Markets and FED QE

[rtp]

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.

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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[RiverRat1]

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.

[eradicator]

Cash is king right now. Interest rates are gonna be raised several times this yr IMO.

[TeamAmerica]

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.

[rtp]

Cash is king right now. Interest rates are gonna be raised several times this yr IMO.

It’s 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 isn’t 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 haven’t seen since the Carter days.


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[Gumbo Man]

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 “ Redistribute The Wealth” platform in the back of my head. Really wish I knew exactly what they mean by that. Let’s Go Brandon.

[Shane]

It’s 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 isn’t 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 haven’t 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.

[Preacher Man]

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.

[rtp]

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.

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.

[BrianL]

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.

[RiverRat1]

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.

[91cavgt]

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.

[RiverRat1]

Well no pause in rate hikes yet. Just the opposite. Just raised 0.75% largest in a long time.

[Pineywoods]

https://www.bloomberg.com/news/articles/2022-06-15/fed-hikes-rates-75-basis-points-intensifying-inflation-fight?sref=HQB7G2wY&utm_campaign=socialflow-organic&utm_medium=social&utm_content=business&utm_source=facebook&cmpid=socialflow-facebook-business

[captainsling]

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 can’t be bad for a while?