Down goes the Dow

It's already up strongly from the start of the year. I think it could likely trade sideways from here, and maybe come close to revisiting recent lows, but I simply don't see a 25% drop from here likely as anything more than a very fleeting blip, though even that is unlikely.

Just to chime in, 2022 was a bad year for me in the stock market...not enough to harm me in any way, but on paper, a very down year, and as I have previously mentioned, I lost to the Dow big time in 2022 which is rare for me.

As of today and right now, the Dow is down 0.78% YTD. For me though, I am UP 8.07% (as of close of business yesterday). I didn't rebalance anything after the bad year. I used to do that more in the early days, but these days I don't need to and I don't care to. Even though I am now retired, we still invest because my wife still works and wants to work for 4 or 5 more years after this school year ends. We'll see how that goes. Many things could make her decide to retire sooner than that, not the least of which is if one of our kids has a baby, and that's a real possibility for one of them. We may decide to move closer to that kid of ours if that happens, and that would mean that The Lovely Mrs. Flagpole would retire from her college professor job. We don't need her income, so it would be just a lifestyle choice.

Anyway, I do like to check in here from time to time. I see that Ghost is as permabear as ever. I never time the stock market ever, and I realize Igy is older, but for those of you still working and younger, if there's ever a time to be consistently still putting money in the stock market (of course I say to ALWAYS do that; you should just think of it as money you don't need today that you will need later), it would be after a down year and then a couple months into a flat year. At some point, the pressure will be released, and the market will climb north again. Always good to have bought when the market was lower which ultimately is pretty much EVERY purchase you make because ultimately the market drives higher. Yes, I made some purchases when the Dow was over 35,000...and it will be again. Just kind of how it works.

done

I don’t necessarily disagree with that assumption. That is not the point, to ignore all the extraordinary events of the last decade makes little sense to me. It goes to the fundamentals of finance. To me, rather ignorant to to excuse the obvious. That said, but how else do you get to one of the historic bubbles?

Fine by me. You are still a permabear no matter what happens to the S&P 500 in 2023. Permabears are right 27% of the time in any given year, but then of course wrong 73% of the time in any given year. I don't predict how the stock market will do in any given year because it is meaningless...it ONLY matters how the market does over time, and when you are still investing, a down year only means that you bought stocks on sale.

Today the S&P 500 opened at 3,991.05. You are predicting around a 900 point drop from today by the end of 2023. Ok. We will see.

A simplistic statistic. Perhaps useful to a 30 year old with a $25,000 portfolio.

“From a valuation perspective, it should not be surprising that the total return of the S&P 500 lagged the total return of Treasury bonds from August 1929 to July 1950, from December 1968 to December 1987, and from March 1998 to March 2020. Stocks don’t always outperform bonds, and starting valuations help to identify when they probably won’t.”

John Hussman, February 2023 Market Commentary

Like all the warm hugs and embraces. Something I can’t imagine you experiencing.

A good time to review how this actually works:

Just a reminder that valuations are only slightly higher than their 25-year averages.

Calling this a bubble in stock prices....just doesn't follow.

That explains it.

Nope! You are consistently a permabear. Such a weird and not relevant quote you added there too, so I just removed it.

Stocks go up generally over time. Look at the beginning of this thread. People were arguing that the Dow was going to go to as low as ZERO! You've been consistently down on the market the whole time, so WRONG.

I'm sorry that you didn't make good financial decisions when you were still working so that you would have enough today to not be afraid of how your small pile is doing, but that's because you were a permabear then too. What you SHOULD have done is invest, invest, and invest some more in diversified mutual funds made up of stocks instead of trying to time things and buy individual stuff.

If you pay off debt, you invest 15% MINIMUM of your income into a diversified stock portfolio made up of mutual funds, and then either have three YEARS of expenses liquid at the time of retirement OR a very conservative bunch of stocks come retirement time, then you don't need to be concerned about the ups and downs of the market. It takes very little for the average couple to live on when they have a paid for house and have no other debt. If the market goes down, then either use your expenses fund to carry you through until the market heads north again (because it WILL), or just continue taking the 4% you should be taking anyway as a 4% draw takes into account that there will be down years. If you have enough money, you can take even more than 4%, though with enough money even 4% will be more than fine.

Seems to overpriced to buy in a lot now, but I should def add on any dips.

Getting 4.85% right now in the Marcus savings account (let me know if you want a referral for 4.85%) — which seems pretty solid.

Considering I’m young I should prob risk on. Seems like everybody is waiting, which means “do the opposite” sooner than later.

Def will get a bit back in energy if it drops another 5% from here.

“I'm sorry that you didn't make good financial decisions when you were still working so that you would have enough today to not be afraid of how your small pile is doing, but that's because you were a permabear then too. What you SHOULD have done is invest, invest, and invest some more in diversified mutual funds made up of stocks instead of trying to time things and buy individual stuff.”

Hmmm….

Yeah, I wouldn't call it a bubble either. If we HAD a bubble, then it already burst when the Dow was over 35,000.

Also, yes manufacturing is down...that makes complete sense regarding where we were with the pandemic and what people put off. People bought STUFF during the pandemic and immediately after. Now, the industries that are booming are tourism; so restaurants, airlines, hotels, etc. Businesses surrounding the wedding industry too are booming (caterers, venues, wedding bands, etc.). We can't just cherry pick an industry and hold that up as an example of a bad economy to follow.

Igy has two things working against him here...#1 he's a permabear, and #2 he is so against the current White House Administration that he can't see straight and he hopes for bad things to come just so the Biden Administration will look bad. Not how things work with either point.

You are a market timer. I don't do that. I have always had a set amount that goes into retirement accounts no matter what, and then (in the past I did this...I don't need to do this anymore) if there were big drops, I would put in MORE. I never held out any money ever waiting for a dip. I also don't take money OUT of the market. I will do that eventually when my wife also retires, but for now, it stays there.

I would agree that 4.85% on a savings account is pretty solid. I'm not in the market for that, but thanks for the offer.

“Igy has two things working against him here...#1 he's a permabear, and #2 he is so against the current White House Administration that he can't see straight and he hopes for bad things to come just so the Biden Administration will look bad. Not how things work with either point.”

You are just making stuff up, and coloring me with your own biases.

I have been vocal in the past and even in recent weeks of the 2017 Republican tax cut, that was not trickle down, and led to new levels of financialization of stock buybacks. I enthusiastically support the increased taxation of buybacks recently proposed by the Biden Administration. You would likely oppose this as a member of the investor class, because you are ethically two faced.