Bill Bowerman urinated on Phil Knight.
Bill Bowerman urinated on Phil Knight.
Ghost of Igloi wrote:
Maserati,
I said months ago that cash would be superior asset class to stocks. I was widely criticized for that view. And of course capital preservation is an important concept and certainly will be viewed more favorably if my market views prevail.
Igy
Cash is great when the market goes down and lousy when the market climbs. Overall it's lousy as an "investment".
nice to see stocks hang in there when oil crashes again
stocks flat
oil down 6%
maybe the crazy is over
Lemons,
Cash should be part of all investors portfolios. To ignore it is foolish. All financial planners recommend a position 2-6 months equivalent of monthly income.
Igy
A good one from Kevin Ferry at
https://contrariancorner.com/2016/02/01/econ-200/
Econ 200 Money and Banking
Revised Edition. Chapter 5 Quiz
What is the purpose of a Central Bank?
A: To create excess reserves for its constituents.
What is the basis of modern monetary policy?
A: To penalize said constituents for holding created excess reserves.
Why do Central Banks raise the IOER?
A: To create a pool of funds to pay the future penalty with.
My loca,
If there is one, just one factor that could trigger a severe market downturn it is central bank policy. That is not hard to see with the undue influence of central bank policy in the market's rise.
Igy
Ghost of Igloi wrote:
agip,
I guess all I can add is that is why so many investors will be disappointed at the end of this cycle.
Igy
Because they were sitting in cash while the market gained?
(Sorry, Igy, I couldn't resist.)
POTO,
Yes, but cash has outperformed the market since I first posted here.
Igy
There will always be short term periods where that is true.
POTO,
And that is why you always have cash in your portfolio, like bonds it lowers the volatility of the portfolio and increases your compounded return over time.
Igy
Agreed. How much is the perennial question.
POTO,
There are plenty of investors that are not going to stick with 60/40 stock/bond mix in a severe market downturn. How about the parents sending a child to college, or someone like myself nearing retirement? All of these factors argue for higher than normal amounts of cash. But as you alluded to, that is an open ended question that needs to be individualized.
The view is, cash is an important asset class, that is not inferior to stocks, anymore than stocks are an inferior an inferior asset class to cash today. They all have their place. Perspective of the moment sometimes clouds the viewpoint, that is, when stocks are doing well other asset classes tend to look poor until that trend reverses. That's all.
Igy
iShares 20+ Year Treasury Bond ETF +5.01% year-to-date.
Remember all the pundits proclaiming the death of bonds.
Igy
Congrats, you found one! How'd it do last year?
Sally V,
Better than SPLS and CHK.
Igy
Sally V,
TLT 2015 performance -1.79%.
Igy
Two FANGs broken, two to go.
Igy
Ghost of Igloi wrote:
Sally V,
Better than SPLS and CHK.
Igy
And nowhere near as well as others.
Will still be in my range after today's drop. I admit that my range is pretty broad, but with one month of the year gone, my lower bound has held up well.
Every day I see a big move (which seems to have been quite often in 2016), I think back to that poster Chemical Reagent and his ETF's, or whatever he was trading, or whoever he was betting with. Assuming there is anyone out there who "knows what they're doing" on a daily basis, some fortunes must be being made on these moves.
Of course nobody who I know is in that group, although some have tried. Somewhere, somebody is making money off these moves.
Presumably you include yourself in that "no one I know" group.