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What to Worry About in This Surreal Bull Market

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Re: What to Worry About in This Surreal Bull Market

#151

Post by b4lancesh33t »

dominotw wrote: post #101
mathgeek wrote: post #14

The next market recession will happen the same as the previous ones: some lucky people will predict it, most won't, and everyone will in hindsight declare how obvious the signs were. The best strategy is still to diversify your investments, keep enough emergency assets to ride the wave, and not worry about it.

>diversify your investments Diversify into what though? Once market crashes, it takes everything down with it.

As long as you don't need the assets during the downturns, this doesn't matter.

Re: What to Worry About in This Surreal Bull Market

#152

Post by pault »

dhimes wrote: post #103
dsacco wrote: post #65

Earlier quoted context omitted.

I agree with the thrust of your comment, but to nitpick: > Books have been written around timing markets and it's generally accepted that it cannot be done reliably. To get out before a crash then buy cheap would require you to predict three different moments accurately: when to get in, when to get out, and then when to buy on the "cheap". Timing even one reliably requires luck or clairvoyance. This doesn’t strike me…

Attempting and succeeding are two different things. Right before the last real-estate crash I attended a seminar with an economist who spoke at length why there would not be a crash and in the coming spring there was going to be a real estate boom. Quoted lots of economic stuff to back it up (indicators and such- I don't remember but he was definitely convinced). The field of economics seems to have a ways to go befo…

It occurs to me that economics today is roughly at the same level of development medicine was circa 1500CE.

Re: What to Worry About in This Surreal Bull Market

#153

Post by CharlesDodgson »

I like the idea of bitcoin, but I can't help but worry that the fact it's both unregulated and has no intrinsic value, couple that with the general volatility and it looks less appealing.It's tough to think of something as a safe haven when it has such wild fluctuation.

If it had one of those things I'd be tempted to invest, but the fact it lacks either makes me fearful of it.

I really liked this write-up on crypto-currencies, it's a nice way of thinking about the taxonomy of money and where it sits. https://www.bis.org/publ/qtrpdf/r_qt1709f.htm

Re: What to Worry About in This Surreal Bull Market

#154

Post by specialist »

benevol wrote: post #44
aedron wrote: post #12

A bubble in slow motion, someone called the present economic environment. I think it's an apt description. Extreme "quantitative easing" (I refuse to take fed speak seriously) has only taken effect very, very slowly. Why? Because all it really was was recapitalizing banks which had enormous gaping holes on their balance sheets after 2008. They have been able to fill the tanks now, getting money hot off the presses fo…

> "growth" (i.e. inflation) before the inevitable crash What you need to know is this: Financial crashes are an eternal cycle, they will never go away. Unless there is fundamental societal change. Here's why: Financial crashes are business to a couple of extremely powerful/rich people. After every crash, assets are undervalued. Rich people have the financial cushion to not be impacted in the slightest way by such cra…

aka disaster capitalism.

Re: What to Worry About in This Surreal Bull Market

#156

Post by qznc »

the_gastropod wrote: post #116
dominotw wrote: post #101

Earlier quoted context omitted.

>diversify your investments Diversify into what though? Once market crashes, it takes everything down with it.

This is not necessarily true. To avoid volatility, invest across asset classes with low correlation [1]. E.g., bonds will probably not tank when U.S. equities do. [1] https://www.investopedia.com/terms/c/coefficientofvariation....

Bitcoin does not correlate with anything. Should people diversify into it?

Re: What to Worry About in This Surreal Bull Market

#157

Post by gdubs »

ronnypostsstuff wrote: post #32

What is the best thing to do with my savings? I am thinking about investing, and read up on it. One thing I don't understand is where to put money to minimize the impact of a recession. Government bonds? But then Graham says, I think, bonds prices also rise in a bull market, and fall afterwards.

Speak to a financial advisor (a fiduciary). One consideration is whether you’ll need cash in the near term (The other is whether you have expensive debt, like credit cards.

Dollar cost averaging might be a way to reduce risk a little bit (deciding on a regular amount / interval and sticking to that whatever happens.)

Finally, do you have an adequate safety net? (6m - 1yr of expenses in an insured account.)

Re: What to Worry About in This Surreal Bull Market

#158

Post by pault »

KozmoNau7 wrote: post #75
matwood wrote: post #54

Earlier quoted context omitted.

> It will happen before 2020, the question is when exactly it will hit. What will be the catalyst? Just because we haven't had a recession in awhile is not enough. Corporate profits are up, consumer spending is up, and even though everyone on here thinks the numbers are lies, wages are starting to go up. > My money is on late 2018 or early 2019. So you have already either shorted the market or bought put options out…

Market overvaluation and public debt are sky-high, it's an unsustainable situation, we either reign it in by controlled means (not gonna happen), or it's going to crash. I'm not a huge investor, but I am preparing by reducing the proportion of US stocks in my portfolio.

How is market overvaluation calculated? And is public debt an absolute measure or is it relative to another indicator?

Re: What to Worry About in This Surreal Bull Market

#159

Post by kazagistar »

yequalsx wrote: post #59
ronnypostsstuff wrote: post #32

What is the best thing to do with my savings? I am thinking about investing, and read up on it. One thing I don't understand is where to put money to minimize the impact of a recession. Government bonds? But then Graham says, I think, bonds prices also rise in a bull market, and fall afterwards.

If you truly, deep down in your heart, believe there is a crash coming soon then the best thing you can do with your money is to keep it in cash. Invest after the crash. If, like most people, you aren't absolutely certain there will be a crash then you invest for the long haul. You have a diversified set of investments. You put in a little bit each month. After 30 years, barring a civilization destroying event, you'l…

... assuming the crash isn't accompanied by significant inflation, which would wipe out cash stores too.

Re: What to Worry About in This Surreal Bull Market

#160

Post by ac29 »

qznc wrote: post #156
the_gastropod wrote: post #116

Earlier quoted context omitted.

This is not necessarily true. To avoid volatility, invest across asset classes with low correlation [1]. E.g., bonds will probably not tank when U.S. equities do. [1] https://www.investopedia.com/terms/c/coefficientofvariation....

Bitcoin does not correlate with anything. Should people diversify into it?

Bitcoin wasnt around during the last recession. We don't know what will happen in the next one.
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