the "The bond market is on the cusp of a collapse." Greenspan

[eddie914]

Tabs,

Thanks!

Eddie

[pwd72s]

Originally Posted by KC911

^^^^^ Paul....you learned a thing or two along the way....was it from lumberjacks, down at the pool hall, or from that nekkid lady ? But that was great!

After the Fed quit buying 4.5 Trillion in bonds during the QEs, and Fed interest rates were 0 for years, I had some bond funds, but a relatively small amount. When the Fed started raising rates a bit (long overdue IMO), those bonds funds tanked. They've done OK since, I don't keep track, but now the Fed is talking about reducing it's balance sheet and interest rates WILL be higher than now.....they've been pretty clear with their game plan. That's my perspective....I moved to relatively short term, individual, investment grade corporate bonds, and will hold them to maturity instead of bond funds....I sleep better that way . Thoughts????

Well, traditionally, should a corporation fall into bankruptcy, bond holders are first in line when assets are sold off. When chasing interest, the higher the interest, the higher the risk. Cindy & I are pretty damned risk adverse right now. We still hold some equities, but our only bonds are I bonds, which are no longer issued by the fed.
If you're thinking individual corporate bonds, do your homework before buying.

we also have a 5 year bank CD paying a whopping 2%. We have more in cash
than we probably should. But like I said, risk adverse.

The are no lumberjacks in Oregon...we have loggers. Kind of ironic. Back in the mid 70's, I began having lunch time conversations with a log truck driver. It was he who turned me on to long term investing. When others in the coffee shop were talking gossip, Chet & I talked investing. Chet enjoyed talking with a younger guy who would listen & ask questions. Few in town realized that by small town standards, Chet was quite a financial success. Ever read "The millionaire next door"? Chet fit into that profile. May he rest in peace, this self educated investor who got me started.

Cindy got diagnosed with MS during that same time period. That prompted me to get my ass in gear. Everybody's situation is different, therefore should tune their investing to their own situation.

[wdfifteen]

Originally Posted by pwd72s

Shift to equities in a volatile market? Damn risky for old folks like me. When young with time to ride out a market downturn that could last a decade or more is risk tolerant. When in your mid 70's with a heart condition? Well, you shouldn't be as tolerant of risk. Preservation of capital takes on more importance than potential gains (or sudden loss) through equities.

I'm 67 and I've reduced my equities holdings to less than 50% of my portfolio for that very reason. I don't want to be eating cat food while waiting for a market recovery.
Not buying any green bananas either.

Originally Posted by pwd72s

Yep, the market has done extremely well since Trump's election. But those of us who look at P/E ratios and other factors wonder how long the bull will last...

I was expecting the bull to have died by now. I just don't see any reason for all this exuberance on Wall Street. With Washington's inability to get anything done, I believe it is inevitable before the end of the year.

[pwd72s]

The exuberance is because Trump is far more business friendly than our previous president. Many of Obama's unfriendly to biz executive actions have been done away with. So, there is good reason for the exuberance. That can only go so far, though..

[Don Ro]

^^^
Heard lately that some call it the "Trump Thump".

[BE911SC]

Originally Posted by pwd72s

Many of Obama's unfriendly to biz executive actions have been done away with.

Such as the gutting of McCain-Feingold. You'd be smart to prepare for another financial meltdown as more banking regulations are abolished.

[wdfifteen]

Originally Posted by pwd72s

The exuberance is because Trump is far more business friendly than our previous president. Many of Obama's unfriendly to biz executive actions have been done away with. So, there is good reason for the exuberance. That can only go so far, though..

I think the exuberance should have encountered reality at least 2000 Dow points ago. There is only so much that can be accomplished by executive order, and congress is proving to be completely inept.

[pwd72s]

Now this is trickling into PARF territory. I apologize for opening that door.

[74-911]

Originally Posted by wdfifteen

I'm 67 and I've reduced my equities holdings to less than 50% of my portfolio for that very reason. I don't want to be eating cat food while waiting for a market recovery.
Not buying any green bananas either.

Same here, I'm 71 and over the last 4 years have reduced exposure to equities from 80+% to 40+%. Yes, I have missed some of the run-up but I sure as hell sleep better at night. Having gone through every market "crash" since 1980, I just don't want to do that anymore. Always before I thought just hang in there and it will come back and it has but I just don't feel that way anymore... Tabs just may be right