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Bullitt's Account Talk
- Thread starter Bullitt
- Start date
Bullitt
Well-known member
TLT turned out to be more of the cup handle, but now it's well past it's buy point. Was that the final ramp up?
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Hopefully most already had a long term plan in place and weren't sitting at their computer this week thinking, "Oh my god I've got to make a move", or even worse, "I'm going to go 100% S today hoping for a dead cat bounce tomorrow." Are either of those sustainable long term plans? I liken both to gambling.
If you don't have a financial plan, it's time to sit down and figure one out. How much of a drawdown can you afford? Can you sleep at night with your current allocation? Do you have other accounts outside of TSP with similar or different goals?
Those with 10 year plus time frames need to look at this as a chance to continue buying stocks at somewhat sensible valuations. S&P 500 is some 20% below the 200 DMA which historically has always been a good time to invest - as long as you have the discipline to do so. Problem is you need to tune out the news in your financial decisions.
I did use today's collapse as an opportunity to rebalance my TSP which was off by over 5% due to market fluctuation.
Currently 60 CSI / 40 F G.
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Hopefully most already had a long term plan in place and weren't sitting at their computer this week thinking, "Oh my god I've got to make a move", or even worse, "I'm going to go 100% S today hoping for a dead cat bounce tomorrow." Are either of those sustainable long term plans? I liken both to gambling.
If you don't have a financial plan, it's time to sit down and figure one out. How much of a drawdown can you afford? Can you sleep at night with your current allocation? Do you have other accounts outside of TSP with similar or different goals?
Those with 10 year plus time frames need to look at this as a chance to continue buying stocks at somewhat sensible valuations. S&P 500 is some 20% below the 200 DMA which historically has always been a good time to invest - as long as you have the discipline to do so. Problem is you need to tune out the news in your financial decisions.
I did use today's collapse as an opportunity to rebalance my TSP which was off by over 5% due to market fluctuation.
Currently 60 CSI / 40 F G.
1965Vintage
Member
I have been telling all the young'uns in my family this same thing. This is a gift! Take advantage of it!
Bullitt
Well-known member
A hedge fund blowing up in a bull market can't be a good sign. It brings back memories of Bear Sterns in 2007.
https://www.wsj.com/articles/SB118252387194844899
Anyone remember that guy Jerome Kerviel who, in 2008, took on massive risk and nearly blew up Societe Generale?
https://www.bloomberg.com/news/arti...st-5-6-billion-trading-loses-520-000-in-court
As far as those stocks that got buried last week in the forced selling, they are all very overvalued in their own mini-bubbles. Everyone is caught up in the streaming craze and looking for anything they consider "cheap" to pile into. It's a very low-margin business with leader Netflix looking for any possible way to eek out profits.
Some day TSLA will see a crash of 20%+ and it will take down all those ESG/innovation stocks with it. So will bitcoin/crypto. Good-bye to all those paper millionaires buying 3-second video clips of a guy slam dunking a basketball.
I did a re-balance last week to maintain my allocation, which is rare for me since it's not needed very often. (65/35 stocks to bonds for those wondering) Re-balancing is means to manage risk, not so much maximize gains. If you were to re-balance in March 2020, you'd surely have had to re-balance again up here as stocks have run so far. That's pretty much where I'm at. Allocations were off by 5-10%, mostly due to the run in S fund, and the rise in bond yields.
It seems right now that risk here is high. A $3T spending package doesn't help matters. What if in 10 years it doesn't work out? Maybe it will, but that's a ton of responsibility to manage. What happens if there is some kind of financial crisis in the next couple of years? Will there be enough money (bond market demand) to bail out banks again?
All tail risks for now, but many times, tails are fatter than you think.
https://www.wsj.com/articles/SB118252387194844899
Anyone remember that guy Jerome Kerviel who, in 2008, took on massive risk and nearly blew up Societe Generale?
https://www.bloomberg.com/news/arti...st-5-6-billion-trading-loses-520-000-in-court
As far as those stocks that got buried last week in the forced selling, they are all very overvalued in their own mini-bubbles. Everyone is caught up in the streaming craze and looking for anything they consider "cheap" to pile into. It's a very low-margin business with leader Netflix looking for any possible way to eek out profits.
Some day TSLA will see a crash of 20%+ and it will take down all those ESG/innovation stocks with it. So will bitcoin/crypto. Good-bye to all those paper millionaires buying 3-second video clips of a guy slam dunking a basketball.
I did a re-balance last week to maintain my allocation, which is rare for me since it's not needed very often. (65/35 stocks to bonds for those wondering) Re-balancing is means to manage risk, not so much maximize gains. If you were to re-balance in March 2020, you'd surely have had to re-balance again up here as stocks have run so far. That's pretty much where I'm at. Allocations were off by 5-10%, mostly due to the run in S fund, and the rise in bond yields.
It seems right now that risk here is high. A $3T spending package doesn't help matters. What if in 10 years it doesn't work out? Maybe it will, but that's a ton of responsibility to manage. What happens if there is some kind of financial crisis in the next couple of years? Will there be enough money (bond market demand) to bail out banks again?
All tail risks for now, but many times, tails are fatter than you think.
Bullitt
Well-known member
Still 65/35 in TSP.
The US is trapped in low interest rates and will have a near impossible time pushing rates over 2% without causing a recession. Raise rates now only to lower them again some day. Thanks to technological advances, deflation is the real looming threat.
The media has been calling the 60/40 portfolio dead for years and for years they have been wrong. The fear is that "high interest rates" and "inflation" will kill all bonds and mortgages, but when have predictions ever been right, especially when the predictions are front page news?
It's the things that nobody is expecting that really move the needle (think COVID, Lehman), and they are impossible to plan for. Diversification remains the only smart way to play it. Looking forward to what alternative offerings will be available when TSP opens up their fund selections in 2022.
The US is trapped in low interest rates and will have a near impossible time pushing rates over 2% without causing a recession. Raise rates now only to lower them again some day. Thanks to technological advances, deflation is the real looming threat.
The media has been calling the 60/40 portfolio dead for years and for years they have been wrong. The fear is that "high interest rates" and "inflation" will kill all bonds and mortgages, but when have predictions ever been right, especially when the predictions are front page news?
It's the things that nobody is expecting that really move the needle (think COVID, Lehman), and they are impossible to plan for. Diversification remains the only smart way to play it. Looking forward to what alternative offerings will be available when TSP opens up their fund selections in 2022.
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