What is your strategy to protect your money?

Has your mindset changed since the election?

Are you nervous with the trillions the government is spending on stimulus?

We're low 50's and have majority in growth equities.

At least wait until the next round of stimulus hits the market!
Joking but not really. We're not the only major economy that's using the pandemic as an excuse to print money, and despite it (or because of it) the USD remains the standard. I think we'll be alright as long as we stay in USD-based equities, the only exception being if you're considering putting the money into land or your retirement home.

GenericAggie said:

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What is your strategy to protect your money?

Has your mindset changed since the election?

Are you nervous with the trillions the government is spending on stimulus?

We're low 50's and have majority in growth equities.

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Selling because of a feeling is not a sound financial strategy.

Obligatory... bitcoin.

VIX

hedge said:

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VIX

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Obligatory username checks out

Use this as a chance to diversify your portfolio. Specifically, take a portion and put towards something you and your wife feel is more secure, more stable. The action will alleviate your feelings of anxiety and (hopefully) give you a sense of security knowing that if one investment strategy does not pan out, another may. The sense of financial security is especially important for physiological reasons - minimization of stress, healthy sleep.

Yes, I would simply assess your allocation strategy and diversity to a less risky position if you are that concerned with it. What's your horizon for retirement?

Do you think stocks will be higher priced or lower priced than where we are now in ten years?

After watching the banking crisis in 07-09 and the covid shutdowns, I've realized the government refuses to let markets fail. They can't afford for baby boomers to lose their retirement portfolios.

Tell your wife to turn off the news. Seriously.

SoupNazi2001 said:

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Danwell Home said:

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After watching the banking crisis in 07-09 and the covid shutdowns, I've realized the government refuses to let markets fail. They can't afford for baby boomers to lose their retirement portfolios.

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Again it's not that easy or simple. Their will be ramifications to the government and Fed's monetary policy eventually but no one can predict when or what.

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Yes. A friend told me the other day not to even consider P/E ratios anymore. Just stay in the big winners and buy more like everyone else in the bigs with the most money flowing in.

But market sentiment can and will change quickly.
Anybody remember a few years ago when our stock market took a big hit when it was worried about the PIGS?
Yeah that's right Portugal, Italy, Greece, and Spain and all of their debt problems? Well how are they doing today? And how about the rest of the countries in the world? We are currently a pig.

Just a matter of when the story changes. Could be days, months, or years but it will be relative.

Of course and I agree with you. I'm just done fighting it after the past 15 years. I'll keep riding it up and I'm confident if/when it does pop, I'll still have a higher return than exiting the market years prior. If you're scared but an apartment complex.

Perhaps move a portion of your growth stocks into defensive stocks?


..but the fed printer is still on, so i wouldnt sell out.

This is not hard. Take 2% of your portfolio and buy 2022 SPY 320 puts. Best case you lose that 2%, worst case you'll have a 10X gain on that 2% and you won't feel as bad staying long.

SoupNazi2001 said:

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Look no one really knows when it will end but I think we are in a massive bubble. A large % of the population has been decimated by the pandemic and yet stocks and real estate are at all times highs. Much of that demand will never return to previous levels. People are justifying that everything these days is good for equities and slowdowns will just be met with massive stimulus so it doesn't matter anymore. When things that used to matter to stocks, don't anymore, you probably should be more worried about risk than return.

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I don't think all sectors are in a bubble. Stocks still correlate to revenues and some of the hot stocks today do have impressive revenue growth.

If you can't stomach a big draw down it wouldn't hurt to reduce exposure to some of the big growth stocks by going with total stock index ETFs or using sector ETFs to manage exposure. Can always switch some to bonds too.

Individual Credit card debt fell off a cliff
Personal savings is up
6 trillion in money markets.

Tha in normal times is Rocket fuel.

The shift this pandemic has caused, has moved next gen technology and innovation forward by ten years, and we aren't going back to the old ways of doing things

So what has changed.

The way you shop Amazon
The way you get your food HEB
The way you visit the doctor. Teledoc
The way you are entertained. Rocky, Disney+ Nflx YouTubeTv. Appletv HBO max
The way you communicate. Facebook Twitter google
Soon the way you drive. Ev
The way you transfer money. PayPal Venmo cash app. Square
The way you borrow. Lending tree rocket mtg
Battery tech.
Energy storage
Clean energy
Artificial intelligence
Robotics and automation.

Now, instead of selling out......use your head, think it through.

The return you miss you can't get back.

It's a parody

Change name to Fransica and apply for Biden's loans.

Yes some stocks do correlate to revenues... mainly the ones that benefited from the pandemic. However a vast majority do not. Take a look at the chart of the S&P stock price vs earnings from 2010-2020. It is absolutely terrible. Year after year the earnings are flat or negative while the stock price SKYROCKETS. As we now know... it happened for two reason. The Fed and corporate buybacks fueled the S&P for over a decade. We saw how they worked out for the airlines during the pandemic. The airline industry used 96% of the free cash flow on corporate buybacks. It fueled their stock prices and gave huge bonuses to execs when the stock price hit certain milestones. By doing that it left them unprepared for a hiccup in the market and it required for the Fed/treasury to print more money (more debt) to bailout/payoff existing debts. What a crappy system we have. We aren't even close to being a capitalist society. Socialism for the rich and capitalism for the poor. While large companies get bailed out our very own mom and pop shops go out of business. What a country we have.

Outdoorag011 said:

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Yes some stocks do correlate to revenues... mainly the ones that benefited from the pandemic. However a vast majority do not. Take a look at the chart of the S&P stock price vs earnings from 2010-2020. It is absolutely terrible. Year after year the earnings are flat or negative while the stock price SKYROCKETS. As we now know... it happened for two reason. The Fed and corporate buybacks fueled the S&P for over a decade. We saw how they worked out for the airlines during the pandemic. The airline industry used 96% of the free cash flow on corporate buybacks. It fueled their stock prices and gave huge bonuses to execs when the stock price hit certain milestones. By doing that it left them unprepared for a hiccup in the market and it required for the Fed/treasury to print more money (more debt) to bailout/payoff existing debts. What a crappy system we have. We aren't even close to being a capitalist society. Socialism for the rich and capitalism for the poor. While large companies get bailed out our very own mom and pop shops go out of business. What a country we have.

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Yep - it's certainly far from perfect. In fact, I'd say our capitalistic system is the second worst in the world. Unfortunately, all the other systems are tied for last.

By the way, I tend to agree on your "corporate welfare" rant - a core tenet of capitalism is that business owners take a lot of risks (including bankruptcy), and deserve the rewards for taking this risk. Whenever the government "tinkers" with either side (risk or reward) of this equation, capitalism suffers. Yes, I'm an avid free-marketer, and sometimes you just have to let businesses go under if they're no longer viable. That said, you also can't begrudge them "windfall profits" legally obtained in the good times.

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What a crappy system we have. We aren't even close to being a capitalist society. Socialism for the rich and poor on the backs of the middle class.

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FIFY

Honestly I could think worse times to sell off. I think the past year has been mentally taxing on almost everyone and if taking a timeout from the stock market might contribute to some mental healing, I am sure you'd be cashing in on a really nice run in the market. Sometimes things in life need to be handled differently than just following conventional wisdom or what a textbook says. To be further up front, I sold a bunch back about 6 weeks ago right before the election - I have missed out on some modest gains since then but I'll be honest that it's been nice to not think about my exposure (or lack there of). I am not trying to time the market because it's just not really possible and I'm not smart enough to try.

Gold and Silver.

YouBet said:

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Yes, I would simply assess your allocation strategy and diversity to a less risky position if you are that concerned with it. What's your horizon for retirement?

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I don't know. 5 years. I have enough right now but losing 1/2 because of the trillions we're spending would suck.

I don't see how we avoid some big inflation soon. So you'd be a fool to be in cash when that hits.

I've been shifting out of individual stocks and index funds into some actively managed mutual funds. For one, my stock picking and timing seems inferior to the SP500, and I'm hoping the active mgmt will do a little better when we start getting into a correction.

chris1515 said:

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I don't see how we avoid some big inflation soon. So you'd be a fool to be in cash when that hits.

I've been shifting out of individual stocks and index funds into some actively managed mutual funds. For one, my stock picking and timing seems inferior to the SP500, and I'm hoping the active mgmt will do a little better when we start getting into a correction.

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Good luck. History says it won't, but I will be genuinely curious to see your results.

Be sure to post that Robinhood link once he shares it. I too would like to try his buy low and sell high strategy

GenericAggie said:

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YouBet said:

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Yes, I would simply assess your allocation strategy and diversity to a less risky position if you are that concerned with it. What's your horizon for retirement?

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I don't know. 5 years. I have enough right now but losing 1/2 because of the trillions we're spending would suck.

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Well, you may at least want to look at your current allocation mix if your horizon is that short. Most of the pundits say it's going to go up for the next year or so but who knows past that.