Investing, Stock Market and Retirement Planning Thread

[Dickie Dunn]

I’ve harped on here numerous times before about how our economy (and really not just our economy but the global economy) is a house of cards set up for and dependent on people and organizations to continually live beyond their means in an effort to grow grow grow GDP as much as possible, which is why the government has had to make trillions of dollars appear out of thin air to save individual, corporate, and government asses at the first sign of trouble.

While the economic fallout from most people living on an economic razors edge is yet to be determined, I wonder if this experience causes a change in consumer behavior and we see more saving instead of spending (despite the interest rates). If so, I don’t expect the economy to bounce back as quickly or strongly as projected.

[MrKennethTKangaroo]

Did the great recession changed the way people behaved? Maybe temporarily, but here we are, over leveraged yet again.

[Troy Loney]

Can you imagine high interest rates ever being politically tenable. Until there is some kind of collapse in the US dollar across the globe the fed will keep rates low.

[DigitalGypsy66]

People saving money works against a robust consumer based economy, so that’s not going to happen.

[Dickie Dunn]

Then this will be a continual cycle. A decadish of prosperity followed by the government creating money out of thin air to bail out people and businesses when **** hits the fan.

[Dickie Dunn]

Current headlines on CNBC:

IMF slashes growth forecasts, says world will ‘very likely’ experience worst recession since the 1930s

Dow futures point to 400-point jump as virus outlook improves

[Troy Loney]

That IMF article highlights another potential debt crisis, and is the EU going to be in a position to demand austerity programs from Spain and Italy again?

[Troy Loney]

https://www.nytimes.com/2020/04/14/busi ... e=Homepage

It's concerning that these "investors" seem exceptionally short sighted, and that last comment is **** crazy. It's as though monetary policy is the only factor for anything, "as long as interest rates are low companies will keep spending money". Yes, that could be a mitigating factor, but if demand is down and revenues are down, they will base decisions on that.

If earnings disappoint investors and management’s forecasts are worse than expected or disconcertingly vague, share prices could plunge back toward their recent lows. That would add to the gloom about the economy and cast doubts on the government’s ability to revive the economy.

But some investors believe earnings season could provide evidence that a swift recovery is possible. “We are viewing this as very much transitory,” said Timothy Fidler, who helps manage money at Ariel Investments, “a deep, unprecedented shock, but one that will cure itself — and cure itself pretty rapidly.”

Such bullishness from investors might seem irrationally exuberant when states like New York are still reporting hundreds of deaths a day. But traders make money when they accurately predict the future. And sometimes, their optimism can also help lift the economy. That’s because when corporate executives see stocks surge and borrowing costs plunge, they might be less likely to cut back on spending and hiring as much as when stocks are slumping.

[NTP66]

CNBC with a lot of shocker headlines: Goldman says downturn will be 4 times worse than housing crisis, then an ‘unprecedented’ recovery

And the last bullet point in that article: However, the recovery in the second half of the year could be stronger than anything the U.S. has seen.

[MrKennethTKangaroo]

We (both in this thread, the market, and these investors, article wrtiers, guys getting paid well in excess of six figures at goldman, etc) are all effing clueless about what is going to happen in the next six days, six weeks, six months, etc. The market was sold bigly (probably too bigly) last month and has seen a modest rebound since then.

Projecting anything at this point when we don't have basic facts about spread, who can work, how to treat sick people, how to prevent people from getting sick, and so on. About 10% of the workforce is unemployed right now. The oil and gas industry is starting at a cliff. Perhaps another 10% of the workforce could be unemployed within the next six weeks unless people stop getting sick easily and dying just as easily.

We have no idea. That's why this is a perfect opportunity for the Cornhole Capital approach to investing. The market is either work way more than it is right now, or it is worth way less. Either way, we don't have a clue and the dudes from Cornhole Capital don't have a clue where its going, but I bet they have a strategy to make money based on the collective not knowingness of the market.

Rant over.

[Troy Loney]

We (both in this thread, the market, and these investors, article wrtiers, guys getting paid well in excess of six figures at goldman, etc) are all effing clueless about what is going to happen in the next six days, six weeks, six months, etc. The market was sold bigly (probably too bigly) last month and has seen a modest rebound since then.

Rant over.

I felt like there were a lot of people itching to sell prior to the March sell-off (cash in the Trump gains). The virus was the external event that prompted that.

These up and down movements in April don't seem tethered to anything. We've seen the massive unemployment numbers, but it's easy to also see that those could easily just be temporary as service workers are laid off till things open up.

I guess I mostly get the impression that the market is not the indicator for what the post- covid reality is going to be, economically. And that's because we aren't going to get an idea of the demand impacts for weeks and months.

[MrKennethTKangaroo]

Agreed.

[mac5155]

Nobody is immune to the market downturn. Lil 20 month old mac jr has already lost $450 in value in his 529 plan, nearly 10% reduction.

[Beveridge]

Nobody is immune to the market downturn. Lil 20 month old mac jr has already lost $450 in value in his 529 plan, nearly 10% reduction.

Haha, same here. We went from a positive position to being less than what has been contributed so far. 16% drop from it's high at Valentine's Day. If I had done that calculation before last week happened, would have been a 25% drop. Made some #gains this past week.

[mac5155]

Nobody is immune to the market downturn. Lil 20 month old mac jr has already lost $450 in value in his 529 plan, nearly 10% reduction.

Haha, same here. We went from a positive position to being less than what has been contributed so far. 16% drop from it's high at Valentine's Day. If I had done that calculation before last week happened, would have been a 25% drop. Made some #gains this past week.

Yeah, I'm $450 in the red with current value vs. contributions. I'm almost $1000 down from the high point when you factor in performance.

[NTP66]

Nobody is immune to the market downturn. Lil 20 month old mac jr has already lost $450 in value in his 529 plan, nearly 10% reduction.

Haha, same here. We went from a positive position to being less than what has been contributed so far. 16% drop from it's high at Valentine's Day. If I had done that calculation before last week happened, would have been a 25% drop. Made some #gains this past week.

Same for my daughter's 529 - about a 16% drop. She's 100% TSM.

[NTP66]

Marcus dropped their rate from 1.70% to 1.55%. Surprised it took this long to happen.

[DigitalGypsy66]

Balls. They just dropped an app fwiw.

Huh, mine still says 1.70...and then the page reloaded as I typed this sentence and changed to 1.55.

[NTP66]

Yeah, I have the app (been live for months now). It sucks, because I do like how quickly Marcus is able to transfer money. Unfortunately, most banks are doing the same, and it's not worth rate hopping for 10-15 bps.

[NTP66]

I wonder if the IRS is ignoring DD account numbers on returns where you owe them money, because their site says our information is missing.

[mac5155]

I am still waiting on my Wells Fargo and Citizens checking bonuses. It's been about 3 weeks since I met the criteria.

[robbiestoupe]

I wonder if the IRS is ignoring DD account numbers on returns where you owe them money, because their site says our information is missing.

I posted this in the political thread, but you may be right. At first glance, the number of people who have not received their checks on this site alone tells me that there are going to be many people out there waiting for their e-checks and not knowing they have to enter their info.

[DigitalGypsy66]

The site said mine was delivered this morning, but I still can't verify because my bank's online services **** the bed.

[mac5155]

lol yeah, PNC has been down like all day

[robbiestoupe]

lol yeah, PNC has been down like all day

I've been able to get in twice, once on mobile and once on a laptop