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Dow plunges 1000 points

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Re: Dow plunges 1000 points

#351

Post by north_east_dev »

allenbrunson wrote: post #346
mcintyre1994 wrote: post #142

Earlier quoted context omitted.

I'm sure there's some dimensions it's not optimal on, but Vanguard LifeStrategy is a single low fee fund that does this for you. IIRC they have 20/40/60/80/100% equity options.

Here’s my own anecdote ... After hearing so many people say positive things about Vanguard for so long, I set up an account there. They had pretty much all my disposable cash, in a Roth IRA, for about two years. Rather than begin the predictable uptick in wealth I expected, my results, having about $25K parked there, was that I lost about 300 bucks. I sent several messages asking what I could do about it, their respo…

What did you invest in? If a 1.2% swing (over how long of a period?) spooked you then you probably want a heavy bond to equity fund/balance.

Re: Dow plunges 1000 points

#352

Post by allenbrunson »

north_east_dev wrote: post #351
allenbrunson wrote: post #346

Earlier quoted context omitted.

Here’s my own anecdote ... After hearing so many people say positive things about Vanguard for so long, I set up an account there. They had pretty much all my disposable cash, in a Roth IRA, for about two years. Rather than begin the predictable uptick in wealth I expected, my results, having about $25K parked there, was that I lost about 300 bucks. I sent several messages asking what I could do about it, their respo…

What did you invest in? If a 1.2% swing (over how long of a period?) spooked you then you probably want a heavy bond to equity fund/balance.

see, those are the exact sort of questions, and answers, that you are prepared to provide. and you're probably pretty good at it! i am not. that's why vanguard didn't work for me.

i am going to pay an actual human being to give me a list of options, with all the pros and cons spelled out, so i can make limited decisions that wind up with my pile of money growing, instead of shrinking. if that's too much to ask, i'll just keep my money under a mattress, thanks.

Re: Dow plunges 1000 points

#353

Post by north_east_dev »

allenbrunson wrote: post #352
north_east_dev wrote: post #351

Earlier quoted context omitted.

What did you invest in? If a 1.2% swing (over how long of a period?) spooked you then you probably want a heavy bond to equity fund/balance.

see, those are the exact sort of questions, and answers, that you are prepared to provide. and you're probably pretty good at it! i am not. that's why vanguard didn't work for me. i am going to pay an actual human being to give me a list of options, with all the pros and cons spelled out, so i can make limited decisions that wind up with my pile of money growing, instead of shrinking. if that's too much to ask, i'll…

> see, those are the exact sort of questions, and answers, that you are prepared to provide. and you're probably pretty good at it!

Thank you, but it really has been a recent thing for me. It's only in the past year that I actually worked out what this all means, passive versus active investments, pensions etc.

> i am going to pay an actual human being to give me a list of options

I totally understand that but do me a favour. Before you pay anyone or start down that route, watch this playlist - https://www.youtube.com/watch?v=_chiIIxMGl0&list=PLXy71rkGuC...

It was accidentally stumbling across that which led to me getting my stuff together. At the very least it should give you a grounding in what to read up so as not to be blindsighted by any financial advice you may get in the future from a professional.

> instead of shrinking. if that's too much to ask, i'll just keep my money under a mattress, thanks.

Inflation is always eating away at your money there, no matter how thick your mattress is ;)

Re: Dow plunges 1000 points

#354

Post by allenbrunson »

north_east_dev wrote: post #353
allenbrunson wrote: post #352

Earlier quoted context omitted.

see, those are the exact sort of questions, and answers, that you are prepared to provide. and you're probably pretty good at it! i am not. that's why vanguard didn't work for me. i am going to pay an actual human being to give me a list of options, with all the pros and cons spelled out, so i can make limited decisions that wind up with my pile of money growing, instead of shrinking. if that's too much to ask, i'll…

> see, those are the exact sort of questions, and answers, that you are prepared to provide. and you're probably pretty good at it! Thank you, but it really has been a recent thing for me. It's only in the past year that I actually worked out what this all means, passive versus active investments, pensions etc. > i am going to pay an actual human being to give me a list of options I totally understand that but do me…

> Inflation is always eating away at your money there, no matter how thick your mattress is ;)

while that's true, if i'd kept my money under a mattress for the last two years, i'd have 300 bucks more than i have now. and with a lot less hassle.

so, here's another story. i hate paperwork. hate, hate, hate. i hate it enough that i pay a guy to do my taxes. i send him the forms as they trickle in, sign what he tells me to sign. he answers my dumb questions about my mortgage and my car loan and other financial stuff, when i ask them. i give him a check for like 200 bucks a year, and i consider it money well spent.

i've been working with this guy for over ten years now. he's proven himself to be absolutely trustworthy. i tried to give him even more money to manage my portfolio, but he is not interested in having that job, so he turned me down.

is it really impossible to find somebody like him, to be my money manager? while i hate paperwork, i am a really good judge of character. i dispensed with half a dozen shysters before i landed on my current guy. i could do the same thing with financial planners.

Re: Dow plunges 1000 points

#355

Post by eli_gottlieb »

carlmr wrote: post #331
eli_gottlieb wrote: post #299

Earlier quoted context omitted.

>If everyone's income rises by 5% (and most of most people's income is spent rather than saved), I would expect prices to rise by about 5% and find that entirely logical. Generally everyone's income would be rising 5% either from inflation, which amounts to a transfer from creditors to debtors, or from growth, in which case the total basket of goods and services available has grown 5% and there's no need for prices t…

You always have a mix. There will be growth in some markets, and inflation in others. Humans tend to eat always roughly the same amount of food (except if they can't afford it). So food prices generally inflate with wage increases. Growth leads to bigger televisions, safer cars, faster internet being available at roughly the same price.

>Humans tend to eat always roughly the same amount of food (except if they can't afford it). So food prices generally inflate with wage increases.

Quite the opposite. Over the long term, food prices have deflated, and the variety has dramatically increased of foods available at a given price and a given distance from the point of production.

Re: Dow plunges 1000 points

#356

Post by allenbrunson »

north_east_dev wrote: post #353
allenbrunson wrote: post #352

Earlier quoted context omitted.

see, those are the exact sort of questions, and answers, that you are prepared to provide. and you're probably pretty good at it! i am not. that's why vanguard didn't work for me. i am going to pay an actual human being to give me a list of options, with all the pros and cons spelled out, so i can make limited decisions that wind up with my pile of money growing, instead of shrinking. if that's too much to ask, i'll…

> see, those are the exact sort of questions, and answers, that you are prepared to provide. and you're probably pretty good at it! Thank you, but it really has been a recent thing for me. It's only in the past year that I actually worked out what this all means, passive versus active investments, pensions etc. > i am going to pay an actual human being to give me a list of options I totally understand that but do me…

also, for the record, i started watching the videos. i heard that guy tell the same story, twice, about the woman who is far better prepared to invest (or not invest) in microsoft than i am, because she's steeped in it, day in, day out. um, duh? i am well aware that i am not going to do as well as that woman is, or i wouldn't be watching introductory videos on investing.

this is why i just want to pay a guy like my accountant to narrow down the decision tree for me.

Re: Dow plunges 1000 points

#357

Post by astrodust »

valuearb wrote: post #319
astrodust wrote: post #243

Earlier quoted context omitted.

Even during the darkest days of the "lost decade" in Japan their companies never gave up on manufacturing and innovating. There were struggles, failures, but also successes. In that time Sony managed to dominate televisions and, later on, game consoles. The level of utter destruction the US economy will face if it continues to double down on hedge-fund style acquisition/mergering of every one plus dog is hard to fath…

Try building something without capital. It's really really hard.

I wouldn't build something unless there was demand for it and a profitable business model. If people can't pay for it then demand doesn't matter, you won't make money, so you shouldn't invest in the first place.

Capital alone doesn't do anything.

When you have demand and a profitable business model then capital can help you, but it's a tricky balance between too much capital and too little. If you raise too much money then the investors will be clamouring for returns you can't deliver on. If you raise too little you'll be starved for capital and stunt your growth.

The real problem is when it's all about capital, when you ignore everything else. If your only goal is to create more of it then you're going to have no qualms about driving businesses into the ground if you can make money doing it. That helps only a small group of people and causes a massive amount of trouble for others.

Re: Dow plunges 1000 points

#358

Post by mateo411 »

dahart wrote: post #272
state_less wrote: post #193

Earlier quoted context omitted.

I wasn't a big fan of the tax cuts, even though I'll see the proceeds from them. Some think that the less you pay, the better, all the way to zero. In my view, taxes are like porridge, you don't want it too hot or too cold. The best amount is not too little or too much. I too worry about the deficit and think we need to tax the biggest gainers a bit more and provide safety nets for the economic losers so they can bre…

I quite like your reasonable, balanced approach. I've always been curious about your last point though: > There needs to be an incentive to to do well and I'd be against cutting into that too deeply. I've never understood why any tax rate would be a disincentive to do well. Even if the tax rate was 90%, doing well is doing well. If I make more money, I get to keep more money, even if taxes are high. If we have tax br…

> If we have tax brackets, then yeah sure there could be an unlucky minority of people who just barely land in a higher bracket than someone just under the line, so they pay a higher percentage than someone else.

This statement makes me think you might be confused about tax brackets. This is a common misconception, so I'll explain how tax brackets work.

Tax brackets assign a percentage to tax up to a certain amount of income. Suppose you went over a bracket by $100, then only that $100 is going to taxed the highest amount. The entire income is not taxed the amount in the highest tax bracket. So, while the unlucky people are still taxed at a higher amount, it is for a very small amount of their income. Their after tax income will be still be more than somebody who earned less money and was just under a tax bracket.

Re: Dow plunges 1000 points

#359

Post by dimitrix »

quotha wrote: post #63
valuearb wrote: post #14

I hate to be nitpicking about good news, but the S&P 500 is down less than 7% from it's peak, that's hardly a crash. Especially after gaining 26% over the previous year. And, after increasing over 90% the last 5 years. Obviously, either way a decline in the stock market indexes is good news for almost everyone. I'm hoping for a real crash as I need to save lots more money, not just for my retirement but also for my k…

Nikkei 225 Hit All-Time High of 38,957.00 on December 29th, 1989.

Japan has a declining population (due to low immigration, suicides, low birth rates, etc) which in effect has a negative impact on economic growth.

Re: Dow plunges 1000 points

#360

Post by anigbrowl »

samfisher83 wrote: post #157
anigbrowl wrote: post #123

Earlier quoted context omitted.

Last time I heard a lot of people saying "the fundamentals of our economy are still strong" was fall 2008. They are not bad, but you need to recall that the nominal full employment comes with far less financial security than in previous cycles as much of it is in part-time jobs, the gig economy etc., and demand is thus considerably more elastic than in an economy dominated by full-time jobs.

Its different than 98. We had a huge housing bubble. We had people getting no income loans. It doesn't seem the same in this case. The biggest risk is going to be the 1 trillion dollar deficit which is resulting in rising yields which makes stocks less appealing. However if you have a lot of inflation you need to put your money in some assets since the value of the dollar is going to be lower.

Good points all, though I'm wary of debt merely having shifted into things like student loans and subprime auto loans (which have a worryingly high default rate). It's not the same by any means, but I feel the combination of an overdue correction and political uncertainty could prove a toxic one.
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