes 20% and it happens really fast. This has been a buy the dips market for going on 12 years and I expect that to continue. I, like you remain a long term bull.
There is nothing wrong with a healthy correction and you typically see 1-2 10% corrections in bulls markets during good years. It is nothing new.
People forget about 2018......when the Fed did do a couple of raises from 0 and the market had a fit. Everyone forgot about that.
I did not. And I expect the same type of reaction.
The market will speak at some point. No matter what all these talking heads on CNBC and Fox Business, Bloomberg etc say.....”oh it’s priced in” “the market is expecting it already so no need to worry” yeah.....no need to worry long term but short term the volatility will happen and again we are so high that the speed and violence of algorithmic trading can send a jolt thru the market.
Long term investors should have 95% quality in the portfolio.....then you never have to worry about this stuff long term.
But people approaching (close or very close to retirement) or in retirement need to have a different approach. Rebalancing and reallocating out of a lot of growth and really getting a lot more defensive and dividend and income orientated is critical for those going into 2022 looking to retire soon.
If you are in retirement this is a great time to really analyze your income portfolio and making sure you move out of more interest rate sensitive stuff (cough cough high yield and corporate bond funds and high yield leveraged equites) into more staples, utilities and munis. Make sure your income can be stable and predictable but also making sure your capital won’t get jolted too much either. If the market corrects 20% you don’t need that kind of volatility anymore. You should want a standard deviation (a measure of implied volatility) of at least 35-40% than that of he S&P 500.
So some food for thought for anyone in that position.
It has been a great run.....and shaving off some growth here is prudent if you are very close or in retirement. In fact building cash for one years worth of expense’s is nice rule of thumb when you are expecting a lot more volatility because you can then re-deploy that into some great value dividend paying stocks that will be on sale or add to ones you already own (you are living off your dividends anyway). If it presents itself then that can be a great yield to cost situation and enhance the yield of your portfolio long term.
That thing trades like a penny stock so be wary of whiplash.Hot damn that was a big change. Trailing the indexes to now beating them. Glad I added some more DOCN yesterday as I’d been wanting to do and having it go pretty low.
@McBokonon I added 200 of MQ in the $16s when it was still down a chunk earlier.
Have you looked at BA, DIS, CRM and PPYL current and forward multiples?As someone that hasn't been doing this that long how different is this with the massive, resilient companies we currently have that prop up indexes like AAPL and MSFT?
As still a relative noobie it feels like those companies (and FAANG in general) have really hidden some massive corrections we've already had. SPY is down like 1.5% since mid-November but that is with AAPL up 20% in that time. If AAPL and other FAANG was down something modest like 2% over that time, SPY would probably already be sitting on a 15% pullback. Lord knows a lot of the other stocks in the index are down that much or more.
There are a lot of companies, even a lot of good ones, that are already way down off their highs. Boeing 36% off it's 52 week high, CRM 22%, Disney 31%, Paypal 40%, etc.
Then you get into the mid-cap and small cap stuff and some of them are 50%+ off their highs already.
QQQ has had two 8% corrections and a 13% correction so far this year, and that's with AAPL/MSFT in there. Take those two out and it's probably more like 15-20% each time.
I guess my question would be, with so much of market health being dictated by the SP500 which is largely driven by a small handful of uber massive and resilient companies, if we actually do see the S&P pull back 15-20% where is that going to leave all the mid/smallcap stuff? How much more can they pull back from the 40-60% they already have? Are we talking 90% here, because that seems more like a crash than a correction.
I am fully expecting a moderate correction. My definition is anywhere from 10-20%. Typically it snowballs and with a lot of new young inexperienced money that has entered the market here recently I expect some panic and uneasiness when a moderate 7-10% sell off happens that snowballs to 12-15% sometimes 20% and it happens really fast. This has been a buy the dips market for going on 12 years and I expect that to continue. I, like you remain a long term bull.
There is nothing wrong with a healthy correction and you typically see 1-2 10% corrections in bulls markets during good years. It is nothing new.
People forget about 2018......when the Fed did do a couple of raises from 0 and the market had a fit. Everyone forgot about that.
I did not. And I expect the same type of reaction.
The market will speak at some point. No matter what all these talking heads on CNBC and Fox Business, Bloomberg etc say.....”oh it’s priced in” “the market is expecting it already so no need to worry” yeah.....no need to worry long term but short term the volatility will happen and again we are so high that the speed and violence of algorithmic trading can send a jolt thru the market.
Long term investors should have 95% quality in the portfolio.....then you never have to worry about this stuff long term.
But people approaching (close or very close to retirement) or in retirement need to have a different approach. Rebalancing and reallocating out of a lot of growth and really getting a lot more defensive and dividend and income orientated is critical for those going into 2022 looking to retire soon.
If you are in retirement this is a great time to really analyze your income portfolio and making sure you move out of more interest rate sensitive stuff (cough cough high yield and corporate bond funds and high yield leveraged equites) into more staples, utilities and munis. Make sure your income can be stable and predictable but also making sure your capital won’t get jolted too much either. If the market corrects 20% you don’t need that kind of volatility anymore. You should want a standard deviation (a measure of implied volatility) of at least 35-40% than that of he S&P 500.
So some food for thought for anyone in that position.
It has been a great run.....and shaving off some growth here is prudent if you are very close or in retirement. In fact building cash for one years worth of expense’s is nice rule of thumb when you are expecting a lot more volatility because you can then re-deploy that into some great value dividend paying stocks that will be on sale or add to ones you already own (you are living off your dividends anyway). If it presents itself then that can be a great yield to cost situation and enhance the yield of your portfolio long term.
@Todem
Love and appreciate all your stuff. Largely agree with all your posts.
Im trying to get more clarity on your anti bond, anti fixed income rhetoric.
please elaborate on why you don’t like junk/high yield bonds going into anticipated fed rate increases. Is it that the prices will get hammered, or the dividends, or both?
same with the boring vanguard tax exempt bond funds for short term, medium term, long term - will prices get whacked and/or the dividends?
pleaae let me know your thoughts on these assuming 1, 5, or 10 years from retirement
thanks!
As a quick comment junk bonds, in particular, have seen their premium dive dramatically. People are stretching for yield and driving these rates down. That makes them very fragile. I see an asymmetric downside risk with those.@Todemplease elaborate on why you don’t like junk/high yield bonds going into anticipated fed rate increases. Is it that the prices will get hammered, or the dividends, or both?
I have lightened up on fixed income heading into what looks like at least 3 hikes next year and more as we move forward on our way to a more normalized interest rate environment.@Todem
Love and appreciate all your stuff. Largely agree with all your posts.
Im trying to get more clarity on your anti bond, anti fixed income rhetoric.
please elaborate on why you don’t like junk/high yield bonds going into anticipated fed rate increases. Is it that the prices will get hammered, or the dividends, or both?
same with the boring vanguard tax exempt bond funds for short term, medium term, long term - will prices get whacked and/or the dividends?
pleaae let me know your thoughts on these assuming 1, 5, or 10 years from retirement
thanks!
Had my NRGU buy set for 139 but it didn't trigger which is surprising. Bah. Will try again tomorrow.
Any recommendations in the utilities or materials space? Looks like EXC is still popular (should have jumped there when Todem mentioned to roll out of PPL) and I already have BEP. Just been doing a review and noticed my weightings there are among the lowest.
Big OKE fan...
Not sure if that's what you're after though
Today erased yesterday. Sucks.Man I really thought yesterday's reaction to the fed meeting was a shift in sentiment and bought some TQQQ to trade that. Could not have been more wrong. Ouch.
Same with Jonah Lupton subscription. I spent $90 and it’s cost $5000 now.Man that free Motley Fool stock advisor subscription from last year was hella expensive.
Man that free Motley Fool stock advisor subscription from last year was hella expensive.
Same with Jonah Lupton subscription. I spent $90 and it’s cost $5000 now.
What happenedMan that free Motley Fool stock advisor subscription from last year was hella expensive.
They are growth stock heavy in their recommendations, and it sounds like they bought/got the subscription at growth stock peak.What happened
Yea I’m never going to get any likes again.Wait, did they pinch the ROFL emogi?
You’re not that funny but that does suck. Did someone get offended by it?Yea I’m never going to get any likes again.
LOL, now that's funny, pretty harshYou’re not that funny but that does suck. Did someone get offended by it?
It has become extensively used in the PSF and not in a laughing with you kind of way.Did someone get offended by it?
I was just kidding, sad part is you couldn’t even like it with a ROFL.LOL, now that's funny, pretty harsh
Seriously? That’s so silly. What’s to stop this?It has become extensively used in the PSF and not in a laughing with you kind of way.
I disagree. Those… (deleted mean comment) would just be littering this forum if the PSF didn’t exist. Now they’re in their little crazy island taking turns talking to each other’s alias. It’s great.They should have nuked the PSF years ago. That thing has ruined this board.
It's Hamsterdam for message boards.I disagree. Those… (deleted mean comment) would just be littering this forum if the PSF didn’t exist. Now they’re in their little crazy island taking turns talking to each other’s alias. It’s great.
Seen this article? Not surprisingly REITs seem have the best chance to weather inflation well.Todem said:Fixed income.....I still like munis. Even though their prices will also fluctuate on the long side...I still like them. Floating Rate will be a great trade again as rates rise. Bank Preferred will do well. And Convertibles will do well after the recalibration. I have exited global bonds and emerging market debt and also really lightened up emerging market equity. There will be value there after rates rise and those asset classes fall.
I like REITS as a nice inflation hedge.
They should have nuked the PSF years ago. That thing has ruined this board.
Never have two statements been so untrue than whatever hype you've laid on us about Oregon football.
I disagree. Those… (deleted mean comment) would just be littering this forum if the PSF didn’t exist. Now they’re in their little crazy island taking turns talking to each other’s alias. It’s great.