With the stock market plunging. . .

[davidvel]

OK, so you are expecting HUGE stock market gains ... at some point in the future.
Please tell us a day or two before the HUGE gains occur .... much thx

Time will tell if it hit bottom. If it did, for those who continued to buy as it fell, those gains are coming now. If not, those huge gains will come later, but surely they will.

 

[Fredflintstone]

TP is still very scarce around here, but it can be found first thing as stores open up for a little while usually. However, haven't see basic staples like canned veggies, soup, flour, sugar, rice and bean on any shelf for the last couple of weeks.


I don't know about huge gains, as I think this struck a deep blow to the economy and it is going to be slow to recover. But recover it will; just a matter of how long it will take.

I continue with my automatic investments, but I haven't stepped up those as, frankly, I'm keeping a larger emergency cash fund. I think that is a prudent plan for me.

Kurt

Having Emergency cash is always smart, Kurt. That way, you aren’t forced to sell anything cheap. Heaven knows, we don’t want anyone forced to pawn their watch or wedding ring for 5 bucks.

Frankly, it’s debt that kills folks. The sooner one is free of debt, the better.


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[VacationForever]

We have decided to make use of the RMD waiver provision in the stimulus bill. However we still need to sell something by mid-year to cover what would have been the RMD withdrawal. No one knows what the market will do in the coming months.

 

[Ironwood]

These past three days may be a dead cat bounce, only time will tell, but 20-30% up from Mondays close in some sectors is welcome. I just sold two holdings near the high for the day to sell into the rally....still well below B/E on both, so I will look to buy back in lower on the next sell off....or shift into something else. You have to be nimble in this, and that's easier said than done.

 

[Fredflintstone]

We have decided to make use of the RMD waiver provision in the stimulus bill. However we still need to sell something by mid-year to cover what would have been the RMD withdrawal. No one knows what the market will do in the coming months.

True. It takes time to repair the damage. How long is anyone’s guess. I’m sorry you have to liquidate anything.

I have been reading about the impacts in Las Vegas. I find, sadly, Vegas is very badly hurt when the economy has shocks. The layoffs there are going to be brutal. That said, on a financial front, this may be the time to buy up properties after the full impact happens. Vegas is always one place that recovers nicely when economies turn around.


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[easyrider]

Was this just the natural, long term die off of the boomers as they age out, or was he saying there would be a significant die off just due to COVID-19? Just curious.

Kurt

His assumption is that the boomers have been dying off and since they are a huge group, with many in the group owning property, property prices will decline as the boomers sell off their properties creating a housing surplus. He also thinks stocks are heading down and it will take decades for prices to come back to the highs. Basically, Harry says it is time to sell your house and stocks. The one thing with Harry Dent is he is a writer as much as he is a financial "expert". Many of the things he says are to sell books, imo. Same goes for Robert Kiyosaki in some ways.

Bill

 

[pittle]

We have decided to make use of the RMD waiver provision in the stimulus bill. However we still need to sell something by mid-year to cover what would have been the RMD withdrawal. No one knows what the market will do in the coming months.

We have already taken our RMD out for this year - plus some extra because the markets were really up in January.

We have enough emergency cash in a safe to keep us going for quite a while. For several years, we have both gotten extra money out of the ATM to build that fund - so it is mostly in 20"s, but we do have smaller bills. As hubs says, if someone does not have change for a $20, we will be OK with no change, but how many folks will have change for a $50 or $100 bill in a crisis? (Actually, at the first of the year I counted it and we took some back to the bank to put into our savings account - we had way too much just sitting at home!)

In 2016, we made the decision to stop going out to eat weekly, buy fewer clothes, and take fewer (but longer) vacations. We still did 6-8 weeks a year, but just went fewer times to save on airfare. All the money not spent on these things was put into the savings account. We also took out more than the RMD, paid taxes on it and added that to the savings account. This account now has 2 years of monthly expenses in it. So, now we can just sit it out and wait and see how it goes.

But, I will say that it was a shame that we did not start doing this until we were close to 70. We just kept the money in the IRA or bank accounts. After watching the natural disasters and how people did not have cash to pay for things when they had to evacuate, we decided that we needed to have some cash available. I'm glad that we have it now.

 

[Luvtoride]

Phyllis, I understand the need for having available funds for living so you don't need to liquidate investments during down markets like this, but where is the need for CASH in the safe coming from? There is no issue with getting cash from banks and most folks don't even use cash much anymore....they use debit cards or credit cards that are paid off in full each month. I think we are a long way off from the banks and financial system being that precarious that the banks and the FDIC insurance would be at risk. Have you had a financial advisor helping you to structure your assets in a way to avoid selling in a crisis or paying more than you should in taxes?

 

[Brett]

We have already taken our RMD out for this year - plus some extra because the markets were really up in January.

We have enough emergency cash in a safe to keep us going for quite a while. For several years, we have both gotten extra money out of the ATM to build that fund - so it is mostly in 20"s, but we do have smaller bills. As hubs says, if someone does not have change for a $20, we will be OK with no change, but how many folks will have change for a $50 or $100 bill in a crisis? (Actually, at the first of the year I counted it and we took some back to the bank to put into our savings account - we had way too much just sitting at home!)

In 2016, we made the decision to stop going out to eat weekly, buy fewer clothes, and take fewer (but longer) vacations. We still did 6-8 weeks a year, but just went fewer times to save on airfare. All the money not spent on these things was put into the savings account. We also took out more than the RMD, paid taxes on it and added that to the savings account. This account now has 2 years of monthly expenses in it. So, now we can just sit it out and wait and see how it goes.

But, I will say that it was a shame that we did not start doing this until we were close to 70. We just kept the money in the IRA or bank accounts. After watching the natural disasters and how people did not have cash to pay for things when they had to evacuate, we decided that we needed to have some cash available. I'm glad that we have it now.

I would also question the need for physical paper cash. Do you think that the financial system will collapse and ATM's and credit cards won't work?
I carry almost no paper cash, I pay everything online or through credit cards

 

[easyrider]

I would also question the need for physical paper cash. Do you think that the financial system will collapse and ATM's and credit cards won't work?
I carry almost no paper cash, I pay everything online or through credit cards

I don't use much cash either but usually keep some around. I like air miles so we use our credit card. The kids in our family all use venmo. I haven't tried this yet but I think its about time.

Bill

 

[Fredflintstone]

I would also question the need for physical paper cash. Do you think that the financial system will collapse and ATM's and credit cards won't work?
I carry almost no paper cash, I pay everything online or through credit cards

No, I don’t think the financial system will crash BUT I am not sure about inflation/deflation. With all this borrowing going on worldwide to prop up the economy, something has got to give.


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[pittle]

Phyllis, I understand the need for having available funds for living so you don't need to liquidate investments during down markets like this, but where is the need for CASH in the safe coming from? There is no issue with getting cash from banks and most folks don't even use cash much anymore....they use debit cards or credit cards that are paid off in full each month. I think we are a long way off from the banks and financial system being that precarious that the banks and the FDIC insurance would be at risk. Have you had a financial advisor helping you to structure your assets in a way to avoid selling in a crisis or paying more than you should in taxes?

I am not worried about the financial institutions being that precarious either. We have been retired for 18 & 20 years living off of savings and IRA. Our guy is awesome.

I use ATM and credit cards a lot, but when I have to spend real cash, I think about it more. It is so easy to spend more than you plan to when using the cards. Some months, I am surprised at how much the two of us have spent when that bills come in.

Before we started a specific Savings Account, hubs started collecting cash because he had specific things that he knew that we would need for - things like new tires, car repairs, grandson's graduation, etc. He just did not want to pay for those things with a CC, he started saving cash. The cash could be deposited in the bank when we needed to spend it. He got so that he liked having some cash available.

We lived in Tornado Alley for 30+ years and when things get blown away in one part of town, all the power is off everywhere so no ATM's work. Once when the power lines broke from ice storm - hubs was able to buy a generator with cash (from the safe) at a farm store that had no power either. The manager had opened because they did know how to make a sales transactions without the cash register.

 

[DavidnRobin]

The stock market is only one part of the Economy. Most Americans are not directly invested in the stock market. Those with wealth are involved in the stock market with the wealthiest more involved. People who own TimeShares are also more likely to be invested in the stock market since many had the finances that allowed them to buy TSs (hopefully).

Things like GDP, Inflation, USD Value, and Deficit/Debt are also part (gauges) of the Economy.

The economy is not working well for the jobless, homeless, in debt, or living paycheck to paycheck (etc.)


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[Fredflintstone]

The stock market is only one part of the Economy. Most Americans are not directly invested in the stock market. Those with wealth are involved in the stock market with the wealthiest more involved. People who own TimeShares are also more likely to be invested in the stock market since many had the finances that allowed them to buy TSs (hopefully).

Things like GDP, Inflation, USD Value, and Deficit/Debt are also part (gauges) of the Economy.

The economy is not working well for the jobless, homeless, in debt, or living paycheck to paycheck (etc.)


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I dont think the economy has ever worked well for the jobless, homeless, in debt or living paycheque to paycheque. That’s why we have a class structure where it’s hard to move up the ranks...


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[Fredflintstone]

So far I’m glad I bought a further 5 k shares of WYND at 15.00 even on the dip. Just adding to my dividends for vacation.

So far, purchased

3500 at 36.75
1500 at 27.50
5000 at 15 even

Dividends currently at .50 a quarter. They may temporarily go down but I see a rise.

Price now at around 25 a share.

Still see this as a great, long term investment and dividends paying for the vacations.


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[pedro47]

Now is the time to purchase quality stocks for long term investments. IMO.

 

[Brett]

Now is the time to purchase quality stocks for long term investments. IMO.

OK ... assuming one doesn't have to sell quality stocks to obtain the cash to purchase other quality stocks

 

[VacationForever]

We just got off a phone call with our FA. We had emailed him earlier today to stop RMD distribution for the rest of the year and how we will need to liquidate a small amount from a taxable account in the second half of the year. He is bullish about stock market recovery in the 2nd half of this year. Time will tell.

 

[rickandcindy23]

I would like to see credit card interest rates decrease, as a result of this poor economy. I would like to see them lower the rates from 22% to about 5% for people who owe money and cannot get caught up. This isn't a position I am in, but I see it as a major roadblock for many low-middle income people.

 

[Brett]

I would like to see credit card interest rates decrease, as a result of this poor economy. I would like to see them lower the rates from 22% to about 5% for people who owe money and cannot get caught up. This isn't a position I am in, but I see it as a major roadblock for many low-middle income people.

Low interest rates are good for borrowers but most credit card interest rates are not like CD's, bond or mortgage rates.
most credit card rates are not directly dependent on short term market interest rates

 

[dioxide45]

I would like to see credit card interest rates decrease, as a result of this poor economy. I would like to see them lower the rates from 22% to about 5% for people who owe money and cannot get caught up. This isn't a position I am in, but I see it as a major roadblock for many low-middle income people.

Most people likely have flexible rate credit cards, meaning they move with the fed funds rate. The fed funds rate was as high as 2.5% in December 2019 and 2.25% in mid 2019. It is now down to 0%-0.25%. So those with flexible rate cards have seen a decrease of 2%-2.5% in their rate. Of course, no where close to the 5% you mention.

 

[DavidnRobin]

I dont think the economy has ever worked well for the jobless, homeless, in debt or living paycheque to paycheque. That’s why we have a class structure where it’s hard to move up the ranks...


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I don’t disagree - I was commenting that the economy is more than just the stock market. Income inequality is also currently at the highest mark in modern history.

btw - the overall economy was strong in 2016, and the stock market from during the previous administration was similar (%-wise) to the current administration prior to Covid.

Stock Market Performance by President

This interactive chart shows the running percentage gain in the Dow Jones Industrial Average by Presidential term. Each series begins with the closing value of the month of inauguration and runs to the closing value of the last month of the term. The y-axis shows the total percentage increase...

www.macrotrends.net

And the previous admin had a reduction of unemployment from 10% to 4.5%, whereas the current admin went from 4.5% to 3.5%. (approximately)

Annual unemployment rate U.S. 2023 | Statista

The annual unemployment rate fell to its lowest point in decades in 2022 as the U.S. economy continues to recover from the COVID-19 pandemic.

www.statista.com

Then there is the Federal Deficit/Debt...

U.S. Budget Deficit by President

Here are the budget deficits for each president back to Woodrow Wilson. Obama had the highest dollar increase, but Wilson had the biggest percentage rise.

www.thebalance.com

U.S. National Debt by President

Check out how the national debt has increased by year and president. Depending on how you measure it, the answers may differ.

www.thebalance.com

These are facts - not rhetoric.


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[Brett]

I don’t disagree - I was commenting that the economy is more than just the stock market. Income inequality is also currently at the highest mark in modern history.

btw - the overall economy was strong in 2016, and the stock market from during the previous administration was similar (%-wise) to the current administration prior to Covid.

Stock Market Performance by President

This interactive chart shows the running percentage gain in the Dow Jones Industrial Average by Presidential term. Each series begins with the closing value of the month of inauguration and runs to the closing value of the last month of the term. The y-axis shows the total percentage increase...

www.macrotrends.net

And the previous admin had a reduction of unemployment from 10% to 4.5%, whereas the current admin went from 4.5% to 3.5%. (approximately)

Annual unemployment rate U.S. 2023 | Statista

The annual unemployment rate fell to its lowest point in decades in 2022 as the U.S. economy continues to recover from the COVID-19 pandemic.

www.statista.com

Then there is the Federal Deficit/Debt...

U.S. Budget Deficit by President

Here are the budget deficits for each president back to Woodrow Wilson. Obama had the highest dollar increase, but Wilson had the biggest percentage rise.

www.thebalance.com

U.S. National Debt by President

Check out how the national debt has increased by year and president. Depending on how you measure it, the answers may differ.

www.thebalance.com

These are facts - not rhetoric.


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I get it.
But on this timeshare website you cannot indicate "which president had the most federal debt"
or which president that had the "best stock market performance"

or probably even say that the economy is more than the "stock market" ......
sorry, that isn't allowed here - TUG rules: potentially socially contentious issues -

 

[TravelTime]

The Wall Street Journal says we just entered a new bull market! LOL It makes a good headline. Maybe people will read news like this and jump back in, making it a self fulfilling prophecy. Personally, I am least worried about the stock market and most worried about the unemployment rates, businesses going bankrupt and how so many people will be defaulting on rent, mortgages, etc. The complete shut down of the economy will cause a possible depression. The stock market will start coming back once the virus stabilizes and well before the worst is over. By 2009, the stock market was already climbing even though the worst of the Great Recession was not over for several years after that.

--------

Dow Escapes Bear Market With a 6% Rally
The blue-chip index is now up 20% from its low, qualifying as a new bull market
By Caitlin McCabe, Anna Hirtenstein and Chong Koh Ping
Updated March 26, 2020 5:31 pm ET

U.S. stocks soared Thursday as the government came closer to approving a $2 trillion stimulus package to combat the coronavirus pandemic, capping a three-day rally that has pushed the Dow Jones Industrial Average into a bull market.

The Dow industrials finished the day up 1351.62 points, or 6.4%, to close at 22,552.17. The jump ends an 11-trading day bear market for the index—the shortest in history for the Dow—which reached its bear-market low just three days ago.

The rapid plunge out of, and then back into, a bull market underscores just how volatile U.S. stocks have become as the coronavirus pandemic ripples through the economy. The Dow industrials are still down 21% for the year, despite also climbing 21% in the last three days—the largest three-day percentage gain for the index since 1931.....

Read more here:

Dow Rallies 6.4% After Stimulus Vote

The Dow industrials rose more than 1,300 points, putting it 20% above its recent low and back into bull-market territory, despite unemployment claims soaring in a fresh sign of the economic disruption caused by the coronavirus pandemic.

www.wsj.com

 

[Brett]

The Wall Street Journal says we just entered a new bull market! LOL It makes a good headline. Maybe people may read news like this and jump back in, making it a self fulfilling prophecy. Personally, I am least worried about the stock market and most worried about the unemployment rates, businesses going bankrupt and how so many people will be defaulting on rent, mortgages, etc. The complete shut down of the economy will cause a possible depression. The stock market will start coming back once the virus stabilizes and well before the worst is over. By 2009, the stock market was already climbing even though the worst of the Great Recession was not over for several years after that.

--------

Dow Escapes Bear Market With a 6% Rally
The blue-chip index is now up 20% from its low, qualifying as a new bull market
By Caitlin McCabe, Anna Hirtenstein and Chong Koh Ping
Updated March 26, 2020 5:31 pm ET

U.S. stocks soared Thursday as the government came closer to approving a $2 trillion stimulus package to combat the coronavirus pandemic, capping a three-day rally that has pushed the Dow Jones Industrial Average into a bull market.

The Dow industrials finished the day up 1351.62 points, or 6.4%, to close at 22,552.17. The jump ends an 11-trading day bear market for the index—the shortest in history for the Dow—which reached its bear-market low just three days ago.

The rapid plunge out of, and then back into, a bull market underscores just how volatile U.S. stocks have become as the coronavirus pandemic ripples through the economy. The Dow industrials are still down 21% for the year, despite also climbing 21% in the last three days—the largest three-day percentage gain for the index since 1931.....

Read more here:

Dow Rallies 6.4% After Stimulus Vote

The Dow industrials rose more than 1,300 points, putting it 20% above its recent low and back into bull-market territory, despite unemployment claims soaring in a fresh sign of the economic disruption caused by the coronavirus pandemic.

www.wsj.com

GREAT news !
I look forward to the raging bull market rally