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Old 12-02-2021, 05:18 AM   #1
RiverRat1
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Default Markets and FED QE

Any predictions or guesses on what will happen once the FED starts to raise rates and reduce QE?

Obviously the markets will tank like a spoiled brat trying to get their way but after that will markets be able to get back near all time highs without FED helping as much?

One has to wonder how in the heck markets hit all time highs over and over all through everything.

Does "Don't fight the FED" that's worked the last 20 years on the way up also apply once they raise rates to cool the economy to fight inflation for the ride down?
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Old 12-02-2021, 07:34 AM   #2
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Any predictions or guesses on what will happen once the FED starts to raise rates and reduce QE?

Obviously the markets will tank like a spoiled brat trying to get their way but after that will markets be able to get back near all time highs without FED helping as much?

One has to wonder how in the heck markets hit all time highs over and over all through everything.

Does "Don't fight the FED" that's worked the last 20 years on the way up also apply once they raise rates to cool the economy to fight inflation for the ride down?

If we only knew.

I wonder how fast they are going to have to raise rates to tame inflation. You know the transitory inflation THEY told us about earlier this year.

Iíve come to believe the exact opposite of what the experts say is happening. I think they are going to have to raise rates much quicker than they are saying. The idiots on the Hill are wanting to throw another couple trillion into the system. Buckle up, this time itís for real. Carter will finally be off the hook as worst President ever. Bidenís Afghanistan debacle was worse than Carterís Iran debacle and Bidenís inflation will be worse. The markets will not do spit over the next several years IMO. You canít park your money in cash. Iím not sure what to do.


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Old 12-02-2021, 09:45 AM   #3
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Lets assume they raise rates faster than most think. I'll stay long in my retirement accounts on mutual funds... But are there ways one should transition to ease the pain?

I know cash sucks. Will rising rates cause bond funds to rise or fall? Will growth stocks get hit harder than big cap stocks? (I'm in growth funds and regular big cap)

I know one has to ride it out even if it takes 10-15 years. But surely there's a couple things to move around to help.
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Old 12-02-2021, 10:38 AM   #4
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I don’t think they can raise rates high or fast. Our own government won’t be able to afford the interest rate increase on their own debt. Without printing more money. Making the problem worse. It’s a bad cycle. And could get worse. The Fed, IMO, has basically exhausted every tool in their tool box, they can’t do much of anything else to influence the economy in a positive way. If the economy starts to downturn, they have very few options. My guess is that they are saber rattling, will ease their bond buying some, maybe raise the fed funds rate .25%, and that will be it. They can’t stop the bond buying. And they can’t raise rates quickly or too high. That alone would trigger an economic crash.
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Old 12-02-2021, 12:12 PM   #5
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Markets would have to correct more than 50% to erase the gains of the last three years, and that ain't happening IMO. I'm up 26% this year. It will correct(my guess 10-15%), but even so I will have positive results. Markets seem to recover very quickly. They know its coming and till we get to at least 2% Fed rate, we aren't even back to normalized rates. Corporate welfare has to end at some point.
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Old 12-02-2021, 12:39 PM   #6
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I donít think they can raise rates high or fast. Our own government wonít be able to afford the interest rate increase on their own debt. Without printing more money. Making the problem worse. Itís a bad cycle. And could get worse. The Fed, IMO, has basically exhausted every tool in their tool box, they canít do much of anything else to influence the economy in a positive way. If the economy starts to downturn, they have very few options. My guess is that they are saber rattling, will ease their bond buying some, maybe raise the fed funds rate .25%, and that will be it. They canít stop the bond buying. And they canít raise rates quickly or too high. That alone would trigger an economic crash.
I've heard this before. LOL

They will have to either raise rates or we will have hyperinflation. I'm thinking they raise soon..and keep raising for 2-3 years.
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Old 12-02-2021, 12:43 PM   #7
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I've heard this before. LOL

They will have to either raise rates or we will have hyperinflation. I'm thinking they raise soon..and keep raising for 2-3 years.
I just wonder what that will do to the housing markets and property prices. Everything is sky high right now because borrowed money is almost free. I'm betting housing slows way down and maybe creates a small crash because so many new home owners are getting into flexible interest loans and won't be able to handle the new rates when they rise. Maybe not but could see it happening
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Old 12-02-2021, 12:44 PM   #8
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If we only knew.

I wonder how fast they are going to have to raise rates to tame inflation. You know the transitory inflation THEY told us about earlier this year.

Iíve come to believe the exact opposite of what the experts say is happening. I think they are going to have to raise rates much quicker than they are saying. The idiots on the Hill are wanting to throw another couple trillion into the system. Buckle up, this time itís for real. Carter will finally be off the hook as worst President ever. Bidenís Afghanistan debacle was worse than Carterís Iran debacle and Bidenís inflation will be worse. The markets will not do spit over the next several years IMO. You canít park your money in cash. Iím not sure what to do.


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I want to word this carefully as I dont want to give Biden any kind of pass here and I am not. We seem to always blame the Presidents in power for problems created by our government and give the Congress a pass. Biden has supported all this spending so he is not without fault but the Congress is the most guilty when it comes to the spending. Pelosi has been in charge of this country basically for decades.
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Old 12-02-2021, 01:03 PM   #9
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Brian Wesbury is my favorite economist currently. He's not 100% right all of the time, of course. But he's very common sense oriented, and he's pretty well spot on most of the time. Here's his most recent take on trying to answer the question you're asking.

https://www.ftportfolios.com/Comment...long-term-pain
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Old 12-02-2021, 03:40 PM   #10
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Default Markets and FED QE

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Originally Posted by ∆theling View Post
I want to word this carefully as I dont want to give Biden any kind of pass here and I am not. We seem to always blame the Presidents in power for problems created by our government and give the Congress a pass. Biden has supported all this spending so he is not without fault but the Congress is the most guilty when it comes to the spending. Pelosi has been in charge of this country basically for decades.

Agree to some extent about Congress though I personally give none of them a pass. The reason the President gets most of the blame is because he is the gate keeper. He can veto it and it would be done for. No way it goes back to Congress with enough support to override his veto. Ultimately he is the one giving the or .


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Last edited by rtp; 12-02-2021 at 03:49 PM.
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Old 12-02-2021, 04:33 PM   #11
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If we only knew.

I wonder how fast they are going to have to raise rates to tame inflation. You know the transitory inflation THEY told us about earlier this year.

I’ve come to believe the exact opposite of what the experts say is happening. I think they are going to have to raise rates much quicker than they are saying. The idiots on the Hill are wanting to throw another couple trillion into the system. Buckle up, this time it’s for real. Carter will finally be off the hook as worst President ever. Biden’s Afghanistan debacle was worse than Carter’s Iran debacle and Biden’s inflation will be worse. The markets will not do spit over the next several years IMO. You can’t park your money in cash. I’m not sure what to do.


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I do agree with everything you have said but I’m curious. Why wouldn’t cash be the safe bet until until we get a new administration ( hopefully) on the hill and see which direction the markets will go with a better economy? In my way of thinking I would rather make no money as apposition to losing it all overnight.
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Old 12-02-2021, 04:38 PM   #12
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I do agree with everything you have said but I’m curious. Why wouldn’t cash be the safe bet until until we get a new administration ( hopefully) on the hill and see which direction the markets will go with a better economy? In my way of thinking I would rather make no money as apposition to losing it all overnight.
Cash will lose purchasing power, given near zero interest rates and elevated inflation. Ideally, you could put your money into assets that would at least keep pace with inflation. Can't do that with "zero risk" cash/Treasuries/CDs these days though. So you just have to decide how much of all the various kinds of risks you want to subject yourself to - market risk, inflation risk, interest rate risk, default risk, liquidity risk, etc...
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Old 12-02-2021, 04:51 PM   #13
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Cash will lose purchasing power, given near zero interest rates and elevated inflation. Ideally, you could put your money into assets that would at least keep pace with inflation. Can't do that with "zero risk" cash/Treasuries/CDs these days though. So you just have to decide how much of all the various kinds of risks you want to subject yourself to - market risk, inflation risk, interest rate risk, default risk, liquidity risk, etc...
Makes sense. Has anyone been watching AMC Entertainment stocks for the last year and a half? During lockdown last year it tanked at a couple of bucks and then rose to 72 and some change. Sure would have liked to have gotten in on that. Iíve been watching the trends all year and itís up and down consistently. Looks like you could make some money on these waives.
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Old 12-02-2021, 05:00 PM   #14
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I do agree with everything you have said but Iím curious. Why wouldnít cash be the safe bet until until we get a new administration ( hopefully) on the hill and see which direction the markets will go with a better economy? In my way of thinking I would rather make no money as apposition to losing it all overnight.

Cash could turn out to be the smallest lose but doubtful. For round numbers sake letís say inflation continues up and is at 10% and levels off there. If you park 1 mil in cash to wait it out, you will still have your 1 mil a year later but it will have the purchasing power of 900k. I hope that makes sense.

Iím not sure the best solution but Iím thinking commodities and real estate will be safe places to park money in a high interest rate environment.

For the past 2 years as my bonds have matured I have been moving that money into equities and real estate. So far those have been excellent moves. Iím 58 and currently my bond holdings are right at 10% of my net worth. Various real estate, including home, make up about 40%. Stocks make up the other 50%. This is pretty aggressive by typical standards for my age but I plan to live another 40 years so I can weather the ups and downs of these cycles. I also live well below my means so I donít have to change my lifestyle if/when turbulence hits.

What I donít own and never have owned is commodities. I think that may be about to change.


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Old 12-02-2021, 05:16 PM   #15
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Cash could turn out to be the smallest lose but doubtful. For round numbers sake let’s say inflation continues up and is at 10% and levels off there. If you park 1 mil in cash to wait it out, you will still have your 1 mil a year later but it will have the purchasing power of 900k. I hope that makes sense.

I’m not sure the best solution but I’m thinking commodities and real estate will be safe places to park money in a high interest rate environment.

For the past 2 years as my bonds have matured I have been moving that money into equities and real estate. So far those have been excellent moves. I’m 58 and currently my bond holdings are right at 10% of my net worth. Various real estate, including home, make up about 40%. Stocks make up the other 50%. This is pretty aggressive by typical standards for my age but I plan to live another 40 years so I can weather the ups and downs of these cycles. I also live well below my means so I don’t have to change my lifestyle if/when turbulence hits.

What I don’t own and never have owned is commodities. I think that may be about to change.


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We have been talking about staying out of the market for a while until the world levels up again and investing in more real estate but if the sh*t hits the fan liquidity will be our best friend. Just kind of nervous these days planning on selling the business in 3 years and retiring if there’s anything left.
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Old 12-02-2021, 07:53 PM   #16
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We have been talking about staying out of the market for a while until the world levels up again and investing in more real estate but if the sh*t hits the fan liquidity will be our best friend. Just kind of nervous these days planning on selling the business in 3 years and retiring if thereís anything left.

I hear you on the business front. Been there and done that. One way to invest in Real estate and retain liquidity is to own some REITs.


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Old 01-28-2022, 07:01 PM   #17
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Looks like bond funds are now 4-6% down from when I started this thread.
And the markets down 6-10%

Looks like cash was the place to be.
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Old 01-28-2022, 07:31 PM   #18
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Cash is king right now. Interest rates are gonna be raised several times this yr IMO.
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Old 01-28-2022, 07:58 PM   #19
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I've got a large cash reserve bigger than ever! But have been timid to buy in too quick. I try to dollar cost average. I expect oil prices to continue to rise. I am finally buying crypto (slowly and methodically) and expect a bitcoin ETF very soon. I think BTC will hit $100k eventually. You may consider short term muni bonds if not in a tax deferred account while things work themselves out. I believe most of those interest rate increases are already priced in.

My wife wants to use the cash reserve to redo the kitchen! If you have any equity in house or land I would refinance and cash out as much as I possibly could without changing monthly payments.
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Old 01-29-2022, 10:45 AM   #20
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Cash is king right now. Interest rates are gonna be raised several times this yr IMO.

Itís not an opinion, there are going to be interest rate hikes. The question is whether 4 quarter point raises this year will tame inflation or not. I believe that is what the markets have factored into the equation. If it starts looking like 4 isnít going to do it and more rate hikes are needed then markets will tank harder.

If Bite Me somehow manages to get more govt spending to pass through Congress then hold on to your hat. Inflation will roar like we havenít seen since the Carter days.


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Old 01-29-2022, 11:03 AM   #21
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Cash is king right now. Interest rates are gonna be raised several times this yr IMO.
I agree with cash being king in unstable times. Have cash that I wish was working for me but I keep the Libs ď Redistribute The WealthĒ platform in the back of my head. Really wish I knew exactly what they mean by that. Letís Go Brandon.
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Old 01-29-2022, 11:47 AM   #22
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Itís not an opinion, there are going to be interest rate hikes. The question is whether 4 quarter point raises this year will tame inflation or not. I believe that is what the markets have factored into the equation. If it starts looking like 4 isnít going to do it and more rate hikes are needed then markets will tank harder.

If Bite Me somehow manages to get more govt spending to pass through Congress then hold on to your hat. Inflation will roar like we havenít seen since the Carter days.


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They'll use any dips in the market, especially closer to election day, as an excuse to pause the rate hikes. They don't want high interest rates. They would rather stick us with higher inflation than have higher rates on all that government debt.
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Old 01-29-2022, 12:07 PM   #23
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They'll use any dips in the market, especially closer to election day, as an excuse to pause the rate hikes. They don't want high interest rates. They would rather stick us with higher inflation than have higher rates on all that government debt.
Absolutely agree with this! I think we'll get some small rate hikes. The FED might get 3 in before the mid-terms. But I think they'll get them in as early as they can during the year, and then stop until the mid-terms. Then they'll start again Q4 or Q1 of 2023. I don't think the FED will risk too much with Biden already in trouble and having a terrible presidency. So probably %.025 rate increases to start with and go from there depending on how the economy and the general population reacts.
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Old 01-29-2022, 02:55 PM   #24
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They'll use any dips in the market, especially closer to election day, as an excuse to pause the rate hikes. They don't want high interest rates. They would rather stick us with higher inflation than have higher rates on all that government debt.
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Absolutely agree with this! I think we'll get some small rate hikes. The FED might get 3 in before the mid-terms. But I think they'll get them in as early as they can during the year, and then stop until the mid-terms. Then they'll start again Q4 or Q1 of 2023. I don't think the FED will risk too much with Biden already in trouble and having a terrible presidency. So probably %.025 rate increases to start with and go from there depending on how the economy and the general population reacts.
I agree that's what they want to do......but if inflation continues the way it is going, they will not have no choice but to raise rates regardless of the timing and mid terms.

I think everyone has 4 rate hikes baked into their numbers for this year. If we get to 4 before November it isnt going to be pretty.....IMO.
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Old 02-07-2022, 02:11 PM   #25
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Anyone else thinking of taking a break from equities and going little more liquid? Between tech stock suffering, inflation, crude oil going way up, earnings not as strong as expected, FED interest rates going up in March, and a possible Russian invasion, looks like it could be a rough couple months with lots of different "shocks" to the market. I'm thinking of going more liquid till about April and see where all this settles out.
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Old 02-10-2022, 07:28 PM   #26
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Anyone else thinking of taking a break from equities and going little more liquid? Between tech stock suffering, inflation, crude oil going way up, earnings not as strong as expected, FED interest rates going up in March, and a possible Russian invasion, looks like it could be a rough couple months with lots of different "shocks" to the market. I'm thinking of going more liquid till about April and see where all this settles out.
On that last big rally last week I took a lot off. Still long 50+% with most of my money and retirement account.. But now I can sleep better at night and will have money to buy if we crater.

I don't think 4 rate increases is priced in. How many times did they raise rates in 2017-2018 when the SPY fell 20% and the Nasdaq 24%? We are not even close to falling that hard yet.
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Old 02-10-2022, 07:53 PM   #27
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The FED is going to do what helps the stock market, but they are in a tough position right now. If the inflation rate were computed the way it was in the 80’s then inflation would be at 15% right now!! The FED knows this and knows that is hurting the economy and thus is also hurting the stock market. Pump more currency and inflation will get worse. Stop pumping and raise rates and the stock market will tank.


The FED has done what they could over the last several years to help the stock market and it worked. But the can has been kicked to the end of the road. It is time to pay the piper.

One of 3 things will happen. Either;

1. Inflation will keep getting worse or

2. The stock market will tank or

3. Both inflation keeps going up and the stock market tanks.


The big question is what asset will stay strong, or grow through all of this. Historically speaking, precious metals have always performed really good during times like these, but not in the beginning of downturns. Gold is expensive but it typically a safe bet. Silver is undervalued right now and has been artificially kept low. With all of the investment going on with solar power, wind power, and electric cars, the demand for copper is only going up so the price is going to follow as well. Personally, I don’t like certificates. My preference is for physical metals held in your hand and stored in a place where you have access to it 24/7.


Just my opinions anyway.
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Old 06-15-2022, 02:15 PM   #28
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Well no pause in rate hikes yet. Just the opposite. Just raised 0.75% largest in a long time.
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Old 06-15-2022, 03:02 PM   #29
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https://www.bloomberg.com/news/artic...ebook-business
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Old 06-15-2022, 03:11 PM   #30
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I hear you on the business front. Been there and done that. One way to invest in Real estate and retain liquidity is to own some REITs.


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Would you be willing to share what REITs you are in? Just curious. Never owned any and never even looked into them, but with rates going up, it canít be bad for a while?
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Old 06-15-2022, 03:54 PM   #31
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Well no pause in rate hikes yet. Just the opposite. Just raised 0.75% largest in a long time.

Needed to happen. Should have started these last year.


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Old 06-15-2022, 04:45 PM   #32
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Needed to happen. Should have started these last year.


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Should have never created so much money or lowered to zero % in the first place
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Old 06-15-2022, 06:12 PM   #33
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Should have never created so much money or lowered to zero % in the first place
True.....those are actually the root cause.
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Old 06-15-2022, 06:32 PM   #34
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My short honest is opinion, we are screwed especially if you are already retired. Our retirement funds are being destroyed.! I put this straight on Biden!
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Old 06-15-2022, 10:23 PM   #35
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I hate Biden as much if not more than everyone else...This is not all his fault though. Sure high gas/oil is his fault. It's failed liberal BS policies that are all their fault.

But it's all politicians fault that voted to spend, print, and/or give away money.

Now if Trump were in office would things be different? Sure. But there would still be inflation, just not near as bad IMO...BUT it would get to us one way or another IMO sooner or later.
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Old 09-23-2022, 12:29 PM   #36
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Looks like bond funds are now 4-6% down from when I started this thread.
And the markets down 6-10%

Looks like cash was the place to be.
Wish I would listen to myself more. Seems like I have lots of guesses but when I take the time to post on TBH that's the ones that actually happen.

Next time I post a thread like this I need to follow my own thoughts more LOL

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They'll use any dips in the market, especially closer to election day, as an excuse to pause the rate hikes. They don't want high interest rates. They would rather stick us with higher inflation than have higher rates on all that government debt.
Nope. FED was serious this time. Even now they're still saying they will raise more well into 2023.

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Well no pause in rate hikes yet. Just the opposite. Just raised 0.75% largest in a long time.
Now get bonds to move up. Or crash the SPY to 300 and end this cycle. I don't think that will happen though. In the past it takes years to slow inflation.

IMO investing will revert to more like the late 80's and early 90's once the FED is complete. May not be a bad thing.
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Old 09-23-2022, 12:52 PM   #37
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So what are you doing now, Rat (meaning today)?

I've always tried to build cash when market is high and go in on a "real" drop. I have been waiting for this one and am jumping in. I fully believe in jumping in when everyone is scared, and taking profits when everyone believes it rains money forever.

It's at a risk of needing (and not having) that cash over the next few years, but heck - building wealth is a risk in the first place. Making my living by closing mortgage loans is not pretty right now.

I went in .25% of my cash today. I'll trickle in more as the market dives, IF it does. If it turns and I'm not yet all in, that's perfectly fine. Cash in the bank is always the opportunity to jump on a good real estate deal.
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Old 09-23-2022, 01:16 PM   #38
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So what are you doing now, Rat (meaning today)?

I've always tried to build cash when market is high and go in on a "real" drop. I have been waiting for this one and am jumping in. I fully believe in jumping in when everyone is scared, and taking profits when everyone believes it rains money forever.

It's at a risk of needing (and not having) that cash over the next few years, but heck - building wealth is a risk in the first place. Making my living by closing mortgage loans is not pretty right now.

I went in .25% of my cash today. I'll trickle in more as the market dives, IF it does. If it turns and I'm not yet all in, that's perfectly fine. Cash in the bank is always the opportunity to jump on a good real estate deal.
I like your way of thinking.
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Old 09-23-2022, 01:21 PM   #39
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I'm watching and waiting. Debating on selling the rest on my PUTS.

Overall day to day this market is impossible to trade or time. Even week to week.

Before this drop I was 90% sure markets would correct. But man alive they rallied it so hard up to SPY 430 in the face of everything bad it made it hard to short.

I'm still saying they go 10-20% lower within 6 months BUT zero idea if they rally up or tank on Monday or what they do until they break lower.

If they go back to normal trading this soon then nothing changes. They need to wipe out many more traders to end this. If you're not scared to buy then it's not the bottom.
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Old 09-23-2022, 10:13 PM   #40
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Originally Posted by Tex_Cattleman View Post
So what are you doing now, Rat (meaning today)?

I've always tried to build cash when market is high and go in on a "real" drop. I have been waiting for this one and am jumping in. I fully believe in jumping in when everyone is scared, and taking profits when everyone believes it rains money forever.

It's at a risk of needing (and not having) that cash over the next few years, but heck - building wealth is a risk in the first place. Making my living by closing mortgage loans is not pretty right now.

I went in .25% of my cash today. I'll trickle in more as the market dives, IF it does. If it turns and I'm not yet all in, that's perfectly fine. Cash in the bank is always the opportunity to jump on a good real estate deal.
.25 or 25% cash!? Catching a falling knife is hard. I still think we have at least 15 to 20% to go in the market. To get rid of inflation you need higher unemployment. You literally need to contract the economy and bond rates look really attractive right now with 3 mth t bills pushing 3.5%.
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Old 09-23-2022, 11:16 PM   #41
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Heard tonight on the news that if you have invested $10,000 in stock markets when trump was elected it would have been worth $20,000 when he left and if you have invested $10,000 in stock market when Biden took over you would have lost $6,000 so far. F j b
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Old 09-24-2022, 07:49 AM   #42
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Im sitting on cash, dont know enough to get in the stock market. I kind of like the idea of holding cash to be ready for the good real estate deals though. Though I know nothing of real estate....may just sit on cash forever
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Old 09-24-2022, 08:09 AM   #43
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I believe the banks are much healthier than they were in 2008. Will be interested to see if they can still lend thru another crisis. It won't matter if rates are at 20% because no one can afford to borrow! Powell has been on record that Volcker is his mentor and he had no issue raising rates to 20%! If the fed is not buying bonds, fewer buyers means higher yields. Market manipulation at the highest level!
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Old 09-24-2022, 08:59 AM   #44
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Amazing how wealth plans change in such a short amount of time? Just a yr ago I was told and was telling others that cash laying around was a bad thing. Between rising inflation and high rates of return in investment sitting in cash in the safe or in a savings account was loosing you money. Now I’m just under a yr cash is king. No def answers when it comes to investing.
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Old 09-24-2022, 10:03 AM   #45
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Originally Posted by Tex_Cattleman View Post
So what are you doing now, Rat (meaning today)?

I've always tried to build cash when market is high and go in on a "real" drop. I have been waiting for this one and am jumping in. I fully believe in jumping in when everyone is scared, and taking profits when everyone believes it rains money forever.

It's at a risk of needing (and not having) that cash over the next few years, but heck - building wealth is a risk in the first place. Making my living by closing mortgage loans is not pretty right now.

I went in .25% of my cash today. I'll trickle in more as the market dives, IF it does. If it turns and I'm not yet all in, that's perfectly fine. Cash in the bank is always the opportunity to jump on a good real estate deal.
What rates are you seeing Trey? MND is saying 6.6%. Is that close to reality? Without buying points?
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Old 09-24-2022, 10:13 AM   #46
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Amazing how wealth plans change in such a short amount of time? Just a yr ago I was told and was telling others that cash laying around was a bad thing. Between rising inflation and high rates of return in investment sitting in cash in the safe or in a savings account was loosing you money. Now Iím just under a yr cash is king. No def answers when it comes to investing.
Yep. Im a cash kinda guy. Im also a "earn it" kind of guy vs invest it kind of guy. Poor man mentality I guess.
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Old 09-24-2022, 03:35 PM   #47
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What rates are you seeing Trey? MND is saying 6.6%. Is that close to reality? Without buying points?
As if yesterday afternoon, 6.75% for a good credit, good money down, conforming loan. Lots of investors are not offering a par rate right now. Rather than points to buy a rate down, points are REQUIRED up front. In many cases 2%. That gets steep real quick.

If you see someone quoting rates below 6.0%, you can be sure you'll get unknowingly bent over at some point.

It's rough out there!
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