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well, spoke too fast, strong rally and now a fade to the downside but the Nasdaq is rallying... and I thought small caps would rally as interest rate forecast is down now, strange market!
Equities, including small caps, down sharply today. Suspect worries about slow growth or possible recession could weigh on markets for a while.
6 month - 10Y spread is down to 5 basis points, the bond market may be setting up for a recession signal.
I agree. Remember the equity market leads recessions. By the time recessions are announced/obvious, equities have usually bottomed. With the economic uncertainty, I don't see equities going a lot furthur in the short to intermediate-term. Keep in mind we are in the longest bull market in stock market history. It will come to an end one day, and the drop will be much longer and deeper than the December correction.
well, spoke too fast, strong rally and now a fade to the downside but the Nasdaq is rallying... and I thought small caps would rally as interest rate forecast is down now, strange market!
It is very strange. I really would have expected a positive finish today. Phooey.
Interesting in that gold prices tend to follow inflation.
gold follows opposite the dollar and no interest rate hikes is not good for the dollar .. unless inflation is very high and weakens the dollar there really is not much of a link to normal inflation levels .
Last edited by mathjak107; 03-20-2019 at 05:20 PM..
Many of us thought, that if only we secured good jobs, lived frugally and invested aggressively, we'd all become billionaires in 2-3 generations.
I feel sad for anyone who was sold that bill of goods and more so for anyone who actually believed it.
Billionaire-level wealth is generally not created from working a 9 to 5 type job or working for anyone else. Billionaires are people who invent, create, and shift a whole paradigm, often taking some very large risks along the way. They tend to own whatever space they've helped create or transformed and they also tend to keep creating and innovating as it's part of their inner drive.
But, that said, just about anyone who learns and practices good financial and investing behaviors, starts early in their working life doing so, and consistently does so over a few decades will be able to retire and, as long as they are reasonably healthy, will not have to live hand-to-mouth in that retirement.
I feel sad for anyone who was sold that bill of goods and more so for anyone who actually believed it.
Let's not be excessively hasty. A well-compensated employee might be able to save $100K annually. If we assume 12% annual returns, which was actually conservative for the 1980s and 1990s, then that $100K per year, becomes $1B after 63 years... which isn't even 3 generations.
In the above example, we've ignored both inflation and pay-raises.
Even at a much more reasonable 9% annual rate of return, $1B is reached after 79 years... beyond the lifetime of one human investor, but not entirely ridiculous, if we presume a multi-generational compact to amass and store wealth.
Consider one more example: a very highly compensated employee, such as a corporate lawyer or a surgeon, who saves $300K annually, over a 40-year career. And let's assume a relatively reasonable 7%/year return.
By the time that said career concludes, the erstwhile employee has accumulated $60M... and then, stops contributing further. The portfolio perseveres, assuming zero withdrawals. It takes another 42 years - for a total of 82 years - to reach $1B.
The magic of compounding is indeed magical! We need three ingredients: (1) voracious savings, (2) good annual rate of return, and (3) fanatically zealous discipline to NEVER spend the money, passing 100% to one sole heir, who continues the tradition.
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