Thanks guys, those of you who made thoughtful posts.

My concern level is pretty high. Would call it a 7+
Obviously I have been wrong as I thought the bubble would have already burst so time ago.

But having said that I think we are on a downward trend.

We cannot live in the past.

Where we are as a country and the policies and thought process' in place do not lead me to believe we will be a prosperous nation for the majority of our citizens into the short term future. So that cannot be good for the markets.
The process of taking from those that have. To give to those who don't is very dangerous. Not only economically, but culturally and socially as well. Not a place America should be.

The cost of things is going to take a huge bite out of our budgets in the future. You can see that coming in the here and now.

Hopefully things can and will improve longer term. In the mean time, hold on to your hats is my best guess.

quote:

Originally posted by old rugged cross:
The cost of things is going to take a huge bite out of our budgets in the future. You can see that coming in the here and now.

That's one of the primary reasons why you invest your money: To at least match inflation, or ideally beat it by a comfortable margin. Your financial plan for retirement should be taking inflation into account.

Money that is just sitting in your wallet, safe, or bank account is devaluing by the day. Even money in a savings account, whose interest rates can't even come close to matching inflation. (Although there are still compelling reasons to have a reasonable emergency fund on hand despite inflation; you just don't want to do that with all your money.)

But money invested is not devaluing, despite potential short-term dips. And there are safe(r) ways to invest your money that won't be harmed as much by a market dip or recession, and will still beat inflation, although not by as much as the stock market could potentially.

Personally I'm more worried about an increase in interest rates and inflation. That would have far more negative effects on our lives than our small investments in the market. We are retired and our income is pretty much fixed.

Jim

If the vaccines have the desired effect, the pandemic blows out, and the economy comes back to life, the market will likely go up hard.

If you watch the market daily...and I do, you'll see tons of fluctuations and just in the last few days we saw a big downturn. Not a bear market drop, but substantial. I keep my eye open for these and add to positions or open new positions that I think are worth the current price. Of course back in March and April, the real bear market days of the year, it would have been wise to pick up some things. I'm thankful to have done that.

In general and I'm no expert, but I don't think investing is rocket science. Look for solid companies with good products and track records, reasonable PE's and or solid and growing dividends and buy on dips. It's done well by me.

quote:

Originally posted by old rugged cross:
next 18 month and again in 5 years. Also on a scale of 1-10 what is your level of concern. 1 being not concerned 10 being very concerned.

1. If your window is 18 months, you should be out of the market.
2. If your window is 5 years (or longer) you should be in the market.

Never take financial advise off an internet chat board.

quote:

Originally posted by yucaipa:

quote:

Originally posted by old rugged cross:
next 18 month and again in 5 years. Also on a scale of 1-10 what is your level of concern. 1 being not concerned 10 being very concerned.

1. If your window is 18 months, you should be out of the market.
2. If your window is 5 years (or longer) you should be in the market.

Never take financial advise off an internet chat board.

I wouldn't necessarily get out of the market but definitely change the risk factor. And yes, never take financial guidance off a chat board.

quote:

Originally posted by BBMW:
If the vaccines have the desired effect, the pandemic blows out, and the economy comes back to life, the market will likely go up hard.

+1

we will not see rates raising appreciably over the next couple years.

I can foresee Dow 40K within 2-3 years if we do not have some geo-political anamoly

-----------------------------------

And if you don't carry debt of any kind, who cares what the interest rates are?

quote:

Originally posted by Flash-LB:
And if you don't carry debt of any kind, who cares what the interest rates are?

Everyone should care. Because even if you don't carry any debt personally, interest rates still affect you (especially as an investor), since they affect the economy in a bunch of different ways.

Interest rates affect various things like the stock and bond markets, personal and corporate spending levels, business performance and growth, unemployment rates, the housing market, inflation, etc. They therefore have a noticeable effect on the country's overall economy.

From there, there's a ripple effect with even more personal impact on you, since the state of the economy affects things like the local crime rate, the value of your house, the amount of local taxes you pay, your retirement savings, etc.


We currently have historically low interest rates. Low interest rates are good for economic growth, because they lead to more buildings being bought/built and a rise in real estate values, more new businesses opening, existing businesses expanding and investing in new capital for better production, unemployment falling due to job creation from business expansions and new business openings, the refinancing of existing debt (both corporate and personal) to free up that additional disposable money to be spent elsewhere, greater confidence in the economy and corresponding increased spending, etc.

The economy rebounded so quickly from the big March 2020 drop in a large part due to the dramatically low interest rates.

Conversely, high interest rates are bad for economic growth. When interest rates go up, companies and people both spend less and invest less, businesses stagnate or contract, unemployment goes up, etc.


The trick is, the growth and spending from low interest rates contributes to faster inflation, while the stagnation and contraction from high interest rates helps combat inflation. So there's a constant balancing act going on by the Fed to allow for interest rates that are as low as practical in order to stimulate the economy, without allowing inflation to run rampant. So these ultra low interest rates and corresponding rapid growth won't last forever, but there's still some time to go. And it's not like raising the interest rates a little from where they're at will trigger a recession. It'll just slow the growth down a bit.

quote:

Originally posted by Flash-LB:
And if you don't carry debt of any kind, who cares what the interest rates are?

I have very limited debt, but I care a great deal about interest rates.

If I could get 6% on my investment accounts from a risk free bank savings account or a Treasury Bond, I would not have one red cent in stocks. I suspect there are a lot of retirees who would do the same thing.

The only way the stock market goes up is if there are more buyers than sellers. If rates go up significantly, there may be more stock sellers than buyers and the market may go down.

But rates are not going up to 6% in my lifetime. With $27 Trillion in interest bearing debt, the Federal Government would have to eliminate the entire defense department budget to make just the additional interest payments.

It pisses me off hugely that when I was young and borrowing money that I had to pay 12.875% for my first mortgage. Now that I have saved money, I get .40% from Navy Federal on my CDs.

Back to the original question, the market will go up sometimes and down sometimes. Parts of the market will go up (SMH) and other parts will go down a lot (TSLA, Bitcoin). When this will happen is a mystery to me. I own stocks and cash, but not bonds, in my investment accounts.

A lot of stocks look quite frothy to me at this time, but the "stimulus" spending will inject a lot of cash that has to go somewhere.

I'm a broken record...Dogs of the Dow. I want to own blue chip stocks that must pay me 4 times a year. I don't trust this market but where else is better? No place. At age 70 I'm debt free and am roughly 20% cash, 10% real estate, 60% stock mkt, 10% prep/hard times items.

Same ol story we all know - Diversify, low debt, and a solid cash emergency cushion. Buy blue chippers, preferably dividend aristocrats, when they are a little down on their price. Basic dogs of dow theory is to re-evaluate once a year and buy 10 equal amounts of the 10 highest yielding DOW stocks. I'm not nearly that rigid and hate capital gains tax so I tend to hold even if yield is down. beauty is yield down = share price up

Never take stock advice from the internet but I'm horny for MO. 8% div and a big player in cannabis.

I am of the view that the more socialist (gov't controlled) the economy, the weaker the economy will be, thus the weaker the market will be. My concern is that the current administration's interference with capitalism, plus the quite likely heavier debt/heavier taxes, will take it's toll.

Me too Scoutmaster.

And I never said "my" window is 18 month's or 5 yeaar's. I simply asked what your take is on where the market is headed at those periods of time in the future.