Keep throwing money into this bubble or park in bonds/cash?

burritos said:

---

Keep throwing money into this bubble or park in bonds/cash?

---

If you're smart, you'll take a pulse of the collective wisdom here and do the exact opposite. If you'd followed that strategy in December you'd be sitting on a nice pile of profits right now. If you'd followed their advice and gone into bonds back then...

burritos said:

---

Keep throwing money into this bubble or park in bonds/cash?

---

How about keeping faith in the principles that guided you instead of acting based on your fear or euphoria. Smart investors don't make money by predicting macroeconomic trends but by exploiting greed or fear of the less disciplined investors. I have made excellent returns keeping my investments in equity and continuing to invest in well managed companies through all of the recessions. Sure, I could have made more by predicting accurately all of the downturns and upturns. But then I would be a multi-billionaire.

Uthaithani said:

---

burritos said:

---

Keep throwing money into this bubble or park in bonds/cash?

---

If you're smart, you'll take a pulse of the collective wisdom here and do the exact opposite. If you'd followed that strategy in December you'd be sitting on a nice pile of profits right now. If you'd followed their advice and gone into bonds back then...

---

I'm not smart. I'm greedy and have classic human gut instinctual emotions to both noxious and euphoric financial stimuli. Nonetheless, still very heavy on equities based on greed. Always have been. Always have been greedy. Just bumping to get a small meta opinion sample for fun. Rebalance will be thrown out there. If everyone is saying that, that might mean something. If everyone is saying buy or sell, that too might mean something. Cal people are smart in general so let's see what is said. They say that if the shoeshine guy(sorry if disrespectful) is telling you to buy, then you should be selling, which I rarely do unless the stock has lost 90% of the value.

Inflation still going nowhere, which means low rates = higher equities.

Now up 9.84% on the year, gonna be pushing 12% by year-end at this rate.

I apologize for sounding like an arsehole, but these disasters are going to drive the market even more correct? There will certainly be more debt. Where that debt lands, I guess who cares. But 1/4 trillion dollars in direct spending on real goods and services to rebuild(as opposed to trading gold and bitcoins) will push upwards revenues and corporate bottom lines right?

burritos said:

---

I apologize for sounding like an arsehole, but these disasters are going to drive the market even more correct? There will certainly be more debt. Where that debt lands, I guess who cares. But 1/4 trillion dollars in direct spending on real goods and services to rebuild(as opposed to trading gold and bitcoins) will push upwards revenues and corporate bottom lines right?

---

https://en.wikipedia.org/wiki/Parable_of_the_broken_window

I'm still 95% invested in the market. I was tempted to move it around the election but just decided to ride it out and see what happened. So glad I did.

I haven't really invested new money in the market. I rebalanced earlier this year and have been accumulating cash since then.

Don't plan on selling anytime soon. I think this market still has room to run, though certainly not as aggressive as earlier in the year.

ibhoagiesforlife said:

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I'm still 95% invested in the market. I was tempted to move it around the election but just decided to ride it out and see what happened. So glad I did.

I haven't really invested new money in the market. I rebalanced earlier this year and have been accumulating cash since then.

Don't plan on selling anytime soon. I think this market still has room to run, though certainly not as aggressive as earlier in the year.

---

Depending on your age, it could be an excellent strategy. Over 15+ year periods and especially the longer you go over that, there is rarely a period that you would not come out ahead....Now, if you are a couple years from retirement, that could be a different story.

OdontoBear66 said:

---

ibhoagiesforlife said:

---

I'm still 95% invested in the market. I was tempted to move it around the election but just decided to ride it out and see what happened. So glad I did.

I haven't really invested new money in the market. I rebalanced earlier this year and have been accumulating cash since then.

Don't plan on selling anytime soon. I think this market still has room to run, though certainly not as aggressive as earlier in the year.

---

Depending on your age, it could be an excellent strategy. Over 15+ year periods and especially the longer you go over that, there is rarely a period that you would not come out ahead....Now, if you are a couple years from retirement, that could be a different story.

---

Agreed. The bigger risk for people who are still young is being too conservative and not having enough to retire. If you are closer to retirement, you would want to (1) hopefully have enough capital at that point and (2) protect that capital while still investing a portion in equity.

calbear93 said:

---

OdontoBear66 said:

---

ibhoagiesforlife said:

---

I'm still 95% invested in the market. I was tempted to move it around the election but just decided to ride it out and see what happened. So glad I did.

I haven't really invested new money in the market. I rebalanced earlier this year and have been accumulating cash since then.

Don't plan on selling anytime soon. I think this market still has room to run, though certainly not as aggressive as earlier in the year.

---

Depending on your age, it could be an excellent strategy. Over 15+ year periods and especially the longer you go over that, there is rarely a period that you would not come out ahead....Now, if you are a couple years from retirement, that could be a different story.

---

Agreed. The bigger risk for people who are still young is being too conservative and not having enough to retire. If you are closer to retirement, you would want to (1) hopefully have enough capital at that point and (2) protect that capital while still investing a portion in equity.

---

And an excellent website for all ages is that of Paul Merriman who someone on this website (I believe it was dajo) put me on to. By looking at all his historical charting you can pretty much figure what your weighting should be at each age, based on historical returns. Then factor in your own risk/reward assessment and you can figure right where you should be invested to gain certain returns.

Until the market says otherwise, I remain the same in my various accounts, some more long than others.

The Fall does bring some level of trepidation though, at least for me. If I enter any new positions (long or short), I will have a tight stop, in case I am wrong. One can use options too for such purposes. When bearish, I always use puts.

My current fixation is the Chinese economy. Actually, that has been the case for a while now, the past a couple of years on the Bearish side. Chinese debt is approaching 30 trillion USD (was 29 a month or so back). The more important debt to GDP ratio the highest ever recorded. There is something even more telling possibly the rapid acquisition of debt over a short time frame. Morgan Stanley's Sharma calls this out here (2 min vid excerpt):



Long before China's acute debt binge that began about 8 years ago, the economy was quite appealing and fascinating, meaning it merited being bullish, for me at least. In the back of my mind there was always some concern about the unknowns though. Successful command economies, to be quite polite, don't exactly have history on their side. Coupled with the current economic state of China, I'm very interested to see what materializes in the short-term

By most accounts, the collapse of the Soviet Union remains a bit of mystery. Speculation and theories abound though. Regardless of what one believes, the downfall of the USSR was rapid as it was unexpected. I imagine many here remember and the shock felt by so many of us. It was surreal. In my readings over the years, there are indeed some parallels with China's Communist Party (CCP) and the Soviet state. While that is undeniable, that in no way means one can be conclusive with an assertion that the CCP will follow suit. It merits some level of appreciation, IMO.

Based upon history, the bubbles in China are also very indicative of darker days ahead. While housing is the big one of course, there have been others, obviously the stock market, but in other areas like art, calligraphy, even PVC as in pipes, etc. It's a sickness that the world has seen repeated for centuries. The housing bubble is now recognized as the biggest in history, more so than ours a decade ago, and what the Japanese experienced. I'll spare the articles, but they are out there, including China's richest man and land developer, echoing the same.

As China has been trying to replicate the US's consumer-driven economy to be more self-reliant, the Chinese people are no longer the savers they once were, which had offered some level of comfort. The increase in Chinese consumer debt has been increasing in relation to the both the overall debt and GDP. The last year in particular, it has really accelerated. A query on such (Chinese consumer debt) will yield several recent concerning articles. There is data reflecting this current trend, such as huge increases in consumer loans, and that those are being driven by real estate (mortgages). Between 70-80% of new consumer loans are mortgages. There are expressed norms in Chinese tier one and tier two cities for mortgages as a percentage of one's monthly income. The consensus range is from 50-70% of one's monthly pay is commonly used for mortgage payments. China's state-owned enterprises are leveraged to the hilt, and now the Chinese consumers are taking bigger steps in that direction.

More to say, but I'll stop for now. I'm currently monitoring China's stock market. I have not attached anything yet on this new forum, so hopefully I'll be successful. If so, you'll see a 5-year weekly chart for ETF MCHI (Chinese equities). It is right near the 2015 highs where I have the alert set (horizontal line). I bought puts at that time, which served me well as you can see. While I often use a multitude of indicators, I have found that RSI (bottom of chart) performs quite well with this ETF. You'll note in red the times were RSI indicates over-bought conditions, and the subsequent change in direction. Per RSI, it is very over-bought once again. Going into the CCP's 19th National Congress next month, and so much riding on that event (every five years), I might wait to put on this position a little longer.

Hmmm... looks like no attachment options for my screenshot. I will post and try to figure-out later...

Cal89 said:

---

Until the market says otherwise, I remain the same in my various accounts, some more long than others.

The Fall does bring some level of trepidation though, at least for me. If I enter any new positions (long or short), I will have a tight stop, in case I am wrong. One can use options too for such purposes. When bearish, I always use puts.

My current fixation is the Chinese economy. Actually, that has been the case for a while now, the past a couple of years on the Bearish side. Chinese debt is approaching 30 trillion USD (was 29 a month or so back). The more important debt to GDP ratio the highest ever recorded. There is something even more telling possibly the rapid acquisition of debt over a short time frame. Morgan Stanley's Sharma calls this out here (2 min vid excerpt):



Long before China's acute debt binge that began about 8 years ago, the economy was quite appealing and fascinating, meaning it merited being bullish, for me at least. In the back of my mind there was always some concern about the unknowns though. Successful command economies, to be quite polite, don't exactly have history on their side. Coupled with the current economic state of China, I'm very interested to see what materializes in the short-term

By most accounts, the collapse of the Soviet Union remains a bit of mystery. Speculation and theories abound though. Regardless of what one believes, the downfall of the USSR was rapid as it was unexpected. I imagine many here remember and the shock felt by so many of us. It was surreal. In my readings over the years, there are indeed some parallels with China's Communist Party (CCP) and the Soviet state. While that is undeniable, that in no way means one can be conclusive with an assertion that the CCP will follow suit. It merits some level of appreciation, IMO.

Based upon history, the bubbles in China are also very indicative of darker days ahead. While housing is the big one of course, there have been others, obviously the stock market, but in other areas like art, calligraphy, even PVC as in pipes, etc. It's a sickness that the world has seen repeated for centuries. The housing bubble is now recognized as the biggest in history, more so than ours a decade ago, and what the Japanese experienced. I'll spare the articles, but they are out there, including China's richest man and land developer, echoing the same.

As China has been trying to replicate the US's consumer-driven economy to be more self-reliant, the Chinese people are no longer the savers they once were, which had offered some level of comfort. The increase in Chinese consumer debt has been increasing in relation to the both the overall debt and GDP. The last year in particular, it has really accelerated. A query on such (Chinese consumer debt) will yield several recent concerning articles. There is data reflecting this current trend, such as huge increases in consumer loans, and that those are being driven by real estate (mortgages). Between 70-80% of new consumer loans are mortgages. There are expressed norms in Chinese tier one and tier two cities for mortgages as a percentage of one's monthly income. The consensus range is from 50-70% of one's monthly pay is commonly used for mortgage payments. China's state-owned enterprises are leveraged to the hilt, and now the Chinese consumers are taking bigger steps in that direction.

More to say, but I'll stop for now. I'm currently monitoring China's stock market. I have not attached anything yet on this new forum, so hopefully I'll be successful. If so, you'll see a 5-year weekly chart for ETF MCHI (Chinese equities). It is right near the 2015 highs where I have the alert set (horizontal line). I bought puts at that time, which served me well as you can see. While I often use a multitude of indicators, I have found that RSI (bottom of chart) performs quite well with this ETF. You'll note in red the times were RSI indicates over-bought conditions, and the subsequent change in direction. Per RSI, it is very over-bought once again. Going into the CCP's 19th National Congress next month, and so much riding on that event (every five years), I might wait to put on this position a little longer.

Hmmm... looks like no attachment options for my screenshot. I will post and try to figure-out later...

---

Very interesting. Could be prophetic. Could be noise. Always love reading and learning interesting interpretations of when economists cite x,y,z as being indicators or signs of a,b,c. These are very smart people. Many are using scientific reasoning to try and enlighten the story of the financial markets. As someone who wants to enhance my own personal financial lot, I find this stuff very fascinating. Do any of these economists ever use their own interpretations to make a killing with their own money? They should be able to if what they are saying is true.

I know of two bears(one a cal bear, both aremarket bears), Peter Schiff and Jim Rogers(investors, not economists) have been bad mouthing the US for the better part of a decade. Jim Rogers went all in as to move to Singapore and actually have his daughter raised in a Chinese speaking school. Peter Schiff has been a crazy gold bug for decades. Both are way richer than me, but but their net worth probably don't even sniff the daily fluctuations of Warren Buffett's portfolio. Had those two actually just plunked their money in the S+P and walked away. They probably could have spent their last decade playing video game and even richer than they really are.

LunchTime said:

---

burritos said:

---

I apologize for sounding like an arsehole, but these disasters are going to drive the market even more correct? There will certainly be more debt. Where that debt lands, I guess who cares. But 1/4 trillion dollars in direct spending on real goods and services to rebuild(as opposed to trading gold and bitcoins) will push upwards revenues and corporate bottom lines right?

---

https://en.wikipedia.org/wiki/Parable_of_the_broken_window

---

Sorry, I didn't mean to imply that disasters will improve the financial state of the nation. Nor do I believe that the stock market is an indicator of how well the country is doing. My assertion is that the restoration of these damaged area will enrich many, not precluding people already in the investor class(which include many on this thread I assume).

burritos said:

---

Cal89 said:

---

Until the market says otherwise, I remain the same in my various accounts, some more long than others.

The Fall does bring some level of trepidation though, at least for me. If I enter any new positions (long or short), I will have a tight stop, in case I am wrong. One can use options too for such purposes. When bearish, I always use puts.

My current fixation is the Chinese economy. Actually, that has been the case for a while now, the past a couple of years on the Bearish side. Chinese debt is approaching 30 trillion USD (was 29 a month or so back). The more important debt to GDP ratio the highest ever recorded. There is something even more telling possibly the rapid acquisition of debt over a short time frame. Morgan Stanley's Sharma calls this out here (2 min vid excerpt):



Long before China's acute debt binge that began about 8 years ago, the economy was quite appealing and fascinating, meaning it merited being bullish, for me at least. In the back of my mind there was always some concern about the unknowns though. Successful command economies, to be quite polite, don't exactly have history on their side. Coupled with the current economic state of China, I'm very interested to see what materializes in the short-term

By most accounts, the collapse of the Soviet Union remains a bit of mystery. Speculation and theories abound though. Regardless of what one believes, the downfall of the USSR was rapid as it was unexpected. I imagine many here remember and the shock felt by so many of us. It was surreal. In my readings over the years, there are indeed some parallels with China's Communist Party (CCP) and the Soviet state. While that is undeniable, that in no way means one can be conclusive with an assertion that the CCP will follow suit. It merits some level of appreciation, IMO.

Based upon history, the bubbles in China are also very indicative of darker days ahead. While housing is the big one of course, there have been others, obviously the stock market, but in other areas like art, calligraphy, even PVC as in pipes, etc. It's a sickness that the world has seen repeated for centuries. The housing bubble is now recognized as the biggest in history, more so than ours a decade ago, and what the Japanese experienced. I'll spare the articles, but they are out there, including China's richest man and land developer, echoing the same.

As China has been trying to replicate the US's consumer-driven economy to be more self-reliant, the Chinese people are no longer the savers they once were, which had offered some level of comfort. The increase in Chinese consumer debt has been increasing in relation to the both the overall debt and GDP. The last year in particular, it has really accelerated. A query on such (Chinese consumer debt) will yield several recent concerning articles. There is data reflecting this current trend, such as huge increases in consumer loans, and that those are being driven by real estate (mortgages). Between 70-80% of new consumer loans are mortgages. There are expressed norms in Chinese tier one and tier two cities for mortgages as a percentage of one's monthly income. The consensus range is from 50-70% of one's monthly pay is commonly used for mortgage payments. China's state-owned enterprises are leveraged to the hilt, and now the Chinese consumers are taking bigger steps in that direction.

More to say, but I'll stop for now. I'm currently monitoring China's stock market. I have not attached anything yet on this new forum, so hopefully I'll be successful. If so, you'll see a 5-year weekly chart for ETF MCHI (Chinese equities). It is right near the 2015 highs where I have the alert set (horizontal line). I bought puts at that time, which served me well as you can see. While I often use a multitude of indicators, I have found that RSI (bottom of chart) performs quite well with this ETF. You'll note in red the times were RSI indicates over-bought conditions, and the subsequent change in direction. Per RSI, it is very over-bought once again. Going into the CCP's 19th National Congress next month, and so much riding on that event (every five years), I might wait to put on this position a little longer.

Hmmm... looks like no attachment options for my screenshot. I will post and try to figure-out later...

---

Very interesting. Could be prophetic. Could be noise. Always love reading and learning interesting interpretations of when economists cite x,y,z as being indicators or signs of a,b,c. These are very smart people. Many are using scientific reasoning to try and enlighten the story of the financial markets. As someone who wants to enhance my own personal financial lot, I find this stuff very fascinating. Do any of these economists ever use their own interpretations to make a killing with their own money? They should be able to if what they are saying is true.

I know of two bears(one a cal bear, both aremarket bears), Peter Schiff and Jim Rogers(investors, not economists) have been bad mouthing the US for the better part of a decade. Jim Rogers went all in as to move to Singapore and actually have his daughter raised in a Chinese speaking school. Peter Schiff has been a crazy gold bug for decades. Both are way richer than me, but but their net worth probably don't even sniff the daily fluctuations of Warren Buffett's portfolio. Had those two actually just plunked their money in the S+P and walked away. They probably could have spent their last decade playing video game and even richer than they really are.

---

No perennial bear here, that's for sure. Well, Cal Bear...

Looking at the markets over the decades is the reason. As I stated earlier, I always have at least 20% cash on the sidelines. That grows depending upon what I sense or interpret from the various indicators that I follow... I believe I had shared a fair amount earlier in this thread that dates back to the old forum. I won't do so again.

One of the considerations or factors though is that this bull mkt is 8+ years old. The average over decades, generations, is like a little less than 5 years. We are now in the 2nd longest bull run in history. Actually, if I'm not mistaken this current market will tie for first this or next month! I'll have to check on that... Regardless, this is something of note, I feel.

Ok, another... Last one! The PE of the S&P 500 is nearing 25 again. Not exactly danger zone, as you can see below, but it has seen resistance there before, and when we have broken through it, things ended badly shortly thereafter.

http://www.multpl.com/

One such indicator turning south maybe gets my attention. Two to three does. Four or more I begin to raise more money and with even more indicators flashing red, the confidence level increases to protect my assets and take-on bearish positions. I'll try to make some time this weekend to look further.

My primary charting software (TradeStation and MultiCharts) is on a PC and have not yet set that up with a home remodel taking priority. The snapshot above is from ThinkorSwim, which is Mac-friendly...

Do we all silently agree that there is going to be correction? Or is there people here in the camp of "This time it's REALLY different".

No one knows of course.

The recognized definition of a bull mkt is an upward run by the stock market that did not see a 20% or more downward move. Anything less is generally recognized as a correction, with a possibly upward trend resumption.

With that said/understood, I never go all-in on a mkt "correction". I have had standing buy orders for a few months, quite a bit lower than these current levels. If those get filled, I then enter addtional buys at lower strategic levels, possibly much lower, still leaving more cash on the table. A third and final buy has happened a few a times in my lifetime and they tend to be on wash-out days where the market crashed on crazy volume and actually even reversed by the end of the session; which is often a great sign of a bottom being put in.

I'm a firm believer of not shooting your wad on the first shopping spree. Prices might actually go lower still.

That all said, if this were a 1 year old bull mkt, one might be more inclined to think it likely to have much more steam. Now, approaching the longest ever bull mkt in our history, our equities at or near a PE of 25, which is historically on the expensive side, and major headwinds for the 2nd largest economy in the world (China), the next downward move might indeed signal the end of this bull run. If not, I'm of the growing belief that it might not be far off...

US interest rates are apt to increase, per the Fed, in 2018 and 2019, continuing from this year. With respect to China and its aforementioned major challenges, this is certainly not good news for them. One of many such stories from late last year to current:

https://www.cnbc.com/2016/12/14/higher-interest-rates-in-the-us-next-year-could-make-problems-for-china.html

burritos said:

---

Do we all silently agree that there is going to be correction? Or is there people here in the camp of "This time it's REALLY different".

---

Of course, there will be a correction. The question is when and for how long. The error isn't to think that there will be a correction, but to try to predict when and for how long and, by guessing wrong (as most likely one would), one would sell too early or wait too long to buy back in. Knowing that I can't predict the timing, I stay in as long as my horizon is long enough. I may not continue to bet aggressively on companies that have too high of a multiple when the underlying facts have not changed, but my investment behavior will not be based on my trying to time precisely the ups and downs.

Uthaithani said:

---

burritos said:

---

Keep throwing money into this bubble or park in bonds/cash?

---

If you're smart, you'll take a pulse of the collective wisdom here and do the exact opposite. If you'd followed that strategy in December you'd be sitting on a nice pile of profits right now. If you'd followed their advice and gone into bonds back then...

---

There's been a lot of advice in this thread. I'm not sure what I've done qualifies as advice or just taking the step of publicly laying out my investment convictions. In any case, when I sold equities I bought bonds. The bonds have performed very well, so your comment is not quite on point. I should have named this thread OT - Buying Bonds. I'd look much smarter.

LunchTime said:

---

burritos said:

---

I apologize for sounding like an arsehole, but these disasters are going to drive the market even more correct? There will certainly be more debt. Where that debt lands, I guess who cares. But 1/4 trillion dollars in direct spending on real goods and services to rebuild(as opposed to trading gold and bitcoins) will push upwards revenues and corporate bottom lines right?

---

https://en.wikipedia.org/wiki/Parable_of_the_broken_window

---

The problem with using the strawman of the Parable of the Broken Window is that it assumes that money is all used equally. If money that would have sat in a bank collecting 1% interest is suddenly moved into action employing somebody to fix a window, then that will certainly grow the economy.

Whether that applies to the hurricanes I don't know. There seems to be lots of destruction and that will negatively impact business. I do know contractors that speak of the glory days post Hurricane Sandy, so I guess it all depends on which side of the ledger you are on.

OdontoBear66 said:

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calbear93 said:

---

OdontoBear66 said:

---

ibhoagiesforlife said:

---

I'm still 95% invested in the market. I was tempted to move it around the election but just decided to ride it out and see what happened. So glad I did.

I haven't really invested new money in the market. I rebalanced earlier this year and have been accumulating cash since then.

Don't plan on selling anytime soon. I think this market still has room to run, though certainly not as aggressive as earlier in the year.

---

Depending on your age, it could be an excellent strategy. Over 15+ year periods and especially the longer you go over that, there is rarely a period that you would not come out ahead....Now, if you are a couple years from retirement, that could be a different story.

---

Agreed. The bigger risk for people who are still young is being too conservative and not having enough to retire. If you are closer to retirement, you would want to (1) hopefully have enough capital at that point and (2) protect that capital while still investing a portion in equity.

---

And an excellent website for all ages is that of Paul Merriman who someone on this website (I believe it was dajo) put me on to. By looking at all his historical charting you can pretty much figure what your weighting should be at each age, based on historical returns. Then factor in your own risk/reward assessment and you can figure right where you should be invested to gain certain returns.

---

I hope I am within 10 years of retirement. If my gains in being 80%+ in equities until now get wiped out, that won't be true, so I dialed back to 55% as long as PE ratios stay this high. If the market keeps right on growing, I'll make my goal. If the market takes an over-correction, then I have to decide when to dial back up again -- that could be the toughest decision I have to make.

burritos said:

---

Do we all silently agree that there is going to be correction? Or is there people here in the camp of "This time it's REALLY different".

---

Absolutely agree there is going to be a correction. But, what is scary I felt exactly this way two years ago, one year ago. This time is NO different, but what will bring it down this time.

One factor that may continue it up for a while besides no NoKo to date, is the feeling that there will be some form of tax reform couple with the Fed staying the course. How long? Anyone's guess. But, I would still have "some" chips in the game, with a lot of dry powder. Time to take a little less profit in good times, to assure a little less loss when it turns.

Well with some re-allocations I made a few months back, plus everybody calming down about North Korea, I am up over 10% YTD, how's everybody else doing?

Sorry, quarterly bump. Keep throwing money into this thing? Allocation is skewed and rebalancing model is having me put all new contributions into bonds/even sell equity positions to bring the balance in alignment. Hate it when I can't do equities. Ignore and be greedy?

burritos said:

---

Sorry, quarterly bump. Keep throwing money into this thing? Allocation is skewed and rebalancing model is having me put all new contributions into bonds/even sell equity positions to bring the balance in alignment. Hate it when I can't do equities. Ignore and be greedy?

---

stay away from bonds.....unless less than 2 years...

Goobear said:

---

burritos said:

---

Sorry, quarterly bump. Keep throwing money into this thing? Allocation is skewed and rebalancing model is having me put all new contributions into bonds/even sell equity positions to bring the balance in alignment. Hate it when I can't do equities. Ignore and be greedy?

---

stay away from bonds.....unless less than 2 years...

---

What then, instead?

dajo9 said:

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sp4149;842778712 said:

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How economics have changed, massive deficit spending has always triggered inflation.

---

This statement is just false. I don't know how you define "massive" but we have had major deficit increases during WWII, the 1980s/early 1990s, and after the Great Recession - none of which resulted in consumer inflation. Consumer inflation happens when there is too much money in the system AND that money finds its way to consumers. There is currently no mechanism for the 2nd part of that equation to happen. We will be left with asset inflation (which means lower rates).

sp4149;842778712 said:

---

I noticed Trump saying recently that we are going to build a wall along our borderS (as part of his
victory tour and in response to earlier comments of maybe a fence or something less than a wall,
basically what we already have). We have two borders; previously I thought he was merely talking
about our Mexican border; which has a real long water boundary and would require a dam not a wall.
But now, if you can believe his words, he is really also talking about the Canadian border; maybe he told
Canada that Mexico would pay for that border.

And a couple of trillion in unfunded infrastructure improvements will really help build the deficit.

---

I have bolded above the key issue I have with what you write above. I have no interest in what Trump says. I follow what he does. More importantly, I follow what Congress is doing since all legislation will come from them. To me, it appears they will pass large tax cuts which will build the deficit and lead to more asset inflation (risk on - good for equities / risk off - good for bonds which means lower rates).

Congress appears to have no interest in infrastructure spending, which is the one action that could trigger inflation by driving up employment and wages. I would support this, but I am a Keynesian liberal. Congress is not.

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If you believe that we have asset inflation, with no other outlet for spending, then equities are the right call (and the reason why bonds have taken a hit and equities are doing well. I do not currently see where that changes. Until bonds become attractive, there is no where else to put your money.

The biggest issue and the reason why equities at least this year will continue to perform well is that people expect the GIANT CORPORATE TAX CUT to help out companies. Is Apple going to give $30 per share back? Wells Fargo is going to get an additional billion dollars in earnings....after increasing salaries to their employees. I means, this is a big bonus to the corporations. And so we are seeing an asset increase in not only Americans voting with their dollars but international money coming in to prop up the market. When that changes, that is when you start to sell your equities.

This is all just an auction, and if you have no where else to go, then the prices keep going up. People are comparing the PE ratio at 15-17 range. But during that historical time, the 10 year bond yield was at 4.5%, not 2.4%. And the Fed Funds rate was at 4%, not 0%. So it turns out that the only place to keep money is in the market right now. So people are pricing in the increase in the funds rate, but that is only 75 bps next year. Compare that to the new inflow of profit from the tax deal and maybe that is a wash.

I imagine sometime this will shake out but I do not think it is right now.

Big C said:

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Goobear said:

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burritos said:

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Sorry, quarterly bump. Keep throwing money into this thing? Allocation is skewed and rebalancing model is having me put all new contributions into bonds/even sell equity positions to bring the balance in alignment. Hate it when I can't do equities. Ignore and be greedy?

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stay away from bonds.....unless less than 2 years...

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What then, instead

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Don't worry about it. Use your asset allocation and may be some gold...short term bonds are fine too

Anytime you want to move this to the OT board would be just fine.

Yogi Bear said:

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Anytime you want to move this to the OT board would be just fine.

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Yogi, you are such a purist. I consider the OT board my private playground because as NYCB pointed out, "No one reads that board."

bearister said:

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Yogi Bear said:

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Anytime you want to move this to the OT board would be just fine.

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Yogi, you are such a purist. I consider the OT board my private playground because as NYCB pointed out, "No one reads that board."

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I read everything you post on every board.

Yogi Bear said:

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Anytime you want to move this to the OT board would be just fine.

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If the top one thousand or so Cal fans maximize their wealth, some of that's GOTTA trickle down, no? Heck, maybe I even go "premium"!

bearister said:

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Yogi Bear said:

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Anytime you want to move this to the OT board would be just fine.

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Yogi, you are such a purist. I consider the OT board my private playground because as NYCB pointed out, "No one reads that board."

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Curmudgeon would be more apt. The arguably off topic threads do yogi no harm, yet he harps on moving them. Unless its an off topic thread he likes, in which case, he posts in it and say nothing.

BearGoggles said:

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bearister said:

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Yogi Bear said:

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Anytime you want to move this to the OT board would be just fine.

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Yogi, you are such a purist. I consider the OT board my private playground because as NYCB pointed out, "No one reads that board."

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Curmudgeon would be more apt. The arguably off topic threads do yogi no harm, yet he harps on moving them. Unless its an off topic thread he likes, in which case, he posts in it and say nothing.

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Posting OT on regular boards led to my 8 month exile.