Yeah Husker......without a crystal ball it is impossible to know when China might strike and the market impact. It would not be pretty. If someone was going to try to trade or play it.....I guess the best way would be to sell everything the day it happens.....than ride out the next year or two in cash or until it is very clear that things are resolved for the markets. I am not saying that is what I would do. Till it happens no one can know. I guess my two alternatives would be to sit it out and remain fully invested for the long term and wait for the longer term market recovery. My other alternative would be to sell into the event....very early....and hope to capture bargain prices and potential big gains....as the markets deal with the issue and recover over the longer term.....at least 1-2 years. One thing is sure.....for all the millions of baby boomers that will be retiring every year.....for the next 10 years or more....it would be a potential disaster.
I had a GAIN today.....but minor. My stocks in the green today.....MSFT, AAPL, NVDA, and AMZN. Nice to see a positive day even if it was very mild. I got beat by the SP500 today by 0.03%.
The very mild close today. S&P 500 closes little changed Thursday, struggles to reach record: Live updates https://www.cnbc.com/2023/12/27/stock-market-today-live-updates-dec2728-2023.html (BOLD is my opinion OR what I consider important content) "The S&P 500 finished marginally higher Thursday, closing in on a new all-time high in the penultimate trading day of what’s been a strong year for stocks. The broad market index added 0.04% to finish at 4,783.35, putting it within striking distance of its highest closing level of at 4,796.56 set in January 2022. The Dow Jones Industrial Average rose 53.58 points, or 0.14%, to end at 37,710.10 and notch a fresh record closing high. The Nasdaq Composite inched down 0.03% to close at 15,095.14. “What we’re seeing now is the market exhibit extreme resilience,” despite some technical indicators suggesting overbought conditions, said Adam Sarhan, CEO of 50 Park Investments. “We have every chance in the world for the market to fall and it refuses to fall in a meaningful fashion. That tells me that the bulls remain in clear control.” With just one trading day left in 2023, all major averages are on pace to wrap up the year with gains. The blue-chip Dow and the S&P are poised to finish higher by nearly 13.8% and 24.6%, respectively. Meanwhile, the technology-heavy Nasdaq is on track for its best year since 2003, climbing 44.2%. That outperformance has been driven by the artificial intelligence craze and a rebound among mega-cap tech names after 2022′s carnage. The three major indexes are also slated to notch their ninth straight winning weeks. That underscores the market’s late 2023 rally, rebounding off a negative third quarter. The S&P is up 11.6% for the quarter and headed for its best quarterly performance in three years. Stocks are now in the middle of a period dubbed the “Santa Claus rally,” which refers to the last five trading days of an ending year and the first two of a new one. The S&P 500 has risen about 1.3% over this timeframe on average, per data going back to 1950 from the Stock Trader’s Almanac. As 2023 comes to a close, expanding breadth and bullish technical patterns forming across the major indexes create the “perfect storm” for stocks in 2024 as markets look ahead to rate cuts and the continued easing in inflation, said 50 Park’s Sarhan. “The big risk now is a recession,” he said. “We didn’t have the reset everybody coming into this year was expecting.”" MY COMMENT A good day....basically the markets treading water with a slight upward bias today. Good enough for year end.
WELL....WELL....we are down to the final market day of 2023. it has been a kick-ass ride this year. Baring a 40% drop tomorrow in the markets....I am in good shape for the close of the year. HAPPY DAYS ARE HERE AGAIN.....blah, blah, blah.......blah......blah, blah blah, blah. We fought the good fight in 2023.......and....we won.
Indeed a disaster. I may be the only one in my particular situation who reads this thread but surely there are many out there in a similar predicament, and it's down right frightening. The other thing is, if you want what money you have to work for you, you not only have to time the market once but twice. We joke about cashing in and living like royalty in SE Asia if we ever get tired of the daily grind, but what if China decides to create havoc beyond Taiwan... For now it's one foot in front of the other and an ear to the parade deck. Leaning towards paying the 15% cap gains and cashing out but damn I don't like to gamble against a market that has had positive returns for 40 some years. Fork in the road...
On the China issue, since I been thinking, would it not make sense to maybe setup the retirement plans and taxable accounts with some sort of trailing stop loss? Maybe something big like 25% to where it don’t kick in on small dips? And then, even if it did you could buy right back in if the issue that caused the dip was not a major event like China invading?? Worst case then is a 25% loss and maybe some taxable events. Thoughts/opinions?
A good idea Blake. BUT.....with such a stop loss you would get driven out of the markets every time there was a bear market like 2022. AND.....the easy part is selling when there is some HUGE disaster. The hard part is knowing when to buy back in. it is nearly impossible to pull off both ends of the spectrum. I have mentioned in the past a bunch of times on this thread......I was able to pull it off in the 2008/2009 near world wide economic collapse. Back in 2008.....I went to all cash....I believe it was in May of 2008. I did it because with what was happening I thought that for the first time ever....in my life and before.....there was an actual chance....I figured as much as 25% or more...of a world wide economic and banking collapse. So I sold my entire account. When we got to about January of 2009....I believed that we were within about 10% of a bottom. My thinking was that we were either at a bottom or within 10% of a bottom. So I got back in.....sometime between January and March....fully invested. I was willing to take a 10% hit to get back in before the market turned. In hindsight my timing worked very nicely. BUT....that was a one time event and I could have just as easily been hammered....so LUCK was involved. There was no......GRAND SIGNAL....to get out or to get back in. It was pure and simple.....educated intuition....and LUCK. I think anyone with time on their side would be better off simply holding on and waiting it out. But for all the baby boomers nearing and in retirement....there is no cushion of time....it would be an epic disaster. One thing I have done.....assuming that such an event did not cause a world wide economic collapse and a collapse of the banking system.....is......I have isolated my stock market money from my retirement income. Assuming that the insurance companies that provide my income annuity payments survived.....and Social Security survived.....I would have no need to use my stock market money. So I have set up an income system where my stock market money should NEVER be needed for retirement income. Therefore....in theory....my stock market money is ALL long term money....and I could stay invested and wait it out. My default action in such an event is to do nothing....and...stay fully invested all the time. I think that is the best course of action compared to trying to time the markets. If we are a little bit lucky...we will completely avoid this big nasty BLACK SWAN.
Definitely an option Blake, a 25% loss would certainly be better than a 80 or even a 60% swan dive. '22 was a painful year to watch for a guy like me who in the last 4 years began to manage our own accounts and have been fully invested since. We even had a windfall of unexpected money come our way as some on here may remember. We invested 100% of it because we're comfortable with our lifestyle and comfortable with the fact that retirement wasn't in the cards for us. But the emotions of '22 were legit, all throughout '22 my attitude was simply WTF I'm never going to retire anyway, lol. In '23 we've made our max contributions and even bought some dips in the taxable, with one market day left it's looking like we did the right thing. On the positive side, one knucklehead contrarian macro goon I follow has been calling for a blow off top and an S&P500 target of 6-7000 this year and now estimates that his forecast may prove to be conservative! Long live Taiwan.
I've seen you mention this in the past and was aghast, my favorite fictitious Long Term Investor and person on the world wide web was at one point a GAMBLER! Curious to know how old you were at that time, 40's? Sometimes it's better to be lucky than good as the old saying goes.
The plan would have to be as I mentioned, to look at market and see if the drop was from war tensions or not, and if NOT to immediately buy back in. This would be the only way to avoid getting back in after prices go up But I know that would be hard to do psychologically.
If only we could detach our emotions from investing! W, as I see it, is not a gambler, but although he is fully invested all the time, he DOES, and don’t let him fool ya, indeed trade. But that doesn’t mean he day trades or invests foolishly. No. He too has a pulse, and mouths to feed. And that is why I think the stock market is a thing of beauty - even if your root fundamental investing mantra is to NOT trade, you can and SHOULD do it when you let emotions run high. Higher than we can control. The thing that sets W ahead of the herd is this - EXPERIENCE. That’s what makes you gain confidence in your abilities coupled with confidence in our market. Ok, back to topic - LAST DAY OF THE YEAR - show us what you got 2023!!!
Well Husker.....in 2008 I was 58 years old. AND....I did not just make a spur of the moment or emotional snap decision. I had been doing lots of reading and study on the bank situation for months before. When I got back into the markets I made a mental calculation of the state of the USA and world economy and the stock markets and decided the risk of further drop was that the markets might lose another 10%. I was willing to accept that risk....in order to get reinvested at great prices. In hindsight I was right on both ends of the sell off of my entire account. That time was a situation that most people even in hindsight have no idea how close we came to a world wide banking and economic collapse. I put my money where my mouth was.....since I saw an actual legitimate possibility of a 100 to 200 year event happening that would devastate the entire world. I will say that .....in the past....even some times reflected in this thread. If I see a situation that I can take advantage of....I will do it. There are a few examples in here of short term trades that I have done with a particular stock.....a rare event for me....but I consider myself a.......hunter/gatherer investor.....once in a while if I see something that is an opportunity and I think the probabilities are good...I might do it. But always within reason. For example....scraping together all liquid money, $80,000 and buying 1000 of MSFT stock in about 1990. Over the next 10-12 years that turned into a life changing move. BUT...in the end my constant is....long term investing. I may be a long term investor but if given a golden opportunity on a platter I will consider it....within reason. On the other hand if I see a significant chance that the world economy as we know it may collapse....I will do what I have to do to protect myself and those that own the accounts that I manage for family. I was a very successful business person for a long time.....I understand risk and projecting the future. BUT........that is why over the past five plus years I have posted on here every market move I have made.....as a long term investor.....whether a short term trade once in a rare while...... or most of the time doing nothing. I post every action so others reading this thread will see the REALITY of being an investor.....a LONG TERM INVESTOR.....and my thinking behind the process.
I like this little article...it ties in with the current discussion. The Biggest Risk in 2024 https://awealthofcommonsense.com/2023/12/the-biggest-risk-in-2024/ (BOLD is my opinion OR what I consider important content) In late-2019, The Economist put out a 150 page report called The World in 2020 that offered some predictions for the coming year in geopolitics and the economy. The issue was full of thoughts and ideas from CEOs, economists, scientists, politicians and business leaders about what was coming in the year ahead. These thought leaders were worried about the lasting impacts of Brexit, the upcoming U.S. presidential election, China’s role as a global superpower, climate change and more. They weren’t worried too much about a recession or a stock market crash or anything related to a healthcare panic. Obviously, no one knew how badly the Covid epidemic would disrupt life as we knew it heading into 2020. How could anyone possibly predict what was coming? To their credit, The Economist issued a mea culpa in a follow-up at the end of 2020: Well, we didn’t see that coming. Like almost everyone else, we were blindsided by the outbreak of covid-19, the first cases of which were identified in December 2019. As well as causign death and hardship around the world, and the delay or cancellation of events large and small, one of the pandemic’s less important side-effects was to invalidate most predictions for 2020, including our own. We expected a global slowdown, but not the biggest economic contraction since the Depression. We anticipated continuing Sino-American tentions over Chinese exports, but not of the viral variety. We looked forward to action to reduce greenhouse gsa emissions, but not an 8% annual reduction, the largest since the second world war, as the pandemic throttled transport and industrial activity. The pandemic truly changed the trajectory of the world forever. No one could have predicted what would happen or the potential ramifications from how we live to where we work to the prices we pay to where people live to the wages people earn and on and on down the line. But that’s the point. We didn’t see that coming should be your default assumption when it comes to risk assessment. The risks aren’t always going to be as big as a pandemic but things rarely follow the script when it comes to how people assume things will work out. When “everyone” does feel certain about the way things are going to work out, it usually doesn’t happen that way. This headline from October 2022 is a perfect example: We’re still waiting on that recession. Any day now. Here’s a more recent article from one year later: This story was plus or minus a day or so from the peak in yields. The 10 year Treasury topped out at 5% in October; it’s now below 4%. We humans are bad at forecasting the future because of recent bias, availability bias and overconfidence. But it’s also true that predicting the future is impossible because so much of what happens is impossible to predict since the world is inherently unpredictable. This is true of both short-term forecasts and long-term forecasts. Lin Wells worked at the Pentagon for both the Bill Clinton and George W. Bush administrations. Wells drafted the following document for Bush in April 2001: The kicker here is my favorite part of the memo: All of which is to say that I’m not sure what 2010 will look like, but I’m sure that it will be very little like we expect, so we should plan accordingly. Less than six months later came 9/11. The first decade of this century included two wars, two gigantic stock market crashes, a housing bubble (and bust), a mild recession and the worst financial crisis since the Great Depression. Wells was right — no one had a clue how things would look in 2010 back in 2001. I have some thoughts on things that could happen in 2024 but there is a good chance those thoughts will be proven useless because something unexpected will change things up. The stock market could be up or down depending on interest rates, the inflation rate, economic growth, earnings, investor sentiment or something else completely out of left field. The next big risk is rarely the one everyone is talking about or planning ahead for. I’m not saying we shouldn’t make forecasts. Everyone essentially needs to make forecasts about the future to survive. Companies need to make forecasts to plan for the future to figure out their investments, outlays and hiring decisions. Households need to make forecasts to plan out their spending, borrowing and consumption patterns. Investors need to make forecasts to set baseline expectations of gains or losses for financial planning purposes. People who go on vacation need to look at the weather forecast so they know what to pack for the trip. Forecasting is fine. Everyone has to think about the future, whether they like it or not. But it’s important to understand how often life gets in the way of your expectations. Surprises occur more often than anyone could imagine. Something surprising will happen in 2024. Just don’t be surprised that you’re surprised when it does." MY COMMENT The best laid plans of mice and men.......etc, etc, etc. Bottom line is being able to stay very CLINICAL and detached when the unexpected happens. Emotion is the investing return KILLER.
LOL....run for office.....not a chance of a snowball in hell. I have known too many politicians and seen how the political process works in reality....behind the scenes.
This is certainly good news......for us that are already invested and have been for some time. Global equity funds draw robust inflows on rate cut hopes https://finance.yahoo.com/news/global-equity-funds-draw-robust-132438142.html "According to LSEG data, global equity funds received a net $16.01 billion during the week, logging their most significant weekly net purchase since March 22. Investors poured about $14.57 billion into U.S. equity funds, the biggest amount since June 14. European and Asian funds however, faced outflows of roughly $1 billion and $182 million, respectively."
I dont even have to look to know that I am probably down today.....so far. We still have a long way to go in the day. But....it looks like 2023 will simply end with a....whimper. Not an exclamation mark. Fine with me....I am fully satisfied with how I am ending the year and the big gains that have been racked up. No need for GREED.......the other return KILLER. No doubt we are seeing tax loss selling.....something I dont do.....and...profit taking today. Not to mention that investors are all on vacation and/or distracted by the NEW YEAR.
NOTE: At the time of the MSFT trade in 1990 mentioned above......I was 40 years old. The next decade was a HUGE gap-up in our lifestyle and net worth.....due to my business and investing. What happened financially for us over that time allowed me to retire in early 1999. Much of it due to PROBABILITY based LUCK. I say LUCK because think how often someone does something based on all the correct probabilities.......but it simply STILL does not work out due to factors beyond your control. You can make all the right moves.....and still....it does not work out. This is why you dont bet the farm. Part of business and financial success is not just recognizing the opportunity....but knowing how to take advantage of the opportunity in a way that protects you in the event of failure. In other words....plan for he best scenario....and....the worst scenario...that you can live with. Of course where many people get in trouble is that this takes an accurate view of.....REALITY....in order to know the best and worst case.
