Stock Market is the bottom in?

[OakSeeds]

Foggy says .... "Folks talk about high interest rates today at 5.5% or so......but I can remember getting aa much as 20% for some time in the Vanguard Money Market fund......back in the 70's. Talk about spooky times to borrow money!"

In 1981 you could get a 1-5 year CD that paid 15.8%, backed by the full faith and credit of the FDIC.... if you could have locked CDs - at that time - for more than 5 years, I'd probably still have funds in one. LOL

 

[Foggy47]

Foggy says .... "Folks talk about high interest rates today at 5.5% or so......but I can remember getting aa much as 20% for some time in the Vanguard Money Market fund......back in the 70's. Talk about spooky times to borrow money!"

In 1981 you could get a 1-5 year CD that paid 15.8%, backed by the full faith and credit of the FDIC.... if you could have locked CDs - at that time - for more than 5 years, I'd probably still have funds in one. LOL

I remember when TAX EXEMPT Muni's were yielding over 14% for a 20 year bond. However, most of those were callable and they were called after a few years. If you were a good buyer however.....you could lock in on 14% for the long term. I was selling this stuff at the time.....and had a business owner that had just sold his biz. He wanted some of those Nuveen muni's that I had access to (and those were no-callable)........but I could never get any before they were sold out. They would go on sale in the morning and would be gone in minutes. Some other brokers landed him some of those.

Imagine compounding 14% state and federal tax exempt.....with little risk of your principle. Still......stocks were cheap then too. It was a golden time if you had some money to invest. Many people were just starting to "seriously" invest for retirement.....and finally some tax advantaged retirement plans were made available.

 

[Barndog56]

Does anyone know how much money goes into 401k's each week nationwide, compared to how much is taken out?

If more goes in every week than comes out, how big is the difference, and how much affect does that have on the overall market?

 

[Bowsnbucks]

I don’t think Buffet would be very happy at all getting 5.25 on his cash. That’s what YOU can get. He has a little better rate. LOL

I agree!!! With that much cash - he can write his own yield to some degree, I suspect. I was just using the everyday rate (5.25%) most people are aware of.

 

[Bowsnbucks]

With all due respect to my friend BNB who said .... "The point those gents were making is that active managers do have index-beating results some years - but don't do so on a consistent basis ..." I'm calling those gents out ... that be bovine do-do or bunny grunt, and I'll also illustrate the downside/upside recovery effect mentioned above by my ol pal Foggy. This post is simply informational for those who wish to follow along. Since my friend BNB appears to favor Vanguard funds - I'll compare the VFINX (Vanguard S & P 500 Index Fund) with the Fidelity FBGRX (Fidelity Blue Chip Growth Fund) for the past 16 years.
First, each fund had 3 losing years out of 16, and the Fidelity Fund beat the Vanguard Fund 11 out of 16 years. I'll share the relevant info... went back 16 years to ensure I captured the BIGGEST loss the Blue Chip fund has incurred in the last 20 years (handicap them a little for a more robust comparison). Using a FBGRX / VFINX format, and starting with the year 2008, you will see their respective performance
data (Yahoo finance). Using a FBGRX-Blue Chip / VFINX-S&P 500 Index format, here is 16 years of data .....
For example, 2008 (-38.60 for FBGRX / -37.02 for VFINX), 2009 (44.96 / 26.49), 2010 (19.61 / 14.91), 2011 (-2.72 / 1.97), 2012 (17.77 / 15.92), 2013 (39.84 / 32.18), 2014 (14.60 / 13.51),
2015 (6.28 / 1.25), 2016 (1.59 / 11.82), 2017 (36.06 / 21.67), 2018 (1.07 / -4.52), 2019 (33.44 / 31.33), 2020 (62.23 / 18.25), 2021 (22.71 / 28.53), 2022 (-38.46 / -18.23), 2023 (55.60 / 26.11).

The recovery effect ... start with 2008 and a $100 investment in each of the 2 funds - both lost over 37% in 2008; now, calculate their respective performance increase in a $100 investment) for 3 years (2008 - 2010). 2008 (FBGRX -38.60 and 500 Index -37.02), 2009 (FBGRX 44.96 and 500 Index..26.49), 2010 (FBGRX...19.61 and 500 Index..14.91), What is the Blue chip fund (FBGRX) and 500 index funds value, respectively, on Dec. 31, 2010. FBGRX has a value of $106.45 (up $6.45 on $100 investment) while the VNIFX has a value of $91.53 (loss of $8.47 on $100 investment). The total difference of $14.92 suggest the FBGRX enjoyed a rather speedy 2-year recovery while the 500 Index was down more than 8% overall. Now, let's pencil it out for the next 5 years ( 2011 - 2015 when FBGRX had superior performance over the 500 Index for 4 of the 5 years). Starting with 2011 (FBGRX has a 2.72 loss) and calculating their overall increase by Dec. 31,2017. A $100 investment in the Blue Chip Growth Fund is now worth $207.69 (ignoring expenses) while the Vanguard S & P 500 Index Fund has a value of $164.19. Given the large differences in expense ratios (8X or 9X), the $43.50 ($435 on a $1000 investment) difference on $100 investment is not all that great over an 8-year period.

I agree with you totally. Fidelity Blue Chip has outperformed most other similar mutual funds. It's a more aggressive fund, and many people (not all!) are gun-shy of too much aggression in their portfolio's. Everyone has their own risk tolerance. FBGRX has outperformed the S&P 500 Index - but once again, I was repeating Buffet's advice / own words for most investors. He didn't say for every investor.

Indexes aren't for everyone, as you no doubt know. And neither are actively-managed funds the guaranteed answer in every circumstance. Wife and I own a few actively managed funds, beside several index funds. That mix has done well for us, because it's kept our expenses really low for decades. Do we hit home runs all the time? No, but our returns are above average, due in part to lower expenses. I can tell you this, if our more aggressive fund returned 42% last year, and another fund beats that by returning 50% ........ are we upset??? Not one bit. Every year has it's winners and also-rans, (which can switch quiclky), but as long as the long-term trend is upward, I'll take that.

 

[Bowsnbucks]

Points of all this ... 1, there are clearly mutual funds that can compete strongly with the S&P 500 Index Fund and 2. over the long haul (long game) the downside risk assumed with the volatility of the FBGRX Fund (and perhaps others like it) is not as dangerous ($ lost) as you might imagine. All numbers used in this discussion were pulled from the internet (yahoo finance) and the intent of this post is to help others better understand mutual fund investing. Who knows, maybe the Mag-7 tech stocks will all crash and blue-chip growth stocks will tank badly.

Agreed!!! That's investing.

 

[Bowsnbucks]

I can vouch for the Vanguard funds group....by and large. I own a few Vanguard funds today....and at one time almost exclusively would own and trade Vanguard as they cover most of the bases I had an interest in. Outstanding funds for me were their Health Care Fund, Windsor Fund, Wellington Fund, S&P500 Index, and their International Fund (likely some others I have forgotten).....but those are some time ago. Generally they have lower expenses that others that also perform well. I also have liked some T. Rowe Price funds based on good performance....and there are lots of others that have performed well over time. Morningstar is your friend to help sort it all out (or at least used to be).

Folks talk about high interest rates today at 5.5% or so......but I can remember getting aa much as 20% for some time in the Vanguard Money Market fund......back in the 70's. Talk about spooky times to borrow money!

Vanguard Health Care, Windsor, and Wellington have been good, low-cost funds for years, as you said. Fidelity, Vanguard, and T. Rowe price all have some great funds. I like some from all 3 fund families. Fidelity Blue Chip has been a great fund for many years, as OakSeeds mentioned above. T. Rowe Price Global Technology and their blue chip fund have also been very good. We don't want all of our eggs in a higher-risk basket. (age) We're diversified among some higher-paying dividend funds, market indexes, tech / growth funds, bond funds, MM funds, real estate funds, and some international stuff. Our CFP set up a plan / roadmap for us. Thanks be to God ...... it's paid off so far.

 

[Bowsnbucks]

Iran attacked Israel today, firing rockets and drones into Israel. Look for world oil prices to jump with even more Middle-East strife. Geo-political tensions have been on a slow boil in several regions - not good for markets ..... oil or stock. Escalation is likely.

 

[bwoods11]

It’s a total mess !!

 

[BuckSutherland]

Iran attacked Israel today, firing rockets and drones into Israel. Look for world oil prices to jump with even more Middle-East strife. Geo-political tensions have been on a slow boil in several regions - not good for markets ..... oil or stock. Escalation is likely.

Welcome to the Xiden presidency...

- 30+% inflation since 2021
- If you get vaccinated you cant get or spread covid (lie of the century)
- bodies falling off C130s leaving Afghanistan and leaving $86 billion worth of equipment and weapons for the Taliban
- US soldiers getting blown up and killed in the disastrous withdrawal from Afghanistan (nobody was even injured in the last 18 months of Trump)
- Selling strategic oil reserves to China
- Making red lines for Putin not to invade Pukraine and then spending $200 billion leading an entire generation of Pukrainian men to the slaughter after Russia blows through his red line
- Entire middle east about to explode
- WW3 has never been closer


I could go on and on and on.... When the oil prices spike that is sure to add to our inflation woes. People will look to "The FED" to solve problems created by our pedophile unity party politicians. Joe Brandon from Ice Cream Cone, Delaware had to be brought back from the beach today. What a f******g loser. This POS has been at the highest levels of our gov't for about 47 of the last 51 years....


We could sure use some mean tweets, world peace and 2% inflation right about now.

 

[Tree Spud]

The Fed has an impossible job. Their job is to help control the money supply to balance the economy (supply & demand). The Biden admin keeps spending trillions pumping cash into the market off setting and counteracting anything the Fed does.

With the election approaching, the Biden admin will be pushing the Fed to drop rates to try and help boost the economy. The Fed had planned to drop rates, but with rising inflation, they know that dropping rates will set-off more spending which will impact supply. If the Fed drops rates, they will be seen as being manipulated by politics.

With the escalating conflict in the middle east, and Ukraine attacking Russian oil refineries, oil will rise as supply gets tightened. We could off-set this by opening up drilling here, re-starting the keystone pipeline, etc. but the Libs won't let that happen. Our emergency oil reserves are now down to about 18 days.

Remember, the best way to stop inflation, is to crash the economy. Wonder what the Fed will do?

 

[OakSeeds]

Food for thought ...

As SD51555 explained to Native Hunter in post 4,082, anyone moving $ from tech stocks or tech-heavy mutual funds to an S&P 500 Index Fund to diversify away from over reliance on tech stocks may not be escaping the "tech-effect" as much as they think or prefer. Excerpts from a recent article regarding the influence of tech stocks on the 500 index suggest the wealth-creating possibilities of the tech sector may be influencing/forcing the 500 index to increase their exposure to tech stocks in order to achieve competitive returns. Be an informed investor; as they increase the role of tech stocks in the 500 ... the downside risk you may be hoping to avoid actually increases.

By ..... Lewis Braham
"Updated April 08, 2024, 11:21 am EDT / Original April 05, 2024, 2:30 am EDT
It’s safe to say John Bogle has won. The founder of Vanguard Group was mocked early in his career for believing that a low-cost index fund tracking the S&P 500 would beat most active managers.
Almost 50 years after the Vanguard 500 Index fund’s August 1976 launch, there are no doubts. Index fund assets for the first time ever in the U.S. surpassed those of active funds in 2024’s first quarter. Just by itself, “Bogle’s folly”—as Vanguard’s original fund was nicknamed—has exceeded $1 trillion."

"But with that victory come risks. While Bogle, who died in 2019, championed indexing, he also believed in diversification. That wasn’t an issue for the S&P 500 in the past, but the index has become a victim of its own success. Its largest stocks are now so popular they have come to dominate it, and they’re primarily in the technology sector—which comprises 30% of the benchmark. The last time the index was so concentrated in tech occurred before the dot-com bubble burst in 2000. Moreover, three of the most highly valued companies in the so-called Magnificent Seven driving the market now— Amazon.com, Meta Platforms, and Alphabet —aren’t classified as tech by the S&P 500, but as consumer and communication stocks. The official tech weighting thus understates the sector’s impact, says Ben Inker, co-head of asset allocation at GMO: “The market is much more concentrated than anything we have experienced in over half a century now.”

 

[Bowsnbucks]

Food for thought ...

As SD51555 explained to Native Hunter in post 4,082, anyone moving $ from tech stocks or tech-heavy mutual funds to an S&P 500 Index Fund to diversify away from over reliance on tech stocks may not be escaping the "tech-effect" as much as they think or prefer. Excerpts from a recent article regarding the influence of tech stocks on the 500 index suggest the wealth-creating possibilities of the tech sector may be influencing/forcing the 500 index to increase their exposure to tech stocks in order to achieve competitive returns. Be an informed investor; as they increase the role of tech stocks in the 500 ... the downside risk you may be hoping to avoid actually increases.

By ..... Lewis Braham
"Updated April 08, 2024, 11:21 am EDT / Original April 05, 2024, 2:30 am EDT
It’s safe to say John Bogle has won. The founder of Vanguard Group was mocked early in his career for believing that a low-cost index fund tracking the S&P 500 would beat most active managers.
Almost 50 years after the Vanguard 500 Index fund’s August 1976 launch, there are no doubts. Index fund assets for the first time ever in the U.S. surpassed those of active funds in 2024’s first quarter. Just by itself, “Bogle’s folly”—as Vanguard’s original fund was nicknamed—has exceeded $1 trillion."

"But with that victory come risks. While Bogle, who died in 2019, championed indexing, he also believed in diversification. That wasn’t an issue for the S&P 500 in the past, but the index has become a victim of its own success. Its largest stocks are now so popular they have come to dominate it, and they’re primarily in the technology sector—which comprises 30% of the benchmark. The last time the index was so concentrated in tech occurred before the dot-com bubble burst in 2000. Moreover, three of the most highly valued companies in the so-called Magnificent Seven driving the market now— Amazon.com, Meta Platforms, and Alphabet —aren’t classified as tech by the S&P 500, but as consumer and communication stocks. The official tech weighting thus understates the sector’s impact, says Ben Inker, co-head of asset allocation at GMO: “The market is much more concentrated than anything we have experienced in over half a century now.”

Yes. Diversification is always important - as most CFP's will advise.

Bogle's idea of indexing has proven itself out over time, and has forced other fund companies to lower their expense ratio's - a good thing for investors. Most of the big fund families now have various indexes - a move Vanguard started with Bogle at the helm. Almost any CFP will advise putting some money into an S&P 500 index fund for their clients. But they also recommend diversification with other types of funds - to the point you made above. An S&P 500 index alone isn't a good long-term move. The S&P 500 has gotten overweighted in the "Magnificent Seven" - all the more reason to diversify into some small caps, real estate, bonds, dividend-paying "value" funds or stocks, international funds, etc. Each investor needs to assess their own risk tolerance, and invest accordingly.

Amazon, Meta, and Alphabet have been seen as companies that will utilize AI to further grow their profits over time - not as "tech hardware" companies - according to numerous articles on the AI boom. Recent news, however, has said that Amazon and Microsoft are making moves to build in-house chips of their own to compete with Nvidia. I guess we wait & see about those.

 

[Bowsnbucks]

With the escalating conflict in the middle east, and Ukraine attacking Russian oil refineries, oil will rise as supply gets tightened. We could off-set this by opening up drilling here, re-starting the keystone pipeline, etc. but the Libs won't let that happen. Our emergency oil reserves are now down to about 18 days.

Remember, the best way to stop inflation, is to crash the economy. Wonder what the Fed will do?

The major oil companies have had dozens of approved, green-lighted drilling permits for years, but they've been sitting on them. This has been the case through several administrations going back about 30 years. Why haven't they drilled? Those permits were approved. And as a daily reader of investing news, it's no secret that the U.S. is producing more oil & gas than it ever has. We export oil & natural gas to other countries, traveling through established pipelines to U.S. port facilities & refineries. Energy sector investors and reporters know this. The info is out there. It just won't appear on Pox, Spewsmax or other heavily biased outlets. (The sky is always falling on those outlets. Anger = money for them.) Read IBD, Forbes, Barron's, WSJ, Fortune, Kiplinger, Money, InvestorPlace, etc. to get updated stock & investment news.

As for how to stop / slow inflation ......... the Fed is doing just what (then Fed head) Paul Volker did back in the 1980's under Reagan - hike interest rates. Volker was hailed as a hero for putting the clamps on inflation. If the conservative community (and not just the conservative community!) thought Volker did a great job by hiking rates to kill inflation, why is Powell now a villain for doing the exact same thing? Politics - that's why. Numbers are numbers - they don't care about red or blue. Taming inflation is NEVER an easy or painless task. All the Fed governors look at all available data to set rate policy. Many economists now seem to think setting higher rates is needed to hammer inflation down to around 2% from the 3.7% it's at now. We're down from 9%+ when it was at it's peak. (Historically, 3.7% isn't all that bad - but you need to research years of info to know that). It's a real delicate balance trying to tame inflation without tipping the economy into recession. That's what all the Fed governors are trying to accomplish by analyzing all the data. I hope they succeed .......... for all of our sakes.

 

[Foggy47]

The major oil companies have had dozens of approved, green-lighted drilling permits for years, but they've been sitting on them. This has been the case through several administrations going back about 30 years. Why haven't they drilled? Those permits were approved. And as a daily reader of investing news, it's no secret that the U.S. is producing more oil & gas than it ever has. We export oil & natural gas to other countries, traveling through established pipelines to U.S. port facilities & refineries. Energy sector investors and reporters know this. The info is out there. It just won't appear on Pox, Spewsmax or other heavily biased outlets. (The sky is always falling on those outlets. Anger = money for them.) Read IBD, Forbes, Barron's, WSJ, Fortune, Kiplinger, Money, InvestorPlace, etc. to get updated stock & investment news.

As for how to stop / slow inflation ......... the Fed is doing just what (then Fed head) Paul Volker did back in the 1980's under Reagan - hike interest rates. Volker was hailed as a hero for putting the clamps on inflation. If the conservative community (and not just the conservative community!) thought Volker did a great job by hiking rates to kill inflation, why is Powell now a villain for doing the exact same thing? Politics - that's why. Numbers are numbers - they don't care about red or blue. Taming inflation is NEVER an easy or painless task. All the Fed governors look at all available data to set rate policy. Many economists now seem to think setting higher rates is needed to hammer inflation down to around 2% from the 3.7% it's at now. We're down from 9%+ when it was at it's peak. (Historically, 3.7% isn't all that bad - but you need to research years of info to know that). It's a real delicate balance trying to tame inflation without tipping the economy into recession. That's what all the Fed governors are trying to accomplish by analyzing all the data. I hope they succeed .......... for all of our sakes.

I think I just threw up a little in my mouth while reading YOUR take on our Government and the Fed. I hope you realize the current inflation mess that was CREATED by the POS that is the current POTUS. For Starters......Stop spending money we don't have....which will slow the increases of money supply that creates inflation. Open pipelines and stop using our strategic oil reserves to lower prices. Ooops....I forgot......your mind is made up.....I won't confuse you with any more facts.

 

[jsasker007]

The major oil companies have had dozens of approved, green-lighted drilling permits for years, but they've been sitting on them. This has been the case through several administrations going back about 30 years. Why haven't they drilled? Those permits were approved. And as a daily reader of investing news, it's no secret that the U.S. is producing more oil & gas than it ever has. We export oil & natural gas to other countries, traveling through established pipelines to U.S. port facilities & refineries. Energy sector investors and reporters know this. The info is out there. It just won't appear on Pox, Spewsmax or other heavily biased outlets. (The sky is always falling on those outlets. Anger = money for them.) Read IBD, Forbes, Barron's, WSJ, Fortune, Kiplinger, Money, InvestorPlace, etc. to get updated stock & investment news.

As for how to stop / slow inflation ......... the Fed is doing just what (then Fed head) Paul Volker did back in the 1980's under Reagan - hike interest rates. Volker was hailed as a hero for putting the clamps on inflation. If the conservative community (and not just the conservative community!) thought Volker did a great job by hiking rates to kill inflation, why is Powell now a villain for doing the exact same thing? Politics - that's why. Numbers are numbers - they don't care about red or blue. Taming inflation is NEVER an easy or painless task. All the Fed governors look at all available data to set rate policy. Many economists now seem to think setting higher rates is needed to hammer inflation down to around 2% from the 3.7% it's at now. We're down from 9%+ when it was at it's peak. (Historically, 3.7% isn't all that bad - but you need to research years of info to know that). It's a real delicate balance trying to tame inflation without tipping the economy into recession. That's what all the Fed governors are trying to accomplish by analyzing all the data. I hope they succeed .......... for all of our sakes.

Lighting a fire so that you get credit for putting out the fire seems counter productive to me. jmo

 

[Foggy47]

A little history.....

 

[bwoods11]

Giving Biden any credit for producing oil is like giving Inspector Clouseau credit for solving the crimes !

He’s been anti oil and pro EV since day one . He’s lightened up on that a bit, due to crazy high inflation during his administration!

 

[jsasker007]

Easter is now transgender awareness day in biden's world.

 

[Native Hunter]

Food for thought ...

As SD51555 explained to Native Hunter in post 4,082, anyone moving $ from tech stocks or tech-heavy mutual funds to an S&P 500 Index Fund to diversify away from over reliance on tech stocks may not be escaping the "tech-effect" as much as they think or prefer. Excerpts from a recent article regarding the influence of tech stocks on the 500 index suggest the wealth-creating possibilities of the tech sector may be influencing/forcing the 500 index to increase their exposure to tech stocks in order to achieve competitive returns. Be an informed investor; as they increase the role of tech stocks in the 500 ... the downside risk you may be hoping to avoid actually increases.

By ..... Lewis Braham
"Updated April 08, 2024, 11:21 am EDT / Original April 05, 2024, 2:30 am EDT
It’s safe to say John Bogle has won. The founder of Vanguard Group was mocked early in his career for believing that a low-cost index fund tracking the S&P 500 would beat most active managers.
Almost 50 years after the Vanguard 500 Index fund’s August 1976 launch, there are no doubts. Index fund assets for the first time ever in the U.S. surpassed those of active funds in 2024’s first quarter. Just by itself, “Bogle’s folly”—as Vanguard’s original fund was nicknamed—has exceeded $1 trillion."

"But with that victory come risks. While Bogle, who died in 2019, championed indexing, he also believed in diversification. That wasn’t an issue for the S&P 500 in the past, but the index has become a victim of its own success. Its largest stocks are now so popular they have come to dominate it, and they’re primarily in the technology sector—which comprises 30% of the benchmark. The last time the index was so concentrated in tech occurred before the dot-com bubble burst in 2000. Moreover, three of the most highly valued companies in the so-called Magnificent Seven driving the market now— Amazon.com, Meta Platforms, and Alphabet —aren’t classified as tech by the S&P 500, but as consumer and communication stocks. The official tech weighting thus understates the sector’s impact, says Ben Inker, co-head of asset allocation at GMO: “The market is much more concentrated than anything we have experienced in over half a century now.”

I've been well aware for a long time of how tech heavy the S&P 500 is. I didn't need anyone to "explain" that to me. My concern was not being in tech, because I desire to be heavily invested in tech. My concern was having too many eggs in only one tech stock - especially one that has shot to the moon like NVDA has since I bought it.

Maybe you should also have noticed my reply to him in post 4084: "Yea, I would still be tech heavy, but would be a little more insulated from the full hit of a NVDA crash."