Is the stock market going to tank?

[Benny Profane]

@benny- or a lot of people just don't have the time and/or insight to do it themselves
kinda like a home remodel. sure, you could probably do it yourself, but it takes up all your time, you mess up a bunch and it takes longer than you think bc you don't have the best tools, it's not as coordinated as you hope, it ends up becoming something you hate, yada yada
For people with an interest in in- go right ahead- more power to you to be informed and know what's going on, but not everyone is retired with too much time on their hands...

and like every industry- some people are better/ smarter than others so choose your advisor like you choose your contractor

but, yes, even for those in the industry for a long time- the "crystal ball" is frequently referenced

This is much much easier than a new bathroom. Here. Go to Vanguard.com, start an account, have them extract a certain amount monthly from your paycheck, and put that money into a balanced stock and bond index fund. Dont fuck with it. If you have a matching 401k at work, you're a total fool by not participating, except maybe it's not too low cost, certainly not as much as Vanguard. Make sure that money is invested in a balanced fund. Read John Bogle. Easy.

Now, you owe me a drink.

[babybear]

This is much much easier than a new bathroom. Here. Go to Vanguard.com, start an account, have them extract a certain amount monthly from your paycheck, and put that money into a balanced stock and bond index fund. Dont fuck with it. If you have a matching 401k at work, you're a total fool by not participating, except maybe it's not too low cost, certainly not as much as Vanguard. Make sure that money is invested in a balanced fund. Read John Bogle. Easy.

Now, you owe me a drink.

ha- I loved bogle too
but people are different and also not everyone has a work participation. ie my husband.
I'd def buy you a drink. I love all my grumpy old men here and you are in the 1%

[jono]

I keep thinking this but I'm too lazy to research, so maybe someone here knows: has there ever been an all time high that wasn't subsequently retraced?

[schuss]

Not yet, but depends on how you define high - sp500? Dow?
Tons of factors in play and most analysis I read (more market scale strategy stuff) has been expecting a recession for the past 1.5 years. Trump cuts+stock buybacks kept it hot for a little, but I think a lot were just waiting for some reason to go bearish.
Also, tech has had another mini bubble burst with the latest IPOs/WeWork/failure of new vision fund etc.
At the end of the day I mostly care where the market is when I retire, which is at least a decade away, so eh.

[bennymac]

"Trust me, your "financial advisor" ain't inside."

/\ Truth

You can learn how to do your own wise investing in the same amount of time it takes to learn how to install your own ski bindings or change your own car oil.

I'll pay someone to clean my house because I have better things to do with my time. But paying someone to do your investing is gonna cost you a lot of money lost over time (to them). Put in a little bit of research and a few weeks from now you can be using the money you would have paid to an adviser to good use making money for yourself through compounding. It's not scary. What's scary is if you look at how much you stand to lose by not doing it yourself - especially if you are young.

Financial advisers are like taxi drivers right now - they are panicking as they see their career opportunities shrinking.

[k2skier112]

"Trust me, your "financial advisor" ain't inside."

/\ Truth

You can learn how to do your own wise investing in the same amount of time it takes to learn how to install your own ski bindings or change your own car oil.

I'll pay someone to clean my house because I have better things to do with my time. But paying someone to do your investing is gonna cost you a lot of money lost over time (to them). Put in a little bit of research and a few weeks from now you can be using the money you would have paid to an adviser to good use making money for yourself through compounding. It's not scary. What's scary is if you look at how much you stand to lose by not doing it yourself - especially if you are young.

Financial advisers are like taxi drivers right now - they are panicking as they see their career opportunities shrinking.

The only income my FA gets from me is the .6% (or thereabouts) integrated into the fund price (1.35-1.7% total). I will not pay any extra to a FA

[bennymac]

The only income my FA gets from me is the .6% (or thereabouts) integrated into the fund price (1.35-1.7% total). I will not pay any extra to a FA

Yes - minimize fees. Why pay an adviser a fee to put me into a managed fund (managed by people) that also charges a fee (for the management)? It's like paying some random person to take your car to the mechanic because that random person told you they know the best shop with the best prices - you can find the prices out online and do it yourself. Not sure if this is the best analogy but you get my drift

An even better deal is a fund that I can buy myself that has very little management (therefore really low fees) and is broad enough to weather the storms. Those percentage points saved add up to thousands or millions over a career. Why pay an adviser when I can do a tiny bit of research and retire a few years earlier? Why am I funding their retirement - because they say they have a crystal ball?

[Brock Landers]

Lots of risk in market cap weighted index funds. Lots.

[bennymac]

Lots of risk in market cap weighted index funds. Lots.

I'm young and risk tolerant and invested broadly in different markets. I also am very far from an expert so continue to research and learn from multiple online and print resources. Low cost index fund investing seems to make sense to me at this point in my life. I'm not asking anyone to trust me. Just don't see the point of trusting some dude in a suit to beat the market.

[Brock Landers]

Risk tolerance isn’t the risk inherent in today’s market cap weighted indices after a 10 year bull market and growth run.

You’re young and risk tolerant. Buy equities. Diversify your equity holdings. Sure. But you can do that having an eye on the risk of having 35% of your portfolio in a certain factor that is priced insanely. Or 60% of your portdolio’s companies have high valuations and deteriorating business drivers. Index doesn’t save you...in fact right now it may be doubling down.

All I do all day is research markets, multi asset investing/asset allocation and pick managers to invest in. It’s been tough sledding in some asset classes to beat benchmarks, fees included. But we’ve done it. It doesn’t work out every quarter. Or every year. But longer term, 5 years plus, you want a well rounded set of exposures that will weather the next cycle. And it can be done. And when the bull market invariably does shift, the money racing out of those index-inflated companies will be a sight to see.

[bennymac]

Appreciate the expertise. I still have a lot of learn I know.

Another analogy - we go to doctors to get advice on health care because its not like we can just go online and learn as much as a doctor would through school and job experience. But they have textbooks and national guidelines that consolidate the research that says "do this when this happens" - therefore the advice you receive from a doctor when looking at your broken ankle is likely going to be very similar across the country. I don't feel that matches up to what financial advisers do.

Do you feel that it's likely that someone like me, researching and reading on this stuff in their spare time, can do their own investing and manage it over decades and get a decent return? I'm not asking if it's possible because of course someone "could" do it. Just like someone could manage their health and pull it off. But is it likely. You study markets all day - is that the level of time investment required to successfully navigate managing your own family's money? Honest question.

[BmillsSkier]

So you dont listen to the John Bogles who have been saying, mix of stocks and bonds, more bonds in old age, leave it there and get back to your life, save your money, spend less than you make, avoid taxation, buy a home and live in it a long time with one spouse. Nope.

Benny, I sat next to John Bogle at my youngest sister's undergrad graduation, front row on a chilly Connecticut Saturday morning outside, as his granddaughter gave a speech on, of all things, "privilege" (way before it became hip among the kids to self-loathe). We laughed about the topic and he shared some candid thoughts on the market. Fascinating guy to chat with. His philosophy was a bit more nuanced then your list, but it's pretty spot on.

Anyway, back to rampant blindfolded dart throwing.

[4matic]

Brock speaks truth. Index risk is off the hook right now. My bond funds are acting squirrelly right now too. Could be dividend positioning.

[Brock Landers]

If I had a decent amount of money, and associated financial planning matters (estate, tax efficiency,etc) I would actually find an adviser. Or 2. I’m no fan of financial advisors broadly- I’ve seen too many that were either selling some bullshit or they just didn’t know much. But I’d rather pick one good financial advisor that comes highly recommended and you feel comfortable with, than picking 20 funds across 10 asset classes and knowing the estate or tax or life event shit. Feel like you’re getting a deal paying the .8 or 1.2% or whatever.

As for just picking funds in a pool of drug money (or a 401k)...you can do it. When you read research, just know the source. Equity managers are always bullish. Reading vanguard propaganda is full of half truths. And I’m not necessarily anti index either. But how’d the index funds do in ‘99, when jerkoff.com was a 3% weight? Or a group of .com’s was 30% of the index and never made a single dollar?

For your portfolio, Figure out the broad asset classes and risk levels you want exposure to. Populating it is twofold- gaining a diversified set of company/factor/philosophical exposures- and finding good managers who piece well together.

50% of active managers you can wipe out easily. Lack of experience, resources, whatever. Out of the rest, that smaller subset will generally beat most indices long term (studies done on this by a guy named Crejmers) Then look at it the other way- looking for the best, rather than cutting out the worst. This actually takes a bit of experience, knowledge and time.

Let me know if you have questions though, whether picking managers, allocating to asset classes, whatever. Happy to help. Generally at least 95% invested, not trying to time markets though will allocate at the margins between some higher or lower % fixed income, equity, more commodity, real estate, etc.

[4matic]

Do you feel that it's likely that someone like me, researching and reading on this stuff in their spare time, can do their own investing and manage it over decades and get a decent return?

Sure. Easy. Pick an allocation model you are comfortable with and underweight and overweight based on your own work.

Define your risk
Define your timeframe.

Go through the Lazy Portfolios

https://www.marketwatch.com/lazyportfolio

[BmillsSkier]

I for one am glad I shorted jerkoff.com.

[rideit]

Is Pornhub publicly traded?

[Brock Landers]

4m much more succinct.

Defining risk is always a bitch

[bennymac]

you guys are so cheerful and helpful (for reals). I need to spend more time in the padded room and less in polyass. Cheep liquor, fast cars, and redheads. And financial advice. What a time to be alive!

[4matic]

High yield bonds could be catalyst for a leg lower. The junk etf’s have started to rollover

[Brock Landers]

Christ maybe we are getting soft. Fuck.

[4matic]

PFF (preferred stock etf) is an example of an indexed etf that could just get crushed in a liquidity crunch. Lots of public ownership and illiquid assets pricing it. I’ll watch that one for opportunity.

[rideit]

We need pics of Bennymac’s girlfriend’s tits in order to assess a good financial strategy.

[iceman]

Christ maybe we are getting soft.

hey speak for yourself.

[rod9301]

As an individual investor you have a big advantage over professional investors who have to be invested all the time.
You can choose to not be in equities when they are expensive.

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