Is the stock market going to tank?

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Originally Posted by yeahman

Opinions on financial advisors? Yay or nay?

Been talking to some since my dad's estate was settled. Standard procedure seems to be to give them every scrap of financial information about yourself so they can create a financial "plan" (I've never had one), then they want to take control of your assets and do their thing for a fee. And if you want access to your own money you need to go through them. I have a really hard time relinquishing control like that. Like, a really hard time. But the portfolio my dad left needs work. It is heavy on equities and has some concentrated positions that seem unwise to hold, but the unrealized gains make it tricky to deal with from a tax perspective. Maybe all I need to do is to work with my accountant?

I feel like if I could consult with somebody for a flat fee and develop a strategy on how to deal with the portfolio, I could implement it myself. It's not hard to click a mouse and move stuff around. But nobody I've found seems to want to do that type of consultation. They want a looooong relationship where they control your assets and the fees go on forever. Seems like a bit of a racket but maybe I'm being too cynical about this? Should I just submit to the system and pay somebody?

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Full disclosure, I was an options trader, not an investment guy.

Everyone has a different history of risk, and no one can decide your comfort level for you. These advisors never know enough to consider that. You can take risk at work, have millions, but still not have the history, or your family does not, to ride the up’s and downs of the mkt. it takes experience. These advisors. just want to put your money to work and make a %. I mean no disrespect to any of them, but they are largely un qualified. That’s why the average mutual fund is not held very long. In general, way too many people in the mkt. in my opinion. Back in 2001, my ex would come home and tell me about 20mm Acct’s that were now 5mm, and these “sophisticated” types shitting the bed and selling.

If you’re a blue collar guy, they can at least give you a plan, but most don’t even do that. They simply don’t have time for small accounts. They need their to ,10 clients or they get the hatchet.

Id recommend going with vanguard balanced fund, and forget it. Bonds are paying again too. Or some kind of “lazy etf portfolio”.

I really appreciate the replies, this is all super helpful. The reason for the unrealized gains is that my parents separated their assets into two separate trusts, mom died in 2015, and my dad took over as trustee. So everything that was in her trust reset in 2015 but not since. The stuff in my dad's portfolio did reset upon his death last year. Anyway I like the idea of searching for a flat-fee advisor because I'm not intending to get fancy and try day trading or anything, I just want to rebalance in a conservative way and more or less track the market. I'm meeting with my accountant next week to help determine if it makes more sense to do this over time to minimize tax liability, or maybe just do it all at once and take the tax hit and be done. I also enrolled in a basic investing class online so I can at least "know what I don't know." A lot of what you guys said kind of confirmed my own ideas and suspicions, and that's helpful. I just don't want to fuck it up by being naïve and thinking I'm smarter than I am. But at the same time I don't want to pay somebody a bunch of money for years to do something that I can actually do myself if I'm careful. Thanks all.

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Originally Posted by Kevo

I'm wondering how the higher for longer thing is going to play out for equities. So far it doesn't seem to be making a huge difference, since the total stock market indices are near all-time highs.

Will the $6 trillion on the sidelines flow to assets in a long-term inflationary environment, wait in money market funds for distressed assets to become available, or just hold onto yield in the money market funds?

If we do go into stagflation, wouldn't it be good to own assets instead of holding cash/ money market funds?

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Dividend yielding US entities with lots of cash + parking cash in 5.5% insured savings accounts imo still seems a fairly safe bet. As a Canadian, for FX reasons the buy and holds are then effectively neutral

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Originally Posted by bfree

Yeahman, The search term you want is "fee-only" advisor/planner. You're absolutely on the right track in that situation. Tell the AUM advisors to fuck off.

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Yep - and *confirm* with whomever you select that they are a fiduciary, as per DeJong's post. It sure looks like AUM is NOT: https://adviserinfo.sec.gov/firm/summary/287653

FTR, it sure looks like West End Advisors probably aren't fiduciaries either. I'd avoid them unless you can confirm they *are* actually fiduciaries: https://adviserinfo.sec.gov/firm/summary/124606

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Originally Posted by AdironRider

You should just park it in an 80/20 etf portfolio equities to bonds. Everybody offers one that tracks the s&p 500 for basically zero money in fees. Same for a bond etf. When it comes time for you to retire, rebalance to 60/40. I just saved you 1% for life and you won't have to think about this at all.

Where an advisor provides value is if you have plans to get "creative" or have a multitude of different assets like real estate holdings, stock portfolios, & stakes in businesses. That adds complexity and you will want good advice, and you will also need a good accountant as well. A financial advisor is not going to do both of those tasks nor should you trust one to do both.

And if they start pushing annuities just tell them to fuck off and find somebody else. 9 times out of 10 they are just trying to hustle you for a commission.

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I think where a CFP comes in handy for a lot of folks is when it comes time to start pulling $$ from all the accumulated wealth. Making sure you take it at the right time, in the right amounts, in order to not run out, and not leave a bunch leftover when you die... that's shit can get COMPLICATED.

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Originally Posted by skaredshtles

I think where a CFP comes in handy for a lot of folks is when it comes time to start pulling $$ from all the accumulated wealth. Making sure you take it at the right time, in the right amounts, in order to not run out, and not leave a bunch leftover when you die... that's shit can get COMPLICATED.

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I would agree with this, like when to take SS etc. I get referrals from smaller independent guys, and they seem to offer that more than the big wire house advisors.


The only big reason I’d use a big wire house firm, like JPnmorgan etc is for estate planning. Trusts, corporate trustee etc. if you rich etc.

My ex works for a firm now that started off doing trust work. They do the whole package. The only reason I’d pay some schmuck like me is for estate planning, and the whole 9 yards, which is a good thing for some.

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Originally Posted by yeahman

Opinions on financial advisors? Yay or nay?

Been talking to some since my dad's estate was settled. Standard procedure seems to be to give them every scrap of financial information about yourself so they can create a financial "plan" (I've never had one), then they want to take control of your assets and do their thing for a fee. And if you want access to your own money you need to go through them. I have a really hard time relinquishing control like that. Like, a really hard time. But the portfolio my dad left needs work. It is heavy on equities and has some concentrated positions that seem unwise to hold, but the unrealized gains make it tricky to deal with from a tax perspective. Maybe all I need to do is to work with my accountant?

I feel like if I could consult with somebody for a flat fee and develop a strategy on how to deal with the portfolio, I could implement it myself. It's not hard to click a mouse and move stuff around. But nobody I've found seems to want to do that type of consultation. They want a looooong relationship where they control your assets and the fees go on forever. Seems like a bit of a racket but maybe I'm being too cynical about this? Should I just submit to the system and pay somebody?

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Flat fee is entirely the way to go. Don't pay an assets under management fee if you don't have to, especially if the portfolio value is over a million.

My parent's used Vanguard for awhile and their service was terrible.

I set my parent's up with this group who I found through this article- https://www.whitecoatinvestor.com/ho...ncial-advisor/

My parents are really happy with them.

They get unlimited access to a fiduciary CFA/CFP/RICP and who has them in very low cost index funds and optimizes their situation for tax strategy. They have regularly quarterly check in meetings with my parents and monthly disbursement checks sent to them for a flat fee per year. They would pay way more in AUM fees.

There are also some advisors on the White Coat Investor page that I linked to above that are willing to charge a one time fee for setting things up for you.

You could also do it yourself... www.bogleheads.org

I haven’t looked into the fees (says zero) but it’s a good way to learn about how allocation works. It will use the same metrics a human advisor uses:

https://www.schwab.com/intelligent-p...4aAm-pEALw_wcB

Did a quick search on Schwab robo. There are premium services at $300 a year and their portfolios do keep a high cash reserve relative to others. I like that part especially if you don’t need it to generate income because it will automatically balance back into other portions on weakness

Crude oil into support. Weak demand, high inventories, and a Middle East agreement could send it back to the $60’s

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Originally Posted by LeeLau

Dividend yielding US entities with lots of cash + parking cash in 5.5% insured savings accounts imo still seems a fairly safe bet. As a Canadian, for FX reasons the buy and holds are then effectively neutral

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Interesting. I'm roughly 70% equity indices, 25% money market and 5% BTC at the moment. I'm prepping for stagflation with my small BTC and I'm moving some cash equivalents to an RE investment.

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Originally Posted by 4matic

Did a quick search on Schwab robo. There are premium services at $300 a year and their portfolios do keep a high cash reserve relative to others. I like that part especially if you don’t need it to generate income because it will automatically balance back into other portions on weakness

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Yeah I've looked into that, need to look deeper. All my accounts are with Schwab and their customer service is excellent. Always easy to get somebody on the phone. Great website and app. I'm a little uncertain about the cash reserve part though. I'd rather have it in money market or high yield savings. Seems like a way for Schwab to make $$ off their "free" robo service. But definitely worth a little more exploration and a phone call.

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Originally Posted by Kevo

Flat fee is entirely the way to go. Don't pay an assets under management fee if you don't have to, especially if the portfolio value is over a million.

My parent's used Vanguard for awhile and their service was terrible.

I set my parent's up with this group who I found through this article- https://www.whitecoatinvestor.com/ho...ncial-advisor/

My parents are really happy with them.

They get unlimited access to a fiduciary CFA/CFP/RICP and who has them in very low cost index funds and optimizes their situation for tax strategy. They have regularly quarterly check in meetings with my parents and monthly disbursement checks sent to them for a flat fee per year. They would pay way more in AUM fees.

There are also some advisors on the White Coat Investor page that I linked to above that are willing to charge a one time fee for setting things up for you.

You could also do it yourself... www.bogleheads.org

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Thanks, Clark looks like an interesting option. I assume they take control of your assets which is something I would like to avoid but never say never. Worth a phone meeting for sure.

Danno's girlfriend pointed me in the direction of a network where you can search for advisors using various filters. Found a CFP who charges a flat hourly or project rate. Never takes control of your assets, and I can end the relationship at any time. "Essentially you are renting my brain," is how he puts it. His brain is not cheap but I'd be suspicious if it were. Zoom meeting with him tomorrow to see what he has to say. Initial impression is good and he could be exactly what I'm looking for.

The Schwab cash account in robo pays 4.6%.

FYI there is a Schwab office in Bozeman. Not sure if there is one in Helena.

Quick Google says Vanguard Investor advisor is .30 percent and minimum 500k.

Current money market rate is 5.27 in my unmanaged V account.

Different topic, I don't find the Vanguard web or app interface to be all that bad and I haven't experienced any issues. I think in some ways I prefer the Vanguard app to the Schwab app. Quicker to check in and see everything on one screen, satisfy my OCD and move on. Definitely less function, but that doesn't matter to me.

I think after all the years of super low yields it is almost hard to not keep a nice chunk of money in a money market especially in tax sheltered accounts. Those monthly dividends are a nice soft pillow amongst the turnoil. I am not at all sure this means it is actually prudent, but psychology matters, and I like sleep.

Rare success story for me since I am all about boring stocks which never give me much to talk or humble brag about. Trane TT...I bought some at various times over the last couple years. Really nice stock price rise and also paying a small dividend.

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Originally Posted by Kevo

Interesting. I'm roughly 70% equity indices, 25% money market and 5% BTC at the moment. I'm prepping for stagflation with my small BTC and I'm moving some cash equivalents to an RE investment.

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It's entirely personal risk dependent. I'm 70% yield + covered calls (self-selected). 10% crypto (was 2% but it's in a tax- sheltered registered Canadian ETF so there's incentive to let it ride), approx 20% cash equivalents (5.5% savings accounts insured deposits dry powder).

Equity indices are imo a solid bet.

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Originally Posted by Kevo

Interesting. I'm roughly 70% equity indices, 25% money market and 5% BTC at the moment. I'm prepping for stagflation with my small BTC and I'm moving some cash equivalents to an RE investment.

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Stagflation???

We are at historical just-below-average fed funds rate with inflation moderately above target and historically low unemployment.

I don't get this concern.

Stagflation had average double the current interest, triple the current inflation, and over twice current unemployment. Why do you think that is where we are headed?

I'm more concerned with trying to hedge for a potential hot conflict with China or Iran, though unsure how to do so other than buying defense stocks.

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Originally Posted by summit

Stagflation???

We are at historical just-below-average fed funds rate with inflation moderately above target and historically low unemployment.

I don't get this concern.

Stagflation had average double the current interest, triple the current inflation, and over twice current unemployment. Why do you think that is where we are headed?

I'm more concerned with trying to hedge for a potential hot conflict with China or Iran, though unsure how to do so other than buying defense stocks.

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^^^ yep.

Another data point: TIPS vs regular treasuries allow for calculating the market’s prediction of inflation. Currently that market is betting on inflation averaging 2.35% over the next five years, and 2.35% over years 6-10.

How do you hedge against a large regional war?

I don't hold any international funds that invest in China, don't hold any Chinese equities, and am working on limiting my exposure to companies that manufacture or source /w China, although indexes have built in exposure, and RIO is an indirect exposure since China buys lots of metals. FLNG could be exposed to a hot war with Iran (or China) if commerce raiding becomes the norm.

In the past it was almost always an energy shock or the Fed that caused a recession. In a scenario like that with high government debt today and corresponding high interest payments means fiscal dominance leaves little room for the Fed to both fight inflation and fight a recession. As things stand, immigration, productivity growth and relatively cheap energy put us in a kind of Goldilocks zone. So it's a question of what type of thing could cause a shock now? War is certainly one possibility. The Fed making a policy mistake or things like a trade war etc. are other possibilities.

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Originally Posted by summit

Stagflation???

We are at historical just-below-average fed funds rate with inflation moderately above target and historically low unemployment.

I don't get this concern.

Stagflation had average double the current interest, triple the current inflation, and over twice current unemployment. Why do you think that is where we are headed?

I'm more concerned with trying to hedge for a potential hot conflict with China or Iran, though unsure how to do so other than buying defense stocks.

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The economy is slowing and CPI has been rising.

The way that inflation is measured is different than the 80s. If we used the same calculations as the 80s inflation would report higher than we are currently reporting it.

No one believed inflation would go up in consecutive months in Q1 2024, but here we are.

We've run down our strategic petroleum reserve to 1983 levels at the same time that we are running up a $1 trillion deficit every 3 months.

The federal reserve is lightly tapping on the brakes while congress has their foot on the gas.

I don't have a crystal ball, but I don't think inflation is defeated and I don't think congress has any intention of stopping their stimulatory spending.

Ok, so what if the economy continues to expand and inflation goes back down? Cool- I'm in equities and a very specific RE play that will do well in that scenario.

But what if we end up in a downturn? Well, I guess I could have taken more off the table and waited for a crash.

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Originally Posted by summit

How do you hedge against a large regional war?

I don't hold any international funds that invest in China, don't hold any Chinese equities, and am working on limiting my exposure to companies that manufacture or source /w China, although indexes have built in exposure, and RIO is an indirect exposure since China buys lots of metals. FLNG could be exposed to a hot war with Iran (or China) if commerce raiding becomes the norm.

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Google search black swan funds... More than a few existing now.

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Originally Posted by Kevo

The economy is slowing and CPI has been rising.

The way that inflation is measured is different than the 80s. If we used the same calculations as the 80s inflation would report higher than we are currently reporting it.

No one believed inflation would go up in consecutive months in Q1 2024, but here we are.

We've run down our strategic petroleum reserve to 1983 levels at the same time that we are running up a $1 trillion deficit every 3 months.

The federal reserve is lightly tapping on the brakes while congress has their foot on the gas.

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I would add to the last point a good piece on the Fed's balance sheet and the status of quantitative tightening.

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Originally Posted by up an down

Google search black swan funds... More than a few existing now.

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I used to buy index out of the money puts. It's a long term very patient very painful thing to do. Sadly about 1.5 years before the Covid meltdown I abandoned that play

Do a ratio next time, for even.

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Originally Posted by summit

How do you hedge against a large regional war?

I don't hold any international funds that invest in China, don't hold any Chinese equities, and am working on limiting my exposure to companies that manufacture or source /w China, although indexes have built in exposure, and RIO is an indirect exposure since China buys lots of metals. FLNG could be exposed to a hot war with Iran (or China) if commerce raiding becomes the norm.

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1/2 my portfolio is in defensive non cyclical blue chips, half big cap tech. The non cyclicals will hold up better in the future mkt melt. (I hope), the other half is big cap tech, I bought Amazon, google, coin etc 2 yrs ago, I posted. I did sell some gold, and so,e blue chips, but it worked out better. I will never sell any of that Amazon, or google, it goes to my kids. Coin, I will dump the second half at ipo price.

It’s now all hedge with the Vix. And I buy a little more every month. Of, course not a true hedge, and I could still lose, maybe vol gets crushed on the way down, but highly unlikely.

If I ever sell vix for a profit, I will short puts for good prices, in stocks I’m prepared to take delivery of, I.e. no leverage.

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Originally Posted by Cono Este

Do a ratio next time, for even.

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Sell the calls to fund the puts? Or some sort of spread? Always interested if nothing else but for thought experiments

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Originally Posted by Kevo

The economy is slowing and CPI has been rising.

The way that inflation is measured is different than the 80s. If we used the same calculations as the 80s inflation would report higher than we are currently reporting it.

No one believed inflation would go up in consecutive months in Q1 2024, but here we are.

We've run down our strategic petroleum reserve to 1983 levels at the same time that we are running up a $1 trillion deficit every 3 months.

The federal reserve is lightly tapping on the brakes while congress has their foot on the gas.

I don't have a crystal ball, but I don't think inflation is defeated and I don't think congress has any intention of stopping their stimulatory spending.

Ok, so what if the economy continues to expand and inflation goes back down? Cool- I'm in equities and a very specific RE play that will do well in that scenario.

But what if we end up in a downturn? Well, I guess I could have taken more off the table and waited for a crash.

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this

wage growth will continue upward especially for trades and service industry work
the white collars are desperate to tamp down wage increases and decrease wages back down to 2018 levels
they liked it better when these people made less and they (white collars) could afford to spend more on goods and services

since the majority of people elected to govt office these days are all into showmanship and personal advancement in life vs altruistic good for the country
they are going to run us into the ground with debt
it's absolutely insane

something has to give but what it is who knows
this winter was the biggest slow down I've had since 2017/2018 shit fell off the cliff
but guess what? Now I'm running ragged the volume back to insanity
just endless people miffed over the costs

https://www.youtube.com/watch?v=R47h_ux-nE8

https://www.youtube.com/watch?v=FATQ0Yf0Fhc

watched the doc last night. interesting look at MMT explained. on board w some of it. what say our great financial thinkers of the padded room?

since the majority of people elected to govt office these days are all into showmanship and personal advancement in life vs altruistic good for the country

they are going to run us into the ground with debt


Very true, but you forgot to mention the obscene amounts of money they are making, bribes

Sent from my moto g 5G using Tapatalk

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Originally Posted by byates1

https://www.youtube.com/watch?v=R47h_ux-nE8

https://www.youtube.com/watch?v=FATQ0Yf0Fhc

watched the doc last night. interesting look at MMT explained. on board w some of it. what say our great financial thinkers of the padded room?

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MMT is the stupidest idea in a long time. Politicians love it because they never have to cut spending

Sent from my moto g 5G using Tapatalk

What's she's positing is that since the dawn of man law has been established first, and taxation is the engine that creates the need for currency etc.

That the national debt is really a representation of resources outlayed to the citizens (although unjustly allocated en masse disproportionaly)

Imo the gov recklessly spending these perceived needed resources is a huge issue. Some of the points are interesting.

Politicians love harping on the national debt topic. Although weaponizing any talking point is fine.

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Originally Posted by rod9301

MMT is the stupidest idea in a long time. Politicians love it because they never have to cut spending

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I'm no economist, but I have been hearing screaming about how deficits/debt are going to destroy us since before I was even old enough to vote, and I'm 56. And both parties have continued to run up that debt, my entire adult life. When are they going to destroy us again?

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Originally Posted by byates1

https://www.youtube.com/watch?v=R47h_ux-nE8

https://www.youtube.com/watch?v=FATQ0Yf0Fhc

watched the doc last night. interesting look at MMT explained. on board w some of it. what say our great financial thinkers of the padded room?

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I'm not a great financial thinker, but minus her click-bait sound-bites, her TED talk point is:

Deficit spending:
1. Has a cost for all
2. Has a benefit for many/few depending
So make sure you deficit spend wisely and appropriately so that the benefit outweighs the cost

Or is there more to it than that?

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Originally Posted by Danno

I'm no economist, but I have been hearing screaming about how deficits/debt are going to destroy us since before I was even old enough to vote, and I'm 56. And both parties have continued to run up that debt, my entire adult life. When are they going to destroy us again?

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The issue with MMT is that they basically say that the size of the debt/deficit CAN’T cause problems.

There are a lot of mainstream economists who speak out against debt fearmongering, but they still acknowledge that debt CAN become an issue.

MMT is an insane idea. Running up deficits with government spending will necessarily deflate currency.

We (humans) have been here before. The US isn't the first country to debase its own currency. We won't be the last.

Newly printed money is outcompeting labor for the ownership of every asset class, including housing. It is unconscionable and indefensible.

I highly recommend the book "The Price of Time" by Edward Chancellor

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Originally Posted by J. Barron DeJong

The issue with MMT is that they basically say that the size of the debt/deficit CAN’T cause problems.

There are a lot of mainstream economists who speak out against debt fearmongering, but they still acknowledge that debt CAN become an issue.

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again, I'm no economist and have no idea. What I do know is that people have been screaming at me for 40 years how we're destroying ourselves with debt, and we still haven't. So if some here in this thread are screaming the same, pardon me if I have a hard time believing them.

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Originally Posted by Kevo

MMT is an insane idea. Running up deficits with government spending will necessarily deflate currency.

We (humans) have been here before. The US isn't the first country to debase its own currency. We won't be the

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Inflation is back to reasonable levels and the USD over 10 years trumped any other currency in the world.

As for MMT the problem is that they are 2 parts: 1- deficits don’t matter UNTIL there is inflation. 2- raise taxes to kill inflation. Part 2, the often ignored part, is completely unpalatable in the US so we should abstain from part 1.

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Originally Posted by Danno

I'm no economist, but I have been hearing screaming about how deficits/debt are going to destroy us since before I was even old enough to vote, and I'm 56. And both parties have continued to run up that debt, my entire adult life. When are they going to destroy us again?

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America tried MMT in the late 60s / early 70s, and it failed. That was before my time and you were just a kid so maybe boomers can fill us in on what living through latter 70s / early 80s stagflation was like. Our more recent inflation ills give us a taste of what MMT'ers would do to us if they had their way.

Going back even further Weimar Germany is the canonical example. The part that is often left out is the fact Weimar righted the ship and got spending & inflation under control but by that time it was too late to prevent a radicalized labor force ushering in political violence and the Hitler putsch.

Developing countries have also seen their economies destroyed by too much debt followed by attempts to monetize it. Venezuela started out with a left-wing spending agenda only to find itself mired in constant political turmoil. Albeit, MMT'ers blame America for that situation too.

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Originally Posted by Danno

again, I'm no economist and have no idea. What I do know is that people have been screaming at me for 40 years how we're destroying ourselves with debt, and we still haven't. So if some here in this thread are screaming the same, pardon me if I have a hard time believing them.

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I’m one of those people who’s always saying that debt fears are overblown. And you can look at Japan as an example of a country having significantly higher debt without catastrophic, or even significant harm.

But I don’t think there are any serious economists out there who would say it wouldn’t be a problem is the US debt was, say, ten times as big as it is now.