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Everything is relative. Home affordability is not worse today.
What?? This last couple of years?? You're way off here.
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Originally Posted by treasurekidd
And I’ll repeat myself here - cash is still trash, 5% or not. I’m not saying it’s not appropriate to have some percentage of cash set aside, but it should never be more than needed to meet emergencies.
LOL. I retired last year and have watched my portfolio decline since December of 2021. Today I am still down, nearly 11% now, from that high, almost 15 months later. I'll take 5% any day of the week. I've added iBonds and moved some cash into CDs and Tbills this year. Ibonds are still earning excellent interest, and the others are all at or near 10%. I'm happy with that. I'm lucky that I don't need to touch my retirement accounts for my living expenses, but many others are not so lucky.
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Originally Posted by treasurekidd
It took me many years to find my way in the markets and settle into a long term buy and hold dividend growth strategy, but once I did I did I discovered that it suits me just fine, and I no longer fear bear markets.
If you are still working and making enough money to throw into the market, have at it. For those that no longer do, this long down/sideways market is nothing to feel good about.
Last edited by ChessieMom; 02-22-2023 at 11:20 AM..
This isn't based on any major technical analysis, rather just on an accumulation of bad news - rising bankruptcies, rising credit card debt, possible re-start of student loan payments, continuing bad news with Russia Ukraine, and continued horrible political leadership.
It says here a 20 to 25% haircut is on the way by....let's call it August 1, 2023.
Student loan restart will be the nail in the coffin and not nearly enough people are talking about it.
Americans are so over leveraged with debt from high inflation it's ridiculous. 40 million Americans have student loans with an average payment of $400 a month. That means the average American family will lose $800 a month in spending power once student loans restart, if they don't pay, their credit will get shot and they'll lose borrowing power which is the only thing propping up this economy. They are supposed to restart in June, I think Q4 retail numbers will see the largest drop in history, the market will crash, and bring down everything else with it (housing market, auto market, layoffs, etc). I'm only buying Tbills, waiting for ish to hit the fan and buy up the bottom some time in 2024.
What?? This last couple of years?? You're way off here.
Sorry, I have to disagree. I realize that real estate is local, and I can't speak for wherever you are, but here in my state, a good starter home with 3 beds and a bath and a half can be had in decent (not great, but decent) neighborhoods for $300-$350k. A two-person working couple making $80-$100k between them can easily afford that, especially with a decent down payment. It's really not that hard, but most people, especially younger couples, make it harder than it should be because they lug around car payments, student loans and credit card debt. I stayed away from that type of debt for the most part, and easily afforded my home and paid it off early. It's all just a matter of choice - prioritize what you want most in life and you'll have it. If eating out 4 nights a week, clothes shopping at the mall or too much car is your top priority, then yes, you'll find it harder to save for a home. But it can be done, and it is within reach for most people today, they just need to learn to do things the right way.
And the income to home price ratio I just laid out is a reality for this area, as were the examples I gave earlier of my parents and grandparents. I can even add myself into that, as my first home was purchased in 1999 for $107K when I was very young, with kids and a $25k salary and a wife who only worked part time. That house is now worth $350k. I can't speak for Miami or California, but then I would never want to live in either of those places. WHERE you live is an important factor in home affordability, but you get to decide where you live. If you're in CA and can't afford it, leave CA. From what I understand, lots have been doing just that for years now.
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LOL. I retired last year and have watched my portfolio decline since December of 2021. Today I am still down, nearly 11% now, from that high, almost 15 months later. I'll take 5% any day of the week. I've added iBonds and moved some cash into CDs and Tbills this year. Ibonds are still earning excellent interest, and the others are all at or near 10%. I'm happy with that. I'm lucky that I don't need to touch my retirement accounts for my living expenses, but many others are not so lucky.
No offense, but if you had read what I wrote, you'd see that I was actually advocating keeping a certain percentage of cash on hand. Put that in whatever you want, high yield savings, CD's, Tbills, iBonds, whatever. All I was trying to say was that anyone going 100% to cash out of fear of a bear market was making a huge long term mistake. Nowhere did I say you anyone should have ALL their money in stocks.
You state that you "have watched my portfolio decline since December of 2021.", which I take to mean that you have kept a certain allocation to equities, no? If so, then you have done exactly what I was trying to advocate. And I clearly mentioned "even retirees".
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For those that no longer do, this long down/sideways market is nothing to feel good about.
Long, down/sideways market, huh? Since ALL the way back to December 2021? What's that, 14 months? Again no offense, but that's not a long period at all when it comes to investing. Not at all.
Last edited by treasurekidd; 02-22-2023 at 04:01 PM..
What?? This last couple of years?? You're way off here.
LOL. I retired last year and have watched my portfolio decline since December of 2021. Today I am still down, nearly 11% now, from that high, almost 15 months later. I'll take 5% any day of the week. I've added iBonds and moved some cash into CDs and Tbills this year. Ibonds are still earning excellent interest, and the others are all at or near 10%. I'm happy with that. I'm lucky that I don't need to touch my retirement accounts for my living expenses, but many others are not so lucky.
If you are still working and making enough money to throw into the market, have at it. For those that no longer do, this long down/sideways market is nothing to feel good about.
It’s tough when you retire in a down market. You are lucky you don’t need to withdraw your money.
It’s tough when you retire in a down market. You are lucky you don’t need to withdraw your money.
Yes, that it is. Very tough. But since you've still got money in the retirement accounts, a good portion of that is still long-term money and should be invested as such. What if you retire at 65 and then live to 100? Will there be enough to keep your lifestyle funded that long? A portion of your retirement account should be allocated to equities regardless of age. It doesn't have to be anywhere near 100% equities, and shouldn't be, but a good-sized portion should be, perhaps 25%. I believe a 25% allocation to equities is what Mathjak talks about with the permanent portfolio.
If you've got money, and you want it to grow and last, never go to 100% cash.
No offense, but if you had read what I wrote, you'd see that I was actually advocating keeping a certain percentage of cash on hand. Put that in whatever you want, high yield savings, CD's, Tbills, iBonds, whatever. All I was trying to say was that anyone going 100% to cash out of fear of a bear market was making a huge long term mistake. Nowhere did I say you anyone should have ALL their money in stocks.
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I read what you wrote. You stated "cash is still trash". I disagreed completely.
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Originally Posted by treasurekidd
Long, down/sideways market, huh? Since ALL the way back to December 2021? What's that, 14 months? Again no offense, but that's not a long period at all when it comes to investing. Not at all.
I didn't say it was long "when it comes to investing". It is long for such a market as this.
TK, everything you cited above regarding home affordability is anecdotal. Atlanta fed actually has an index for tracking affordability, which I linked earlier in this thread. If you think the current housing market is affordable, you are sorely mistaken. We are at all time lows for home affordability.
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