# When Do You Think We Will Have the Next Economic Recession?



## TravelTime (Aug 23, 2018)

https://www.pbs.org/newshour/econom...ry-means-for-the-economy-and-your-investments

The stock market is having its longest bull run in history. Housing prices are maxing out in many markets. Unemployment is low. Inflation is creeping up. This party can’t last forvever. When do you think we will have the next recession? Do you predict a correction or a true recession? How do you think this will affect timeshare prices and maintenance fees?


----------



## breezez (Aug 23, 2018)

In the short term next 2 years I think things will be fine, but may slow a little. Long term we are going to be like other countries of the world with currency devaluations if we can’t get our debt under control, both funded and un-funded liabilities.

I see a couple near term scary things coming.

1) Housing loans are starting to go again to people with minimal means to pay them.

2) Average vehicle loan for items like trucks pushing north of $700.  With people financing vehicles up to 84 months.   Almost 35% of vehicle loans are sub prime, with interest rates above 16%

3) Stocks of many of the big names are trading at crazy multiples up to a few hundred times earnings.

These things are not sustainable and will create problems sometime within next decade I feel.

Long term, 

4 in 10 people get disability before reaching social security retirement age, further depleting social security funds.  people are not saving as they should for retirement, company pensions are dwindling and I fell many people 40 and younger failing to save enough thus they are not getting  the effect of compounding.  This is going to create a huge drag on economy when they want to retire and can’t but one day physically can’t work either.


----------



## Talent312 (Aug 23, 2018)

Two more things:
(1) As higher tariffs kick in, products we buy everyday will go up in price.
(B) The Fed, not seeing the forest thru the trees, will continue tightening.
These things will ultimately choke the economy, tax-cuts notwithstanding.

IMHO, the party will end in about 18-30 months, but it won't be a dramatic correction, just a slowly grinding to a stop which may not even be noticed as such until one day the bad economic news (which is backward looking) cannot be ignored.

I plan to start lightening up on equities and move more into fixed-income over the next 12-18 months.
YMMV.


----------



## Bucky (Aug 23, 2018)

Soon. Don’t look now but housing prices have started dropping in CA again. This was the beginning of the last one that really shifted into high speed in 2008 and didn’t bottom until 2012. From personal observations trends seem to start n the West and move Eastward!


----------



## TravelTime (Aug 23, 2018)

Parts of California’s housing market has still not recovered from the last recession. Luxury condos and coops in NYC are falling too.


----------



## Brett (Aug 23, 2018)

Talent312 said:


> Two more things:
> (1) As higher tariffs kick in, products we buy everyday will go up in price.
> (B) The Fed, not seeing the forest thru the trees, will continue tightening.
> These things will ultimately choke the economy, tax-cuts notwithstanding.
> ...



Yesterday the WSJ mentioned the same, increasing tariffs and/or interest rates noting that a significant portion of the increased valuations are from a few stocks in the technology sector like Apple, Amazon, Facebook, etc  

"with the Federal Reserve gradually raising interest rates and unwinding a decade of easy-money policies enacted after the crisis, many investors believe shares trading at highprice/earnings multiples — as many of the largest tech stocks are — will prove vulnerable to a reassessment of future return prospects"

And just this morning there was interview with a certain politician that said if he's voted out of office "the stock market would crash and everyone would be very very poor"


----------



## bogey21 (Aug 23, 2018)

breezez said:


> Long term we are going to be like other countries of the world with currency devaluations if we can’t get our debt under control, both funded and un-funded liabilities...



IMO things will fall apart when (not if) interest rates rise dramatically increasing the cost of carrying the huge National Debt...

I hope I am wrong but own a bunch of gold and silver coins as insurance...

George


----------



## Ironwood (Aug 23, 2018)

Recession is when a neighbor loses his job. Depression is when you lose yours. – Harry S. Truman


----------



## DavidnRobin (Aug 23, 2018)

Nine of the ten economic recessions since 1953, when Dwight D. Eisenhower became President, have come under Republican Presidents as follows:

July 1953 to May 1954–Eisenhower

August 1957 to April 1958–Eisenhower

April 1960 to February 1961–Eisenhower

December 1969 to November 1970–Nixon

November 1973 to March 1975–Nixon/Ford

January 1980 to July 1980–Carter (Democrat)

July 1981-November 1982–Reagan

July 1990-March 1991—HW Bush

March 2001-November 2001–W Bush

December 2007-June 2009–W Bush/Obama–last five months under Democrat


Sent from my iPhone using Tapatalk


----------



## CalGalTraveler (Aug 23, 2018)

After the midterms. The sugar high from the tax reform will have worn off for corporations and they will have to earn revenue and profits the old fashioned way.


----------



## TravelTime (Aug 23, 2018)

DavidnRobin said:


> Nine of the ten economic recessions since 1953, when Dwight D. Eisenhower became President, have come under Republican Presidents as follows:
> 
> July 1953 to May 1954–Eisenhower
> 
> ...



Interesting data!


----------



## CO skier (Aug 23, 2018)

DavidnRobin said:


> Nine of the ten economic recessions since 1953, when Dwight D. Eisenhower became President, have come under Republican Presidents as follows:
> 
> July 1953 to May 1954–Eisenhower
> 
> ...


At one point in time, the Super Bowl Indicator had a 90% success rate correctly "predicting" positive or negative stock market returns for the year 28 out of 31 times.

Coincidences can be amazing.

Recessions are part of the boom and bust economic cycle, not any political cycle.

I recently traded 90% of my stock holdings for short terms bond funds, at what has so far been the stock market highs for this cycle, due to a number of reasons that have nothing to do with politics.  Tax deferred accounts and Exchange Traded Funds make this easy and economical to do.  Plus, I have no idea when the next recession will arrive.  Nothing grows to the sky.

Now I watch the tape, not the TV.  If the markets exceed the recent highs by 4%, that will my indicator that the market risk is not what I think it is, and I will buy back in.


----------



## DavidnRobin (Aug 23, 2018)

CalGalTraveler said:


> After the midterms. The sugar high from the tax reform will have worn off for corporations and they will have to earn revenue and profits the old fashioned way.



Including the increase in our deficit - that iirc is >$1 trillion over the last year alone.


Sent from my iPhone using Tapatalk


----------



## DavidnRobin (Aug 23, 2018)

CO skier said:


> At one point in time, the Super Bowl Indicator had a 90% success rate correctly "predicting" positive or negative stock market returns for the year 28 out of 31 times.
> 
> Coincidences can be amazing.
> 
> ...



Actually it goes back to Teddy Roosevelt (1909) - but didn’t have the years of those...

Now to protect from inflation due to recent policies (e.g. tariffs)


Sent from my iPhone using Tapatalk


----------



## DavidnRobin (Aug 23, 2018)

TravelTime said:


> Parts of California’s housing market has still not recovered from the last recession. Luxury condos and coops in NYC are falling too.



Prices in SF Bay Area have continued to climb based on a report today.

We have just put our house on the Market (SF Peninsula). Ranch style - 3Bd/2Ba - 2000sqft... (basic home) listed at $1.8M (as is).

Now fingers-crossed no economic downturn or major earthquake in the next month.

I personally think the affordability index has been reached for our area. 
Of course they have been saying this since the 1970s...


Sent from my iPhone using Tapatalk


----------



## CalGalTraveler (Aug 23, 2018)

Prices have increased dramatically in our area (SF East Bay Tri-Valley) as well. Primarily because it has become an extension of the Silicon Valley and an influx of buyers from Asia.

The rise in interest rates will cool this trend somewhat.


----------



## Ralph Sir Edward (Aug 23, 2018)

Personally, not soon enough. I'm locked and loaded for the next bear market. My best guess would be early next year. Watch the unemployment numbers. When they break 300,000 a week on the up side, that means "show time!".

(I'm only a vulture on my dad's side. . . . )


----------



## CO skier (Aug 23, 2018)

DavidnRobin said:


> Actually it goes back to Teddy Roosevelt (1909) - but didn’t have the years of those...
> 
> Now to protect from inflation due to recent policies (e.g. tariffs)


There is also this political, economic coincidence

https://www.forbes.com/sites/peterl...-is-better-for-the-stock-market/#1ac9145f239d


----------



## dsmrp (Aug 23, 2018)

DH has a lot of his retirement in his company's stock. 
I told him last year he should cash out a third of it, but he didn't have time to do it (never does )
and it kept going up and up.  He knows it won't go up forever and an adjustment will be coming,
but he still hasn't gotten around to it...and then it will drop... sigh

Last year I started putting a larger percentage of my supplemental retirement contributions into
intermediate and long-term bond funds, but those kept losing value compared to what I put in,
cause interest rates didn't rise as much as I expected.  We're both not great at predicting the market


----------



## dioxide45 (Aug 23, 2018)

dsmrp said:


> Last year I started putting a larger percentage of my supplemental retirement contributions into
> intermediate and long-term bond funds, but those kept losing value compared to what I put in,
> cause interest rates didn't rise as much as I expected. We're both not great at predicting the market


I thought as interest rates rise, bonds lose value? This is because bond funds are priced based on the value of the bonds owned by the fund if they were sold, not what their maturity value is. If you are buying and selling bonds, a rising rate environment is bad. If it is buy and hold, you really should be buying individual bonds and not investing in a bond fund.


----------



## Talent312 (Aug 23, 2018)

dioxide45 said:


> If you are buying and selling bonds, a rising rate environment is bad. If it is buy and hold, you really should be buying individual bonds and not investing in a bond fund.



Nearly all of my bond $$ is in individual bonds, because at maturity,
regardless of interim values, you can count on getting face value.


----------



## TravelTime (Aug 23, 2018)

DavidnRobin said:


> Prices in SF Bay Area have continued to climb based on a report today.
> 
> We have just put our house on the Market (SF Peninsula). Ranch style - 3Bd/2Ba - 2000sqft... (basic home) listed at $1.8M (as is).
> 
> ...



The Bay Area has continued to climb but places in more suburban/rural areas, even many places in Lake Tahoe at the ski resorts, are still below 2006 peak prices.


----------



## DavidnRobin (Aug 23, 2018)

TravelTime said:


> The Bay Area has continued to climb but places in more suburban/rural areas, even many places in Lake Tahoe at the ski resorts, are still below 2006 peak prices.



I am using the old adage of taking money off the table.  Same with our equities - moving again to a larger cash position once again.

Of course - we are moving (renting) into the belly of the beast - Mountain View!
LOL


Sent from my iPhone using Tapatalk


----------



## VacationForever (Aug 23, 2018)

I know that I don't want to sweat over ups and downs of the market by shifting the risk to an insurance company.  I know what I will be getting every year for the next 25 years starting in 4 years' time. The rest of my portfolio will continue to be invested and hopefully after 29 years, if I need the money it will be a good chunk of change.  A no stress retirement is a good retirement.


----------



## Fredflintstone (Aug 23, 2018)

CalGalTraveler said:


> Prices have increased dramatically in our area (SF East Bay Tri-Valley) as well. Primarily because it has become an extension of the Silicon Valley and an influx of buyers from Asia.
> 
> The rise in interest rates will cool this trend somewhat.



I feel truly sorry for the younger generation. Gee, only 25 or less years ago a young couple could buy a house in San Fran or Seattle or Vancouver....Now, at 1.8 million and up they can kiss that dream out of the window. Not everyone can get a 150 k a year job or qualify for a million plus mortgage.

Sigh, maybe dad was right.

He said

1. In his generation expect a house and a recreation property
2. My generation gets a house
3. My kids MIGHT get a house
4. My grand kids....maybe a townhouse or condo
5. Great grand kids...probably rent.


Sent from my iPad using Tapatalk


----------



## Fredflintstone (Aug 23, 2018)

Ralph Sir Edward said:


> Personally, not soon enough. I'm locked and loaded for the next bear market. My best guess would be early next year. Watch the unemployment numbers. When they break 300,000 a week on the up side, that means "show time!".
> 
> (I'm only a vulture on my dad's side. . . . )



Ralph, you make a good point. Even in depression someone is getting rich if they are in the right things.


Sent from my iPad using Tapatalk


----------



## CalGalTraveler (Aug 23, 2018)

I am setting aside some $ now for the next downturn to buy a premium Ocean Front timeshare in HI for pennies on the dollar because the market will be flush with them as people will panic and dump. And hotel brands will not have enough ROFR cash to take them back. Their loss is our gain!


----------



## billymach4 (Aug 23, 2018)

Why are you all speculating?

History has proven that you can't time the market.


----------



## Egret1986 (Aug 23, 2018)

dsmrp said:


> DH has a lot of his retirement in his company's stock.
> I told him last year he should cash out a third of it, but he didn't have time to do it (never does )
> and it kept going up and up.  He knows it won't go up forever and an adjustment will be coming,
> but he still hasn't gotten around to it...and then it will drop... sigh



Stay on him and don't let up.  

Everyone finds the time to do what they want to do.     Find out why he's so against doing this.


----------



## HitchHiker71 (Aug 23, 2018)

billymach4 said:


> Why are you all speculating?
> 
> History has proven that you can't time the market.



There are leading market indicators that have historically predicted recessions with 90% accuracy, they are simply not widely reported.  I used these indicators along with market research to time the Great Recession in 2007/2008.  I lost 5% while I watched most everyone else  lose 50% or more.  The rich time the markets persistently - that’s why they get richer persistently - or they pay hedge fund managers to do it for them in most cases.  

The markets want ordinary people to believe market timing is not possible because someone has to take the losing bets to allow others to win.  Not saying it’s easy, takes a lot of research and effort, but it is possible.  


Sent from my iPhone using Tapatalk


----------



## bluehende (Aug 23, 2018)

dsmrp said:


> DH has a lot of his retirement in his company's stock.
> I told him last year he should cash out a third of it, but he didn't have time to do it (never does )
> and it kept going up and up.  He knows it won't go up forever and an adjustment will be coming,
> but he still hasn't gotten around to it...and then it will drop... sigh
> ...



Learn the lessons from enron and sound financial planning.  Never have your retirement plan in your company stock.  If the company goes down you not only lose your job but your savings.  That kind of risk is irresponsible.


----------



## HitchHiker71 (Aug 23, 2018)

Fredflintstone said:


> I feel truly sorry for the younger generation. Gee, only 25 or less years ago a young couple could buy a house in San Fran or Seattle or Vancouver....Now, at 1.8 million and up they can kiss that dream out of the window. Not everyone can get a 150 k a year job or qualify for a million plus mortgage.
> 
> Sigh, maybe dad was right.
> 
> ...



Agreed.  It’s painful watching my kids struggle financially due to loss of purchasing power.  My 23 year old daughter is making 17/hour 1099, no benefits (fortunately she can stay on our healthcare until 26).  My 21 year old son was making 12/hour at Fastenal until his 1st summer internship that I facilitated for him at 20/hour.  My youngest 18 year old is taking a gap year and is making 13-14/hour at Walmart as a customer service manager.  This is 2018.  I made 13-15/hour working part time at a bank in 1993 while attending college.  25 years ago.  That money in 1994 went a heckuva lot farther than that same hourly rate does now when everything is at least three times as costly (food, real estate, education, fuel, cars, basically everything that’s important).  There are very serious structural imbalances in our economy, just like in 2007.  We have resolved precious few of the core issues that caused the Great Recession in the first place.  The next adjustment will therefore likely be more than just a cyclical recession.  We haven’t learned from our mistakes yet unfortunately.  We have simply kicked the can down the road for as long as we can.


Sent from my iPhone using Tapatalk


----------



## HitchHiker71 (Aug 23, 2018)

DavidnRobin said:


> Nine of the ten economic recessions since 1953, when Dwight D. Eisenhower became President, have come under Republican Presidents as follows:
> 
> July 1953 to May 1954–Eisenhower
> 
> ...



This data is somewhat misleading.  The real reason for almost all recessions since the formation of the Fed mission to target monetary inflation is due to bad monetary policy practices and tightening the money supply too quickly.  Not every instance of the above list fits this case, but in many of the above cases the economy, and particularly inflation was deemed too “hot”, and the Fed hiked rates and the economy stalled in the process.  


Sent from my iPhone using Tapatalk


----------



## bluehende (Aug 23, 2018)

Like many here I believe the next recession will be caused by rising interest rates taking our debt payments out of the economy.  We need to cut our budget deficits not increase them in good times.  If we are guessing mine is 2nd quarter next year is the recession.  My reasoning is the tariffs will slow our economy along with the november elections taking a lot off of the market.  Rising interest rates put us negative 3 to 6 months later.  But my elegant analysis in the past has been right about as many times as throwing a dart.


----------



## dsmrp (Aug 23, 2018)

Egret1986 said:


> Stay on him and don't let up.
> 
> Everyone finds the time to do what they want to do.     Find out why he's so against doing this.



He's not against selling some of the stock....he's just so truly blasted busy at work and short staffed. He feels like he can only make one phone call during his lunch break, if then.
I think he has to research first how to sell it.  The investing part is pretty much automated:  it either comes out of the paycheck,
and possibly more is deposited by company on annual basis per contract.
I will keep on him...I can only remind one thing at a time, otherwise it gets lost among all the other stuff he's hearing


----------



## HitchHiker71 (Aug 23, 2018)

dsmrp said:


> He's not against selling some of the stock....he's just so truly blasted busy at work and short staffed. He feels like he can only make one phone call during his lunch break, if then.
> I think he has to research first how to sell it.  The investing part is pretty much automated:  it either comes out of the paycheck,
> and possibly more is deposited by company on annual basis per contract.
> I will keep on him...I can only remind one thing at a time, otherwise it gets lost among all the other stuff he's hearing



Look into if there is a stop loss option for the company stock investments within his retirement plan.  Especially if you are both older, something along this line is critical to capital preservation.  


Sent from my iPhone using Tapatalk


----------



## HitchHiker71 (Aug 23, 2018)

bluehende said:


> Like many here I believe the next recession will be caused by rising interest rates taking our debt payments out of the economy.  We need to cut our budget deficits not increase them in good times.  If we are guessing mine is 2nd quarter next year is the recession.  My reasoning is the tariffs will slow our economy along with the november elections taking a lot off of the market.  Rising interest rates put us negative 3 to 6 months later.  But my elegant analysis in the past has been right about as many times as throwing a dart.



Our national debt is a HUGE looming problem.  It is exacerbated by the fact that the Treasury has been short cycling an increasingly large portion of the national debt in an effort to decrease interest payments.  Meaning a larger portion of the overall national debt is invested in very short term securities.  So as interest rates rise the service on the debt interest will increase markedly at a time when we can least afford it.  A perfect storm is coming at some point.


Sent from my iPhone using Tapatalk


----------



## billymach4 (Aug 23, 2018)

I know so many people that pulled out after the .com bust in 2001 and the post 9/11 downturn. Same with the 08 recession.  I just stayed course. Same thing for the next bump in the road.


----------



## DavidnRobin (Aug 24, 2018)

billymach4 said:


> I know so many people that pulled out after the .com bust in 2001 and the post 9/11 downturn. Same with the 08 recession.  I just stayed course. Same thing for the next bump in the road.



I was able to retire using this approach.  But, I did increase %equity during downturns. And increased %cash during bull runs.

*****
All economic data can be argued to bend into multiple views.  As it not an exact science.
What I see going on (income equality, tax structures) as a bad sign of things to come.  I hope I am wrong - my personal worry is inflation as we have the future Spend we need for our lifestyle. Glad I have been saving, staying out of debt, and investing.
YMMV


Sent from my iPhone using Tapatalk


----------



## TravelTime (Aug 24, 2018)

HitchHiker71 said:


> There are leading market indicators that have historically predicted recessions with 90% accuracy, they are simply not widely reported.  I used these indicators along with market research to time the Great Recession in 2007/2008.  I lost 5% while I watched most everyone else  lose 50% or more.  The rich time the markets persistently - that’s why they get richer persistently - or they pay hedge fund managers to do it for them in most cases.
> 
> The markets want ordinary people to believe market timing is not possible because someone has to take the losing bets to allow others to win.  Not saying it’s easy, takes a lot of research and effort, but it is possible.
> 
> ...



No one lost anything unless they panicked and sold. I did not care where my portfolio was during the Great Recession. It was just paper losses. So I just kept investing. My DH panicked and stopped investing briefly in 2007 and when I found out, I said don't stop...this is exactly when we need to invest more. When the market falls so dramatically, that is an opportunity. On any given day, our net worth swings dramatically but I have learned not to worry and have faith in basic economics.

Let me modify my comment. If you are not diversified or you have a large percentage of your net worth in one or a few stocks, you are more at risk of losing at not recovering. Then it is not just a paper loss. This is the difference between economic cycles going up and down vs a specific business's fundamentals permanently changing.


----------



## bogey21 (Aug 24, 2018)

dsmrp said:


> DH has a lot of his retirement in his company's stock...



I had a friend who worked for the telephone related company that went belly up a number of years ago.  He lost his job, his pension and a boat load of company stock all in one fell swoop.  Talk about a disaster...

George


----------



## Ralph Sir Edward (Aug 24, 2018)

billymach4 said:


> Why are you all speculating?
> 
> History has proven that you can't time the market.



Actually, you can. It takes knowledge, skill, and (most of all) discipline. In addition, it takes time, because the shorter the time scale, the more random the patterns. The shortest safe pattern to time is the business cycle. it's a solid winner.

You can also make money with the seasonality play, but not as much. You also have to doing some special juggling with it, if you plan to live off the results. Seasonality is an annual play. Best is to combine the two.

On top of all that, there is the structural rhythm to the stock types in the market. You also need to time with the right type of stock for the point in the business cycle.

It's like tracking game. You have to learn the signs, and the tendency of the type of game you're tracking. Not impossible. . .


----------



## bluehende (Aug 24, 2018)

I have always moved slowly and deliberately in my market moves.  My belief is that no one can call the top or the bottom, however you can tell whether you are closer to a top than a bottom.  My moves have always been by feel and move out little bits when I feel we are close to a top and accelerate that as the market continues to move up.  I use a trend line of 8% a year to give me a resistance support line to give it some discipline.  I do the same on the way down.  Right now I am 65% invested which is the lowest I have ever been.  In this cycle I held on a lot longer above old highs and started moving out after the big rise after the election.  Since then I have been moving out every other month or so slowing reducing risk.  This approach has worked to increase my returns slightly.  Of course when the high comes it looks like I am an idiot for pulling out too early and at the bottom I am a genius to have moved money out.  My best guess is I have improved my return by about 15 to 20 percent over the last 30 yrs.  The bad news is that with the latest move I have lost 8% that I would have gained if I had stayed fully invested.  Only the future will tell if my gyrations have actually helped.  I am fascinated by the markets so it is not a chore to stay informed.


----------



## easyrider (Aug 24, 2018)

Bernanke says to expect the next correction around 2020. Other experts say the dow will be between 28,000 and 30,000 before a big correction. 

From what I have noticed regarding corrections is that most people are not really prepared and ride it out. This is fine when time is still on your side. Not a good idea when your over 50, imo. I know many people that didn't retire or had to go back to work in jobs that were very much beneath their skill levels because they lost too much in the last down turn.

Don't get greedy. Invest for your age group. Own something you understand. 

https://www.businessinsider.com/ben...s-to-have-wile-e-coyote-moment-in-2020-2018-6

Bill


----------



## am1 (Aug 24, 2018)

I'm all for the stocks I do not own dropping.  I only own 4.  Mostly invested in other stuff.  No us companies.  

Be careful what you all wish for.


----------



## Egret1986 (Aug 24, 2018)

dsmrp said:


> He's not against selling some of the stock....he's just so truly blasted busy at work and short staffed. He feels like he can only make one phone call during his lunch break, if then.
> I think he has to research first how to sell it.  The investing part is pretty much automated:  it either comes out of the paycheck,
> and possibly more is deposited by company on annual basis per contract.
> I will keep on him...I can only remind one thing at a time, otherwise it gets lost among all the other stuff he's hearing



My DH has the same deal.  Eight hour days have never been an option during his career.  It has gotten worse since he had a forced move into Operations due to the elimination of his department this year.  

My DH has told me this when I've been so overwhelmed by too much to do and not enough time, "How do you eat an elephant? One bite at a time."  Weird....and I wouldn't ever eat an elephant....I hope.....    Anyway, I get the meaning.   It's true.  "I don't have the time" is an excuse.  We all make time for the things that are important to us.  Maybe it's not high on priorities.  Not judging.  

I handle about 80% of our financials.  Our future financial security has always been a priority. I was raised that way.  My DH is so busy with everything else.  I research.  I make the plan, we discuss and I enact the plan.  Whatever is required of him, I remind as necessary to get our goals accomplished.  Yes, I know that at some point it does get lost into "information overload."  But this is so important to your family's future.  What is he working so hard for now if not to build a secure future for your family? 



bluehende said:


> Learn the lessons from enron and sound financial planning.  Never have your retirement plan in your company stock.  If the company goes down you not only lose your job but your savings.  That kind of risk is irresponsible.



 Agreed.  Don't believe that it can't happen to you.  After the fact, it's too late to say "we should have....."




HitchHiker71 said:


> Look into if there is a stop loss option for the company stock investments within his retirement plan.  Especially if you are both older, something along this line is critical to capital preservation.
> 
> Sent from my iPhone using Tapatalk



Key word, "critical".




bogey21 said:


> I had a friend who worked for the telephone related company that went belly up a number of years ago.  He lost his job, his pension and a boat load of company stock all in one fell swoop.  Talk about a disaster...
> 
> George



Think about that.


----------



## billymach4 (Aug 24, 2018)

Ralph Sir Edward said:


> Actually, you can. It takes knowledge, skill, and (most of all) discipline. In addition, it takes time, because the shorter the time scale, the more random the patterns. The shortest safe pattern to time is the business cycle. it's a solid winner.
> 
> You can also make money with the seasonality play, but not as much. You also have to doing some special juggling with it, if you plan to live off the results. Seasonality is an annual play. Best is to combine the two.
> 
> ...


.   

What you and others here are talking about is Day Trading. Us folks here specialize in Vacation trading. Feel free to speak and speculate. Maybe when I get to retire I can play with you.


----------



## TravelTime (Aug 24, 2018)

easyrider said:


> Bernanke says to expect the next correction around 2020. Other experts say the dow will be between 28,000 and 30,000 before a big correction.
> 
> From what I have noticed regarding corrections is that most people are not really prepared and ride it out. This is fine when time is still on your side. Not a good idea when your over 50, imo. I know many people that didn't retire or had to go back to work in jobs that were very much beneath their skill levels because they lost too much in the last down turn.
> 
> ...


 
2020 or so makes sense to me. The market was buoyed by the Trump Bump, as some call it. If an anti-business, anti-capitalist politician takes the Presidency, I think we will see market turmoil. While the stock market is not the economy, it seems to be a good reflection of it. Long term, though, if you stick to a sound investment strategy, you should be fine no matter what happens politically. Unless we become Venezuela, of course.

I hope the above comments are not political as I have refrained from putting in any personal political opinions in a nonjudgmental way and tried to stick to the connection to economics


----------



## TravelTime (Aug 24, 2018)

Ralph Sir Edward said:


> Actually, you can. It takes knowledge, skill, and (most of all) discipline. In addition, it takes time, because the shorter the time scale, the more random the patterns. The shortest safe pattern to time is the business cycle. it's a solid winner.
> 
> You can also make money with the seasonality play, but not as much. You also have to doing some special juggling with it, if you plan to live off the results. Seasonality is an annual play. Best is to combine the two.
> 
> ...



I do not think you can time the market. However, I agree there are certain economic fundamentals and patterns over the last 100 years that we can draw from to make a smart financial plan for ourselves. However, to really get wealthy on investments, one needs to take risks above and beyond the basic economic lessons and pray they are right.


----------



## TravelTime (Aug 24, 2018)

wilma said:


> Of course, others would say the market has been buoyed by the long bull market starting with the obama years after the previous pro-business/capitalist president left it shambles.



Yes it is a surprising continuation. I called the market incorrectly. I thought it would crash in 2016. I was one of those people who had absolutely no idea this President was really as popular as he is. I learned I am always wrong so having a sound long term financial strategy is the best plan.


----------



## HitchHiker71 (Aug 24, 2018)

TravelTime said:


> No one lost anything unless they panicked and sold. I did not care where my portfolio was during the Great Recession. It was just paper losses. So I just kept investing. My DH panicked and stopped investing briefly in 2007 and when I found out, I said don't stop...this is exactly when we need to invest more. When the market falls so dramatically, that is an opportunity. On any given day, our net worth swings dramatically but I have learned not to worry and have faith in basic economics.
> 
> Let me modify my comment. If you are not diversified or you have a large percentage of your net worth in one or a few stocks, you are more at risk of losing and not recovering. Then it is not just a paper loss. This is the difference between economic cycles going up and down vs a specific business's fundamentals permanently changing.



It really depends on how you define capital loss.  The market fell from a high of DOW 14150 to around DOW 6443 during the the Great Recession.  If you were invested in a market index fund, you lost roughly 54% capital during the Great Recession.  I lost 5% capital in comparison.  So let's say we're talking 100k of capital.  A "buy and hold" investor started at $46k capital from the bottom.  I started at $95k in comparison.  Fast forward to DOW 25000 now.  That's a 338% gain since the bottom.  So that's roughly $175k for the buy and hold investor.  For the market timing investor, it would be $361k in comparison - or a $186k difference (not taking into account any dividend reinvestment gains/etc).  Capital preservation is rule number one on Wall street.  Put simply - never lose money (meaning never lose your capital base - avoid this outcome at all costs).  I'm NOT saying people should attempt to time the markets - it takes a huge amount of due diligence and discipline to do so - which is why so few people do it well.  But for those that do - the payoff is considerable.  I do not invest in individual stocks for the most part - and when I do I'm typically a contrarian investor or I buy on fundamentals during temporary downturns.  During secular bear markets - I typically invest in absolute return funds.  During secular bull markets - I typically invest in market or specific sector index funds.


----------



## TravelTime (Aug 24, 2018)

HitchHiker71 said:


> It really depends on how you define capital loss.  The market fell from a high of DOW 14150 to around DOW 6443 during the the Great Recession.  If you were invested in a market index fund, you lost roughly 54% capital during the Great Recession.  I lost 5% capital in comparison.  So let's say we're talking 100k of capital.  A "buy and hold" investor started at $46k capital from the bottom.  I started at $95k in comparison.  Fast forward to DOW 25000 now.  That's a 338% gain since the bottom.  So that's roughly $175k for the buy and hold investor.  For the market timing investor, it would be $361k in comparison - or a $186k difference.  Capital preservation is rule number one on Wall street.  Put simply - never lose money (meaning never lose your capital base - avoid this outcome at all costs).  I'm NOT saying people should attempt to time the markets - it takes a huge amount of due diligence and discipline to do so - which is why so few people do it well.  But for those that do - the payoff is considerable.  I do not invest in individual stocks for the most part - and when I do I'm typically a contrarian investor or I buy on fundamentals during temporary downturns.  During secular bear markets - I typically invest in absolute return funds.  During secular bull markets - I typically invest in market or specific sector index funds.



Your analysis assumes there is such a thing as a "market timing investor." This would require insider knowledge or a genius able to beat the market consistently. We know geniuses are rare and would be in the top 1% of investors. It has been shown in many analyses that frequent traders tend to do worse, on average. I have known some day traders who did well when the market was going up, and lost it all when the market is going down. (Note: I mention day traders because they are market timing investors.) Warren Buffet is more of a "buy and hold investor" - and even he makes mistakes - yet he is considered the most successful investor of all time. I can say that we lucked out because we own a lot of Apple stock starting since 2004 when the stock was less than $10, pre-7x split. Now it is at the equivalent of $1400+ per share if you convert the current price to the price had it not split. However, we have been a "buy and hold" investor with Apple over the years. We have sold some to buy real estate at good prices, especially during the downturn. But we would have been better off not selling. So no one knows the future.  I would not have sold Apple stock and re-invested in real estate if I could predict the future, even though my real estate returns have been phenomenal by the average person's standards. If Apple becomes an Enron, we will lose half our net worth. So in that regard, I am glad we have diversified and have other safe investments. We purposely put half our net worth at risk because I have believed since 2006 that Apple is a good investment but this goes against my basic investing philosophy. At some point, we will need to start unloading our Apple stock, probably in the next 10 years. Our problem now is when we sell stock, we get hit with huge income tax bills so it is almost better to hold.


----------



## bluehende (Aug 24, 2018)

HitchHiker71 said:


> It really depends on how you define capital loss.  The market fell from a high of DOW 14150 to around DOW 6443 during the the Great Recession.  If you were invested in a market index fund, you lost roughly 54% capital during the Great Recession.  I lost 5% capital in comparison.  So let's say we're talking 100k of capital.  A "buy and hold" investor started at $46k capital from the bottom.  I started at $95k in comparison.  Fast forward to DOW 25000 now.  That's a 338% gain since the bottom.  So that's roughly $175k for the buy and hold investor.  For the market timing investor, it would be $361k in comparison - or a $186k difference (not taking into account any dividend reinvestment gains/etc).  Capital preservation is rule number one on Wall street.  Put simply - never lose money (meaning never lose your capital base - avoid this outcome at all costs).  I'm NOT saying people should attempt to time the markets - it takes a huge amount of due diligence and discipline to do so - which is why so few people do it well.  But for those that do - the payoff is considerable.  I do not invest in individual stocks for the most part - and when I do I'm typically a contrarian investor or I buy on fundamentals during temporary downturns.  During secular bear markets - I typically invest in absolute return funds.  During secular bull markets - I typically invest in market or specific sector index funds.


\

Numbers will always look good if you get out at the top and in at the bottom.  I will still say that knowing when those happen are impossible to know.  In hindsight it always seems so obvious, but with 30 yrs of experience it is never easy at the time.  As far as I know the only system that has continued to outperform after being identified using past data is the dogs of the dow.


----------



## TravelTime (Aug 24, 2018)

bluehende said:


> \
> 
> Numbers will always look good if you get out at the top and in at the bottom.  I will still say that knowing when those happen are impossible to know.  In hindsight it always seems so obvious, but with 30 yrs of experience it is never easy at the time.  As far as I know the only system that has continued to outperform after being identified using past data is the dogs of the dow.



I agree. For example, I think it is misleading to compare the stock market returns from the low during the Great Recession. To me, it is more relevant to compare the high to where we are now. Anyone can beat the market if they happen to purchase at the low or happen to become President at the low.


----------



## bluehende (Aug 24, 2018)

TravelTime said:


> I agree. For example, I think it is misleading to compare the stock market returns from the low during the Great Recession. To me, it is more relevant to compare the high to where we are now. Anyone can beat the market if they happen to purchase at the low or happen to become President at the low.




I would rather have a president that takes over at the low and proceeds to a high than a president that takes over at a high and leaves at a low.

edited to say.....it may have little or a lot to do with the president.


----------



## TravelTime (Aug 24, 2018)

bluehende said:


> I would rather have a president that takes over at the low and proceeds to a high than a president that takes over at a high and leaves at a low.
> 
> edited to say.....it may have little or a lot to do with the president.



I agree it has little to do with President.


----------



## tompalm (Aug 24, 2018)

Ralph Sir Edward said:


> Actually, you can. It takes knowledge, skill, and (most of all) discipline. In addition, it takes time, because the shorter the time scale, the more random the patterns. The shortest safe pattern to time is the business cycle. it's a solid winner.
> 
> You can also make money with the seasonality play, but not as much. You also have to doing some special juggling with it, if you plan to live off the results. Seasonality is an annual play. Best is to combine the two.
> 
> ...



Totally agree and there are computer programs that use data with technical analysis to advise when it is time to move to cash or when it is time to buy the best sector that is going up.  It will never call the top or the bottom, but it will send you an email after the long term trend changes and advise you to move into cash, bonds or short the market. I have been using the program for about five years and it works great. It was developed around 2002 but uses data back to 1988 and can demonstrate how well you would have done using the program based on which strategy you pick. The program cost $10 per month and worth every penny of that. Take a look at the Hall of Fame strategies or develop your own. It will send a signal about once or twice a year and it is not day trading. Here is a link. 

http://www.sumgrowth.com/MyPages/Strategies2.aspx


----------



## TravelTime (Aug 24, 2018)

tompalm said:


> Totally agree and there are computer programs that use data with technical analysis to advise when it is time to move to cash or when it is time to buy the best sector that is going up.  It will never call the top or the bottom, but it will send you an email after the long term trend changes and advise you to move into cash, bonds or short the market. I have been using the program for about five years and it works great. It was developed around 2002 but uses data back to 1988 and can demonstrate how well you would have done using the program based on which strategy you pick. The program cost $10 per month and worth every penny of that. Take a look at the Hall of Fame strategies or develop your own. It will send a signal about once or twice a year and it is not day trading. Here is a link.
> 
> http://www.sumgrowth.com/MyPages/Strategies2.aspx



I am surprised the data it uses only goes back to 1998. That is very little data since market cycles average 10 years.


----------



## Brett (Aug 24, 2018)

TravelTime said:


> Yes it is a surprising continuation. I called the market incorrectly. I thought it would crash in 2016. I was one of those people who had absolutely no idea this President was really as popular as he is. I learned I am always wrong so having a sound long term financial strategy is the best plan.
> 
> BTW, I do not think the President prior to the last one (no names, trying to stay non-political) was pro-business at all.



I agree, the prior president or the current president are not necessarily  'pro-business"

Presidents are for *all* US citizens, whether they get a reduced 20% corp tax rate ..... or not
(no names, just trying to stay non-political)


----------



## tompalm (Aug 24, 2018)

The OP asked about timing the next recession, but the real question should be when will the bull market end. History has shown that we never had a recession without an inverted yield curve or without the two year bond interest rate being higher than the ten year bond rate. When the Fed raises rates again, the curve will probably be inverted or almost inverted because the 10 year is not moving much. During the past, the bull market ended 12-18 months after the curve inverted and a recession happened after that. But expect pullbacks and corrections before that happens. Those are difficult to time and seasonality often works. August- October has a history of corrections and now is a good time to be conservative. But chances are you will do better by staying long until Sector Surfer says go to cash. 

Other factors that have occurred in the past before a recession are 
- unemployment has always been above five percent
- the housing market nation wide is falling and that is demonstrated by monthly reports on new home sales 
- the transports index is in a down trend prior to the index turning down
-  consumer staples sector trend is doing better than the consumer discretionary sector
There are other indicators like Market breath and price action on the index being below the 200 day trend line.  None of those things are happening right now and this is a bull market that lives on. It will end badly like it did in 2000 and 2008. But for now stay long.


----------



## tompalm (Aug 24, 2018)

TravelTime said:


> I am surprised the data it uses only goes back to 1998. That is very little data since market cycles average 10 years.



1988 is when computer data becomes available. I am sure that someone wrote it down somewhere, but that is too difficult to enter into a data bank for use in a computer program. Maybe data was available on some stocks or funds prior to that, but overall, 1988 was the best they could do. At least that is what I read.


----------



## TravelTime (Aug 24, 2018)

tompalm said:


> 1988 is when computer data becomes available. I am sure that someone wrote it down somewhere, but that is too difficult to enter into a data bank for use in a computer program. Maybe data was available on some stocks or funds prior to that, but overall, 1988 was the best they could do. At least that is what I read.



Maybe that is all they could get. The stock market has been tracked for at least 100 years. By 1988, the basic principles of the stock market had already been established. (As you can guess, I am old.)


----------



## Brett (Aug 24, 2018)

TravelTime said:


> I agree it has little to do with President.



stock prices have little to do a president or congress ...  or maybe a significant to do with the changes in corporate tax rates
(and interest rates and corporate earnings, etc)


----------



## TravelTime (Aug 24, 2018)

Brett said:


> stock prices have little to do ...  or maybe a significant to do with the changes in corporate tax rates
> (or interest rates and corporate earnings, etc)



Ha? I am confused by your point.


----------



## Brett (Aug 24, 2018)

TravelTime said:


> Ha? I am confused by your point.



maybe stock prices are influenced by *corporate tax rates* and low interest rates and corporate after tax earnings
.... just a hunch
if any of these things would change ...............................  'crash' !!!!


----------



## tompalm (Aug 24, 2018)

TravelTime said:


> Yes it is a surprising continuation. I called the market incorrectly. I thought it would crash in 2016. I was one of those people who had absolutely no idea this President was really as popular as he is. I learned I am always wrong so having a sound long term financial strategy is the best plan.
> 
> BTW, I do not think the President prior to the last one (no names, trying to stay non-political) was pro-business at all.



I was looking at long term indicators in 2016 and made the same mistake because the monthly price action or candles and PMO indicators had a cross over in January 2016.  The only time that happened before was in 2000 and 2008 and I thought for sure a bigger sell off was coming. The market went down 19.6 percent and rallied after that.  I think the Fed saved us with more QE or something else. But, long term momentum or PMO is one thing that Sector Surfer uses to determine when to go to cash. The key is to have confirmation with other indicators before hitting the panic button. Sector Surfer sent a go to cash signal in 2015 and bought back into the market in February 2016. It didn’t get you a better price in 2016, but it save a lot of pain of watching your portfolio value drop. Here is a link to see the momentum. But look at the monthly PMO. 

https://stockcharts.com/freecharts/dpgallery.html


----------



## tompalm (Aug 24, 2018)

dsmrp said:


> DH has a lot of his retirement in his company's stock.
> I told him last year he should cash out a third of it, but he didn't have time to do it (never does )
> and it kept going up and up.  He knows it won't go up forever and an adjustment will be coming,
> but he still hasn't gotten around to it...and then it will drop... sigh
> ...



If he works for Apple or one of the other FANG companies, that is a good thing. But otherwise not to smart unless he is in management and can see how the company is performing and knows the accounting side of the business.  Watch the movie about Enron called “The Smartest Guys in the room”.  Everyone at the company lost huge amounts of money in their 401k.


----------



## TravelTime (Aug 24, 2018)

Brett said:


> maybe stock prices are influenced by *corporate tax rates* and low interest rates and corporate after tax earnings
> .... just a hunch
> if any of these things would change ...............................  'crash' !!!!



Yes, I think the change in corporate tax rates definitely influenced the rally in the past couple of years. Low interest rates have existed since at least 2001. Now low interest rates are the new normal and as they go up, people will panic. The purpose of ultra low interest rates is to boost a failing economy. So it is time they go back up to a normal level.


----------



## Brett (Aug 24, 2018)

TravelTime said:


> Yes, I think the change in corporate tax rates definitely influenced the rally in the past couple of years. Low interest rates have existed since at least 2001. Now low interest rates are the new normal and as they go up, people will panic. The purpose of ultra low interest rates is to boost a failing economy. So it is time they go back up to a normal level.



*corporate* tax rates in the past years or just this past *year*
low interest rates didn't help the '08 recession and a 'normal' level in interest rates probably won't help the next recession  - whenever it occurs


----------



## Talent312 (Aug 24, 2018)

TravelTime said:


> I learned I am always wrong...



I tell folks that whatever I predict (like who wins a ballgame), pick the opposite.
That way, you'll be more likely to make the correct call, than I.

.


----------



## TravelTime (Aug 24, 2018)

Brett said:


> *corporate* tax rates in the past years or just this past *year*
> low interest rates didn't help the '08 recession and a 'normal' level in interest rates probably won't help the next recession  - whenever it occurs



I was saying in 2005 that interest rates were artificially held too low and was fueling excessive borrowing. I strongly believe ultra low interest rates are bad for a long term sustainable economy. It is like giving away free money. Low interest rates did help alleviate the 2001 recession and the 2008 recession. The problem is the Fed has not increased them enough and for the past 20 years we have had such low interest rates it is ridiculous. I still remember interest rates in the teens in what many people consider America's golden eras pre- 1990.


----------



## Brett (Aug 24, 2018)

TravelTime said:


> I was saying in 2005 that interest rates were artificially held too low and was fueling excessive borrowing. I strongly believe ultra low interest rates are bad for a long term sustainable economy. It is like giving away free money. Low interest rates did help alleviate the 2001 recession and the 2008 recession. The problem is the Fed has not increased them enough and for the past 20 years we have had such low interest rates it is ridiculous. I still remember interest rates in the teens in what many people consider America's golden eras pre- 1990.



so you want higher interest rates (unlike a certain politician who tweets his displeasure of the Federal Reserve raising interest rates}
what about the corporate *tax* rate last year going from 35% to 21%
you want to raise that rate too?


----------



## TravelTime (Aug 24, 2018)

Brett said:


> so you want higher interest rates (unlike a certain politician who tweets his displeasure of the Federal Reserve raising interest rates}
> what about the corporate *tax* rate last year going from 35% to 21%
> you want to raise that rate too?



I am pro-business. I do not want higher corporate tax rates. I would like to eliminate California state tax. The new tax bill has screwed us royally because we have a lot of state taxes and property taxes that are not longer deductible. However, interest rates are the only way to control the consumer spending, inflation and bubbles. So yes, I feel interest rates should be higher.


----------



## am1 (Aug 24, 2018)

TravelTime said:


> I do not want higher corporate tax rates. I would like to eliminate California state tax. The new tax bill has screwed us royally because we have a lot of state taxes and property taxes that are not longer deductible. However, interest rates are the only way to control the economy. So yes, I feel interest rates should be higher.



I would like a lot of things.  You would probably be best to start asking people to get off the free ride program for that to happen.


----------



## TravelTime (Aug 24, 2018)

am1 said:


> I would like a lot of things.  You would probably be best to start asking people to get off the free ride program for that to happen.



Yes, I would like that too.


----------



## VacationForever (Aug 24, 2018)

TravelTime said:


> I do not want higher corporate tax rates. I would like to eliminate California state tax. The new tax bill has screwed us royally because we have a lot of state taxes and property taxes that are not longer deductible. However, interest rates are the only way to control the economy. So yes, I feel interest rates should be higher.


You know there is no way California will eliminate state tax, let alone reduce it.  There are too many social programs that need tax dollars to support.  

Several years ago, I interviewed a young lady, my guess would be she was in her early 20s.  She said she was originally from Texas and had lost her parents.  She said at the age of 15, she was living out of a car and social workers advised her to point her car in the direction of California and she would be taken care of.  Not to get political, but California attracts people who are in need and these social policies don't come free.


----------



## Brett (Aug 24, 2018)

TravelTime said:


> I am pro-business. I do not want higher corporate tax rates. I would like to eliminate California state tax. The new tax bill has screwed us royally because we have a lot of state taxes and property taxes that are not longer deductible. However, interest rates are the only way to control the consumer spending, inflation and bubbles. So yes, I feel interest rates should be higher.



so you want to eliminate state taxes and lower corporate taxes ... to maybe to. ~ 0 %
and the *federal budget deficit* keeps gets higher and higher
and then state budget deficits get higher and higher
.
 any connection between borrowing and budget deficits and government revenue ?
or do you believe in the "free lunch" for everyone?


----------



## Panina (Aug 24, 2018)

am1 said:


> I would like a lot of things.  You would probably be best to start asking people to get off the free ride program for that to happen.


There are people who legitimately need help and if things went to only people who truly needed assistance we would be able to even help them more.

Unfortunately over the years many have learned to work the system to get a free ride when they are educated, healthy individuals that can work. I personally know a few of them.  I can think of five right now. So how far can my tax dollars go to supplement them, so the deficit goes up.


----------



## dsmrp (Aug 24, 2018)

Thanks everyone for your cautious tales and examples.
I talked to DH and he totally agrees he should reduce his risk by selling a good portion of company stock and buying something more conservative. Said he would look into it in a weekend or two...  He spends a lot of time submitting insurance claims on behalf of our son (the care providers' offices don't do this to limit their expenses, and we don't want to change providers).

He gets a pension too and his other retirement account with company stock
is a supplemental one.  He thinks now is a good time to sell stock,
cause there's no major proprietary knowledge now that could be construed as insider trading.  e.g. they know of something in a product line which could affect stock price.

He doesn't work for a FANG (I had to look that one up!), but does work for a certain
brick & mortar airplane manufacturer   Pensions are contractually defined, but I guess could be renegotiated one more time before he plans to retire ...


----------



## TravelTime (Aug 25, 2018)

Brett said:


> so you want to eliminate state taxes and lower corporate taxes ... to maybe to. ~ 0 %
> and the *federal budget deficit* keeps gets higher and higher
> and then state budget deficits get higher and higher
> .
> ...



Don't ask me to run the USA...LOL...I'd be called Crooked TravelTime. LOL

On a more serious note, I feel state taxes are distributed unequally. It is unfair and unequal for Californians to subsidize other states. On the other hand, our high state taxes drive inflation in California and that is partially why we need to pay higher wages and everything is so expensive. For anyone who thinks this is not true, I can tell you first hand I have to charge higher rates to customers to cover all my overhead and taxes to be able to pay my employees a living wage. As a small business owner, taxes are always on my mind from an operational perspective. My landlords have the same concerns. My last landlord and my current landlord have indicated they will raise my rent if their taxes go up. In California, we are up to 13% in the personal tax rate. The average person pays 9%+. And this and property taxes are essentially non-deductible now.

I would have preferred to keep the federal income tax rate the same. I think Californians have gotten screwed with the new tax law. We continue to subsidize the USA.

I would like to see a consistent state tax rate for every state. It bugs me that several states have no state income tax and they tend to be whiners! You can't expect federal bailouts and have good local and state services if you aren't willing to pay for them. Most states have a pretty low state income tax and many have no sales tax. Everyone should be paying their fair share.

We have high wages and high housing prices but it becomes a vicious cycle when more than half of many Californians income goes to state income taxes, local taxes, sales tax, federal income taxes and property taxes. And SALT is not deductible anymore. You would think California would be doing better than it is with al the taxes and revenue this state generates.

I do think raising interest rates from what has been essentially 0% for the past 10-20 years would be helpful if the economy is as "hot" as people say. It would help cool inflation a bit. I have read the inflation is starting to erode wage increases. It would also help average people to get some return on their safe investments. In the old days, you could get 5% on CDs. Now no one even knows what a CD is!

Corporate tax rates...no strong opinion. If it truly drives investment in the USA, then perhaps it is helpful. But that remains to be seen. It does seem silly to overtax corporations. 35% was a super high tax rate for corporations, IMO. It makes sense corporations do not want to bring money back to the USA. Even 21% is high. Remember most corporations are already paying taxes on the money earned overseas. Then they pay again when they bring it back home. Unless, of course, they are in some kind of safe haven country. But I have very little understanding of how all that works, given it does not affect me and my business.

As a final comment, I do not believe in a free lunch for anyone! I think we need to balance government control, taxes and social services with an incentive to work and motivate entrepreneurs and businesses to run efficiently and provide jobs and pay a living wage to employees.


----------



## tompalm (Aug 25, 2018)

dsmrp said:


> Thanks everyone for your cautious tales and examples.
> I talked to DH and he totally agrees he should reduce his risk by selling a good portion of company stock and buying something more conservative. Said he would look into it in a weekend or two...  He spends a lot of time submitting insurance claims on behalf of our son (the care providers' offices don't do this to limit their expenses, and we don't want to change providers).
> 
> He gets a pension too and his other retirement account with company stock
> ...



Well if he works for Boeing, he has done well and that stock has gone up a lot during the past few years. Now would be a good time to take some profits and get more conservative. Congrats to him.


----------



## TravelTime (Aug 25, 2018)

VacationForever said:


> You know there is no way California will eliminate state tax, let alone reduce it.  There are too many social programs that need tax dollars to support.
> 
> Several years ago, I interviewed a young lady, my guess would be she was in her early 20s.  She said she was originally from Texas and had lost her parents.  She said at the age of 15, she was living out of a car and social workers advised her to point her car in the direction of California and she would be taken care of.  Not to get political, but California attracts people who are in need and these social policies don't come free.



Yes and it will get worse in the future with the possible new Governor who is the front runner. I hope a more conservative Governor wins - regardless of party. We need balance in California.


----------



## Big Matt (Aug 25, 2018)

I think there will be a very interesting series of events that happen over the next 30 years.  A huge number of people are going to become rich through inheritance from baby boomers who die and leave a lot of their 401k money behind.  Combine that with an aging work force that doesn't retire early any longer and you are going to see an elite class of people aged 55-80.  These folks are going to be a very strong voting block.  The country very well could change very quickly in terms of social and economic policy.  We are leaning towards socialism now, but I think the events I mention will swing the pendulum in the opposite direction.


----------



## Bucky (Aug 25, 2018)

TravelTime said:


> 2020 or so makes sense to me. The market was buoyed by the Trump Bump, as some call it. If an anti-business, anti-capitalist politician takes the Presidency, I think we will see market turmoil.



Funny. Just finished reading this when I came here for my morning fix. 
https://finance.yahoo.com/news/week-trumponomics-markets-dont-really-need-trump-174105905.html


----------



## WinniWoman (Aug 25, 2018)

Fredflintstone said:


> I feel truly sorry for the younger generation. Gee, only 25 or less years ago a young couple could buy a house in San Fran or Seattle or Vancouver....Now, at 1.8 million and up they can kiss that dream out of the window. Not everyone can get a 150 k a year job or qualify for a million plus mortgage.
> 
> Sigh, maybe dad was right.
> 
> ...




Many of our kids are already in the rent category. Heck- we ourselves could be falling into that category.


----------



## WinniWoman (Aug 25, 2018)

VacationForever said:


> You know there is no way California will eliminate state tax, let alone reduce it.  There are too many social programs that need tax dollars to support.
> 
> Several years ago, I interviewed a young lady, my guess would be she was in her early 20s.  She said she was originally from Texas and had lost her parents.  She said at the age of 15, she was living out of a car and social workers advised her to point her car in the direction of California and she would be taken care of.  Not to get political, but California attracts people who are in need and these social policies don't come free.




As does New York!


----------



## Brett (Aug 25, 2018)

Big Matt said:


> I think there will be a very interesting series of events that happen over the next 30 years.  A huge number of people are going to become rich through inheritance from baby boomers who die and leave a lot of their 401k money behind.  Combine that with an aging work force that doesn't retire early any longer and you are going to see an elite class of people aged 55-80.  These folks are going to be a very strong voting block.  The country very well could change very quickly in terms of social and economic policy.  We are leaning towards socialism now, but I think the events I mention will swing the pendulum in the opposite direction.



"we are now leaning towards socialism"  --- so you think these old elite rich people will not like 'socialist' programs like Medicare and social security and will vote to eliminate those programs
funny how some older people literally count the days until they are eligible for medicare and social security.  I suppose if the "future elite" inherit multiple millions in a roth IRA they won't care about medicare,  they will just pay cash for knee and hip replacements


----------



## bogey21 (Aug 25, 2018)

TravelTime said:


> It is unfair and unequal for Californians to subsidize other states....



Really!!

George


----------



## Ralph Sir Edward (Aug 25, 2018)

billymach4 said:


> .
> 
> What you and others here are talking about is Day Trading. Us folks here specialize in Vacation trading. Feel free to speak and speculate. Maybe when I get to retire I can play with you.



Trading in and out once every 4 to 10 years is hardly day trading. But it is very profitable.


----------



## CalGalTraveler (Aug 25, 2018)

I don't have a dog in this race (other than we pay a LOT of taxes!) but thought this would be of interest. It appears to have been compiled by a few professors so there is some rigor to the analysis.

https://wallethub.com/edu/states-most-least-dependent-on-the-federal-government/2700/


----------



## Ralph Sir Edward (Aug 25, 2018)

Its State Resident calculation is bad. It double counts the money for Federal jobs. The Federal spending includes the amount for Federal jobs. The amount for Federal jobs should not be counted again.


----------



## CalGalTraveler (Aug 25, 2018)

dsmrp said:


> He thinks now is a good time to sell stock,
> cause there's no major proprietary knowledge now that could be construed as insider trading.  e.g. they know of something in a product line which could affect stock price.
> .



If he is not designated as a restricted 10b5-1 senior executive, he has nothing to worry about and can trade the stock at any time (sooner the better). If he is designated as 10b5-1 (he will know because they are all over executives for this), then he should start working ASAP with a broker who can sell during the next open trading window (usually a few days after a quarterly close for public companies). He can also set up a 10b5-1 trading plan to sell the stock at designated trigger prices when the trading window is closed (like a blind trust).

Glad to see that he is taking action on this. I know he is busy, but right now this is much more important than work or a delay filing for a medical reimbursement because a sudden crash of the stock e.g. tariff regulation, international tensions, N. Korea or Iran surprises could affect the livelihood of your family for decades.

The guideline given by Bob Brinker, a financial pundit is that you should not be invested in ANY stock more than 4% of your portfolio. A company stock perhaps even less given @bogey21's scenario of too many eggs in one basket.


----------



## bluehende (Aug 25, 2018)

bogey21 said:


> Really!!
> 
> George


Yes California is a net donor state.  It is not one of the top ones like NJ,NY CT but they do send more to the feds than they get back.  One of a few.  Their cost of living does mean they get a lot for federal programs, but their large economy more than makes up for it.


----------



## bluehende (Aug 25, 2018)

Bucky said:


> Funny. Just finished reading this when I came here for my morning fix.
> https://finance.yahoo.com/news/week-trumponomics-markets-dont-really-need-trump-174105905.html




I am from De the state least dependent on the feds.  Our state does not have overly high taxes.  Not a low tax state, but not out of hand.  Our budget as a small state is supplemented by our corporate franchise fees.


----------



## Makai Guy (Aug 25, 2018)

This thread is getting very close to being closed due to too much politics creeping in.   The topic is "When Do You Think We Will Have the Next Economic Recession?".   Let's get back to it, please.


----------



## vikingsholm (Aug 25, 2018)

The economy is a very complex beast, and every time I think I'm starting to understand it, it changes.

One theory that I tend to subscribe to though is that we now are driven more by credit and debt cycles than by the past understanding of normal economic cycles. This is a link to a series of short articles that expounds on this view. A recommended read for those who like to look behind the curtain a little further. I don't agree with all the points of view in these, nor claim to be versed enough to agree with or rebut the detailed specifics, but think that there are a lot of facts and good information here that you'll never see in the daily mainstream economic reporting.

One premise is that corporate debt has gotten out of hand and some of the shakier elements are coming due soon. Also, that easy credit in general has just become a really big issue, even post-2008 (up to 2008 or so it was most egregiously applied to housing):

First in series:  http://www.mauldineconomics.com/frontlinethoughts/credit-driven-train-crash-part-1

Later in series, with links to the other prior weekly articles near the top right after the subscription plug (which can be easily ignored in each article): http://www.mauldineconomics.com/frontlinethoughts/unfunded-promises/P10

I've found these types of articles often to be correct about a lot of things, but even by their own admission, the timing to react to it is very difficult. Those of us who read these may be early in understanding (if not always savvy in reacting), because it can go on a lot longer than you think, and it often just continues until it doesn't. As others here said earlier, timing is possible, but takes a lot of work and deeper understanding of what's going on out there than most of us have time or expertise to figure out.

I will stay away from more bombastic commentary other than to say look at when the booms occur and why, when the busts occur and why, and who ends up cleaning up the messes. Then draw your own conclusions.


----------



## TravelTime (Aug 25, 2018)

vikingsholm said:


> The economy is a very complex beast, and every time I think I'm starting to understand it, it changes.
> 
> One theory that I tend to subscribe to though is that we now are driven more by credit and debt cycles than by the past understanding of normal economic cycles. This is a link to a series of short articles that expounds on this view. A recommended read for those who like to look behind the curtain a little further. I don't agree with all the points of view in these, nor claim to be versed enough to agree with or rebut the detailed specifics, but think that there are a lot of facts and good information here that you'll never see in the daily mainstream economic reporting.
> 
> ...



I haven’t read the article yet but I agree easy credit has been a huge problem since the 2000s. That fueled the housing boom because then banks were able to structure subprime loans with low interest rates to get people with bad credit into homes as well as many people got in over their heads with 3 and 5 year mortgages that exploded after the intro period. I know there were many other complicating factor that enabled a perfect storm. I believe the housing boom was really consumer driven because of absurdly low interest rates. Low interest rates then unable the creation of new mortgage products. This is why I commented earlier that it would be wise for interest rates to increase. In 2005, I thought interest rates should go up to stop the boom. Then in 2008+, we needed to maintain low interest rates to prevent aother Great Depression. Instead we were lucky and only got as Great Recession. Now it is time to end the party...the questions is when and how will it end? No one knows but it has to end. I just hope we have a soft landing this time.


----------



## Panina (Aug 25, 2018)

TravelTime said:


> I haven’t read the article yet but I agree easy credit has been a huge problem since the 2000s. That fueled the housing boom because then banks were able to structure subprime loans with low interest rates to get people with bad credit into homes as well as many people got in over their heads with 3 and 5 year mortgages that exploded after the intro period. I know there were many other complicating factor that enabled a perfect storm. I believe the housing boom was really consumer driven because of absurdly low interest rates. Low interest rates then unable the creation of new mortgage products. This is why I commented earlier that it would be wise for interest rates to increase. In 2005, I thought interest rates should go up to stop the boom. Then in 2008+, we needed to maintain low interest rates to prevent aother Great Depression. Instead we were lucky and only got as Great Recession. Now it is time to end the party...the questions is when and how will it end? No one knows but it has to end. I just hope we have a soft landing this time.



I sold real estate during the time of easy loans for a luxury builder.  I remember people who had great credit ratings getting approved for loans they really couldn’t afford from day one.  There was no income/savings cushion for anything such as fixing a car, a gift for someone, etc.  Many customers came in with pre approved mortgages.

When I saw these situations I always advised my customers they really couldn’t afford these homes.  Most got mad at me as I charted out income/savings versus expenses accusing me of many things.  Many after going home and going over the numbers called or came back in thanking me as they really didn’t realize they could not afford it.

I never would sell a home to someone I knew could not afford it.  I educated them on what they could really afford.  It always upset me tremendously when other agents didn’t care and took any deal that could be made.


----------



## CalGalTraveler (Aug 25, 2018)

DavidnRobin said:


> Prices in SF Bay Area have continued to climb based on a report today.
> 
> We have just put our house on the Market (SF Peninsula). Ranch style - 3Bd/2Ba - 2000sqft... (basic home) listed at $1.8M (as is).
> 
> ...



Smart move. It is a good time to do this before rates get too high and market downturns.

We have about six friends and work colleagues nearing retirement who are "cashing out" their homes in the SF Bay Area and moving to less expensive locales. Many are taking north of $1 million off the table for retirement by selling their basic tract home that they purchased in the 80s and 90s for $250 - $600k. 3 of our friends are independent consultants who can work from anywhere but still support clients in the area.


----------



## lizap (Aug 25, 2018)

DavidnRobin said:


> Prices in SF Bay Area have continued to climb based on a report today.
> 
> We have just put our house on the Market (SF Peninsula). Ranch style - 3Bd/2Ba - 2000sqft... (basic home) listed at $1.8M (as is).
> 
> ...



Wow. In our area, your home would likely sell for around 200k.


----------



## lizap (Aug 25, 2018)

dioxide45 said:


> I thought as interest rates rise, bonds lose value? This is because bond funds are priced based on the value of the bonds owned by the fund if they were sold, not what their maturity value is. If you are buying and selling bonds, a rising rate environment is bad. If it is buy and hold, you really should be buying individual bonds and not investing in a bond fund.



Last year, moved most of our retirement money to workplace stable value funds paying 3-4%.


----------



## John Cummings (Aug 25, 2018)

TravelTime said:


> The Bay Area has continued to climb but places in more suburban/rural areas, even many places in Lake Tahoe at the ski resorts, are still below 2006 peak prices.



That is not a realistic comparison. House prices in 2006 were out of sight due to mortgage lenders allowing people to buy homes they couldn't afford. Prices are climbing in Southern California but not dramatically like they did 12-13 years ago.


----------



## John Cummings (Aug 25, 2018)

DavidnRobin said:


> Nine of the ten economic recessions since 1953, when Dwight D. Eisenhower became President, have come under Republican Presidents as follows:
> 
> July 1953 to May 1954–Eisenhower
> 
> ...



So what is your point? Politics are NOT allowed in TUG.


----------



## DavidnRobin (Aug 25, 2018)

John Cummings said:


> So what is your point? Politics are NOT allowed in TUG.



My point was someone asking about when the next recession was coming - so I was giving on data points...


Sent from my iPhone using Tapatalk


----------



## tompalm (Aug 25, 2018)

DavidnRobin said:


> My point was someone asking about when the next recession was coming - so I was giving on data points...
> 
> 
> Sent from my iPhone using Tapatalk



Not realistic to determine when the next recession will happen and using that has little value. Each president has a four or eight year time span. So if you had gone to cash when a president was elected that you didn’t like, you would be missising huge gains. There are much better ways to determine when a recession might happen.


----------



## WinniWoman (Aug 25, 2018)

lizap said:


> Wow. In our area, your home would likely sell for around 200k.



Same here! I was just going to post that! Our home is a million dollar home really by CA standards! Especially on the 10.5 acres of land it sits on. With a stream and bridge. But would be lucky to sell it for $250,000 around these parts! Paid $208,000 for it in 1987.  A salt box colonial.2600 square feet. Updated. LOL!


----------



## TravelTime (Aug 25, 2018)

John Cummings said:


> That is not a realistic comparison. House prices in 2006 were out of sight due to mortgage lenders allowing people to buy homes they couldn't afford. Prices are climbing in Southern California but not dramatically like they did 12-13 years ago.



That was my point. Housing is still recovering in many places. I agree with you completely.


----------



## klpca (Aug 25, 2018)

TravelTime said:


> That was my point. Housing is still recovering in many places. I agree with you completely.


In San Diego they are just as out of whack as pre-2008, but it is inventory shortage driven this time, not demand due to sub-prime lending. Inland areas, not so much. My mom always says that the housing prices in the inland areas are the last to rise and the first to fall. Probably true.


----------



## klpca (Aug 25, 2018)

TravelTime said:


> I am pro-business. I do not want higher corporate tax rates. I would like to eliminate California state tax. The new tax bill has screwed us royally because we have a lot of state taxes and property taxes that are not longer deductible.


If you are subject to the AMT (and I suspect you are) then you never received any tax benefit from the state tax deductions anyway since they aren't deductible for AMT. Hopefully this will make you feel a bit better.


----------



## VacationForever (Aug 25, 2018)

TravelTime said:


> Parts of California’s housing market has still not recovered from the last recession. Luxury condos and coops in NYC are falling too.



Most people do not realize why luxury condo and coop prices have fallen hard since 2008 and will never recover unless the current or future administration changes the law.  During the real estate bust, the Obama administration deemed that condos loans were risky and put in place something called warrantable vs. non-warrantable condos.  All new condos sold by developers are non-warrantable, which in plain English meant that no FHA loan will be granted.  It also kills the resale market as buyers have to come up with 100% cash or get high interest loan through the secondary market.

To meet warrantable criteria, basically to get FHA loans:

Fannie Mae and Freddie Mac use the term “warrantable” to describe condominium projects and properties against which they’ll allow a mortgage. Typically, a condo is considered warrantable if no single entity owns more than 10% of the units in a project, at least 51% of the units are owner-occupied, fewer than 15% of the units are in arrears with their association dues, the homeowners association (HOA) is not named in any lawsuits, and commercial space accounts for 25 percent or less of the total building square footage.
https://themortgagereports.com/18658/condo-mortgage-non-warrantable-loan-rates-gina-pogol

When we were looking at condos several years ago, our realtor said in the entire Las Vegas area, there were only 2 condo development that were warrantable.  If you want to buy a condo to live it, that is fine.  If you want to buy it for investment, it is a money losing proposition.


----------



## TravelTime (Aug 25, 2018)

VacationForever said:


> Most people do not realize why luxury condo and coop prices have fallen hard since 2008 and will never recover unless the current or future administration changes the law.  During the real estate bust, the Obama administration deemed that condos loans were risky and put in place something called warrantable vs. non-warrantable condos.  All new condos sold by developers are non-warrantable, which in plain English meant that no FHA loan will be granted.  It also kills the resale market as buyers have to come up with 100% cash or get loan high interest loan through the secondary market.
> 
> To meet warrantable criteria, basically to get FHA loans:
> 
> ...



Thanks for sharing this information. We have been looking into a ski condo and we were surprised the prices are below what they sold for when they were brand new. The agent said something about people not being able to get mortgages. She did not explain but I suspect it has to do with this “warrantable” issue. I guess this would be a terrible investment since it would be hard to resell it.


----------



## dioxide45 (Aug 25, 2018)

VacationForever said:


> Most people do not realize why luxury condo and coop prices have fallen hard since 2008 and will never recover unless the current or future administration changes the law.  During the real estate bust, the Obama administration deemed that condos loans were risky and put in place something called warrantable vs. non-warrantable condos.  All new condos sold by developers are non-warrantable, which in plain English meant that no FHA loan will be granted.  It also kills the resale market as buyers have to come up with 100% cash or get high interest loan through the secondary market.
> 
> To meet warrantable criteria, basically to get FHA loans:
> 
> ...


You will also find that if a condo is eligible for FHA financing, the resale prices of those codos are considerably higher than those that are not FHA eligible. The problem with many condos is that when real estate went bust in 2008 many private equity firms stepped in and bought up a lot of units and rent them out. This often makes the projects non-warrantable since they don't meet the requirements you cite. Those that bought their condos before 2008 are stuck since they often still owe much more than they can sell them for, even now after the market has gone back up.


----------



## VacationForever (Aug 25, 2018)

We went ahead and bought a condo because it has to die for views.  Every unit in our building was sold in 2008 (with deposits down) but bank pulled financing to the developer which in turn could not complete the transactions and filed for bankruptcy.  The building was left unoccupied and BOA held the asset.  An investor bought over the entire building from BOA for $4M in 2011. Our penthouse unit was sold for 1.8M in 2008 and we paid 500K for it 5 years ago.  The price has not moved. Our HOA has put in an application to make it warrantable and hopefully when approved, we will see some appreciation.  But we want to live here so we don't worry about resale value.


----------



## klpca (Aug 25, 2018)

dioxide45 said:


> You will also find that if a condo is eligible for FHA financing, the resale prices of those codos are considerably higher than those that are not FHA eligible. The problem with many condos is that when real estate went bust in 2008 many private equity firms stepped in and bought up a lot of units and rent them out. This often makes the projects non-warrantable since they don't meet the requirements you cite. Those that bought their condos before 2008 are stuck since they often still owe much more than they can sell them for, even now after the market has gone back up.


Depends on the market. We bought a condo in 2010 for less than the original owner paid in 2004. The price has doubled in 8 years - I don't think that anyone in our market is upside down any more.


----------



## Big Matt (Aug 26, 2018)

Brett said:


> "we are now leaning towards socialism"  --- so you think these old elite rich people will not like 'socialist' programs like Medicare and social security and will vote to eliminate those programs
> funny how some older people literally count the days until they are eligible for medicare and social security.  I suppose if the "future elite" inherit multiple millions in a roth IRA they won't care about medicare,  they will just pay cash for knee and hip replacements



I absolutely believe my post is directionally correct.  I'll throw some more hand grenades into my view of the future 30 years from now:  

1) people will either not buy houses as we know it today or they will buy very small houses.  The asset called a house gains 4-5% in value annually over a long period of time.  Take out cost of living adjustment and that's not a great investment, especially given the asset size. Homes will be mostly be made in factories and assembled on a site of your choice.  This is happening in the modular home market now.  

2) modern health care will shift from a pharmaceutical oriented model to a genetic modification model.  Wellness and Eastern medicine will continue to increase in popularity.  Diet will change radically away from sugar, and many local and state governments will outlaw sugar based products. Most care will be preventative in nature shifting the cost of healthcare to a focus on wellness starting at an early age. 

3. People will buy local and will eat much less than today. Obesity will become a thing of the past just like the ill effects of smoking are already a thing of the past for most people.   How people shop will change also (already is).  Everything will move away from buying at the store to picking things up at Amazon or similar pick up points.  

4.  Cars as we know them will go away.  Cars will be electric and modular.  You will have a very small car that will be able to attach things like small modules for storage, luggage, etc.  They will all be electric or an alternative energy source. Many people will use electric scooters.  We will not see driverless cars dominate the roads, but there will be far fewer vehicles.  

5.  About 75% of all workers will be independent contractors and the work week will shift away from a standard 40 hour work week.  People will do two to three jobs that add up to 30-60 hours per week.  Businesses will be mostly service based and with few brick and mortar locations.  Everything will be in the cloud.  

Now let's look at what it was like in 1988 just 30 years ago.  
1) Smoking was around 30 percent of the population. It is about half that now.  
2) Most workers still relied on pensions and made careers at one or two companies.  401k plans were taking off.  The Roth IRA wasn't in place until 1997.  
3) American cars were terrible.  
4) MRI machines were just becoming available in most large hospitals.  The human genome project had not started yet.  
4) Every shopping center, most restaurants, and city streets had pay phones that cost a quarter.  Find one today.  People had cameras that were not part of their phone.  
5) Sears was a dominant player in retail.  Walmart was just getting off the ground nationally.  
6) Video rental stores were becoming an important part of most shopping centers.  So the bottom line is that 
a) 30 years is a long time, and b) societal  norms change a lot over a similar time period.  I may not be right about my predictions, but I'm not making up the past.

[Added paragraph breaks to make this readable.]


----------



## CalGalTraveler (Aug 26, 2018)

VacationForever said:


> Most people do not realize why luxury condo and coop prices have fallen hard since 2008 and will never recover unless the current or future administration changes the law.  During the real estate bust, the Obama administration deemed that condos loans were risky and put in place something called warrantable vs. non-warrantable condos.  All new condos sold by developers are non-warrantable, which in plain English meant that no FHA loan will be granted.  It also kills the resale market as buyers have to come up with 100% cash or get high interest loan through the secondary market.
> 
> To meet warrantable criteria, basically to get FHA loans:
> 
> ...



Thanks for sharing this @VacationForever. I learn so much from Tuggers as I had no idea this had taken place.  It's something to be aware of as we downsize someday, or consider trading our mountain cabin for a rental condo as a 1031 exchange.

re: the other thread on using a TS as a second home, this provides another downside of owning a vacation condo because non-warrantable rentals makes vacation condos sound more like timeshares.  However condos are higher risk for loss (via more capital invested) than a typical timeshare, non-warrantable makes it harder to sell, plus you have HOA dues etc that increase regularly.  -  there goes that condo in Hawaii dream...


----------



## Brett (Aug 26, 2018)

Big Matt said:


> I absolutely believe my post is directionally correct.  I'll throw some more hand grenades into my view of the future 30 years from now:  1) people will either not buy houses as we know it today or they will buy very small houses.  The asset called a house gains 4-5% in value annually over a long period of time.  Take out cost of living adjustment and that's not a great investment, especially given the asset size. Homes will be mostly be made in factories and assembled on a site of your choice.  This is happening in the modular home market now.  2) modern health care will shift from a pharmaceutical oriented model to a genetic modification model.  Wellness and Eastern medicine will continue to increase in popularity.  Diet will change radically away from sugar, and many local and state governments will outlaw sugar based products. Most care will be preventative in nature shifting the cost of healthcare to a focus on wellness starting at an early age. 3. People will buy local and will eat much less than today. Obesity will become a thing of the past just like the ill effects of smoking are already a thing of the past for most people.   How people shop will change also (already is).  Everything will move away from buying at the store to picking things up at Amazon or similar pick up points.  4.  Cars as we know them will go away.  Cars will be electric and modular.  You will have a very small car that will be able to attach things like small modules for storage, luggage, etc.  They will all be electric or an alternative energy source. Many people will use electric scooters.  We will not see driverless cars dominate the roads, but there will be far fewer vehicles.  5.  About 75% of all workers will be independent contractors and the work week will shift away from a standard 40 hour work week.  People will do two to three jobs that add up to 30-60 hours per week.  Businesses will be mostly service based and with few brick and mortar locations.  Everything will be in the cloud.  Now let's look at what it was like in 1988 just 30 years ago.  1) Smoking was around 30 percent of the population. It is about half that now.  2) Most workers still relied on pensions and made careers at one or two companies.  401k plans were taking off.  The Roth IRA wasn't in place until 1997.  3) American cars were terrible.  4) MRI machines were just becoming available in most large hospitals.  The human genome project had not started yet.  4) Every shopping center, most restaurants, and city streets had pay phones that cost a quarter.  Find one today.  People had cameras that were not part of their phone.  5) Sears was a dominant player in retail.  Walmart was just getting off the ground nationally.  6) Video rental stores were becoming an important part of most shopping centers.  So the bottom line is that a) 30 years is a long time, and b) societal  norms change a lot over a similar time period.  I may not be right about my predictions, but I'm not making up the past.



ok, so all those trends means the US is heading towards socialism
I'd like one of those socialistic scooters (or a socialist electric bike)


----------



## Big Matt (Aug 26, 2018)

Not socialism at all.  In my original post I outlined why an elite class of older voters will emerge.  They will not be aligned with socialist tendencies.  I think more Libertarian and anti Big Government.    I actually believe that there will be a crisis in the next 10-20 years that will force us to address the education gap between those people of lower socioeconomic status and those who have more resources/money.  I also believe that China and the U.S. will dominate the Global economy.  I see Russia and Europe becoming much less of a factor.


----------



## Brett (Aug 26, 2018)

Big Matt said:


> Not socialism at all.  In my original post I outlined why an elite class of older voters will emerge.  They will not be aligned with socialist tendencies.  I think more Libertarian and anti Big Government.    I actually believe that there will be a crisis in the next 10-20 years that will force us to address the education gap between those people of lower socioeconomic status and those who have more resources/money.  I also believe that China and the U.S. will dominate the Global economy.  I see Russia and Europe becoming much less of a factor.



but those things in your post are happening now!

just last week I saw lots of people were zipping around on electric scooters in a large US city
maybe libertarianism is now like socialism (but with universal health care)


----------



## dsmrp (Aug 26, 2018)

tompalm said:


> Well if he works for Boeing, he has done well and that stock has gone up a lot during the past few years. Now would be a good time to take some profits and get more conservative. Congrats to him.


One of the rare  times where procrastination paid off , but he was hearing of stock price every now and then.



CalGalTraveler said:


> If he is not designated as a restricted 10b5-1 senior executive, he has nothing to worry about and can trade the stock at any time (sooner the better). If he is designated as 10b5-1 (he will know because they are all over executives for this), then he should start working ASAP with a broker who can sell during the next open trading window (usually a few days after a quarterly close for public companies). He can also set up a 10b5-1 trading plan to sell the stock at designated trigger prices when the trading window is closed (like a blind trust).



Oh no no, he 's not an exec by any means. Just one of many thousands who abides by company ethics norms.  He's researching on how to do his own buy/sell transactions, via an online portal.


----------



## dsmrp (Aug 26, 2018)

dioxide45 said:


> I thought as interest rates rise, bonds lose value? This is because bond funds are priced based on the value of the bonds owned by the fund if they were sold, not what their maturity value is. If you are buying and selling bonds, a rising rate environment is bad. If it is buy and hold, you really should be buying individual bonds and not investing in a bond fund.



Yes you are quite right about inverse relationship of interest rate to bonds. I usually forget this. I was mis-remembering having put a little in a gold fund as a trial  hedge again interest rates. But gold fund promptly dropped in value after i invested, and has not come up . So it's a long term hold...


----------



## 3kids4me (Aug 26, 2018)

Big Matt said:


> 1) people will either not buy houses as we know it today or they will buy very small houses.  The asset called a house gains 4-5% in value annually over a long period of time.  Take out cost of living adjustment and that's not a great investment, especially given the asset size. Homes will be mostly be made in factories and assembled on a site of your choice.  This is happening in the modular home market now.  2) modern health care will shift from a pharmaceutical oriented model to a genetic modification model.  Wellness and Eastern medicine will continue to increase in popularity.  Diet will change radically away from sugar, and many local and state governments will outlaw sugar based products. Most care will be preventative in nature shifting the cost of healthcare to a focus on wellness starting at an early age. 3. People will buy local and will eat much less than today. Obesity will become a thing of the past just like the ill effects of smoking are already a thing of the past for most people.   How people shop will change also (already is).  Everything will move away from buying at the store to picking things up at Amazon or similar pick up points.  4.  Cars as we know them will go away.  Cars will be electric and modular.  You will have a very small car that will be able to attach things like small modules for storage, luggage, etc.  They will all be electric or an alternative energy source. Many people will use electric scooters.  We will not see driverless cars dominate the roads, but there will be far fewer vehicles.  5.  About 75% of all workers will be independent contractors and the work week will shift away from a standard 40 hour work week.  People will do two to three jobs that add up to 30-60 hours per week.  Businesses will be mostly service based and with few brick and mortar locations.  Everything will be in the cloud.  Now let's look at what it was like in 1988 just 30 years ago.  1) Smoking was around 30 percent of the population. It is about half that now.  2) Most workers still relied on pensions and made careers at one or two companies.  401k plans were taking off.  The Roth IRA wasn't in place until 1997.  3) American cars were terrible.  4) MRI machines were just becoming available in most large hospitals.  The human genome project had not started yet.  4) Every shopping center, most restaurants, and city streets had pay phones that cost a quarter.  Find one today.  People had cameras that were not part of their phone.  5) Sears was a dominant player in retail.  Walmart was just getting off the ground nationally.  6) Video rental stores were becoming an important part of most shopping centers.  So the bottom line is that a) 30 years is a long time, and b) societal  norms change a lot over a similar time period.  I may not be right about my predictions, but I'm not making up the past.



There is a lot that I don't agree with here, but I'll focus on two items:   

1. You have forgotten to add the "opportunity cost" (or loss) of *not* owning a house.  To be able to live in a appreciating (or even stable) asset is typically better than to be spending money and not gaining any equity.  I highly doubt people will stop buying houses.

2. Small cars may be fuel efficient, but in parts of the country where weather is a huge factor, 4WD vehicles, and larger, heavier vehicles, will continue to be needed.  And in other parts of the country, they would need to invent a smaller car that is as safe as a larger one, and/or people would have to stop needing to transport their families.

It's always fun to speculate on the "what ifs" and if we all knew for sure what would happen in 20 years, we could get rich on investing in the right companies who will move these things forward.  Certainly medical advances will continue to be made, and things will continue to become more digital - but we also have much stricter privacy laws than we had a few years ago.  GDPR will be coming to the US and elsewhere, and that will also change the landscape of what is manageable vs. not "on line."


----------



## bogey21 (Aug 26, 2018)

Big Matt said:


> 3. People will buy local and will eat much less than today. *Obesity will become a thing of the past* just like the ill effects of smoking are already a thing of the past for most people.   How people shop will change also (already is).  Everything will move away from buying at the store to picking things up at Amazon or similar pick up points.



Liked your post but I question that "Obesity will become a thing of the past"  I just got home from Subway.  Even at Subway everyone I saw was way overweight.  Most all were buying 12" sandwiches, sloshing on mayo or some other dressing, buying chips, super large sugar drinks (and a few) cookies in addition...

Me at my less than 150 pounds add only pepper to my 6" sandwich and drink water...

George


----------



## TravelTime (Aug 26, 2018)

Brett said:


> but those things in your post are happening now!
> 
> just last week I saw lots of people were zipping around on electric scooters in a large US city
> maybe libertarianism is now like socialism (but with universal health care)



Libertarianism and socialism are very very different. Opposites in many ways.


----------



## dsmrp (Aug 26, 2018)

Can we have a "jobfull economic recession"?  or is that an oxymoron? 

There are a lot of people living on the edge, afraid another downturn with increased cost of living or job loss, will force more people towards homelessness.  Although we've had a bull market, I've read articles that it hasn't translated to higher wages.  (I work for state gov't so not keeping abreast with private sector wages.)

My group did some community service a few weeks ago, handing out sack lunches. One team reported being able to give lunches to a man and his son who stopped and pulled over car on the street. The father said they were living in their car.  I gave a few bucks to a middle-aged couple on the bus, for fare on a different bus system to go 30-40 miles north to get to a shelter by the time it closed for the night.
Not meaning to sound political but I equate recession with more homelessness.


----------



## VacationForever (Aug 26, 2018)

dsmrp said:


> Can we have a "jobfull economic recession"?  or is that an oxymoron?
> 
> There are a lot of people living on the edge, afraid another downturn with increased cost of living or job loss, will force more people towards homelessness.  Although we've had a bull market, I've read articles that it hasn't translated to higher wages.  (I work for state gov't so not keeping abreast with private sector wages.)
> 
> ...



From this report, real wages for blue collar and low wage jobs have been increasing.  It appears that income gap may be closing between the lower and higher wage jobs.

https://www.usatoday.com/story/mone...-in-june-was-2018s-strongest-so-far/36579285/


----------



## VacationForever (Aug 26, 2018)

Big Matt said:


> I absolutely believe my post is directionally correct.  I'll throw some more hand grenades into my view of the future 30 years from now:
> 
> Diet will change radically away from sugar, and many local and state governments will outlaw sugar based products. Most care will be preventative in nature shifting the cost of healthcare to a focus on wellness starting at an early age.



There are lots of food that are sugar based, including sweet fruits like water melon and cantaloupe.  I don't see "outlaw" sugar based products will happen or even make sense.  Eating pasta, bread and rice have the same outcome as sugar based products.  All carbohydrates are turned into sugar in the body.  The pyramid table needs to be inverted and promoted by dieticians and health professionals.  I went to a weight management class for fun and it was OMG, the dietician had an apple shape body and belly, and she was still touting the pyramid food structure.  She also showed a video from the 60s, where an entire plate was filled with pasta, topped with red sauce and a little meat.  That same video also showed that on a plate, carbohydrates like grains or potatoes filled half a plate, followed by a quarter for vegetables and a quarter for protein.


----------



## Brett (Aug 26, 2018)

TravelTime said:


> Libertarianism and socialism are very very different. Opposites in many ways.



maybe...   Ayn Rand and Alan Greenspan thought they were very different
but if you believe the prior posts, they may be *quite similar* !
.
shocking !!!


----------



## dsmrp (Aug 26, 2018)

VacationForever said:


> From this report, real wages for blue collar and low wage jobs have been increasing.  It appears that income gap may be closing between the lower and higher wage jobs.
> 
> https://www.usatoday.com/story/mone...-in-june-was-2018s-strongest-so-far/36579285/



Perhaps they are.  In the article, my state, Washington, was listed as #5 of the 16 states where incomes are booming. But it is mainly for people in the information-tech industry.  The  real-estate and apartment rental prices went crazy cause in part they were afforded by tech workers with higher salaries. This drove more lower income people out to bordering towns where they have to spend more time and money getting to their jobs in the city.  The cost of living is pretty high here, but we have jobs...  I don't see it coming down a lot.  Apt rents in Seattle are leveling out because there's more empty new units 

I should restate, non-tech wages aren't keeping up with cost of living in my neck of the woods.


----------



## TravelTime (Aug 26, 2018)

VacationForever said:


> There are lots of food that are sugar based, including sweet fruits like water melon and cantaloupe.  I don't see "outlaw" sugar based products will happen or even make sense.  Eating pasta, bread and rice have the same outcome as sugar based products.  All carbohydrates are turned into sugar in the body.  The pyramid table needs to be inverted and promoted by dietician and health professionals.  I went to a weight management class for fun and it was OMG, the dietician had an apple shape body and belly, and she was still touting the pyramid food structure.  She also showed a video from the 60s, where an entire plate was filled with pasta,
> topped with red sauce and a little meat.  That same video also showed that on a plate, carbohydrates like grains or potatoes filled half a plate, followed by a quarter for vegetables and a quarter for protein.



Unless science invents a way to stop people from overeating or miraculously get rid of calories in a health way, obesity will continue. I can eat all the natural sugar I want from fruits and vegetables and not gain weight. The minute I eat processed food with added sugar, chocolate, ice cream, mixed drinks, beer, bread and similar unhealthy carbs, the weight jumps on. Just an FYI, I am at a normal weight with a normal BMI but would like to lose a few pounds that I regained when I started traveling a lot and eating out too much in the past couple of years.


----------



## TravelTime (Aug 26, 2018)

Brett said:


> maybe...   Ayn Rand and Alan Greenspan thought they were very different
> but if you believe the prior posts, they may be *quite similar* !
> .
> shocking !!!



Ayn Rand had a philosophy that was similar to libertarianism and Alan Greenspan is a Republican. True libertarianism and true Republicanism (without the social and religious stuff) are nearly identical.

https://en.m.wikipedia.org/wiki/Ayn_Rand

I think many people confuse libertarianism with socialism or liberalism because it starts with “liber...” Libertarianism is economically conservative and socially liberal.


----------



## dioxide45 (Aug 26, 2018)

TravelTime said:


> I can eat all the natural sugar I want from fruits and vegetables and not gain weight. The minute I eat processed food with added sugar, chocolate, ice cream, mixed drinks, beer, bread and similar unhealthy carbs, the weight jumps on.


The problem is that the processed foods are calorie dense where the fruits and vegetables are not, they are mostly water. In some cases 90+% water. So when eating processed foods, you are really eating more calories and it is the more calories that make the weight jump on not the type of foods you are eating.


----------



## TravelTime (Aug 26, 2018)

dioxide45 said:


> The problem is that the processed foods are calorie dense where the fruits and vegetables are not, they are mostly water. In some cases 90+% water. So when eating processed foods, you are really eating more calories and it is the more calories that make the weight jump on not the type of foods you are eating.



Yes exactly. Also there is a lot of fiber in fruits and veggies to fill you up quickly. I have never heard of someone overeating bananas or broccoli. LOL Unless the bananas are in a frozen drink or the broccoli is drenched in cheese.


----------



## davidvel (Aug 27, 2018)

TravelTime said:


> https://www.pbs.org/newshour/econom...ry-means-for-the-economy-and-your-investments
> 
> The stock market is having its longest bull run in history. Housing prices are maxing out in many markets. Unemployment is low. Inflation is creeping up. This party can’t last forvever. When do you think we will have the next recession? Do you predict a correction or a true recession? How do you think this will affect timeshare prices and maintenance fees?


10/10/2020


----------



## bluehende (Aug 27, 2018)

dsmrp said:


> Can we have a "jobfull economic recession"?  or is that an oxymoron?
> 
> There are a lot of people living on the edge, afraid another downturn with increased cost of living or job loss, will force more people towards homelessness.  Although we've had a bull market, I've read articles that it hasn't translated to higher wages.  (I work for state gov't so not keeping abreast with private sector wages.)
> 
> ...



Yes you can.  A recession is very specific to two quarters of negative gdp growth.  In the past we have had many times that were not recessions but felt like one.  Rarer but not precluded is your scenario of having a recession while having job growth.    

The wage growth is another problem.  We have had this problem for decades.  Every recession hits workers inversely to their salary.  We can hope that future wage and wealth gains get distributed a little more evenly.  A booming economy has always helped this as with a free market when labor gets tight the power shifts.  The drop in the market earlier this year was on a jobs report that saw a rise in wages.  This prompts inflation and leads to the brakes being put on by the fed.  Wages can be that canary in a coal mine for the next recession by signalling a top.


----------



## Big Matt (Aug 27, 2018)

TravelTime said:


> Libertarianism and socialism are very very different. Opposites in many ways.


Very much opposite.  One loves big government and the other does not.


----------



## Big Matt (Aug 27, 2018)

3kids4me said:


> There is a lot that I don't agree with here, but I'll focus on two items:
> 
> 1. You have forgotten to add the "opportunity cost" (or loss) of *not* owning a house.  To be able to live in a appreciating (or even stable) asset is typically better than to be spending money and not gaining any equity.  I highly doubt people will stop buying houses.
> 
> ...


Good debate.  

I never said that people would just spend their money instead of investing in a house.  I said very clearly that they would chose either not to buy or to buy smaller houses.  I never said they would blindly just spend the money.  

As for the car portion, I said that they were going to be electric and small with the ability to add modules.  I would expect that if one wanted to add modules for back seats, luggage, or even a larger compartment that they would just add them.  We'll see about whether people will continue to need to be mobile and driven around.  Everything I see leans towards people in the future working and being schooled at home.  Computers combined with the cost of supporting brick and mortar will force people back to the 1800's model where people didn't travel as much.  I also don't think most people will own cars, but that's another debate.    

Again, this is all in fun, and yes I'm 100% sure that many of my predictions will NOT come true in 30 years, but I do think they are based in fact.


----------



## Big Matt (Aug 27, 2018)

bogey21 said:


> Liked your post but I question that "Obesity will become a thing of the past"  I just got home from Subway.  Even at Subway everyone I saw was way overweight.  Most all were buying 12" sandwiches, sloshing on mayo or some other dressing, buying chips, super large sugar drinks (and a few) cookies in addition...
> 
> Me at my less than 150 pounds add only pepper to my 6" sandwich and drink water...
> 
> George


George, it is becoming an epidemic just like tobacco was in the 40s and 50s.  I'm of the opinion that our Big Government will begin to pass laws outlawing consumption of specific things (like sugar).


----------



## TravelTime (Aug 27, 2018)

Big Matt said:


> George, it is becoming an epidemic just like tobacco was in the 40s and 50s.  I'm of the opinion that our Big Government will begin to pass laws outlawing consumption of specific things (like sugar).



I think a huge difference between smoking and eating is that people need to eat, they do not need to smoke. Some people say going cold turkey on a bad habit is much easier than losing weight because of this. Perhaps as people get more affluent and can afford more fruits and vegetables and go to fast food restaurants less often, then the population may get thinner. Current stats show a huge difference in obesity rates by state and the poorest states that eat more fast food have a higher obesity level.


----------



## dsmrp (Aug 27, 2018)

TravelTime said:


> I think a huge difference between smoking and eating is that people need to eat, they do not need to smoke. Some people say going cold turkey on a bad habit is much easier than losing weight because of this. Perhaps as people get more affluent and can afford more fruits and vegetables and go to fast food restaurants less often, then the population may get thinner. Current stats show a huge difference in obesity rates by state and the poorest states that eat more fast food have a higher obesity level.



Yes people do not need to smoke, but they *want* to smoke. Nicotine is very addicting, and to top it off, it's an appetite suppressant as well.
More affluence and better consumer education would help people to have healthier diets, but I think change will come pretty slowly.
Fast food and more processed foods are pretty high in fat and/or carbohydrate content which contributes towards obesity.
They are also generally cheaper and more convenient than 'healthier' raw foods which take more time to prepare.


----------



## Brett (Aug 27, 2018)

Big Matt said:


> George, it is becoming an epidemic just like tobacco was in the 40s and 50s.  I'm of the opinion that our Big Government will begin to pass laws outlawing consumption of specific things (like sugar).



"*B*ig *G*overnment" soon outlawing sugar and the obese sugar hoarders end in up in jail............   meanwhile the little governments (states) are legalizing marijuana ....  maybe the illegal immigrants will be now be smuggling sugar across the border instead of weed


----------



## TravelTime (Aug 27, 2018)

Brett said:


> "*B*ig *G*overnment" soon outlawing sugar and the obese sugar hoarders end in up in jail............   meanwhile the little governments (states) are legalizing marijuana ....  maybe the illegal immigrants will be now be smuggling sugar across the border instead of weed



Actually “big” state governments are legalizing marijuana such as my state of California. Bad health move in my opinion. But I guess we need to fund entitlements somehow. Can we raise state tax above 13%? Can we increase sales tax about 9.5%? I think we are at the limit of what states can do to increase revenue to fund everything so they legalized marijuana as a way to grow the government.


----------



## VacationForever (Aug 27, 2018)

Sugar will never be outlawed because it just doesn't make sense.  Large consumption of carbohydrates is the real culprit.  Look at pasta - a regular plate of pasta yields about 100 to 200 grams of carbohydrates.  Carbs = sugar in the body.


----------



## wilma (Aug 27, 2018)

TravelTime said:


> Actually “big” state governments are legalizing marijuana such as my state of California. Bad health move in my opinion. But I guess we need to fund entitlements somehow. Can we raise state tax above 13%? Can we increase sales tax about 9.5%? I think we are at the limit of what states can do to increase revenue to fund everything so they legalized marijuana as a way to grow the government.



The voters of california legalized recreational marijuana.


----------



## DeniseM (Aug 27, 2018)

Since you are no longer discussing the original topic, and since the posts continue to be political, I am closing this thread.


----------

