Billionaires and other "smart money" are pulling out of stocks...

Bubble time wrote:

With inflation high and everything overvalued, there's no good place to put your money right now. Inflation will eat away at the value of cash, and there's a fairly high probability of a drop in equities in the next 12 months..

why doesn't inflation boost stock prices? Companies's earnings should go up, and people have more money to spend on their stock.

How about savings bonds and treasury bonds?

I don’t see real estate going down even in a stock crash.

Real estate has been going up because of very low unemployment and the Fed QE keeping mortage rates and below market rates.

The Fed stops buying bonds and raises rates to curb inflation, the real estate market could easily change quickly.

Stocks generally do perform okay during inflation.

The more interesting question to me is retail REITS usually perform well during times of inflation. With Costco, Walmart, Amazon, Jet ect delivering stuff to people will that continue to hold if we have a longer bout with inflation now.

um hum wrote:

Stocks generally do perform okay during inflation.

The more interesting question to me is retail REITS usually perform well during times of inflation. With Costco, Walmart, Amazon, Jet ect delivering stuff to people will that continue to hold if we have a longer bout with inflation now.

Do you mean equities usually do well during inflation as equities traded sideways from circa 1969 to 1981.

There's still an underlying supply issue in RE -- we didn't build enough housing for years because of bad housing policy followed by the Great Recession. Maybe the market will pull back if rates go up, but I don't see a crash with supply this low

okayy wrote:

I don’t see real estate going down even in a stock crash.

Of course it would go down.

That wasnt hard was it.

bigmig19 wrote:

Flagpole wrote:

Yes, we mostly have common ground. My "Nope" was in response that you said my advice there was for people who had already reached financial independence. Where we differ is that it is more than ok to have extra cash lying around. If you are already doing 15% or more into retirement accounts, you do not NEED to do more. I actually do more, and I have no problem with people doing more, but you don't HAVE to. You don't HAVE to be investing every last extra penny. Now, if you want to retire by age 40 with $4 million dollars, you might have to, but that's not for everyone.

To emphasize the common ground...yes, long term is the goal. I agree.

That wasnt hard was it.

No. Why would it be?

jamin wrote:

okayy wrote:

I don’t see real estate going down even in a stock crash.

Of course it would go down.

Incorrect.

jamb innnnn wrote:His tactic is for Indicies vs individual stocks. Buy the sp500, dont buy a falling knife on individual stocks.

That is completely untrue. He says if you don't know what you are doing, then you should go with indicies. If you DO know what you are doing, you shouldn't, and he doesn't, and that is easy to look up.

“Diversification is protection against ignorance, it makes little sense if you know what you're doing.” - Warren Buffett

A common-sense approach. I respect the hell out of this, Flagpole. I've been tempted to touch my money and then my inner voice tells me to be patient. I just do dollar-cost averaging and put everything in index funds. I'm 38 and will be married in June. My assets will be combined with my wife's (found out she has a trust of some kind) and feel stronger about long-term finances.

Don't put $ in that you can't afford to lose--like you said.

Maybe...... wrote:

jamin wrote:

Of course it would go down.

Incorrect.

Have you never heard of the Wealth Effect? When the stock market has a good run, people have more money to put down on a house, feel more confident about their ability to afford the payments in the future, etc., thus will pay more for houses especially where supply is limited.

Bad Wigins wrote:

Rainy Day wrote:

We are nearing one of the longest bull runs ever. Eventually it will come back down. You might miss out on gains if you pull out now.

it has been flat as a pancake for 8 months now.

No, it's been flat since Sept/October. That is 3- 4 months. It's up about 9% since 8 months ago, which is better than the average return.

NICE! (the fact you just found out your future wife has a trust of some sort). I hope it's a ton, and I wish you and your future wife the best.

S and P 500 down another 1% today, more than 5% off recent highs, and the main action wasn't/isn't supposed to start happening until March when the Fed starts their pullback. Could be hot air, but it could just be the beginning too.

Bubble time wrote:

S and P 500 down another 1% today, more than 5% off recent highs, and the main action wasn't/isn't supposed to start happening until March when the Fed starts their pullback. Could be hot air, but it could just be the beginning too.

I want to be clear, I am not a cheerleader for S&P 1500 or other indices. I want to be clear, I don't care if one is a newborn baby or 101 years old, bonds should be a part of everyone's investment portfolio. Specifically no retired person should be 100% in equities. That said, Federal Reserve have flexibility. They don't have to wait for a specific monthly or quarterly report. Maybe by March the data will be different. We should get used to inflation greater than 5%. When I was econ classes and biz school, 3% inflation was considered normal. We had a lot of years sub-3% inflation. Cannot cheat the mean forever.

If you were tempted to mess with your investment in this tiny drop, make sure that you are invested in a way that you can tolerate if and when the real drop comes.

Most people have their investment be too aggressive as during the good times, they see all of these instant millionaires from crypto or hitting big with some option call so their investment gets more and more aggressive as the bull run continues. But when the correction or collapse comes, they’re at a point where it’s too aggressive that in the long run, it may be difficult to recover unless they had more of a balanced approach or a strategy that is more up their risk tolerance.

So, make sure you have a long term plan that you won’t waver when the inenvitable drop comes sooner or later. I hope it won’t come for a while, but could.

As long as you’re in total market index funds, some in growth, some in international, and bit of bond fund, you should be fine. As long as you’re not mainly in individual stocks unless you have absolute conviction that you’re willing to lose it all.