The Long Term Investor

TOUGH OPEN.....coming tomorrow. With oil prices crashing and the ten year Treasury driven down to .5% yield or lower we will see a NASTY open tomorrow. Could easily be 1000 points or more.

This is what is going on:

"Oil prices suffered an historic collapse after Saudi Arabia shocked the market by launching a price war against onetime ally Russia. US oil prices crashed as much as 27% to a four-year low of $30 a barrel as traders brace for Saudi Arabia to flood the market with crude in a bid to recapture market share."

Oil crashes by most since 1991 as Saudi Arabia launches price war

https://www.cnn.com/2020/03/08/investing/oil-prices-crash-opec-russia-saudi-arabia/index.html


MY COMMENT

Never mind that cheaper energy costs will save consumers BILLIONS of dollars in gas prices, heating products, and EVERYTHING else that uses oil based products for transportation, manufacturing, etc, etc. We are in IRRATIONAL times so expect irrational responses from the markets.

Here is the current TRUTH.....but none of this matters in the least:

"global fatalities 3,800"

"The number of additional cases in South Korea has been declining for the past four days."

"daily increase in new cases is falling" (in Korea)

"China - 40 additional coronavirus cases for the end of March 8, 36 from Hubei province. China now has 80,735 total confirmed cases. The death toll on the mainland rose by 22 to 3,119. Discharged patients rose by 1,535 to 58,600."

MEANWHILE...here is the good old USA:
The death toll rose to 21 on Sunday, including two more from the infection-stricken nursing home. U.S. cases have surpassed 500 and affected more than 30 states, as well as the District of Columbia

YEP.....that is all......21 deaths and 500 cases in America.

That is about it.....other than continued PANIC&FEAR reactions on the part of some leaders, governments, the MEDIA, and etc, etc, etc. Meanwhile the general public is going to, sooner or later, start to react and put the economy into a REACTIONARY Recession based on.......NOTHING.........but fear and panic around the country and world. At this point, there is nothing to be gained by doing anything...I will just sit through the carnage and continue to be invested for the LONG TERM as usual.

Russia is obviously in dire economic condition....as usual...and they are trying to raise money from oil. ALL this "stuff" is going to create BIG credit issues around the world. The impact of a world wide credit crisis and business failures will make people very quickly FORGET some little virus. As I have been saying for many years now......the world, is STILL in a deflationary depression. I dont believe the USA is, but the rest of the world is in serious trouble right now.

As this sort of every country for itself economic thinking starts to take hold, which, incidentally, always has and always will be actual reality no matter how much some want to fool themselves.....so much for the old......We Are The World....we are all the same....diversity is your friend....KUMBAYA....sort of thinking. What a surprise......NOT.

 

HERE.....is the REAL danger to the world......NOT the Corona virus. The MEDIA and others are going to talk the world into a really dire situation if they are not careful.

Cracks are forming in corporate bonds as coronavirus slams Wall Street

https://www.marketwatch.com/story/c...?itm_source=parsely-api&mod=mw_more_headlines

(bold is my opinion or what I consider important content)

"Stress is beginning to take shape in corporate-debt markets as the spread of the coronavirus chokes off crucial sales and revenues to companies — and the problems could accelerate if these companies find themselves unable to obtain funding in the coming weeks and months, according to J.P. Morgan Chase analysts.

“The economic fallout from the COVID-19 crisis is raising questions about credit and funding markets,” according to a Friday research note from a J.P. Morgan team led by global markets strategists Nikolaos Panigirtzoglou and Mika Inkinen.

The team said returns for corporate bonds over the past two months have contracted as ratings downgrades have overtaken upgrades. Downgrades by ratings firms and deteriorating economic conditions can translate into higher borrowing costs for companies looking to refinance maturing debt, or for credit to dry up entirely in some extreme cases.

J.P. Morgan said problems are in their early stages but also come with debt markets having been a focal point of investor and regulatory worries for years. The credit-default-swap index, or CDX, for investment-grade securities, often used to hedge against risks of default in a basket of corporate debt, has been surging, reflecting heightened concerns for corporate defaults.

On Friday, a gauge of concerns about the health of credit markets surged by more than it had on any day since 2011, Bloomberg reported.

Equity markets also have been under pressure. The Dow Jones Industrial Average DJIA, -0.98% is down 12.3% since its Feb. 12 all-time high, a decline that meets the widely accepted definition of a correction. The technology-heavy Nasdaq Composite COMP, -1.86% and the broad-based S&P 500 SPX, -1.70% also are in correction territory, off 12.5% and 12.2%, respectively, from their recent peaks.

And crude-oil prices CL00, -26.429% have plunged nearly 35% from the recent settlement peak, on Jan. 6, weighing mightily on the bond and equity values of indebted oil and gas producers.

J.P. Morgan said much of the concern in credit will be centered on the airline, travel and leisure, and retail sectors, which may be disproportionately hit by the outbreak of the COVID-19 epidemic, which was first identified in Wuhan, China, and has spread to nearly 110,000 people and claimed 3,800-plus lives, according to real-time data compiled by Johns Hopkins University.

“If these shifts in credit and funding markets are sustained over the coming weeks and months, especially in the issuance space, credit channels might start amplifying the economic fallout,” wrote the analysts.

Here is a J.P. Morgan chart with January and February 2020 annualized of the number of so-called fallen angels, or companies whose coveted investment-grade ratings, drop to high-yield, or “junk,” levels:


Source: Falling
‘If these shifts in credit and funding markets are sustained over the coming weeks and months, especially in the issuance space, credit channels might start amplifying the economic fallout from the COVID-19 crisis.’

— J.P. Morgan Chase
The J.P. Morgan research team emphasized that downgrades in credit and the impact on the broader market pose a real threat to investors.

“Are current concerns by market participants about rating downgrades/fallen angels justified? The answer is yes, in our view, if one looks at simple credit fundamentals such as median debt-to-income ratios,” the analysts wrote.

One measure of debt to Ebitda, or earnings before interest, tax, depreciation and amortization, for U.S. high-yield corporations shows that the ratio is at its highest level in the past 20 years:


Source: JPMorgan Chase & Co."


MY COMMENT

TIME for the MEDIA to start to act responsibly and not CHEER-LEAD the economy into a recession. What is said and how it is said still has impact....even though the majority of the country has little to no confidence in the media anymore. That said......I have ABSOLUTELY NO expectation that the MEDIA will stop their breathless, headlong rush, to push the country to the economic brink if they think it will drive ratings, earn money for themselves and push their political views.

 

ZUKODANY and others.

If this is your first year investing I assume you are relatively young. If so, this will be a shared, common bond, type of investing experience for you. In the future you will be able to say you were an investor in the great VIRUS panic of 2020.

A FEW little comments:

First....at this point most regular people are better off to just do nothing. There is an old saying....dont try to catch a falling knife. At the moment, the entire market is a falling knife.

If you have money to invest, I would plan to filter it into the markets over the next month or two or three.......not immediately. We are CERTAINLY going to see the markets go lower from here. My GUESS is somewhere between 10-20% more is certainly a 50/50 chance.

QUIT listening to the MEDIA. They have no expertise and no advance knowledge. In fact most are probably DUMBER than the general public. They live and work in a bubble. And many are simply....EGOMANIACS (you have to be in that business) and way overestimate their importance, their ability, their intelligence and their role in society.

REGARDLESS of the virus...we are now seeing the impact of a computer trading driven market. Algorithmic trading, AI trading, program trading.....it is the REVENGE of the QUANTS (nerds). These BIG moves are going to be with us for a while. BECAUSE this trading is being driven by computers with ONLY one goal....to take advantage of micro market conditions and news on a micro second level......there is NO connection to human reality or rationality.

The MEDIA is out of control and driving fear and panic....as usual.

If you are young....under age 40. This is the GOLDEN ERA of investing for you. The money you invest over the coming months or put into your 401K over the coming months will be a compound goldmine as you age into life. If you are under 55...you still have 10 or more years to retirement. You will be fine. If your risk tolerance and investing style is long term.....NO PROBLEM.

If you are a BABY BOOMER that has just entered retirement, or is going to retire in the next few years or is heavily in stocks and funds with your retirement money.......BUMMER. You should take this opportunity to re-evaluate your retirement plans and ESPECIALLY your plans as to how you are going to invest in retirement. I have said many times...it is very difficult to preserve and convert your retirement savings into a lifetime income. MOST people will struggle with this. I CANNOT EMPHASIZE ENOUGH........it is important that you KEEP at least 2-3 years of liquid money for retirement use so you will not be liquidating stocks and funds in a NASTY market and end up REVERSE-COMPOUNDING your money.

As to RECESSION. If we end up in a recession......it will NOT be an economic driven recession. It will be a FEAR/COMPUTER driven recession. My opinion is that such a recession will be DRAMATIC but very short lived. What we are seeing is NOT economic events but a news and computer trading event. Of course, the impact will be economic. I have NO SPECIAL KNOWLEDGE, but my opinion is that such a recession will be shorter....perhaps 6-12 months.

AS to RECESSION. I DONT use that term or think in those terms when it comes to investing. I think in terms of CORRECTIONS and BEAR MARKETS. These are very different than recession. BOTH corrections and bear markets are NORMAL market events. To me, recession is a general economic/business event which MAY or MAY NOT impact stocks. PERSONALLY I would rather experience a RECESSION than a BEAR MARKET. In my investing life bear markets tend to last longer than recession. BUT, these are just man made definitions and attempts to bring rationality to the......OFTEN....irrational.

The bottom line.....I will continue to do nothing. I dont need to use any of my stock market money for any reason. I am LONG TERM with that money and will continue to be so.

 

I was still in bed this morning when the markets were down about 2000 points and trading was paused. NOT a surprise at all considering the oil price collapse and all the other fear mongering and computer trading in this short term environment.

I wold guess that many that have only been in the markets for 10-15 years have never experienced a CIRCUIT BREAKER.

Here is how it works:

What are stock market circuit breakers?

https://www.foxbusiness.com/markets/what-are-stock-market-circuit-breakers

(BOLD is mine)

The S&P 500 plummeted more than 7 percent on Monday as an oil price war between Saudi Arabia and Russia sent crude prices plunging, triggering so-called circuit breakers that prevent further dropping.

According to the New York Stock Exchange, the equities and options exchanges all have procedures for coordinated trading halts if a severe market decline threatens to exhaust liquidity levels. The procedures, known as market-wide circuit breakers, may halt trading temporarily or, under extreme circumstances, close the markets before the normal close of the trading session.

Trading was paused for 15 minutes on Monday morning and resumed at 9:49 a.m. ET.

The circuit breakers are measured by single-day decreases in the S&P 500. A trading halt can be triggered at three thresholds that measure a decrease against the prior day’s closing price.

• Level 1: If the S&P 500 drops 7 percent, trading will pause for 15 minutes
• Level 2: If the S&P 500 plunges 13 percent, trading will again pause for 15 minutes if the drop takes place before or at 3:25 p.m. ET.
• Level 3: If the S&P 500 falls 20 percent, trading will halt for the remainder of the day.

The purpose of the circuit breakers, which are approved by the Securities and Exchange Commission, is to curb panic-selling.

Monday was the first time that one of these circuit breakers, in their current form, have kicked in during regular trading hours. The rules were revamped in February 2013 after they failed to prevent the flash crash on May 6, 2010, which saw the Dow Jones Industrial Average drop by almost 1,000 points in just 10 minutes.

Although prices mostly recovered by market close, it prompted regulators to update the circuit breaker system.

“The market circuit breakers are designed to slow trading down for a few minutes, give investors the ability to understand what’s happening in the market, consume the information and make decisions based on market conditions,” New York Stock Exchange President Stacey Cunningham told CNBC. “This is operating as it’s supposed to.”

MY COMMENT

So, there you have "circuit breakers".

A type of circuit breaker in the past was the UP-TICK RULE. This rule worked as follows:

"The uptick rule is a trading restriction that states that short selling a stock is only allowed on an uptick. ... Short sales were not permitted on minus ticks or zero-minus ticks, subject to narrow exceptions." The rule went into effect in 1938 and was removed in 2007."

In my opinion.....one of the most IDIOTIC moves ever made......was the elimination of this rule. BUT....you cant live in the past.

 

Being a GLUTTON for punishment.......I actually look ed at my accounts a few minutes ago. ACTUALLY, I was surprised....pleasantly surprised. They were NOT down anywhere close to what I was imagining.

In addition, I am kicking ass on the SP500 today.....so far. Portfolio model is down (-3.03%). SP500 is down (-4.81%). So another moral, pyrrhic, victory.........so far BEATING the SP500 today by 1.78%.

 

Hi Husker

I assume that your IRA's are ROTH.....yes? If so if it was me, I would max out the ROTH IRA for each of you first and than put any left over investable funds in the taxable account. Both accounts, ROTH and taxable will be done with after tax money. As long as you hold long term in the taxable any gain will be long term capital gain. On the ROTH, any gain will be tax free when you take distributions assuming that you hold for at least five years and you are age 59.5.

You have picked a real nail biter of a time to invest for the first time. BUT, with a long term horizon, you should be just fine and any money you put in over the next few weeks to perhaps a few months should be going into the markets at dirt cheap prices.

WELCOME and feel free to drop in to this thread and post any time about your experiences. ANYONE else is also welcome to do the same.

If ANYONE is feeling the pressure of investing in this scary time period, feel free to post for moral support if needed, to whine about the markets, to ask for reassurance, to spit in the face of the virus, or whatever might help you to get through this time period and back to a regular market. I am sure TomB16 would feel the same way with his investing blog thread, he is a good guy. I am also sure any of the other threads on this board would also be glad to be a sounding board if needed. WE ARE ALL IN THIS TOGETHER.

 

By the way, at the close today:

DOW year to date (-16.42%)

SP500 year to date (-14.99%)

 

AS A PUBLIC SERVICE.....I am going to once again post the TRUTH about the Corona virus. It is amazing the GARBAGE you see reported in the media and ESPECIALLY on any sort of commentary or opinion show. For disclosure, I do agree with the article below and like the authors, I have ALSO come to the same conclusions based on much reading.

Coronavirus: Seeing Through the Fog of Fear
What we learned in our review of hundreds of coronavirus articles.

https://www.fisherinvestments.com/en-us/marketminder/coronavirus-seeing-through-the-fog-of-fear

(BOLD is my opinion or what I consider important content)

"With nearly every news website, broadcast, blog, social media outlet and publication wallpapered with coronavirus coverage, information—and, sadly, misinformation—about it abounds. That slew of coverage is seemingly spawning fear, which makes focusing on facts currently known about the outbreak all the more urgent, in our view. Now, we aren’t epidemiologists or physicians. Neither of us studied medicine. We don’t even play doctors on TV. But part of what we do is analyze media—our team covers dozens of outlets daily from around the world. That means we have collectively read hundreds of articles on the subject—and found some significant overlap across various experts about what is true and what isn’t. While there are still some significant unknowns about the outbreak, we thought rounding up our findings may help readers. Now, of course, all this could change—and some statistics surely will—but we hope to provide you as good a basis for seeing this as possible now, given extant fear over the issue. Without further ado, here we go.

How Many People Have the Coronavirus?

Most outlets cite the total number of identified cases in response to that question. As of March 6, Johns Hopkins University’s dashboard (which you can view here) cites 101,781 coronavirus diagnoses—260 in America. However, there are a few caveats to this. One, that doesn’t deduct the number of patients who have recovered or, tragically, died. Hopkins counts 55,866 patients as having recovered from the virus. 3,460 have died. Hence, these data show 42,455 persons currently known to have coronavirus globally—238 in the US.

Of course, these numbers are likely understated. Limited testing worldwide means officials only identify those patients with the most severe symptoms. When Elisabeth got swine flu in 2009, she was not part of the official tally because she stayed in bed and had fever dreams instead of checking in at a clinic. That the disease is likely more widespread than data suggest may seem frightening, but it brings us to another critical point to consider: The coronavirus death rate is likely overstated—potentially by a lot.

How Deadly Is the Coronavirus?

Interviews with professionals uniformly agree on this point. If you use basic math and simply divide the number of deaths by the total number of identified cases, you may think the death rate is 3.4%. But the trouble with this is, again, identification. As Tom Frieden, former director of the US Centers for Disease Control (CDC), put it, the 3.4% rate “is certainly an overestimate.” The reason: Limited testing means many mild cases went unidentified. At a panel discussion Friday on Capitol Hill, Johns Hopkins’ Dr. Tom Inglesby stated that roughly 80% of known cases were mild. So mild that patients recovered with no hospitalization or medical intervention. (Some 15% did need hospitalization and 5% critical attention.) Many others likely didn’t even know they had it.

This means we don’t have the right denominator to calculate the death rate. In South Korea, where testing has been more aggressive, Dr. Inglesby noted the death rate was 0.6%. Frieden told Bloomberg reporters he expected the death rate to eventually hover around 1%. Now, that is speculation to an extent, but it is educated speculation that seems logical given the backdrop. That puts the death rate higher than influenza, which CDC estimates killed an average 0.14% of people who contracted it from the 2010/2011 flu season through 2017/2018. But it is far lower than mortality rates tied to 2003’s Severe Acute Respiratory Syndrome and other similar outbreaks.

Who Is Most at Risk of a Severe Form of the Coronavirus Illness?

Older people—and, particularly, those with pre-existing health conditions. Again, these data are likely overstated, but there are some demographic findings worth noting. World Health Organization (WHO) data show those over age 60 are at an elevated risk, with those over 80 particularly vulnerable. The table below is about a week old, but it contains the latest available data, and the general gist likely still holds.

Exhibit 1: Global Coronavirus Fatality Rate by Age


Source: World Health Organization, as of 2/29/2020.

The US experience echoes this: Of 14 fatalities in America, most stem from a single nursing home in the Seattle area. Moreover, many of the younger people who have died had major pre-existing conditions—another point global data show.

Exhibit 2: Pre-Existing Conditions Exacerbate Death Rate


Source: World Health Organization, as of 2/29/2020.

Dr. Lisa Lockerd Maragakis, also of Johns Hopkins, echoed this point, noting that high-risk groups cluster among the elderly—which is normal for virtually any illness. As she put it, this “happens every year with influenza.” So, this is a sign older readers should take caution—we won’t get parental here and tell you to wash your hands, because we figure you already do that. But if you do feel ill—fever, cough, and shortness of breath are common symptoms, although gastrointestinal issues can be too—take action.

Because the Number of Cases Seems to Increase Exponentially, the Coronavirus Must Be Highly Contagious.

This viewpoint has gained popularity thanks to the likes of Bill Gates, who went on to call the coronavirus the “once in a century pathogen we’ve been worried about.” But how does the coronavirus’s contagion compare with other infectious diseases?

Epidemiologists measure contagion with a statistic called the reproduction number, denoted as “R0.” It estimates the number of people each patient is likely to infect. Bloomberg rounded up R0 estimates for the coronavirus and other infectious diseases from the WHO and CDC and found that while the coronavirus’s R0 of 2.8 makes it more contagious than the seasonal flu (1.3) or Ebola (1.9), it is much less contagious than smallpox (4.8) or the measles (15.0). A separate New York Times analysis estimates it is also far less contagious than chickenpox.

Yet even these comparisons may overstate the transmission risk. As WHO Director-General Tedros Adhanom Ghebreyesus explained on Monday: “We don’t even talk about containment for seasonal flu – it’s just not possible. But it is possible for Covid-19.” He elaborated: “We have never seen before a respiratory pathogen that’s capable of community transmission but at the same time which can also be contained with the right measures. If this was an influenza epidemic, we would have expected to see widespread community transmission across the globe by now and efforts to slow it down or contain it would not be feasible.” WHO officials have also observed that the coronavirus appears to be much less contagious than the flu in their respective incubation periods, i.e., before symptoms appear.

The Statistics Show the Coronavirus Is More of a Threat Than the Seasonal Flu.

This statement depends on how you define “threat” and which data you cite. As shown above, the documented R0 and fatality rate are higher for the coronavirus than the flu. Its fatality rate is far below 1% of infected patients, compared to 3.4% for the coronavirus. We deconstructed the latter above. But even if you take it at face value, it doesn’t mean the coronavirus is worse than your typical seasonal flu thus far.

The WHO estimates that of the tens of millions of people who contract influenza globally each year, there are between 3 and 5 million severe cases, with 250,000 – 500,000 fatalities. At last count, as mentioned above, the number of confirmed coronavirus cases is 101,587, with 3,460 deaths. That is between 0.7% and 1.4% of the amount of annual influenza casualties.

The Coronavirus Is a Bio Weapon Created by the Chinese Government.

As a general rule, whenever something bad or scary happens, you will get a conspiracy theory. This one is a 21st century version of the conspiracy theory about Lyme disease being the US government’s botched attempt at germ warfare during the Cold War. It is also quite likely incorrect. Public health scientists who studied this virus’s genome have concluded it came from wildlife.

The coronavirus is what virologists call a zoonotic disease—it was transmitted from animals to humans. MERS and SARS, which were also coronaviruses, transmitted from bats to an intermediate animal to humans. Researchers believe this coronavirus did the same, potentially with a cute little scaly anteater called a pangolin the likely intermediate agent. Pangolins are endangered, and there is a global ban on selling them. But they have also long been used in Chinese traditional medicine, and poachers often traffic them into the country. They then sell at open-air markets like the one in Wuhan where the first cluster of coronavirus cases emerged. The pangolin may or may not yet prove to be the culprit, and it is possible that the virus may have leapt directly from bats to humans. But for now, all are operating on the working theory that wildlife sold illegally at the market was the initial infection source. It will take further research to confirm, but Occam’s Razor—which says the simplest explanation is almost always right—is always a good analytical starting point.

We also feel compelled to point out that if a government were going to create a bio weapon, it would probably go for something more virulent and deadly than a coronavirus, considering that this is also the family of viruses that causes the common cold. If this was indeed germ warfare, it was an epic flop, considering the mortality rate is low and likely to fall.

What About the Economy?

To turn to something much more in our wheelhouse: the virus’s economic impact. It is too soon to know exactly how the coronavirus will impact economic growth. There will almost certainly be some kind of hit, with most forecasts suggesting slowing growth. But, and this is key, it looks to be temporary. Already, various purchasing managers’ indexes hint at inventories falling while order backlogs rise—fuel for a rebound. In China, there are already signs of this. One Chinese online travel agency noted hotel bookings soared 40% in the week ending 3/1 from the prior, while flight demand skyrocketed. In a hard-to-refute sign the country is getting back to work, nitrogen dioxide pollution is back. The gas, a byproduct of utility output and factory emissions, largely vanished amid the twin impact of the Lunar New Year holiday and coronavirus-related shutdowns—which NASA captured in a recent image of the week. We aren’t cheering pollution, but it seems a pretty tangible sign of a rebound. Of course, there are many other pollutants—and China’s economy is mostly services these days, not factories. But it still seems relevant to note, in our view.

While we are on the subject of Chinese pollution, let us put to bed the notion that went viral (sorry) that an uptick in sulfur dioxide emissions showed China was mass-cremating coronavirus dead. As NASA put it: “In the model, the concentrations of SO2 are estimated from historical emissions sources that are transported around the globe by atmospheric circulation. Therefore … [the] simulations cannot account for variations in SO2 concentrations arising from a sudden change in human activity (like a quarantine).” We know, shocker, somebody said something wrong on the Internet.

Because the coronavirus outbreak is new, still ongoing and its eventual end is unknown, fear is running high. In presenting the results of our broad survey of media on the subject, we hope to cut through some of that emotion by sharing our findings in one consolidated place."

MY COMMENT

YES....exactly. BEWARE media BS on this subject and jumping to conclusions put out there by people with ZERO medical or scientific knowledge.

 

HUSKER

Why not start new ROTH IRA accounts going forward? And just leave the old IRA accounts in place but don't add any more to them? Are you in that high a tax bracket that the deduction is important? If you MAX out ROTH IRA's till age 65 or 70 that will be 10-15 years. A lot of tax free income could build up over that time. Will the taxes you pay each year if you did a ROTH with pretax money be higher than paying a lifetime of income taxes on a regular IRA?

 

I am so TIRED of the virus, virus, virus, ZOMBIE APOCALYPSE stories constantly in the news. I just checked. China reported the virus at the end of December:

"On December 31 last year, China alerted WHO to several cases of unusual pneumonia in Wuhan, a port city of 11 million people in the central Hubei province. The virus was unknown.
Several of those infected worked at the city's Huanan Seafood Wholesale Market, which was shut down on January 1.
As health experts worked to identify the virus amid growing alarm, the number of infections exceeded 40."

So over a span of about two and a half months in China about 80,000 people got sick and some 3100 or so died. https://www.worldometers.info/coronavirus/country/china/

This is the same span of time....approximately.....that represents HALF a FLU season here in the USA and around the world. In about 3 months of the year....half a flu season...... seasonal FLU kills about 145,000 to 323,000 people every year. https://www.medicinenet.com/script/main/art.asp?articlekey=208914

So here we are nearly 3 months....half a flu season into this little virus....with about 4,027 deaths WORLD WIDE with the VAST majority being in China, a third world country with poor health care.

No need to cite the flu data for the USA, I have done it enough. BUT....last FLU season, a bad one, the number of deaths in the USA was tens of thousands........over a flu season, about 6 months.

This virus coverage and panic is simply a MASSIVE OVERREACTION.......TOTALLY IRRATIONAL. Sorry, I have to say the above on here.....but I dont expect it will matter, make any difference, or change anyone's mind. We will simply have to slog our way through this event.....REGARDLESS.....of facts or reason.

 

Husker

I would not just load it all in the taxable if it was me. I would put the max for each of us in a ROTH....because NONE of the gains, none of the contributions would be taxed AT ALL when withdrawn. You would nave ZERO tax obligation on any of that money in retirement. If you just plop it into the taxable account, when you sell and need to use that money in retirement you will pay capital gains tax. You will also pay FULL, REGULAR, income tax on every penny, contributions and gains, in the regular IRA account some day when you sell and use the funds for retirement.

If it was me....it would not bother me to manage 5 accounts. That is because as a long term investor I would not be making many changes or trades in any of those accounts anyway. I would also probably just put all the IRA accounts, ROTH and REGULAR, in a SP500 Index Fund and let it ride till retirement. So, NO management for those 4 accounts....if it was me.

BUT...that is me. You guys have to do what you wish, how you wish. The main thing is that you are getting started and going to do something. That is GREAT, you will be very glad you did when you are 70.

 

The reason.....if it was me.....that I would put all retirement funds in a SP500 Index Fund is because this is CRITICAL money. This is your retirement. I would NEVER trade a retirement account in any way. So, in a retirement account I would want to get exposure through a SP500 vehicle to the greatest largest 500 companies in the US economy. this would give me extreme diversification. This would give me a great dividend base. This would....on a historical basis.........give me a 10-11% return over the long term.

Based on the little that I know from your posts....this is what I would do if I was you guys. BUT...I am not you guys and I know very little about your life, income, investments, situation, etc, etc. AND....these sorts of questions, there is no one right answer. There is a range of answers and things that can be done. The main thing is to do something, invest for the future. Doing so in a way that you are comfortable with and fits your life is important. PLEASE, dont do something just because that is what I would do. It sounds like you guys are successful people. You will do well, whatever you decide to do.

 

OK......I looked. A few minutes ago. VERY PLEASED that I am still beating the SP500 lately on the UP and DOWN days. Today beating the SP500 by .25% in my stock portion of the account. I have been BEATING the SH#T out of the SP lately. Yes......I know......random stuff. BUT....nice to have some little victory. NICE to see the averages showing good LATE DAY strength heading to the close. A positive sign. The markets are in a HUGE battle lately......The shorts, Algorithmic trading, AI trading, the so called professionals, etc.......versus.....the long term investors, main stream mutual funds, etc.

 

WELL......my view is more simple. I think the MEDIA is hyping this story because a good fear and panic story gets eyeballs and clicks. Especially a virus story. I also think some are pushing this story as politics. I do think they are completely exaggerating this virus and over time it will be shown to be similar to a flu or cold but with FAR lower death rates and little to no long term impact. As to the economy and markets, I believe the impact will be far less than is being......again....pushed by the media.

For me...at least....after today my primary account, invested like the portfolio model, is once again back to about the beginning of October 2019 in value. NOT too much of a hit to lose 5 months of gains.

 

Want to know the REAL death rate from the KILLLER VIRUS...

Divide the USA deaths, 26 so far, by 327,000,000...the population of the US.

OR

Divide the world deaths, 4400, by the world population....7.7BILLION.

That is what we do with ALL the other causes of death from health issues to determine general RISK of dying from a particular cause...heart attack, cancer, stroke, accidents, violence, etc, etc. You will get a death risk that is so small it is just about ZERO. EVERYONE is playing with statistics in this little virus DRAMA. AND....many are manipulating them for their own personal gain. This makes as much sense as any other way to evaluate risk to ANY ONE PERSON in the world or the USA.

As usual, the FEAR MONGERING continues. Sooner or later people are going to be exhausted by all this IDIOCY and will simply go back to normal. BUT....for now, no one is going to waste a good crisis....there is money to be had, political gains to be attempted, power to be taken, short term trading to be taken advantage of, etc, etc.