What's the next stock market bubble?

[easyrider]

Just wanting to help others in (unpredictable) times of need. .... Bless your heart, Bill

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I think you were right regarding timing the market. The only problem I had was our gains didn't seem reliable enough to bet my retirement on. I do look at the old 2008 portfolio and if I held it , you would be right in that it did eventually make really good gains.

Bill

 

[Ralph Sir Edward]

Just wanting to help others in (unpredictable) times of need. .... Bless your heart, Bill

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It's that my view of a diversified portfolio is much more "diversified" than yours. And then there is the re-balancing - how much and how often. Of course, with re-balancing comes taxes. Some prefer not to re-balance, per se, but to alter what they currently invest their new money in; to whatever is currently the most under valued, avoiding unwanted taxation. You pays your money and takes your choice. . .

I simply consider gold and real estate as the same class of asset. When you look at stocks as a class, for example, do you exclude all stock that don't pay a dividend? There's been a lot of money made in stocks that don't pay a dividend.

 

[Brett]

It's that my view of a diversified portfolio is much more "diversified" than yours. And then there is the re-balancing - how much and how often. Of course, with re-balancing comes taxes. Some prefer not to re-balance, per se, but to alter what they currently invest their new money in; to whatever is currently the most under valued, avoiding unwanted taxation. You pays your money and takes your choice. . .

I simply consider gold and real estate as the same class of asset. When you look at stocks as a class, for example, do you exclude all stock that don't pay a dividend? There's been a lot of money made in stocks that don't pay a dividend.

I invest in Schwab 1000 ETF, Vanguard 500, Vanguard Utilities ETF, etc.

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[Ralph Sir Edward]

I invest in Schwab 1000 ETF, Vanguard 500, Vanguard Utilities ETF, etc.



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This is where we disagree. Diversification does not mean merely different grouping of stocks, or shifting between stocks and bonds. It means totally different kinds of investments.

If I may quote from ecclesiastes. There is a time for everything. There is a time to sow, and there is a time to reap. . .

And even though tomorrow is known to no man, guessing what the morrow will bring is the business of investing. Being wrong and being totally surprised is part of the lot of being an investor. It always helps to have something that will go right when other things go wrong.. . .

 

[Carolinian]

With the debt bomb out there with many western countries, bonds carry a fiat currency risk. If I were doing bond investments, I would look for ones denominated in currencies of countries that are not facing a debt bomb, Switzerland, Norway, and a handful of others. If France's budget problem goes pear-shaped over its current financial problems, look out for contagion.

 

[Brett]

This is where we disagree. Diversification does not mean merely different grouping of stocks, or shifting between stocks and bonds. It means totally different kinds of investments.

If I may quote from ecclesiastes. There is a time for everything. There is a time to sow, and there is a time to reap. . .

And even though tomorrow is known to no man, guessing what the morrow will bring is the business of investing. Being wrong and being totally surprised is part of the lot of being an investor. It always helps to have something that will go right when other things go wrong.. . .

Diversification

 

[Ralph Sir Edward]

Diversification

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Of that list, 90+% are financial assets. The only ones that aren't are: Commodities and precious metals. (and I expect by commodities you mean future contracts, rather than actual commodity ownership.)

No direct ownership of real estate, no royalty income of any sort, (patents, copyrights, mineral royalties), no art work, no business silent partner, ect.

Only things that are bought and sold on trading counters, with other people making all the business decisions, good or bad, all as part of the package.

 

[Brett]

Of that list, 90+% are financial assets. The only ones that aren't are: Commodities and precious metals. (and I expect by commodities you mean future contracts, rather than actual commodity ownership.)

No direct ownership of real estate, no royalty income of any sort, (patents, copyrights, mineral royalties), no art work, no business silent partner, ect.

Only things that are bought and sold on trading counters, with other people making all the business decisions, good or bad, all as part of the package.

Actually, the metals and commodities listed are "financial" assets in an ETF. And, of course, patents, royalties, copyrights, etc. owned by corporations.

But dude, Everything is ultimately "financial" except the physical gold (or diamonds) in your basement safe. Even your house !

Yes, in a zombie apocalypse your basement gold coins will be valuable but until then ............

https://theonion.com/financial-expe...-portfolio-with-multiple-harebrained-schemes/

 

[Ralph Sir Edward]

Actually, the metals and commodities listed are "financial" assets in an ETF. And, of course, patents, royalties, copyrights, etc. owned by corporations.

But dude, Everything is ultimately "financial" except the physical gold (or diamonds) in your basement safe. Even your house !

Yes, in a zombie apocalypse your basement gold coins will be valuable but until then ............


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https://theonion.com/financial-expe...-portfolio-with-multiple-harebrained-schemes/

Even my paid for house? Explain to me how it is a financial asset. It keeps the rain off of me. And I can do anything I want with it.

 

[Carolinian]

Of that list, 90+% are financial assets. The only ones that aren't are: Commodities and precious metals. (and I expect by commodities you mean future contracts, rather than actual commodity ownership.)

No direct ownership of real estate, no royalty income of any sort, (patents, copyrights, mineral royalties), no art work, no business silent partner, ect.

Only things that are bought and sold on trading counters, with other people making all the business decisions, good or bad, all as part of the package.

His list also neglects owning actual rental real estate, as it only lists REITs. It also calls bonds defensive, which is laughable given the level of debt and inflation out there now, with a potential to get much worse. Hello, France! Hello UK!

But here is the real stock market problem. Margin debt is through the roof, over a trillion dollars. Imagine what margin calls will do to the stock market, and the economy. Of course, it will also temporary depress precious metals because investors who hold paper gold and silver contracts tend to sell them to meet margin calls. In the past, gold and silver investors have known that is predictable after a stock market downturn and use that dip as a buying opportunity. Once the margin calls are washed out of the paper gold and silver markets, values tend to go back to where they were. Part of that is because central banks also know it is a buying opportunity and they take advantage of it, too.

Of course, in the event of margin calls getting to the point they are about to crash the economies, I would expect governments to flood the economies with cash, which will also drive high inflation.

 

[easyrider]

I simply consider gold and real estate as the same class of asset.

It kind of depends on the type of real estate. Rental properties provide cash flow. Gold doesn't provide cash flow but I would rather have gold than cash.

Bill

 

[easyrider]

Yes, in a zombie apocalypse your basement gold coins will be valuable but until then

Actually, the thing about gold is it has a Federal value of about $42.00 and a market value of around $3,700. Interesting is the talk of resetting the Federal gold prices. If they used the money supply to gold ratio , gold would be close to $10,000 per ounce and silver would be close to $1,225 per ounce. What ever they do, $42 isn't the right number, imo.

Bill

 

[Brett]

Actually, the thing about gold is it has a Federal value of about $42.00 and a market value of around $3,700. Interesting is the talk of resetting the Federal gold prices. If they used the money supply to gold ratio , gold would be close to $10,000 per ounce and silver would be close to $1,225 per ounce. What ever they do, $42 isn't the right number, imo.

Bill

Yes, use the gold to pay off the national debt and fund social security - genius !
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[easyrider]

Yes, use the gold to pay off the national debt and fund social security - genius !
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I think it's their end game. The Fed can place the value of gold to whatever they want. In 1934's Depression the did reset gold values to devalue the dollar.

Bill

 

[Carolinian]

The main bubble is debt. With over a trillion dollars in margin loan debt in US stock markets, margin calls could lead to a doom loop feeding even bigger margin calls. That is private debt.

There is also government debt. As bad as US government debt is, some European countries are worse. In the agreement to establish the euro currency, one commitment was to limit government debt to 60% of GDP. Many countries are way past that, with five double that amount, including struggling France. Here is the debt to GDP ratio for eurozone countries:

 

[WaikikiFirst]

The bubble here is in NostraMalthus. It competes with a BobbyMcFerrinus bubble.

 

[Carolinian]

To avoid bubbles, one can look to what central banks are buying for security. Over the last few years, they have been dumping all major fiat currencies, the dollar, the euro, the pound, the yuan, the yen, etc. and buying gold. They are likely to keep doing that because all major fiat currencies have government debt problems. That is why gold has just reached another ATH. When there is a dip in gold prices, it just triggers more central bank buying.

 

[Ralph Sir Edward]

Gold this morning - $3800/oz spot, Silver above $44/oz spot.

 

[Carolinian]

Gold this morning - $3800/oz spot, Silver above $44/oz spot.

Silver $46.50 today

The G7 have named silver a critical mineral to stockpile.

 

[Ralph Sir Edward]

I ran across this youtube video about Boomers (and Jonesers) and retirement. It's really worth a look, and some thought about retirement for those younger than them. it's about 30 minutes.

It's the reason why I am so much a champion of true diversification.

 

[Brett]

I ran across this youtube video about Boomers (and Jonesers) and retirement. It's really worth a look, and some thought about retirement for those younger than them. it's about 30 minutes.

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It's the reason why I am so much a champion of true diversification.

LOL
(why I'm a champion of true diversification )

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https://money.com/wealthiest-generation-baby-boomers/

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[Ralph Sir Edward]

LOL
(why I'm a champion of true diversification )

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https://money.com/wealthiest-generation-baby-boomers/


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Define a boomer. The life experience of someone born in 1946 is very different from 1964. I got my first job when mortgage rates were 18 percent. Get an old mortgage rate comparison book and compare the monthly payments at 18% to 7%.

I'll do it for you 18% - $1,507 7% - $665. You could buy 2.25 time more house at 7% than at 18%.

Take a look at the median wage in the early 1980's and compare it to the median wage today.

 

[4TimeAway]

How about the idea that many Boomers want to wait until they are ready for retirement not when the market is flashing sell?
I guess all I can say is Asset Class Diversification is not just buying one of anything and more importantly being ready to make do with less for a bit is not a bad idea in general.

I attended a presentation recently about the idea that Private Equity has pushed small business valuations to an extreme and with interest rates possibly going down (short term) the window to liquidate and reinvest in non-correlated assets might be upon us. It was partially cyclical, but also just the Baby Boom aging out of the workforce.

Anecdotally I can say I’ve had a couple clients pass on rather unexpectedly (i.e. still working) and never having lived the advertised golden years. I suspect many people are going to struggle with multiple asset classes collapsing in multiple valuations after the Mid-Terms. The country already feels like it’s a loaded cannon waiting to explode and we have the best times ever? (SARC)


Gosh do we my wife and I have so much stuff we don’t need, don’t use and don’t enjoy…
But those darn resale timeshares sure help us make some memories as the years fly by!

 

[4TimeAway]

Silver $46.50 today

The G7 have named silver a critical mineral to stockpile.

Didn't a guy named Warren corner that a couple decades ago?

 

[Carolinian]

YTD performance:
Silver UP 54.87%
Gold UP 43.04%
bitcoin UP 15.27%
S&P 500 UP 12.54%
Dow Jones UP 8.39%

And here's the changes on a 5 year time horizon:
Silver UP 158.43%
Gold UP 148.58%
S&P UP 102.73%
Dow UP 59.83%