The markets are on a cliffs edge...

[WarGamer]

I was lucky... made $$ with SPY put options purchased at open this morning...

But I'm seeing things that are truly disturbing.

A number of stocks have broken previous support levels and might drop precipitously now that those levels are broken.

Tech is a mess. NVDA, 52 week low hit today. TSM, the Taiwanese chip powerhouse, 52 week low hit today. AMD, 52 week low hit today.

Banking... Goldman Sachs, down 24% in the last year... JP Morgan, sitting at a 52 week low. Bank of America, Citigroup and Morgan Stanley sitting near 52 week lows... banking monster BlackRock down 35% in a year.

And this is just the start...

The Fed Rate folly is just starting to take a bite out of the market.

There will be another 75bps increase in November which will translate to 8% mortgage rates by years end and make auto loans more expensive.

And then the real implosion happens.

When mortgage rates are prohibitively high, the real estate market crashes. Hard. Like 2008/9.

I'm just telling everyone... don't believe the sweet nothings being whispered in your ears... trouble is coming.

Oh and I didn't even mention the Ukraine War or oil prices.

[marybourg]

1. And so we should . . .

[WarGamer]

3. Not being a financial advisor...

If you're IN the market, don't sell. It'll come back, eventually.

If you can avoid it, postpone large financed purchases right now.

If you're able... try to save and build some savings.

[marybourg]

5. That is a better post than your OP.

[WarGamer]

6. Sorry... the state of the market has me a bit frazzled.

I've been a daily trader for a few years and watch this stuff closely.

[marybourg]

9. There's your problem. Turn off the

computer. Find a better hobby/vocation. Smell the roses.

[WarGamer]

12. I do both... but a significant part of my life is the market.

Early in COVID I kinda realized that after being squeezed out of my job and made an IC I decided it's as good a time as any to just retire.

And it allows me to spend a full 6-8 hrs a day on the markets.

But I have other interests, due to my former career, my passports look like Jackson Pollock artwork so I've seen and done a lot.

Some time around New Year I'd like to go to Cambodia to Angkor... I've been to Bangkok an worked on/off in China for years but have never been.

[former9thward]

31. You will enjoy Angkor.

I have been there 3 times and enjoyed each trip. Cambodia has largely recovered from the Pol Pot era although some scars remain.

[WarGamer]

60. I can't wait!!

[we can do it]

7. Thank you. Good lord.

[Shermann]

13. Postpone large financed purchases until...rates are higher?? Seems contradictory. nt

[WarGamer]

15. Rates will head down... as soon as the Fed realizes they crashed the economy.

[BannonsLiver]

11. Not take financial advice from random people on the internet.

[DBoon]

29. my definition of a stock market bubble

When the person in the cubicle next to me is bragging about how much money they made on their stock picks.

[Probatim]

40. 2008/09 - strippers on fox news talking about money they made buying real estate.

Actual strippers. Not the bobble heads they hire.

I knew then that it was time to exit. It's similar to what you're saying about your fellow cube rat.

My only comment about WG's OP is that he's expecting the market to go lower - it's quite possible given the Fed's statements about controlling inflation (or as I see it, cutting off your nose to spite your face), the market will go lower. Trouble is - market timing is really tough.

[A HERETIC I AM]

54. " market timing is really tough."

As the old saying goes, like trying to catch a falling knife.

[ashredux]

39. LOL. No shit

[Joinfortmill]

2. Hold on tight.

[WarGamer]

4. precisely.

[Alpeduez21]

8. The fed is run by dumbasses

Who probably still think US currency is backed by gold. There actions certainly reflect old thinking. Some one explain how raising the rates making housing even more unaffordable keeps egg prices from going up? Trick question;it doesn’t.

[Scrivener7]

21. The Fed is run by republiQans.

[former9thward]

32. You better tell Biden.

He has appointed its leadership.

[Scrivener7]

33. I'm sure he knows. And Powell was appointed by tfg first.

[former9thward]

34. Nope.

Powell was appointed by Obama. Trump appointed him Chair.

[Scrivener7]

35. Sigh. Trump appointed him to run the fed, which is what this conversation is about.

Have a lovely evening.

[former9thward]

45. Sigh.

The fed chair is not a dictator. Votes are taken on every decision. That is what this conversation is about. Obama appointed him for good or bad.

[BradAllison]

50. Some people pay attention around here at least

The same few with their certain talking points.

[PoindexterOglethorpe]

10. Those who have cash can start cautiously buying.

In 2020, in just over a month's time (February and March) the Dow dropped some 10,000 points. In then promptly started climbing back, and before the end of the year had fully recovered.

Of course, it could be different this time. Drop could be more, a higher percentage amount, take longer to recover. Who knows? But trying to time the market rarely works. Most people who try to do that sell low, then hesitate buying again until prices are high. Better to buy good stocks or funds, and with a certain amount of adjusting and balancing periodically, stay with them.

Unfortunately, the Fed is probably doing it all backwards by raising interest rates. I seem to recall that the high inflation we had in the 1970s and '80s was accompanied by high interest rates.

[Shermann]

14. This will last until the first Fed meeting with a dovish tone. nt

[WarGamer]

16. So far JPow seems REALLY insistent on getting back to 2-2.5% inflation...

[Lonestarblue]

38. Meanwhile, he will cause another recession that will then take years for recovery.

The FED is ‘t even waiting to see if previous rate increase are working. They’re just planning to raise rates every month until the economy crashes. Supply chain problems have caused a lot of cost increases, some of which is just predatory pricing, as with gasoline. Just continuing to raise rates will have no impact on the supply chain problems, but they will really hurt the poor and middle class, who already pay very high interest on credit card balances.

I was disappointed that Biden did not replace Powell. He is a Republican and not all that good at his job. He contributed to inflation by literally throwing money at big corporations for a couple of years instead of moderating that access to easy money much earlier.

[Pantagruel]

17. If you want to own stocks

it's smart to wait for a 20% or more correction. Then begin sytematically averaging into non-speculative securities. For instance , on 1-1-23 spend 25% of your capital. Wait until 7-1-23 and add another 25% and repeat on 1-1-24 and 7-1-24.
"Dollar cost averaging "is said to be the one "free roll" in investing.

[modrepub]

18. Stock Market Isn't For The Faint of Heart

As an individual investor, diversify, don't work with money you can't afford to loose and always work on long time horizons. Not looking too often at your investments helps if you don't like seeing loses.

That said, in the long run being in the market pays off better than any other investment. You should be in stocks if you can do it; you give away your proxy rights with a mutual fund. If you're going to own it then it's best to be a stock holder with voting rights.

One thing I've noticed about markets over the years, when everyone is on the same page either up or down, it always seems to go the other way. While I won't say that the markets aren't in trouble, I never believe it's as bad or good as the pundits say.

Interest rates look bad but I'll take some solace in rising rates will probably hurt folks with more money than small time earners. The reason I say that is the lower income folks have been dealing with high interest credit cards for decades. It'll be entirely different for the ultra rich folks who suddenly need money.

I'll also add that rising interest rates may not be a bad thing. Cheap money over the last decade or so has probably contributed to a lot of wasted capital. Lower interest rates allow folks to invest in a lot of hair-brained schemes (like crypto). IMO it wouldn't be bad to prune folks like Musk and Zuckerberg a little bit.

[PoindexterOglethorpe]

28. I have an excellent advisor, and I have a lot of faith in him.

He's done very well for me, not making risky investments, staying in touch and telling me what's going on, what he's doing, and why he's doing it.

A lot of people here scorn advisors. There was a time, years ago, when I was trying to make my own decisions about buying and selling, and I could tell that I didn't know enough and wasn't likely to learn enough, given that it wasn't something I could do full time. I was with a major investment firm for some time, and eventually got this guy, as the brokers came and went. When my current guy left the major firm to be with a small one, I decided to go along with him. Excellent decision. Yeah, my investments are down a bit right now, but I am living below my means, which is reassuring.

[honest.abe]

19. Powell is pushing us over the cliff.. intentional or not.

It’s a financial disaster in the making.

[Scrivener7]

20. I purchased my first home in 1990 during that real estate crash. It was a big crash

in NYC with people simply walking away from apartments and taking the loss on their mortgages. I bought my first co-op for next to nothing.

Crashes are a great time to get into the real estate market for the first time, if anyone is at that point in their lives. You do pay higher mortgage interest, but you can get a bargain. And getting into the real estate market with a bargain can significantly affect your lifelong wealth.

So that's an opportunity. But if you already have your home, there isn't much you can do during a downturn other than wait it out.

[honest.abe]

22. With interest rates near 7% many are priced out.

They don’t have the income to make the inflated payments due to high interest rates. And to make matters worse house prices are still extremely high even if they have come down a bit in some areas.

[Scrivener7]

30. If the drop is as steep as the OP says, they might come down enough to make the price worthwhile.

And we forget that in the old days, a 7% interest rate was normal. Mine on that 1990 apartment was 7% adjustable to 11% depending on prime , though it never went over 7.3.

Also, when the interest rates come down, if they do (again, we have gotten used to historically low rates that have been artificially maintained for a really long time) you can refinance, and you still have a cheap home.

[MichMan]

23. A lot of people watching their retirement accounts plummet are going to blame the party in power.

[central scrutinizer]

25. Yes, October surprise

The third quarter statements. I think that helped doom the Republicans in 2008 when the Bushco chickens starting coming back to roost.

[central scrutinizer]

24. I put $10,000 into a mutual fund in 1996

I’ve never tweaked it, never sold any, never added to it. Rarely even check it. I’m sure it’s gone up and down, sometimes wildly. I just checked the balance and calculated that it’s increased by an annual rate 9.3%. I’m happy with that and I’ve spent zero energy stressing about it. Eventually my daughter will inherit it and she can do whatever she wants with it.

[Igel]

26. My mother died.

When the Arizona death industry finally let the estate out of probate (they found a reason to, a week before the period for probate to be invoked, to invoke probate for another two years of incompetent, self-serving, funds management), I finally got a pile of foreign souvenir currency and a cashier's check. That was last spring.

Years after death, in spite of the trust that was intended to avoid probate. Gotta love the death industry. Then again, my paranoid dementia-ridden mother ignored the terms of the trust.

The investment company that now has the money--not a huge amount--has been harassing me. I've avoided doing anything with it and that's intolerable. Granted, it's lost value. Not as much as the stock market or bond indices.

Meanwhile, inflation's cut my self-financed retirement accounts by 10%. I was going to retire in 3-4 years, because by then I'd have enough, debts paid off. Now, to stay even with the underfunded 2021 amount I need to work probably 2-3 additional years, perhaps more--my take-home pay doesn't allow me to pay off debts (like car, house). I'll be at least 67-68, maybe 69 or 70, when I retire with less funding, but then again, I'll have two years less retirement. Maybe 3, given stress and grief. At 63, I notice my age. I know a teacher who's 70 (my son had his class) and do *not* want to be him. "We have this assignment. It's the third time in 3 weeks."

I figure my inheritance should be passed through to offspring, if at all possible. My parents worked as steelworkers for decades, starting as a man who left home with his high-school diploma and a suitcase and single high-school drop-out mother with no job asking for her step-father to spot her and her infant (my half-brother) living space.

[Amishman]

27. Still overvalued relative to earnings

The markets overall valuation had most companies absurdly overpriced. Shiller P/E (price eto earnings ratio for S&P 500) is still 27. Over the past 100+ years the median is around 16 (though it's trended higher over the past few decades due to increased market participation).

[GoodRaisin]

52. S&P is up 30% over the last 5 years.

[Martin68]

36. No, the sky is not falling.

[ashredux]

37. No....but it will. Put the market

[Martin68]

42. "Put" the market?

[ashredux]

48. Buy put contracts...or play the negative ETFs...

[A HERETIC I AM]

53. Do you honestly think it's wise...

To suggest to a total stranger, one for whom you know literally nothing about their tolerance for risk and/or their investing knowledge and strategy, to enter the HIGHLY speculative sleeve of trading Put options?

Seriously?

This is irresponsible at best and reckless at the minimum.

[ashredux]

55. Relax....if you take my advice your a fool.

I spent 25 years in the business and managed money… this is a silly online blog…

But I will stick with my prognostication that we will see a major correction

[A HERETIC I AM]

56. Relax?!?

1) You should never type out the words “Your a fool” because people might think you’re a fool.

2). It’s four in the fucking morning and I just finished working. Relaxing is exactly what I’m doing.

3) If you spent 25 years in the business (I’ll assume you meant the Securities Industry), then you should fucking know better than to suggest to total strangers on the internet they should make an inherently risky investment, “silly online blog” (it’s not a “blog, FWIW) or not.

4) Fine, stick with your guess. No problem. I don’t have a problem with you sharing it, either. I just take issue with people making investment suggestions of that sort to strangers. If you had a Series 7, a 66, a 3, a 4 or any number of other licenses gathered in 25 years, you should know this.

[ashredux]

57. Back off the caffeine....chill man

Look, this is not a financial site where professionals talk about portfolio management. Nobody’s going to take this “advice“ and go out in short the market. This is a bunch of guys sitting around in the bar drinking beer saying, “I think we’re gonna have a big correction, and we might want to rearrange our portfolios. “You’re really over playing this a bit. This is Anonymous “blog”. Yes, I know it’s not a blog, good grief, and I will go back to what I originally said. Chill man….

[A HERETIC I AM]

58. Sorry, but

I just said I FINISHED working. My day is done.

It’s beer and bourbon.

Kindly take your condescension elsewhere.

I remain completely unimpressed.

[ashredux]

59. LOL...I wasn'ttry to impress your ass, I think you better to have another drink, and as I said Chill

[Martin68]

61. ashredux, you have revealed your total failure to understand what politics is about,

not to mention ethical financial advice. I suggest you find a forum more receptive to your scams and jokes. You have a long way to go before you're a genius.

[ashredux]

62. Are you a stalker?

[Martin68]

65. I was wondering the same about you, ridiculing constructive criticism of your poor financial advice

to financial novices, and your characterization of DU as "a silly online blog."

[roamer65]

41. I won't ever have a mortgage or another car loan.

I’ll be sitting ok.

[Martin68]

43. Same here.

[roamer65]

44. 👍👍

[FSogol]

46. Oh, FUD!

SSDD.

[IronLionZion]

47. The investor class likes the stock market and is very influential

so they would likely pressure the Fed if it goes down too much.

As for the loans, they are trying to reduce demand for homes and cars. For housing it's regional. There are affordable homes in places people don't want to live, so folks might end up with multi-hour commutes like I had during the last recession if they can't work from home.

During the last recession jobs were fewer and employers were evil about abusing workers as much as they could. That's not the case now since there are plenty of jobs and unemployment is low.

Sure things might get worse before they get better. But I'll know we're in a jobs recession when educated liberals tell me I'm stealing jobs away from "real Americans". When any American citizen of Indian race magically becomes an H1B, then we're in a jobs recession.

[purr-rat beauty]

51. As the Joker said...

it's all part of the plan

burn it down to buy it back cheaper

[ZonkerHarris]

63. Good thing only about 40% of Americans have any stock market investment then .

[WarGamer]

64. Misleading...

A retired school teacher receiving a pension from the State relies on the stock market... because the Pension Fund uses earning from the market to pay out benefits.

And when the market is bad, States have to redirect money from the General Fund to cover shortfalls from the State Pension Fund investment returns.

A bad market pretty much affects everyone.

[True Dough]

66. The markets have proven surprisingly resilient

Still waiting for the big crash, if there is going to be one at all...