Is the stock market going to tank?

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Originally Posted by Buzzworthy

Always good to learn more here, thanks for this info.

I’ve got money in VDIGX, VMVAX, VQNPX, VTSAX and VMRXX (cash reserves). My dad had these set up previously as he’s been contributing as well.

Admittedly I’m new to these funds and how they work.

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VMRXX is really similar to VUSXX. I believe that there might be some small state tax advantage to VUSXX, but that likely doesn't have an affect if the money in question is in a 529 plan.

If you are looking for shelter from volatility you could move money out of the equities index funds that you are currently invested in into VMRXX.

Worth mentioning that just like VUSXX, there could be a theoretical loss of value in VMRXX if the government defaults.

I truly don't know of a safe haven in that scenario. Hopefully it doesn't happen.

Thanks Kevo. For the time being I am going to move a bit to VMRXX. Just to be on the safer side during this time. Down the road I’ll move some back into equities.

She will not need it all in undergrad with the scholarships she has obtained. Which is fantastic news as she plans to go to med school.

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Originally Posted by Buzzworthy

Thanks Kevo. For the time being I am going to move a bit to VMRXX. Just to be on the safer side during this time. Down the road I’ll move some back into equities.

She will not need it all in undergrad with the scholarships she has obtained. Which is fantastic news as she plans to go to med school.

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So keep in mind that the horizon for using these funds may not be "short-term" - you may want to factor that into the decision-making...

FWIW, our kids 529 plan *automatically* moved invested funds from higher risk to lower risk options the closer they got to starting college.

Vanguard target date funds seem to be pretty well driven by data, so you could do worse than just checking what the asset allocation of their 529 funds for you college start date is and copying their strategy.

https://investor.vanguard.com/accoun...ent-portfolios

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Originally Posted by J. Barron DeJong

Vanguard target date funds seem to be pretty well driven by data, so you could do worse than just checking what the asset allocation of their 529 funds for you college start date is and copying their strategy.

https://investor.vanguard.com/accoun...ent-portfolios

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Or just put it all in the relevant target retirement fund and skip the extra step? My daughter's fund is in a vanguard target fund. Total set it and forget it option.

Well yeah. I guess I assumed he didn’t want the hassle of changing institutions.

Target date funds are very heavy into bonds as they get close to the target date. There is interest rate risk associated with those funds as they near their target date and move more of their holdings out of equities and into bonds.

If rates continue to go up, those target date funds are going to lose money as the coupon value of the bonds they hold goes down.

This won't be a problem if you believe the Fed is done raising rates. If they continue to raise rates though...

Vanguard's funds are simply a mix of 4 (I think it's 4) index funds, and they balance down (move out of equities, but they still keep some) as they get closer to target. You can increase the equity mix by choosing a later target date (for ex, I have some money on a 2040 fund though I sure as fuck better be retired by 2035).

Obviously, if the mix they use doesn't appeal to you, then it's not good. But it is pretty much the easiest comprehensive way to invest for a future date.

Yes, it is easy. My point is that there is interest rate risk in near dated target date fund because they move heavily into bonds as they near maturity. If interest rates continue to go up, the bond funds you are invested in through the target date funds will lose value.

Buzz might be better off moving to money market funds instead of target date funds if he expects interest rates to continue to rise because a near dated target date fund (and it's underlying bond index fund) will likely lose value in the short term in a rising interest rate environment. Money market funds don't have that risk and will perform better if rates continue to rise.

Someone with a longer time horizon (kids don't got to college until 2030 or 2035) is probably better off just using a target date fund for the simplicity of it and because the likelihood of a long dated target fund over performing money market funds in the long term.

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Originally Posted by Kevo

Yes, it is easy. My point is that there is interest rate risk in near dated target date fund because they move heavily into bonds as they near maturity. If interest rates continue to go up, the bond funds you are invested in through the target date funds will lose value.

Buzz might be better off moving to money market funds instead of target date funds if he expects interest rates to continue to rise because a near dated target date fund (and it's underlying bond index fund) will likely lose value in the short term in a rising interest rate environment. Money market funds don't have that risk and will perform better if rates continue to rise.

Someone with a longer time horizon (kids don't got to college until 2030 or 2035) is probably better off just using a target date fund for the simplicity of it and because the likelihood of a long dated target fund over performing money market funds in the long term.

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What rates have risen? 6month tsy out to 30year yields have fallen the last 2 months.


Anyway if you need the money in 3 months put it in a money market, make 4+% and take it out when you need it. I’d say the same if mm rates were back at 0.05% like the last 10-15 years. Liquidity is your #1 concern. Not timing the market from an internet chat room.


That said…vanguard doesn’t use an allocation to commodities in the bulk (all?) of their target date strategies. “Keep it simple” doesn’t work quite as well in an inflationary regime. Others (fidelity, blackrock, state street) I believe do.

Brock, I think we're saying the same thing but you are coming from a more academic perspective and I'm layering in pontification about the potential for interest rates to continue to rise.

I think there is a chance of rates continuing to rise despite recent drops in 6 month to 30 year bond rates. Today's employment report was better than expected and wage growth was much higher than expected.

Brock knows more than I do and I'd do what he was suggesting if it were my kid's college fund and said kid was starting college in the fall.

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Originally Posted by Kevo

I think there is a chance of rates continuing to rise despite recent drops in 6 month to 30 year bond rates. Today's employment report was better than expected and wage growth was much higher than expected.

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If the fed were to hike again (chances before this morning were very low but deffffinitely not 0 now) rates would go DOWN. Like they have the last 2 months.

We are near the end of the hiking cycle if not already there. Inflation is coming down. The rate hikes will eventually hit businesses which will hit workers and consumers. Cuts are priced in for later this year and 2024. Why? Because shits going to get real.

That’s why at this point, the more the Fed raises the front end, if they do, anything 5 years and out yields will likely fall. And if the Fed has to cut its because shits hitting the fan. And yields will drop. And that’s why you put money into longer dated bonds. Especially when they’re paying 4%.

Is there a high level reason for the disparity in growth of indexed mutual funds vs etfs on a day like today?

VFIAX 3.70 vs VOO 3.73
VTSAX 0.97 vs VTI 2.05

Or is this something more in the weeds like specific allocations, expense ratios, etc?

Isn’t everything up ~1% today?


Mutual funds price after close. ETF’s price in real time. But everything should be aligned by now.

You're totally right, my stocks app reverted to price change instead of percentages.

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Originally Posted by Kevo

Yes, it is easy. My point is that there is interest rate risk in near dated target date fund because they move heavily into bonds as they near maturity. If interest rates continue to go up, the bond funds you are invested in through the target date funds will lose value.

Buzz might be better off moving to money market funds instead of target date funds if he expects interest rates to continue to rise because a near dated target date fund (and it's underlying bond index fund) will likely lose value in the short term in a rising interest rate environment. Money market funds don't have that risk and will perform better if rates continue to rise.

Someone with a longer time horizon (kids don't got to college until 2030 or 2035) is probably better off just using a target date fund for the simplicity of it and because the likelihood of a long dated target fund over performing money market funds in the long term.

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I’ll be discussing this my my dad, coming up from AZ for my daughter’s graduation next week. For the time being I did pull half of each fund into the cash reserves fund, as to keep some money safe from market fluctuations.

33 yr high on the Nikkei 225

IEP going to $5. Old man Icahn stayed too long. No way he recovers. Wall Street eats their own.

Jesus Christ people must be choking on vol. it’s like the market is rigged. I don’t think I can remember a crazier time where the mkt just goes fucking no where. Must be little to no risk on. Boring.

I’m going out in a limb and predicting a more than usual volatility summer.

Bless your heart.

Anybody sell TSLA after the last months increase? I did this am, sold my 50 shares in the YOLO account. Managed to eke out a decent profit but individual stocks are not for me any longer.

No, paid 108 ish. 220 was a good spot to sell, but it’s in my Sep ira so I’m not going to ruin a good entry that should hold up.

crazy amount of t-bill auctions being announced. Not sure if I should buy t-bills or bet on buying a lower s&p(guessing sell off as people move into t-bills). Last 52/26 week t-bills was just over 5%...I'm guessing might hit 6% in next few auctions.

Treasury supply has never been an issue that overrides macro sentiment. I doubt it does this time.

That said, I’m liking TLT on this pullback. Claims ticking up and inflation could surprise lower.

It is confusing to me why anyone would buy a T bill directly instead of buying a treasury money market fund like VUSXX.

You can have all the liquidity of cash and still get paid just about the same as short term T bills.

Tax efficiency? VUSXX has been lagging tbill rates by ~.2%? Ability to lock in a long term rate with a tbill?

and/or simply can't buy it on whatever platform you use

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Originally Posted by ghosthop

Tax efficiency? VUSXX has been lagging tbill rates by ~.2%? Ability to lock in a long term rate with a tbill?

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My understanding is that VUSXX lags because it holds short term T bills, many of which have rates from treasury auctions that took place a month or so ago.

Since we're in a rising interest rate environment, VUSXX lags a little behind the most recent T bill yields. If treasury rates were to decline, VUSXX would be a little higher than the most recent T bill auctions on the way down.

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Originally Posted by ghosthop

Tax efficiency? VUSXX has been lagging tbill rates by ~.2%? Ability to lock in a long term rate with a tbill?

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52 weeks is the longest term on a t-bill. 15 months ago they yielded nothing. So you get 5% for one year. Then what? It’s called duration risk.

LQD yields almost 4% with 9 year duration. That’s not great for that much duration.

BOND has a 6 year duration with current yield at 4.17 and a yield to maturity of 5.17. While is does have some principal risk you’ve basically locked in a 4% yield for at least 5 years.

T-bills are great but you need a longer term strategy to match your goals.

Tesla!

I’ll be tempted to sell at 300. But I won’t.

Some say I don’t contribute much around here, some say I’m crazy, we’ll maybe, but the smart money knows to never trade with me. I’ve given nothing but winners since this tread started. Batted a 1000 for 10 yrs. I dare annyone to find a single post where I was wrong. Even posting my trades the last few months.

That ends today. So I hope I helped some pay for their passes while it was good.

If I know you, dm me.

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Originally Posted by Cono Este

Some say I don’t contribute much around here, some say I’m crazy, we’ll maybe, but the smart money knows to never trade with me. I’ve given nothing but winners since this tread started. Batted a 1000 for 10 yrs. I dare annyone to find a single post where I was wrong. Even posting my trades the last few months.

That ends today. So I hope I helped some pay for their passes while it was good.

If I know you, dm me.

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https://uploads.tapatalk-cdn.com/202...1b3d7a274c.jpg

It's a wazzy it's a woozy

In this thread I found CE's additions interesting, but I'm not going to cry if he doesn't wanna play.

Core CPI is still higher than FFR.

The market is ripping higher and higher.

Who knows where the top is J Pow pauses tomorrow like the market thinks he will? The market is betting the Fed doesn't want to actually stop inflation.

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Originally Posted by Kevo

Core CPI is still higher than FFR.

The market is ripping higher and higher.

Who knows where the top is J Pow pauses tomorrow like the market thinks he will? The market is betting the Fed doesn't want to actually stop inflation.

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I think it’s more that the market is betting that the Fed has inflation under control:

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Originally Posted by Kevo

Core CPI is still higher than FFR.

The market is ripping higher and higher.

Who knows where the top is J Pow pauses tomorrow like the market thinks he will? The market is betting the Fed doesn't want to actually stop inflation.

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Probably just want to slow walk inflation. Seems like the market is cool with that. DOW 36k for Christmas?

I’m still plugging along doing my thing. I’ve made back about 2/3rds of the cash I lost on FRC. Apparently buying GOOGL and AMZN in the low $80’s a few months ago was a wise move, as well as AMD at $58. The AAPL shares I was buying at $125 worked out well.

I’m up to $503.61/month in dividends. Bought a little BTI because it’s cheap, been loading up on REITs for the same reason.

I’ve been selling CMPS puts the last few weeks, been buying them back and resetting figuring I’ll be assigned at some point. I like taking the quick cash on a stock I wouldn’t mind having at the strike price.

I really wonder about the future of GOOGL as a company.

Ha, this looks fun https://twitter.com/benmezrich/statu...14896819142656

Deep Fucking Value