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IGotWorms

Is it time to get out of the market?

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Okay first things first, you can’t time the market.

That said, I’m really feeling a strong urge to get out. Stock values are wildly overinflated and now we’ve got the Fed cutting, yes CUTTING, rates.

WTF? I thought the economy was good? Why are we cutting rates then? That’s what you do when things are bad.

And, relatedly, how are we going to cut rates when things are bad, when we’ve already cut them to the bone?

Don't like where this is heading at all. I see a huge bust on the horizon and wonder if it’s time to get into cash.

Also, shed debt. If I was really smart and dedicated, I think I’d sell my house at these wildly inflated prices, pay off all my debt, and rent whilst sitting on a pile of cash.

Anyway, thoughts from the investment geeks?

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Cutting rates has traditionally signaled the market is about to drop.  But, in my mind I seem to remember an initial drop, followed by a big rally, followed by a bigger drop.  Wait for the rally. Or sell now, and buy again after the initial drop.

The rate is it's highest in 10 years, so it's not exactly "cut to the bone".  On the plus side, stocks go down, home values go up.  Housing has been stagnant for a while.

 

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1 minute ago, TimmySmith said:

Cutting rates has traditionally signaled the market is about to drop.  But, in my mind I seem to remember an initial drop, followed by a big rally, followed by a bigger drop.  Wait for the rally. Or sell now, and buy again after the initial drop.

The rate is it's highest in 10 years, so it's not exactly "cut to the bone".  On the plus side, stocks go down, home values go up.  Housing has been stagnant for a while.

 

Only because rates have been at historic lows for ten years running now. This was supposed to be a temporary solution but we’re addicted to it. It’s basically free to borrow money right now so where in the hell could we go from here?

I’m telling you, this is not good.

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2 minutes ago, IGotWorms said:

Only because rates have been at historic lows for ten years running now. This was supposed to be a temporary solution but we’re addicted to it. It’s basically free to borrow money right now so where in the hell could we go from here?

I’m telling you, this is not good.

 

I agree, I created a thread last week about fed interest rates, although posters here did not take it seriously. They only want to talk about social issues and not economic or commercial issues.

 

We need to raise rates now or else we will not be able to cut rates in the future.

 

As far as getting out of the market, it depends. Retirement savings? Then no leave it in.

 

Short term savings, who knows. We pulled our short term savings out of the market a little while ago, and my wife likes to remind me of this fact. We are not going back in until the crash though.

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Just now, MTSkiBum said:

 

I agree, I created a thread last week about fed interest rates, although posters here did not take it seriously. They only want to talk about social issues and not economic or commercial issues.

 

We need to raise rates now or else we will not be able to cut rates in the future.

I’ll check it out 👍🏻

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4 minutes ago, IGotWorms said:

Only because rates have been at historic lows for ten years running now. This was supposed to be a temporary solution but we’re addicted to it. It’s basically free to borrow money right now so where in the hell could we go from here?

I’m telling you, this is not good.

I hear you.  I have no crystal ball.  However, lowering interest rates while the market is flying, seems better than lowering them when the market is toast. 

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I'm thinking of pulling out a majority of my money but have not done it yet.  With the Fed lowering interest rates and an eventual end to the trade war with Gina, we could see another 10% run up in the market before it crashes.  

 

Note:  I am not an investment/broker but I did stay at a Holliday Inn a few times. 

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So MtSkiBum, that’s interesting that we’re both concerned about the rate cut but for different reasons.

You think it’s a bad idea because it’s unnecessary since the economy is doing well.

I think it’s a bad sign because the only way it makes sense is if the economy is doing far worse than we realize, or heading for a precipice.

Yield curve is inverted and several other traditional indicators are flashing recession. Frankly I think we’re already in one but don’t know it yet. Only very good sign is unemployment rate but that can change very quickly. If that starts going up I’m getting the eff out. Yes retirement too though yes that may be a bad idea.

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If you're under 50 and not a "day trader" then I don't get why people try to read the market.  Stay diversified and keep plugging away.

ETA:  It is interesting to talk about though.....

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The Dow Transports have not recovered for the Dec drop. The Russel 2000 also has not recovered. WHY??? The S&P and NAZ are powered by just a few companies (AMZN, FB, GOOG, NFLX, MSFT, etc). Everything falls in a recession. Those wont be immune to a sell off. 

Part of the problem is mom and pop investor is still holding out but just recently started jumping in due to FOMO. (fear of missing out). That could give us a melt up. Then a melt down once the institutions feel its time. That's why I simply jump in and back out between funds and a money market.

On the other hand people are too stupid to hire. Recessions require layoffs. In the previous recessions, companies used the recession to lay off high priced employees. How do you do that now when you will be hard pressed to find anyone competent to replace them? 

Another problem is that companies are lowering guidance without being punished. So the next quarterly earnings report becomes a good report. Never seen that before. Usually they get whacked when they lower guidance.

There is no reason to cut rates. They should not cut them.

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49 minutes ago, IGotWorms said:

 

That said, I’m really feeling a strong urge to get out. Stock values are wildly overinflated and now we’ve got the Fed cutting, yes CUTTING, rates.

 

 

If you get out, are you getting out for good? 
If "No", then when you get out, when ya thinking of getting back in? 

 

Nov 1992 - 3,200
Jan 1997 - 6,500
Oct 2007 - 14,000
March 2009 - 6,500
Jan 2013 - 14,000
July 2019 - 27,000

 

--If the market falls, and your investment drops by 50%, you now need a 100% gain to just to get back to where you were.

How many do ya suppose got out in 2008 or 2009 when market was 6,500-7,500 or so, and said "what a crock of sh@t, and vowed never to get in again?  How are they sitting now? Or lets say if they did get back in when they felt "safe", like maybe January 2013 or after, they lost the chance to (basically) double their money between 2009 and 2013. 

or

Got in the market in 2006 or 2007 at 13,000 or 14,000, saw it fall to 6,500 or 7,500,  hung back in til market hit 13,000 or 14,000 they saw their investment "recouped" then felt "lucky to get it back" so they got out?   Had they just stayed in 6 more years, they'd have essentially doubled it again.

 

Its easier, much easier to scare people out stocks than vice versa.  

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I would definitely get back in but your point is still well-taken. It is a bad idea to try to time the markets. I won’t be waiting for the perfect time but just trying to avoid the brunt of the 10,000 loss in the DOW.

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Cryptocurrency is the answer

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You answered your own question in the first sentence.

You cannot time the market.

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20 minutes ago, IGotWorms said:

I would definitely get back in but your point is still well-taken. It is a bad idea to try to time the markets. I won’t be waiting for the perfect time but just trying to avoid the brunt of the 10,000 loss in the DOW.

 

It sounds like you are saying you know you shouldn't time the market, but yet you are gonna try to time to the market?   What's your strategy in timing it?  When out? When back in? 

Earlier, was trying to make both points.  The part about your investment falling by 50%, and you then needing a 100% gain to get back where you were, is true, but there is nothing anyone could to avoid it.

L0DO1 mentioned a melt up.   in I recently watched a video on a "melt up" that some think is coming.  I know...some think a melt down is coming too. 


Basically, they predicted a melt up because a lot of money is on the sidelines, in cash.  "They" can see this.  The info is available.    The dude on the video said a "melt down" occurs when there is little money on the sidelines.  A melt up occurs when there is a lot of money on the sidelines, and it starts being injected into the market at a fast pace at the fear of missing out. The video was sort of a promotional video, trying to sell you on their subscription, but I thought the melt up theory made sense.  
 

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13 minutes ago, edjr said:

Cryptocurrency is the answer

Magic the gathering.

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3 minutes ago, tubby_mcgee said:

 

It sounds like you are saying you know you shouldn't time the market, but yet you are gonna try to time to the market?   What's your strategy in timing it?  When out? When back in? 

Earlier, was trying to make both points.  The part about your investment falling by 50%, and you then needing a 100% gain to get back where you were, is true, but there is nothing anyone could to avoid it.

L0DO1 mentioned a melt up.   in I recently watched a video on a "melt up" that some think is coming.  I know...some think a melt down is coming too. 


Basically, they predicted a melt up because a lot of money is on the sidelines, in cash.  "They" can see this.  The info is available.    The dude on the video said a "melt down" occurs when there is little money on the sidelines.  A melt up occurs when there is a lot of money on the sidelines, and it starts being injected into the market at a fast pace at the fear of missing out. The video was sort of a promotional video, trying to sell you on their subscription, but I thought the melt up theory made sense.  
 

The theory makes total sense. I remember being in the 2000 bubble melt up. The day before it popped, I made 20% in a day on a handful of stocks. I extrapolated the melt up data over time from 10/1999 to the day before the bubble burst and came out that I would have about $4.5 BILLION in a few years. :lol: WTF was I thinking staying in the market??? When you look a the max chart on it now, you can only laugh.

The same holds true right now. Extrapolate the current run from 2009. It's unsustainable. Something will give and give badly at some point soon. Look at the NAZ chart in yahoo at max timeline. On the other hand, there's no where else to put $. This is something we have never seen before. I believe a meltdown will just be a manufactured one to steal $ from those putting $ in now.

Also, when a meltdown starts, always KEEP AN EYE ON THE ^VIX. When it spikes, if you are out, get in. You can't hit the peak but that doesn't matter.

I like this link: https://money.cnn.com/data/fear-and-greed/

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Housing market is due for a yooge pop as well

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8 minutes ago, edjr said:

Housing market is due for a yooge pop as well

 

Depends where you are at, our house is worth the same as it was when we bought it 8 years ago and is almost the same as what it was even after the housing crash.

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4 minutes ago, MTSkiBum said:

Depends where you are at, our house is worth the same as it was when we bought it 8 years ago and is almost the same as what it was even after the housing crash.

Agree.  A decent house in a decent neighborhood that is nowhere near the top of the area should be totally safe.  My house maybe recovered 20% since the crash, which is still 20% less than peak.  Houses 1/2 mile away have doubled in 10 years, nearly back to peak. Those are the ones that should be a bit worried.

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8 minutes ago, MTSkiBum said:

 

Depends where you are at, our house is worth the same as it was when we bought it 8 years ago and is almost the same as what it was even after the housing crash.

I'm on the ocean 45 minutes from Boston.  Prices have skyrocketed in the pas 5 years

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1 hour ago, Cdub100 said:

You answered your own question in the first sentence.

You cannot time the market.

Can't stand when people take this hard line stance or answer... 

Most people are smart enough to realize you can't time the market perfect.... no shiit.... you CAN however use market trends and current due diligence and get out of stocks before a large crash or even as one is beginning. You can minimize losses to your current net gains and park your money in a safe vehicle until the eventual rebound begins (because it always has and always will).... not only will you save yourself money now , but you'll create a great buying opportunity down the road.

It's not about timing the market as much as it is moving your money in a smart manner when needed.

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10 minutes ago, edjr said:

I'm on the ocean 45 minutes from Boston.  Prices have skyrocketed in the pas 5 years

 

Those are the downsides, but what are the positives that is causing the housing market to increase?

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2 minutes ago, MTSkiBum said:

 

Those are the downsides, but what are the positives that is causing the housing market to increase?

People are retarded

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5 hours ago, WhiteWonder said:

Can't stand when people take this hard line stance or answer... 

Most people are smart enough to realize you can't time the market perfect.... no shiit.... you CAN however use market trends and current due diligence and get out of stocks before a large crash or even as one is beginning. You can minimize losses to your current net gains and park your money in a safe vehicle until the eventual rebound begins (because it always has and always will).... not only will you save yourself money now , but you'll create a great buying opportunity down the road.

It's not about timing the market as much as it is moving your money in a smart manner when needed.

No you can't. Nobody knows if it's a large crash or a short drop. It's silly to think you can beat Wall Street. If you could predict a huge crash and when it would rebound you wouldnt be posting on a low rent message board.

 

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Buy low, sell high

 

I think it sort of matters how much you have now and where it is.  If you are heavily into the market, then you have a high risk profile right now.  If you have some cash on the sideline, managing your debt and you have other areas where money is (real estate, bonds, etc.), then you will be fine.  The big question if you get out of the market now is where are you going to put that money? If they economy does bad, then there aren't many options. 

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It's true, generally speaking, that people who pulled out in 2008 would have been rewarded over the last few years if they stayed in, right? Someone was showing me a graph of general stock market ROI since '00 and that appeared to be the case.

Pardon my uber basic questions.

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6 hours ago, edjr said:

Housing market is due for a yooge pop as well

Oh god, I hope so. I wanna buy a house!

....and Amazon stock. Is it falling?

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7 hours ago, tubby_mcgee said:

 

If you get out, are you getting out for good? 
If "No", then when you get out, when ya thinking of getting back in? 

 

Nov 1992 - 3,200
Jan 1997 - 6,500
Oct 2007 - 14,000
March 2009 - 6,500
Jan 2013 - 14,000
July 2019 - 27,000

 

--If the market falls, and your investment drops by 50%, you now need a 100% gain to just to get back to where you were.

How many do ya suppose got out in 2008 or 2009 when market was 6,500-7,500 or so, and said "what a crock of sh@t, and vowed never to get in again?  How are they sitting now? Or lets say if they did get back in when they felt "safe", like maybe January 2013 or after, they lost the chance to (basically) double their money between 2009 and 2013. 

or

Got in the market in 2006 or 2007 at 13,000 or 14,000, saw it fall to 6,500 or 7,500,  hung back in til market hit 13,000 or 14,000 they saw their investment "recouped" then felt "lucky to get it back" so they got out?   Had they just stayed in 6 more years, they'd have essentially doubled it again.

 

Its easier, much easier to scare people out stocks than vice versa.  

My rule of thumb... avoid Democrat control.  I got into the market in 2000 and got out when Obama won.  After the GOP took over the HoR and SEN in 2010, I got back in.  I'm hanging in until the 2020 election.  If the Dems keep the HoR and win the SEN and WH, I'll get out again and wait to reassess in 2022.

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6 minutes ago, TBayXXXVII said:

My rule of thumb... avoid Democrat control.  I got into the market in 2000 and got out when Obama won.  After the GOP took over the HoR and SEN in 2010, I got back in.  I'm hanging in until the 2020 election.  If the Dems keep the HoR and win the SEN and WH, I'll get out again and wait to reassess in 2022.

This is awesome. I remember Mark Cuban telling everyone who would listen that if Trump won, he would instantly pull all of his money out of his stock investments. I hope he did.

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1 minute ago, sderk said:

This is awesome. I remember Mark Cuban telling everyone who would listen that if Trump won, he would instantly pull all of his money out of his stock investments. I hope he did.

It's why you shouldn't make important decisions on emotion instead of logic.

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Just now, TBayXXXVII said:

It's why you shouldn't make important decisions on emotion instead of logic.

And isn't it interesting that, the nearly entire liberal population makes all of their decisions based on emotion INSTEAD of logic.   

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1 minute ago, TBayXXXVII said:

It's why you shouldn't make important decisions on emotion instead of logic.

bingo. It's similar to gambling in that respect.

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But the market crashed before Obama was elected.

October 2008 Stock Market Crash. Although history may state the actual market crash occurred on Monday, October 6th, the market experienced eight consecutive trading days of negative movement starting on October 1, 2008.

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There is absolutely NO sign of a major market top here.  Could there be another small correction? Sure.   But it would be a buying opportunity.  

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4 minutes ago, tubby_mcgee said:

And isn't it interesting that, the nearly entire liberal population makes all of their decisions based on emotion INSTEAD of logic.   

Emotion is their current sales pitch. 

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8 minutes ago, Baker Boy said:

But the market crashed before Obama was elected.

October 2008 Stock Market Crash. Although history may state the actual market crash occurred on Monday, October 6th, the market experienced eight consecutive trading days of negative movement starting on October 1, 2008.

Bush focked everything up when he was in office. The markets lost $ over his 8 years. The retard couldn't see a housing bubble that was the most obvious bubble in the history of bubbles. Worst performance by any president since Nixon. Dude was a worthless pile of sh1t. The only good thing was that it was obvious that it was one of the investments opps of a lifetime if you started pouring $ into the markets in 2009.

 

8 minutes ago, riversco said:

There is absolutely NO sign of a major market top here.  Could there be another small correction? Sure.   But it would be a buying opportunity.  

When markets crash, they don't normally crash for obvious reasons. I do agree that any selloff will be short lived because I can't see any sort of large scale recession and that is because people are too stupid. Go figure that. The increase in stupid people is actually preventing a recession. You can't lay off a good worker because all you get later is a retard that can't get the job done.

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