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US Stocks Suffer Worst Week in a Decade

Kaban

Member
May 22, 2014
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well that sucks - it might be a correction, but it's been consistent for weeks now
 

pramod

Gold Member
Oct 24, 2017
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Corrections are healthy and good for the long term. Good thing I still have a ton of cash standing by to jump back in.
 

haxan7

Volunteered as Tribute
May 9, 2016
2,330
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My overall portfolio dropped about 20% in the last few weeks. Doesn't feel great but I'm just going to ride it out.
 
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longdi

Member
Jun 7, 2004
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My portfolio dropped 10%, i think this is the end, big one is coming, china and corporate debt bubbles are going to burst.

Should have sold some at the peak of q3 earnings. Fuck the trump.
 

ssolitare

Manbaby: The Member
Jan 12, 2009
17,033
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Well definitely ride it out because I won't retire for another 40 years. Overtime the stock market only goes up, the dips don't even register on a histogram.
 
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Bogey

Member
May 4, 2014
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290
Well definitely ride it out because I won't retire for another 40 years. Overtime the stock market only goes up, the dips don't even register on a histogram.
That's a common statement, but a bit misleading.
First of all, "over time, the stock market always goes up" - the only thing needed to renter that statement true is that today's levels are higher than the levels first observed when markets first started emerging.

If you assume total randomness, odds are still 50:50 you could make this statement today by pure coincidence. And worse still: even under total randomness, markets should still drift with inflation at least, so even under pure randomness the odds of this statement being true are significantly higher than 50 percent (haven't done the maths, but given inflation over a long period of time.. Likely higher than 95 percent or so).

Having said that, you'll be able to find quite a lot of periods in history where stocks significantly underperformed even over extended horizons.

(for the record: don't get me wrong, historically investing was still the best choice for most people. It's just nowhere near as guaranteed as statements like the above suggest)

And worse yet, ever since 2007 we're not facing normal markets. Central Bank liquidity is imho like electrocution a dead frog - sure, it'll twitch still, but that doesn't mean it's alive and doing well. Read, since 2007, markets have simply been propped up artificially.

Personally, I see little ways out of this dilemma. If we ever want to normalize policies again, a massive - possibly unprecedented - crash is inevitable imho. Of course with that downside, neither central banks nor governments exactly have any incentive to do that any sooner than necessary - but you won't be able to get away with those policies forever, and when you'll stop, the longer you have waited, the worse the consequences you'll face.

And even worse yet, markets are probably in the worst shape they've ever been to withstand a massive sell-off. Banks are legally forbidden from taking significant prop risk; managed assets have shifted strongly towards ETFs, which are purely pro cyclical; and since 2007 we have seen an unprecedented breakdown in correlations, suggesting the same might hold true once we move in the opposite direction. So in short, there's barley anything or anyone left in the market who would stand up and take the opposite side anymore in a big sell-off.
 
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longdi

Member
Jun 7, 2004
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I think once China overtakes US by the next decade, thanks in part to Trump evil deeds. Those invested in ETF, will see their retirement funds destroyed. I am officially afraid.
We have 10-15 years left of "stock markert always goes up" imo. The theory works as we saw the rise of US. Better buy some Chinese ETF while you can.
 
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pramod

Gold Member
Oct 24, 2017
1,942
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600
That's a common statement, but a bit misleading.
First of all, "over time, the stock market always goes up" - the only thing needed to renter that statement true is that today's levels are higher than the levels first observed when markets first started emerging.

If you assume total randomness, odds are still 50:50 you could make this statement today by pure coincidence. And worse still: even under total randomness, markets should still drift with inflation at least, so even under pure randomness the odds of this statement being true are significantly higher than 50 percent (haven't done the maths, but given inflation over a long period of time.. Likely higher than 95 percent or so).

Having said that, you'll be able to find quite a lot of periods in history where stocks significantly underperformed even over extended horizons.

(for the record: don't get me wrong, historically investing was still the best choice for most people. It's just nowhere near as guaranteed as statements like the above suggest)

And worse yet, ever since 2007 we're not facing normal markets. Central Bank liquidity is imho like electrocution a dead frog - sure, it'll twitch still, but that doesn't mean it's alive and doing well. Read, since 2007, markets have simply been propped up artificially.

Personally, I see little ways out of this dilemma. If we ever want to normalize policies again, a massive - possibly unprecedented - crash is inevitable imho. Of course with that downside, neither central banks nor governments exactly have any incentive to do that any sooner than necessary - but you won't be able to get away with those policies forever, and when you'll stop, the longer you have waited, the worse the consequences you'll face.

And even worse yet, markets are probably in the worst shape they've ever been to withstand a massive sell-off. Banks are legally forbidden from taking significant prop risk; managed assets have shifted strongly towards ETFs, which are purely pro cyclical; and since 2007 we have seen an unprecedented breakdown in correlations, suggesting the same might hold true once we move in the opposite direction. So in short, there's barley anything or anyone left in the market who would stand up and take the opposite side anymore in a big sell-off.
There is still a lot cash out there sitting on the sidelines. Almost everyone i know is sitting in tons of cash waiting to jump into the next crash, which I doubt this one is.

Having been trading as long as I have, things always happen when people least expect it. Experts have been calling for a huge crash for a long time which is why i doubt it will happen anytime soon.
 

pramod

Gold Member
Oct 24, 2017
1,942
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600
i think we're past "it's just a correction" at this point
Sure if you chased high flying stocks like Nvidia and Netflix those stocks are in bear market mode. But the overall stock market hasnt reached that point yet.
 

pimentel1

Midas Member
Jul 22, 2018
1,244
856
645
In Jan 2009, when Obama took office, the Dow was at around 8,000. When Trump took office in 2017, stocks were at 20,093. A difference of 12,093. Divide that by 8 years and each year saw around a 1,500 gain under Obama.

Stocks are at the moment 22,045. A difference of about 1,952. Divided over 2 years, equalling about 976 per year.

— Average —

Obama: 1,500 pt gain per year
Trump: 976 pt gain per year

— Summary —

Obama better.
 
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Nov 23, 2010
4,432
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I think once China overtakes US by the next decade, thanks in part to Trump evil deeds. Those invested in ETF, will see their retirement funds destroyed. I am officially afraid.
We have 10-15 years left of "stock markert always goes up" imo. The theory works as we saw the rise of US. Better buy some Chinese ETF while you can.
China's GDP (PPP) is already at 24 trillion + according to the IMF. What does Pres. Trump have to do with their success over the years? They're already in the driver's seat thanks to the decisions by people who were in charge before Pres. Trump called the shots.
 

longdi

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Jun 7, 2004
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Dow down 600! It is over...

China's GDP (PPP) is already at 24 trillion + according to the IMF. What does Pres. Trump have to do with their success over the years? They're already in the driver's seat thanks to the decisions by people who were in charge before Pres. Trump called the shots.
Trump makes it even easier for China to over take US. Maybe not military wise, but GDP and Tech, next 10 years will be painful for US if they dont start to rein in the Trump asap.
 

finowns

Member
May 10, 2009
3,104
688
865
Dow down 600! It is over...


Trump makes it even easier for China to over take US. Maybe not military wise, but GDP and Tech, next 10 years will be painful for US if they dont start to rein in the Trump asap.
How does Trump make it easier?
 

diablos991

Can’t stump the diablos
Jun 15, 2013
8,529
684
700
The federal reserve raising rates way too fast. They are causing the shakyness single handedly.
 

ssolitare

Manbaby: The Member
Jan 12, 2009
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The federal reserve raising rates way too fast. They are causing the shakyness single handedly.
It's not just them, it's Trump causing uncertainty.

The markets are shaky around a trade deal being reached with China, and there weight of the tariffs. They are also afraid of this:

 
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ssolitare

Manbaby: The Member
Jan 12, 2009
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The Dow Jones Industrial Average plunged more than 650 points Monday -- the worst Christmas Eve trading session in the country's history, according to experts -- after eyebrow-raising comments by the treasury secretary, an escalating trade with China, and amid an economic slowdown.

Stocks are negative for the year, and the Dow has fallen thousands of points from its high of nearly 27,000.

The Dow ended the day a dramatic 653 points lower at 21,792 in an abbreviated trading session ahead of the Christmas holiday, down nearly 10 percent from a mere week ago. The day's losses of 2.9 percent, added to last week's of 6.8 percent, set the stage for a sober last week of trade this year.

"I do believe this was the worst Dec. 24 in history," U.S. Global Investors head trader Michael Matousek told ABC News. "There hasn’t been a worse Christmas Eve since I started in the industry 22 years ago."
Thanks Obama!
 
Dec 3, 2018
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I admit that when I first saw this thread, I thought it was about the Worst Stocking Stuffers in a Decade. It took about four posts before I realized my error. I might be dyslexic, though I'm probably not that special. I'm probably just good old fashioned illiterate.
 

finowns

Member
May 10, 2009
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FED raising rates probably is causing most of this but we’ve had super low interest rates for like 10 years, or something like that, we have to protect what we’ve gained. Although Trump is arguing it’s a ‘booming market’ so we should allow more lending. But Trump is constantly talking about the stock market so who can blame his detractors who now use it against him.

I will also add I know nothing about economics.
 

ssolitare

Manbaby: The Member
Jan 12, 2009
17,033
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FED raising rates probably is causing most of this but we’ve had super low interest rates for like 10 years, or something like that, we have to protect what we’ve gained. Although Trump is arguing it’s a ‘booming market’ so we should allow more lending. But Trump is constantly talking about the stock market so who can blame his detractors who now use it against him.

I will also add I know nothing about economics.
Trump simply wants a good legacy, but the world is bigger than that.
 

#Phonepunk#

Member
Sep 4, 2018
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i mean 2008 happened and they did absolutely nothing to fix things and make sure it wouldn't happen again. by now i'm pretty used to the volatile stock market. W and Obama proved that speculators can do whatever the hell they like and the American people will always bail them out.

tbh im surprised there hasn't been another straight up crash and bank bailout. Trumps been shaking a lot of shit up so none of this is really unexpected.

im not a stock trader nor do i know any. long term there's really nothing to worry about.
 
Nov 23, 2010
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Dow down 600! It is over...


Trump makes it even easier for China to over take US. Maybe not military wise, but GDP and Tech, next 10 years will be painful for US if they dont start to rein in the Trump asap.
I apologize if I wasn't clear. China is already more than 20% larger according to the IMF. And in the long-run growth and innovation in the US is slowing down, therefore the gap is just going to widen between the two countries because they're rapidly growing.

As far as tech, China won't imitate the US as much in the years to come as they become richer and more knowledgeable. The downside for them is that the US and other countries will have the opportunity to copy Chinese innovations. So, the shoe will be on the other foot as far as industrial espionage and IP theft.

In any event, if Pres. Trump is exacerbating the gap that existed prior to him calling the shots, then maybe your right. However, if he shakes things up and it works out better for the US, then I don't see how the next 10 years will be painful. You're going to have to do what you have to do to compete. And you need someone who thinks outside the box for that.
 
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Mr Nash

square pies = communism
Jun 8, 2004
4,508
515
1,775
Powell is in a bad position since he's stuck taking the reigns after Yellen and Bernanke's years of quantitative easing and rock bottom interest rates. There were plenty of people who felt those two were creating a powder keg with their policies, and it would be difficult to secure the US against all of the debt and money printing that has been going on for the last decade.

Now we're pretty much coming to the end of an economic cycle, and it was one that was basically lipstick on a pig. We're starting to see Treasuries flirt with an inverted yield curve more and more, so a recession probably isn't that far off. As such, interest rates need to be higher so that the central bank has somewhere to go when it becomes necessary to bring the back down during a recession. Sure, they could go to zero or even negative interest rates, but ask Japan and the EU how well that worked out for them.

The economy is barreling toward what may be a very serious time of reckoning. In the early 2000s, it was built on debt and when the financial crisis came the powers that be decided the solution was more debt and printing money. Something like that may work for a time, but does nothing to address the underlying problems, so we're where we are now with things ready to slam into wall. When the last financial crisis happened, the solution was to kick the can down the road for a few years. Now we've caught up to the can again. They may be able to kick it once more, but it won't go very far, and after that central banks are going to be out of options. From there we're going to have to eat a much worse financial crisis than if we were to have just taken our lumps in 2008 and been done with it.

I for one look forward to the parade of talking heads on the news claiming that no one could have saw it coming when the crisis hits.
 

zelo-ca

Member
Jan 26, 2018
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I'm in it for the long haul. I'm 27 and dont plan to retire for 40 years. Bring on the crashes :). Itll help my dollar cost averaging ;)
 

Corrik

Member
Jan 20, 2018
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Pittsburgh
Pretty much every economist says our economy is fine and will keep chugging along so it seems like a huge reaction to nothing. Good time to put in because it will likely rebound up soon for easy short term gains.
 

finowns

Member
May 10, 2009
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Pretty much every economist says our economy is fine and will keep chugging along so it seems like a huge reaction to nothing. Good time to put in because it will likely rebound up soon for easy short term gains.
Amazon is down $700 from October if I had some money that would be an easy bet.
 

sahlberg

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Amazon is down $700 from October if I had some money that would be an easy bet.
Don't catch a falling knife.

They will continue falling, most likely for several more quarters. There is a lot of speculation that needs to be bled out from the market.

Stock market has been falling a bit over the last 3 months. Trends last longer than a quarter or two though.
I will give it until February. If it is still down from here then I think we do have a much needed correction and I will be buying a lot of naked puts to ride the rest of the correction down.


I full exited the marked beginning of this year. Explaining to wife why we have so much money in a virtually-no-interest savings account was not easy.
It is very easy now.


IMHO, not financial advice, a correction is well overdue. And it will continue for a while once we confirm this is a change of trend and not just a short blip.
 

finowns

Member
May 10, 2009
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Don't catch a falling knife.

They will continue falling, most likely for several more quarters. There is a lot of speculation that needs to be bled out from the market.

Stock market has been falling a bit over the last 3 months. Trends last longer than a quarter or two though.
I will give it until February. If it is still down from here then I think we do have a much needed correction and I will be buying a lot of naked puts to ride the rest of the correction down.


I full exited the marked beginning of this year. Explaining to wife why we have so much money in a virtually-no-interest savings account was not easy.
It is very easy now.


IMHO, not financial advice, a correction is well overdue. And it will continue for a while once we confirm this is a change of trend and not just a short blip.
Betting Amazon will be a successful company in, for example, the next ten years is not a hard decision. You are correct Amazon might drop more so you can wait it out and buy lower but there's a very good chance Amazon has a bright future with the onset of automation and more precise robots.
 
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Bogey

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May 4, 2014
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Betting Amazon will be a successful company in, for example, the next ten years is not a hard decision. You are correct Amazon might drop more so you can wait it out and buy lower but there's a very good chance Amazon has a bright future with the onset of automation and more precise robots.
I don't think anyone would argue amazon is about to go bankrupt;
it being being a successful company in the future doesn't necessarily imply it'll go up anytime soon, though.

Hypothetical example: The market prices the world's most profitable company at a stock price of say, 1000. Now it's long-term (say perpetual) profits drop by 5%, and hence say its stock price around 5% as well. It may still be the world's most profitable company and be around forever, and yet whoever bought it at 1000 may have still made a long-term loss.

For stock like amazon, multiple factors are at play - mostly, as with any other tradeable asset out there, the >decade long central bank liquidity inflating all asset prices. And on top of that, the relative outperformance of tech assets even to that massive bull market (you'll have seen the term tech bubble float around quite a lot again recently).

So even a massive drop wouldn't necessarily imply amazon is a bad company - it may just imply it's coming back to somewhat fundamentally reasonable levels.

For a more detailed view (even more simply stuff like EPS doesn't work too well for amazon), you'd probably want to look at its fundamentals, try to find a reasonable measure for its current and future profitability, and check out its stock price historically, and your future forecast, as a function of these.
 

finowns

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May 10, 2009
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I don't think anyone would argue amazon is about to go bankrupt;
it being being a successful company in the future doesn't necessarily imply it'll go up anytime soon, though.

Hypothetical example: The market prices the world's most profitable company at a stock price of say, 1000. Now it's long-term (say perpetual) profits drop by 5%, and hence say its stock price around 5% as well. It may still be the world's most profitable company and be around forever, and yet whoever bought it at 1000 may have still made a long-term loss.

For stock like amazon, multiple factors are at play - mostly, as with any other tradeable asset out there, the >decade long central bank liquidity inflating all asset prices. And on top of that, the relative outperformance of tech assets even to that massive bull market (you'll have seen the term tech bubble float around quite a lot again recently).

So even a massive drop wouldn't necessarily imply amazon is a bad company - it may just imply it's coming back to somewhat fundamentally reasonable levels.

For a more detailed view (even more simply stuff like EPS doesn't work too well for amazon), you'd probably want to look at its fundamentals, try to find a reasonable measure for its current and future profitability, and check out its stock price historically, and your future forecast, as a function of these.
I didn't follow any of that but I appreciate it.
 

sahlberg

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Betting Amazon will be a successful company in, for example, the next ten years is not a hard decision. You are correct Amazon might drop more so you can wait it out and buy lower but there's a very good chance Amazon has a bright future with the onset of automation and more precise robots.
Oh, Absolutely. I think Amazon is an exceptionally well managed company and I think it will do heaps better than the competition. I am mostly talking about the stock market at large.
If Amazon and other companies STOCK PRICE drop in the next 12 months, that will me more macro-economical reasons than their own perfornance themselves.
Like interest, for the first time in a decade, interests are non-trivially above zero.


I don't want to wait to buy lower. Once trend is confirmed, I will buy naked puts. Then when it bottoms out in a year or two, then I will buy shares in them.
(or likely someone else, hit harder by the downturn than Amazon. Lets see in 2020 - 2021 who that might be.)
 

sahlberg

Gold Member
Oct 27, 2017
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Betting Amazon will be a successful company in, for example, the next ten years is not a hard decision. You are correct Amazon might drop more so you can wait it out and buy lower but there's a very good chance Amazon has a bright future with the onset of automation and more precise robots.
Investors are not betting against companies. They invest towards/against share price.
I am certain Amazon will be in the top ten most successful companies 10 years from now. That is good for them. I don't care.
I invest against their stock price, not against Amazon as a company.
 

Bogey

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May 4, 2014
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I didn't follow any of that but I appreciate it.
Bit of an over-used example, but: https://en.wikipedia.org/wiki/Tulip_mania



Tulips are great, we still all love them and they're still an excellent flower. None of their features have deteriorated over time in any way. And yet, buying them at 200 would've been quite a regrettable choice.

So just short summary being: Market prices are much more than just fundamentals. A product, or a company, being "good", unfortunately isn't quite enough to assume its price will definitely rise in the foreseeable future.
 
May 22, 2018
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I feel sorry for the investors and the stock market as a whole, but I would be lying if I said that it hasn't been rather entertaining watching Trumpers do mental gymnastics to try and hand wave this very serious problem.



The economy is the ONE THING that Trumpers could brag about when it came to his Orangeness and now even that is going to shit thanks to him. Its like watching a slow motion car wreck as they run out of excuses and bullshit.
 

sahlberg

Gold Member
Oct 27, 2017
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Bit of an over-used example, but: https://en.wikipedia.org/wiki/Tulip_mania



Tulips are great, we still all love them and they're still an excellent flower. None of their features have deteriorated over time in any way. And yet, buying them at 200 would've been quite a regrettable choice.

So just short summary being: Market prices are much more than just fundamentals. A product, or a company, being "good", unfortunately isn't quite enough to assume its price will definitely rise in the foreseeable future.
r such

Tulips are a great example of a crazy speculation bubble but can make a lot of money when you spot them.
They happen every 10-15 years. You can make LOT of money when you spot the end of these cycles.

I have done that twice now 2000 and 2008. Risk is super high. Reward is super high too.
I think now might be another downturn cycle but not sure yet. If we are still down from here to mid February then I think it is a trend and I might put some money into naked puts again.
 
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sahlberg

Gold Member
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I feel sorry for the investors and the stock market as a whole, but I would be lying if I said that it hasn't been rather entertaining watching Trumpers do mental gymnastics to try and hand wave this very serious problem.



The economy is the ONE THING that Trumpers could brag about when it came to his Orangeness and now even that is going to shit thanks to him. Its like watching a slow motion car wreck as they run out of excuses and bullshit.
Hey, the economy is still doing great. Even better in fact.
However, the stockmarket is down hard since the interest rates are going up from being basically zero for a decade to be > zero.
(I.e . the economy i still doing great but there are risks that that might end and the economy will NOT be doing great in the future.)

You are in poverty and have no money so you don't care about the economy. However, >90% of americans likely HAVE a 401k retirement fund and they care very GREATLY of its value.
This downturn, if there is one, will hurt everyone with any savings, personal or 401k.
Unless Trump can pull a rabbit out of the hat, that leads to a downturn in the overall economy.
Your job as well as all other at the bottom will be the first to feel the downturn.


That anyone is celebrating a economic downturn is insane. No one wins in that scenario.



How the economy is doing != The Stock Market

but there is a correlation where one often trails the other.


Now, IMHO, this is not on Trump, or even Obama. This that will happen in my opinion is Bush/Clinton that allowed the private debt to get out of control.
Doesn't matter really. Now is not the time to assign blame, that comes later.

Now is to navigate the downturn.
((EDIT: if the downturn is prolonged I will make a lot of money on my puts. No hard feelings. Just want to make money.))
 
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May 22, 2018
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Hey, the economy is still doing great. Even better in fact.
However, the stockmarket is down hard since the interest rates are going up from being basically zero for a decade to be > zero.
(I.e . the economy i still doing great but there are risks that that might end and the economy will NOT be doing great in the future.)

You are in poverty and have no money so you don't care about the economy. However, >90% of americans likely HAVE a 401k retirement fund and they care very GREATLY of its value.
This downturn, if there is one, will hurt everyone with any savings, personal or 401k.
Unless Trump can pull a rabbit out of the hat, that leads to a downturn in the overall economy.
Your job as well as all other at the bottom will be the first to feel the downturn.


That anyone is celebrating a economic downturn is insane. No one wins in that scenario.



How the economy is doing != The Stock Market

but there is a correlation where one often trails the other.


Now, IMHO, this is not on Trump, or even Obama. This that will happen in my opinion is Bush/Clinton that allowed the private debt to get out of control.
Doesn't matter really. Now is not the time to assign blame, that comes later.

Now is to navigate the downturn.
((EDIT: if the downturn is prolonged I will make a lot of money on my puts. No hard feelings. Just want to make money.))




(Financial world is not my strong suit. I just found the Trumpers response to the news about the Dow Jones Etc entertaining)
 
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sahlberg

Gold Member
Oct 27, 2017
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(Financial world is not my strong suit. I just found the Trumpers response to the news about the Dow Jones Etc entertaining)
Try this then

The stockmarket has boomed over the last 10 years. A lot due to the cost of money being 0. (zero or near zero interest rates).
This drives money away from savings accounts, bonds or termed deposits towards something that pays better interest.

That used to be stockmarket since everything else paid near 0 interest.


FED is now changing this and increasing interests. Pulling money from stocks towards savings accounts.
You increase the interest for savings accounts and people will sell their shares and put money in their savings accounts instead.


This is a very simplified view of it. Still you can make a LOT of money when you spot these trend shifts. A LOT
 
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Woo-Fu

incest on the subway
Jan 2, 2007
13,915
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Can't be surprised when imaginary money evaporates. Can't remember the last time stock prices were tied to anything other than perception.