Recession

Piobaire · Jan 18, 2008

Originally Posted by kwilkinson

Speaking of the ups and downs of the market..... what does someone who is retiring in 5 years to do? This isn't me of course, but i think it's interesting. Their 401(k) would have looked awesome during the 90's, and they'd have been stoked, but now they plan on retiring when the economy is bad... I really don't know too much about the subject... but would they be forced to work and not retire until the next bull?

I would not worry about it too much kwik. Off the top of my head, I think every index is up a minimum of 60% since Y2K.

kwilkinson · Jan 18, 2008

Originally Posted by Piobaire

I would not worry about it too much kwik. Off the top of my head, I think every index is up a minimum of 60% since Y2K.

I'm not worried... I have 45 years til I retire lol. I just always kinda wondered about that, and saw an opening. Thanks though!

dkzzzz · Jan 18, 2008

I see.
Almost all joking aside.
I see the same picture every time recession is around the corner:

When major networks start inviting "Analysts" to weight in on a possibility of recession or "health of the market", as they usually phrase it and when such analysts basically say" Folks, don't panic, the only way to win in a market is to stick with it long term, etc" That is the best indicator for me to bail out of all stocks.

It is the only reliable indicator of coming recession.

itsstillmatt · Jan 18, 2008

Originally Posted by Piobaire

I would not worry about it too much kwik. Off the top of my head, I think every index is up a minimum of 60% since Y2K.
well, the S&P500 is down about 80 points since 1/1/00.

Connemara · Jan 18, 2008

Originally Posted by Piobaire

I would not worry about it too much kwik. Off the top of my head, I think every index is up a minimum of 60% since Y2K.
+1. If they have participant plans, they would have been able to choose what funds comprise their current 401(k). Likely they invested in fairly safe funds (index, moderate growth) so there's nothing to worry about.

Piobaire · Jan 18, 2008

Originally Posted by dkzzzz

I see.
Almost all joking aside.
I see the same picture every time recession is around the corner:

When major networks start inviting "Analysts" to weight in on a possibility of recession or "health of the market", as they usually phrase it and when such analysts basically say" Folks, don't panic, the only way to win in a market is to stick with it long term, etc" That is the best indicator for me to bail out of all stocks.

It is the only reliable indicator of coming recession.

I am not selling my current 401k positions, I had taken conservative positions last summer, but since last November I have had all contributions going into a money market. I did the same with my wife's account too. Now the trick is to figure out when to put them back into play with the accumulated cash.

Eustace Tilley · Jan 18, 2008

Originally Posted by dkzzzz

It is the only reliable indicator of coming recession.

No - that is incorrect. Take the example of 1987 - Black Monday happened and y-o-y stocks were down. By your estimate, that means a recession should have happened. But the GDP grew by ~2% that year.

You are confusing stock market performance with GDP growth. Reread Matt's post on the last page - he is correct in his analysis and he explains it well.

Most economists believe that the unemployment rate is the most accurate indicator of a coming recession. But's its not perfect either. If there was a perfect indicator, then dozens of fund managers with access to strong metrics would be making billions everytime a recession happened.

Violinist · Jan 18, 2008

Originally Posted by dkzzzz

I see.
Almost all joking aside.
I see the same picture every time recession is around the corner:

When major networks start inviting "Analysts" to weight in on a possibility of recession or "health of the market", as they usually phrase it and when such analysts basically say" Folks, don't panic, the only way to win in a market is to stick with it long term, etc" That is the best indicator for me to bail out of all stocks.

It is the only reliable indicator of coming recession.

I remember 2 years ago when the stock market had a rocky month or two (my trust lost quite a bit of money), they were all trumpeting recession, and the last year proved to be huge so even though it's probably true, the united states has a pretty stable economy, and when it's recession time, it's time to buy. Look at it as a positive thing. If you're a student without much money to invest, then a recession is perfect for you. Look for a good company with great fundamentals and watch your money grow when investors regain their confidence, and of course, this subprime bullshit shows signs of getting better.

Piobaire · Jan 18, 2008

Originally Posted by Violinist

I remember 2 years ago when the stock market had a rocky month or two (my trust lost quite a bit of money), they were all trumpeting recession, and the last year proved to be huge so even though it's probably true, the united states has a pretty stable economy, and when it's recession time, it's time to buy. Look at it as a positive thing. If you're a student without much money to invest, then a recession is perfect for you. Look for a good company with great fundamentals and watch your money grow when investors regain their confidence, and of course, this subprime bullshit shows signs of getting better.

Are you saying you are an honest to goodness trust fund baby?

Violinist · Jan 18, 2008

Originally Posted by Piobaire

Are you saying you are an honest to goodness trust fund baby?

Anyone who says they are a trust fund baby on the internet is most likely lying.

No, I'm not talking about being a trust fund baby. That was just my only experience with the market when I turned 21. It is for education and sensible things, not for a diamond studded cell phone or bullshit like that.

I mean, that was in one of the best funds in Canada (a growth fund). Most of the money was invested in american companies, and with the growing strength of the Canadian dollar, it was losing money. Not too much later, the losses were recovered and the market shot up like 1400 points.

A lot of people were doing poorly that month, and the CNN analysts were all going crazy saying that there would be some apocalyptic recession. That's also when the crazies hit the street and started telling everyone to hoard gold.

Gio · Jan 18, 2008

Originally Posted by Violinist

I remember 2 years ago when the stock market had a rocky month or two (my trust lost quite a bit of money), they were all trumpeting recession, and the last year proved to be huge so even though it's probably true, the united states has a pretty stable economy, and when it's recession time, it's time to buy. Look at it as a positive thing. If you're a student without much money to invest, then a recession is perfect for you. Look for a good company with great fundamentals and watch your money grow when investors regain their confidence, and of course, this subprime bullshit shows signs of getting better.

Well yeah, thats pretty good advice. Carlos Slim, richest man in the world (they say so at least) bought a ton of companies when the country (mexico) was broke, in the eighties... It worked for him at least...

But how much time are we talking about? We all agree about the recession, but how much will this take? And well I have another question, the results in the election are going to affect any of this?

Violinist · Jan 18, 2008

Originally Posted by Gio

Well yeah, thats pretty good advice. Carlos Slim, richest man in the world (they say so at least) bought a ton of companies when the country (mexico) was broke, in the eighties... It worked for him at least...

But how much time are we talking about? We all agree about the recession, but how much will this take? And well I have another question, the results in the election are going to affect any of this?

I don't know nearly enough about economics to tell you how long. I would have no idea where to even start finding out.

I think that a hawkish candidate like Hillary Clinton, McCain, or Giuliani would make oil prices unstable and would probably create a bit of turmoil. If people are afraid of a war with Iran, which is most likely with the above three, then yes, it might affect the market. If Obama were elected, you'd probably see some confidence between people are convinced that he can be like this savior of the United States. Hillary wants to have free healtcare which will require further taxing, and I think retail would suffer even more than it has in the past, so I think investors will be scared off there too.

dkzzzz · Jan 18, 2008

Originally Posted by Violinist

I remember 2 years ago when the stock market had a rocky month or two (my trust lost quite a bit of money), they were all trumpeting recession, and the last year proved to be huge so even though it's probably true, the united states has a pretty stable economy, and when it's recession time, it's time to buy. Look at it as a positive thing. If you're a student without much money to invest, then a recession is perfect for you. Look for a good company with great fundamentals and watch your money grow when investors regain their confidence, and of course, this subprime bullshit shows signs of getting better.

That is true. The trick is to know enough about market to jump on oversold stocks.
I am too lazy to research around internet , but I am sure there are genuine bargains to be had among battered banks.

Violinist · Jan 18, 2008

Originally Posted by dkzzzz

That is true. The trick is to know enough about market to jump on oversold stocks.
I am too lazy to research around internet , but I am sure there are genuine bargains to be had among battered banks.

I put most of my money into index funds. We know that for just about any but the most experienced investor, that's the absolute best thing to do with your money. Buy it up when its cheap, wait for the market to return. Obviously it's a long holding kind of thing, but it couldn't hurt to start out strong.

dkzzzz · Jan 18, 2008

Originally Posted by Violinist

I put most of my money into index funds. We know that for just about any but the most experienced investor, that's the absolute best thing to do with your money. Buy it up when its cheap, wait for the market to return. Obviously it's a long holding kind of thing, but it couldn't hurt to start out strong.

So ,what you are saying is: you are lazy too?

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