Yep......Rayak. You have got to love....government. My view....there is only ONE WAY to deal with all the constant "stuff' that government and others throw at the markets and USA business.....by investing for the long term in the most DOMINANT companies possible. The companies that have the ultimate business strength to survive it all and thrive. The companies that are.....too big to fail.....until they do.....hopefully years down the road. AND.......when a company fails....like NIKE over the past 3-4 years.....you sell and move on. My GREATEST concern for the BIG DOMINANT companies that I own......the constant attacks and threats from government and radical government beurocrats to punish them and break them up under antitrust BS.
A MILD open today....very much like yesterday.....but probably worse. Not a lot of confidence being shown by the markets at this moment. We will just have to wait and see how things settle in after the turmoil of the open and the opening trading.
A very nice little article that is perfectly relevant right now. Summer’s Dip Completes Round Trip, Again Proving Market Timing’s Perils Why going to cash when markets are bouncy may not be the salve you think. https://www.fisherinvestments.com/e...ound-trip-again-proving-market-timings-perils (BOLD is my opinion OR what I consider important content) "Can you hear investors’ collective sigh of relief? The S&P 500 is back at new highs after a W-shaped recovery from its summertime dip, which flirted with a full-blown correction (sharp, sentiment-driven -10% to -20% pullback) in early August. While there is never an all-clear signal for stocks, the two-month turnaround highlights how short-term volatility can both start and end unpredictably—and why short-term market timing is so perilous for investors needing equity-like returns over time. As Exhibit 1 shows, when volatility strikes, headlines go into overdrive seeking eyeballs from suddenly wary investors, potentially stoking more fear—and further inflaming volatility, which lends fears more credibility than they arguably deserve. And they often keep hyping those things far into a recovery—well after markets have moved on. Short-term sentiment wiggles have little bearing on stocks’ longer-term direction, which depends largely on how well earnings expectations match reality over the next 3 to 30 months. Exhibit 1: Bouncy Stocks—and Surrounding Headlines—Are No Reason to Quit Them Source: FactSet, as of 9/20/2024. S&P 500 total return, 12/31/2023 – 9/19/2024. Headlines sources (in chronological order): Staff, The Economist, 7/16/2024; Michael Sincere, MarketWatch, 7/20/2024; William Edwards, Business Insider, 7/27/2024; Prashant Rao and Marta Biino, Semafor, 8/2/2024; Amanda Cooper, Reuters, 8/5/2024; Staff, Reuters, 8/9/2024; Bill Stone, Forbes, 8/11/2024; Carolina Mandl, Reuters, 8/12/2024; Alexandra Canal and Karen Friar, Yahoo! Finance, 9/6/2024. The decision to exit stocks should always be forward looking, not a reaction to past market moves or stale news stocks dealt with long ago. Either you suspect a bear market (a fundamentally driven decline exceeding -20%) is developing—when most others don’t, as well-known fears lack surprise power—or your personal situation changes, requiring a lower stock allocation to meet new financial objectives. That may require adjusting cash flow (and spending) decisions, saving rates and more. Absent those developments, getting out of stocks is usually a mistake. Too often, the urge to flee occurs just after a bout of sharp volatility. Cashing out then presumes you can get back in below or level with where you were before—and without volatility just resuming thereafter. This is extremely difficult, as sentiment-driven volatility can occur for any or no reason—and can flip on a dime. Moreover, there is an emotional challenge: If you exit because of a decline, how willing will you be to buy in when the decline has gotten worse? When dealing in hypotheticals, the allure of snapping up bargains is easy to cite. It is far harder to actually do, though. Short-term timing rarely works out well. Consider a recent Morningstar study approximating market timing’s costs. It finds the returns investors actually earned lagged their funds’ posted returns by an average -1.1 percentage points annually—tied to “mistimed purchases and sales” from frequent trading. Now, the methodology here is imperfect. It uses fund flows (purchases and sales) to estimate investors’ exposures—and performance. It can’t fully account for how proceeds are reinvested (or not) after they sell. But this aligns with our experience, even if magnitudes vary. Some may think the risk of missing returns is worth it since you aren’t earning zero on cash nowadays. But yields around 5%, while perhaps enticing when stocks were dropping, pale next to the bull market’s 64.7% return from October 2022 so far.[ii] And while inflation has subsided, cash returns generally reflect inflation rates longer term. Its real returns (adjusted for inflation) gravitate to just above zero over time. Maintaining purchasing power isn’t nothing, but we doubt that is sufficient for most investors’ long-term financial goals. Of course, volatility like we have experienced lately can be difficult—and can flare any time, for any reason. But time in the market is an individual investor’s greatest advantage, not timing it. Remember: Short-term volatility is why stocks’ long-term returns are high—the reward for investors sticking it out. While cash may seem comforting in the moment, its lack of volatility means there is little (real) reward for parking your funds there. This could make it harder to reach your long-term investment goals, raising your overall financial risk. The solution, in our view, isn’t to tie your brain (or your stomach) in knots over short-term swings you will never know with certainty how to trade. Tune them out and look longer term. Are stocks likely to be up over the next 12 to 18 months? What, if anything, do you see that could end the bull market that others don’t? If sentiment isn’t euphoric and a global expansion-ending wallop isn’t evident, stocks probably move higher—and you shouldn’t be in cash. Ultimately, reaping stocks’ rewards to achieve your lifetime financial aims means not missing out on them. Staying invested during bull markets—and occasional bouts of volatility—is essential to that." MY COMMENT NOTHING ever changes. Same message in this little article as is spread all through this post. YES.....it takes GUTS to be a long term investor and not be fooled into trying to time the markets by your emotions. But....the longer you do it the easier it gets. You learn to IGNORE all the noise and pressure of the headlines. During my entire investing career the ACADEMIC RESEARCH has been totally consistent.....market timing does not work......fully invested for the long term wins out......all in all at once is the best long term strategy for new money......trading is a losing game for the vast majority of investors. Of course it is also all about....QUALITY, QUALITY, QUALITY in what companies you choose to own
Here is a nice little article that ties in to the recent discussion posed by RAYAK. Weekly Market Pulse: Did The Fed Just Make A Mistake https://alhambrapartners.com/weekly-market-pulse-did-the-fed-just-make-a-mistake/?src=news MY COMMENT A good little article that is worth reading. Here is the final summary of the article: "So, did the Fed make a mistake? I don’t know and I’ve said many times, I don’t think the Fed matters as much as most people think. Economic growth per capita is about innovation – productivity growth – which has little to do with interest rates (monetary policy) or grand government plans (fiscal/regulatory policy) and a lot to do with the creativity. True growth is about human capital, the imagination, skills, knowledge and experience possessed by the American people. For much of the last decade, economic policy has been about trying to force economic growth through government coercion such as tariffs and industrial policy (CHIPs Act, etc.). We don’t know the final outcome of these policies yet but history isn’t kind to this heavy handed approach. Can we still get the good outcome, the one where AI or some other innovation creates higher growth and lower inflation? Of course we can but I’d hardly call the odds overwhelmingly in favor." I am personally more optimistic than this writer......but this is a legitimate view. My view is that we have already paid the price for the government and FED policies of the 2008 to 2020 time period. We paid the price during the 2022 NASTY BEAR MARKET and the recent SOARING inflation. The pandemic and economic shut down changed the story-line and we have now shot out the other end of the pipe.....in better shape than most people anticipated. AI...has had a lot to do with this result. BUT, even if inflation is now under control.....we have to avoid slipping into a deflationary environment.....stagnation. AND....there is NO DOUBT that people and small business are still being hammered by the HUGE price increases of EVERYTHING that have occurred over the past three years.
Here is another little article that is relevant to the recent discussion in this post. We finally got a rate cut. Here’s what history says will happen next https://www.cnn.com/2024/09/23/economy/rate-cut-what-next/index.html?utm_source=business_ribbon (BOLD is my opinion OR what I consider important cocntent) "New York CNN — So we finally got a rate cut — and a supersized one at that. After the move was announced Wednesday, Federal Reserve Chair Jerome Powell said officials made that decision to keep the US economy in its current “good shape.” Will that pan out? Only time will tell, of course, but recent history doesn’t make it look like it’s a sure shot by any means. Here’s a look at what could happen to the economy in terms of the labor market, inflation and the likelihood of a recession now that the Fed has lowered its sky-high benchmark lending rate. Recession track record: mixed Oftentimes, the Fed cuts interest rates because it expects economic conditions will worsen drastically in the near future and it wants to preemptively soften the blow, knowing it sometimes can’t prevent a recession altogether. So in that regard, it shouldn’t be too shocking that recessions frequently begin after the Fed cuts rates. Excluding the rate cuts that happened during the pandemic, the Fed has had six cutting cycles since 1990. Starting from the point that the Fed began cutting, the economy has fallen into a recession 18 months later on average. But it’s a wide range: For instance, after the Fed began lowering rates in July 1995, it took 69 months for a recession to occur. However, a recession started immediately when the Fed cut rates in July 1990 and just two months after it cut in January 2001. But it’s certainly not a comforting sign that one recession indicator is currently flashing. Unemployment rate: generally rises On average, for those six cycles, the unemployment rate rose by 1.4 percentage points a year after the Fed cut rates. But had it not been for the pandemic that occurred less than a year after the Fed cut rates in August 2019, the unemployment rate likely wouldn’t have sprung up by nearly five percentage points by August 2020. For instance, a year after the Fed cut rates in July 1995, the unemployment rate was unchanged at 5.5%. And the unemployment rate was actually lower in September 1999 compared to September 1998, when the Fed began a cutting cycle. In the other four instances, the unemployment rate was at least a percentage point higher a year after the Fed cut rates. Inflation: no clear trend The Fed is currently playing risk manager. As it looks to keep the economy in good standing, a growing concern is whether cutting rates will cause inflation to spike. Fed Governor Michelle Bowman, who voted for a smaller quarter-point cut as opposed to the half-point cut other officials voted for, said in a statement Friday that she was concerned the larger cut could “unnecessarily” stoke demand, potentially ushering in more inflation. The concerns are valid, based on past cutting cycles. For instance, after the Fed cut in 1996 and 2007, the annual pace of inflation, as measured by the Consumer Price Index, rose by over a percentage point a year later. But in some cases, the Fed actually lowers rates in order to allow inflation to accelerate if prices are rising too slowly because consumers may be putting off purchases. But in several other instances, inflation cooled significantly. Part of the reason for that is that the unemployment rate generally rose when inflation cooled. That’s because when consumers are unemployed, they tend to cut back on spending, which means businesses can’t pass along higher prices." MY COMMENT I do NOT anticipate a recession. BUT.....18 months down the road....2-3 years down the road....who knows. RECESSION is actually a normal event in our economic history. I actually dont think the FED has much relevance in terms of the current economy. They are just following....being pulled along by events that they have no real control over. I see the AI REVOLUTION as the key economic event of the next 5-15 years. If all the....AI STUFF....pans out as a event on the scale of the....industrial revolution, the advent of the internet, WWII pulling our out of the depression, etc, etc, etc....no one will care about what the FED is doing right now. The other BIG FACTOR in what the FED is doing is the approaching election. There is a very clear distinction on what our government will be doing...in terms of business and the economy.... depending on who wins the Presidency and Congress.
If you want to get further down into the weeds of the FED and this rate cut...here you go. Personally I am more interested in the upcoming EARNINGS.....and.....will simply invest through whatever happens. Same as usual. So....as should be abundantly clear in this post.....I really am not concerned about the FED one way or another. Fed up with Fed Talk? Fact-checking Central Banking Fairy Tales! https://aswathdamodaran.blogspot.com/2024/09/fed-up-with-fed-talk-central-banks.html
In line with the posts above....here is one final little article.....if you have any interest in potential negative impacts of the FED cut. Fed Governor Bowman explains dissent on rate vote, says she’s worried about inflation https://www.cnbc.com/2024/09/24/fed...e-vote-says-shes-worried-about-inflation.html
I am a run your own race kind of guy but I also like having some sort of metric or benchmarks to see where I'm at. These averages, while completely believable, are extremely low. I can't imagine sleeping at night at 65 years old with only $272k. It appears the vast majority of americans are relying extremely heavily on our SS system. We didn't see the giant economic collapse that people were speculating when the boomers dropped out of the work force. Or maybe we did and the Pandemic shutdowns over shadowed it!. Anyway, the data for the next decade of the quality of retirement for the baby boomers should be interesting. They have SS, many have pensions and 401k's, they enjoyed a bull market for the last 10 years of their working life and if they are homeowners many have doubled their money on home value. If they struggle then I would consider it a warning sign for the next generation to take note and make changes. I will tell you there are some Gen Z's that I work with that are pumping money into 401k's and HSA's and know the importance of saving, investing and compounding. I believe some of this is from the rise in popularity of FIRE and all the articles, discussion boards and short videos on it. While only a fraction of people can pull it off the primise of living well within your means and investing are a good foundation for future financial stability, even if you do have to maintain some source of employment. Time will always be our most valuable asset. Time in the market. Time with Friends and Family. Time doing what we want to be doing. According to Vanguard's 2024 report, the average 401(k) balance in 2023 was $134,128, which is up 19% from the end of 2022. The average 401(k) balance by age is: Under 25: $7,351 25–34: $37,557 35–44: $91,281 45–54: $168,646 55–64: $244,750 65 and older: $272,588
I will say that regardless of the content of the last four or five articles posted......I remain very positive for the near term and long term future for investors. I put those articles up for discussion and content that some on here might find interesting. For the most part they do not reflect my views on where we are headed. BUT.....no one has a crystal ball.
YEP.....many people are in for an old-age shock Tiresmoke. But.....they will just muddle through on Social Security and what they have. I see people doing that every day and somehow they survive.
Speaking of Social Security......Tiresmoke We are closing in on the 2025 cost of living increase in Social Security. It will be announced on October 10. The total consensus now seems to be a raise of.......2.5%. This increase will appear in the payments made by Social Security in January of 2025. BUT....we are probably looking at a $10 premium increase per month for Medicare. https://www.usatoday.com/story/money/2024/09/18/social-security-2025-cola-increase/75281003007/
We have now evolved to a totally FLAT market. Both the SP500 and NASDAQ are at about ).00% for the day. So we start fresh from here. The positive.....the averages have improved from the red they were showing earlier in the day. We are basically in a totally NEWS-LESS day in terms of business or actual stocks. I see NOTHING in any of the news sources that I typically scan and read. So....lets see if the generally positive market BIAS......can pull us into a green close as the day progresses.
I did expect this to happen...but this is FAST. BofA clients drove strongest equity inflows in nearly 2 years during Fed cut week https://www.investing.com/news/stoc...in-nearly-2-years-during-fed-cut-week-3629301 (BOLD is my opinion OR what I consider important content) "Investing.com -- Bank of America Securities clients were large net buyers of U.S. equities last week, during which the Federal Reserve delivered the first interest rate cut in years and the S&P 500 advanced 1.4%. Inflows totaled $6.9 billion, the largest since October 2022. According to BofA, clients purchased both individual stocks and exchange-traded funds (ETFs), with record inflows into single stocks. All market caps—large, mid, and small—attracted buyers. Institutional clients were the leading buyers, marking their first inflows in five weeks and the biggest since November 2022. Hedge funds also continued their buying streak for the third week, while private clients were net sellers for a second straight week. Stocks from eight of the 11 sectors were purchased, with Tech, Consumer Discretionary, and Utilities leading the charge. BofA strategists note that the Consumer Discretionary sector “could benefit from less rate pressure, and saw the second-largest inflows in our data history last week (led by institutions).” Utilities experienced a record inflow, the highest since 2008. BofA strategists recently upgraded the sector to Overweight, favoring its income and quality in a landscape of Fed rate cuts and ongoing market volatility. On the other hand, Financials, Real Estate, and Energy faced outflows, with Real Estate seeing its fifth consecutive week of selling. Unlike in individual stocks, Financial ETFs saw the strongest inflows last week, while Real Estate ETFs saw the largest outflows. Meanwhile, Corporate buybacks remained robust, even though they slowed slightly last week. Year-to-date, buybacks as a percentage of the S&P 500 market cap are on track for a record year." AND Global equity funds draw big inflows ahead of Fed rate cut https://www.reuters.com/markets/us/global-markets-flows-graphic-2024-09-20/ This is just the star to some BIG MONEY entering the markets over the next 1-2 years. People that have been enjoying the nice rates on safe money and people afraid of the markets and many others will now be moving into the stock markets.
OK....we are looking very good in the general averages right now. We are being PULLED UP by the general markets....strong positive BIAS. LOOKING GOOD.....ONWARD AND UPWARD. COURAGE....PATIENCE.
WELL.....I ended with a nice gain today. I looked at the markets about ten minutes before the close and after the close. In that little ten minutes the markets made a nice move up and added AMZN to the green side of the ledger. So I ended the day with five of nine stocks GREEN.....NVDA, HD, AAPL, GOOGL, and AMZN. A nice mix of stocks in that list....making money for me today. In addition I WHOOPED the SP500 today by 1.20%.....thank you NVDA. All in all a very good day today. NOW....we move on toward COST earnings on Thursday and hopefully a good solid close to the week over the next three days. I dont see anything standing in our way this week.......LOL....yeah right.
Here is how we did today. S&P 500, Dow hit fresh records, China stocks soar on new stimulus https://finance.yahoo.com/news/live...na-stocks-soar-on-new-stimulus-175230224.html (BOLD is my opinion OR what I consider important content) "US stocks rose modestly on Tuesday, with the S&P 500 (^GSPC) and Dow Jones Industrial (^DJI) average notching record closes. Investors digested China's launch of aggressive stimulus and a notable dip in US consumer sentiment. The tech-heavy Nasdaq Composite (^IXIC) rose 0.56%, leading the day's gains, while the S&P 500 (^GSPC) was up 0.25%, hitting its 41st record close of the year at 5,733.03. Meanwhile, the Dow Jones Industrial Average (^DJI) rose about 0.1% to close at a record 42,208.41. Stocks recovered from a dip into negative territory following a new consumer confidence index reading. The Conference Board's index fell to 98.7 in September, below the 105.6 seen in August and lower than what the 104 economists surveyed by Bloomberg expected. But Wall Street's September rally continued. The Fed's jumbo rate cut last week kicked off the rally, and on Monday, several policymakers hinted the door is open for more big moves. On Tuesday, Fed governor Michelle Bowman explained she dissented to last week's half percentage point interest rate cut because "upside risks to inflation remain prominent." Also boosting the mood was China's launch of a raft of stimulus measures, its biggest since the pandemic. Global stocks and oil (CL=F, BZ=F) rallied after the PBOC's move to revive a slowing economy and support markets. US-listed stocks of Chinese e-commerce companies also popped on the news, led by a nearly 14% surge in shares of JD.com (JD). China stocks soar on back of new stimulus The S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) hit fresh records on Tuesday, but the main fireworks in the day's market action came from news out of China. China's launch of a raft of stimulus measures, its biggest since the pandemic, sent US equities tied to Chinese e-commerce soaring on Tuesday. Online retail giants Alibaba (BABA), Pinduoduo (PDD), and JD.com (JD) all rose more than 7% on the day. Below is a look at how stocks sold in the US with heavy ties to China's economy performed on Tuesday. Source: Yahoo Finance MY COMMENT Thank you China....now go away......the worlds most brutal communist dictatorship. I like that phrase......"Wall Street's September rally". If we can keep this stuff up for a while we might be able to look back and see that we were in a little STEALTH RALLY after the FED rate cut.
I like this little article.....but for those in retirement.....you do have to be very careful to keep adequate "safe money" for your immediate needs.....perhaps about three years worth....if you are going to continue to have significant money in stocks and funds. Why ‘capital preservation’ could be your riskiest — and worst — strategy for retirement https://nypost.com/2024/09/23/busin...r-riskiest-and-worst-strategy-for-retirement/ (BOLD is my opinion OR what I consider important content) "World peace. Calorie-free cheesecake. Sensible politicians with your interests at heart. Like all these pipe dreams, investment strategies promising both growth and capital preservation are phony baloney. Fiction. Yet so many vendors in varied forms – especially in rocky times like this summer’s – claim otherwise, peddling poor products destined to disappoint. Rational expectations are key to successful investing. Growth and true capital preservation can’t coexist in the short run. However, achieving growth likely means accomplishing both in the long term. Confused? Let me explain. “Capital preservation” sounds appealing and even prudent given the recent chop and fearful election headlines. But a true capital preservation strategy is wise for far fewer investors than almost anyone imagines. Why? True capital preservation means your portfolio’s value shouldn’t fall – the eradication of potential volatility. Sounds nice – get rid of those stomach-churning ups and downs! Yet volatility and negativity aren’t synonymous. A 1% rise is similarly volatile to a 1% dip. Here’s what’s crucial – and especially tough for market-addled investors to digest: Volatility is your friend. With stocks, volatility is much more often up than down. Eliminate the “down,” and the “up” also disappears. Nixing volatility would mean, for example, that you miss out on the 63.1% of calendar months US stocks rose (and 73.5% of all calendar years from 1925 – 2023). Indeed, true capital preservation is limited to ultra-low-returning cash or cash-like vehicles. Growth? No. Treasury bonds offer better-than-cash long-term returns, but they don’t eliminate volatility, as 2022’s stock-like bond price plummet proved. Bond prices and yields move inversely, mechanically so. Hence, rising long-term rates slaughter bond returns. Enter inflation. While it soared recently, America’s long-term annual average is about 3.5%, running about 2.5% now. Ten and 30-year Treasurys yield 3.7% and 4.0%, respectively. Lock up your funds for 10 or 30 years now, and maybe you outpace inflation. But what if inflation averages its historic average or higher? Savers can be losers. 5 Ten and 30-year Treasurys yield 3.7% and 4.0%, respectively. Even mild growth requires volatility. It is the opposite of capital preservation. Don’t forget: Without downside volatility, there is no upside. Ever. Hence, as unified investing goals, capital preservation and growth can’t coexist. If someone says otherwise, they’re wrong. Maybe they foolishly believe it. Worse, maybe they hawk awful products – insurance-like, “buffered” funds or others. Worst, maybe they’re crooks touting “upside with no downside,” a la Bernie Madoff. For real growth you need short-term volatility. Full stop. Can’t stomach it? Expect low returns which may require reconsidering your goals, savings and future spending rates. But there is good news. While capital preservation and growth don’t work as a combined goal, a result of pursuing long-term growth is likely to preserve capital in time. Consider: The S&P 500 rose in 82 of 94 rolling 5-year periods from 1925 to 2023. And 84 of 89 10-year periods. It has never been negative over any rolling 20-year span, averaging 806%. The past never guarantees the future, but it does help set reasonable expectations. So long as profits motivate people and we have a quasi-capitalistic world, stocks should deliver significant long-term returns. 5 The S&P 500 has never been negative over any rolling 20-year span. Hence, a well-diversified equity portfolio is very likely to grow over coming decades—maybe a lot—despite bouts of sharp negativity en route. Hence, if you consider that very realistic investing time horizon, it may look like you achieved big growth while preserving initial capital. But it all stemmed from pursuing growth. Those peddling growth with capital preservation sell a siren’s song. Don’t let it shipwreck your financial future. And from your profits, have some calorie-rich cheesecake on me." MY COMMENT I totally agree with the above for long term money. This entire article is predicated on the assumption of LONG TERM money.
In conjunction with the above. Why playing it too safe with retirement savings could be a mistake Some risk is necessary to retire comfortably, but you can take steps to reduce your risk of loss without hampering your money's growth. https://www.usatoday.com/story/mone...t-savings-stock-market-investing/75245703007/ (BOLD is my opinion OR what Is important content) "The dangers of taking huge risks with your retirement savings are pretty well known. If you try to get rich quick by investing big in a cryptocurrency you think will go to the moon, you run the risk of losing a huge chunk of your savings if things don't work out. That could set you back years and may have a substantial effect on your quality of life in retirement. You shouldn't gamble with your savings. You need to take a measured approach to protect what you have. But you also don't want to be too cautious. The downsides may not be as obvious, but they can hurt your retirement just as much as taking too much risk. The problem with being too conservative Being conservative with your money, perhaps by investing it mostly in bonds or certificates of deposit (CDs), will reduce the likelihood of loss compared to investing your money in the stock market. You'll even earn a little on your savings over time, but it's not a solid retirement strategy. While your savings are growing slowly but surely, inflation is also eating away at your money's buying power. What you can buy with $1 today may require $1.10 or $1.25 in the future. You need to outpace inflation to grow your wealth over time. Otherwise, you might find that your financial position remains stagnant or gets worse even while your account balances continue to climb. How to strike the right balance Investing in the stock market helps you avoid a stagnant financial position. It can be intimidating, but with the right strategies, you can grow your wealth more quickly while still minimizing your risk of loss. Only invest money you won't need in the next few years Investing in stocks can help you grow your money more quickly than investing in bonds or CDs, but there's also a risk of loss. Stocks can be volatile in the short term, so it's generally not a good idea to invest money you need for emergency expenses or cash you plan to spend within the next five to seven years. A high-yield savings account or a CD is more appropriate for these funds. Diversify your portfolio You need to diversify so that no one stock has too great of an effect on your portfolio. One of the best and cheapest ways to do this is by investing in an index fund. Index funds are bundles of investments that mimic the performance of a market index, like the S&P 500. They contain the same investments in roughly the same quantities, so your money is spread out between dozens or even hundreds of companies. Index funds are also among the most affordable investments available. Some of the best S&P 500 index funds charge an expense ratio of 0.03%, or about $1 per year for every $10,000 you have invested in the fund. You can invest in index funds through IRAs, and your workplace retirement plan may offer this as an option as well. Workplace plans also offer target-date funds. These are designed to be hands-off investments that grow more conservative as they approach the target retirement year, listed in the name of the fund. These can also be good options for those who aren't comfortable picking their own investments. But target-date funds have higher fees than index funds. You'll want to keep some money in bonds as well, especially as you near retirement. One common rule says you should keep 110 minus your age in stocks with the remainder in bonds. That means a 40-year-old would have 70% invested in stocks and 30% in bonds. This balance helps you grow your savings without exposing you to unnecessary risk. Accept loss as part of the investing process Finally, you'll need to accept the fact that you'll lose money periodically. Fluctuating prices are a normal part of investing and sometimes that won't work in your favor. But it's important not to make any emotional decisions when you see your portfolio's value drop. Oftentimes, it will rebound if you just wait it out. If you have good reason to believe you have too much money invested in one particular stock or that you have more money in stocks than is appropriate for your age and risk tolerance, that might be a good reason to move some of your savings around. Otherwise, be patient and trust that over the long term, things will move in a positive direction." MY COMMENT Some good basic information above for those that are starting the investment journey. The most important thing....taking that first step. We have all been there. YOU....just have to DO IT.
For those buying or selling a house. Mortgage applications hit 2-year high as refinancings surge https://finance.yahoo.com/news/mort...ear-high-as-refinancings-surge-110056393.html US new home sales fall in August; median house price drops https://finance.yahoo.com/news/us-home-sales-fall-august-142352880.html
