Boghies Account Talk

[Boghie]

Re: This Does NOT feel like a Normal Market

Current Allocation (as of COB Monday, July 14, 2022):

[table="width: 500"]
[tr]
[td]Fund[/td]
[td]Allocation[/td]
[td]Banal Thoughts[/td]
[/tr]
[tr]
[td]G[/td]
[td]60%[/td]
[td]Let's lose money more slowly[/td]
[/tr]
[tr]
[td]F[/td]
[td]10%[/td]
[td]Rode this pig, but a big rate hike is coming[/td]
[/tr]
[tr]
[td]C[/td]
[td]10%[/td]
[td]Nobody else wants to buy in, why should I[/td]
[/tr]
[tr]
[td]S[/td]
[td]10%[/td]
[td]Socialists hate small/medium sized businesses[/td]
[/tr]
[tr]
[td]I[/td]
[td]10%[/td]
[td]The EuroTrash look worse than we do[/td]
[/tr]
[/table]

Sciencey Stuff:

Expected Annual Return: 6.00%
Expected Risk: 4.78%
Best Year: 16.92%
Worst Year: -9.08%
Biggest Dump: -13.38%​

More sciencey Stuff - Current Drawdown:
[table="width: 500"]
[tr]
[td]Fund[/td]
[td]Drawdown[/td]
[td]Start Date[/td]
[/tr]
[tr]
[td]F[/td]
[td]-14.61%[/td]
[td]July 2020[/td]
[/tr]
[tr]
[td]C[/td]
[td]-21.11%[/td]
[td]January 2022[/td]
[/tr]
[tr]
[td]S[/td]
[td]-33.82%[/td]
[td]November 2021[/td]
[/tr]
[tr]
[td]I[/td]
[td]-25.61[/td]
[td]September 2021[/td]
[/tr]
[/table]

I am gaining confidence that the steady hand of our gubmint will guide us toward an unforced error.

The nice thing is that for those that did not just eat all of the losses the predatory recovery will be wonderful. When the pie gets smaller I still intend to eat well.

 

[rangerray]

Re: This Does NOT feel like a Normal Market

Best to you. I don't even want the anxiety of having just a little in right now. It's sort of been nice not worrying (and I know a better day lies ahead eventually).

 

[LTJPFED]

Re: This Does NOT feel like a Normal Market

Best to you. I don't even want the anxiety of having just a little in right now. It's sort of been nice not worrying (and I know a better day lies ahead eventually).

Hardest part is blocking out the noise and thinking there is an opportunity one way or another. Sitting on hands too but it's not always easy.

 

[nasa1974]

I'm 100% "S" fund. I'm way past anxiety. Yep, Boghies November 2021 numbers for "S" fund are spot on. Not living the dream.

 

[Boghie]

Heard it on the Radio, Seen it on the InterWebs

Ok, so Intuit's mortgage grinder business is selling home equity mortgages as:

1. You can use your home equity as an ATM!!!
2. and, you can use a home equity loan as a cash reserve!!!

Sure, that's the ticket.

Where have we seen that before

For those that are a bit too young to have felt the pain of 2007 - 2009 here is reality:

1. You LIVE in your house, it is not really a cash store
2. and, the loan companies were 'calling in' home equity loans back in 2008/9.

When a loan - or a credit card - company 'calls' it's loan you have to pay it back in full, refinance it, or go on some sort of payback schedule. So, that car you bought in 2019 using the HELOC loan is now due in full. And, you now have no 'cash' buffer.

Don't be dumb.

 

[Epic]

Re: Heard it on the Radio, Seen it on the InterWebs

I established a Home Equity Line Of Credit decades ago simply to establish a resource that if I needed cash quickly for emergencies or a large purchase, it was available to me just by writing a check. I think I've used it twice (for vehicle purchases) in all that time.
At some point I really didn't "need" it any longer because my other accounts and funds were growing and were just as accessible, but I've hung onto it anyway. It doesn't cost me anything if I don't use it. It just sits there.
What I would like to point out is that, it's basically a lien against your home, and when you go to sell (which I am planning to do in a few years), the HEL account needs to be closed and gone. You can't sell and move on with that in existence.
If you suck at managing money, then an HEL is probably not for you. :smile:

 

[Boghie]

Re: Heard it on the Radio, Seen it on the InterWebs

I have direct experience with a credit card, but only heard about HELOCs being called from the media and a friend. Both happened during the depths of 2008/9.

I had a credit card with a 7% interest rate back then - a VERY good interest rate at the time and not bad even now. My FICO/Credit rating was also very good and I had never missed a payment. Then in a billing statement the minimum payment was the full amount. Yowser. I was certain it was a mistake. I mean, credit card companies spend a lot of money finding suckers like me that have a balance. So I called. Dude on the phone just told me repeatedly that 'It was a corporate decision.'. They offered a payment plan with about twice the interest rate. I told them in no uncertain terms that I would close the card myself if they did not reverse this stupid decision. They didn't, I did. It was one of the dumbest things I have ever seen a business do. And, now that card company no longer exists.

A friend of mine was using his HELOC as his emergency fund. He had very little or nothing on it, but it was 'called' and canceled by the provider. He had months to act, but sluffed it off.

If a provider informs you that THEY will cancel the credit line than make sure YOU cancel it first and on your terms - and do so in writing. If a credit provider cancels credit it looks bad on your FICO/Credit score. If you cancel it had no affect. Plus, you don't want them auto-dumping you into a high-rate payback plan. Do things yourself, you will have at least a month to do so and I think you actually get three months.

 

[Epic]

Re: Heard it on the Radio, Seen it on the InterWebs

Ahhh, I see.
My account has been transferred or sold once or twice to another financial provider, but never just "Cancelled" like that. That sucks. :worried:

 

[Boghie]

It Might Be Time...

Ok, so equities seem to be in a rebound.

I haven't seen a reason for a rebound. The FED will keep raising rates - but that will really only affect consumers and debt laden corporations unless we hit a deeper recession. The new spendulous bill out of Washington is called something about fighting inflation - but, it's authors don't really make that claim. So... And, remember the FED can 'surprise MFA!!!' FED surprises are never really pleasant.

However, a 'good' reason for a market rebound is simply that equities have hit bottom. I don't like being heavily invested in equities this time of year, but the market does as the market wills. It might be time to start moving assets back into equities. You are guaranteeing loss of buying power sitting in 'G'. That loss over that last 12 months would have been -7% or so. No bueno.

My gut tells me that August/September/October are killer months. They kill because they are thin. One surprise and poof you are sitting at an 8% loss (or more if you can't move and don't move). It is safer to limit loss but take some gain - but is taking 30% of the gain the right choice? Maybe take equity holding to 40%.

Stream of Thought...

 

[Boghie]

Re: It Might Be Time...

The Futures Looks Bright,
But, I Gotta Wear Shades

Again, I cannot fathom why an inflation rate of a mere 8.5% is a good thing. The FED wants 2%. It is going in the right direction so maybe...

I really no longer need much growth in my retirement accounts. Kinda got what I need covered between the three of them - one of which is in 'risk' and making some bank. So, I think I will watch for a bit with my main nest egg (TSP).

I'd sure hate to get all excited and all invested and all in only to have the FED go all Volker on me:laugh:

 

[FireWeatherMet]

Re: It Might Be Time...

The Futures Looks Bright,
But, I Gotta Wear Shades

Again, I cannot fathom why an inflation rate of a mere 8.5% is a good thing. The FED wants 2%. It is going in the right direction so maybe...

Your last sentence (in bold) is all you need to know.
Its not whether its 8.5% now...its validation that Inflation has peaked, and with all commodities, real estate, etc falling hard from June peaks, there is greater expectations of 0.5% to even 1% LOWERING of the Inflation rate each month. That lowering trend will start making people believe the FED will slow their rate hikes in the coming months.
Instead of 0.75% hikes, they might do that 1 more time then signal that 0.50% hikes, or even 0.25% hikes are in the future. That takes VOLKER-like double digit rates off the table.
And THAT...will likely lead to rising equities...from their 30% Oversold position the first half of this year.

Also, the super-strong jobs numbers (300,000-500,000 per month) and Atlanta FED now betting on POSITIVE GDP for this 3rd quarter, takes Recession OFF the table, at least for now.
There is now an increasing chance of the "Soft Landing" that almost everyone had written off a few months ago. Maybe 50/50 now as opposed to 10/90 just 2 months ago.
Now that could change later towards winter...but 'Winter" has nothing to do with allocations in August.

The Futures Looks Bright,

I really no longer need much growth in my retirement accounts. Kinda got what I need covered between the three of them - one of which is in 'risk' and making some bank. So, I think I will watch for a bit with my main nest egg (TSP).

I'd sure hate to get all excited and all invested and all in only to have the FED go all Volker on me:laugh:

Congratulations on having your retirement accounts lined up where they need to be. Nothing wrong with being conservative in that stage.
I'm still trying to get there...and have to outperform the markets to get there in the next 5-6 years.

 

[WorkFE]

Re: It Might Be Time...

Also, the super-strong jobs numbers (300,000-500,000 per month) and Atlanta FED now betting on POSITIVE GDP for this 3rd quarter, takes Recession OFF the table, at least for now.
There is now an increasing chance of the "Soft Landing" that almost everyone had written off a few months ago. Maybe 50/50 now as opposed to 10/90 just 2 months ago.

Of course every talking head has their own agenda but BlackRock disagrees.
BlackRock Says There Is No 'Soft-Landing': Central Banks Will Have To Plunge Economy Into A Deep Recession To Stop Inflation | Markets Insider (businessinsider.com)

 

[FireWeatherMet]

Re: It Might Be Time...

Of course every talking head has their own agenda but BlackRock disagrees.
BlackRock Says There Is No 'Soft-Landing': Central Banks Will Have To Plunge Economy Into A Deep Recession To Stop Inflation | Markets Insider (businessinsider.com)

Of course that article was from Aug 9th...will be interesting if Black Rock tries a "Face-Saving Pivot" in the coming days/weeks given todays inflation report.

 

[Boghie]

What my cheesy allocation in C/S/I allows is time.

I'm trying to keep politics out. I left money on the table during the Obama presidency because my economic and political beliefs interfered with what I was witnessing in the market.

So, I will camp this a bit and watch. I have been throwing a large chunk of cash every pay period purely into C/S/I. I really don't like to be heavily invested in the Summer months anyway. If we hit bottom - and, there really has to no other reason than that we hit bottom and now the prices warrant buying by the big boys - than we will likely get a short sell period that will shake the last of the folks out. I won't get all the early gains, but I will get a decent chunk and I can buy in sometime in November. I really don't like August through October - I have lost a lot of money in those months.

Best wishes, FWM. This early timing move may get you to retirement earlier than you think. They are POWERFULL when they hit.

 

[Boghie]

The Market Does What the Market Wills

Current Allocation (as of COB Tuesday, August 16, 2022):

Fund Allocation Banal Thoughts

G 40% I don't trust this market, but bonds suck, so...
F 10% Rode this pig, rate hikes still coming
C 20% Acting like a market bottom was reached
S 20% Acting like a market bottom was reached
I 10% The EuroTrash look worse than we do. Is this permanent​

Sciencey Stuff:

Expected Annual Return: 7.40%
Expected Risk: 7.92%
Best Year: 22.17%
Worst Year: -15.57%
Biggest Dump: -25.71%​

I don't trust equities, but math is not on the side of either bonds or the 'G Fund'. You are guaranteed loss of buying power in G during inflation, you are almost guaranteed loss of return in F during periods of interest rate hikes. However, greedy corporate grinders can increase pricing to deal with increased energy costs and other forms of inflation. Still, an extremely conservative allocation for me. Not recommending anything for those dumb enough to pay attention to this loss leading thread.

 

[nasa1974]

Current allocation: 100% "S" fund.

Expected Annual Return: No clue. I'm sitting at a -14.77% I was as low as -30.58%. Hoping for something close to zero.
Expected Risk: I'm staying 100% "S" fund.
Best Year: 33.40%
Worst Year: -12.82% So far. But this year might end up being my worst year

 

[Boghie]

Current allocation: 100% "S" fund.

Expected Annual Return: No clue. I'm sitting at a -14.77% I was as low as -30.58%. Hoping for something close to zero.
Expected Risk: I'm staying 100% "S" fund.
Best Year: 33.40%
Worst Year: -12.82% So far. But this year might end up being my worst year

Too funny. This is what 'Portfolio Visualizer Backtest Portfolio Asset Class Allocation' says about your running nekkid on the beach allocation:

Sciencey Stuff (closest thing I can get to S is 'Small Cap'):

Expected Annual Return: 11.51%
Expected Risk: 19.64%
Best Year: 55.13%
Worst Year: -36.07%
Biggest Dump: -53.95%​

At the end of June, the Small Caps were in the 9th worse draw (-22.49%) down since 1972.

That worse year and worse drawdown look mighty scary. I don't want to take part in that ride!!!

 

[felinecrl]

I just love the way you narrate your thoughts. Keep it up, as it helps to humor the situation rather than sulk in it. Thanks for the chuckles...:laugh:

 

[Boghie]

I guess FED Chair Powell isn't overly impressed with the Administration's attempts at controlling inflation - by pouring more money into the system. Who would have thunk?

Why can't this guy open his yak on the days TSP is buying my shares. That would have been nice.

Positive thoughts, think positive thoughts.

This is what we voted fore.

Gooder and harder

Happiness

 

[Boghie]

P

l

o

p​

​

;damnit

I have lost more this year than I did peak to dump during 2007 - 2009. I knew this would be a mess, but I wanted to keep my personal feelings out of my investing. Glad I'm old and never had more than 70% in the market (C/S/I). Yowser...

Man, down 14.5% with conservative allocations.:blink: