Not to be a Debbie Downer, but if it's going to be "great depression bad", your wife may not have a job either.
I think it was 25% unemployment in those times. So she works in health care which will be more necessary than my Construction/Manufacturing based means of employment. If we both lose jobs...I'm sure I can take up crime.
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I think it was 25% unemployment in those times. So she works in health care which will be more necessary than my Construction/Manufacturing based means of employment. If we both lose jobs...I'm sure I can take up crime.
...just one last heist then I'm out.
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I'm probably misremembering the details, but a few days ago on a financial podcast I heard something along the lines of "the market could fall by 50% and we technically still wouldn't be breaking the long-term bullish trend that we've been on for 15 years". Apparently that's how much we're extended these days from the norm.
So technically there is potential for quite a retrace...the trick is of course timing it all, as this trend could keep advancing for years.
There's also the question of, if there is a sudden crash, how much pain will be considered too much. Events like the 07-08 GFC and Covid have taught us that if there is always a point where Governments/Fed will step in and subsidize a crisis. You could of course argue it was necessarily, but once that precedence was set with the GFC (and exacerbated with Covid), it basically changed everyone's behaviour and risk tolerance. At this point, people expect to be bailed out financially...which of course can stretch things to even more irresponsible levels.
What would be the pain threshold this time? I have no idea...but when everyone is invested balls-deep (especially the rich and government officials) in the current system, you can bet there would again be enormous pressure for action if there was a big enough drop (assuming it was a sudden drop...if it was more of a Japanese style slow burn towards economic mediocrity, that's another thing).
Between Crypto and Governments printing money to their hearts content all historical precedence is out the door IMO
I thought rising interest rates would be the death and the market kept on humming . Now rates are (have to) come down I don’t see the market tanking in the next few years
I'm a lot more worried about an all out crash on nearly everything. Housing, traditional stock markets, banks... I'm a couple years short of 50 and don't own a house free and clear plus and I have two kids that I'm needing to support for at least 10 more years. Essentially need to prepare for a 5 year period that will be great depression bad..where I have to figure I lose my job and will need to survive off what my wife makes. But I can't get there in under 10 years...and I think it hits within 5. So it's causing me a lot of anxiety. Story of my life...5 years behind where I need to be and I'm not smart enough to figure out how to catch up.
Have you found a financial planner you connect with/trust? I’d suggest starting there, you can have initial consultations with a number of them until you find one you like. Getting a plan in place will give you peace of mind and assurances you’re on the right path. You can talk to them about your concerns and they can help put a plan in place to mitigate. If you’re 10 years out of when you think you’re retiring, get that done, it’s better now than later. You can start laying the groundwork for 10 years from now, and you might be surprised to find you’re in better shape.
I mean, if you really think that's going to happen you could buy some ways out of the money puts on SPY (the big US etf). In "great depression 2.0" that pays out like 100 to 1.
Not something I'd normally suggest but you could use it as "sleep at night" insurance.
Interesting. Have never thought about that kind of “portfolio insurance”.
Nor have I ever purchased options.
I like the idea of spending say $25k to potentially gain $2.5m. When would those kinds of puts typically expire? Thanks.
Regarding the thread title…in a word no. I have between 300 and 400k in rsps but I’m in my 50s and currently between jobs. I’m not sure it’s going to be enough given the constantly rising cost of living and changing economic climate. If anyone has practical advice for taking some of it and putting it into something possibly more lucrative, I would appreciate it.
Between Crypto and Governments printing money to their hearts content all historical precedence is out the door IMO
I thought rising interest rates would be the death and the market kept on humming . Now rates are (have to) come down I don’t see the market tanking in the next few years
But that prob means it will !
Well, rising rates sent the US indexes down 20-30% in 2022. I guess that seems like ancient history, but financial markets did get smoked pretty solidly just two years ago.
Quote:
Originally Posted by Manhattanboy
Interesting. Have never thought about that kind of “portfolio insurance”.
Nor have I ever purchased options.
I like the idea of spending say $25k to potentially gain $2.5m. When would those kinds of puts typically expire? Thanks.
You can buy options that expire a few years out. They’re more expensive as you go out further.
Well, rising rates sent the US indexes down 20-30% in 2022. I guess that seems like ancient history, but financial markets did get smoked pretty solidly just two years ago.
You can buy options that expire a few years out. They’re more expensive as you go out further.
My original plan had been to cull the savings of others into my own retirement fund.
In retrospect, starting off with hobos and transients was not a brilliant plan. This might take a loooong time. I might be better off just working for a living. Which undeniably sucks.
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Between Crypto and Governments printing money to their hearts content all historical precedence is out the door IMO
What are you talking about? The pace of money creation over the last 10-20 years is basically nothing compared to what was going on in the '70s and early '80s.
From 1970-1983, Canada's M2 increased by about 15% a year. That's about the same amount it increased in 2020 in response to COVID, except for over a decade straight.
Well, rising rates sent the US indexes down 20-30% in 2022. I guess that seems like ancient history, but financial markets did get smoked pretty solidly just two years ago.
You can buy options that expire a few years out. They’re more expensive as you go out further.
Yes DURING 2022 the markets saw a big drop however they had a healthy rebound. By not messing with things and staying in the market (ie not missing all the best days) I, like so many others, ended 2022 with a positive return. But that return only came about because of the last quarter.
Yes DURING 2022 the markets saw a big drop however they had a healthy rebound. By not messing with things and staying in the market (ie not missing all the best days) I, like so many others, ended 2022 with a positive return. But that return only came about because of the last quarter.
Are you thinking of 2020? I’m well aware that everyone made money in 2020, but 2022 not so much. Both bonds and stocks had a rough 2022. Indexes were all negative and there weren’t a lot of people who made money.
This thread is nearly 10 years old. Has anyone used that time wisely to plan for the future? The markets have been blistering hot during that time period, have people taken advantage of their unprecedented rise to contribute to their retirement?
Plan is wife and I will hit our stretch target for liquid investments/savings in the next 2 years, after which I plan to coast FIRE and spend more time with my kids before they become teenagers.
Not going to lie, it will be tough to leave a job/career and the money it pays me, but the thought of never having to log into LinkedIn again... I am looking forward to that
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Still waiting for a lottery win. At this rate I'll probably be working until I'm 80. My divorce/custody battle put me in a gigantic hole where I probably should've just filed for bankruptcy but instead am slowly just clawing my way out of it. I have a good job and make above the average income...but I'll be servicing debt for another 3-4 years before I can meaningfully invest any money.
the thought of never having to log into LinkedIn again... I am looking forward to that
My experience is I still do, mainly just as a way to see what people are up to. I’ve been a board of advisors member for a student organization for years so it’s kind of interesting to see where these students have gone to. You can be a resource for others if you like to help. What IS liberating is you no longer need to play “the game” and keep marketing yourself. It’s very freeing.
Have you found a financial planner you connect with/trust? I’d suggest starting there, you can have initial consultations with a number of them until you find one you like. Getting a plan in place will give you peace of mind and assurances you’re on the right path. You can talk to them about your concerns and they can help put a plan in place to mitigate. If you’re 10 years out of when you think you’re retiring, get that done, it’s better now than later. You can start laying the groundwork for 10 years from now, and you might be surprised to find you’re in better shape.
I'm 10 years out from being able to hunker down and not panic sell my house or dip into long term savings in the event that we have 25% unemployment and an absolutely hopeless job market for like 5 years. I don't think it would be that bad..but like Covid...it would be something not experienced in my lifetime and I don't know what it would look like.
I do have a FP...she tries to assure me that my situation isn't as hopeless as I think it is. I hope she's right.
__________________ "Some guys like old balls"
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