Author Topic: ‘Anything can happen:’ Why the hottest investing trend is playing it safe  (Read 617 times)

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Online catfish1957

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https://www.marketwatch.com/story/the-decades-hottest-investing-trend-playing-it-safe-11601585149?mod=mw_latestnews

<snipit>
Shocks of 2008 and 2020 “illuminated the idea” that anything can happen, says one adviser....
“Consider a turkey that is fed every day. Every single feeding will firm up the bird’s belief that it is the general rule of life to be fed every day by friendly members of the human race ‘looking out for its best interests,’ as a politician would say. On the afternoon of the Wednesday before Thanksgiving, something unexpected will happen to the turkey. It will incur a revision of belief.*”
― Nassim Nicholas Taleb, The Black Swan: The Impact of the Highly Improbable

Does anything from your recent experience make you feel like Taleb’s poor turkey on the fateful Wednesday before Thanksgiving? Say February 2020, when stocks plummeted from all-time highs to a sharp correction in a matter of days? Or maybe you think of September 2008, when the entire financial system was brought to its knees?

If you feel like you’ve incurred your own “revision of belief” over the past few years — the entire global financial system can’t just collapse overnight, modern science will keep us safe from a little virus, the greatest democracy in the world never has to think twice about a peaceful and orderly transition of power – you’re not alone.
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Just another perspective, so just take it for what it is worth.  But one thing is for certain.  I can not remember an election in my lifetime  (Maybe 1980 as an exception) that had more bearing on investment plans and strategies.  IMO...any long term hopes for equity price growth reside exclusively with a Trump victory.  Want more '10's slow growth and stagflation?  You know the ticket.  In any case, I still think stock/MF prices or overinflated.  That is a fact. But investors are behind the proverbial rock and hard place as far as I can see.  So much captial is locked up into 401K's, IRA's and fluffy situations where Cap Gains are an issue.  Bonds and CD's have sank to microscopic levels that in the scheme of things, might not even outperform inflation.  And the writer's discussion of annuties?  He failed to mention that most of them are at about 2.5% locked in.  (yuck)  As far as myself, even at the crazy elevated costs now of precious metals....   they seem to be the best hedge against a government that has spent us into bottomless pit.  That has at least been my recent adjustment plan.  Would love to hear from others on their take on planning and how this election is influencing them. 
I display the Confederate Battle Flag in honor of my great great great grandfathers who spilled blood at Wilson's Creek and Shiloh.  5 others served in the WBTS with honor too.

Online IsailedawayfromFR

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Just another perspective, so just take it for what it is worth.  But one thing is for certain.  I can not remember an election in my lifetime  (Maybe 1980 as an exception) that had more bearing on investment plans and strategies.  IMO...any long term hopes for equity price growth reside exclusively with a Trump victory.  Want more '10's slow growth and stagflation?  You know the ticket.  In any case, I still think stock/MF prices or overinflated.  That is a fact. But investors are behind the proverbial rock and hard place as far as I can see.  So much captial is locked up into 401K's, IRA's and fluffy situations where Cap Gains are an issue.  Bonds and CD's have sank to microscopic levels that in the scheme of things, might not even outperform inflation.  And the writer's discussion of annuties?  He failed to mention that most of them are at about 2.5% locked in.  (yuck)  As far as myself, even at the crazy elevated costs now of precious metals....   they seem to be the best hedge against a government that has spent us into bottomless pit.  That has at least been my recent adjustment plan.  Would love to hear from others on their take on planning and how this election is influencing them. 
Well, my savvy in the investing world is not as hands on as yours is @catfish1957 . Tend to be a buy and hold guy with emphasis on dividends during my retirement years.  Always keep up to 50% in bonds/cash as simply to wade through the bad times which are more than likely imminent.

Never much onto the techie crowd so have lost out on the really big runups like Apple and Google, mostly because their value to me is so ephemeral compared to say, reserves in the ground of an oil company or solid products like Coke or proven winners like JNJ.

Nope on hedges or going for gold for me.  I like real estate and have a lot locked up in raw land, which is going up with the movement out of the cities.  I can always grow potatoes on that land if times get really tough, inflation makes money worthless and companies are bankrupt.
“no punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin” ~  George Washington

Online catfish1957

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Well, my savvy in the investing world is not as hands on as yours is @catfish1957 . Tend to be a buy and hold guy with emphasis on dividends during my retirement years.  Always keep up to 50% in bonds/cash as simply to wade through the bad times which are more than likely imminent.

Never much onto the techie crowd so have lost out on the really big runups like Apple and Google, mostly because their value to me is so ephemeral compared to say, reserves in the ground of an oil company or solid products like Coke or proven winners like JNJ.

Nope on hedges or going for gold for me.  I like real estate and have a lot locked up in raw land, which is going up with the movement out of the cities.  I can always grow potatoes on that land if times get really tough, inflation makes money worthless and companies are bankrupt.

You sound pretty savvy to me.  Your disaster hedge might differ from mine a little bit more, more because I really don't want to sink any more into real estate.  Outside some farm land, pretty much all my real estate is non-income producing.  Long term zero returns on any investments give me indigestion. But don't forget.....  If this thing really goes full bore Dystopia, you are going to need barter or equivalnt tender.  Be it in bottles of whiskey, toilet paper, silver, gold, services, whatever.   
I display the Confederate Battle Flag in honor of my great great great grandfathers who spilled blood at Wilson's Creek and Shiloh.  5 others served in the WBTS with honor too.

Online IsailedawayfromFR

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You sound pretty savvy to me.  Your disaster hedge might differ from mine a little bit more, more because I really don't want to sink any more into real estate.  Outside some farm land, pretty much all my real estate is non-income producing.  Long term zero returns on any investments give me indigestion. But don't forget.....  If this thing really goes full bore Dystopia, you are going to need barter or equivalnt tender.  Be it in bottles of whiskey, toilet paper, silver, gold, services, whatever.
My barter is ammo.  Makes no difference on caliber, someone somewhere will trade for it.

Obama was the best gun salesman this country has ever known, and I took the sales pitch.
“no punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin” ~  George Washington

Online Fishrrman

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"So much captial is locked up into 401K's, IRA's..."

Once the communist/democrats gain full power, a substantial amount of that "capital" is going to be "freed" from its "locks" -- into the pockets of the government, via taxation or outright confiscation.

Offline skeeter

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"So much captial is locked up into 401K's, IRA's..."

Once the communist/democrats gain full power, a substantial amount of that "capital" is going to be "freed" from its "locks" -- into the pockets of the government, via taxation or outright confiscation.

The bureaucrats have been eyeing our 401ks for several decades now.

I figure at some point they'll appropriate them, using some excuse like 'not everyone had a nice paying job like you did, time to pony  up for the good of the whole' and in exchange promise some additional SS benefit which won't come close to equally what they've taken.

We'll all shrug and suck it up.

Online catfish1957

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"So much captial is locked up into 401K's, IRA's..."

Once the communist/democrats gain full power, a substantial amount of that "capital" is going to be "freed" from its "locks" -- into the pockets of the government, via taxation or outright confiscation.

@sneakypete

Very good point Pete.  In fact there were secret obama era dimocratic subcommittees that met for discussions around confiscation of IRA's and 401K's into one general fit all Social Security System administered by the feds.  It'd all go in one big pot, and would divyed up the way fedzilla sees fit.

http://www.economicpopulist.org/content/house-discusses-401kira-confiscation
« Last Edit: October 21, 2020, 06:42:55 PM by catfish1957 »
I display the Confederate Battle Flag in honor of my great great great grandfathers who spilled blood at Wilson's Creek and Shiloh.  5 others served in the WBTS with honor too.

Online IsailedawayfromFR

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"So much captial is locked up into 401K's, IRA's..."

Once the communist/democrats gain full power, a substantial amount of that "capital" is going to be "freed" from its "locks" -- into the pockets of the government, via taxation or outright confiscation.
Those trillions sitting there are too tempting a target for the libs.

The debt is so high, that a 'national emergency' will occur to get people to believe we are 'on the brink of collapse' so they will give up their hard earned money to support to govt.  Instead of going to debt payment, any monies will go toward more bureaucratic handouts.

They will be targeted first as the rationale will be no taxes have been paid on them so they are considered the property of the feds.  It is one reason I have been whittling down my own amounts in IRAs in spite of the hefty taxes paid in order to distance myself from their grubby hands.  With the current relatively low tax rates courtesy Trump and the GOP Congress in 2017/8, it is a good time to do so.
“no punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin” ~  George Washington

Online catfish1957

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They will be targeted first as the rationale will be no taxes have been paid on them so they are considered the property of the feds.  It is one reason I have been whittling down my own amounts in IRAs in spite of the hefty taxes paid in order to distance myself from their grubby hands. 

One of my compatriots in my investment coffee klatch group has taken an interesting, but highly complicated way to avoid IRA government confiscation.  Real Estate.  Personally, I don't want to go through complications and hassle, but it is do-able.  His theory?  Would the government go as far as deal with the problems of seizing and disposing of a real estate property.  He's hedging not, with at least part of his portfolio.

https://www.investopedia.com/articles/personal-finance/111615/using-your-ira-buy-investment-property.asp
I display the Confederate Battle Flag in honor of my great great great grandfathers who spilled blood at Wilson's Creek and Shiloh.  5 others served in the WBTS with honor too.

Online IsailedawayfromFR

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One of my compatriots in my investment coffee klatch group has taken an interesting, but highly complicated way to avoid IRA government confiscation.  Real Estate.  Personally, I don't want to go through complications and hassle, but it is do-able.  His theory?  Would the government go as far as deal with the problems of seizing and disposing of a real estate property.  He's hedging not, with at least part of his portfolio.

https://www.investopedia.com/articles/personal-finance/111615/using-your-ira-buy-investment-property.asp
There is a hierarchy of assets which are less and less palatable to citizens to give to the govt.

Easy for IRS to seize a bank account, but much more difficult a piece of land, and the last one's own house.
“no punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin” ~  George Washington

Offline sneakypete

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One of my compatriots in my investment coffee klatch group has taken an interesting, but highly complicated way to avoid IRA government confiscation.  Real Estate.  Personally, I don't want to go through complications and hassle, but it is do-able.  His theory?  Would the government go as far as deal with the problems of seizing and disposing of a real estate property.  He's hedging not, with at least part of his portfolio.

https://www.investopedia.com/articles/personal-finance/111615/using-your-ira-buy-investment-property.asp

@catfish1957

WHAT problems?  They make the rules,no one is allowed to object without facing prosecution for being "anti-governmet,and the fines for even trying would be more than the money you would be saving.

And that ain't even taking into account the fines for "being a Nazi" for objecting to the theft.

When you control the judicial,the legislative,and the elective parts of government,there is no one left to object.
« Last Edit: October 22, 2020, 08:35:20 PM by sneakypete »
Anyone who isn't paranoid in 2021 just isn't thinking clearly!