OK. It was a forecast more than advice. If I was actually giving advice, I would have recommending an exchange of a large portion to short term bonds, which clearly would have been, and will remain the better choice. To continue to believe that a handful of stocks can continue to drive markets seems unlikely to me, but I have a 75 IQ.
So, in a nutshell Igy said his holding would drop by 47% and it dropped only briefly by 23%. Furthermore, Igy's wording seems to suggest that the investment would stay at that level for some time: "you will be under $150K over the coming year".
I would say that that is bad advice.
The fund is currently down only 8% from when the question was posed. It is a 401K Retirement fund, and people don't presumably market time with a retirement fund. Yes, they fluctuate up and down, as we all know. The best advice given the timeframe noted, with the advantage of hindsight, is that the investor should have stayed the course.
yeah I hear you but bottom line is that Igy said stocks would fall and stocks fell. That's better than the rest of us did over the past year.
sure we can talk about long term strategy and market timing and over-pessimism, but Igy got the direction correct and that's a win of a sort.
When the market(s) goes up 75% of the time, the market goes up 75% of the time. Igy has said stocks would fall for many years. Has he ever said stocks would rise?
OK. It was a forecast more than advice. If I was actually giving advice, I would have recommending an exchange of a large portion to short term bonds, which clearly would have been, and will remain the better choice. To continue to believe that a handful of stocks can continue to drive markets seems unlikely to me, but I have a 75 IQ.
OK. It was a forecast more than advice. If I was actually giving advice, I would have recommending an exchange of a large portion to short term bonds, which clearly would have been, and will remain the better choice. To continue to believe that a handful of stocks can continue to drive markets seems unlikely to me, but I have a 75 IQ.
So you would recommend that a young guy start taking major positions in short term bonds in the 401K Retirement plan?
It is not as if he has $20,000 in a 401k. If I recall correctly, he has a good job, substantial net worth in house, and investments. Every one of those impacted by the easy money cycle of the last 14 years. I see far more downside risk, and believe age not the predominant factor. But I am a Certified Financial Planner with a 75 IQ.
In my view if you do not reallocate you will be under $150k over the coming year.
Here's a matured Igy prediction.
On 4/3/22 Noob asked what he should do with his 401k, which was in the vanguard total stock market. He had $285k at the time.
Igy said that by some point 4/3/22-4/3/23 it would fall to $150,000.
Instead, it's now worth approx $260,000.
Lowest it got was around $220,000
Easy call on this one: Igy was wrong on specifics.
Although Igy was directionally correct - the value of the fund did fall quite a bit over the year and remains much lower than it was a year ago. The poster would have done better to sell a year ago, per Igy's advice.
Investor noob wrote: Any recommendations for my 401k? I've been 100% total market fund for the past few years. Age 38. Should I move some to bonds or stay the course? Balance is about 285k. It fell to the 260k range earlier this year.
Ghost of Igloi wrote:
In my view if you do not reallocate you will be under $150k over the coming year.
If Noob has been maxing out his contributions he's at approx $281,000. If he's over 50 and maxing out he's at around $289,000. This assumes no company match, in which case both amounts would be higher.
This post was edited 2 minutes after it was posted.
So you would recommend that a young guy start taking major positions in short term bonds in the 401K Retirement plan?
Bonds average 4% annually. Stocks/equities/mutual funds average 11% annually. A young guy need to be mostly invested in equities.
This would be my approach. And it was my approach. And it continues to be my approach. And it is one that I don't regret for a second. And I'm not a young guy, for that matter.
yeah I hear you but bottom line is that Igy said stocks would fall and stocks fell. That's better than the rest of us did over the past year.
sure we can talk about long term strategy and market timing and over-pessimism, but Igy got the direction correct and that's a win of a sort.
When the market(s) goes up 75% of the time, the market goes up 75% of the time. Igy has said stocks would fall for many years. Has he ever said stocks would rise?
yes, Igy has been long stocks several times during the past year or so. I believe. Trading buys.
So you would recommend that a young guy start taking major positions in short term bonds in the 401K Retirement plan?
It is not as if he has $20,000 in a 401k. If I recall correctly, he has a good job, substantial net worth in house, and investments. Every one of those impacted by the easy money cycle of the last 14 years. I see far more downside risk, and believe age not the predominant factor. But I am a Certified Financial Planner with a 75 IQ.
I may have him confused with the guy in Boston. This poster may be the one living with his parents. If so, and I recall correctly, he has a good job, and all his net worth in investments. Doesn’t change my view. I think much depends on how one sees valuation as a future driver of returns. But heck, I bought single stock shorts on NVDA and TSLA Friday.
When the market(s) goes up 75% of the time, the market goes up 75% of the time. Igy has said stocks would fall for many years. Has he ever said stocks would rise?
yes, Igy has been long stocks several times during the past year or so. I believe. Trading buys.
Really? I Must have missed those. At times he has covered short positions, which is different than being long.
I tend to have heard nothing except a general, pervasive message over the last 6 years or so - as long as I can remember - that the markets were overvalued and a massive downturn was inevitable, broad-based, and of a very long duration.
When the market(s) goes up 75% of the time, the market goes up 75% of the time. Igy has said stocks would fall for many years. Has he ever said stocks would rise?
yes, Igy has been long stocks several times during the past year or so. I believe. Trading buys.
Friday I was down 5.47% YTD after being up 20% in 2022. Today I have cut my annual loss by 1.5%, so these numbers change quite a bit from day to day. Outperformance today is shorts, but largely the CEFs up about 1% plus a dividend. CEFs hurt by rising dollar, but now reversing. I was adding to positions on the dip. If I am wrong, I will reduce risk. Likely close shorts, add to CDs, CEFs, and HSGFX. None of which would change my view this is a historically large asset bubble.
yes, Igy has been long stocks several times during the past year or so. I believe. Trading buys.
Really? I Must have missed those. At times he has covered short positions, which is different than being long.
I tend to have heard nothing except a general, pervasive message over the last 6 years or so - as long as I can remember - that the markets were overvalued and a massive downturn was inevitable, broad-based, and of a very long duration.
I was triple long back in the fall, posted as such, I think. Anyway, I found selling shorts on market declines more effective, buying back on market rallies. Either way they express the same view. Using my valuation metric as a guide, I have a substantial investment in EM Bond CEFs, which is not a risk free asset class.
^I am up ~10% on EMD and FAX, with reinvested dividends. At one point I was up 20%, late 2022. Sold some shares to fund retirement distribution. Tactically would have been wiser to sell more. At some point I will just shift to taking income. Probably in 2025.
Hoo boy GDP Now estimate for the 1Q is falling fast, matching some other indications of a sharp slowdown in feb-march.
that can reverse of course, and the economy still grew in the 1Q, but this is how it's supposed to work...the fed kicks up interest rates to slow the economy. The economy is slowing.
Stocks of course are looking six months or more out, so this isn't so critical to stocks yet. And slower growth can ease the aggression of the Fed, which would be good for stocks.
But this is why many see the fed cutting rates by the end of the year - they think this slowing will gain momentum and turn to recession in the Q2 or Q3.
If the market turns down here it sure would fit in with the trading range of this market for the last 11 months or so. Would be a shame if the only way to make money is to trade that range.
Hoo boy GDP Now estimate for the 1Q is falling fast, matching some other indications of a sharp slowdown in feb-march.
that can reverse of course, and the economy still grew in the 1Q, but this is how it's supposed to work...the fed kicks up interest rates to slow the economy. The economy is slowing.
Stocks of course are looking six months or more out, so this isn't so critical to stocks yet. And slower growth can ease the aggression of the Fed, which would be good for stocks.
But this is why many see the fed cutting rates by the end of the year - they think this slowing will gain momentum and turn to recession in the Q2 or Q3.
If the market turns down here it sure would fit in with the trading range of this market for the last 11 months or so. Would be a shame if the only way to make money is to trade that range.
Latest estimate: 1.7 percent — April 3, 2023
Agreed wholeheartedly. This may be why Fed was so proactive in shoring up the banks. They know the economy has downside risks as well as a fear of unbridled growth/inflation.
Like you said, the traders may view this as a positive, and I am a bit surprised it's not being met as good news by the markets today.
Bonds average 4% annually. Stocks/equities/mutual funds average 11% annually. A young guy need to be mostly invested in equities.
This would be my approach. And it was my approach. And it continues to be my approach. And it is one that I don't regret for a second. And I'm not a young guy, for that matter.
Twitter is now putting images of the dogecoin dog all over the site.
Doge is up 27% as a result.
I have zero doubt that Elon Musk is trying to recoup his Twitter-related losses by pumping his Dogecoin holdings. I don't have a sense of scale on this, but Musk is trying to get his money back.