stocks and economics continue to diverge

[djAdvocate]

Feb 5, 2014 8:59:55 GMT -5 @gdgyva said:

probably the other difference is most of my investments i do myself

not at all.  i have done all my own investments since the market crashed in 2001.  prior to that, i also did them myself, but i primarily used mutual funds, so that doesn't really count.

from early 90's through 2006, i like most people, just owned mutual funds for the majority of everything i had

in 2006, i really got more interested in investing, and really started reading a lot

i sold most of my mutual funds....i thought i could do better myself, and didnt like the fees i was paying for someone to do what i thought i could do for free

i have averaged just under a 20% return over that 6 year period......including the 08-09 disasters

20%/6, or 20% x 6?

right now approx 25% in in mutual funds (intl funds, bond funds, and etf's that i think will do well)

the rest i actively invest.....in a basket of no fewer than 10, and no more than 20 individual equities

i have had a lot of success finding beaten down companies, buying low and holding them

some of my big winners include MTW, GE, MAS, WFM, SYY

when my average share purchase price for GE is $ 9.xx and the stock is 24-25 a share, a correction back to $ 20 doesnt bother me

i wasn't talking about you, and i wasn't talking about GE.  i was talking about investing in a market that is far more likely to go down than up over the next 3-5 years.

i read every quarterly report from every company i own, and every company i want to buy

i stopped doing that in 2010, but i plan on getting back to it.

i am willing to spend my time and energy to make the best possible decisions i can make

i understand that as rates rise, equities MAY NOT hold up.....

i will adjust as the market dictates.....

if interest rates rise, equities WILL FALL.  as i say, i hope you have more than 5 years until retirement.....

[Deleted]

have averaged just under a 20% return over that 6 year period......including the 08-09 disasters

20%/6, or 20% x 6?


average return per year is 19.15% 

my best year was 2011 when the number was 65.23% for the year

2014 is down.....but i dont believe it will stay that way

as far as retirement, i am right at 5-7 years away (havent decided exactly when yet)

but i will keep my strategy through retirement, and SLOWLY move from equities to bonds as i age

i dont forsee going below 50% on equities.....because so many of them are blue chip conglomerates

even in down years, their value will only decrease so much

[djAdvocate]

Feb 5, 2014 10:45:08 GMT -5 @gdgyva said:

have averaged just under a 20% return over that 6 year period......including the 08-09 disasters

20%/6, or 20% x 6?


average return per year is 19.15%

you are an expert, dude.  that is really good ROI.

my best year was 2011 when the number was 65.23% for the year

2014 is down.....but i dont believe it will stay that way

as far as retirement, i am right at 5-7 years away (havent decided exactly when yet)

but i will keep my strategy through retirement, and SLOWLY move from equities to bonds as i age

i am sure you know what to do.  but here is the rule of thumb:

The old rule of thumb used to be that you should subtract your age from 100 - and that's the percentage of your portfolio that you should keep in stocks. For example, if you're 30, you should keep 70% of your portfolio in stocks. If you're 70, you should keep 30% of your portfolio in stocks.

i dont forsee going below 50% on equities.....because so many of them are blue chip conglomerates

even in down years, their value will only decrease so much

like i say, i have less than 10% of my investments in equities.  but if i had, say, over 50%- and i was 5 years from retirement, i would be @ about 40% equities right now.  i know, i know- fixed income stuff is crappy.  have you looked at some of the foreign bond markets?

[Lizard King]

Talk about an appreciating asset.

[djAdvocate]

hahahaha.  yeah.  he is always a good investment. 

[Deleted]

i do have about 15% sitting in a mixed international fund....bonds and blue chips (part of that 25% i let others control)

and it also has a corporate bond fund in it......which has done okay

again...i am not a raging bull.....some of the market is definitely overpriced

but when there are few alternatives, the market even if it is overbought, is still the only real game in town

and even in a down market my yield on my portfolio is at 2.2% right now (just the equities i control)

[djAdvocate]

Feb 5, 2014 11:38:07 GMT -5 @gdgyva said:

i do have about 15% sitting in a mixed international fund....bonds and blue chips (part of that 25% i let others control)

and it also has a corporate bond fund in it......which has done okay

again...i am not a raging bull.....some of the market is definitely overpriced

but when there are few alternatives, the market even if it is overbought, is still the only real game in town

and even in a down market my yield on my portfolio is at 2.2% right now (just the equities i control)

here is my point- one last time.  you are free to disagree with it.  you already have.  but i will make it again:

i think the odds are extremely high (approaching 100%) that yields are going higher.
when that happens, it will draw "risk capital" away from stocks, into safer investments.
since the market is generally overvalued, it will correct.

i am really confident that this will happen.  the only question is: when?

the fed has already started easing QE.  interest rates are responding.  they are still too low to attract capital.  how long will that last?

[Deleted]

my guess till they top 4.5% on the 10 year

and that is at least 2-3 years away (i think)

[djAdvocate]

Feb 5, 2014 13:13:12 GMT -5 @gdgyva said:

my guess till they top 4.5% on the 10 year

and that is at least 2-3 years away (i think)

that's where we differ.  i think it will be there before YE2015.

[Phoenix84]

Hard to say.  "Macroeconomic data" is a pretty broad term.

[Lizard King]

"Scarlett Johansson," on the other hand, is just a pretty broad.

[djAdvocate]

Feb 5, 2014 15:57:17 GMT -5 Phoenix84 said:

Hard to say.  "Macroeconomic data" is a pretty broad term.

indeed.  i tried to track down this index, and FAILED to do so.

i think it is probably correct.  however, without any data to back it up, it is just my gut that says so.

[Phoenix84]

I'm not saying the data is wrong, it's probably right.  But it's hard to have a meaningful discussion when we don't know half the equation.  I'm assuming it's some sort of index that tracks economic factors like wage, consumer confidence, spending, or some combination thereof.

I do think part of the problem is employers are slow to hire.  I think some employers realized they don't need as many staff as they thought they did pre recession.  In other words, some positions lost will never get filled.  And I'm sure there is some anxiety over the new healthcare regulations.  Such conditions may mean that fewer Americans are in the workforce, which may affect "macroeconomic data."