Maximum pain for the most players - Where's the market heading?

turbo6bar · 10-26-2008, 04:48 AM

In 2003, Alan Greenspan claimed financial innovation was bringing the world economy to new heights.

In 2005, most believe the housing market was on fire and would never stumble.

In 2006, many believed the US dollar was toast and currency hedging via international stocks was the answer.

In 2007, some felt crude oil was rising on the basis of current and future demand.

In 2008, many baby boomers were/are heavily invested in equities, preparing for future retirement.

The past several years, the majority view has been punished greatly.

Today, there is a lot of cash on the sidelines. Is this the next group to feel pain?

Where else can the market punish the most players? I'm not trying to make a quick buck. I see this as a challenge. Can you or I anticipate the next crash? I realize, by default, the correct view may not be the most popular, the most widely accepted.

I am personally still in the cash camp. We may see inflation of dollars, but I'm not convinced this will offset deflation of assets like houses, commercial real estate, equipment, and fine cars. Over time, inflation will win, but for now, I'm sticking with Ben Franklins.

HardDrive · 10-26-2008, 08:43 AM

Sitting on Bennys here as well.

Not really a strategy, just don't see anyplace else thats makes sense. We are probably going to blow a huge chunk of money on renovating our house. At least we can benefit from the improvements every day. Pump some money into the local construction market.

Oh yes, and anodized parts for my Ducati. I predict a huge market for blue anodized parts that will fit a 2000 Monster. Thus, as a responsible investor, I will be hording them, keeping them on my bike for convenient storage. Gold....bah! Fools! Its billet aluminum brake fluid cover that people will want in the future.

turbo6bar · 10-26-2008, 06:03 PM

Hehe, good on ya. I am doing the same (upgrades to the castle). I am doing most of the work myself, so the equity boost is easy.

I am spying SL Mercs and 356 verts. Can't take it with ya, so why not enjoy it.

cl8ton · 10-26-2008, 06:25 PM

55% in cash and bonds right now.
I think the next big milestone is either 5000 or 10000…wish I knew?

legion · 10-26-2008, 06:49 PM

I'm not changing a thing. I'm in the most aggressive no-fee funds I can get through work.

I can tolerate a lot of risk. I just bumped my 401k contributions and opened a Roth IRA. I want to put as much money in right now as I can.

***

I just caught a Charles Schwab commercial--with Charles Schwab himself doing the talking. He basically said that the instinct to flee the market is strong when it is down, but you need to hang in for the recovery. He's absolutely right IMO.

Hugh R · 10-26-2008, 06:55 PM

Sitting on about 2/3 equities and 1/3 cash. Used to be more like 3/4 equities and 1/4 cash. The market changed that. I have about 10-11 years until I plan to retire, might be 15. Nothing like retiring at 70, sigh. On paper, I've lost 0.5 million in the last year between stocks and home equity. The only really good thing is I have less than 9 years on my 15 year mortgage and I pay 4.625% APY on the house note. The really, really good thing is when I sold the DB4 last year, I put it in CDs.

YTNUKLR · YTNUKLR's Garage

Somehow, I feel the commodities market in the next few years is going to be where most fortunes are made and lost. I remember trading a Uranium company from $7-14, then got out of it last year. At last glance it was at $0.96. Commodities, and global shipping.

Derivatives and credit-default swaps will continue to be a general nuisance, inflating imaginary fortunes and ruining others.

I got nothin' in the market but trying to help my Mom retire . She's 55 and just sold my Grandma's house, wondering what to do with that $. I tell her, sit tight....

JMH 2¢