Down goes the Dow

Ghost of Igloi wrote:

In regards to CDs I only said they would likely outperform the market in 2018 and I was correct.

I would like to know when that post was made.

And even if you did, prior to that you were touting cash. I guess you were correct on that too?

No I said cash was the best asset class when risk returned to the market. And guess what, cash did better than stocks in 2018 and by some meadures was the best asset class in 2018.

4/4/2018

Ghost of Igloi wrote:

Big Dog Investments wrote:

Today? Nothing. I’m not a day trader.

What did you short?

Actually I did buy some CDs 6 month 1.8% and 12 month 2.1%. Better bet than the market at current valuations.

A bold prediction in the middle of the year.

I guess the 4th qtr 2018 will be your new 2000 for the next 5 years. Let me guess, you called 1929.

You are a clown.

The Dow is up 8% from where it was on 4/4/2018.

Fact checker wrote:

The Dow is up 8% from where it was on 4/4/2018.

Yeah! but it's went in to correction territory 2 or 3 times in the past several years lasting 2 or 3 months.

Definitely, a reason for panic.

Ghost of Igloi wrote:

Well, that is because the Fed QE and low interext rate policies.

Are you that clueless?

[I]n a globalized world of open economies, the tight control of central banks over interest rates is a mirage. Central banks remain important enough players in the loan market that they can push short-term rates up or down a little. But in the final analysis, the market, not central banks, determines real interest rates.

Sally Vix wrote:

Sally Vix wrote:

So just ignore dividends? Isn't part of investing incurring dividends? Don't you want to look at how an investment does overall? Or you just have an agenda?

I didn't mean to be combative in my last post. But, you can't just look at how the stock market does just by looking at the index. You also have to figure in the dividends that were paid out or were reinvested.

Here's the deal : it's a fun fact about the index, not a particular investor over that time. As with most little factoids, they paint a relatively small picture that isn't indicative of the overall global view (which included the Great Depression and the largest war ever).

I think it's interesting that it took that long for the index to recover, inflation adjusted of course. Yes, if you apply principals of modern portfolio theory then an investor would have potentially recovered much quicker. However, said investor would have to be in position that isn't worth $0. A lot of investors were broke. You can't reinvest dividends if the company goes bankrupt or ends a dividend all together.

Ghost of Igloi wrote:

Better than stocks.

Apparently not.

wondering wrote:

Ghost of Igloi wrote:

Better than stocks.

Apparently not.

Ghost - the NASDAQ is up 20% in two months. Would you have not wanted to be on that wave???

Sally Vix wrote:

wondering wrote:

Apparently not.

Ghost - the NASDAQ is up 20% in two months. Would you have not wanted to be on that wave???

Of course nothing to be concerned about. Don’t worry, be happy:

Avoidance.

I avoid phony trolling attempts.

Greedings, oh hungry ones!

Update on this issue i had with a low rate of return i was getting on my brokerage money market accounts. You guys had a bunch of good advice, and this is back from a couple of weeks ago, thank you very much!

I called my online brokerage and they said the rate was so low because it was the going rate for FDIC ensured money markets. It's a tiered rate sched. ranging from 0.10 % to 0.70%.

They set me up with a SIPC insured deposit account instead and i will be getting 1.99% interest rate instead. And it is a daily sweep, btw, and otherwise identical in how i have immediate access to the capital for trading or disbursement or whatever.

I did research the difference between FDIC and SIPC, and i understand there is a bit more risk, but the risk seems rather benign to my assessment.

Thanks for all the advice and I just thought i would get back to you on how this played out.

Seattle,

SIPC is insurance against the brokerage firm going bankrupt. It is an industry funded insurance. All securities are insured for Net Asset Value or NAV. So a non-FDIC insured money market account can go below $1.00 a share. FDIC insured money market are “bank deposits” and covered by FDIC insurance where $1.00 is a dollar. However, FDIC insurance covers $250,000 per account holder, or $500,000 for a couple. If you had CDs in a brokerage account in two different banks and the FDIC bank deposit program, you could have $250,000 per sccount holder in each entity, or $750,000 for a single account holder or $1,500,000 for a couple. The SIPC covered assets could theoretically, but not likely, go to zero.

Igy

But how often does the SIPC account actuallly lose any value whatsoever? My understanding is that it virtually never happens (though could).

CDs aren't something i was interested in because I prefer not to tie the funds up for a period of time.

Thanks for the ideas.

Seattle,

Money market accounts “broke the buck” in 2008 with the Leman bankruptcy. As a result the SEC formulated new rules where you have two classes of money market funds, “bank deposit” programs, which by definition are insured by FDIC up to $250,000 per account holder, and money market accounts that have the same SPIC insurance as equities (market value). At our firm all sweep accounts, where dividends or deposits go, are bank deposit programs. As I said, money markets are likely to break $1.00 in a severe downturn, but unlikely to go to zero. However, they do contain commercial paper and repo paper and other more exotic instruments. In 2008-2009 there were problems.

Igy

Ghost of Igloi wrote:

Gruntz wrote:

His lying has been well documented here.

Bug off troll. I have never lied. @$$ wipe.

Oh, the irony!

seattle prattle wrote:

But how often does the SIPC account actuallly lose any value whatsoever? My understanding is that it virtually never happens (though could).

CDs aren't something i was interested in because I prefer not to tie the funds up for a period of time.

Thanks for the ideas.

Basically if the credit markets get blown to pieces then you could be in trouble. Or if you invest with Bernie Madoff.

Probably also depends if you have a cash settled vs margin account