# Stock market...buckle up!



## Don M. (Apr 22, 2022)

The stock market has been taking some serious hits this year....the Ukraine mess, and now the Fed planning on increasing the rates.  The losses today are among the worst in years, and the CBOE VIX took the biggest jump in months.  Some of the "experts" are predicting a recession by the end of the year.  

Personally, I think raising the Fed Funds rate is a good thing...may finally give Savers a bit of decent return on their money in the bank.  

Anyone who is "invested" should be watching their portfolio closely in coming weeks/months.


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## dseag2 (Apr 22, 2022)

Absolutely right.  I don't plan on seeing my retirement savings in the stock market increase at any time this year.  It has been pretty bleak.  Since the market typically looks ahead by 6 months I'm hoping the Recession will happen soon (if it happens) and we can move on.


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## OneEyedDiva (Apr 22, 2022)

I was waiting for yesterday! It was what I call a "buy day".  I set my alarm for 3:30 every weekday then check my watchlist to see how my investments are doing. Of course I can't tell about the mutual fund prices in real time but when all the benchmarks take a big hit like yesterday, I know it's time to do some buying. Last time I took advantage of a big dip, one of the funds rebounded by $20 a share, another by $2 a share. With the drop, I lost something like 2.2%, no biggie. I'm a buy and hold investor who doesn't need to take distributions (except my RMDs), so I never panic when the market dips like this. Even with today's downturn, the NAV of the fund I take my RMDs from has doubled it's original purchase price.


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## Aunt Bea (Apr 23, 2022)

If you had a good allocation and sound investments yesterday, you probably have a good allocation and sound investments today.

_"It's only when the tide goes out that you learn who has been swimming naked." - Warren Buffett_


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## HarryHawk (Apr 23, 2022)

When the recession hits, it is not going to be trivial.  Typically, a government responds to a recession by increased spending and lowering the interest rate to stimulate investment.  Both of those options are pretty much already maxed out.  Couple that with a possible ongoing pandemic, unsecured border problems, broken supply chains, uncertain energy supplies, international chaos, etc, etc, etc


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## Don M. (Apr 23, 2022)

HarryHawk said:


> When the recession hits, it is not going to be trivial.  Typically, a government responds to a recession by increased spending and lowering the interest rate to stimulate investment.  Both of those options are pretty much already maxed out.  Couple that with a possible ongoing pandemic, unsecured border problems, broken supply chains, uncertain energy supplies, international chaos, etc, etc, etc



Yes, it looks like we may be headed for a repeat of 2008.  The government has exhausted any options it may have, and would be flirting with a collapse of the Dollar if they tried to throw any more money at the problems.


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## Aunt Bea (Apr 23, 2022)

Since the collapse in 2008, my portfolio has more than doubled, but my purchasing power has remained about the same. 







I'm not concerned with the numbers as much as being able to maintain a comfortable standard of living with the resources I have.


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## HoneyNut (Apr 23, 2022)

OneEyedDiva said:


> I was waiting for yesterday! It was what I call a "buy day".


Yes, as long as you have some cash to invest.  I'm going nuts because I feel like I need the cash I have to live on (since I retired last month), but if I do sell my house in a few weeks I will look back and be frustrated I didn't use my cash to invest.  



Don M. said:


> Anyone who is "invested" should be watching their portfolio closely in coming weeks/months.


My personal preference is not to look and hope it is back up by the time I peek at it again.  But, so far I can't resist watching it.



HarryHawk said:


> Typically, a government responds to a recession by increased spending and lowering the interest rate to stimulate investment. Both of those options are pretty much already maxed out.


My opinion, they need to pass the infrastructure bill, that would boost the economy and we really need to invest in our infrastructure.  Wasn't infrastructure spending what helped during the depression?


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## Pecos (Apr 23, 2022)

OneEyedDiva said:


> I was waiting for yesterday! It was what I call a "buy day".  I set my alarm for 3:30 every weekday then check my watchlist to see how my investments are doing. Of course I can't tell about the mutual fund prices in real time but when all the benchmarks take a big hit like yesterday, I know it's time to do some buying. Last time I took advantage of a big dip, one of the funds rebounded by $20 a share, another by $2 a share. With the drop, I lost something like 2.2%, no biggie. I'm a buy and hold investor who doesn't need to take distributions (except my RMDs), so I never panic when the market dips like this. Even with today's downturn, the NAV of the fund I take my RMDs from has doubled it's original purchase price.


MDS
LOL, you are a "gutsy" lady.


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## HarryHawk (Apr 23, 2022)

HoneyNut said:


> My opinion, they need to pass the infrastructure bill, that would boost the economy and we really need to invest in our infrastructure.  Wasn't infrastructure spending what helped during the depression?


I seem to recall during the Obama administration a trillion-dollar infrastructure bill that was going to fix things once and for all.  Remember all the shovel ready jobs?  I can't say I've noticed many improvements from the last trillion spent.  Does anyone know where it went?


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## HarryHawk (Apr 23, 2022)

Don M. said:


> Yes, it looks like we may be headed for a repeat of 2008.  The government has exhausted any options it may have, and would be flirting with a collapse of the Dollar if they tried to throw any more money at the problems.


Personally, I think you are being optimistic to think it will only be another 2008.   The economy was humming along before 2008, unlike today.  Doing a google search regarding 2008 --

_The Fed has reduced its key policy rate from 5.25% to barely above zero in little more than a year.

The inflation rate was in the mid 3.00%s_

The current Fed interest rate is between 0 - .25 (again from google).  Big difference, that is where we are starting from.  Plus the national debt has grown SIGNIFICANTLY since 2008 (thanks to both Dems and Reps), servicing that debt becomes more and more difficult as the Fed raises interest rates.


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## mathjak107 (Apr 23, 2022)

Totally different situation and causes in 2008


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## Don M. (Apr 23, 2022)

mathjak107 said:


> Totally different situation and causes in 2008



True....but I suspect the Results will be quite similar.


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## DonnyO (Apr 23, 2022)

I don't think the, "The Infrastructure Bill," has much infrastructure in it.


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## Liberty (Apr 23, 2022)

Don't think we'll be in recession this year - if we have a recession it will probably be in late 2023.  If these supply chain issues could get somewhat rectified it would sure help.  My fav etf fund is still up for the year, but that won't last with the present market tantrums.  Everything can be going good and a Fed opens up their mouth about rate increases and the free fall starts again.

TS Elliot said "April is the cruelest month of the year (The Waste Land)"...who knew he 
was talking about the stock market, LOL!


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## Alligatorob (Apr 23, 2022)

HarryHawk said:


> I can't say I've noticed many improvements from the last trillion spent. Does anyone know where it went?


Sure, into the same rathole as much of our government spending...


Aunt Bea said:


> Since the collapse in 2008, my portfolio has more than doubled, but my purchasing power has remained about the same.


Yep, hope mine does that well over the next 20 years or so...  I try to be optimistic.


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## Harry Le Hermit (Apr 23, 2022)

I've often hear we seniors are susceptible to short term memory loss. The $1.4 Trillion Infrastructure Investment and Jobs Act was signed into law on 11-15-2021. It was deemed a once-in-a-generation investment in our nation’s infrastructure and competitiveness.

It should not be overlooked that the current banking system in the U.S. has excess reserves near $4 Trillion. Excess reserves were unheard of the U.S. prior to 2008, when the FED was permitted to pay interest on both required and excess reserves. When the FED raises interest rates, these are what is being discussed. I stated "these", but the FED no longer differentiates between the two and just says interest on reserve balances. In any case this is the reserves of depository institutions.

As for the common man seeing higher interest on bank savings... not seeing much of that taking place.


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## HarryHawk (Apr 23, 2022)

Alligatorob said:


> Sure, into the same rathole as much of our government spending...


_Back in 2009, former President Barack Obama made some lofty promises about the infrastructure overhaul that his $800 billion economic stimulus plan would provide. Obama used the phrase “shovel-ready projects” in reference to construction projects that could begin right away.

In the end, however, only $98.3 billion of the $800 billion stimulus was dedicated to transportation and infrastructure. Of that $98.3 billion, only about $27.5 billion was actually spent on transportation infrastructure projects.

https://finance.yahoo.com/news/happened-shovel-ready-infrastructure-projects-212123861.html_


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## Lara (Apr 23, 2022)

Monday I'm switching to Low Risk.

I'm at Medium Risk right now. I wish I'd done it earlier.

I feel like Monday's going to be a bad day.

Monday's usually are.


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## Don M. (Apr 23, 2022)

Lara said:


> I feel like Monday's going to be a bad day.
> 
> The futures are all in the Red for Monday....especially NASDAQ.  Between Ukraine, rampant inflation, and now, the Fed stirring the pot, I expect a rather disappointing Summer....maybe longer.  After some nice gains in late 2021, things went down rapidly a couple of months ago.  I moved most of my funds into the Money Market in Early February, and they may stay there until the markets begin to show some stabilization.  I'm not making any gains, but I'm not losing a bundle either.



I use the CBOE VIX as my "clue" as to where the markets may be headed....the Higher the VIX, the more volatility we can expect.  In good times, the VIX is 18, or lower.  Today, its showing a bit over 28....which means that more declines are expected.


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## OneEyedDiva (Apr 24, 2022)

HoneyNut said:


> Yes, as long as you have some cash to invest.  I'm going nuts because I feel like I need the cash I have to live on (since I retired last month), but if I do sell my house in a few weeks I will look back and be frustrated I didn't use my cash to invest.
> 
> 
> My personal preference is not to look and hope it is back up by the time I peek at it again.  But, so far I can't resist watching it.
> ...


Well, actually I have cash sitting around in my Roth waiting for days like Friday. @Pecos  Not so much gutsy MDB, as strategic. That tactic has served me well several times. The market always bounces (or crawls) back. I don't need that money to live on since my monthly expenses take up only half of my monthly income. Also, if I ever need (preferably) at home care, my Medicare plan via retiree benefits pays for 35 hours a week for an unlimited time, the rest I can cover.


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## HoneyNut (Apr 24, 2022)

HarryHawk said:


> I seem to recall during the Obama administration a trillion-dollar infrastructure bill that was going to fix things once and for all. Remember all the shovel ready jobs? I can't say I've noticed many improvements from the last trillion spent. Does anyone know where it went?


I didn't pay attention in the past, but I think 1 trillion is not much, something like $3k per person in the US?  My property taxes every year are almost twice that.  No wonder infrastructure is failing!


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## HarryHawk (Apr 25, 2022)

HoneyNut said:


> I didn't pay attention in the past, but I think 1 trillion is not much, something like $3k per person in the US?  My property taxes every year are almost twice that.  No wonder infrastructure is failing!


Since if you take the U.S. population estimate in 2021 of 332.8 million people (U.S. Census Bureau), $28.43 trillion would be equivalent to *more than $86,000* for every individual in the U.S, I guess another $3k won't make much difference.

With the current rate of inflation, that will be a drop in the bucket for our kids, grandkids, and great grandkids.  I'm sure they will all be more than happy to pick up the tab.


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## Liberty (Apr 25, 2022)

Does anyone know anything about crypto banks paying interest?  Got a friend who says he's earning 30% a year!


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## OneEyedDiva (Apr 25, 2022)

Liberty said:


> Does anyone know anything about crypto banks paying interest?  Got a friend who says he's earning 30% a year!


If it sounds too good to be true, it probably is. The IRS is going after crypto owners too. But to answer your question, no I don't know anything about that. I found this article and there are more if you search.
https://theconversation.com/crypto-...ter-than-high-street-but-are-they-safe-163026
This is an article about the IRS and crypto owners.
https://www.cnbc.com/2021/07/14/irs-new-rules-on-bitcoin-ethereum-dogecoin-trading.html
I will add that no matter what, when dealing with crypto...*stay away from Coinbase!*


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## Liberty (Apr 26, 2022)

Thanks, Diva...still confused about what he's got going.  Says he is also representing a crypto "bank" and that the investors are getting 30% interest.  LOL!


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## Rich29 (Apr 26, 2022)

I agree with comments that the circumstances leading to the downturn in 2008 are different than the ones impacting
the economy / financials today. The turn-around after 2008 was relatively swift. It seems to me today's issues may be 
more complicated (inflation, climate change, supply chains, Ukraine, politics, etc.) and may take longer to resolve. I hope
I am wrong.


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## Don M. (Apr 26, 2022)

The markets took another major Nose Dive today, and there are few signs of this trend easing up anytime soon.  There are so many negative things happening at the same time....both here, and globally...that it will be a minor miracle if the markets begin to turn positive in coming weeks...maybe months.


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## Lethe200 (Apr 26, 2022)

Remembering the recessions of 1980, 1990, 2000, 2008-9, and now maybe another? Yawn.

But... we are very fortunate. Like Diva, we don't need to take distributions from our portfolio (although we do, at a 3% ratio, for fun money). Our CFP has our accounts in a Balanced Risk position, which they define as between a 50/50 split and a 60/40 split, depending on what the market is doing. 

_From their most recent quarterly newsletter:_
" Currently they're taking the opportunity to harvest tax losses and have allocated a slightly larger shift into two REITs due to inflation considerations. It's still less than 3% overall, as REITs are more volatile than bonds.

Over the last 5 yrs they have changed the bond funds used, de-emphasizing income production. 
With bonds yielding little and under pressure from expected rate increases, some bond holdings have been reduced to accommodate the new REIT investments.

To lessen that impact, bond portfolios were adjusted to reduce correlation to stocks. This may mean lower income but better capital preservation and diversification benefits. "


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## dseag2 (Apr 26, 2022)

I just keep saying to myself that investing in the stock market is a long-term proposition.  2022 is pretty bleak for my portfolio, but I hope to live for another 20 years so hopefully there will also be cycles where my assets appreciate.  2021 was a great year.  Unless we have a 10-year economic stagnation like Japan did between 1991-2001 I am hopeful.  I don't think that is going to happen.


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## oldman (May 9, 2022)

According to all the financial geniuses on CNBC, we are headed for a recession. If that is the case, I would expect the markets to drop to whatever the major investment firms feel is a safe level. It appears that the bond markets are doing better, which makes sense. 

We use Edward Jones to manage our trusts and investments. They are probably about the same as any other company, but I like not having to look over their shoulder every day or week. They send me a weekly printout of how the accounts are performing. 

I began noticing that they were moving us into cash late last year. Our stock portfolio is about 50% cash as of today. I also noticed that "I bonds" are paying 9.62%, so I may dump some cash into those instruments to help bail out the government.


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## JonSR77 (May 9, 2022)

With Ukraine, with huge changes in the oil market...I would just urge everyone to be extremely careful with their finances.

These are hardly ordinary times...or anything close to it.

Take care everyone and be safe...


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## Don M. (May 9, 2022)

I will be surprised if the markets show any signs of recovery in the next 6 months.  I think the S&P and NASDAQ will be down by at least 30% by the end of Summer.  The elements of recession just keep looming larger.  It will be interesting to see if the FED and its rate hikes have any real effect on inflation...I kind of doubt it.  For now, IMO, Cash is King.


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## Alligatorob (May 9, 2022)

dseag2 said:


> I just keep saying to myself that investing in the stock market is a long-term proposition.


Of course it is, problem however is that my view of long-term is getting shorter.  I will probably have to start taking money out of my 401k in a couple of years...  I think a lot of folks here are in that boat.


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## oldman (May 9, 2022)

dseag2 said:


> I just keep saying to myself that investing in the stock market is a long-term proposition.


Long term investing is for the young. Over time, unless we have another depression, a person's portfolio should go up. When you become a senior, it's really not about growth, but more about income that can be used to supplement your pension and social security, if those two are not enough to live off of. People that need income and have investments in the market look towards buying stocks that pay high dividends. When the dividends are paid out, they will withdraw that amount or have their account setup so that the money comes directly to them, instead of being reinvested. 

Buying growth stocks are for younger people that have time to tolerate the ups and downs of the markets. JMO


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## dseag2 (May 9, 2022)

My financial advisor understands my long and short-term goals and invests accordingly.  I have a varied portfolio, and he has set aside enough cash to last me for a couple of years when I finally have to start withdrawing (which will like be in the next couple of months).  Also, lots more dividend-paying stocks and a more risk-averse portfolio.


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## Aunt Bea (May 9, 2022)

IMO investing needs to be a long-term proposition.

I've been retired for 17 years and could have 20-30 years ahead of me.

Try to tune out the noise and never bet against the future of America.

_“What we learn from history is that people don’t learn from history,”_ - Warren Buffett

_"If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks."_ - Jack Bogle

_“Someone’s sitting in the shade today because someone planted a tree a long time ago.”_ - Warren Buffet


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## Liberty (May 10, 2022)

Yes, think the real problem is older folks want to know how long the drawdowns  will be taking place...after all, they don't have as many years left...lol.


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