Some good posts this morning. The long term game is just simply that...long term. Sticking with it through the good times and the bad. If this happens to be the first bear market for some, if you can stick with it and continue with your plan, it will be valuable to you down the road. It will (should) give one some valuable experience in terms of learning your tolerance level and prepare you for the next one that will come somewhere down the path. Secondly, if one just keeps contributing you are going to be pleased with your return in the future when it does turn around. What we are experiencing is not new and it will not be the last one. Now, the circumstances/events involved in these bear markets can be different, but the fact that they occur is not unusual at all. Nobody likes seeing their portfolio go down and I do not dismiss the obvious discomfort that comes with it. Long term for me has always been about a beginning and an end. Starting out as early as you can and invest for your financial future for that day when you are no longer going to be at the beckon call of "work." For most, that is a considerable amount of time. Even if one got a late start, do not be discouraged and do not take unnecessary risks. Just make the contributions regularly in a sound plan and then make some more where ever and whenever you can. As one nears the end of the work path it may be necessary to make some adjustments to allocations or your plan, but by then one should be well experienced enough to handle just about anything "investment life" can throw at you. None of us know how or when this will end. Nobody did on the last one either. We see and hear it everyday, but I do not need their predictions or suggestions to guide me on how to get through it. Neither do you, if you are in it long term with the goal of being financially secure down the road. The goal at the end of our road has always had some element of "risk" to it. There is not a path around it when investing and it has been that way since the beginning. Create your plan on what you are comfortable with and stick with it. That is the path through it.
If you care about the economic minutiae here you go. Retail sales unexpectedly edge higher in August despite soaring inflation Shoppers still facing painfully high inflation at stores https://www.foxbusiness.com/economy...dly-edge-higher-august-despite-high-inflation and Weekly jobless claims fall for fifth-straight week, showing resilient labor market https://www.cnn.com/2022/09/15/economy/jobless-claims-september-10/index.html
Exactly Smokie. Keep it simple and keep it RATIONAL. Over time the gains are significant enough especially with compounding.....there is no reason to take EXTRA or EXTREME risk. Keep in mind your final long term goals......and......realize that long term means at least 3-5 years.....minimum. Too often these days......we see people whose thinking has been COMPRESSED to where they think long term is 6-12 months. Too many people are TRADING and dont even realize it. The frog in the boiling water situation. We are at the point now in terms of the language, the media, and EVERYTHING where the total emphasis is on the short term with investing. In the old days it was the CARDINAL SIN for your broker to "CHURN" your account. Now.....we have all kinds of investors CHURNING their own account. I would bet that most investors under age 40 have never even heard the term......"CHURN"......partly because most investing now is self directed. "CHURNING" - "When a broker engages in excessive buying and selling (i.e., trading) of securities in a customer's account without considering the customer's investment goals and primarily to generate commissions that benefit the broker, the broker may be engaged in an illegal practice known as churning." I have seen a lot of investors over the past 10-15 years that are doing the above to themselves.....minus the commission part.
I have noticed that for myself personally.....I always HATE the early stages of a BEAR MARKET. I am losing money and I hate to lose money. SO....it is irritating. It does not make me lose sleep....but it makes me mad and irritated......to see it happen. It screws up the future that I was VISUALIZING for my account balance. It is also irritating that the cause of the event is usually so IDIOTIC or screwed up. At least for me....with how I am set up financially....I dont rely on my market money......so there is no pressure to do something crazy. I am also very aware of the academic research......and.....the probabilities of investing. That helps me to be confident in doing nothing. BUT.....after a while.....(I am in this stage now)......it goes on long enough that you get to the point of acceptance and you simply dont care anymore. It is like.....WHATEVER. Now I am at the stage where more often than not it just seems funny....to watch it all.
“All Things Come to Those Who Wait” AND......it is like fishing.....you are never going to catch a fish if your hook is not in the water.
Agree completely. I suspect the old "churning" still occurs to some extent. The financial managers are just more sneaky about it. I think many of them have switched to having a clients portfolio scattered into a ton of investments. Many with their own high fee or even load fees. Then on top of all of that is the AUM fee. I have seen more than a few and was amazed at the endless amount of funds in the portfolio. The manager was making bank off of their money just in a different way.
For those that have cash looking to earn some nice returns. The one year and two year Treasury is looking good. Of course the rates WILL go up over the next 2-4 months even more.....but.....for short term money....these are good rates. Short-Term Bonds Yield 4%. Why They Could Beat Cash. https://finance.yahoo.com/m/28e80b04-8764-315b-8c15-9bb72d3bb4fd/short-term-bonds-yield-4-.html Until recently, short-term bonds were a yield wasteland: A two-year Treasury note yielded 0.21% a year ago and just 1% in January. Today, the yield is over 3.8% and could soon touch 4%, thanks in good measure to the Federal Reserve’s aggressive interest-rate-hiking campaign. The Fed’s work—trying to cool down the economy and tame persistently high inflation—isn’t close to finishing. Rates are expected to keep rising into early 2023. Typically, that would pressure bond prices, which move inversely to yields. But this could be a good entry point for short-term bonds: They may not fall much more, and yields are now high enough to withstand some price pressure. “We are actually comfortable owning the front end of the yield curve here,” says Bob Miller, head of Americas fundamental fixed income at BlackRock. Granted, this a wacky time for bonds. The yield curve is now inverted: Most short-term bonds yield more than long-term notes, such as the 30-year Treasury at 3.47%. The upshot is that investors aren’t being compensated for holding long-term bonds. Quite the contrary: Yields are lower, and duration risk—or sensitivity to rates—is higher at the long end. Short-term funds have racked up losses this year. The iShares 1-3 Year Treasury Bond exchange-traded fund (ticker: SHY), a proxy for Treasuries, is down 3.85%, after interest. Yet some analysts think that short-term yields may now be close to pricing in the remainder of the Fed’s rate increases. With yields at nearly 4%, there’s far more of an income cushion against price declines. Investors may also scoop up a bit more income than with cash proxies like money-market funds, now yielding about 2%. “When you have a 3.75% yield, that’s much more manageable,” says Cary Fitzgerald, head of short-duration fixed income at J.P. Morgan Asset Management. The risk still out there is the “terminal” federal-funds rate—the point at which the Fed pauses its increases. Currently in a range from 2.25% to 2.5%, the fed-funds rate is expected to rise sharply from here. The futures market sees a 75% chance of a three-quarter point hike when Fed officials meet this coming week. Another rate hike is expected in November, putting the rate around 4% in December. The futures market is expecting the fed-funds rate to peak at 4.4% in the first quarter, following a consumer price inflation reading that came in much hotter than expected in August. Terminal rates of 4.75% or even 5% aren’t impossible, however, under a range of scenarios: Inflation stays hot, the war in Ukraine continues to disrupt energy prices, or supply chains don’t get back to normal, exerting more upward pressure on prices. “Really, what it comes down to is what the average fed-funds rate will be for the next two years,” says Fitzgerald." The bond math does seem favorable for short-term notes. At a duration of two years, for instance, the two-year Treasury note would lose 40 basis points, or 0.4% in price, for another 20 basis point rate increase by the Fed. (A basis point is 1/100th of a percentage point.) Even if the Fed were to raise rates by another 175 basis points, the bonds could generate positive returns over their lifetime. Inflation data aren’t predictable, of course, but some bond managers say the market has largely priced in a terminal fed-funds rate. BlackRock’s Miller thinks the two-year Treasury’s yield embeds the rate peaking around 4.3% in the first quarter of 2023. “The two-year note looks like a reasonable asset,” he says. “Is it screamingly cheap? No. But it’s no longer ridiculously rich like it was a year ago.” Tom Tzitzouris, head of fixed-income research at Strategas, says short-term yields are also now in the terminal ballpark. If that’s the case, he adds, “you’re basically going to clip your coupons in two-year Treasuries because the market has already priced in the tightening.” Opportunities in shorter-term bonds aren’t confined to Treasuries. John Bellows, a portfolio manager at Western Asset Management, likes investment-grade corporate debt, which features both a yield component and some income from the credit risk embedded in the bonds. “We have a widening in credit spreads at the very front of the curve,” he says. The spread on one- to three-year investment-grade corporates was recently about 75 basis points over corresponding Treasuries, putting yields in the neighborhood of 4.5%. “Over a three-year period, there is a lot of potential total return,” he says." MY COMMENT If I had short term cash......1-2 years.....the rates on one and two year Treasuries are getting very attractive. I would be happy to soon lock in a 4%+ yield on cash for a year or two......if I needed to keep that money in cash for that time. My ONLY criteria would be that I was going to keep the money invested in the Treasury to maturity. Supreme safety and a nice rate.
Glad to have today over with. It could have been worse as a follow up to Tuesday and the economic data....retail sales and jobles claims....that came out today. I will be glad in general to have this week over with so we can get the rate increase done next week and move on toward EARNINGS. In the RED today as expected. Nine of ten stock positions down today. When I first looked I thought it was ten out of ten....since that is what I expected....than I noticed that my TSLA was green today....by a slight amount. I also got beat.....as expected....by the SP500 today by 0.53%. Looking forward to Friday tomorrow.
I see where the railroad strike has been avoided for tomorrow. As if we needed anything else to throw into the pot of things going wrong in 2022. It may be just a temporary aversion, but nonetheless it appears to have been avoided at least short term. I am not posting the particular article, simply because it has a ton of political crap in it. We are on the down hill slide to the end of 2022...literally in some aspects. This year seems to have moved quickly, but then again in other ways maybe not quick enough. It is 100 days until Christmas!!!
Yes the strike was averted.....but.....thinking of a wage/price spiral......and the next few years of the economy........the approximately 25% wage increase over a few years is NOT going to help inflation. It we start to see those sorts of wage gains over more and more segments of the economy.....we have potential for much worse inflation when taken in conjunction with all the massive government spending that is happening and locked in now over the next year or two. I remember in the late 1970's early 1980's.....the HUGE wage gains for auto workers that spread through the economy and was partly responsible for what became historic high inflation. I consider the primary issue back than a very nasty wage/price spiral. BUT.......you cant blame people individually for trying to get what they can.
As far as wages/economy. I think this year has seen several places raising wages to attract employees and employers are competing for employees of other companies. Several people I know have received decent increases in pay and others have left to get higher pay elsewhere. I believe it all goes back to the shutdowns and etc. It has been a major adjustment and distortion to what was normal. Companies are having to pay to keep and get folks to stay around. The dust will settle at some point and maybe things will adjust, but until it does the employee/employer dynamic will continue to have this push/pull type environment. Employees are using that leverage when they can and moving on when they can't.
We are stuck with the....breathless, shocking......Fed Ex market for today. Stock market news live updates: Stocks plummet on heels of FedEx earnings warning https://finance.yahoo.com/news/stock-market-news-live-updates-september-16-2022-112456288.html (BOLD is my opinion OR what I consider important content) "Stocks tumbled Friday morning, deepening a sell-off across U.S. equity markets that placed all three major averages on pace for a weekly loss. The moves came as traders weighed an ominous warning from FedEx about the global economy. The S&P 500 slid 1.2% at the start of trading as the Dow Jones Industrial Average shed 350 points, or 1.1%. The technology-heavy Nasdaq Composite led losses, plunging 1.6%. FedEx (FDX) withdrew its full-year guidance late Thursday and delivered messaging around its earnings outlook that sent the stock spiraling. Shares tanked more than 20% at the start of Friday's session. "Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S." FedEx CEO Raj Subramaniam said in an earnings statement. "We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first quarter results are below our expectations." With the third-quarter reporting season on deck, a number of strategists have soured on their earnings expectations and trimmed their forecasts. According to data from FactSet Research, earnings growth expectations for the S&P 500 stand at an increase of 3.7% for the third quarter, down sharply from expectations of 9.8% growth at the end of June. Analysts have cut Q3 earnings expectations over the last 2-3 months for every sector in the S&P 500 except energy, and seven out of 11 sectors in the index are now expected to show outright year-over-year declines in earnings, compared to only three in the second quarter. Morgan Stanley’s lead U.S. equity strategist Michael Wilson, a vocal stock market bear, has said that while the first half of the year was shaped by inflationary pressures and hawkish Federal Reserve policy, the remainder will be fueled by slowing growth and weakness in earnings. “While acknowledging the poor performance in equities year-to-date, we do not think the bear market is over if our earnings forecasts are correct,” Wilson said in a recent note to clients. In the bond market, the benchmark U.S. 10-year Treasury note held above 3.46%, while the policy-sensitive 2-year Treasury spiked further, hitting 3.9%, the highest level since 2007. Oil prices ticked up slightly Friday morning but the commodity was on pace for a third week of declines." MY COMMENT I dont follow Fed Ex......so what I am going to say is just my personal opinion as a PAST USER of their services. I am NOT shocked at all that their earnings are tanking. They brought it on themselves over many years. When I was in business they were the SUPREME LEADER in shipping especially overnight and second day delivery. I knew many many people in business that would NEVER use UPS. UPS customer service was terrible as was their constant destruction and losing of items.....still is......in my experience. Fed Ex was the KING of shipping. Amazing customer service, supremely efficient, very dependable and affordable. That ALL started to change when they switched over to DIMENSIONAL CHARGING for their services. At that point their rates jumped up so much that I had to quit using them. Most of the business people I knew also was driven away from using them by their EXTREMELY HIGH pricing. Over the last 20 years that pricing has escalated to where NO ONE I know ever uses their services. In addition email, zoom, Docu-sign, texting, scanning, etc, etc.....has made them even more irrelevant. NOW....with the inflation.....their pricing is simply OBSCENE for most people. I dont know anyone that uses their shipping services or their overnight services. Now...when I have to ship....I bite the bullet and use UPS ground....even though I hate UPS and their crappy service. In my world Fed Ex simply priced themselves out of the market and they are paying the price for that. They have priced their own customers away.....demand destruction on steroids. I cant imagine any world where this company has much of a future. They had a complete customer service and market advantage.....but....they got greedy and cut their own throat with obscene pricing for their services. I had a commercial Fed EX account for many many years. My mantra was....."I will NEVER use UPS". NOW.....I never use Fed Ex.....simply way too expensive.
Another IRRATIONAL day today based on the comments of a single CEO of a company that is not representative of the general economy. BUT.....that is exactly how the short term works. Over the short term the markets establish a direction and then....become a self fulfilling prophesy machine. That is why traders LOVE short term volatility. Now in the modern world....we have BIG INVESTMENT banks and investment firms.....legally.....manipulating the markets short term with massive computer trading operations that are based on headlines and news items and sentiment....all operating in unison. I am not complaining....that is just how it is. If you are going to invest and try to achieve the long term returns that the markets will give you......you just have to deal with the world the way it is. it just comes with the territory.
Lets hope so. How To Exploit Stock Market Rise In Midterm Election Years https://www.investors.com/etfs-and-...market-tends-to-rise-after-midterm-elections/ (BOLD is my opinion OR what I consider important content) "If you had a crystal ball that told you what the stock market is going to do, how would you use it? To pick investments, right? Well, you sort of have a crystal ball from now through at least the fourth quarter. At least, you have a pretty good idea what the stock market has done in years with something in common with 2022. That's because the stock market has a strong record of rising after midterm elections. Stock Market And this isn't just a history lesson. Keen market observers say individual investors can take advantage of the stock market's midterm election pattern. Andrew Schrage, co-founder and CEO of MoneyCrashers.com, spells out why he likes large-cap funds in general and equity-income funds. Ameriprise (AMP) Chief Market Strategist Anthony Saglimbene details which election outcome should help health care, financials and technology. He also explains which sectors should benefit from recently passed legislation. Paul Schatz, vice president and treasurer of the National Association of Active Investment Managers, recommends funds for betting on large caps balanced by small doses of midcap and small-cap funds. And he lists funds for plays on technology, semiconductors, financials and biotech. Outperformance Pattern Some studies show the stock market outperforming in the fourth quarter vs. earlier in the year when there's a midterm election. Others show the stock market outperforming in the 12 months following midterm elections vs. the prior 12 months. Researchers include U.S. Bank, J.P. Morgan Asset Management and E-Trade (ETFC). Either way, the midterms tend to trigger market a period of outperformance. Why? Theories vary. One theory is that markets don't like uncertainty. Midterm elections end the uncertainty that precedes an election. Investors feel more confident once their questions about upcoming tax policy and monetary policy have been resolved. But the "why" matters less than the "what" — the tendency of the market to outperform. And that pattern emerges in study after study. How To Benefit From The Trend Now the question is, what are you going to do with this information? Schrage says individual investors should know the outperformance pattern is not a guarantee of outperformance after this upcoming midterm election. But investors can still try to exploit the tendency of the market to rev up after midterms. That's especially the case with the diversified, funds-only, long-term portion of their portfolios. "Both large-cap funds and equity-income funds make sense for investors looking to capitalize on a potential market upturn after the midterm elections without exposing themselves to riskier sectors and styles," said Schrage, whose MoneyCrashers.com is a personal finance education website. Why large-cap mutual funds and ETFs as well as equity-income funds? "Large-cap companies in general and dividend-paying stocks in particular — especially ... with very long track records of stable or increasing dividends — tend to weather uncertain markets better," Schrage said. Investors are already aiming to tap into that perceived stability. Large-cap funds overall and equity-income funds are by far the two categories of mutual funds and ETFs with the most net inflows this year. Still, Schrage warns investors that a trend is not an ironclad cinch. "The market remains uncertain," he said. "Many economists expect a recession in the first half of 2023." If you do want to try to exploit stock market outperformance after midterm elections, Schrage recommends Vanguard Large-Cap Fund (VV). The $57.6 million Vanguard ETF's return this year is -14.01%, per Morningstar Direct. Its yield the past 12 months is 1.52%. If you prefer mutual funds, Schrage recommends considering the Vanguard ETF's mutual fund nearly identical twin, $25.9 billion Vanguard Large-Cap Index Fund (VLCAX). The fund is down 14.1% this year. Its yield the past 12 months is 1.51%. Election Impact On Stock Market Ameriprise's Saglimbene frames his advice in terms of likely election scenarios. He says that political observers predict a continuation of divided government. Republicans running the House, Democrats controlling the Senate. If that's the outcome, "We believe a divided government could reduce the odds of significant changes to regulation over the next two years, which may benefit areas such as health care, financials, and technology," he said. The Inflation Reduction Act and the so-called Chip Act should encourage U.S. manufacturing of computer semiconductors, he says. Saglimbene added, "Investments in green technology could also help utilities and other clean energy producers." But he cautions investors that those benefits may take years to appear. Stock Market: Safe Plays NAAIM's Schatz says the safest way to play a midyear election rally is through large-cap funds like iShares Core S&P 500 ETF (IVV). The $294.9 billion fund is down 17% this year. Its yield the past 12 months is 1.5%. If you can stomach volatility, Schatz recommends allocating 50% of this midyear election play to large-caps and 25% each to small- and midcaps. The $66.2 billion iShares Core S&P Small-Cap ETF (IJR) is down 14% this year and has a 1.76% trailing 12-month yield. "On the midcap side, I would look at MDY," Schatz said. That $17.9 billion SPDR S&P Midcap 400 ETF (MDY) is also down 14% and has a 1.2% TTM yield. "On the sector side, I favor technology and semis in particular with a little software thrown in," Schatz said. "I like XLK, SOXX and IGV. And I like financials like XLF and biotechs like IBB and XBI." IBB is the symbol of iShares Biotechnology ETF and XBI is SPDR S&P Biotech ETF. The $39.8 billion Technology Select Sector SPDR ETF (XLK) is down 24% this year. Its trailing 12-month yield is 0.89%. The $6.1 billion iShares Semiconductor ETF (SOXX) is down 35% this year. Its yield the past 12 months is 1%. iShares Expanded Tech-Software ETF (IGV) is down 30% this year. The $32.4 billion Financial Select Sector SPDR ETF (XLF) is down 29% this year. Its yield the past 12 months is 2%." MY COMMENT Kind of a FLUFF article with very little research or facts listed. But....I do suspect that this is true....especially with an outcome of DIVIDED GOVERNMENT. A STALEMATE would be the best outcome for investors in my view. I dont know what planet the person above is living on that talks about a "continuation" of divided government.....in my world the Republicans dont control the legislature or the Presidency. I do hope that this.....supposed.....mid term election trend happens this year. this is probably one of the few non-market events that might have a big impact on the markets this year and going forward. BUT.....there is NO WAY I am going to try to somehow "play" this sort of event as an investor. that is simply a LOSING strategy.
We are seeing a nice come-back at the moment. But....we are still down significantly. As to the close today.....totally up in the air. We might see a recovery into the green by day end. Strong EMPHASIS on the word....."might".
HELLO.....Crypto fans. Government is calling.....they want to "partner" with you for the common good. I am sure you just cant wait. Treasury urges SEC, CFTC crack down on crypto industry in wide-ranging new reports https://finance.yahoo.com/news/treasury-crypto-regulation-reports-september-100041563.html
If you want more info on the DISASTROUS earnings announcement report from FED EX and the Blatent excuse making by the CEO....here you go. In looking at the list of actions they are going to take......one category is totally missing.....anything to do with the customer and service to the customer including outrageous pricing. As FedEx stock crashes after brutal profit warning, analyst points to a lurking Amazon https://finance.yahoo.com/news/fedex-stock-crashes-after-brutal-profit-warning-amazon-100353781.html MY COMMENT YES.....Amazon is kicking their butt. Unfortunately this company is arrogantly pricing themselves to death. Here are the steps they are planing to take. This list is a classic WARNING to potential investors.....BEWARE. When you see a business doing this sort of "stuff" it is a very BAD INDICATOR for the future. Perhaps the list SHOULD actually start out with......."Find a new CEO and replace the top management". "What FedEx says it's doing to stabilize its giant ship: "Reduction in flight frequencies and temporarily parking aircraft; Volume-related reductions in labor hours and other linehaul expenses; Consolidation of certain sort operations to drive productivity; Reduction of Sunday operations at a number of FedEx Ground locations; Cancellation of certain planned network capacity and other projects; Deferral of staff hiring; Closure of over 90 FedEx Office locations; and Identification of five corporate office facilities to be closed, with additional real estate rationalization planning under way.""
