Trump is certainly elite at timing the market retroactively. Not a terribly useful skill though.
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My view would be that the 5% match is a sure thing and sure things are never more valuable than in a financial crisis.
You can always reallocate so your 401k goes into a money market. You still get the tax break but less stock exposure.
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Whatever you do don’t reply to this with a multiquote. It bothers SenorKeeeeeeed.
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I think the market is pricing in uncertainty more than any specific guess of a future state. Is that “efficient”? Probably not but, but its possibly rational.
The tax break and the sweet, sweet employer match.
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Isn’t that foolish to not buy stocks right now though. I’m not retiring for 30 years and I don’t even look at my 401k. Assuming the world doesn’t end, I should just keep going right? I’m at like 90% equities.
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Overall I’m starting to feel like the markets are getting closer to where they should be, at least bottom for today was close - bouncing back seems wrong. DOW 18-20K seems about right. We were down 29-30% from all-time high. That’s probably pricing in a recession and the fact that stocks were overvalued to start with, right?
Italy has kept the supply chains moving, and once they hit their peak the world knows there is an end in sight with lockdowns a democratic country can take. As long as we keep supply chains moving and provide enough support to make sure rent/mortgages either get paid or frozen, we bounce back from this - we’re looking at a recession not a depression.
If we don’t do that, which is a possibility, we’re looking at a depression and then DOW 10K-15K is probably where we are headed.
At this point I’m not sure what people would need to hear to drop the markets more than 2-3% at a time. Lockdowns are expected now and should be mostly priced in. Like if NY State came out and said full lockdown starts Tuesday, except for groceries/medical, do the markets drop a lot? I mean, we expect that now right?
I assume that Wall Street still isn’t expecting hospitals to be overrun in USA #1 and they will be in all likelihood, so I expect a market overreaction to that. The Fed and Treasury will do everything in their power to keep banks and markets liquid. The vast majority of companies won’t go under from a two month slowdown, and the airlines will get bailed out.
So two questions for the group, I’ll answer first… What makes the markets drop more from here?
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Going full lockdown in major cities will be a small dip, but it’s somewhat priced in IMO.
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Full lockdown nationally for more than a month, but it’s somewhat priced in IMO.
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Hospitals being overrun, but it will be an emotional reaction more than anything else. Could be a big dip, though.
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A run on liquidity. Seems very unlikely.
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Companies announcing mass layoffs or furloughs, a risk of this has to be priced in, right?
Second question, what makes the markets go up from here?
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European countries hitting their peak in the curve and starting to see daylight on the other side.
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News on a vaccine/cure that speeds up the timeline to less than 18 months away.
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US regions/states/cities hitting their peak and starting to see daylight on the other side.
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A bill to address the two-month shutdown with a strong enough social safety net that we see a pause and resumption in the economy and the impact on the year is only the two-month pause, as opposed to a pause → 25% unemployment → depression.
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A big stimulus bill, which is sort of the same as #4.
Standard advice is no it is not foolish.
If the DOW is really worth something like 5k though like the Peter Schiff’s of the world have been saying since the 80s, well…
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The DOW probably should have tanked the moment Donnie Daycare won and stayed down until he left. If they were really pricing in all the horrible damage he could do. It’s not like he’s even a smart fascist.
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Oh I would buy stocks for sure. Sorry for the confusion. My point is that your priority should be to get that employer match. Even if someone was terrified to participate in the markets right now, they should still stay in the 401k to get the match.
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They thought (correctly) that they could get favorable tax policy from Trump even though he’s an imbecile.
I think continuing to get money into your account is wise and if it’s not higher in 30 years than it is today, there’s a pretty good chance the USD isn’t doing so hot and your savings for devalued a ton anyway.
But I think now is a good time to have a 6 month emergency fund. Maybe try to put a little less into the 401k and build that fund up, but balance the two?
Also what you need for an emergency fund may vary based on what you do in a worst case scenario? Can you move back in with the folks for 3-6 months? Cut your living expenses dramatically? Etc.
We often think of emergency funds in terms of current living expenses, but in reality before we run out we’d switch to ramen noodles and cut our caloric intake, we wouldn’t be driving and using gas, etc…
So in a real emergency maybe a 5 month fund lasts 6.5 months.
I feel like I won’t get laughed at about this question for once.
Let’s say I would like a big chunk of my current cash in Euros instead of dollars because I am worried about the dollar crashing relative to the Euro. I do still plan to spend about 3 years driving my car around the world when all this blows over. IE - if the dollar tanks I won’t just be spending my money in the US - so I will feel it.
Is it basically the same thing as holding Euros if I put some of my cash in this? https://www.invesco.com/us/financial-products/etfs/product-detail?productId=FXE
The Invesco CurrencyShares® Euro Trust (the “trust”) is designed to track the price of the euro, and trades under the ticker symbol FXE. The euro is the currency of 19 European Union countries. The Fund is rebalanced quarterly.
It’s like renting your spare bedroom to a pyromaniac. Sure you get some extra cash flow, but the risks.
I think it’s more like you can rent to a pyro for $1500 a month or a normie for $1000 per month. I wouldn’t avoid renting altogether because you’re scared of the pyro, that’s just throwing away $1000 per month. Declining an employer match because of fear of the stock market would be the same.
Some guy who’s the equity head of Lazard Asset Management just said they think, based off Hopkins tracker, there are 3,800 official cases and this projects to 10K to 20K actual cases in the US. He thinks ICU’s won’t be overrun for 33 more days.
Sounds like the market is not pricing this in right, if he’s anywhere near the consensus.
It’s gotta be more like 40K to 80K actual cases, being somewhat optimistic, and it’s concentrated regionally so those areas are like 7 days away from blowing through capacity.
Sounds like exactly the kind of guy I want to be hearing medical advice/predictions from.
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