[SeaGypsy]

When will the euphoria end? Bank of America thinks about ""we recommend buying S&P 500 puts for the second half of 2017."
http://www.zerohedge.com/news/2017-03-0 ... great-fall

When we can no longer grow through spending borrowed money. "Money" being the avatar for fossil fuels, we are spending tomorrow's resources and planetary well-being today in exchange for a new kitchen bench top, plastic doo-dads from China and holidays to Fiji.

Having we been doing that since the industrial age began

Now it's on turbo...

Funny, you know what a turbo does? It uses pressure from the exhaust to drive more air (& fuel mixture) into the engine- kind of a metaphor for the recycling industry (which I work in & one of my two brothers works in also).

[Outcast_Searcher]

In 1999 I went from $ 100k in my portfolio up to $ 675K and then back down to $ 150k. It was a roller coaster that left me so fried in the brain I completely exited the stock market and never looked back. I won't go there again. Real estate investments in Canada, Thailand, Panama and the USA has been much more reliable and profitable. It's tangible, its a piece of land, you work it, increase its value and sell it.

As much as stocks makes up the fundamental building block of capitalism the way the market is manipulated by traders working algorithms makes me steer clear. There is something parasitic and messed up with it. Most small time investors are just pawns licking up a few scraps.

You can do these things slowly, and relatively carefully and gradually. Examples:

I noticed early this year that my stock holding percentage has been skewed upward by the strong US market (generally) since spring 2009, well away from my 50/50 cash/stock default. So I have taken a decent amount of profits to move toward rebalancing. And as Trump insurance. I don't like realizing the capital gains, but better paying 20% cap gain taxes than watching a financial panic without as much cash as I want. If the US market keeps unreasonably screaming upward, I'll just have to force myself to take some more profits later this year. This is the first big shift for me since the financial crisis mess, where I finally put stocks in my 401-K when the S&P dividend yield passed 4%.

I held MSFT in the 90's. (I loved PC's and software, and wrote software. It was a blindingly obvious pick). It split so many times it ended up scaring me. 600 shares went to like 3200 shares with splits. Sometimes those shares could move about $5 on a volatile day. So that was a potential gain or loss of roughly $16,000 in one day -- just from one stock. With me earning under $400 a day (and being a coward at heart).

I couldn't hack that (and sleep), so I sold half. Then every time it split, I sold half ('94, '96 '98 and '99). At least that way if something really bad happened, I'd already taken a bunch of money off the table multiple times. Then I got lucky. When the big MSFT anti-trust lawsuit happened, as an IBMer, it smelled like the nasty consent decree mess IBM had been put through. So I sold 80% of what I had left near the top (somewhere late in '99 -- No, I wasn't smart enough to sell it all). (I'd rather be lucky and cautious than greedy and "clever" anytime). So I got out at the right time for mostly the wrong reason.

One doesn't have to play the market like a casino. Over the long run, it strongly trends up. Timeframes like one year are pure speculation and yes, 1999 was a doozy of a year.

For me the stocks I hold are almost all broad based stock index funds now that I'm retired -- and many of those index funds are international, not just US. I'm keeping all the international stocks since the world markets overall have NOT been on a huge tear like the US, and have actually been subdued over the last decade. Plus (hopefully) Trump stupidity won't mess up the whole world (aside from a possible cascading short term panic if the US markets tank, like in 2008).

If you hold such funds for several decades, then time tends very strongly to take care of you IF you just leave it alone, reinvest the dividends, and don't panic on dips.

If I'm holding for 3 or more decades, I don't really care if traders play games in the short run. In the long run, corporate earnings will strongly correlate to stock prices.

Disclosure: I'm not comfortable with making large international real estate investments - if that works well for you then great. Stocks pay dividends. Land tends to require upkeep and taxes, which means negative cash flow. If I'm not living on it, I don't like that. If I want to own rental real estate, that's what REIT funds are for (and I never have to pick up a screwdriver or deal with a tenant).

[Outcast_Searcher]

By the way if you're in the US and moving from stocks to cash, IMO, "High Yield" savings accounts in major banks are as safe as it gets up to $250,000 per bank, FDIC insured. They pay about 1% interest (which is better than the near zero most places). They're quite liquid, generally allowing 6 withdrawals a month.

You can do your research online and find out from reviews things like customer service, etc. Sometimes the very top yields come with BAD service (per reviews), so it's worth checking, IMO.

I've been happy with American Express Bank for years and Ally Bank more recently. (I have no direct connections or investments with any bank, except as a customer with an account).

[GoghGoner]

The global market capitalization is at 73 trillion (which is a little below the record in 2015). So 73 trillion divided by the number of people on earth is approximately 10k each invested in the markets. Of course very few people in the world have any money in the market.

[Cog]

The global market capitalization is at 73 trillion (which is a little below the record in 2015). So 73 trillion divided by the number of people on earth is approximately 10k each invested in the markets. Of course very few people in the world have any money in the market.

On a worldly basis you would be correct. But quite a few in the first world have a great deal invested in it. Pensions, 401k's, IRA's. The list goes on.

[Newfie]

And because of the tax rules a lot of the money can not readily be withdrawn from the market.

[Ibon]

If I want to own rental real estate, that's what REIT funds are for (and I never have to pick up a screwdriver or deal with a tenant).

That's part of the problem I have with stocks. You see, if I can't pick up a screw driver and tinker with what I own I am not fulfilled. Here in Panama by keeping a minimum of pasturage and cows I gain the exemption of paying property tax. The infrastructure we add only increases the value of the land which increases on its own anyway, much like the trend in stocks through the years.

In Thailand we bought raw land, about 40 acres. Paid $ 1.6 million. Subdivided into 24 lots, all but 8 sold. The beach front lots sold for $ 550k each and on top of that we built and sold the villas making money on the construction as well. You can't easily match this with the stock market. On top of that you take a mono culture of coconuts and cashews and turn it into 16 villas, a common area and landscaped like a botanical garden. You have created something, it isn't just buying and selling stocks. The fact that all these villas will be under water in 30-50 years is another topic and so castles made of sand....slip into the sea, eventually. I would never have bought one myself...haha.

Some people are fulfilled with just making money.

Life is too short to be satisfied with just security and making money on stocks. Why not risk some capital and do something creative.

Too many wealthy people are sitting on investments. This does not circulate money in the market. It actually squeezes the money supply.

If you older and retired help a relative or son open a business. why tie up capital in the stock market? Makes no sense to me.

[Cog]

Because you make money on parking your capital in the market.

[Outcast_Searcher]

Life is too short to be satisfied with just security and making money on stocks. Why not risk some capital and do something creative.

Too many wealthy people are sitting on investments. This does not circulate money in the market. It actually squeezes the money supply.

If you older and retired help a relative or son open a business. why tie up capital in the stock market? Makes no sense to me.

That's all fair enough. People being different is what makes the system workable (via trading skills and resources, often using money as the value placeholder). I think the stock market helps the economy grow and is important to capitalism, but that's just my opinion based on things I've read.

I didn't have kids. Now I'm helping young relatives (neices and nephews) with things like college educations, good used cars to avoid piling up debt in their early careers, etc. I help a homeless foundation locally, which significantly helps keep up to 100 homeless people and 30+ veterans with problems off the street.

And I've helped friends and neighbors pretty significantly when they ran into serious financial trouble due to illness, etc. A good friend is fairly poor and his interest income went away with ZIRP, and in his 70's he's afraid to invest in the stock market. So SS and I are basically splitting providing his retirement income. (And this guy lives about as frugally as anyone I've ever seen, so it's not like he wastes it).

So to me, it just depends on your situation, as to how you can and "should" help people out.

When I die the capital I have left will go to my young relatives. Hopefully by then by example and helping them save and invest some themselves, they'll at least potentially use it wisely. In the mean time, I never want to be a financial burden to anyone, no matter what medical, etc. situation I may face. Since I have only a very tiny pension, having some capital to produce income for my old age seems rather necessary to me.

There are lots of ways to "do good" for people, and people of conscience do what they feel they can and should, IMO.

[Ibon]

If you are fortunate enough to have savings and if you want to invest and see those savings grow then consider having your investments circulate in the economy by enabling your children or friends or community to grow a business.

Just parking money in the stock market is a digital way to make money without getting involved.

What I am posting here sounds antiquated and yet this is historically how markets grew and resilience in your local community happened. Feeding the multicorporate juggernaut so that you can privately check your portfolio go up or down seems to define the malaise of our times. It is just another example of cyber pathology.

I know I sound foolish for many but when you really look deeply at this on a global scale and you see how weak our communities have become then it makes sense.

Instead of waiting for Donald Trump to bring the jobs back, something that I am sorry to inform you will never happen, why don't you put your money where your mouth is and do it yourself.

You really prefer to feed Apple, Caterpillar and Exon?

Come on guys, step up to the plate.

[Cog]

Half of new businesses fail within five years. 2/3rds of businesses fail within ten years. The business world is tough and the weak are eliminated. You better know what you are doing if you are going to advise your kids to start a business.

[onlooker]

I would not go anywhere near the stock market, no doubt that a huge correction is coming on the bearish side. Get out while they're is still time!

[Cog]

I would not go anywhere near the stock market, no doubt that a huge correction is coming on the bearish side. Get out while they're is still time!

Was this your advice 2000 points ago?

[Ibon]

I would not go anywhere near the stock market, no doubt that a huge correction is coming on the bearish side. Get out while they're is still time!

Was this your advice 2000 points ago?

I will say it right now. Get your money out right now, otherwise you will never see a single cent of it.

I highly doubt that.

[Cog]

No one can predict market upswings or downswings. Not me, not you, not anyone. If you think you can, you could make a fortune. Go forth and do that.

There are many ways to hedge your bets at the top of a bull market, by shifting your allocations. But to get out of the market completely is just plain ignorant.

[Outcast_Searcher]

And because of the tax rules a lot of the money can not readily be withdrawn from the market.

You mean without paying taxes? Well, yeah, that's the way life in the first world works, at least for honest folks not in the top .01% that can have their minions generate special tax structures to avoid that.

Or, you can take some capital losses to help balance it. I did. And I'd rather pay some capital gains taxes at long term rates than lose all my gains in another 2008-2009 event, even if I didn't have losses to take.

For example, I have some big losses long term in FCX. (If you buy a broad based portfolio in many sectors, you WILL have some losses, at least for a while, now and again). With commodity prices generally in the ditch and very low inflation, this inflation hedge didn't work out -- at least so far.

So, I can harvest losses to help balance the gains, and if I want (and I probably will), buy back the equivalent position after the 30 day wash-sale period, to keep my long term inflation hedge.

So I think it's how you look at it.

...

(Given how nasty inflation is over time, I'd FAR prefer be having some losses in inflation hedges than have 5% or more inflation eating at my entire portfolio every year -- and stocks generally don't like high inflation. Witness the 70's in the US, for example).

[Ibon]

But to get out of the market completely is just plain ignorant.

Unless you do something real like move to Panama and buy 400 acres.

[Outcast_Searcher]

I would not go anywhere near the stock market, no doubt that a huge correction is coming on the bearish side. Get out while they're is still time!

Was this your advice 2000 points ago?

I will say it right now. Get your money out right now, otherwise you will never see a single cent of it.

Gee, what a surprise. The doomer perma-bears are afraid of the stock market. Wanting to time it by having no money in it.

And how has that worked for you the past 8 years? Or 18? Or 28?

If you're so good at short term price forecasting, why aren't you easily winning the annual oil price guessing game?

There is prudence (which we've been discussing), and then there's irrationality. Good luck building a retirement portfolio with the latter. There's always a 1% interest rate, I suppose, unless you don't trust banks.