Stock Market & Retirement Planning

[Carolina Golfer]

What happens to the stock market if Biden wins? With Trump, it should remain strong, no? Not trying to be political at all, just financial.

 

[JB]

What happens to the stock market if Biden wins? With Trump, it should remain strong, no? Not trying to be political at all, just financial.

Unfortunately with the nature of the question being 100% political, we are going to kindly ask that it not continue.

Thanks for understanding

 

[Flipit]

Buy low, sell high.

I guess your buying now.

 

[Snickerdog]

I had my meeting today to go over portfolio. Not doing to bad, just need to stay the course.

 

[Crapgame]

I had my meeting today to go over portfolio. Not doing to bad, just need to stay the course.

Plenty of additional downside risk remains, let's hope we somehow escape the worst

 

[millsan1]

The ramifications to the economy from COVID and rampant government spending have not hit yet. I predict ugliness in 2021 and a big, longer term correction.

 

[RealPretendPsychic]

I thought this was funny.

 

[Reframmellator]

The ramifications to the economy from COVID and rampant government spending have not hit yet. I predict ugliness in 2021 and a big, longer term correction.

I've heard several models proposed for the shape of the recovery:



I've also heard talk of a "K Recovery" - some sectors are doing very well, while other sectors are suffering terribly.

 

[Iceman!]

Apple stock is ripe for a pullback with it’s P/E ratio way higher than it has ever been. It’s P/E has mostly hovered in the teens the last two decades since I’ve been following (and trading) the stock and it is now in the mid 30’s. I’ll never understand the stock market and how it values stocks, lol. Apple has tripled in price since January of 2019, a nearly impossible rise in price for a such a large CAP stock. I’m shocked that it reached $2 Trillion in value so quickly.

View attachment 8961823

Think you called this one....

 

[Nicegy525]

I work in the wholesale automotive industry for a major auction company. Im seeing the signs and the expectations of many of our commercial clients. We are expecting an incoming tide of reposessions next year when payment protection legislation ends.

Now I am trying to figure out how to position myself in the stock market to take advantage. Companies like Carvana, Shift, Vroom are set to take a bigger share of the auto sales industry next year, but their revenue doesnt come from repos.

I could invest in auction companies like KAR, Manheim or others. KAR is down 50% on their share prices from late last year.

Anyone have perspective on investing in bank stocks like wells fargo, chase etc who will be dealing with most of these repos? Is that even the way to go? Technically, a bank repo is a liability for the bank and they are trying to cut their losses with it. So it might not be wise to invest in that...

 

[OITW]

Wife’s job has me digging through my stock and retirement accounts so she can submit for “compliance” f**k that ****

 

[Carolina Golfer]

What's a better value, more stock or a second vacation home at Myrtle Beach? If the stock tanks, the money evaporates. If the housing market tanks, you still have a house, no? My wife says, but, you have new monthly expenses on a house, too. Thoughts? What's a good argument to buy the condo?

 

[JB]

What's a better value, more stock or a second vacation home at Myrtle Beach? If the stock tanks, the money evaporates. If the housing market tanks, you still have a house, no? My wife says, but, you have new monthly expenses on a house, too. Thoughts? What's a good argument to buy the condo?

They are both risk and return investments in my mind. Historically will have data.
Next year could change the market quite a bit.

Myrtle Beach has been on the low side of costs for a while, compared to other beach area options. One note with the condo is the monthly fees that come along with that. I don't mean typical home expenses, but association fees that usually include maintenance and external building insurance.

 

[tahoebum]

What's a better value, more stock or a second vacation home at Myrtle Beach? If the stock tanks, the money evaporates. If the housing market tanks, you still have a house, no? My wife says, but, you have new monthly expenses on a house, too. Thoughts? What's a good argument to buy the condo?

She is right about the expenses. Unless you’re getting rental income, equities will likely leave you with a larger nest egg 20 years from now. You can’t put a price on the memories spent at a second vacation home especially if it gets you to spend more vacation time together. We owned a condo for over a decade in Lake Tahoe that was a lousy investment but we have so many great memories from our time spent there.

My best argument for a vacation home would be to finance most of it at the very low mortgage rates we have now that are around 3%. Long term you should get a 9% growth rate on the value of the condo so if you can rent it out 50-100 days a year to offset the property taxes, utilities, and association dues, you could see a very solid return.

Keep in mind that condo associations have very different rules on rentals. Our Tahoe condo allowed daily rentals such as VRBO but our Florida condo has a 60 day minimum rental and the renter goes through an interview process. Some condos don’t allow any rentals.

 

[Molten]

I work in the wholesale automotive industry for a major auction company. Im seeing the signs and the expectations of many of our commercial clients. We are expecting an incoming tide of reposessions next year when payment protection legislation ends.

Now I am trying to figure out how to position myself in the stock market to take advantage. Companies like Carvana, Shift, Vroom are set to take a bigger share of the auto sales industry next year, but their revenue doesnt come from repos.

I could invest in auction companies like KAR, Manheim or others. KAR is down 50% on their share prices from late last year.

Anyone have perspective on investing in bank stocks like wells fargo, chase etc who will be dealing with most of these repos? Is that even the way to go? Technically, a bank repo is a liability for the bank and they are trying to cut their losses with it. So it might not be wise to invest in that...

I’ve done a fair bit of digging on Wells Fargo because I thought I liked the price but it seems that they are the worst positioned bank of the major ones. I invested in the rest of them and left WF on the sidelines. Time will tell if I’m right but it’s what I did.

 

[Iceman!]

I work in the wholesale automotive industry for a major auction company. Im seeing the signs and the expectations of many of our commercial clients. We are expecting an incoming tide of reposessions next year when payment protection legislation ends.

Now I am trying to figure out how to position myself in the stock market to take advantage. Companies like Carvana, Shift, Vroom are set to take a bigger share of the auto sales industry next year, but their revenue doesnt come from repos.

I could invest in auction companies like KAR, Manheim or others. KAR is down 50% on their share prices from late last year.

Anyone have perspective on investing in bank stocks like wells fargo, chase etc who will be dealing with most of these repos? Is that even the way to go? Technically, a bank repo is a liability for the bank and they are trying to cut their losses with it. So it might not be wise to invest in that...

So if I read your post correctly, the current boom in the Used Car market could be fleeting if Repo's hit the market.
A flood of used cars would lower prices correct?

 

[DataDude]

I think we are going to continue to see a very mixed bag moving forward especially if no further stimulus is passed before 2021 and based on how the election is forecasting that won't happen. If stimulus is passed then the continued recovery will gain steam and move forward. If nothing else is passed we will have a long slow recovery just like 2008 and on. If the federal government helps the states and we don't increase taxes on corporations it could be a robust recovery. Unfortunately with both Presidential candidates it seems we are going to get one of those 2 things instead of both.

 

[Nicegy525]

So if I read your post correctly, the current boom in the Used Car market could be fleeting if Repo's hit the market.
A flood of used cars would lower prices correct?

Inventory is in short supply right now, which is driving prices up, especially on trucks. I guess you are correct. Prices would come down once the influx of repos hit the market. But not at first. People will be happy to get their hands on fresh inventory.

 

[Carolina Golfer]

They are both risk and return investments in my mind. Historically will have data.
Next year could change the market quite a bit.

Myrtle Beach has been on the low side of costs for a while, compared to other beach area options. One note with the condo is the monthly fees that come along with that. I don't mean typical home expenses, but association fees that usually include maintenance and external building insurance.

Thx, JB. Good point on the association fees. That part is a concern. It can go much higher than expected.

 

[JB]

Thx, JB. Good point on the association fees. That part is a concern. It can go much higher than expected.

It definitely can. We have a condo in FL still and our association fees are VERY high and will never go down.

 

[Crapgame]

Anyone have perspective on investing in bank stocks like wells fargo, chase etc who will be dealing with most of these repos? Is that even the way to go? Technically, a bank repo is a liability for the bank and they are trying to cut their losses with it. So it might not be wise to invest in that...

That's definitely NOT a good rationale for holding banks or other traditional financial institutions (can't speak for payday lenders, etc.). Banks are not lending on asset values with any intention of taking control over the assets.

There are hedge funds and other distressed investors that employ a "loan to own" strategy, but most of the ones I know are not investable via public securities.

 

[Crapgame]

I think we are going to continue to see a very mixed bag moving forward especially if no further stimulus is passed before 2021 and based on how the election is forecasting that won't happen. If stimulus is passed then the continued recovery will gain steam and move forward. If nothing else is passed we will have a long slow recovery just like 2008 and on. If the federal government helps the states and we don't increase taxes on corporations it could be a robust recovery. Unfortunately with both Presidential candidates it seems we are going to get one of those 2 things instead of both.

I would agree that it appears that either candidate winning would net out to a less than ideal scenario for economic growth and/or stocks. We'll either have more stimulus, but higher taxes or lower stimulus and lower taxes.

 

[tahoebum]

The stock market this morning is super pleased that the gridlock in Congress will remain. I am too. For those wondering what a divided Congress means for the returns of the S&P 500, here’s the data.

Election Preview: The Makeup Of Congress Is Very Important

History shows that the U.S. economy has had major bearings on presidential elections.

www.fa-mag.com

 

[tahoebum]

Our investment advisor sends us weekly updates. She is with Merrill Lynch and here is the summary from her this week.

​ ​ ​ ​ After months of buildup to the presidential and congressional elections, the day after finds us staring at an epic photo un-finish. While that’s not the situation a weary electorate (or investors) might have hoped for, markets are generally calm after a two-day rally of more than 3.5 percent in the equity indices to begin election week. So, what could the markets be telling us? And what’s our view for the coming days, weeks and months as the results solidify and we gain a clearer understanding of what we might expect from the next administration? Whoever is ultimately declared the next president, we do appear likely headed for a period of “checks and balances”—divided government rather than one party holding all the reins. Let’s start by looking at what the markets could be telling us in real time, in three key areas— equities, the U.S. dollar and Treasury yields. And let’s keep in mind that elections are only part of the story. We’ll also look at nine fiscal and monetary issues—we’re calling them “convergence points”—that will be central to moving the economy into full economic recovery regardless of the final election results. What the markets could be telling us Equity Markets Growth sectors that have performed particularly well since the lows in March are rallying the day after the election, relative to the rest of the marketplace. These include mega-growth leaders such as Technology and Healthcare, plus the “stay-at-home” sectors centered around a shift in consumer purchasing patterns. This outperformance could signal the market’s expectation that divided government could result in fewer new regulations. Divided government may also mean less fiscal spending by the government. That could translate into reduced market enthusiasm for the more cyclical and economic sensitive sectors plus the value segment of the markets. As evidence, the Nasdaq Composite at this point is outpacing gains in other indices. The Technology rally could also be signaling that market participants see less potential for an increase in capital gains tax rates in a divided government. The sector had been under pressure in the last couple of weeks over concerns that technology investors would take profits prior to 2021 before a potential change to tax policy. A divided government could take this concern off the table. The U.S. Dollar While the U.S. dollar remained flat across a basket of currencies in the last 24 hours, the Chinese Yuan in the late evening declined significantly versus the dollar. That signaled a potentially harder line versus China over trade, technology and other issues. The decline in the Yuan has since stabilized and moved back in line with its trend pre-election. Prior to the election, the Yuan’s decline had been muted by lower volatility, as markets anticipated a lower chance for major changes in trade policy between the two countries. We would watch this currency pair for signs of changes as we gain more insights on the election results. Treasury Yields Treasury Yields moved up and down throughout the night but have now generally leveled off about 10 basis points off of their highs in terms of 10-Year yields. This could indicate the potential for less fiscal spending than anticipated, possibly slower economic growth and lower inflation expectations and a stronger dollar. The shape of the Treasury yield curve heading into election night had been steepening, in some cases sharply. We expect to see a flatter yield curve in the coming weeks before it adjusts again to a steeper slope as the economic recovery gathers momentum. Nine “points of convergence” that could affect the markets moving forward Whichever way the election results ultimately go, we expect these developments to affect the economic and market cycle moving forward: Despite the possibility for lower spending overall, we still expect eventual passage of a new “fiscal package 4.0.” We expect higher capital investment as the build out of the digital economy continues and is accelerated by the pandemic era. The housing cycle is robust and should continue to drive core U.S. growth in the coming years. The Federal Reserve’s monetary policy remains very accommodative and we expect short-term interest rates near zero to remain in place. Future infrastructure investment and redevelopment remains a major focal point under each election scenario. The prospects for a continued correction in the dollar in the medium term remains. Advancements in coronavirus treatment, testing and potential vaccines continue to unfold. Job growth through 2021 and 2022 remains a key focus throughout the remaining phases of the CIO workout process. Current stimulus (fiscal) and liquidity (monetary) available now and in the near future is approaching approximately 40 to 50% of U.S. Gross Domestic Product (GDP). That’s far larger than any combined package in history. This is a major pivot from most recent cycles post the global financial crisis, in which fiscal and monetary support did not appear to be coordinated. Despite the ongoing election uncertainties, markets seem to be applauding the prospects for a continued economic recovery, job growth and less worries over trade given the improvement in global manufacturing. The recent increase in hedging activity in the markets seems to be waning significantly. However, it is important to remember that although markets are rallying in the very short term, today’s calm may not last. If the Presidential race remains in a “photo un-finish state” for an extended period, market uncertainty will likely rise and could place renewed pressure on equities and a downward force on long-term bond yields. Thoughts for investors We continue to emphasize a consistent, long-term investment strategy. And we strongly caution against attempts to “time” the markets. History shows the S&P 500's best days generally follow its worst days. According to the recent analysis produced by Savita Subramanian, head of BofA Global Research’s U.S. Investment and Quantitative Strategy team, since the 1930s, if an investor sat out the 10 best return days per decade, his/her returns would be just 13% over the full time frame compared to 15,607% (as of 11-3-20) returns since then. With that in mind, the Chief Investment Office remains bullish on equities in both the short and long term, and we continue to look for re-positioning opportunities into the end of 2020.

 

[1ironrocks]

Look, here's the deal. If you borrow money you won't be able to retire. Luckily my wife and I make a ton of money and we've never borrowed any money. Put away 5 million or more and golf everyday wherever in the world you want.

Don't borrow money!