Credit spreads blew out today massively. which is a sign that we're entering step 2: recession.
So we're still in the tariff panic and about to start the recession panic.
I suppose step 3 is financial crisis if something breaks because of the USA being a bull in a china shop.
great. just great.
I think if indicators of a weakening economy and poor earnings reports start coming in, things will go significantly lower. The biggest trouble with all of this is that Trump is unpredictable, so he could cancel all this tariff nonsense, or he could drive us into a deep recession. Either are quite possible from my perspective. With that in mind, the current dip could be momentary, or it could just be the beginning. Seeing the Nasdaq down 40% from all time highs sometime this year is not at all out of the question.
Regardless, for the last 5 months or so I have felt like there was not really any good place to invest my spare cash. I no longer feel like that with things down 20% at present. Returning to DCA right now would not be a bad long term strategy.
Credit spreads blew out today massively. which is a sign that we're entering step 2: recession.
So we're still in the tariff panic and about to start the recession panic.
I suppose step 3 is financial crisis if something breaks because of the USA being a bull in a china shop.
great. just great.
I just heard a brief interview with an analyst on the BBC Radiohour a few minutes ago, and they said that the price increases would be noticable in two weeks to a month, and that these effects on the economy are distinct from what the market has already been enduring.
EMD closed at ~12.25% and FAX at ~13.25% yield; both trading at lower than average annual discount to NAV. I sold some SOXS and SMST and added to EM Bond CEFs on carnage.
I'm usually not one to try timing the market, but when Trump announced his "reciprocal" tariffs after close on Wednesday, it was obvious what was coming. I should have moved all my 401K out of Vanguard Institutional Index VINIX and Extended Market Index VIEIX (boglehead's 80/20) into bonds VBTLX right away.
Yesterday, seeing "futures plunge" and "markets have ample space to keep selling off" and especially Trump doubling down, saying he's now backing down, I did the switch now. I won't be able to switch back for 30 days due to market timing rules, but I feel safer already stopping the bleeding. If he calls off the tariffs before 30 days, I can always switch to the Fidelity versions of the low-load total stock market index funds in my 401K (luckily I have good choices).
I can see what a pickle I'm putting myself in now and accept the two downvotes. Like you guys said, the Vanguard Index mutual funds sells end of business day. It's not yet in VBTLX yet in my 401k, so I guess switching mutual funds a two day process, sell at end of day, buy at the end of the next day. That could leave me behind if Trump suddenly announces he's dropping everything when stocks go to record highs in one day before I can do any switching back, locking in my 10% down.
I can get back my 401K into the market right away tomorrow by switching to the Fidelity Large Cap Growth FSPGX, (which is similar enough to my previous VINIX including the 0.035 expense ratio) right now after hours. I'm still expecting turmoil though and Trump is stubborn, so I can also still just wait and see. There's no way he just decides to drop everything because that would make he look so weak. He'd rather crash the market. On the other hand the futures are up 1.5-2%, but that can't be permanent because there is so much turmoil, so looking for a dip from today I guess.
I'm usually not one to try timing the market, but when Trump announced his "reciprocal" tariffs after close on Wednesday, it was obvious what was coming. I should have moved all my 401K out of Vanguard Institutional Index VINIX and Extended Market Index VIEIX (boglehead's 80/20) into bonds VBTLX right away.
Yesterday, seeing "futures plunge" and "markets have ample space to keep selling off" and especially Trump doubling down, saying he's now backing down, I did the switch now. I won't be able to switch back for 30 days due to market timing rules, but I feel safer already stopping the bleeding. If he calls off the tariffs before 30 days, I can always switch to the Fidelity versions of the low-load total stock market index funds in my 401K (luckily I have good choices).
I can see what a pickle I'm putting myself in now and accept the two downvotes. Like you guys said, the Vanguard Index mutual funds sells end of business day. It's not yet in VBTLX yet in my 401k, so I guess switching mutual funds a two day process, sell at end of day, buy at the end of the next day. That could leave me behind if Trump suddenly announces he's dropping everything when stocks go to record highs in one day before I can do any switching back, locking in my 10% down.
I can get back my 401K into the market right away tomorrow by switching to the Fidelity Large Cap Growth FSPGX, (which is similar enough to my previous VINIX including the 0.035 expense ratio) right now after hours. I'm still expecting turmoil though and Trump is stubborn, so I can also still just wait and see. There's no way he just decides to drop everything because that would make he look so weak. He'd rather crash the market. On the other hand the futures are up 1.5-2%, but that can't be permanent because there is so much turmoil, so looking for a dip from today I guess.
Unless you know something to the contrary, I would suspect that if you entered the Vanguard transfer as a one-step transfer (mutual fund to bond VBTLX), then you are vested in the bond fund immediately upon your shares being removed from the mutual fund. Another words, it doesn't take two days as you are surmising, but happens at the same time, same day.
Here, read this, that explains the process at Vanguard. And fwiw, I have transfered between funds many times at fund companies, including vanguard, and it happens simultaenously.
(Edit: I would definitely call them first thing in the morning and explain your situation and see what your options are). And my google search is giving me conflicting answers, but the first answer I got is as follows: (but again, it is AI generated and not consistent):
"Yes, at Vanguard, when you transfer from a mutual fund to a bond fund, the bond fund shares are typically purchased the same day as the mutual fund shares are sold, as long as the transfer request is made before the market closes (4 p.m. ET). Here's a more detailed explanation: Transfer Process: When you initiate a transfer from a mutual fund to a bond fund, the first step is to sell the shares of the mutual fund you're transferring from. Settlement Fund: The proceeds from the sale of the mutual fund shares will be available in your settlement fund within your account. Purchase of Bond Fund: Once the mutual fund shares are sold, you can immediately purchase shares of the bond fund you're transferring to, using the funds in your settlement fund. Timing: If you request the transfer before the market closes (4 p.m. ET), the transaction will be executed at that day's closing price. If the request is made after market close, the transaction will be executed at the next business day's closing price. Example: If you request to transfer from a mutual fund to a bond fund before 4 p.m. ET, the mutual fund shares will be sold, the proceeds will go into your settlement fund, and you can then purchase the bond fund shares on the same day."
This post was edited 9 minutes after it was posted.
Unless you know something to the contrary, I would suspect that if you entered the Vanguard transfer as a one-step transfer (mutual fund to bond VBTLX), then you are vested in the bond fund immediately upon your shares being removed from the mutual fund. Another words, it doesn't take two days as you are surmising, but happens at the same time, same day.
Here, read this, that explains the process at Vanguard. And fwiw, I have transfered between funds many times at fund companies, including vanguard, and it happens simultaenously.
(Edit: I would definitely call them first thing in the morning and explain your situation and see what your options are). And my google search is giving me conflicting answers, but the first answer I got is as follows: (but again, it is AI generated and not consistent):
"Yes, at Vanguard, when you transfer from a mutual fund to a bond fund, the bond fund shares are typically purchased the same day as the mutual fund shares are sold, as long as the transfer request is made before the market closes (4 p.m. ET). Here's a more detailed explanation: Transfer Process: When you initiate a transfer from a mutual fund to a bond fund, the first step is to sell the shares of the mutual fund you're transferring from. Settlement Fund: The proceeds from the sale of the mutual fund shares will be available in your settlement fund within your account. Purchase of Bond Fund: Once the mutual fund shares are sold, you can immediately purchase shares of the bond fund you're transferring to, using the funds in your settlement fund. Timing: If you request the transfer before the market closes (4 p.m. ET), the transaction will be executed at that day's closing price. If the request is made after market close, the transaction will be executed at the next business day's closing price. Example: If you request to transfer from a mutual fund to a bond fund before 4 p.m. ET, the mutual fund shares will be sold, the proceeds will go into your settlement fund, and you can then purchase the bond fund shares on the same day."
I checked my 401k after hours to see how many shares of VBTLX I now have so I can keep track and it doesn't say yet. I think that while what are saying about immediate transfers is true for transfers within a company of funds, it probably doesn't apply to 401ks which have to accommodate transfers between different fund companies. I got three separate emails from NPWS, my 401k administrator tonight. Two with unspecified transactions (presumably selling VINIX AND VIEIX) and a final email saying "conform to target" is 100% VBTLX (so they haven't done it yet because it's the target, not a done deal). I'll have to take the two day delay into account in the future.
I do have a Vanguard account for an IRA and investments outside my 401k, and that probably has the immediate transfer.
Unless you know something to the contrary, I would suspect that if you entered the Vanguard transfer as a one-step transfer (mutual fund to bond VBTLX), then you are vested in the bond fund immediately upon your shares being removed from the mutual fund. Another words, it doesn't take two days as you are surmising, but happens at the same time, same day.
Here, read this, that explains the process at Vanguard. And fwiw, I have transfered between funds many times at fund companies, including vanguard, and it happens simultaenously.
(Edit: I would definitely call them first thing in the morning and explain your situation and see what your options are). And my google search is giving me conflicting answers, but the first answer I got is as follows: (but again, it is AI generated and not consistent):
"Yes, at Vanguard, when you transfer from a mutual fund to a bond fund, the bond fund shares are typically purchased the same day as the mutual fund shares are sold, as long as the transfer request is made before the market closes (4 p.m. ET). Here's a more detailed explanation: Transfer Process: When you initiate a transfer from a mutual fund to a bond fund, the first step is to sell the shares of the mutual fund you're transferring from. Settlement Fund: The proceeds from the sale of the mutual fund shares will be available in your settlement fund within your account. Purchase of Bond Fund: Once the mutual fund shares are sold, you can immediately purchase shares of the bond fund you're transferring to, using the funds in your settlement fund. Timing: If you request the transfer before the market closes (4 p.m. ET), the transaction will be executed at that day's closing price. If the request is made after market close, the transaction will be executed at the next business day's closing price. Example: If you request to transfer from a mutual fund to a bond fund before 4 p.m. ET, the mutual fund shares will be sold, the proceeds will go into your settlement fund, and you can then purchase the bond fund shares on the same day."
I checked my 401k after hours to see how many shares of VBTLX I now have so I can keep track and it doesn't say yet. I think that while what are saying about immediate transfers is true for transfers within a company of funds, it probably doesn't apply to 401ks which have to accommodate transfers between different fund companies. I got three separate emails from NPWS, my 401k administrator tonight. Two with unspecified transactions (presumably selling VINIX AND VIEIX) and a final email saying "conform to target" is 100% VBTLX (so they haven't done it yet because it's the target, not a done deal). I'll have to take the two day delay into account in the future.
I do have a Vanguard account for an IRA and investments outside my 401k, and that probably has the immediate transfer.
Yeah, that makes sense, and I thought that the transfer was entirely within a single fund company, but apparently yours is within seperate ones.
Glad that you likely still have time to modify the transfer.
Carl Quintanilla @carlquintanilla B of A: “.. We remain constructive on the S&P 500 .. but our conviction has waned given the thawing of extreme bearish sentiment. Our year-end $SPX forecast 5400 implies weak returns, but we have high conviction in large cap value, cyclicals, and dividends.” [Subramanian]
I guess this worked...economy was slowing even before the tariffs.
Post See new posts Conversation Geiger Capital @Geiger_Capital As I always say… pay attention to $FDX Down -14%🔻 Largest drop in over 2 years Alan Greenspan used to gauge the state of the economy on FedEx. Solid macro tell.
I can see what a pickle I'm putting myself in now and accept the two downvotes. Like you guys said, the Vanguard Index mutual funds sells end of business day. It's not yet in VBTLX yet in my 401k, so I guess switching mutual funds a two day process, sell at end of day, buy at the end of the next day. That could leave me behind if Trump suddenly announces he's dropping everything when stocks go to record highs in one day before I can do any switching back, locking in my 10% down.
I can get back my 401K into the market right away tomorrow by switching to the Fidelity Large Cap Growth FSPGX, (which is similar enough to my previous VINIX including the 0.035 expense ratio) right now after hours. I'm still expecting turmoil though and Trump is stubborn, so I can also still just wait and see. There's no way he just decides to drop everything because that would make he look so weak. He'd rather crash the market. On the other hand the futures are up 1.5-2%, but that can't be permanent because there is so much turmoil, so looking for a dip from today I guess.
I exited a couple winners that I had from COVID, sold half of my PGR and all of my RJF last week.
I liquidated a money market fund I had in my 401K (about 15% of my portfolio). I did a nice trade on NVDA yesterday (in and out 7% up in a few hours) and put about 10% of my freed up 401K cash in SPY. I’ll buy a couple more times over the next few weeks/months.
I know everyone is calling this a crash and it’s painful vs 6 weeks ago, but the S&P is still pretty much flat on a 1 year chart.
#2 is to get revenue from tariffs to pay for tax cuts.
So how does all this happen?
Trump's offramp could be some sort of deal to force nations to buy US stuff. Because that would reduce the trade deficit. Trump could trumpet that.
But he also needs tariff revenue. So he'll have the baseline 10% tariff stay on...but give nations some incentive to buy US goods/services to take off the punitive tariff.
So what would that mean for investments?
Sounds good for them, yes?
Not sure how that affects the dollar and inflation.
Have to think through this.
This post was edited 57 seconds after it was posted.
I think there will be many unintended consequences with the tariffs. For me, and many of my country-folk, it’s now god’s work to do absolutely everything in our power to avoid letting a penny end up in American hands. This includes, in particular, avoiding any and all travel to the US. This will reduce what we buy from the US, not helping the trade deficit. I don’t know whether such a reaction was anticipated in Trump’s 4D chess moves. I’ll be keen to see how widespread that response occurs. I also happen to think that most countries are going to look to increase trade elsewhere, away from the US. Which also seems counter to the latest 4D moves.
But Trump’s advisors are no doubt way smarter than me, so probably it’ll all work out for y’all…
Well many of my countrymen have avoided traveling to socialist Canada for a decade or more. Last trip the high end resort was tired, service poor, and food average. The only product I regularly buy that is Canadian is maple syrup.
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