Stock Market 2022 except we just talk about stocks

[anonperson]

I’ve been thinking about doing away with my emergency fund. What are thoughts on that? I have no non-mortgage debt. I’m starting to build a pretty decent sized nest egg in my investment accounts (taxable). My lines of credit with my credit cards could cover at least 3 months of expenses. My spouse works. Having 3-6 months of expenses sitting in cash seems to be a bit of a drag in this environment. Am I crazy for cutting my emergency fund by at least half and investing it? Maybe investing it all? I-bonds?

Oh yeah…VTSAX and chill.

Reasonable.

The 6 month emergency fund is a bit of overkill to be honest, especially for physicians with adequate life and disability insurance.

You have credit cards that can cover major issues and you could probably cash flow a fair amount of stuff just on your income alone.

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[ValentineD]

Buying the dip? Or trying to send JPow a message?

A stock market crash is inherently deflationary. What we have here is just the people cleaning up JPow's mess.

 

[BLADEMDA]

On Monday at one point, the S&P 500 was down 10% from its recent highs.
However, investors who are panicking should bear in mind long-term trends.

What’s unusual is not that we’ve had a 10% correction, what’s unusual is how long it’s been between corrections.

In February-March 2020, the S&P 500 dropped about 33% before recovering.

Prior to that, the last 10% decline was in late 2018, when the Fed talked about raising rates aggressively. That period — from the end of September to just before Christmas — resulted in a decline of 19% for the S&P 500.

_______

If Russia invades Ukraine that could be the temporary bottom and That is when I am adding equities. I expect another 5-10% drop from here before we start bouncing around at those levels. The invasion of Ukraine should create even more anxiety and fear in the market.

 

[IMGASMD]

i take it y ou werent alive for the 2008-10 crash. We spent months where we would be down 1-4 percent daily.

I was in. Just don’t have amount that was worth paying attention to….

I still hold some AIG that was reverse split…. Still holding my few shares, whatever was left of it….. might as well take them as worthless paper to my retirement.

 

[pgg]

I’ve been thinking about doing away with my emergency fund. What are thoughts on that? I have no non-mortgage debt. I’m starting to build a pretty decent sized nest egg in my investment accounts (taxable). My lines of credit with my credit cards could cover at least 3 months of expenses. My spouse works. Having 3-6 months of expenses sitting in cash seems to be a bit of a drag in this environment. Am I crazy for cutting my emergency fund by at least half and investing it? Maybe investing it all? I-bonds?

Oh yeah…VTSAX and chill.

Some people will argue that a HELOC makes the most sense for people like us. My credit union charges no fees to keep it open and just have it available. I think my interest rate is 3.99% if I use it. Very long repayment schedule if I use it. Better than credit cards in every respect. I can access it with a check or debit card.

 

[BLADEMDA]

Dow closes lower, but well off session lows in another massive comeback

U.S. stocks traded volatilely on Tuesday a day after one of the biggest comebacks on record for the major averages.

www.cnbc.com

There is going to be blood in the water...be patient. We are seeing a major correction in the markets. Another 10% down looks highly likely and those growth names will drop 20% or more. This is the type of buying opportunity we get every few years. That's why you need cash on hand because we could be looking at a 30% peak to bottom decline.
“Downside risks from monetary tightening are higher vs history. The pain has so far been localized to high valuation stocks, but signs of a broader risk-off are brewing,” Barclays’ Maneesh Deshpande said in a note Tuesday.

 

[coffeebythelake]

Dow closes lower, but well off session lows in another massive comeback

U.S. stocks traded volatilely on Tuesday a day after one of the biggest comebacks on record for the major averages.

www.cnbc.com

There is going to be blood in the water...be patient. We are seeing a major correction in the markets. Another 10% down looks highly likely and those growth names will drop 20% or more. This is the type of buying opportunity we get every few years. That's why you need cash on hand because we could be looking at a 30% peak to bottom decline.

I'm curious to see if things settle out a little after Wednesday when the uncertainty abates a little. It's been very red and grim so far

 

[BLADEMDA]

'Double down' on defense because stocks will plunge another 10%, Morgan Stanley's Mike Wilson warns

Morgan Stanley's Mike Wilson, the market's biggest bear, suggests investors are dangerously downplaying a collision between a tightening Fed and slowing growth.

www.cnbc.com

S and P of 4,000 looks like a nice re-entry point for deploying some of your cash. This would be cash used to buy solid, blue chip names with reasonable valuations. The high growth names will fall much more than 10% from here.

 

[BLADEMDA]

 

[GassYous]

Dow closes lower, but well off session lows in another massive comeback

U.S. stocks traded volatilely on Tuesday a day after one of the biggest comebacks on record for the major averages.

www.cnbc.com

There is going to be blood in the water...be patient. We are seeing a major correction in the markets. Another 10% down looks highly likely and those growth names will drop 20% or more. This is the type of buying opportunity we get every few years. That's why you need cash on hand because we could be looking at a 30% peak to bottom decline.
“Downside risks from monetary tightening are higher vs history. The pain has so far been localized to high valuation stocks, but signs of a broader risk-off are brewing,” Barclays’ Maneesh Deshpande said in a note Tuesday.

Riiight
Where was Barclays’ Maneesh Deshpande two weeks ago before this happened

 

[deleted126335]

Dow closes lower, but well off session lows in another massive comeback

U.S. stocks traded volatilely on Tuesday a day after one of the biggest comebacks on record for the major averages.

www.cnbc.com

There is going to be blood in the water...be patient. We are seeing a major correction in the markets. Another 10% down looks highly likely and those growth names will drop 20% or more. This is the type of buying opportunity we get every few years. That's why you need cash on hand because we could be looking at a 30% peak to bottom decline.
“Downside risks from monetary tightening are higher vs history. The pain has so far been localized to high valuation stocks, but signs of a broader risk-off are brewing,” Barclays’ Maneesh Deshpande said in a note Tuesday.

 

[BLADEMDA]

Riiight
Where was Barclays’ Maneesh Deshpande two weeks ago before this happened

I am still an optimist on the second half of 2022. We may even end the year flat or up which means this is a buying opportunity for those with cash. Again, once the S and P hits 4,000 I am adding to my positions. I keep cash on hand for this very situation. This is how I buy equities... on sale. I cost average in a decent amount like $5,000 per month but then hold back another $10K per month for sales. I have been doing this since the summer of 2021. In addition, I am going to increase my overall equity exposure when stocks go on sale. Thus, I will be deploying cash from 4,000 all the way to 3500 when I am all in on my available cash.

IMHO, the markets in modern times (post housing market crash) are very volatile with 10-15% shifts over just a few months. This volatility makes for opportunities to buy equities at discounted prices. This is another chance to juice your portfolio if your time horizon is at least 5 years until full retirement.

 

[BLADEMDA]

S and P of 3380 was the level of the stock market prior to COVID induced crash of 2020. So, if the market corrects all the way back to 3500 then all the gains since the Fed eased policy will have been given back. With the stimulus packages pumping out almost 8 trillion in dollars I would argue stocks are indeed worth a valuation of 3500 because of the weakening in the true value of the US Dollar.


The overall conclusion is that a fair value of the S&P 500 index based on its trailing GAAP earnings is probably about 3624 as a point estimate.

 

[OptionOffense]

I am still an optimist on the second half of 2022. We may even end the year flat or up which means this is a buying opportunity for those with cash. Again, once the S and P hits 4,000 I am adding to my positions. I keep cash on hand for this very situation. This is how I buy equities... on sale. I cost average in a decent amount like $5,000 per month but then hold back another $10K per month for sales. I have been doing this since the summer of 2021. In addition, I am going to increase my overall equity exposure when stocks go on sale. Thus, I will be deploying cash from 4,000 all the way to 3500 when I am all in on my available cash.

IMHO, the markets in modern times (post housing market crash) are very volatile with 10-15% shifts over just a few months. This volatility makes for opportunities to buy equities at discounted prices. This is another chance to juice your portfolio if your time horizon is at least 5 years until full retirement.

Timing the market is impossible. Problem with buying now is in 2 months we may be looking at a 30 percent decline. So do you wait?
Cue: Ray Dalio.

 

[GassYous]

I just like watching all the heads try to explain every up and down as though it's rational. "Oh yeah stocks are down 2% because of fears about the fed and inflation. Oh wait it is up because covid is not as bad as they thought. Just kidding stocks are down again because the market is wary about ukraine". The sheer amount of mental gymnastics involved to be a financial writer...

 

[RadOncDoc21]

I just like watching all the heads try to explain every up and down as though it's rational. "Oh yeah stocks are down 2% because of fears about the fed and inflation. Oh wait it is up because covid is not as bad as they thought. Just kidding stocks are down again because the market is wary about ukraine". The sheer amount of mental gymnastics involved to be a financial writer...

They need to justify their jobs somehow.

 

[deleted941485]

I just like watching all the heads try to explain every up and down as though it's rational. "Oh yeah stocks are down 2% because of fears about the fed and inflation. Oh wait it is up because covid is not as bad as they thought. Just kidding stocks are down again because the market is wary about ukraine". The sheer amount of mental gymnastics involved to be a financial writer...

Because its farcical. Being a writer in this space is a joke. Your job is to effectively make up stories that the minions will believe while the insiders make money.

 

[coffeebythelake]

I just like watching all the heads try to explain every up and down as though it's rational. "Oh yeah stocks are down 2% because of fears about the fed and inflation. Oh wait it is up because covid is not as bad as they thought. Just kidding stocks are down again because the market is wary about ukraine". The sheer amount of mental gymnastics involved to be a financial writer...

Yeah mostly it is fear mongering and bull ****. Thry can't just say volatility happens due to uncertainty

 

[coffeebythelake]

In other news, Microsoft beat estimates but stock still tanked today.

 

[coffeebythelake]

Historically has the markets acted this way on announcements of possible fed rate hike? Or does this usually happen afterwards?

 

[epidural man]

Thoughts?

Federal Agency Censors Names of Banks in a Bombshell Study on Wall Street’s Dangerous Derivatives

By Pam Martens and Russ Martens: January 25, 2022 ~ The Office of Financial Research (OFR) is the federal agency created under the Dodd-Frank financial

wallstreetonparade.com

 

[epidural man]

I assume the conversation and thought process went something like this before today's FOMC meeting.

"Your Majesty Mr Powell. Because one of the TWO mandates is to control inflation, that perhaps you should try to reduce the balance sheet (because unemployment seems to be doing great...which is your OTHER mandate) and increase target range for the federal funds rate? I mean, not to sound like a broken record, but that IS really your only mandate right now. "

Mr Powell responds..."Yeah, didn't you listen? I said I was going to raise rates this year. I'm on it."

Then the stock market pulls back 10% and Mr Powell paces in his home and thinks to himself "DAM DAM DAM. I'm loosing millions in my stock portfolio. Ugh. But I have to deal with inflation. Oh FUK EM. I'm gonna use some bul**** language like I've done in the past so it sounds like I might raise rates eventually, but make it very clear I'm not raising rates yet. That should turn the markets around. Also, I nebulize the idea about the balance sheet. If I talk about allowing mature assests to roll off the balance sheet, with bias towards mortgage-backed securities, no one will ask WHEN that actually happens and the dummies will put their money back into markets. Yeah...that's what I'll do. Maybe I can kick this can down the road another year and de-leverage my positions in the mean time. My money is way more important than some stupid mandate."

I suspect that is EXACTLY how it happened. Will markets holds steady now?

 

[epidural man]

 

[ValentineD]

Thoughts?

Federal Agency Censors Names of Banks in a Bombshell Study on Wall Street’s Dangerous Derivatives

By Pam Martens and Russ Martens: January 25, 2022 ~ The Office of Financial Research (OFR) is the federal agency created under the Dodd-Frank financial

wallstreetonparade.com

I was under the impression that the derivative market has only ballooned since 2008. Financialization is a way to manufacture growth (and profits!) where there is none. One would think that the inherent risk would be a deterrent, but it is not when the risk is absorbed by the system and the rewards granted to the individual. I often wonder if there will be a repeat of the housing crises.

 

[Ronin786]

 

[narcotics999]

I'm not a big fan of Motley Fool. They constantly tout their occasional hits (Netflix etc) but never mention the misses.

I know they have an ETF but I think you will get better returns with a lower ER using VTI/TSAX

I don't follow its recommendation but read the rationales.

 

[BLADEMDA]

I will start buying equities about 5% lower from here. That puts the S and P 500 at around 4100. I think that is a nice level to begin dipping my toe. I will keep buying until 3500 but I expect the S and P 500 to level off at around 3800 even in a bear market. Perhaps, an invasion of Ukraine by Russia will be the short term bottom with a 3% decline in one day. I don't know but what I do know is if you believe in US Blue chip companies then buying equities on sale is smart thing to do.

Despite great economic growth the market sold off so I still think it is headed lower towards that 4,000 level.

 

[CHARLESTONMMM]

Anyone buying $BJDX BlueJay Diagnostics? They pre submitted an Interleukin 6 rapid test to the FDA. Seems like it could be useful.

 

[BLADEMDA]

I am getting impatient to buy equities. I may start to deploy cash at 4200 as I am more concerned about missing out then getting the bottom. I still think Russia will invade Ukraine and that will mark at least a short term bottom.

So, even if I start buying at 4200 I expect better prices after the conflict breaks out. This pullback is healthy for stocks over the long run but even with this set back stocks are still expensive. I am a buyer because the alternatives look worse.

 

[ERRES2288]

I am getting impatient to buy equities. I may start to deploy cash at 4200 as I am more concerned about missing out then getting the bottom. I still think Russia will invade Ukraine and that will mark at least a short term bottom.

So, even if I start buying at 4200 I expect better prices after the conflict breaks out. This pullback is healthy for stocks over the long run but even with this set back stocks are still expensive. I am a buyer because the alternatives look worse.

How long will you wait for 4200? That’s this issue with this strategy. Market keeps rising and then what? When will you throw in towel and buy?

 

[HopelessMS]

If you have cash on hand and want to buy equities at a lower price, sell cashed secured puts. If you hold equities and want to make income, sell weekly or monthly covered calls. I've been reinvesting my premiums from selling covered calls to purchase more of the underlying shares.

 

[BLADEMDA]

How long will you wait for 4200? That’s this issue with this strategy. Market keeps rising and then what? When will you throw in towel and buy?

This strategy is not about buying all your equities on the way down. It's about deploying cash set aside for market downturns or shifting your allocation by 10-15% towards equites when they go on sale then rebalanced at market highs. This takes patience and diligence along with cash/bonds/CDs as part of your portfolio. Here is an example:

80/20 portfolio but the market corrects 15% so you begin to slowly deploy 5% more into equities bringing your new allocation to 85/15. Market drops another 10% and you go to 95/5 allocation. New money is set aside to a 50/50 allocation and the original allocation is restored to 80/20 when the market recovers to its previous all time high. I believe such a strategy takes advantage of the fear/volatility with better returns than a pure 80/20 allocation.

At no point do you ever sell all your equities out of fear. For those with a 100% equity portfolio I believe the risk/return favors an 80/20 portfolio such as I describe above. I also think you need at least 5 years until retirement plus an emergency fund of 6 months cash.

 

[BLADEMDA]

Investors with long horizons should view corrections – and especially bear markets – as an opportunity to buy good stocks at even better prices.

Take Apple (AAPL) as an example. Shares in the world's largest publicly traded company plunged more than 30% from peak to trough in the COVID-19 market crash.

Guess what? They've gone on to nearly triple since hitting their March 2020 bottom.

Investors who maintained their convictions about the iPhone maker's fundamentals – and had the guts to buy shares at the point of maximum pessimism – have thus far been rewarded with a price gain of 193%.

"Longtime investors understand that it goes with the territory," Phelps says. "They look to take advantage of things that are on sale. Your inexperienced investor who has only been in the market for a couple of years, they are the ones that you have to kind of talk to and walk them through what's going on."

As Warren Buffett likes to say, "Price is what you pay; value is what you get."

 

[BLADEMDA]

A market correction, which is a 10% to 20% dip in stock prices from their most recent highs, is scary when it happens. But afterwards, markets tend to rebound — often, they rebound quite well.
In fact, for every time the S&P 500 has dipped at least 10% since 1980, the index was higher one year later 90% of the time, and up 25% on average, according to data from LPL Financial.

Investors, Don’t Panic Sell: Here’s What Usually Happens After Stocks Enter a Correction

Volatility is normal, and stock prices have a long history of bouncing back after corrections.

journalnow.com

 

[Neopolymath]

Sorry people about to retire. I'm hoping for a 10 year bear while I throw money at this thing 😂

 

[GravelRider]

Investors with long horizons should view corrections – and especially bear markets – as an opportunity to buy good stocks at even better prices.

Take Apple (AAPL) as an example. Shares in the world's largest publicly traded company plunged more than 30% from peak to trough in the COVID-19 market crash.

Guess what? They've gone on to nearly triple since hitting their March 2020 bottom.

Investors who maintained their convictions about the iPhone maker's fundamentals – and had the guts to buy shares at the point of maximum pessimism – have thus far been rewarded with a price gain of 193%.

"Longtime investors understand that it goes with the territory," Phelps says. "They look to take advantage of things that are on sale. Your inexperienced investor who has only been in the market for a couple of years, they are the ones that you have to kind of talk to and walk them through what's going on."

As Warren Buffett likes to say, "Price is what you pay; value is what you get."

It took guts to buy Apple stock? That sounds like almost the exact opposite of having guts.

 

[BLADEMDA]

It took guts to buy Apple stock? That sounds like almost the exact opposite of having guts.

The point of the post was buy quality companies when they go on sale. If you are a growth/tech investor then buy more, or, if you prefer a mix of value/growth then buy the S and P 500 or nice Dividend stock ETF with blue chip companies. It still takes guts to buy equities when the market is going down but that is exactly what you should do.

Stocks rally to end a dismal January, but S&P 500 still posts worst month since March 2020

Stocks surged for a second day Monday to wrap up a rough January, as investors snapped up some of the tech shares that have been battered all month.

www.cnbc.com

 

[BLADEMDA]

Jim Paulsen, Leuthold Group chief investment strategist noted that “forcing some panic-selling and exhausting the most emotional investors” is the first step in ending a correction and stabilizing the market.

“It would not be shocking if there is a test of last Monday’s intra-day low, and if it fails, the market will probably head lower,” Paulsen added.

______

I expect at least a re-test of 01/24/22 and if it doesn't hold then the market goes another leg lower.

 

[GravelRider]

The point of the post was buy quality companies when they go on sale. If you are a growth/tech investor then buy more, or, if you prefer a mix of value/growth then buy the S and P 500 or nice Dividend stock ETF with blue chip companies. It still takes guts to buy equities when the market is going down but that is exactly what you should do.

Stocks rally to end a dismal January, but S&P 500 still posts worst month since March 2020

Stocks surged for a second day Monday to wrap up a rough January, as investors snapped up some of the tech shares that have been battered all month.

www.cnbc.com

Or the point is that paying attention to the day to day market fluctuations is pointless and time consuming…and boring.

 

[Mman]

Take Apple (AAPL) as an example. Shares in the world's largest publicly traded company plunged more than 30% from peak to trough in the COVID-19 market crash.

Guess what? They've gone on to nearly triple since hitting their March 2020 bottom.

Investors who maintained their convictions about the iPhone maker's fundamentals – and had the guts to buy shares at the point of maximum pessimism – have thus far been rewarded with a price gain of 193%.

gee if only someone could have pointed it out at the time

 

[nimbus]

S&P 500 down 5.3% in Jan 2022. Some recent down January’s.

 

[coffeebythelake]

S&P 500 down 5.3% in Jan 2022. Some recent down January’s.


View attachment 349342

if only it was just that.
i do think that the inflation problem adds to the conundrum,
and puts a lot of pressure on the government to hike interest rates and slow economic growth
it ain't going to put all those trillions of dollars back where it came from,
and it ain't going to fix the supply chain problems
in the end, the poor and middle class lose... yet again.

 

[nimbus]

if only it was just that.
i do think that the inflation problem adds to the conundrum,
and puts a lot of pressure on the government to hike interest rates and slow economic growth
it ain't going to put all those trillions of dollars back where it came from,
and it ain't going to fix the supply chain problems
in the end, the poor and middle class lose... yet again.

But recent experience shows the federal government with do whatever it takes to protect the wealthy (stock market).

 

[coffeebythelake]

But recent experience shows the federal government with do whatever it takes to protect the wealthy (stock market).

that's why i'm keeping my stocks on large caps with a long view.
Apple, Amazon, FB, and the like.
"too big to fail"

 

[epidural man]

But recent experience shows the federal government with do whatever it takes to protect the wealthy (stock market).

There is no way Powell is going to let his millions in stock drop.

Congress with their insider trading will also apply pressure to keep the markets inflated.

 

[BLADEMDA]

that's why i'm keeping my stocks on large caps with a long view.
Apple, Amazon, FB, and the like.
"too big to fail"

Google parent Alphabet announces 20-for-1 stock split

It wouldn't be the first time Larry Page and Sergey Brin have make their stock more affordable. It happened in 2012 with the launch of a third class of shares.

www.cnbc.com

 

[BLADEMDA]

that's why i'm keeping my stocks on large caps with a long view.
Apple, Amazon, FB, and the like.
"too big to fail"

Agree.

Add:

MSFT
NVDA
Alphabet

Here Are the 3 Best Growth Stocks to Buy for 2022 | The Motley Fool

These top-tier companies can take your investment portfolio to new heights.

www.fool.com

I avoid all Chinese stocks and yes, I realize TSM is based in Taiwan for now. But, it is still risky because China will eventually takeover Taiwan IMHO.

 

[BLADEMDA]

Here is my value pick in technology for 5 years with a return of 500% after 5 years (likely year 3 or 4)

INTC- cheap and slowly coming back Buy 300-500 shares and simply put it away like I did with MSFT when it went nowhere for years.

5 Reasons to Buy Intel Stock Right Now | The Motley Fool

The tech giant's stock is cheap with several catalysts on the horizon.

www.fool.com

 

[BLADEMDA]

Here is the other side of the argument why INTC is NOT a buy:

Will TSMC's $40 Billion Spending Plan Wreck Intel's Turnaround? | The Motley Fool

TSMC could pull ahead of Chipzilla thanks to its aggressive 2022 capital spending forecast.

www.fool.com

 

[RadOncDoc21]

Got back 25% over the past 3 days… keep it going! I understand the rationale for bear markets but I’m a Taurus.