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Another thing is, no one really knows what a bond bear market looks like.
True, the S&P has gone up x% since 1993 or 1983. It looks good going forward.....but.......we've built up huge imbalances that have goosed stock returns. I think we're in the 6th or 7th inning of the dollar as the worlds reserve currency.
You look at the GDP equation, GDP = C + I + G + (exports - imports).......the government is focused on the last two parts. Government spending (stimulus), and reducing the value of the dollar to bump exports. What's going to drive the economy going forward? We've been cutting the dollar for 20 or 30 years.
Yeah the multi-year bear in bonds and stocks will be a shock for many. A lot of people are victim to the normalcy bias of seeing the stocks and bond markets move higher on a yearly average, and can't look outside the credit/debt bubble that has been built in this country. Hoping things will get better doesn't mean they will. Many people are going to be surprised at just how bad things remain/continue to get worse for a prolonged period of time.
What always does innovation and likely cheaper energy compared to other countries that I see. Dollar value is relative to other currencies. The dollar often has been too high to drive exports but I time exporting refined product and having cheaper energy is a big advantage especially in western country.
The question is, when, how far, and in which direction? deflation/inflation and the dollar?
Central banks fear deflation. We are currently in a deflationary depression, except the Fed is masking the effects of this through buying bonds (printing money) in an attempt to increase the velocity of money. The problem in doing this is that fundamentally, we are still in a deflationary depression yet the Fed in doing this has also blown up asset bubbles (stocks, housing, etc). They are certainly strange dynamics, yet the Fed is in a Catch-22 situation. If they stop the money printing, the asset bubbles will collapse and the illusion of the "wealth effect" will collapse with it. If they keep printing money (and they will probably have to print even more money soon to keep the "wealth effect" going and the fraud alive), we get bigger asset bubbles and global investors losing confidence in the integrity of the dollar.
With creating asset bubbles you can also have inflation even with deflationary conditions lurking beneath the surface. It is an extremely complex illusion/fraud being perpetrated, and with each day the shell game is more difficult to keep in motion. The Fed has no exit strategy, because either way, the house of cards is going to come crashing down. These next 10 years or so are going to be very interesting. They are going to surprise a lot of people who are used to "normal" investing.
That's what most market timers accomplish. Buy high, sell low!
double false. in fact study after study shows just the opposite. it got so bad that morningstar went to a dual returns on funds system for tracking fund performance.
they track the funds return and the return investors saw based on money flow in and out of the fund.
study after study showed fund investors were seeing 1/3 the gains of the fund itself because they consistently bought and sold at the wrong times.
any bets not one fund in the entire mutual fund universe shows a higher small investor return than actual return the fund got over the same time frames?
What would that same $100,000 invested in 1983 in a small-cap index tracking fund (such as MSCI or CRSP or whatever was available back then) be today?
I'm not familiar with those particular funds. But it's interesting that you mention small-cap index tracking funds because I'm heavily invested in one that tracks this at the moment:
That's what most market timers accomplish. Buy high, sell low!
Quote:
Originally Posted by mathjak107
double false...study after study showed fund investors were seeing 1/3 the gains of the fund itself because they consistently bought and sold at the wrong times.
Um, perhaps my coffee just hasn't kicked in yet, but isn't that what Malloric is saying?
Um, perhaps my coffee just hasn't kicked in yet, but isn't that what Malloric is saying?
Seems to me what I was saying. Who knows, maybe for market timers they're trying to time to buy at the wrong time. I've noticed there's a large population of people who think of the stock market as a rich person's scam. I guess that's a way of validating their psychosis.
Who knows where she'll go. Where she stops nobody knows.
I am happy, I chose to stopping thinking about how far she will go and when she will go. I just keep in contributing/investing per month, regardless what happen.
As long as the asset allocation is set, it doesn't matter where she goes. I know for sure my asset allocation is right for me. All the other stuff is just marketing.
My only regret is not increase the amount of contributions during the down years, 2008-2010. But, live and learn.
I just focus on my saving rate and try to get that increased.
I like the recent posts in this thread. a lot of good thoughts being thrown around. I don't have any good recommendations for anyone.
I have some stocks in my portfolio that I purchased over the years. I have talked about what type of stocks I own in other threads, but my approach is the Peter Lynch approach. Honestly my portfolio looks like a Vice fund with some household brands and some others mixed in. I own a lot of alcohol, food, defense/aerospace, REITs, and random ones mixed in like energy/infastructure. I have been investing in exporting LNG infastructure in companies like D, GAS, TGP, and LNG.
My other part of the portfolio is outside of 401K/Roth IRA/individual accounts. They are physical bullion outside of the system. I hold a large amount of mainly silver and some gold bullion. If the government forces my 401K into Treasuries like most broke countries do right before massive issues, then I am protected from inflation. I also think we are in a secular bull market in commodities and will be for years to come.
Bonds are in a bubble. Is it the top, I have no idea, but I think Bonds will soon show their worth.
what do I recommend? stocks/cash/gold/silver bullion.
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