V shaped recovery

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I’m gonna to pickup usap ipo. I’m telling you. Buy buy buy usap
If you choose to tilt away from the total market portfolio, you must be prepared to accept multi decade periods of under performance. That is the risk you bear for seeking outperformance, i.e., superior risk adjusted returns. Other than the fact that emerging markets haven't delivered for 10+ years, do you believe that your rationale for choosing to tilt that way was flawed? If so, abandon your tilt. If not stay the course or even commit the venal sin of increasing your tilt since they are so much cheaper now.

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I dumped all my emerging markets around 2017. Sure it was high flying from 2004-2007 when I had it. But it’s been horrible the past 10 years.

sometimes u gotta to re balance your portfolio and cut ties with non performing sectors.

I had att and verizon for a long time for their dividend yields but I was better off just buying another blue chip stock without the dividend yields and gotten better gains.

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I’m gonna to pickup usap ipo. I’m telling you. Buy buy buy usap

I dumped all my emerging markets around 2017. Sure it was high flying from 2004-2007 when I had it. But it’s been horrible the past 10 years.

sometimes u gotta to re balance your portfolio and cut ties with non performing sectors.

I had att and verizon for a long time for their dividend yields but I was better off just buying another blue chip stock without the dividend yields and gotten better gains.

I love your posts on the business aspects of anesthesia, and I wish you the best, but a dispassionate look at investor results suggests that the odds are against you.
 
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Good for you, Sevo. Feels like a million years away for me still.

My wife and I just cracked 7 figures in the market. Spent most of my first six years out paying off student loans. Hoping the 2nd million comes faster.
 
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I’ve owned emerging markets since 2007 and still own it. From 2007 to now, emerging markets have grossly underperformed compared to everything I own. My timeline is 13 years of investing. If it goes up great... for now it has been a flatline.

Past performance doesn’t equal future performance imo.

Hey, I agree with you to some extent. My portfolio has about a 5 percent exposure to emerging markets. I still believe in emerging markets but that portion of my portfolio has vastly underperformed in my portfolio.

I have not increased exposure to emerging markets but still believe they are due for a run. They add diversification to a portfolio so I recommend exposure.

Why haven’t I doubled my position? Because the market may take 3,5 or even 7 years for that sector to outperform. I’d rather wait for a confirmed rally to increase my exposure.

Unlike some of you I have a 7-10 year time horizon so my investments in a dog will really hurt my portfolio in retirement. I’d rather stick with the winners until the sector shift is confirmed.

If I had to give the younger me some good advice for building a portfolio for a lifetime it would be to keep it simple but diversified. That said, exposure to technology is key to good investing now and for the next decade. Imho, every portfolio should have higher exposure to technology and the best companies in the world. This was true 10 years ago and it will be true 10 years from now. The market rewards growth and innovation at a fair price.
 
IMHO, a tilt towards technology in a portfolio is just good common sense.

For example a 10 percent or even 20 percent exposure for younger investors to VGT makes great sense. I gifted my kid some money. I have just 3 funds in his portfolio. A total US stock market, VGT and a total international fund including emerging markets. 60 percent, 20 percent and 20 percent exposure respectively.

Since I don’t expect to do much active management with that money I’m happy to just rebalance every few years knowing my kid has diversification and a nice tilt towards technology.

If I was lower middle class and relying on my portfolio to truly build wealth that tilt towards technology would be 40 percent. The best companies offer the best long term returns.
 
An investment of 1000$, since June 2010, now would be worth 5534.65$, with a total return of 453.47% (18.66% annualized).

VGT
 
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Don't sweat so much about growth vs. value, domestic vs. international, small vs. large. developed international vs. EM.

Worry about your stock/bond split. Every other portfolio decision pales in comparison, especially during these years.

Keep working part time, so you can flex up in case market(s) turn to ****. Much easier to do that than come back from full retiree.

Do you have an opinion on whether or not some of the "bond" allocation should be cash?

US total bond dropped a good 10% in March, right when equities tanked.

The old wisdom of bonds being a store of value to rebalance into equities during market corrections or crashes just doesn't seem to be true any more. (If it ever really was.) Now when one asset class tanks, it appears they all do. If that's normal and expected, is there a case to be made for a portion of the "bond" side to be plain old cash?
 
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Do you have an opinion on whether or not some of the "bond" allocation should be cash?

US total bond dropped a good 10% in March, right when equities tanked.

The old wisdom of bonds being a store of value to rebalance into equities during market corrections or crashes just doesn't seem to be true any more. (If it ever really was.) Now when one asset class tanks, it appears they all do. If that's normal and expected, is there a case to be made for a portion of the "bond" side to be plain old cash?


Yes! I recommend CDs and Savings accounts along with BONDS. In fact, my non equity side is 50% CDs, savings. I use online banks for all of these cash holdings.

www.ally.com

www.Marcus.com

Synchrony
 
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I still think 3-5% of your portfolio can be in gold, silver and/or bitcoin. I prefer GOLD as a hedge against the U.S. Dollar.

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You are building a strong argument to have some gold in the portfolio. Tell us why you like gold right now.
I have been talking about having a portion of allocation into gold for the last two years. We wrote that in our annual letter. If you look at the way the stage has been set up on the macroeconomic environment front, you have a huge debasement of currency. If you have to look at the US dollar, which usually acts as a proxy of gold, there is a huge debasement; 7x increas ..

Read more at:
Manish Bhandari makes a strong argument for having gold in your portfolio
 
Do you have an opinion on whether or not some of the "bond" allocation should be cash?

US total bond dropped a good 10% in March, right when equities tanked.

The old wisdom of bonds being a store of value to rebalance into equities during market corrections or crashes just doesn't seem to be true any more. (If it ever really was.) Now when one asset class tanks, it appears they all do. If that's normal and expected, is there a case to be made for a portion of the "bond" side to be plain old cash?

Non Equity Side of a Portfolio:

1. Cash- Place it in a high yield savings account online
2. CDs- safe and federally insured
3. Bonds- essential to have some bond exposure
4. Treasurys/ibonds- Doze likes these but I am not a big fan
5. Bitcoin- I own some but is this for real? Digital money?
6. Gold- I own ETFs and real Gold. 3% of my portfolio

I own REITS as well 4% of my portfolio is in real estate funds/Reits.

I view Gold as a zero yielding asset in my portfolio for insurance/safety against the debased U.S. Dollar. The more we print and borrow money the more valuable is gold.
 
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Even though I have chosen Gold as my "safe Haven" the same argument can be made for Bitcoin. In fact, perhaps bitcoin is the better "investment" for the next 20 years. I don't know. But, I have chosen mostly Gold with a little bitcoin exposure.
 
Do you have an opinion on whether or not some of the "bond" allocation should be cash?

US total bond dropped a good 10% in March, right when equities tanked.

The old wisdom of bonds being a store of value to rebalance into equities during market corrections or crashes just doesn't seem to be true any more. (If it ever really was.) Now when one asset class tanks, it appears they all do. If that's normal and expected, is there a case to be made for a portion of the "bond" side to be plain old cash?

Good question pgg. Like I was saying earlier, past performance doesn’t necessarily mean future performance.
I have diversified myself into commercial real estate for passive income during the retirement years. Proforma on these investments is about 150k a year. But when events like covid happen, those investments are at serious risk. My current bond allocation is very low. I hold mainly equities. I pulled from CD’s, money market accounts and a few other assets during this last downturn. I did not liquidate a single bond position and instead increased my bond holdings slightly. I feel that you and I are the same age (born in the 70’s)- if so, nearly all of our investing years have been during this long bull run which in turn is just a small snapshot of the stock market as a whole.

But yeah when big downturns happen, everything goes down. That being said my inner self tells me to increase my bond positions. Maybe Doze can share a few thoughts on your question.
 
Do you have an opinion on whether or not some of the "bond" allocation should be cash?

US total bond dropped a good 10% in March, right when equities tanked.

The old wisdom of bonds being a store of value to rebalance into equities during market corrections or crashes just doesn't seem to be true any more. (If it ever really was.) Now when one asset class tanks, it appears they all do. If that's normal and expected, is there a case to be made for a portion of the "bond" side to be plain old cash?

At this point, given the shape of the yield curve, CASH is a very rational choice. I have about 1/3 of my fixed income in CASH -high yield savings, Treasury Money markets. The rest in CDs, TIPs, I bond EE bonds. relatively small amount in short corporate bond funds.. As far as total bond market failing, remember that total bond has a good amount of corporates and mortgage bonds in it.

If you look at the financial crisis of 2008 every asset except CASH/nominal treasurys tanked. Nominal treasurys significantly appreciated then. High quality muni bonds and high quality corporate bonds took temporary double digit haircuts. That type of thing was not unexpected.

If you look at this crisis, in late March, just before the fed stepped up, even nominal treasurys started to take a hit and the most liquid market in the world suddenly had bid/ask spreads that were unheard of for US Treasurys. This was new and terrifying. Everybody was desperate for CASH/Tbills. Undoubtedly why the fed stepped in


Right now I like online FDIC INSURED savings accounts that Blade mentioned. interestingly EE Bonds yield 3.53%- way more than any treasury of any duration. The catch is if and only if you hold a full 20 years. Worth a look.
 
This isn’t an economic recovery. It’s a Central Bank manufactured pump of the markets. There’s a reason why 40 million unemployed have no bearing on the equities market going up, those people don’t buy stocks (They are the lower paid service industry sector. The real US economy is consumption and service).

We are in a deflationary spiral and beginning a Great Depression similar (or worse) to 1929. The stock market goes up because the Fed expanded their balance sheet by 7 trillion in under 3 months. We are in a deflationary spiral because the economy has grinded to a halt. People will be spending less on discretionary items in the medium to possibly long term (whose traveling, going to Vegas, staying in a hotel? A vast majority of the American economy, service). It’s all interconnected and pretty clear to see from my perspective.

Once the 7 trillion dollar injection is realized by the economy, we will then see an acceleration in inflation (hyperinflation? but more than the fake 2% CPI that is pushed out to us). At that point we will see a new monetary policy similar to Breton Woods (or when we came off the gold standard in 1971, which is one of the root causes of where we’re at presently I would recommend reading up about 1971 WTF Happened In 1971? personally I think it will be a central bank digital currency in the form of an app where you retain your bank account balances.

Personally I think this isn’t a rally but the opposite. Fiat dollars don’t hold value (especially when 7 trillion is printed up over 2 months). Increased purchasing power would be a better measure. If you look at the SPX vs a sound money like BTC or GOLD instead of USD (or EUR or GBP or any other fiat) you’ll see you’re purchasing power has actually decreased when you look at fiat (number go up, but power go down). I would advise all of you here (like how I’ve been advising for years), to study what sound money actually is, and look at ways to store your hard earned work and energy for your future tomorrow. For me that’s BTC and DCR. I’m slowing opting out of a corrupt system to a new circular economy (that’s growing daily), with advances coming at a fast rate (2nd and 3rd layer protocols being built on the base layer). Which is more scarce 7,000,000,000,000 USD vs 21,000,000 ever!!

I’ve come to realize that it’s not really black vs white (although as a black man, blacks haven’t really been inclusive in the American economy (we went from assets as slaves to liabilities after 1865), republicans vs Democrats (both use their base to keep the system of cronyism going, but actually the haves (0.01% vs the have nots(99.99%). A lot of the problems on this planet can be traced to money and greed (40 million unemployed, nurses and doctors wearing garbage bags to fight covid, an exclusive financial market that excludes outsiders, and a stock market that’s about to reach all time highs lol). Once the masses realizes that for real change to happen, you have to mobilize your dollars, I think we see a positive renaissance in humanity later this decade.


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This is nice succinct tweet thread that was posted after my above post about purchasing power with a failing currency.

Protect your hard earn worked dollars today, so that it has the same or better purchasing power tomorrow.


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I had been dollar cost averaging leading up to this, and when the S&P was around 2,400-2,500 range I moved some money around in my budget and basically dropped the money that would have been incrementally invested for April/May/June into it and interfund transferred to a 100% stock allocation in my tax-deferred accounts. This was my version of timing the market.
 
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I posted over and over again that this market crash was a fantastic opportunity. These crashes are why you have a portfolio with some bonds or cash on the sidelines. Even if you are a young investor 10% in cash or short term bonds is prudent due to the very volatile nature of the stock markets. My comment is directed at those with a 100% equity allocation.

Anyway, I expect some kind of pullback this summer to around 2800-2900 and IF that happens I am a buyer of U.S. equities...again.
 
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This isn’t an economic recovery. It’s a Central Bank manufactured pump of the markets. There’s a reason why 40 million unemployed have no bearing on the equities market going up, those people don’t buy stocks (They are the lower paid service industry sector. The real US economy is consumption and service).

We are in a deflationary spiral and beginning a Great Depression similar (or worse) to 1929. The stock market goes up because the Fed expanded their balance sheet by 7 trillion in under 3 months. We are in a deflationary spiral because the economy has grinded to a halt. People will be spending less on discretionary items in the medium to possibly long term (whose traveling, going to Vegas, staying in a hotel? A vast majority of the American economy, service). It’s all interconnected and pretty clear to see from my perspective.

Once the 7 trillion dollar injection is realized by the economy, we will then see an acceleration in inflation (hyperinflation? but more than the fake 2% CPI that is pushed out to us).

Powell and Mnuchin said this today. And they said additional stimulus is probably necessary. The projection is an 8-9% contraction for the US economy. I’d actually prefer to take the lumps now rather than kick it down the road.




Fed Leaves Rates Unchanged and Projects Years of High Unemployment
 
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Opinion | Why Isn’t the Stock Market Reading the Room?



“Now, as my colleague Paul Krugman cannot stress enough, the stock market is not the economy. In fact, as a wise person on TikTok once said, it’s more of a graph of rich people’s feelings. But that raises the question: Why are rich people feeling so optimistic, and what does that imply about the way the economy works? Here’s what people are saying.



‘Not shocking at all’

As Jeff Sommer explains in The Times, the stock market is inherently amoral. It does not and cannot measure the country’s health — politically, socially or even economically. Rather, as Nir Kaissar writesin Bloomberg, “its sole function, as wonky as it may sound, is to quickly, accurately and unemotionally tabulate investors’ consensus view about the health and prospects of publicly traded companies.” That’s a good thing, too, Mr. Kaissar says, because the market has rarely been good at accounting for anything else.”
 
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My wife and I just cracked 7 figures in the market. Spent most of my first six years out paying off student loans. Hoping the 2nd million comes faster.

Do you mind if I ask how you built up $1mm in six years? Even if I saved $100k a year and invested it, it might be hard to make 66% profit. Asking because we are also starting up our financial lives this year.
 
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Do you mind if I ask how you built up $1mm in six years? Even if I saved $100k a year and invested it, it might be hard to make 66% profit. Asking because we are also starting up our financial lives this year.

Sure. Wife is a physician too, so that helps.

For me:
$56k/yr - corporate profit sharing plan
$6k/yr - Backdoor Roth
$7k/yr - HSA

For her:
$30k/yr - 401k/match
$5k/yr - solo 401k (small amount of consulting work)
$6k/yr - Backdoor Roth

Kids:
$30k/yr 529s

We have been foregoing contributions to our brokerage account in order to pay off our student loans. When those are done in the next year or so, it should free up about $10k/mo in brokerage account contributions.

We have benefitted from a good market the last 6 years too.
 
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Market got ahead of itself at 3100 S and P 500. I suspect it will correct to around 2800-2850 very soon. I may stick my toe in the water again at 2800.
The real stock market recovery is likely late summer or fall when a phase 3 trial is completed and a vaccine is announced. The market will recover before the vaccine actually gets introduced to the public in late 2020 or early 2021.

Regeneron may also cause a bounce once its Covid 19 antibody gets released late this summer.
 
Maybe. Good healthy pullback today.
New Covid cases have certainly been concerning prompting a sell off of airlines and energy markets. I have had some very sick young covid patients recently in my community and our neighboring states are hot zones.
 
I just added to the selling frenzy, but I locked in some gains in some positions that I held onto for a long time. Will probably not re-enter the market for a while. But, my portfolio needed restructuring anyways. Good thing my retirement horizon is more than 15-20 years outs. (2/3rds of the portfolio came down to just 8-9 stocks).
 
This market is in for a lot of pain. Pre covid stock market was anything but healthy. Its all being driven by cheap stimulus and debt over the past 12 year. Once the unemployment stimulus runs out, the summer travel market transitions to the fall, zombie companies (oil and travel companies) start to default, and small and medium businesses start to fail later in the fall from decreased demand and the refusal of banks to provide them credit, the market will start to correct.
 
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This market is in for a lot of pain. Pre covid stock market was anything but healthy. Its all being driven by cheap stimulus and debt over the past 12 year. Once the unemployment stimulus runs out, the summer travel market transitions to the fall, zombie companies (oil and travel companies) start to default, and small and medium businesses start to fail later in the fall from decreased demand and the refusal of banks to provide them credit, the market will start to correct.

We haven’t even got to the bond market as yet. This is the mother of all bubbles (60-70 trillion!!). I’m extremely bearish. And I think it’s time we flush out bad businesses and not prop them up with with our tax dollars that we cant even know where it’s going. It’s straight madness right now.




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We haven’t even got to the bond market as yet. This is the mother of all bubbles (60-70 trillion!!). I’m extremely bearish. And I think it’s time we flush out bad businesses and not prop them up with with our tax dollars that we cant even know where it’s going. It’s straight madness right now.
This is what I have been watching carefully for years, constantly asking "what will be the catalyst?". An overt default on our US debt could. Default would mean less demand for treasuries=less demand for USD globally=devaluation=(hyper?) inflation. Just considering all scenarios however unlikely.
 
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