Economic recession imminent

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AD04 said:
You're wrong. There won't be a hard landing for everyone. Main street is already in a recession. Wall Street is about to get even richer. In Q4 2024, risk-on assets will rip up so high. Not only am I fully invested with risk-on to the max (more risk than indexing in S&P 500), I took out 6-figures in debt to throw into the investments. Then in 2025, returns for risk-on assets will continue to explode. It's the wrong time to be risk-off.
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AD04 said:
How good is PE ratio in terms of investing? Value has been underperforming for a decade or longer. Compare performance of Vanguard Value ETF (VTV) vs Vanguard Growth ETF (VUG). From January 2015 - August 2024, $10k initial investment in VTV would result in $26,175 while in VUG would result in $39,417.

More institutions are buying gold which drives up prices. But are they giving up equities or are they giving up bonds? I'll argue it's the latter. National central banks are buying gold like crazy. Which asset are they giving up if they buy gold? US treasuries. War with Russia may escalate. What happens during wartime? Inflation. What performs poorly during inflation? Bonds.

Since you moved from equities into money market funds, my guess you're expecting a crash in equities -- like GFC. It's not going to happen. Read Broken Money by Lyn Alden. She talks about the 1-2 punch of recessions in the book. The first recession is deflationary due to swelling of private debt that cannot be paid back. We had that during GFC. The second recession is inflationary due to swelling of government debt that is paid back by money printing. We're in the money-printing stage and will be until debt-to-GDP gets under control. We need more inflation for longer. What asset performs poorly during inflation? Bonds.

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I make way more money investing than in medicine. The way I do that is by going to where the puck will be as per Wayne Gretzky and then maximize return without tipping in ruin. To do so, I need to predict accurately.

Think about what you're doing from first principles. Federal Reserve will decrease interest rates in a few days. This means bonds (including money market funds) will yield less. This also means equities will increase in price as money will flow from bonds to equities to seek out return. You're pretty much going to where the puck won't be.
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I'll give myself a pat on the back. My prediction came true so far. The market also rewarded me very handsomely for my gambit.

OP, I hope you took my advice and went risk-on. You're welcome.
 
I posted this in another thread but I’ll post it again. time in the market is more important than timing the market. No one can reliably predict the market consistently.

“Avoiding the market’s downs may mean missing out on the ups as well. 78% of the stock market’s best days occur during a bear market or during the first two months of a bull market. If you missed the market’s 10 best days over the past 30 years, your returns would have been cut in half. And missing the best 30 days would have reduced your returns by an astonishing 83%. “
 
Simba1711 said:
I posted this in another thread but I’ll post it again. time in the market is more important than timing the market. No one can reliably predict the market consistently.

“Avoiding the market’s downs may mean missing out on the ups as well. 78% of the stock market’s best days occur during a bear market or during the first two months of a bull market. If you missed the market’s 10 best days over the past 30 years, your returns would have been cut in half. And missing the best 30 days would have reduced your returns by an astonishing 83%. “
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Totally agreed. I kept so much money off the table after the 2008 crash. Plus losing a crap on my home after selling it in 2009. ( brought at peak end of 2005).
So from 2009-2011 I was 50% cash stupid move. Likely cost me 500k in gaines with the rebound.
 
Simba1711 said:
I posted this in another thread but I’ll post it again. time in the market is more important than timing the market. No one can reliably predict the market consistently.

“Avoiding the market’s downs may mean missing out on the ups as well. 78% of the stock market’s best days occur during a bear market or during the first two months of a bull market. If you missed the market’s 10 best days over the past 30 years, your returns would have been cut in half. And missing the best 30 days would have reduced your returns by an astonishing 83%. “
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aneftp said:
Totally agreed. I kept so much money off the table after the 2008 crash. Plus losing a crap on my home after selling it in 2009. ( brought at peak end of 2005).
So from 2009-2011 I was 50% cash stupid move. Likely cost me 500k in gaines with the rebound.
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+1

I’ve made my share of dumb mistakes eg buying tech stocks on margin at the height of the dot com bubble.

We are anesthesiologists. We don’t have to beat the market to win. We just need to save consistently and be in the market.
 
nimbus said:
+1

I’ve made my share of dumb mistakes eg buying tech stocks on margin at the height of the dot com bubble.

We are anesthesiologists. We don’t have to beat the market to win. We just need to save consistently and be in the market.
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Exactly. I had a colleague have to come out of retirement because his individual stocks tanked. As long as we invest in well diversified broad index funds we will be able to retire comfortably given our income. It’s not sexy and it’s not huge gains but it’s a steady reliable income. We have to resist the human nature of greed and chase individual stocks or other investments for potential bigger gains.
 
Dr. Anonymouss said:
Buckle up, a storm is brewing ⚡️⛈️

There are countless economic indicators out there, but the two I have gravitated towards are 10-2 treasury yield spread and the SAHM index. For those that don't know these indicators I'll give a brief overview below.

The 10-2 treasury yield spread is the difference between the 10 year treasury rate and the 2 year treasury rate. When the 2 year treasury rate is greater than the 10 year treasury rate we call that an inverted yield curve because on the graph the value will be negative. A negative 10-2 yield spread has historically been viewed as a precursor to a recessionary period.

The SAHM index signals the start of a recession when the three-month moving average of the national unemployment rate rises by 0.50 percentage points or more relative to the minimum of the three-month averages from the previous 12 months.


This is the 10-2 treasury yield spread. Notice how every time the yield curve has inverted a recession followed shortly after. The recession has only begun once the treasury rate for the 10 year bonds outpaces the treasury rate for the 2 year bonds. Interesting for us, this event just occurred.

View attachment 392307



This is the SAHM index. Notice how everytime the 3 month moving average for national unemployment is 0.5 a recession has occurred. Unfortunately this doesn't predict recessions because it's data is 3 months in the past, so it is usually confirmatory for stating "we are currently in one".

View attachment 392304



Now does this mean a recession is guaranteed? No of course not. There is no such thing as guarantees in the finance world, we are confined to work with probabilities. What I can say is that the cost of food has become insane, the cost of housing has become unaffordable, and overall most americans are hurting right now from an economic stand point. When you factor this in with the indicators I've provided above I can say that the probability of a recession coming with a hard landing is highly likely. Let me know what you think. Let's discuss.
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I hope everyone has enjoyed this buy signal.
I'm up about 1.1 1.2%
Thank you!
Feel free to post again, any time you get some indicators
 
PpfSuxTube said:
I hope everyone has enjoyed this buy signal.
I'm up about 1.1 1.2%
Thank you!
Feel free to post again, any time you get some indicators
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The non-emotional etf holders should be at all time highs right meow.

I wouldn’t harass the OP however. One of my favorite topics of this forum is the economic/investing discussions. He could be right still… but like others have mentioned, time in the market is what really matters.
 
Y’all ready for the international run up? It’s been at a discount for awhile. Hopefully…
 
My buddy has had 500k cash sitting on the table since end of 2021. He’s got a lot more than that. But he was patting himself for avoiding the 20 plus drop in the market in 2022. That account should be easily worth 700k right now with basic VOO or VTI investment. So even a market downward correction of say 20% soon means he still would be ahead if he kept the money in the stock market

One the flip side. The dude makes 1.5 million a year and owns part of the pain and surgery center. And has assets over 7 million at an earlier age than most of us. And he’s only 40 years old. So he doesn’t need to take a ton of risk and can just coast
 
aneftp said:
My buddy has had 500k cash sitting on the table since end of 2021. He’s got a lot more than that. But he was patting himself for avoiding the 20 plus drop in the market in 2022. That account should be easily worth 700k right now with basic VOO or VTI investment. So even a market downward correction of say 20% soon means he still would be ahead if he kept the money in the stock market

One the flip side. The dude makes 1.5 million a year and owns part of the pain and surgery center. And has assets over 7 million at an earlier age than most of us. And he’s only 40 years old. So he doesn’t need to take a ton of risk and can just coast
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Well done to him...
Guy has obviously worked hard and made good decisions...

My point however is that the market does most of its up moves on like 5 or 6 days evert few year. If you miss those days, and youre just a regular dude you're burned. Your pension won't even cover inflation
 
PpfSuxTube said:
Well done to him...
Guy has obviously worked hard and made good decisions...

My point however is that the market does most of its up moves on like 5 or 6 days evert few year. If you miss those days, and youre just a regular dude you're burned. Your pension won't even cover inflation
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That’s correct. Time in market, not timing the market
 
aneftp said:
My buddy has had 500k cash sitting on the table since end of 2021. He’s got a lot more than that. But he was patting himself for avoiding the 20 plus drop in the market in 2022. That account should be easily worth 700k right now with basic VOO or VTI investment. So even a market downward correction of say 20% soon means he still would be ahead if he kept the money in the stock market

One the flip side. The dude makes 1.5 million a year and owns part of the pain and surgery center. And has assets over 7 million at an earlier age than most of us. And he’s only 40 years old. So he doesn’t need to take a ton of risk and can just coast
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Guy sounds like he won the game if he's pulling in $1.5 million a year. He can easily create generational wealth with that type of yearly income.
 
CubsDynasty said:
This post did not age well. Market up almost 10% since OP called for the market in turmoil. Exhibit #1000 of why you can’t time the market and just need to spend time in it.
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I am humble enough to admit when I am wrong and unfortunately this is one of those times when life wanted to teach me a lesson. I do find it to be a blessing at the same time though because I learned this lesson at 30 years old. I had a chance to time the market direction correctly and had I done that it would have cost me a lot more money in the future by playing this game of trying to constantly sell and buy back. Going forward I am going to take the emotions out investing and just play for the long game; dollar cost averaging into the S&P500 and HODL until retirement.
 
Dr. Anonymouss said:
I am humble enough to admit when I am wrong and unfortunately this is one of those times when life wanted to teach me a lesson. I do find it to be a blessing at the same time though because I learned this lesson at 30 years old. I had a chance to time the market direction correctly and had I done that it would have cost me a lot more money in the future by playing this game of trying to constantly sell and buy back. Going forward I am going to take the emotions out investing and just play for the long game; dollar cost averaging into the S&P500 and HODL until retirement.
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All good man. Nobody gets it right 100% of the time. I’m kicking myself for never really allocating at least some funds to bitcoin. I have an experiment of $1000 that has nearly tripled.
But the saying is true… nobody knows when the next crash is going to happen yet time in the market is what matters. Even if the market tanked 50%, I’d still be up at least 38% over the past 5 years.

1733511148792.jpeg
 
sevoflurane said:
All good man. Nobody gets it right 100% of the time. I’m kicking myself for never really allocating at least some funds to bitcoin. I have an experiment of $1000 that has nearly tripled.
But the saying is true… nobody knows when the next crash is going to happen yet time in the market is what matters. Even if the market tanked 50%, I’d still be up at least 38% over the past 5 years.
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Have to give those crypto cats props. One of my friends must have diamond hands. They literally withstood the 69k to 16k (allocated 20-25%NW) with drops of roughly 75% correction pretty well without selling well a few did and bought back in at 100k... the ones that withstood that dont plan to ever sell since its unlikely to go much below the 69k mark in future bear markets.

Maybe a few of them are anonymalies with that amount invested. Not sure how easy that is to do for someone that has almost a quarter of their wealth in it. They sitting aight now thats for sure.
 
Dr. Anonymouss said:
I am humble enough to admit when I am wrong and unfortunately this is one of those times when life wanted to teach me a lesson. I do find it to be a blessing at the same time though because I learned this lesson at 30 years old. I had a chance to time the market direction correctly and had I done that it would have cost me a lot more money in the future by playing this game of trying to constantly sell and buy back. Going forward I am going to take the emotions out investing and just play for the long game; dollar cost averaging into the S&P500 and HODL until retirement.
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Kudos, incredibly important lesson to learn early in one's career. I did the same thing years ago, didn't think it could possibly go higher, and it sure did. People have thought the same thing for decades and it's behavioral psych that explains why we have difficulty just sticking with it. You can play the game with a small portion of your portfolio picking stocks if you need to get a fix (but if it were easy and you could routinely beat the market then everyone would do it), but the bulk has to be DCAed in indexes and chill. The best retirement account performances belong to those who forget about them or to dead people that can't tinker.
 
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