Time to exit the market?

NormInv

Stock returns have been massive lately, but it doesnt feel right. Something's amiss. So is it time to exit the market. But where would you go? US stocks seem overvalued. Non-US seem risky. If you allocate to bonds, you are facing with a huge risk of rising interest rates, and money markets are offering next to nothing. Inflation will eat up your checking.

Its like we now live in a times where you cannot protect your money no matter how hard you try. Thievery I say!

vtmoon

The price you have to pay for betting your money on other people's work. Isn't capitalism awesome?

Laces_0ut

MFP is always the first place i go when i want financial advice.

EDollah

MFP is always the first place i go when i want financial advice.

My first (and only) thought when I saw this thread.

craigmandu

There is a whole genre of people who believe the FED is artificially keeping the market at all time highs through the influx of federal monies into the system.

I don't really believe we have a true market, too much big money controlling too much of the stock base. I count the FED as just another flavor of big money. The globalness of the markets is a pretty big risk in general.

You really are damned if you do, damned if you don't. You cannot garner any sort of rate of return on the old fashioned mechanisms people used to bank on. It's either you are part of the game, or you are simply "saving" money.

2stepscloser

Put it under your mattress... So I can steal it later.

cmriverside

MFP is always the first place i go when i want financial advice.

My first (and only) thought when I saw this thread.

yeah. ^^This

krazyforyou

Mine is in a Maxwell House tine under the house.

krazyforyou

Mine is in a Maxwell House tin under the house.

NormInv

There is a whole genre of people who believe the FED is artificially keeping the market at all time highs through the influx of federal monies into the system.

I don't really believe we have a true market, too much big money controlling too much of the stock base. I count the FED as just another flavor of big money. The globalness of the markets is a pretty big risk in general.

You really are damned if you do, damned if you don't. You cannot garner any sort of rate of return on the old fashioned mechanisms people used to bank on. It's either you are part of the game, or you are simply "saving" money.

haha...all the wisecracks who said you couldnt get good financial analysis on MFP, this post is probably the best I've read describing the new reality we live in. Suckers!

ldrosophila

Gold lots of gold stock pile it along with guns, cigarettes, booze, and porn that way when it all comes crashing down you have the best bartering tools around. Although you might not do to bad with silver and copper easier to trade for small barters.

It's pretty scary what was once a safe bet is no longer. Hell even housing is risky now! Seriously though, I've pretty much come to the thinking that there will be nothing for my retirement as I can't save now, I live off credit, I live above my means, I dont own a house or have any real equity, in the US we have a huge retiring population that is taking a big hit on the social security and medicare system now, and I'm almost 40. It's been an eyeopener working in the long term care industry too there are only two ways to become old rich or dirt poor. I'm taking the dirt poor route spend it now and hope for the best later.

NormInv

Our new reality is: there are haves, and there are have-nots and never the twain shall meet. There always were rich and poor, but you could improve your financial status through hard work. Not any more. There are no rules, there is no rhyme or reason. You could feel it starting in 2007. The rules have been rigged.

craigmandu

Our new reality is: there are haves, and there are have-nots and never the twain shall meet. There always were rich and poor, but you could improve your financial status through hard work. Not any more. There are no rules, there is no rhyme or reason. You could feel it starting in 2007. The rules have been rigged.

There are still ways to earn a decent % of return...I happen to manage the finances of "most" of the people in my immediate family (because they asked, and I accepted)...

I tell my kids to put money in larger companies that have decent dividend yields...for a couple of reasons. 1. You are getting a steady stream of money for re-investment, which makes stock price not the "entire" underlying decision base and subsequent true value of the investments you hold. 2. These large corporations of today are global as well, and have the ability to manage risk through use of different government strategies to shelter/protect their assets and capital. 3. Larger companies aren't as easily put "out of business" through normal market movement (however true or contrived that is), as they have a large asset base and many different forms of income/capital at their disposal.

Every "portfolio" however, should really diversify in a mix of large/small US business, yes some bonds, and dare I say it, some foreign companies as well. I simply ensure for my children and relatives that what they put their money in isn't the "fly by night" stuff, but rather known entities with good track records.

You are not guaranteed a company/stock/fund etc.. will perform tomorrow what it has over the past 30,50, 80 years...but I personally consider the larger companies more "prepared" to weather the storm if/when it hits.

Good luck!

NormInv

^ good advice and thanks. I take it you are saying large cap is a better bet in current times, and your logic is sound. I am nervous because currently the gap between the economy and stock market is widening and I am not convinced the large cap companies can protect themselves from a meltdown either. So I think I am tempted to exit altogether for a few months.

craigmandu

^ good advice and thanks. I take it you are saying large cap is a better bet in current times, and your logic is sound. I am nervous because currently the gap between the economy and stock market is widening and I am not convinced the large cap companies can protect themselves from a meltdown either. So I think I am tempted to exit altogether for a few months.

From a true meltdown....all bets are off. But from a market correction, say a 5k base dow correction down to a 10k ish level, I think you will find good stable large caps will weather that better than the majority of smalls will. It really should come to light if the FED ever decides to quit pumping QE (quantitative easement), and actually raises interest rates to a respectable level.

Nothing wrong with moving out of the market altogether, especially if you gut tells you that a major correction "must" be around the corner.

It's pretty hard to market time. I have never seen anyone do it with any sort of real consistency, and I have never been able to do it well either. The good thing is, if you decide to move the majority out, you shouldn't "lose" a mass amount if that large correction hits.

If you do decide to move out completely...be prepared to wait and don't jump back in too soon.

I wish you luck and great success in your investing.!

ldrosophila

Our new reality is: there are haves, and there are have-nots and never the twain shall meet. There always were rich and poor, but you could improve your financial status through hard work. Not any more. There are no rules, there is no rhyme or reason. You could feel it starting in 2007. The rules have been rigged.

There are still ways to earn a decent % of return...I happen to manage the finances of "most" of the people in my immediate family (because they asked, and I accepted)...

I tell my kids to put money in larger companies that have decent dividend yields...for a couple of reasons. 1. You are getting a steady stream of money for re-investment, which makes stock price not the "entire" underlying decision base and subsequent true value of the investments you hold. 2. These large corporations of today are global as well, and have the ability to manage risk through use of different government strategies to shelter/protect their assets and capital. 3. Larger companies aren't as easily put "out of business" through normal market movement (however true or contrived that is), as they have a large asset base and many different forms of income/capital at their disposal.

Every "portfolio" however, should really diversify in a mix of large/small US business, yes some bonds, and dare I say it, some foreign companies as well. I simply ensure for my children and relatives that what they put their money in isn't the "fly by night" stuff, but rather known entities with good track records.

You are not guaranteed a company/stock/fund etc.. will perform tomorrow what it has over the past 30,50, 80 years...but I personally consider the larger companies more "prepared" to weather the storm if/when it hits.

Good luck!

How much do you tell them to put into the companies what % of their income? How do they even save to put money into these companies? I'm guilty like millions of other Americans in that I pay rent, I'm still making payments on two cars, I have a couple big balances on some credit cards, student loans, and now an RV payment (I know kick me stupid stupid). I have a hell of time even saving $50 when it's like well I could pay more on the principal for this credit card or *kitten* it I need my favorite bottle of perfume and the fiance wants to buy a freaking $120 ladder. How do people do it has always been my question? I'd love to be some financial wiz and diversify and save, but frankly there is no way I could unless I go bankrupt and start all over again. Then theres the other side of me that looks at all of the people who lost money on this last crash, and you think why would you want to risk gambling on stocks when a pension and home is now a gamble. Good your teaching your kids about money now. No one talks about money its another taboo subject, and they grow up like me a complete money idiot who didnt know the difference between principal or interest till I got my first credit card. I wont even tell you about the fiance he has no concept about money, I swear he's like Rainman!

Sorry long post, but it got me thinking how do you even start when your living like everyone else who is going to be screwed because we had to live off credit.

NormInv

^ good advice and thanks. I take it you are saying large cap is a better bet in current times, and your logic is sound. I am nervous because currently the gap between the economy and stock market is widening and I am not convinced the large cap companies can protect themselves from a meltdown either. So I think I am tempted to exit altogether for a few months.

From a true meltdown....all bets are off. But from a market correction, say a 5k base dow correction down to a 10k ish level, I think you will find good stable large caps will weather that better than the majority of smalls will. It really should come to light if the FED ever decides to quit pumping QE (quantitative easement), and actually raises interest rates to a respectable level.

Nothing wrong with moving out of the market altogether, especially if you gut tells you that a major correction "must" be around the corner.

It's pretty hard to market time. I have never seen anyone do it with any sort of real consistency, and I have never been able to do it well either. The good thing is, if you decide to move the majority out, you shouldn't "lose" a mass amount if that large correction hits.

If you do decide to move out completely...be prepared to wait and don't jump back in too soon.

I wish you luck and great success in your investing.!

You know your *kitten* bro. This coming from a CFA charterholder. I do not believe in market or interest rate timing, but I am not a bullish investor. When I get to certain levels of return for a certain period, I just tend to revert to a more conservative mentality. I am more willing to give up the upside for downside protection. But I could be too conservative. I am young and can sit in there for decades until I actually need the money. But something about this market smell very fishy. Thanks for your very intelligent comments!

SCtolulu

You answered your own question. Where do you go? Well the only place to go has been stocks for the last few years. When that changes the money will move fastert than you can click your little mouse button

AZKristi

I would invest somewhere like Vanguard that doesn't get involved in the trendy financial products that tend to be most ruinous. As a general rule - diversify, diversify, diversify - to protect investments. You'll get slower growth overall, but with less risk.

NormInv

I would invest somewhere like Vanguard that doesn't get involved in the trendy financial products that tend to be most ruinous. As a general rule - diversify, diversify, diversify - to protect investments. You'll get slower growth overall, but with less risk.

this is what the media tell you.

craigmandu

Our new reality is: there are haves, and there are have-nots and never the twain shall meet. There always were rich and poor, but you could improve your financial status through hard work. Not any more. There are no rules, there is no rhyme or reason. You could feel it starting in 2007. The rules have been rigged.

There are still ways to earn a decent % of return...I happen to manage the finances of "most" of the people in my immediate family (because they asked, and I accepted)...

I tell my kids to put money in larger companies that have decent dividend yields...for a couple of reasons. 1. You are getting a steady stream of money for re-investment, which makes stock price not the "entire" underlying decision base and subsequent true value of the investments you hold. 2. These large corporations of today are global as well, and have the ability to manage risk through use of different government strategies to shelter/protect their assets and capital. 3. Larger companies aren't as easily put "out of business" through normal market movement (however true or contrived that is), as they have a large asset base and many different forms of income/capital at their disposal.

Every "portfolio" however, should really diversify in a mix of large/small US business, yes some bonds, and dare I say it, some foreign companies as well. I simply ensure for my children and relatives that what they put their money in isn't the "fly by night" stuff, but rather known entities with good track records.

You are not guaranteed a company/stock/fund etc.. will perform tomorrow what it has over the past 30,50, 80 years...but I personally consider the larger companies more "prepared" to weather the storm if/when it hits.

Good luck!

How much do you tell them to put into the companies what % of their income? How do they even save to put money into these companies? I'm guilty like millions of other Americans in that I pay rent, I'm still making payments on two cars, I have a couple big balances on some credit cards, student loans, and now an RV payment (I know kick me stupid stupid). I have a hell of time even saving $50 when it's like well I could pay more on the principal for this credit card or *kitten* it I need my favorite bottle of perfume and the fiance wants to buy a freaking $120 ladder. How do people do it has always been my question? I'd love to be some financial wiz and diversify and save, but frankly there is no way I could unless I go bankrupt and start all over again. Then theres the other side of me that looks at all of the people who lost money on this last crash, and you think why would you want to risk gambling on stocks when a pension and home is now a gamble. Good your teaching your kids about money now. No one talks about money its another taboo subject, and they grow up like me a complete money idiot who didnt know the difference between principal or interest till I got my first credit card. I wont even tell you about the fiance he has no concept about money, I swear he's like Rainman!

Sorry long post, but it got me thinking how do you even start when your living like everyone else who is going to be screwed because we had to live off credit.

What you are describing is a much bigger issue than what you are investing in. You are describing being over-extended on your current finances. You need to get that in order first. If you are in constant debt, you need to get rid of that debt.

I tell my children the truth. If you want something, you just "want" it. If you "need" something, you cannot live your life without it.

You can live without cable, the RV, smartphones, sometimes a car (sometimes not), etc..etc..etc... If you want to be financially stable and prepared for your future, you really do have to kind of treat it like your weight/fitness...you just do it, you do what it takes to make it fit your life.

I hope you get it worked out and my advice to you personally would be to get rid of all your debt and make that the absolute most important thing for you financially.