Bowsite.com

According to leftists, today's drop was due to falling confidence in trump.

According to business analysts, it was due to the too strong jobs and wages report that came out. Rising employment and wages may encourage the FED to raise interest rates to throttle inflation. Raising rates are balanced by falling stock prices - at least according to common thinking.

In my mind, even more important than stock prices is what the FED has done and may do.

For 8 years, the FED flooded the world with dollars to mask (or maybe just control) the damage being done by obama.

If the FED starts raising rates, the federal budget will quickly be busted because a small rate hike is a lot of money when you are borrowing $20 trillion.

Rising interest rates cause ripples throughout the economy.

Presidents get too much credit (and blame) for many things. That includes stock prices.

Do you think Trump will take credit for the correction like he did the rise? That's a rhetorical question, BTW.

Matt

Matt

When Greenspan ran the FED, he missed the dot com bubble, and was oblivious to the housing market collapse in07-08. And now the FEd is worried about inflation? The FED needs to get the hell out of the way of our recovering economy.

Matt

So ignore it.

To quote Nick Murray, "The market goes down, but it doesn't stay down, so it doesn't matter."

Matt

If we have a big enough drop I will buy more out of my "safe" money.

I agree. When it seems to good to be true.....

Matt

Matt

The number of points is irrelevant. What IS relevant is the percentage increase.

Example: When the Dow went from 10,000 to 20,000, that was a ten thousand point increase and a 100% increase. But when it goes from 20,000 to 30,000, which it will at some point, that's also a ten thousand point increase but only a 50% increase.

Just another case of Trump doing more for the avg US worker than the Dems have done for 50 years. That Dem party leadership should be ashamed of themselves. Trump literally schooled them in one year.

I'm not a fan of Trump the person.......but his heart is in the right place policy wise; America first is right.

So what if we get a big correction?

Unless you need your money TOMORROW, it does not matter what the market does today, yesterday, nor tomorrow!

NOT EVER!

You get in, you stay in, and everything will be all right.

The problem is exactly what we're seeing on this thread. People get scared and then they make emotional and WRONG decisions over and over and over again.

Absolutely the market will scare the crap out of you from time to time. That's just the way it works and putting up with that is the price of admission.

Since 1934, a $10,000 investment into the S&P 500 (which you can't actually buy) would have grown to over $49,000,000 by the end of 2016, which represents an annual average rate of return of 10.9%. NICE!

At the same time, a $10,000 investment into the Investment Company of America, the oldest fund in the American Funds family, would have grown to over $129,000,000 even after all fees and expenses. That represents an average annual return of 12.1%, Even NICER!

The problem investors have has little to do with the investments they make. Instead, it has everything to do with them letting their emotions and their stupid thinking and actions stop them from getting even 50% of those returns. I'm seeing several posts on this thread which, sadly, simply verify my concerns.

Trax, your posts here are at the very top of my "Stupid Thinking" list!

Congratulations! You're #1!

Nothing wrong with moving stock profits to other more stable investments.

Matt

WRONG!

When my parent's generation retired, their combined life expectancy was perhaps an other 5-10 years. So reducing exposure to the whims of the markets might have made sense.

But today, a couple age 65 has a life expectancy for the last survivor of age 85 or beyond,

If you are not invested accordingly, your chances of outliving your principal, outliving the income on your principal, and still not being dead are very high!

Even more reason to secure your funds safely, if you have enough to last your expected lifetime.

Matt

Yet if you are under-weighted in equities, chances are you will NOT have enough assets to keep you from needing your children to support you.

I do this for a living, Matt, and I've done so for all of my clients for coming on 43 YEARS!

What are your credentials on doing the same?

My credentials are common sense. If you have enough, make a good portion of it safe. Not necessarily all of it. Certainly you want to stay in equities. But, not to the extent a 30 year old should.

Agreed?

Matt

Sorry!

If you are not heavily invested in equities and if you are a boomer, you are screwing yourself.

It's called 'inflation.'

The number of dollars you have when you retire matters not at all.

What matters is what those dollars will buy.

I do this for a living, Matt, and everyone of my clients, many who are now age 85-90+ are very well fixed financially because they've followed my advice for the past thirty or more years.

How abuot you, Matt? Can you say the same?

I think not.

Wait. What?

"It's called 'inflatinion.'"

Sorry, Im not familiar with that term. Can you explain?

I hope you proof read your client communications more thoroughly.

Matt

God bless, Steve

Investing in gold is a fools gold play.

Long term, gold almost exactly matches inflation.

That makes sense, because gold produces nothing and therefore can be nothing but a proxy for inflation.

"India has become the latest country to seriously talk about a regulatory crackdown on bitcoin.

There are fears that bitcoin’s lofty valuation may have been artificially propped up.

Facebook has banned ads that promote cryptocurrencies and initial coin offerings."

God bless, Steve

Mostly due to a weaker dollar?

I think this market will continue to tank down to 20ish, human psychology being what drives these things.

And I agree Kodiak, I don't think this correction is over. As I said earlier, a 10-15% slide wouldn't surprise me.

Matt

Classic pump and dump by the powers that be.

Matt

I hope you're not implying that professional financial advisors are the only people capable of managing a successful portfolio, and that all investors are idiots who have no clue about handling their own portfolio.

I've met with a few financial advisors over the years. I've never came away from those meetings overly impressed, or feeling like I couldn't do without their services. Most of them spoke in vague terms, being careful not to provide specific direction, or information, until they got a financial commitment from me. Those that did speak opening and specifically didn't tell me anything I hadn't already learned on my own.

Don't get me wrong, I think you and Kyle provide a valuable service for a lot of investors, but I object to the notion that ALL investors need a advisor.

Matt

"Why do you even bother Kyle?"

Because I want people to be successful with their money and to avoid the all-too-common mistakes most people make. It's been very gratifying to me over my 42+ years in the business to see how financially successful so many of the people who have been with me for thirty years or more have become, and how well they are continuing to do financially now that they are retired.

That's why!

"My biggest job is to prevent you from doing something stupid once your money is invested."

Same here. As you surely know, emotions and the band-wagon effect (more emotions) are by far the biggest reasons people do so poorly when it comes to investing.

As you also know, the cardinal rule in our business is that we are not allowed to make promises to clients about investment performance. Not EVER!

I say BS on that!

Two years ago I was asked to give a talk on ethics at a conference of our top producers in the Western US.

The person who presented immediately before me was one of our Compliance attorneys from our home office.

I based my presentation on how I incorporate ethics ('Cowboy Ethics' in particular) with the investment part of my practice.

Part way through my talk, I looked around the room and asked if that attorney was still present. She was, so I asked her to record what I was about to say or at least take notes.

Then I turned back to the audience and after noting the absolute prohibition we have re. making promises about investment performance, I said I didn't go down that route.

I said I PROMISE every potential investment client two thing about their investments:

#1. "From time to time the market is going make you irrationally exhuberent because your investments are doing so well. I PROMISE you that will happen. It's not my fault and I will have had nothing to do with it."

#2. "From time to time the market is going to scare the ever-loving daylights out of you! I PROMISE you that will happen. That's not my fault and I will have had nothing to do with that either!"

"Then I tell my potential clients, 'It's OK to feel those emotions, It's only natural to feel those emotions, simply because you're human. But it's NOT OK to act on them!' Not if you want to have me as your advisor!"

At the end of my talk, I got a rousing and raucus standing ovation. People where cheering and hollering out. At a freaking ETHICS talk! LOL

There are likely a very few people who do do well in managing their own investments. Matt may well be one of them. If so, good on him!

OTOH, I would bet almost anything the number of people who think they have done well is a LOT smaller than those who actually have done well.

1. How many people who do-it-themselves know what their time-weighted, dollar-weighted average rate of return on their investments is? I would bet it's less than 1/10th of 1%. That's pretty sad, because that's the best way to evaluate returns over time. In fact, it's probably the ONLY way.

2. How many do-it-yourself people have any idea how they are doing relative to the amount of risk they are taking? I would suggest that number is very close to ZERO.

You and I are cut from the same cloth, it would seem.

I agree that there are people out there who just aren't a good fit for me, nor I for them.

The only marketing I've ever done has been to 'affinity' groups. I believe that when I have common interests and shared values with a potential client, the lines of communication open up much faster and the subsequent exchange of information is much better.

There are some people out there who I would not ever consider taking on.

George Soros could call me and tell me he wants me to manage $100,000,000 of his money for him and I'd tell him to get lost, even though the revenue I'd get each year would be well into six-figures.

Cowboy Ethics, Principle #9: "Remember, Some Things Are Not For Sale."

My integrity is one of those things.

Yes, perhaps I was ignorant to expect any “free” information from financial advisors. It just irritated me how they danced around my specific questions, instead of just saying “pay me and I’ll answer that”. So much so, I decided to learn the answers myself.

You're right, it's not rocket science.

Matt

What your father did is a model others can learn from.

1. He got in.

2. He stayed in.

3. He didn't second-guess himself, nor make emotionally-based decisions.

4. The Time Value of Money is indeed the 8th Wonder of the World!

"Teen Bitcoin Millionaire Erik Finman Dishes Investment Tips"

"There's a sucker born every minute."

Just what everyone needs: Investment advice from a nineteen year old!

There is an inverse correlation between the amount of hype you see from ads/articles/internet posts, etc. and the subsequent performance of whatever it is the hype is all about.

You are supposed to invest BEFORE stuff goes up, not AFTER it goes up. And NEVER invest in something that's 'Hot.'

In the end, they have the same value as they did in the beginning - zero.

1. Get in and stay in.

2. Don't make financial decisions based on emotion.

3. Invest before stuff goes up, not after.

Gee, who knew? Who do I write the check to for that advice? ;-)

Matt

"My biggest job is to prevent you from doing something stupid once your money is invested."

Yes, most people do!

Numerous studies show that investors absolutely suck when it comes to making the right decisions for the right reasons, then staying in.

The result? They get less than HALF the returns that the funds they invest in get.

You may well be the exception, but:

What is your time-weighted, dollar-weighted return over the past twenty or so years, and how does that compare to the basic indexes?

Then, what is your risk-adjusted rate of return over those same years?

Don't know, do you?

On the other hand, a motivated investor with half a brain could research the most successful mutual funds in numerous sectors, and determine exactly what companies those funds are invested in and what percentage of the fund was allocated to each company. Then, he could open a Scottrade account and purchase shares of those same companies in the same percentages. Thereby, creating his own mutual funds and eliminating the fees associated with brokers and advisors.

But then, who the hell would do that? ;-)

Matt

I'll take that to mean you don't know the answers and therefore want to avoid answering the questions.

What questions am I avoiding?

Matt

Buffett won.

I do however, believe if you have any amount of money before you retire and/or get into your 60's, you do need assistance with wading through the government tax rules and regulations about SSI and medicaid.

Several active management fund managers have clobbered the S&P over the long run.

Destroyed the S&P!

Oh, PLEEZE!

The questions about your knowing your time weighted and dollar weighted rate of return, as well as your risk-rated returns.

Give me some time to think what you do know. Time is up.

The Rock

The Rock

Here's the deal.

I do not manage money. I simply hire those who do at the very highest level to manage my clients' money.

These men and women graduated high school at the top of their classes, then were admitted to the best universities, where they again graduated at the top of their classes.

As a result, they then went to the best B-schools, where they yet again garduated at the top of their classes.

At that point, they were hired by some of the biggest and best money management firms.

If and when they'd showed they were yet again at the top of their fields, they got hired by the money management firms I use.

These people then are surrounded by the best of the best technology and anaylists in the business.

So, you can either hire them to help you suceed, or, you can try to compete against them in your spare time.

Could it be any clearer than that?

Sorry I missed your edited posts. I was watching a football game. I can't answer your questions because I've never calculated the answers.

I can tell you that my hand-seleted mutual fund has outperformed my 5-star rated mutual funds thru T. Rowe Price.

Does that answer your questions?

Not at all.

But the fact you don't even seem to know what I was asking pretty much proves my point.

Thanks for playing.

Matt

Go it.

The Rock

1. How do you make your money? If the answer takes longer than 30 seconds, walk away.

Matt

Matt

Matt

Matt

putting an order in right now as a matter of fact.

Looking forward to rising interest rates.....

Got 21% on a CD back in the day. There are many people have spent their whole life without seeing even 5% return on CD's.

Think it would be healthy to get away from our debtor society....

Matt

" .......if they truly know what the market is going to do, wouldn't they be making so much money on their own investments that they wouldn't have to work?"

You TOTALLY miss the point.

I have no idea what 'the market' is going to do tomorrow, next week, next month, nor next year.

And frankly, my dear, I don't give a damn.

Nor should you.

The fact that you do seem to care pretty much assures you of constantly making the wrong decisions at the wrong time and for the wrong reasons.

What I do know is that capitalism works and over time, if you invest on a regular basis and don't allow your emotions to cause you to make stupid decisions, in the end, you will become very well off financially.

I still work because I want to, not because I have to, and it's 100% the result of having been disciplined enough to invest every month, stay the course, and not let my emotions screw it all up.

I spent :30 on the phone this afternoon with one of the most respected CF'ers here. He's thinking about retiring and asked for my thoughts.

In the end, I doubt I'll make a penny from helping him, but I don't care.

Just the simple reward of helping him and his lovely wife reach and maintain their dreams for a great retirement is worth far more to me than money ever could be.

What I haven't put away in my 401(k) and my IRA, I've spent on hunts, custom suits, fine wines, nice cars and pick-em-up-trucks, duck clubs, and lots of 'stuff' I really didn't need and all the rest. Not to mention charitable contributions.

But my qualified plan accounts are now worth a few million dollars, which is more than I could ever have even dared to dream of.

Why?

Because I got in, I stayed in, and I never once let my emotions get in the way of rational thinking.

You, too, can do this!

Do you have any idea how many times the market has 'crashed' over the past 85 years?

It crashed because a of great depression, numerous recessions, the assasination of a president, a World War, The Korean War, The Vietnam War, the 'junk bond"/S&L crash, the Dotcom crash, the bursting of the housing bubble and a whole lot more.

Yet in spite of all those "the world is going to end" things, the market, as measured by the S&P 500, has gained an average of 10.9% per year!

CAPITALISM WORKS!!

PERIOD!

True. But then the dow is how much higher than the previous dumps? So Bro. Look at the percentages and you will feel better, 10 % for a couple of minutes max. Then back up. That is a normal correction percentage wise. But it was not a real correction because it was hit by the bots at -700 and ran to the bottom in a couple of minutes. If real sellers had been there the profiteering would have kicked in a lot quicker. It did remove some froth though. The only way anyone that was honest could blame Trump is that he made the economy too good, too , fast and people were worried that there was a bubble and did not know how far it would fall. However , economic stats do not lie and the economy is really strong. Job rates all time high, Jobless rates all time low or near full employment. Huge growth in new jobs and factories and businesses going on line or beginning to. Wages actually increasing. Taxes conducive to business venture and growth. Tax relief for the working class and mid America. Its truly amazing to watch Trump beating the growth drum and a box in the bottom of the screen showing the freefall. Like it was planned as a red flag. Then his speech was interupted by Shepherd Smith who ranted on Trump. Quite the accidental setup.

Ok to the removed all the gains of the last year. That is a direct quote from Shep. Look at how it really reads,. Erased the gains of the last month. That is honest. God bless, Steve

I guess reading comprehension isn't your strong suit. I said, "erased all the gains for the year". That means this year. And yes, I recognize it's only a month. If you look at the DOW's chart, it's actually more like 2 months of gains were lost.

Furthermore, I never blamed Trump for this correction. In fact, if you paid attention on other threads, you'd know I chuckle at Trump every time he takes credit for the economy or the markets. Administrative policy simply doesn't have that much influence, especially after just a year.

Lastly, I don't buy the "bot" theory you keep advancing. Yes, I know some investors use computerized safe-guards, but I don't think that's what caused today's fall, or the last week's worth of loses. I've been expecting this correction for a while and planned accordingly. I hope others did too, including you. I will also use this opportunity to buy more equities when things settle down.

Matt

Nobody expected the election to have that awesome of an outcome.

Nobody can predict how high the markets will go, and they are scared of losing 1/2 their worth...AGAIN. Honestly, who can blame them? So to protect themselves, they take some earnings and stuff it away into something a little more safe, thereby severely reducing their ability to take advantage of a downturn, with History repeated time and time again, and they will be sitting there wishing they had bought in right now because, quite frankly, I’m still not tired of winning.

Remember Joshua? “The Dow will never get to 21,000. It will never get to 22,000. 23,000 will never happen!!!” Kinda funny how their heads explode when presented with reality and a President that wants to do right BY US.

You all keep selling. I’m gonna keep on buying. Like Warren Buffet says “When everyone is greedy, be fearful. When everyone is fearful, be greedy”. Can’t argue with that philosophy, especially when he has a little bit of experience to back it up.

Pete

From mid-September thru mid-October, the DOW dropped ~ 500 points, going from 2,747 to 2,256.

Then on Oct. 19, it plunged another 508 points to 1,748 in ONE DAY, which was a 22.5% drop.

That evening on the radio and TV, and in the morning papers on the 20th, all you'd read and hear were 'experts' who were predicting it would go to 1,500!

NO!, 1,000!

NO!, 500!!!!

Do you know what the bottom really was?

1,748!

By the Spring of 1988, the Dow had recovered all those losses and was back to a new high.

We saw exact same thing in 2001/2002 and in 2007 - early 2009. Both times, the market dropped an astonishing 50%!

And yet again, every guru out there was predicting things would get a LOT worse.

Only they didn't.

Since the market bottom on March 9, 2009, the market has risen over 400%, even after factoring in the fall we've experienced the past few days.

God bless, Steve

Steve, you implied I misrepresented the losses, which I clearly didn't. So, my only conclusion was you didn't comprehend what I posted. Sorry if that ruffles your feathers.

Matt

"........we are much more likely to see 30,000 than we are to see 20,000."

I'll take that one step further:

We may or may not see 20,000 again. But I guarantee you we will see 30,000 at some point and unless I go t!ts up in the next ten years or so, we are very likely to see 50,000 in my lifetime. If I simply make it to life expectancy, it is likely to be well north of 100,000.

To get to 30,000 requires just a 21.3% increase from where we are at this very moment.

To get to 50,000 requires just a 102% increase. So even if the market underperforms its' historical numbers by a significant amount over the next ten years, we'll still see 50,000.

"The charts look like a Christmas tree. I think calmer heads are starting to prevail. "

It's been a weird day, but at least so far, with :45 left to go, we're seeing a significant rebound, esp. in the last :30.

:15 to go and now there's been another huge jump to the upside.

Interesting day for sure.

It started with the futures being up a bit, then down a lot, which was repeated in the first hour. Then a bit of stability showed up until the last 1:15, when things were mostly up by a very nice amount.

I would suspect the market will open on the downside in the morning, simply because all of the panicked sell orders that were likely sent into mutual funds after the close yesterday.

Those cannot be executed until the close of the 'following business day,' meaning the freaked out and panicked average Joe simply lucked out from today's rise. But then again, that's what the average Joe does, and he/she does it EVERY SINGLE TIME! Only more often than not, he does not 'luck out' as he did today.

I will admit, I'm one of the investors who may have "lucked out" today. I moved about 10% of our IRAs from mutual funds into bonds this morning, early. I remain heavily weighted in stocks, just not to the extent I was. I figure I can always move it back in the next day or two, if things settle down a bit.

What's your opinion on variable annuities?

Matt

VA's are a YUGE plus, IF they fit the potential person's goals, needs and objectives.

No other product I know of can guarantee a person's principal, guarantee his income (with the ability to increase his both his guaranteed principal and income as the market grows), not to mention protecting and even increasing what the investor's beneficiary wil receive upon the owner's demise.

My wife and I own VA's for precisely those reasons.

Yeah, the fees on VAs have always spooked me, but I guess the extra protection comes at a cost.

Matt

Yes, there are fees because of all of the guarantees.

TANSTAAFL!

I don' t know how old you are, but a person 60 years old +/- a few years, can get a lifetime income, guaranteed, of 5% or more of his/her original deposit, plus a minimum of 5% growth or FMV if higher, until he/she decides to start the income steam (less withdrawals) obviously. That's a pretty good thing.

For the past several years, the Journal of the Financial Planning Assn.s' magazine has been running studies of what the minimum sustainable withdrawal rate is on a retiree's investment portfolio. These studies righfully use an absolutely worst case scenario re. investment returns and depending upon the author, that rate is 4% - 4.5%.

But when and if there is also a guaranteed income stream which is unaffected by the market (Defined Benefit Plan income, Social Security income, Annuity income, etc.), that rate jumps to ~ 6% or better, which not only provides a person with much greater income security, but also allows them to be more aggressive wih their other investments due to the guaranteed income they already have.

The wife and I are 57 and 55 respectively, so I have few more years before I can touch our IRAs. At that time, I'll probably do a portion in VAs for both of us.

Thanks for the education.

Matt

If you have IRA's I would think they are self-directed IRAs', meaning you can do with them whatever you want.

VA's are generally started prior to retirement and while many of the guarantees are there, you don't have to turn on the income stream until you want to. You just let the values grow until you decide you want income.

In the interim, your income stream, when you do decide to start it, will generally be based on the greater of, the FMV of the contract value as of the latest anniversary of the contract date, OR, the initial contract value plus a 5% per annum guaranteed increase when determining the income value of the contract. If the annual return of the investments in the contract exceed the 5% threshold, then you'll 'lock in' that higher amount and the 5% will then be based on that higher amount, not the original and lower value.

Plus, if you are using non-qualified dollars to purchase the VA, when you decide to start receiving the income, only a small part of the income will be taxable because you'll be using 'annuity taxation rules,' even though you will not be actually technically choosing an annuity payout, as long as you select an annuity company which has an IRS Private Letter Ruling which allows for that.

Very cool!

"In my opinion, those who slam them simply don't understand them, and how they can be or should be utilized"

I'm thinking of one guy, a so-called 'investment professional' who advertises everywhere on the 'net that, "I hate annuities, and you should too."

That's not only incredibly unprofessional, but in my experience with him, it's also mainly because his firm cannot even begin to compete with what good annuities offer.

Sad.

A few years ago, I got a client (husband and wife, both VERY financially savvy people) here in Reno, who gave me ~ $550,000 to manage. The rest of their money was with this guy.

Two years later they called me to say they wanted to move ALL of the money they had with that guy to me, because, "You're giving us twice the returns with one-half of the risk."

I love it!

Yes, they are self-directed. It sounds like I should move on VAs sooner than later.

Thanks again. That was more information than I got from 2 initial meetings I had with advisors. They kept talking about "products" this and that, but never said exactly what product they were talking about. It didn't take me long to figure out it was VAs they were talking about, but I'm still wrapping my head around them.

Matt

What I posted, for breveties sake, was only a part of what you would need to know.

That's mainly because everyone is different: different needs and wants, different assets, different understandings of how investments and markets work, different goals and objectives, etc.

Anyone who talks about products before they first completely understand who you are, what you have, what you need, and what you believe, is someone you should immediately walk out on.

I cannot possibly know what the best ideas, options, strategies and then (and only then) products for someone might be until I know all of those things and a LOT more.

Any other approach would be malpractice on my part.

Kyle

Yep, that's the guy!

Actually, I've met him a couple of times at GOP fundraisers when I lived in the Bay Area.

OTOH, I don't write for Forbes, I don't advertise incessantly on the internet, nor do I crap on products and ideas I cannot compete with.

However, I am not a one-trick pony who only focuses on the largest of the large US companies. Instead, I prefer to select the best-of-the-best managers in a wide array of asset classes, then get to know and understand my clients personally.

Until I can do that, no way do I know what might be the best options for them.

That's very kind of you.

But in reality, I would think either of us could serve you just as well with a few phone calls.

;o)

Good grief.

Matt

Interesting to note that not one of the three Sunday papers I read had any mention of the memo at all, but much on the usual TDS meme.

Impeach Him!!!!!"

For? Please state the high crimes and misdemeanors he is guilty of. And no, winning the White House and embarrassing the preferred princess ain't one of them...

Matt

Matt

Great to hear from you, brother. PM sent.

Matt

I think there is a lot of computer generated selling / buying going on in addition to a lot of folks panicking or trying to time the market. +/- 1% and 2% swings each way within the same day?? Really tells me its emotions at play not sound monetary decisions.

My play is HOLD.. let the market flush out the idiots.

BB, I'm gonna get a lot of mileage out of your hilarious post.

;-)

Matt

God bless, Steve

75% of the world's assets are owned by the Rothchilds, are they not?

Matt