Dow posts worst Opening Day in 8 years

[BLADEMDA]

Second-longest bull market ever aging gracefully, but investors wonder how long it will last

• Since the prior bear market ended in March 2009, this advance in equities is now the second-oldest on record without at least a 20 percent drop in the S&P 500.
• The current trailing 10-year annual return for the index is only 7.6 percent. At previous major bull market peaks, this 10-year annual pace has routinely been above 15 percent.
• There aren't many worrisome stresses in the capital markets at the moment. All asset classes appear similarly stretched in valuation – yet rationally valued in relation to one another.

Second-longest bull market ever aging gracefully, but investors wonder how long it will last

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[BLADEMDA]

Chinese Bonds for a diversified portfolio?

China's 10-year government bond was yielding around 3.6 percent, while the U.S. 10-year Treasury yield was around 2.2 percent.

Where big money investors are putting their fixed income dollars

 

[facted]

Always fun to check in on this thread and all those great predictions. Still waiting for the drop that was INEVITABLE!

If I had only plugged my money into silver or kept more cash for those inevitable deals!!!

 

[BLADEMDA]

Always fun to check in on this thread and all those great predictions. Still waiting for the drop that was INEVITABLE!

If I had only plugged my money into silver or kept more cash for those inevitable deals!!!

We are all enjoying the ride while it lasts; and, at these valuations I would definitely be holding "cash" to invest when (not if) the correction occurs. I'm a long term bull on the U.S. stock market but even this bull market is long in the tooth for a major pullback.

It looks like Trump economic policy should be good for stocks through the rest of the year.

 

[GA8314]

Corrections are unpredictable. Had you been sitting on too much cash 6 months ago you would have lost out on a lot. It's why there is an argument for lump sum investing.

That said, having cash reserves does not mean you are sitting on cash. It just means you have a portion of your savings in cash which is never a bad thing. Such as for an emergency or major life/job change or something.

I think "they" say 6 months of your earnings or 5% of your savings should be in cash but I don't know the right amount. Maybe 6 months of living expenses seems about right to me.

I'm glad I decided to put a lump sum bonus check into some Vanguard Indexed stock funds. I realize, however, that there will be a correction at some time and indeed I don't even really care. It will not change what I do.

When the correction occurs, it will be painful to see your balances cut by who knows how much, but it will be psychologically painful. Expect that. Anticipate that. In fact, simultaneously business/market news will almost predictably be suggesting new "paradigms" (if it's a major correction) and perhaps predicting that stocks are no longer a good investment. They will remind us that history does not predict the future, and that just because stocks have always rebounded within various time frames, this time it's different.

This is when people will lose their nerve. More selling may happen among the less financially educated. Meantime, those knowledgable will be buying.

I suggest you go out and buy some books on the history of corrections. I have one which I've not read but it's on the shelf. I will be referencing this when things look grim, as a reminder that it always looks grim at those moments but that you must maintain your nerve.

I'm prepping (as I would advise anyone) to disassociate my ego from my current balance (growing as most of you). It's just a number, and it WILL change. Expect it to. Know that it will, and do not become tied to that number. Know that your compound interest calculations which many of us run very frequently will be hindered by a correction. Put that on hold, and know that you must stay the course. It's a long game.

 

[facted]

We are all enjoying the ride while it lasts; and, at these valuations I would definitely be holding "cash" to invest when (not if) the correction occurs. I'm a long term bull on the U.S. stock market but even this bull market is long in the tooth for a major pullback.

It looks like Trump economic policy should be good for stocks through the rest of the year.

I understand what you're trying to do, but really it amounts to timing the market with that extra cash. This thread shows that your ability to do that is no better than anyone elses. You've been calling for a drop since at least last sept, missing out on quite a run up.

 

[BLADEMDA]

I understand what you're trying to do, but really it amounts to timing the market with that extra cash. This thread shows that your ability to do that is no better than anyone elses. You've been calling for a drop since at least last sept, missing out on quite a run up.

Being "cautious" isn't the same as "missing out" as I have been investing since the 1990s. How many crashes have you seen? How will your nerve and portfolio hold up if the market tanks 20 or even 30%? A 100% equity portfolio at these valuations doesn't make sense. I'm not arguing to go to "cash" but rather keep some cash on hand to buy when there is a big correction. If your portfolio is small then of course monthly contributions makes sense at these valuations.

Also, I've re-allocated more of my money to Foreign small caps in the past 8 months. They have outperformed the domestic market and I expect them to outperform for the new few years. So, it's about risk vs reward and allocation of your total portfolio.

 

[BLADEMDA]

“Cash vs. fully invested? How can a small-time investor take advantage of large market selloffs (2001, 2008) if you are fully invested all the time?

Sure you can sell a position to enter a better position, but you are likely selling at a loss. In a broad market sell-off, you ideally want some liquid capital to put to work at bargain basement prices on excellent companies.

So I guess the question is: If stocks sold off by 30% across the board in 2017, how would you take advantage of that if you are not holding any liquid assets to invest with?

As a small-time investor, we do not have a way to get our hands on insurance float to invest when stocks go on fire sale.

Should Value Investors Hold Cash When the Market Is Overpriced? - GuruFocus.com

 

[BLADEMDA]

 

[BLADEMDA]

 

[BLADEMDA]

 

[Precedexed Out]

Being "cautious" isn't the same as "missing out" as I have been investing since the 1990s. How many crashes have you seen? How will your nerve and portfolio hold up if the market tanks 20 or even 30%? A 100% equity portfolio at these valuations doesn't make sense. I'm not arguing to go to "cash" but rather keep some cash on hand to buy when there is a big correction. If your portfolio is small then of course monthly contributions makes sense at these valuations.

Also, I've re-allocated more of my money to Foreign small caps in the past 8 months. They have outperformed the domestic market and I expect them to outperform for the new few years. So, it's about risk vs reward and allocation of your total portfolio.

Might as well ignore @facted since this user isn't interested in anything to do with facts. Keep on going, I like reading your posts.

 

[facted]

Being "cautious" isn't the same as "missing out" as I have been investing since the 1990s. How many crashes have you seen? How will your nerve and portfolio hold up if the market tanks 20 or even 30%? A 100% equity portfolio at these valuations doesn't make sense. I'm not arguing to go to "cash" but rather keep some cash on hand to buy when there is a big correction. If your portfolio is small then of course monthly contributions makes sense at these valuations.

Also, I've re-allocated more of my money to Foreign small caps in the past 8 months. They have outperformed the domestic market and I expect them to outperform for the new few years. So, it's about risk vs reward and allocation of your total portfolio.

We've all seen crashes and we all know history. With that being said, you can't time the crashes. Period. My point is you've lost 15% on that cash you had on the sidelines since last Sept with your caution. FYI my philosophy is keep investing through time no matter market conditions, and that includes crashes. Did just fine with that in the last crash.

I do agree that there's more upside in foreign equities than US at this time.

 

[Precedexed Out]

We've all seen crashes and we all know history. With that being said, you can't time the crashes. Period. My point is you've lost 15% on that cash you had on the sidelines since last Sept with your caution. FYI my philosophy is keep investing through time no matter market conditions, and that includes crashes. Did just fine with that in the last crash.

I do agree that there's more upside in foreign equities than US at this time.

You can't time crashes exactly, but you can guess and sometimes are right. Since Obama has been out, the markets are doing well and will continue especially if tax reform can be passed. Selling health insurance stock a few days ago would have been a wise move. Looks like the US government is no longer going to make this industry wealthy, about time. Perfect example of corporate welfare.

 

[sevoflurane]

Stick to the plan.

2017 is turning out to be a fantastic year.

Amazing what sticking to the plan generates after 10 years of practice.

Eventually, your investment returns should beat your income.

 

[Precedexed Out]

Stick to the plan.

2017 is turning out to be a fantastic year.

Amazing what sticking to the plan generates after 10 years of practice.

Eventually, your investment returns should beat your income.

It would be wonderful to know you are making more money in your investments than your income. Seems like that is a long way off for so many soon to be graduates who will be paying off over $200,000 student loan debt, may with over $300,000. I'll barely be able to pay the interest during four years of residency.

 

[sevoflurane]

It would be wonderful to know you are making more money in your investments than your income. Seems like that is a long way off for so many soon to be graduates who will be paying off over $200,000 student loan debt, may with over $300,000. I'll barely be able to pay the interest during four years of residency.

I am a DINK.
Helps a lot.
We came out with 700k in debt post residency.
It's all good.

Stick to the plan.

 

[btbam]

You can't time crashes exactly, but you can guess and sometimes are right. Since Obama has been out, the markets are doing well and will continue especially if tax reform can be passed. Selling health insurance stock a few days ago would have been a wise move. Looks like the US government is no longer going to make this industry wealthy, about time. Perfect example of corporate welfare.

The markets didn’t do well when Obama was president?

 

[GA8314]

Being "cautious" isn't the same as "missing out" as I have been investing since the 1990s. How many crashes have you seen? How will your nerve and portfolio hold up if the market tanks 20 or even 30%? A 100% equity portfolio at these valuations doesn't make sense. I'm not arguing to go to "cash" but rather keep some cash on hand to buy when there is a big correction. If your portfolio is small then of course monthly contributions makes sense at these valuations.

Also, I've re-allocated more of my money to Foreign small caps in the past 8 months. They have outperformed the domestic market and I expect them to outperform for the new few years. So, it's about risk vs reward and allocation of your total portfolio.

I think rebalancing one's portfolio every year or so is wise.

 

[GA8314]

“Cash vs. fully invested? How can a small-time investor take advantage of large market selloffs (2001, 2008) if you are fully invested all the time?

Sure you can sell a position to enter a better position, but you are likely selling at a loss. In a broad market sell-off, you ideally want some liquid capital to put to work at bargain basement prices on excellent companies.

So I guess the question is: If stocks sold off by 30% across the board in 2017, how would you take advantage of that if you are not holding any liquid assets to invest with?

As a small-time investor, we do not have a way to get our hands on insurance float to invest when stocks go on fire sale.

Should Value Investors Hold Cash When the Market Is Overpriced? - GuruFocus.com

As you know, the argument is that you never know when the rebound is going to come either. Most people will totally miss many of the gains to be had on rebounds, just as they can't time when the correction will come.

So, that cash on the sidelines (if more than one's typical cash reserves) doesn't tend to get allocated properly or effectively it seems. Now, rebalancing into asset classes which have underperformed is probably a better idea, as is the concept of perhaps becoming much more conservative if you don't have a 10 year minimum time horizon....

 

[WisNeuro]

The markets didn’t do well when Obama was president?

I mean, only 166% if we take the change from his first day in office to his last. Child's play, I say

 

[GA8314]

Selling assets which have done very well (understanding that you can not time the top) and buying assets which have performed less favorable, while staying broadly diversified, is the key to success IMO. That's a good rebalancing strategy IMO.

But, that's entirely different than hoarding cash waiting for a correction which may not occur for 3 years, or which may happen this week.....

 

[GA8314]

I am a DINK.
Helps a lot.
We came out with 700k in debt post residency.
It's all good.

Stick to the plan.

And go f.ing ballistic on paying that debt off once an attending. Upgrade some things, but prioritize debt elimination and I really think that will serve you in the long run. I don't care if you are able to refinance down to some variable rate in the 4% range, and THINK you can get 7% out of the market. Bury that debt, and you will thank yourself down the road.

You are buying FREEDOM when you take this approach....

 

[GA8314]

The markets didn’t do well when Obama was president?

Look, all the experts say that it really does not matter who is POTUS as pertains to markets. This includes Trump as it also includes Obama. All will blame others when bad, and all will take credit when good.

POTUS and markets care not correlated. Periods of time when this POTUS or that POTUS is in power occurs obviously, but they can't claim responsibility (or fault) when markets gyrate.. Period.

If you disagree with this, then you don't know market history.

 

[btbam]

Look, all the experts say that it really does not matter who is POTUS as pertains to markets. This includes Trump as it also includes Obama. All will blame others when bad, and all will take credit when good.

POTUS and markets care not correlated. Periods of time when this POTUS or that POTUS is in power occurs obviously, but they can't claim responsibility (or fault) when markets gyrate.. Period.

If you disagree with this, then you don't know market history.

I'm well aware of this. My comment was more in regards to "Precedexed Out" who spends his time on here shilling for Trump. His comment was along the lines of "since Obama left office, the markets have done well" which, while true, has also been true for the preceding 7 years.

 

[anes121508]

And go f.ing ballistic on paying that debt off once an attending. Upgrade some things, but prioritize debt elimination and I really think that will serve you in the long run. I don't care if you are able to refinance down to some variable rate in the 4% range, and THINK you can get 7% out of the market. Bury that debt, and you will thank yourself down the road.

You are buying FREEDOM when you take this approach....

Interesting this point you brought up...I'm a new attending and not sure where to put extra money. Assuming I've maxed tax advantaged retirement funds, fsa, 529, emergency fund etc...and now I'm between brokerage account vs paying back more to my student loans at 3.25%. Given that the market is at an all time high would you pay the loans?

 

[deleted126335]

Interesting this point you brought up...I'm a new attending and not sure where to put extra money. Assuming I've maxed tax advantaged retirement funds, fsa, 529, emergency fund etc...and now I'm between brokerage account vs paying back more to my student loans at 3.25%. Given that the market is at an all time high would you pay the loans?

Pay off the loans.

 

[Twiggidy]

Interesting this point you brought up...I'm a new attending and not sure where to put extra money. Assuming I've maxed tax advantaged retirement funds, fsa, 529, emergency fund etc...and now I'm between brokerage account vs paying back more to my student loans at 3.25%. Given that the market is at an all time high would you pay the loans?

Make sure you double check your student loan terms and incentives (ie, interest rate deductions for auto-pay, on time payments etc) because you may be able to get that rate down into the 2s. If not, yes, definitely pay back your loans. Many people in my class consolidated and spread the loans over 30 yrs which drastically reduced the monthly payments while also being able to get the incentives. Student loans (depending on the lender) aren't like car loans or mortgages, in that they actually reward you a little bit for paying the back. I'm content with the fact that I have probably another 20 yrs of student loan payments but the payment is so low versus salary that it lets me focus on saving (house, retirement, etc) at the same time. If you're not in an expensive market you'll be able to do those things on an attending salary easily

 

[GA8314]

Interesting this point you brought up...I'm a new attending and not sure where to put extra money. Assuming I've maxed tax advantaged retirement funds, fsa, 529, emergency fund etc...and now I'm between brokerage account vs paying back more to my student loans at 3.25%. Given that the market is at an all time high would you pay the loans?

Yes. Pay off the f.cking loans. I realize the rate is pretty low. I think that too many people allow that fact to perpetuate a 10 or 15 year loan payback strategy which keeps you in debt, and negatively effects your net worth. Pay it off.

Now, 2% may be different. Frankly, you can do both (aggressively pay off loans and save a lot also) if you don't go ape s.hit and live like you're rich. I think most attendings' salaries/income will allow to max out tax advantaged (don't forget HSA, reverse Roth as well), pay off loans, and also save into a nice Vanguard brokerage account, all at the same time. Just don't go crazy like I've seen some recent grads do. Living like they are rich.....

 

[sevoflurane]

And go f.ing ballistic on paying that debt off once an attending. Upgrade some things, but prioritize debt elimination and I really think that will serve you in the long run. I don't care if you are able to refinance down to some variable rate in the 4% range, and THINK you can get 7% out of the market. Bury that debt, and you will thank yourself down the road.

You are buying FREEDOM when you take this approach....

Paid off loans in a little over a year.
Own 3 homes. All three paid off.
Nice passive income from my other two homes. Goal is to have 100-150k in rental income per year until infinity.
Drop as much as I can into the market every year and have a FU account ready to deploy at any time.
Definitely been preparing for retirement over the last 10 years.
Not having debt is weight off of my shoulders for sure.

 

[mostwanted]

I follow sevo's strategy. Out over 2 yrs, paid student loans off under a year. Own 2 paid off homes. Being debt free is awesome.


Sent from my iPhone using SDN mobile

 

[68PGunner]

Out of all the specialties out there, it seems like that this has the most active # of physicians talking about investment. Are all Gas attendings like this? Just curious bc you guys are awesome.

 

[GA8314]

Paid off loans in a little over a year.
Own 3 homes. All three paid off.
Nice passive income from my other two homes. Goal is to have 100-150k in rental income per year until infinity.
Drop as much as I can into the market every year and have a FU account ready to deploy at any time.
Definitely been preparing for retirement over the last 10 years.
Not having debt is weight off of my shoulders for sure.

Nice man.... That's a great place to be.

Working at it.

 

[GA8314]

Out of all the specialties out there, it seems like that this has the most active # of physicians talking about investment. Are all Gas attendings like this? Just curious bc you guys are awesome.

I think we just have an active forum.

 

[Twiggidy]

And for any high school/college student lurking.....go to a school where they will give you money (unless we're talking like Yale or Harvard in which just go there anyway). A good way to pay of debt fast is to not start with a lot of debt in the first place. There are other ways to get loans reduced, ie the NAVY, but if that's not your cup of tea you need to consider the cost of education (unless you have a rich family)

Med school is expensive. Real expensive. And even more expensive if you go to a private school.

Also consider where you might live. Lower cost of living = easier to pay off school debt.

 

[ambiturner]

Out of all the specialties out there, it seems like that this has the most active # of physicians talking about investment. Are all Gas attendings like this? Just curious bc you guys are awesome.

For every attending on here saving and paying down their debt, there are probably 3 out there driving fancy cars, living in big houses, not saving a penny.

That said, I think anesthesiologists tend to be better with money than most doctors, in part because the salary is pretty good and also the (less flashy) personalities don't seem to flock to the ferraris, rolexes etc like some other fields...

 

[Twiggidy]

For every attending on here saving and paying down their debt, there are probably 3 out there driving fancy cars, living in big houses, not saving a penny.

That said, I think anesthesiologists tend to be better with money than most doctors, in part because the salary is pretty good and also the (less flashy) personalities don't seem to flock to the ferraris, rolexes etc like some other fields...

Anesthesiologists also realize we can only do this for so long, so I think we place having a retirement nest egg as a higher priority

 

[68PGunner]

Anesthesiologists also realize we can only do this for so long, so I think we place having a retirement nest egg as a higher priority

Can you explain what this means? Are you talking about the nurse encroachment or just the burnout feeling?

 

[nimbus]

Can you explain what this means? Are you talking about the nurse encroachment or just the burnout feeling?

You need decent eyes and coordination. You can't do it into your 80s like psych or the law.

 

[deleted697535]

If you think education is expensive try ignorance! Always wanted to say that!!

You can definitely still do anesthetics into your 70s. Maybe not as long as psych but definitely as long as surgery em gastro Ortho ob.
It's not optho like.

 

[Twiggidy]

If you think education is expensive try ignorance! Always wanted to say that!!

You can definitely still do anesthetics into your 70s. Maybe not as long as psych but definitely as long as surgery em gastro Ortho ob.
It's not optho like.

But what I'm getting at is, when you're 70, should you be?

If a surgeon or anesthesiologist are working in the 70s (given the stress of the field) they either have financial problems or lack a hobby.

 

[Twiggidy]

Can you explain what this means? Are you talking about the nurse encroachment or just the burnout feeling?

Nurses, no. Burnout, maybe.

Edit: I say maybe because if certain aspects are removed from my daily work, I could probably see myself doing it longer, meaning, I'm not sleeping in a call room when I'm in my 60s (hell, maybe not when I'm in my 50s)

 

[GA8314]

Can you explain what this means? Are you talking about the nurse encroachment or just the burnout feeling?

Whether you are sitting your own cases or supervising NA's or a bit of both, I think a lot of outsiders don't realize that this gig can be reasonable taxing.

That said, on days I'm really running (or working hard on own in our fastest Gen Surg room), I view moving around and using one's muscles as an ultimate good thing. I think if you take care of yourself relatively well, you can view some of the physicality as just that. Some good exercise....

But, it's def more physical than many realize, and I imagine the productivity pressures known well by all of us, would get challenging at >70 yrs....

 

[GA8314]

For every attending on here saving and paying down their debt, there are probably 3 out there driving fancy cars, living in big houses, not saving a penny.

That said, I think anesthesiologists tend to be better with money than most doctors, in part because the salary is pretty good and also the (less flashy) personalities don't seem to flock to the ferraris, rolexes etc like some other fields...

Perhaps, but I do sense a spirit of sensibility amongst the posters here.

 

[maxxor]

Perhaps, but I do sense a spirit of sensibility amongst the posters here.

Could it be that anesthesia intrinsically requires you to be planners? Always planning for the worst, which translates over to finances as well?

We don’t have that culture in radiology, so I lurk here for finance ideas.

 

[GA8314]

Could it be that anesthesia intrinsically requires you to be planners? Always planning for the worst, which translates over to finances as well?

We don’t have that culture in radiology, so I lurk here for finance ideas.

Not sure we have data to support that. I think the Anesthesiology Forum has a long tradition of discussing finances and has many contributors with a lot of experience and with others sharing knowledge and insight. Not sure you can make a generalization based upon this forum though.

 

[caligas]

Just to clarify, when you guys talk about keeping money in cash, are you talking about money market/savings that truly earns nothing? What about keeping that reserve in index bond ETF that might earn 3-5% but is very liquid and accessible for bargain shopping during a market downturn?

 

[deleted162650]

Paid off loans in a little over a year.
Own 3 homes. All three paid off.
Nice passive income from my other two homes. Goal is to have 100-150k in rental income per year until infinity.
Drop as much as I can into the market every year and have a FU account ready to deploy at any time.
Definitely been preparing for retirement over the last 10 years.
Not having debt is weight off of my shoulders for sure.

First off, I hate you.

If you ever need another avenue to deploy a little of that discretionary income, you can always start paying off my loans. Maybe I can set up a charitable organization, The Young Doctors' Financial Relief Fund, so you can at least get a tax deduction out of it.

Hell, I'll even let you start paying down my mortgage if you're really desperate. In return, you can crash at my place anytime you're in SoCal - think of it like a timeshare really.

 

[anes121508]

Yes. Pay off the f.cking loans. I realize the rate is pretty low. I think that too many people allow that fact to perpetuate a 10 or 15 year loan payback strategy which keeps you in debt, and negatively effects your net worth. Pay it off.

Now, 2% may be different. Frankly, you can do both (aggressively pay off loans and save a lot also) if you don't go ape s.hit and live like you're rich. I think most attendings' salaries/income will allow to max out tax advantaged (don't forget HSA, reverse Roth as well), pay off loans, and also save into a nice Vanguard brokerage account, all at the same time. Just don't go crazy like I've seen some recent grads do. Living like they are rich.....

Thank you all for the advice. Aggressively payment schedule is in place .

 

[WholeLottaGame7]

Nurses, no. Burnout, maybe.

Edit: I say maybe because if certain aspects are removed from my daily work, I could probably see myself doing it longer, meaning, I'm not sleeping in a call room when I'm in my 60s (hell, maybe not when I'm in my 50s)

Yeah, I love my job (most days), but if I'm doing this at 65, something has gone horribly wrong. Also, the attendings that I had in residency pushing retirement age were not typically the ones I would model myself after. Good for perspective and some teaching stuff, but not as good technically or with intra-op management. Would not be cutting it in private practice unless they were sitting in the lounge signing charts.