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Yeah, it’s the kind of logical loop that makes market timing not work. When everything is unattractively priced, the best strategy is to just stay invested, when the market crashes stay invested, and when the market rebounds stay invested. The quiet power of hands off investment strategies is that it gets you through periods exactly like this.
I think the only real exception would be if you literally run up your account so much that you can sell the whole thing and live off it for life.
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Can one of the smart folks here give me a little primer on whether inflation is “really” at 6.2% and what that means? That seems bad to me, but I imagine that I just don’t really understand what that number reflects.
Essentially what it means is that there is a certain set of products, called a “basket of goods,” for which the combined price is now 6.2% higher than it was last October.
Another way to think about it is that $100 today doesn’t buy as much stuff as it did a year ago. If the “basket” used to measure inflation is similar to what you actually buy, you would now have to spend $106 to get the same amount of stuff that you spent $100 on last year.
As to how much this matters to you, that depends in part on how similar your purchases are to the inflation basket. If you look at the more detailed statistics, some categories have a lot more inflation than others: energy prices are up 30% year over year, and used car prices are up 26%, while food prices are only up around 5%.
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It looks like most of the huge gains were from oil/fuel (the bottom had dropped out of oil prices from covid) and used cars (chip shortage).
I don’t know whether restaurants are in the basket, but anecdotally those are up 20-30% too.
Rents are also legitimately up 15% or more in most markets. That’s real and unlikely to change.
There are advantages to having a little old lady as a landlord. She was in the habit of increasing my rent $10 every renewal. I was surprised when the last renewal was +$20.
Maybe you can go on CNN and tell a sob story about how Joe Biden’s Inflation Crisis is ruining your life.
That would involve saying mean things about a capitalist.
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Possibly. Traditionally this would have the Fed raising rates at some point in the not to distant future. However I am not sure they can do that to any meaningful extent without bringing the whole house of cards down.
I guess just make the millennials and Gen Z bear the cost. Who could have seen that coming.
The “nail in the coffin” was Joe Biden winning the nomination.
Meh, big swings are not a huge deal for a super early stage company with literally no revenue yet. You get these crazy bounces all the time for no-name companies with tiny market caps of [checks notes] $100 billion.
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Or buy more milk. Around 12 gallons a week is usual I believe.
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It’s interesting that in Australia rent is down in real terms, though a huge number of our renters are international students (education is our 2nd biggest industry) who are stuck in China during covid so demand has plummeted.
Bad news guys: $10 million is the new $1 million
If you spend time on bogleheads, you’ll find that even 10 million is not enough. Plenty of them would be scared to death of retiring on 10 million at 37.
@Riverman , I’m sure can confirm this.
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At 52 my equation gets easier by double every year (one more year of saving money, one year closer to death).
As long as you’re willing to eat the principle at some point - and don’t assume you’re going to live to 95 - you can squeeze by on a lot less.