“Millennials” is an extremely wide range in this context.
On one end you have some who basically had very little time to accumulate anything pre-COVID, and basically their whole investing lives has been a “good buying opportunity”.
On the other end you have some who have lived fully through two huge market pullbacks, and are hoping that if things go well the next decade in the market, that they have fewer working years left than they’ve already put in.
Maybe, just saying be prepped for volatility and if someone thinks they’d sell down 30 percent or w/e might be time for some caution.
How would the market tanking be good for millenials? Or instead, how would millenials and gen Zers not be the most negatively affected if the market tanks?
If you take the view that whatever happens in the next few years won’t impact where the market is in 20 years, then a crash is a golden buting opportunity.
all these buy and hold people are funny to me 66 to 82 the damn market went down 2/3rds you got your money back in 1995
1929 took 1956 before you got your money back
2000 you didn’t get it back until 2013
if this crashes, I don’t think we’re getting it back for quite some time unlike say 2008 I guess that was 5 years
The low of 1982 was lower than it was in 1952, timing matters a lot more than buy and hold strategies.
Feels like we’re going down a bit to me anyway.
All of this assumes you shoved at the top.
Looks like you’re looking at inflation adjusted, which doesn’t really speak to wanting to stash your cash in a pillow
and ignoring dividends, which were bigger in that period because stock buybacks weren’t really a thing back then.
Assuming we are discussing an 08’ or greater level of crash, the calamity that would ensue would specifically target and hurt the low level/entry - high leveraged businesses that younger folks are forced to configure in this world and are the ones getting wiped out first before the high cap companies with excess cash reserves. That also ignores those affected by the loss of those companies as well as new barrier to entry becoming more difficult as the larger companies are able to continue to monopolize and shut out competition.
I am not sure “buying opportunity” can make up for that considering we’ve witnessed the greatest buying opportunity that is bitcoin that still managed to cause >80% of millenials to lose money investing in it at a time when disposable income was at its highest.
I don’t think it should be taken for granted that things will come back from a huge crash.
Japan agrees with you.
Yet in the vast majority of cases trying to time the market is a losing strategy, so there’s still nothing to do but continue to buy and hold.
Last year we had an unprecedented flow into stonks/crypto/etc. Like years and years worth all at once, that ain’t happening this year, so how isn’t there going to be a pull back?
Like it’s just hard to believe logically buying most stonks now is anything other than a bigger risk than reward.
I just realize I said something similar to this about something else not long ago in a reply to the same person…
I don’t disagree with you, but similar logic has been proffered like every year for the past decade, and if you decided to cash out up to now based on that logic, it turns out it wasn’t the right play.
don’t think there was like 3 years worth of $ in one year like last year tho
I’m not arguing long run on this one, but a short one.
That remains to be seen.
I’d agree trying to time the market is a fool’s errand, but I keep trying.
One thing in the back of my mind, if (or more likely when) the GOP takes the house and Senate this fall, they will do everything in their power to wreck the economy going into 2024.
Well, hold on, a market crash doesn’t guarantee an economic crash. Essentially what’s happened is the stock market has decoupled from the economy. Stocks that are historically supposed to be worth $X are worth like $3X to $5X. So shareholders have gotten way richer than they should. But if that stock drops back down to $X, what happens economically?
Like in this scenario the profits are still the same, so the company doesn’t have to lay a bunch of people off or cut salary. They’ll be under shareholder pressure to increase margins, perhaps, but they’ll be able to look at it and say, “I dunno man, all our numbers are the same, seems like the company is just as good now as it was a year ago.”
Essentially, there are a lot of people who’s stock portfolio says they’re worth $5X but the reality is it’s worth $X and sooner or later it’s going to have to correct to that… Or the currency will have to be devalued enough that it takes care of the issue.
We will still go into recession.
What do you think happens to the California economy, as an example, in this scenario where capital gains taxes from recent years are are gone, the Federal government isn’t there with fiscal stimulus, and the Fed isnt just brrrrrrrrr with the printer?
States have to more or less balance budgets. In a world where the Feds aren’t gonna step in with money (and they aren’t after 2022), the wealth effect and reinforcing state pullbacks will force a recession.
Not to mention the massive list of companies that don’t generate cash flow and are heavily reliant on cheap money from bullish investors to keep their business plans going/people employed.
EDIT: we are already setting up for a nice head start with the Omicron headwinds, cutting off the child tax credit, and teeing up student loans payments for May at the start of a tightening cycle.
That’s possible to trigger a recession, I guess. I would assume they cut a lot of discretionary spending and increase some income taxes, if they have to. I also have my doubts as to how much they actually bring in off cap gains taxes, given how hard the wealthy are working to avoid them. From what I can tell, it’s about 11% of the state budget.
Most states also aren’t relying on cap gains taxes as much.
Some of them could definitely go out of business. But like if their whole business plan requires their stock to be overvalued by 300-500%, then, they probably don’t belong in business anyway. If what they’re doing does actually generate value, they’ll get bought up.
True. But if the big one happens millennials are turbo-fucked no matter what investing strategy they use. Unless they want to become gold bugs or hoard bullets.
So they might as well play the hand as if the money printer will keep going brrrrrrr for a few decades.