Agree we have a massive bubble in all assets. But where do people put their money with all this inflation? Need to keep up with inflation, or else our cash is losing 10% a year.

Anonymous wrote:

Anonymous wrote:Household net worth ballooned by $39T (Yes T for trillion) during the 2 year COVID span. That's 158% the entire US GDP. During the .com bust, that same number was 79%, and prior to the housing bubble crisis in 2008, thst number was 98%.

Let that sink in. In what sane reality has the US economy improved so much DURING COVID that everyone in the country now is 158% better? What a joke....it's a gigantic asset bubble that needs to burst badly because it was fueled on cheap money.

After the .com crash, the market never topped out again until over a decade later because the govt kept stimulating the economy after 2008. After this crash happens to withdraw the 158% gains, we could be in pain for a lot longer this time around.. try 20+ years.

I don’t see the argument. There was massive government investment in basic social safety net during COVID—it sure as heck improved our household financial picture over where it would have been. Sounds plenty sane to me.

i.e. you admit is a bubble - gigantic govt intervention that is now being removed and that has caused inflation. it was a giant sugar rush. no it is imploding. asset bubbles always end badly.

Anonymous wrote:Household net worth ballooned by $39T (Yes T for trillion) during the 2 year COVID span. That's 158% the entire US GDP. During the .com bust, that same number was 79%, and prior to the housing bubble crisis in 2008, thst number was 98%.

Let that sink in. In what sane reality has the US economy improved so much DURING COVID that everyone in the country now is 158% better? What a joke....it's a gigantic asset bubble that needs to burst badly because it was fueled on cheap money.

After the .com crash, the market never topped out again until over a decade later because the govt kept stimulating the economy after 2008. After this crash happens to withdraw the 158% gains, we could be in pain for a lot longer this time around.. try 20+ years.

I don’t see the argument. There was massive government investment in basic social safety net during COVID—it sure as heck improved our household financial picture over where it would have been. Sounds plenty sane to me.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why do so many on the Right just repeat what they’re told. No critical thinking ability. I thought Limbaugh’s “ditto heads” was a joke, but it appears to be true. The Right is mostly a bunch of lemmings ready to follow Trump off a cliff.

Right. Like they blame Biden and his policies for inflation, yet inflation is worldwide (thanks China and Russia) and Biden has hardly been successful with getting much through Congress (thanks Manchin and Synema). They say it’s Biden because that’s what the Right’s pundits tell them to think. Ditto heads.

You should upgrade your sources of information. I'm in Europe now and credible sources like the BBC and the FT constantly differentiate inflation in the US vs Europe: in Europe the main cause is energy and food, given the war. In the US it's the massive stimulus, both monetary (Thanks Fed!) and fiscal (first with Trump, then much expanded with Biden, most recently with the free money for student loans).

Excellent response to the "inflation is worldwide" posters.

Just adding that Both the EU and the US did experience inflation before the war owing to supply chain disruptions. However, in 2021, the US was running 2.5% to 3% ahead of the EU, an amount a San Francisco Fed paper put squarely on the fiscal stimulus of the 2021 American Rescue Plan Act, that same act that Larry Summers criticized as inevitably leading to a surge in inflation, which it did.

Exactly. US inflation was obvious BEFORE the war, whereas EU one is (mostly) a result of the war.

But don't expect the NYT to clarify this to its readers. It's much more convenient to blame Putin for it all.

Household net worth ballooned by $39T (Yes T for trillion) during the 2 year COVID span. That's 158% the entire US GDP. During the .com bust, that same number was 79%, and prior to the housing bubble crisis in 2008, thst number was 98%.

Let that sink in. In what sane reality has the US economy improved so much DURING COVID that everyone in the country now is 158% better? What a joke....it's a gigantic asset bubble that needs to burst badly because it was fueled on cheap money.

After the .com crash, the market never topped out again until over a decade later because the govt kept stimulating the economy after 2008. After this crash happens to withdraw the 158% gains, we could be in pain for a lot longer this time around.. try 20+ years.

2007 DH and I were 30/31. We had been investing since law school and put almost all of our excess cash in a brokerage account. On the worst day after 5 year of saving we were approximately $250k less than we had put in. Our annualized return was in the negative upper 20 percents.

I nearly panicked and sold it all but a significantly older and wiser colleague persuaded me not to by literally calling her broker in front of me and buying $50k of McDonald’s stock and $50K stock of Home Depot stock. She told me rightfully so nothing had in fact changed to those companies or their fundamentals.

She was so right. FYI, if you started investing in 2002 you had less than you put in until 2011. 9 years to get to zero growth.

FYI, this time around I have in the last quarter put and extra $500k into stocks beyond what was automatically being contributed. If it stays flat I’ll continue this pace of acquisitions. If it goes down I will increase it.

Look at all the money you made in the past five years, that should cheer you up!

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why do so many on the Right just repeat what they’re told. No critical thinking ability. I thought Limbaugh’s “ditto heads” was a joke, but it appears to be true. The Right is mostly a bunch of lemmings ready to follow Trump off a cliff.

Right. Like they blame Biden and his policies for inflation, yet inflation is worldwide (thanks China and Russia) and Biden has hardly been successful with getting much through Congress (thanks Manchin and Synema). They say it’s Biden because that’s what the Right’s pundits tell them to think. Ditto heads.

You should upgrade your sources of information. I'm in Europe now and credible sources like the BBC and the FT constantly differentiate inflation in the US vs Europe: in Europe the main cause is energy and food, given the war. In the US it's the massive stimulus, both monetary (Thanks Fed!) and fiscal (first with Trump, then much expanded with Biden, most recently with the free money for student loans).

Excellent response to the "inflation is worldwide" posters.

Just adding that Both the EU and the US did experience inflation before the war owing to supply chain disruptions. However, in 2021, the US was running 2.5% to 3% ahead of the EU, an amount a San Francisco Fed paper put squarely on the fiscal stimulus of the 2021 American Rescue Plan Act, that same act that Larry Summers criticized as inevitably leading to a surge in inflation, which it did.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you’re older and you’re down 20%, blame yourself. Clearly, your asset allocation is too risky. Everyone wants to be 100% in stocks when the gains are piling up, but they forget that the economy doesn’t go to the moon in a straight line.

Agree - there are so many gloaters who are all stocks during the good times, but very quiet these days.

I’m glad Vanguard automatically changes the asset allocation for the 529 as we get closer to college age. Those accounts have not lost as much due to the changes Vanguard made.

Actually they have lost as much, because fixed income has gone down too, like 10% easy.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you’re older and you’re down 20%, blame yourself. Clearly, your asset allocation is too risky. Everyone wants to be 100% in stocks when the gains are piling up, but they forget that the economy doesn’t go to the moon in a straight line.

Agree - there are so many gloaters who are all stocks during the good times, but very quiet these days.

I’m glad Vanguard automatically changes the asset allocation for the 529 as we get closer to college age. Those accounts have not lost as much due to the changes Vanguard made.

Lots of financial institutions have lifecycle funds for 529. Vanguard isn't anything special in that regard.

Anonymous wrote:

Anonymous wrote:If you’re older and you’re down 20%, blame yourself. Clearly, your asset allocation is too risky. Everyone wants to be 100% in stocks when the gains are piling up, but they forget that the economy doesn’t go to the moon in a straight line.

Agree - there are so many gloaters who are all stocks during the good times, but very quiet these days.

I’m glad Vanguard automatically changes the asset allocation for the 529 as we get closer to college age. Those accounts have not lost as much due to the changes Vanguard made.

Anonymous wrote:If you’re older and you’re down 20%, blame yourself. Clearly, your asset allocation is too risky. Everyone wants to be 100% in stocks when the gains are piling up, but they forget that the economy doesn’t go to the moon in a straight line.

This is not as true as it once was. Given rapidly increasing lifespans, it's not longer feasible, or conventional wisdom, to significantly shrink your equities allocation as you grow older. A 50 yo asian woman has a life expectancy of 37 years. A 55 yo white man has a life expectancy of more than 26 years. Those time frames, combined with the lack of defined benefit plans, for most people, require more risk (though not 100% equities).

The Federal reserve is trying to reduce inflation. This will put a lid on stock market until they "finish reducing inflation". There is no way S and P will get over 4500 until they finish what they need to do.

If S and P gets too high it increases inflation and the Fed will just say they will increase interest rates more than previously expected, which will tank the market 10% in a week. Fed controls it all.

Anonymous wrote:If you’re older and you’re down 20%, blame yourself. Clearly, your asset allocation is too risky. Everyone wants to be 100% in stocks when the gains are piling up, but they forget that the economy doesn’t go to the moon in a straight line.

Agree - there are so many gloaters who are all stocks during the good times, but very quiet these days.

Anonymous wrote:

Anonymous wrote:Ugh. I looked at my 401K today after not looking for months. I max out every year (with catch up since I'm in my 50s) and every penny I've put towards it this year is gone, plus an additional $100 grand. So around $125K down since the start of the year. Is this thing going to turn around? And I know that some are going to say that I'm thinking about it wrong, that every cent of my paycheck that I've sent to my 401K this year means I'm buying deeply discounted stocks, etc. It just still feels like a gut punch to see that I'm $125K down. Others who want to commiserate?

As long as you haven’t sold, you are fine. My portfolio is down 500k from high but I am still keep buying.

Yep, OP shouldn't be saying "every penny I've put into it this year is gone," they should be saying "every penny I've put into it this year has gone to buying stocks at a great discount."