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View Poll Results: How low will the DOW fall under Biden?
to 30,000 6 11.32%
to 26,000 12 22.64%
to 22,000 20 37.74%
to 18,000 4 7.55%
to 14,000 2 3.77%
to below 14,000 9 16.98%
Voters: 53. You may not vote on this poll

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Old 05-23-2022, 09:19 AM
 
30,024 posts, read 18,600,956 times
Reputation: 20808

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Quote:
Originally Posted by sholomar View Post
That doesn't mean that stock markets should be artificially inflated to levels that are absurd to generate fake wealth for people. That's a form of welfare.

The markets should trade at realistic valuations backed by historical measures and there should certainly not be central bank propping up of the stock market, especially zombie companies, much less bailouts.

Bankruptcy and defaults are an important part of the system to weed out bad and corrupt elements and keep the system structurally healthy.

We keep rewarding bad behavior in society and at some point it's going to lead to the demise of that society. You can't keep telling people to live in the moment, spend recklessly, go into debt, commit crimes, then bail them out, give them no jail time, participation trophies, and the like. We absolutely need to promote responsible living. With freedom comes responsibility, but we want it all... we want to have our cake and eat it too.. when we actually vote for politicians that let us do this, that's not healthy.
I am not suggesting that the government prop up the markets for this reason. We have had a propping up of the markets since 2008, which has just created a bubble.

NO ONE CAN PREDICT STOCK MARKETS- that is a fool's errand, as most of the time, those predictions prove to be wrong.

All we can say is that the markets are facing significant headwinds in an upcoming recession, higher interest rates, high inflation, and record personal debt. I personally did not "vote" for a level in the poll, as I do not have the foggiest idea of where this market will reach a bottom.

Markets, however, have a funny habit of "not following the rules" and can rise inexplicably. In general the ability of markets to rise under current conditions is less likely, but not impossible. It is, after all, based upon supply and demand and the availability of other investment options. Additionally, even in a bear market, you will have rallies, which tend to kill those who have taken"short" positions. Nothing ever goes straight up or straight down.
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Old 05-23-2022, 10:57 AM
 
Location: Long Island
32,816 posts, read 19,434,384 times
Reputation: 9618
Quote:
Originally Posted by rstevens62 View Post
Look at interest rates, (since 9-11-01)!!


Is there any other time thru out history when rates have remained so low for so long?!


We are hanging on by a freaking thread for the last 15-20 yrs, the govt has been doing all it can to put that bad day off as long as possible, but that cannot continue forever.
Quote:
Originally Posted by banjomike View Post
All I know is money is still circulating very well, so someone must be making money from the low interest.
We're beseiged by so many different problems- a stubborn pandemic, a major war in Europe, and a sundry of problems that come from a divided democracy, I"m not sure looking backward to history is going to inform us much of anything about the near future.

There's plenty of stuff for some folks to holler "The sky is falling!" for sure.

I think that this current drop in the stock market is a very good time to buy some stock at a bargain.
So I'll watch out, and I'll believe the sky is falling when a piece of it actually lands as evidence.

The gloomy gonna feel doomy. I'm not gloomy. Believe as you will.
dont know what the stock markets will do or not do....

its the inflation and interest rates that worry me...and I am speaking how it will affect the government

the government spends on a budget... when inflation goes super high like it is, it costs the government MORE to do what it is budgeted to do..... ie infrastructure... as we "plan" to build, and materials cost more, the plan will now cost more

our responsibility on the national debt...the interest payment...interest only...will increase as the feds raise the rates to hopefully combat inflation.... that means that piece of the budget WILL GO UP... in 2008 our debt was only 10 trillion ...yet the interest payment part of the budget was 383 billion...since then rates have gone lower, but now the debt is sitting at 30 trillion... and if the fed raises the rate much higher (which they supposedly need to do to fight inflation) we could easily see a 1-1.5 (or higher) trillion interest payments in the budget....the budget which Biden has PROMISED to lower the deficit
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Old 05-23-2022, 11:41 AM
 
Location: Orange County, CA
4,893 posts, read 3,346,442 times
Reputation: 2956
Quote:
Originally Posted by hawkeye2009 View Post
The reason that stock markets matter is that the majority of wealth and retirement funds for average Americans (not the ultra rich) are tied up in the stock market.

You are right about the percentage of businesses that are publicly traded. That is not the point at all. The point is that the average American does not have large real estate holdings nor personally own large stakes in businesses. Their avenue of investment has been the markets and they are in jeopardy.

All of our medical staff in our clinic (and hospital) have their retirement and most additional savings they have accumulated in the markets. The only exception is an heiress we have as a nurse (why she is working, I do not know) who has a vast amount of wealth in ownership of a large hotel chain in the US and real estate holdings with very little investment in the stock market. That is a very peculiar exception- most of the rest of Americans who have ANY SAVINGS have those in the markets.
From my understanding, this situation would've never been the case had interest rates been allowed to return to normal.

With the Central Banks keeping interest rates low or even negative, they have incentivized people and orgs to move money from saving accounts/CDs to the much riskier stock market in order to get a better return on investment and even simply to beat inflation.

The stock market should've never been this high to begin with, since the underlying fundamentals don't support it.
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Old 05-23-2022, 12:13 PM
 
13,565 posts, read 4,874,467 times
Reputation: 9608
Quote:
Originally Posted by AnesthesiaMD View Post
Not true at all. You never heard of cash value whole life insurance? Wealthy people have been doing this for a very long time. It beats the hell out of a 401k because you basically are unlimited on how much you can put into it. I have been putting 4 times as much as would be allowable into my 401k. Plus, it will not be down, like my 401k will this year. And when I borrow money against it, there is no income tax because it is a loan.

It is genius actually. It helps to have close relatives who are Wall St. "robber barons" to guide you in your financial planning.

Honestly, I dont think I will need to even use it in retirement. My rentals should be more than sufficient. But it's nice to know it is there if I need it. And if I dont use it, it is all the much more I leave to my heirs.
The only advisors who recommend whole life insurance are insurance salesmen. Listen to Motley Fool:

"Indexed universal life insurance is one of the many life insurance products a slick insurance agent may try to sell you. Here's why: Whole life insurance products like IUL provide companies with a tremendous amount of money in fees."

Or Dave Ramsey:

"Keep your insurance and your investments separate. You don’t want to spend years investing your hard-earned money only to leave it all to your insurance company. Be smart. Get term life insurance."

As insurance, Whole Life is lousy. You can get much cheaper term insurance. And once your kids are grown, what the heck do you need life insurance for? As an investment, you're better off in mutual funds. Whole Life investments have a lot of hidden fees. That guarantee of never going down? You pay a hefty fee for that. And as I said, that only applies to the death benefit. Plus, why would you want to borrow money against it, and pay interest?
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Old 05-23-2022, 12:24 PM
 
14,801 posts, read 17,625,425 times
Reputation: 9246
Quote:
Originally Posted by Leo58 View Post
The only advisors who recommend whole life insurance are insurance salesmen. Listen to Motley Fool:

"Indexed universal life insurance is one of the many life insurance products a slick insurance agent may try to sell you. Here's why: Whole life insurance products like IUL provide companies with a tremendous amount of money in fees."

Or Dave Ramsey:

"Keep your insurance and your investments separate. You don’t want to spend years investing your hard-earned money only to leave it all to your insurance company. Be smart. Get term life insurance."

As insurance, Whole Life is lousy. You can get much cheaper term insurance. And once your kids are grown, what the heck do you need life insurance for? As an investment, you're better off in mutual funds. Whole Life investments have a lot of hidden fees. That guarantee of never going down? You pay a hefty fee for that. And as I said, that only applies to the death benefit. Plus, why would you want to borrow money against it, and pay interest?
Yep, life insurance is an awful investment.
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Old 05-23-2022, 12:51 PM
 
Location: SW Virginia
2,189 posts, read 1,394,615 times
Reputation: 2016
Quote:
Originally Posted by ClaraC View Post
Well, the market got up on the right side of the bed this morning. Let's see if we can continue that optimism through the day.
Anything is possible, but one day early in the month it gained 927. Only to lose 1000 the next day.
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Old 05-23-2022, 02:16 PM
 
35,522 posts, read 17,824,056 times
Reputation: 50529
Quote:
Originally Posted by 16 Acres View Post
Anything is possible, but one day early in the month it gained 927. Only to lose 1000 the next day.
Well, it did end quite well today.

The market is volatile and jumpy, which I'd MUCH rather have than a steady decline with no taking back ground.

Last edited by ClaraC; 05-23-2022 at 02:28 PM..
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Old 05-23-2022, 02:31 PM
 
Location: NJ/NY
18,432 posts, read 15,186,935 times
Reputation: 14297
Quote:
Originally Posted by Leo58 View Post
The only advisors who recommend whole life insurance are insurance salesmen. Listen to Motley Fool:

"Indexed universal life insurance is one of the many life insurance products a slick insurance agent may try to sell you. Here's why: Whole life insurance products like IUL provide companies with a tremendous amount of money in fees."

Or Dave Ramsey:

"Keep your insurance and your investments separate. You don’t want to spend years investing your hard-earned money only to leave it all to your insurance company. Be smart. Get term life insurance."

As insurance, Whole Life is lousy. You can get much cheaper term insurance. And once your kids are grown, what the heck do you need life insurance for? As an investment, you're better off in mutual funds. Whole Life investments have a lot of hidden fees. That guarantee of never going down? You pay a hefty fee for that. And as I said, that only applies to the death benefit. Plus, why would you want to borrow money against it, and pay interest?
Quote:
Originally Posted by Vlajos View Post
Yep, life insurance is an awful investment.
I don't think either of you guys understand, which isn't surprising because I don't think a lot of people do because you have to have a high net worth to qualify for this. Read up on something called "premium financing".

The investing forum might be a better place for this, but the way it works is, I got a letter of credit, so I was borrowing the premium. At first at 2% when it was shopped out on the bond market, and then several years later at 3% when it was refinanced privately. The majority of the (well into the 6 figure) yearly premium goes to the cash value, which is in the S&P fund with the 12% cap and the 0% floor. So I'm averaging a 9% return minus the 2.5% in interest I have been paying. In other words, I haven't put a dime of my own money into it and I have made a substantial amount of money. So much so, that it is completely self funding now. In a year like this, when there is no interest, I can make a choice to fund it myself, or allow it to come out of the profit, as long as I don't let the profit go below the self funding level, which would take at least 6 or 7 years of down markets to do.

Still think it is an awful investment?
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Old 05-23-2022, 02:53 PM
 
14,801 posts, read 17,625,425 times
Reputation: 9246
Quote:
Originally Posted by AnesthesiaMD View Post
I don't think either of you guys understand, which isn't surprising because I don't think a lot of people do because you have to have a high net worth to qualify for this. Read up on something called "premium financing".

The investing forum might be a better place for this, but the way it works is, I got a letter of credit, so I was borrowing the premium. At first at 2% when it was shopped out on the bond market, and then several years later at 3% when it was refinanced privately. The majority of the (well into the 6 figure) yearly premium goes to the cash value, which is in the S&P fund with the 12% cap and the 0% floor. So I'm averaging a 9% return minus the 2.5% in interest I have been paying. In other words, I haven't put a dime of my own money into it and I have made a substantial amount of money. So much so, that it is completely self funding now. In a year like this, when there is no interest, I can make a choice to fund it myself, or allow it to come out of the profit, as long as I don't let the profit go below the self funding level, which would take at least 6 or 7 years of down markets to do.

Still think it is an awful investment?
You got a Letter of Credit at 2% on the bond market? What was the collateral?

I did not realize the bond market issues letters of credit. Can you explain?

Then you refinanced it with a private institution and are paying more? Why did you do that?

What does a Letter of Credit have to do with insurance premiums?

You are correct, I don't understand.

Last edited by Vlajos; 05-23-2022 at 03:10 PM..
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Old 05-23-2022, 03:21 PM
 
4,344 posts, read 5,785,279 times
Reputation: 2465
Quote:
Originally Posted by Leo58 View Post
If it hits 20,000 you might want to switch much of your assets to the stock market, because that will be a huge buying opportunity.

I also think funds that guarantee that you won't lose money are a scam. I had one for a while, then I figured out that the guaranteed balance was only what I would collect if I die. If I tried to cash out I would not get that much money. Think about it: how can a fund guarantee to pay back your principal when the investments underlaying that principal have declined in value?
Annuities are pretty sound. My investments guys is a close friend of our family. Since my husband had discussed with him prior to his death what his plans were, he knew which way to help direct me.

Quote:
Originally Posted by Vlajos View Post
Yep, life insurance is an awful investment.
Whole life yes. Term life no. Term paid me out nicely upon my husbands death.
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