...buy on the dip.
2
It's called stagflation, remember Reagan?. Any idiot can make the economy look great (temporarily) by huge tax cuts (actually borrowing $2 1/2 trillion. greatly increasing the federal debt and giving it all to the super rich). Soon we'll all be paying the piper for this fraudulent "boom economy". We're going to have to make a choice: cut defense, social security, medicare, Medicaid, Obamacare, and veteran's benefits...about 75% of total federal expenditures (like the GOP wants to do), or raise taxes on the filthy rich and corporations to fund these programs....of course the democrats will get blamed for raising taxes....incredible how irresponsible the "fiscally responsible" party (GOP) has been since Reagan.
8
The market is overheated, stock prices soared when Don the Dishonest came into office, it had to be due to optimism. The market is driven by funds, they have to keep paying dividends so are constantly looking for a better ROI. However, the P/E ratio has not kept up with the price, it has far exceeded the historical averaged for good returns from equities. Also you are at the mercy of the other fund investors, they sell, the fund sells to pay them, you value decreases. On top of that, the capital gains of what equities they sold are passed on to you at the end of the year, your investment value decreases,but you still pay.
In 2008 my net worth declined 32%, but I did not have to sell,my dividends remained the same except for B of A and Wells. The Fed made them reduce their dividends, I kept the Wells it has returned. I pretty much stuck to buy and hold, almost all those stocks have returned to pre 2008 values, the dividends have increased, I have been living off them since 1999, still have the same equity I had then, had to sell some like GE recently, will write off the capital loss for that.
I have been following Benjamin Grahams advice for years, just stay away from pop stocks, don't give your money to fund managers.
4
I get the paper edition of the NY Times delivered to my door here in Denver, and was astonished to see this story on the front page, but with the headline "The Best Place To Put Money? Your Mattress." For shame, New York Times!
I realize the headline is supposed to be a witty joke, but really! How many naive investors will take this as advice? I know far too many otherwise intelligent people who admitted later to cashing out their retirement portfolios during a rocky market ... thus adding fees and taxes to their losses.
Not a very funny joke headline for them.
3
I sure hope Democrats know how to leverage information like this to take down the constant Trump rosy scenario we keep hearing about
But, for the youngin's out there wondering how to survive financially into old age what with student debt and $4,000/mo rent for 400 square foot closets in SOHO, here are a few suggestions:
1. Don't have kids.
2. Don't live in expensive cities. No more than $1,000/mo to put roof over head. No more than 1500 sq. ft. home
3. Buy a new (or slightly used) car with the manufacturers extended warranty and keep the car for 10 years.
4. 401K only up to employer match. No match? No go.
5. Invest. Don't trade. Former makes you rich. Later makes broker rich.
6. Value invest. Venerable stocks paying 4-6% dividend yield. Reinvest dividends until retirement.
7. If you have to fly there, you can't afford it. Watch National Geographic for free.
8. Get annual physical exam. Most HC plans waive all fees for this preventative procedure.
10
Does a global meltdown across all investments mean duped Trump worshippers and his ultra rich backers will soon wake up to the disaster of ignorance and impulse they put in the WH? Chaos, trade wars, tariffs, utter and total incompetence across an entire administration, tax policies producing unprecedented wealth and income disparities, kleptocracy and corruption, treason, children in cages or dead.... One wonders what it will take for, for example, Rupert Murdoch to tell his Fox minions to stop lying and covering for the deplorable in chief.
3
Ha! The fruits of Trump-onomics, "Mr. Tariff," the rip-off-the middle-class mindset of Republicans, Conservatives and Trumpists! Raising Middle and Working class taxes surreptitiously whilst giving Billionaires, CEOs and Corporations a $1.6-trillion tax cut! Limiting for the first time in 80 to 100 years the deductibility of State and Local Taxes as well as the Mortgage Interest deduction to under $10-k per year which WILL economically injure Middle and Working Class citizens and their families. Deregulation on steroids exponentially potentiated promoting regressive economic policies -- such as promoting more obscene Oil profits whilst dismantling health and safety regulations designed to reduce pollution of the air, water, and earth. Blind craven greed supported by blind-faith Trump supporters whose own families will suffer from their support of all of these predatory behaviors.
Perhaps this economic news is a precursor, a harbinger, to a rerun of the frenetic and illusory "prosperity" of the 1920s to be followed by a second Great Depression.
In any case, expect the cancerous Fox Propaganda to function like Nazi Germany's "Berlin Betty" by denying the facts and truth and deflecting all responsibility and blame for their lies, distortions and deflections.
4
Two of three investment accounts I own are up for the year, albeit modestly. I am down modestly from the high earlier this year, but well above where I was two years ago in my retirement oriented accounts.
No intelligent person would expect the bull market to continue forever. In fact, I am surprised it lasted this long.
4
Not if you smoke in bed. I happened to move some investments, not enough, into a federally insured online bank such as Marcus.com. Its daily savings account is paying 2.05%, and a one year CD is paying 2.55%, not bad, plus there are some dividend winners. AT&T just hiked its dividend slightly and now is paying 6.6% annually.
2
Defined Pensions remember those? There was a time when Most large Companies offered Pensions. Utility companies, insurance companies , banks, air lines and many more. Today It's 401k Plans. How many working people can actually put large percent into their 401k? They are too woried about school tuition, car insurance, rent ot mortage. So now with the markets down Many working people will hold off retirement being that their portfolio is down. There will be a real problem come 25-30 years from now when most workers will have little in a 401k and only Social security. My parents worked for a bank when they retired they had a pension and their social security. I was a Union employee so I was fortunate to retire with a pension. With Union membership down and Most employers not offering Pensions, many will be between a rock and a hard place come 30 years from now.
2
@frank monaco. If you had a pension, you'd have a lower salary. Companies would have diverted more money into pension assets instead of to peoples' salaries. The idea of a 401k is that you get higher salaries and it then becomes YOUR personal responsibility (something that is becoming a thing of the past these days) to invest for YOUR retirement.
2
Interesting! The best gains were during recovery from the Great Recession. As soon as the economy is firing on all cylinders, boom, it's the end of the great market.
Of course, politics might have something to do with it. Seems like a Republican presidency presupposes a market crash.
2
There's gonna be a big bust at some point; the wealthy and powerful have seized too much of the wealth and power, but they don't want the game to end and know no other way, so degrade the Peoples' democracy, rights, and freedoms to get more. But once you start to get to that point, the People, particularly the young, no longer believe in the system that's made others rich yet themselves with little chance compared to the days the "West" was still "wild" and open for opportunity, "ripe for the pickins", etc.. Worse is, the worse it gets the better the richest do at the expense of everyone else...till it all breaks. At some point the Piper's due and he comes looking for his payment; whether that's through government being taken back and moving against the corrupt corporatocracy, entrenched elites, etc. or a market crash...actually more like a "reset." So better brace yourselves.
1
I don't know, made a killing in palladium. And went short on Huawei Tech after Kushner gave me advance info on arrest of Meng Wanzhou, the chief financial officer.
1
Are we tired of winning yet?
I have never seen my 401(k) look so red. Ugh.
The rule of thumb for investments is to diversify in order to minimize risk. That was shown to be utterly ineffective in 2007/2008 when everything tanked. Maybe we will see a semblance of that again. If so, OMG, gonna be crazy, mon.
If you were diversified, did not sell, then you crushed it. People that sold out, whined and complained, sitting on their cash as the market left them in the dust.
2
What about investing in actually building something!?
The article excessively downplays the return on Treasuries. A 4-week T-bill is returning more than 2 percent, which is far superior to your mattress.
3
In the summer of 2011, when the far right republicans in the House threatened, once again, to fail to raise the debt ceiling and crash the government, I had had enough. I pulled the bulk of my retirement out of the market and put it into an annuity that gave me a 6% return. I know, I know, annuities are fee heavy, so I'm only realizing about 3 to 3 1/2 percent. But I don't sweat Trump and his party of fools. At least not economically.
Honestly, why invest in anything until our collective governments decide to take climate change seriously?
You all aren’t giving enough weight to the worry we all feel about the future
of this planet.
The market is superfluous when our air is thick with smoke, our water polluted, we have mass insect die offs, plastic in everyone’s gut...
2
Who wants to invest when a charlatan is running/ruining the country?
1
They could always try paying taxes instead.
1
I cringe every time that I hear “unemployment is at a record low”. It’s true of course, but it says nothing about the quality of employment. Folks that used to earn enough for a mortgage on a 1500 square foot house are now struggling to pay the rent for a studio apartment and put food on the table - in spite of being “fully employed”. The fact that real wages have not risen since the 70’s seems to be largely ignored in the estimation of our economic well-being.
5
Just look at stock and market charts -- sharp upward moves with a steep slope are called "blow off tops" and are a good sign it is time to take money off the investment table.
That's what you see right now. The price drops are because the big guys have sold off already.
There is a good reason to balance a portfolio with bonds, dividend paying stocks, cash and growth stocks. And, given that market-timing is not something most people can do well, then you can hold onto your best-return stocks because timing an upturn is really hard to do.
3
The very premise of this article (title is: “Investors Have Nowhere to Hide as Stocks, Bonds and Commodities All Tumble”), and articles like this one, are rear-view mirror focused and stupid.
OK… So, the S&P 500 went down (a mere 2% by the way) in 2018, so everyone should sell everything?
Articles such as these do a tremendous disservice to the investing public (but they do sell newspapers and advertisements in those newspapers).
The stock market is for “long term money.” Money not needed for 10, 20, 30 or more years.
A 2% decline in 2018 (a tiny decline, by the way, after the enormous increases of 2009-2017), should have no bearing whatsoever on where one keeps one’s money for 2019 and beyond.
4
The efforts of Democrats to put everyone into homeownership led to the widespread fraud that caused the collapse of the financial system in 2008. We don’t have anything approaching that now. Trump uses tariffs as an open and honest means to rectify the distortions in our trade imbalance that Obama pretended could be ignored. There are consequences for every action, but at least Trump is trying to do something about the problem instead of ignoring it while it gets worse.
4
It’s your choice as an investor…
While the stock market does tend to fluctuate a lot, it does tend to go up 8-12% per year, on average, with a buy and hold index fund strategy for periods of 10-30 years. The S&P 500 more than made up for its -37% return in 2008 in the subsequent nine years: 2009 +27%, 2010 +15%, 2011 +2%, 2012 +16%, 2013 +32%, 2014 +14%, 2015 +1%, 2016 +12%, 2017 +22%, 2018 (year-to-date) -2%.
Or,
“Oh, I don’t trust that stock market. It’s bad. Trump is mean. I don’t like him. It’s his fault. Trump ‘took our money from the stock market and gave it to his friends.’ I’m gonna just leave all of my money at the bank. My returns at the bank were 2009 +1%, 2010 +1%, 2011 +1%, 2012 +1%, 2013 +1%, 2014 +1%, 2015 +1%, 2016 +1%, 2017 +1%. Now, year-to-date, we are at +1%. For every $100 I had in the bank at the start of the year, I now have $101. But people who were in the S&P 500 have $98. Yeah, I’m so much smarter than them. I would much rather get my 1%, and complain that ‘the stock market is bad.’”
The stock market is for LONG TERM investing (10, 20, 30 or more years). Money needed in the next 1 to 10 years should remain in cash. Put the rest in the stock market and leave it there, regardless of who is president today or what goes on in the news today.
5
It’s Obama’s economy, right? Now that it’s taken a downturn it’s suddenly Trump’s. But change is good. Obama was afraid of doing anything. By not jailing the bankers he was sending the message that it was business as usual so sooner or later the same thing would happen again. But has anyone noticed? It’s not nearly as bad this time. Who gets the credit for that?
1
Year end dividend have yet to be declared, and the bell hasn't rung on the January 31 session. So it's early to say what will happen (except that this market volatility is a direct result of political and trade tensions, largely inflicted by DJT). That said, the economy is not in recession (yet) but certainly slowing. And one thing's for sure: when recession does hit, because we have huge budget deficits already, the federal government won't be much help. The tax cuts in combination with a completely nonsensical approach to trade will make America and Americans (except the uber rich) much poorer in the long run.
2
I suppose that things do look alarming for day traders or other short term investors, but for those of us who are long term investors, ups and downs are to be expected and we pretty much don't sweat it. In fact the more savvy long term investors see equities tanking as an opportunity to buy at a discount.
It is similar with bonds - falling prices don't mean a lot for those of us who buy and hold. The short-term price may fall but that has no effect on the principal or the coupon payments. In fact falling bond price means a higher interest rate, which is great for people who live on interest payments.
So, for a huge swath of the investing public that invests for the long haul, this sort of article is just doom and gloom-ism.
6
Maybe grandma was right after all - put the money under your mattress. I got out of the stock market for the most part before the last crash (sheer luck). The problem has been easy Fed money and very low interest rates. The stock market is no longer a place for companies to get capital. It has become a huge casino fir the wealthy instead. Pushing companies for short term results instead of long term gains. There will be another financial crisis. It is just a question of what will trigger it - this time probably student loans. When the student loan deficiency rate hits 40% or 50%, then the whole system will come crashing down.
2
@Mike L
Are you saying you got out of the market before the 2008 crash? That was not "sheer luck." That was the opposite. It was a huge mistake. You missed out on ENORMOUS returns during 2009-2017... which have just experienced a very modest 2% decline this year. Grandma was not right. Under the mattress is not the place to "invest" your money. You'll earn a guaranteed growth rate of 0%, you won't keep up with inflation, and someone can take your money from such an unsafe location. Use grandma's advice for baking apple pies, cookies and cakes but not her advice on investing.
3
A stock market boom built on easy money (from FED at 0% interest) is bound to end up in a bust, hopefully not too severe, when that party (quantitative easing) ends. In any case, the non-investor class has had minimum wage jobs that require two of them to pay the bills, let alone have money to invest in the booming stock market. So much for "full employment" utopia of the last decade! The irony is that the investor class made like bandits from forced investment in stocks by seniors and retirees, who had no option other than see their lifetime retirement earnings shrivel up. Ultimately, it is the 99% that ends up paying no matter what, whether through stock market crashes or exploding deficits. Hey, who wants socialism, when so many (the 99%) can be so easily led to slaughter, while dreaming of a capitalist utopia, which somehow never seems to happen to them?
5
Obama and his economic team entered office facing a failing economy with the banking system on the ropes and with other parts of the economy badly stressed.With low interest rates and a diligent Federal Reserve the economy began to revive and by the time Obama left office the stock market had risen steadily.Enter Donald Trump who decided that the best thing for the economy was a big tax giveaway to the wealthy and big business.Companies bought back their stock or bought other companies with the windfall and interest rates low.This did not put people to work or create new jobs.A large and visionary renewal of infrastructure would have done that.Trump started a Trade War Immediately instead of patiently revising treaties.We now have China facing a slowdown, Europe fractured with uncertainty and a market that knows that interest rates are rising.The market climbed a "wall of worry"and now every worrisome problem is happening- no surprise the market is volatile and falling!
6
It is odd to draw an artificial line in ever-fluctuating financial areas simply to create a political statement. Rather like sending fire and smoke jumpers into a snow storm or a hurricane.
Why, it’s almost as though data is being scrubbed and tumbled together only to launch a point that is critical of our President.
2
fear, uncertainty, and doubt. markets are irrational. economics is a fantasy.
1
Irrational is the interpretation of the forms of appearance or phenomena which continues to confound economists. Thereby the exuberance followed by depression always catches even Noble price winners by surprise. However the valorization of capital has been studied and explained by people like Marx. He explained the phenomena like price or profits that contradict their essence (or the augmentation of value by means of living labor). There is nothing irrational about it. Interest or profits taken by themselves indeed are irrational
1
CD’s provide decent FDIC insured returns (2.75% for a one year maturity) without the interest rate risk of a bond. Financial advisors tend to avoid CD’s because they make very little money selling them. If you own bonds rather than CD’s ask your advisor why.
8
What is a speculator to do? Become an investor with a long-range plan? Nah, that's boring no adrenalin rush as you ride the roller-coaster of the market controlled by trading programs.
I read the comments of fellow seniors who shifted to bonds in the past decade and they got zilch in return when compared to inflation.
I learned about "investing" as a teenager and was taught how to invest, how to speculate as well as how and where to put your cash as you planned for retirement. I implemented the plan and it was anything but exciting, about as exciting as watching the lawn grow. Even my occasional speculative ventures were overall lacking in emotional excitement.
I'm not wealthy but I'm not poor either. Over 30 years ago I started the move to bonds away from stocks. Now, at 70 I don't own any stocks and my bond portfolio has repaid every dime I put into it and still provides me cash every month.
The market is run by programs that few understand and speculators fuel the roller-coaster. Most humans use emotions to make decisions and like the thrills. Well, it is thrilling to see your life savings vanish like a magician's assistant. Are we having fun now?
10
It's only a matter of time until some huge scam by Wall Street manifests and crashes the economy again. With the Republicans in power they have made sure Wall Street knows they are not policing the beat anymore.
Without guidance, the invisible hand of the free market picks our pockets (and cops a feel). The markets are incapable of doing what is in their own best long-term interest and rather operates for short-term gain.
6
Markets rise and fall based on fundamentals and sentiment. Fundamentals are pretty good right now, but sentiment is terrible. This combination is often a good time to be buying, not selling. In fact, just as these bearish, inflammatory articles come out and spook everyone the most, is often the buy signal.
4
I am halfway to being a good investor. I don’t sell when indices decline. That is good (in fact I am buying on the downturn).
But the other half not so good at as I still look at the ticker way too much.
2
When our GOP Congress passed the Wealth-Care-Not-Health-Care 1% tax cut late last year I fully expected that there would be a temporary surge in stocks (at least) since most of the new-found wealth at the top was used for stock buy-backs, not increased employment. It took about 9 months for that to run its course. The momentum of an otherwise-robust (reasonably--I agree with others who say that the unemployment figures don't reflect the fact that pay hasn't kept up with inflation for many workers) economy has kept other investments pretty strong during this low-inflation, high-growth period that started with Obama.
The main difference between now and the last big recession, in 2008, is that because of said GOP tax bill the Fed really doesn't have any tools to counteract a huge downturn: There is no money left for a big stimulus package as in 2008-9; it's all been given away to billionaires and corporations already.
Prediction: When the crash comes--and it's not long now--it's going to be a really rough ride.
Gold ingots for the 1% class and lumps of coal all around in everyone else's stocking this Christmas. Thanks, GOP!
10
The New York Times printing an article advising putting my money under the mattress? I couldn't believe it!!
As a retired person I have invested conservatively for over 25 years slowly investing in stocks and have been slowly but surely rewarded by being frugal and doing research. Yes the market is down, but it was a bubble for a while. I think that a carefully chosen portfolio of dividend paying stocks in stodgy companies reinvesting in themselves is the best way to go at this point. As Paul Kangas said some years ago before leaving Nightly Business Report, the best thing these days is to invest in dividend paying stocks as there is no interest in savings accounts. This seems to hold true.
Also I think it's a terrible idea to be listening to the pundits. Best to do independent research, learn how to research companies, and believe that America is already great.
Personally, I think this article is inflammatory and has a lot of negativity. People have to believe in something rather than tear everything down. America is a rich country with a lot of opportunities, and the economy overall appears to be doing well. The ups and downs of the emotional stock market are the last place you should be acting on in the short term.
5
Yes America is a rich country even though that wealth is concentrated at the top. Furthermore, today’s most value specifically is created overseas by cheaper labor and brought back here or reinvested minimally in productive activities (most is used to buy back shares). You may know though that so called emerging markets are slowing down and the accumulation of wealth thereby slowing down. See case of iPhones to give you an example - or the trade war as a symptom of same phenomena.Too much of a thing is not good. So prices eventually come down to coincide with real values, which at the moment are much lower than claims on them. Therefore, it is prudent to see the end of this cycle (or bubble).
The question is whether this event is presaging a regular recession or a pivotal change of a different magnitude as evidenced by epiphenomena like the mass migration of unemployed around the world, the yellow vest movement, or the rise of proto fascists around the world.
8
@ChristineZC
"The New York Times printing an article advising putting my money under the mattress?"...
I missed that part.
Investors might want to think outside the current box of most economists and have a peak at the fast approaching cliff of severe climate change. Population and economic growth are in the long run suicidal, but this is heresy to nearly all economists. Wake up; we need a new way of maintaining a human economy.
4
@RBS No, Malthus was an economist and he already predicted what you are saying.
Wait-wait wait!
Why are there few comments on how to profit in a declining or flat Market? Ever hear about the conservative pathway of selling Call Options on already owned stock?
Example: You already own 8000 shares (@$50) of a company which pays a 4% dividend. ($32,000/year). You ALSO sell, on a weekly basis 80 Call Contracts that are $2 out-of-the money )($0.80/contract), yielding $640/week, giving you an extra $640x52 = $33,000, giving you a total of $65,000, (14%) assuming the stock goes nowhere in price! Even if a disaster hits, and the stock's price drops to $45 (10%decline) you make $65,000 - $40,000 = $25,000.
I know; I know--Dividend has to be secure, etc. Well?
1
@HM
8,000 shares x $50 = $400,000 x 0.04 = $16,000 a year, not $32,000 a year.
6
Of course interest rates had to go up given the cheap money that flooded the market after the crash. But it doesn’t take an economist to understand the economy is sliding so why is any interest rate dropping at all or even being contemplated ? Inflation is well under control and are they seriously worry it could hit or stay at 2.3 or 2.5 with these cheap employers in this country so greedy in giving proper raises but instead offering as much non cost items to employees ( yoga and art class lol) and doing buybacks and increasing their own pay. Take the brakes off now. Just because someone got it in their head there had to be 8 or 14 rate increases or whatever justifies the economists pay -means that you can’t take the economy off autopilot and started,exercising some common sense judgement. And to be clear Trumps level of knowledge about the economy is equivalent to a 5 th grader so let’s ignore him.
2
It is time to reduce regressive taxes levied by state and local governments and to reduce or hold steady on property taxes.
GET taxes and sales taxes push marginal earners and fixed income seniors over the edge. Property taxes generally increase and threaten people whose incomes do not come with an automatic cost of living adjustment each year.
Businesses and airlines should get rid of surcharges as well.
These small economies taken together will preserve consumer spending at the low end. But the low end includes many more people and stabilizing prices for them will stabilize the economy and stock prices in companies that serve the lower and middle classes.
When cities are again affordable for middle income earners, we will have a dependable economy. Not until, however.
4
Trump is creating excellent buying opportunities. If you have cash or a job and a horizon greater than a few years you should be buying index mutual funds at frequent regular intervals. If not, you should be voting Democrat, to preserve the social safety nets that you now need or will soon need.
I pity anyone who was not significantly invested in the stock market for the last ten years. They were badly advised or over cautious.
4
@Richard Schumacher, sure, Trump’s incompetence is creating buying opportunities, but only for those who have cash with which to buy. For the average salary-person, that cash simply isn’t available. Most of us are contributing the most we can to our retirement accounts, and there are too many people who don’t have such account at all because literally all income is going to pay for living expenses.
Yes, I do as you advise — I buy, with every paycheck, shares in low-cost index funds. Is it enough? It’s all I can do.
Sure, I wish I sold everything in my retirement accounts back in October and had a big pile of cash waiting to be re-invested at the bottom. But as we’re told, you can’t time the market. Also, my company’s 401(k) doesn’t offer a cash/sweep account and the expenses for the Treasury money-market fund are so high that losses are guarantee, so even if I wanted to sell in October, I couldn’t.
3
I am so tired of winning already! Can we bring back Mr. Boring?
10
Cash is a position. Also someone on a 30 year investing timeframe shouldnt care about this.
7
There must be someone who can be blamed for this. Probably not Hillary or Obama. Mueller? Angry Dems? Illegal immigrants? The Chinese certainly could be blamed because they get blamed for everything else. Perhaps we're not raking enough?
11
The media. All that bad news!
Gross inequality makes the markets dangerous, as purchasing power dries up. The late Louis Kelso suggested a Second Income Plan which would sharply reduce the problem.
Kelso was the inventor of the Employee Stock Ownership Plan - ESOP - used by 11,000 companies.
See SECOND INCOMES at aesopinstitute.org to learn more.
1
I'm fully invested in stocks:
Beef.
Chicken
and
Vegetable.
Next year, I expect to be
a boullionaire.
63
Ah yes. Should have taken all of the investments off the table until t-Rump and his band of fools were gone. It was pretty much expected with this bunch.
7
The tariff uncertainty is causing a lot of the volatility of the stock market.
3
Comments pointing fingers at a particular president for how the stock market is doing, whether it be Trump, Obama, Bush, Clinton, or even George Washington, are engaging in a silly exercise. The stock market is much bigger than a 4 (or 8) year presidency. The stock market has been going up and down and up and down (but mostly up, by a lot) for over 100 years. News of the day, including things a president might say or do on a particular day, may have a relatively short-term impact here and there. But, in the long term, big picture, the words/actions of a president really don’t have as much of an effect on the stock market as most people think. Big picture folks. The stock market is for money you can leave invested for 10, 20, 30 or more years. Anything else belongs in cash. Put your money in and IGNORE the day to day ups and downs- spend more time with your family and friends instead.
17
Seriously?
You can’t ignore Trump - he is rolling back environmental regulations, fight with China....and Canada and EU and Britain and Iran....and....and....and...
Markets are not insular to political dynamics, especially when the politics could have implications 10, 20, 30 years from now.
12
@M the economy has gone through recession and recovery for hundreds of years. The markets go up and down. The impact of any politician is very small.
1
Financial assets are grossly overpriced, they are bound to fall with or without the rate increase. The rate increase will at least keep the lid on the inflationary pressure, which has been running above 2% all year, and give people option to save instead of spend. With the huge debt that we've been racking up, that would be a good thing.
I’ve been mystified as to how the market was holding up so well up to now during the tenure of the current president.
It seems that everybody and their mother now knows that the emperor has no clothes. Perhaps a modicum of sanity is being regained.
13
Obama borrowed and spent $9 trillion in 8 years. This sudden expansion of the money supply will result in massive devaluation. It has begun to catch up to us and company margins will not be worth what they were and they cant double their prices overnight to compensate. We are gonna pay for it now.
1
The deficit has surged since Trump to its highest level in six years.
15
The rich will do fine. All crashes occur with deliberation by the super rich. When the markets crash those who know in advance can move in and clean up. This has happened over and over. Don't worry, the taxpayers will bail out the banks and stock companies like they did during Obama's terms with Quantitative Easing. Today the younger generation must work two or three jobs to make ends meet and things will get worse for them. The masses accept this by voting year after year for the same creatures to rule them. The voting class thinks a difference exists between the democrats and republicans because they have no memory.
9
I am a bit surprised at how well my conservative dividend growth portfolio is holding up. I am only down 5%, and all the dividends are still being paid.
Of course, these sorts of stocks don't have giant gains when the market is booming, either. But the value investing model shows its superiority by not losing much in bear markets.
If you have cash, now is the time to make a list of the companies you would like to own, and what you would be willing to pay. Being ready to buy when the time is right is an important part of long-term investing.
68
@Jonathan
I've been a value investor for 40 years.
My biggest problem in retirement is paying taxes!
If the economy tanks, one good outcome is that republicans in CONgress will have no more cover for their disastrous tax cuts tax cuts tax cuts and other con jobs on their gullible base and the rest of US. That plus a overwhelming voter turnout by Democrats could bury republican CONtrol of our government for sufficient time to allow democracy to return under supervision by Democrats.
Clearly republicans have zero intention of acting fairly or in the best interest of the majority of US. For them it's strictly about gaining and retaining power... party over Country 24/7. They can wear all their little flag pins, and claim how patriotic they are. WE see them for what they really are lying FRAUDS led by the biggest LIAR of all CONald Trump, chicken hearted tweeter-in-chief. Tick tock. Tick tock.
8
How will seniors dollar-cost-average their way out of the second Republican-caused economic crash in ten years?
5
@Alex: They won't. They'll learn to do the only thing that can save them now: vote Democrat.
For perspective, read John Bogle’s (Vanguard Funds founder), book on investing. It’s short, simple, easy to understand. You cannot time the market but you can own all of it and sleep soundly at night.
4
Stanton's guaranteed, almost-sure-fire multi-point primer on successful investing for retirement and other occasions.
1. What goes round comes round, i.e., market breaks eventually repair themselves, more or less.
2. Inflation is an ongoing fact of life; regardless of what the government may claim, the money in your pocket and savings account is always and constantly declining in worth.
http://mashable.com/2016/07/27/german-hyperinflation/#xLJRoy2zhsqo
3. Buy and hold common stocks that produce products that people want and need such as food, drugs and oil; that have long records of success. Never invest money in tech stocks that you don’t understand. Fundamentally this means all of them.
Boring companies that produce products like chemicals, food, drugs and minerals are safer and will often do much better in the long run.
4. Favor stocks with long records of paying dividends. Avoid cash, bonds and annuities like the plague they are.
5. Don’t ever think about buying bitcoins. They are stored in computers that are prone to becoming unplugged from electric sockets.
6. If you crave exotic investments, buy tulips. They at least are pretty.
7. The problem with housing and real estate is that buying and selling is slow, cumbersome and complex. Also, they are hard to put in your pocket and take to another country.
8. Reinvest dividends, whenever possible.
9. Don’t pay other people to handle your investment decisions. That job is yours.
More-to-Follow.
15
10. Keep informed about the state of your investments, but do not obsess about them. Checking the state of your investments on an hour-by-hour basis is a pathway to financial ruination. Once a month is O.K.
11. if you cannot tolerate risk, move into a police station. Life is risky.
12. There is a time to buy and hold. And that time is always. Sell only when all your instincts tell you to. Otherwise hold, hold and hold some more.
13. Learn how to read annual reports for what they tell you about the history and business philosophy of the company. You can largely ignore the financial sections, which are mostly exaggerations and lies disguised as truth.
14. Gold can be a good investment. But only in the sense that stocking up on guns, ammunition, canned goods and bottled water can be a good investment.
15. Save early and save late. And then save some more until it really hurts.
16. Live modestly and avoid debt, flashy people, fancy cars, houses and apartments. In the long run, a healthy stock portfolio will keep you happier and saner than any of these things.
17. Find a man or a woman who agrees with you about how to handle your money and marry-up with them.
18. A rich person is rich because he/she has enough money to get what they want or need when they want or need it. The true road to riches is paved with wanting and needing less.
19. Stay healthy, be lucky and never forget to say your prayers before going to bed.
32
@A. Stanton Ha! I loved your comment and have pretty much lived down through the decades what you say. Now, in my 80's, am sitting ever so pretty.
4
@A. Stanton
Kodak, GE, Sears all seem to meet your definition in point 4. Until they didn’t.
The White Mafia House Bears its Fruit...will establish ties to Naples and Sicily!
Guilani to become its ConsigLieore in late January.
2
One year movement in the stock market is relatively short term and does not measure the market results over the Trump presidency. At first, upon the news that Trump had been elected, stock futures dropped sharply. But by the end of the day, stocks rose sharply, reflecting market approval of his election.
In the two years since the Trump election, the market has risen a sharp 31%. True, it has leveled off in the past year. But a 31% two year rise is an extremely strong performance.
Trump's corporate tax cuts were great for big business. And what's great for big business is great for the market. Anyone who thinks that a big business President would be bad for investors has got it upside down. Trump's priority is the 1% and that is exactly what the stock market wants.
2
Two things affect the price of the investments. One is the fundamentals. The other is human psychology. Right now fear (a human factor) is driving people to sell assets for cash which is another asset class. The long term fundamentals are good though. We have a raising middle class world wide and productivity is rising. This makes assets rise in price long term. You make money buying when price is down and selling when it is high. You should be buying right now not selling. Money that you need in the next several years should not be in volatile assets like stock.
5
I can't believe I am saying that, but it might be time to move some money into gold. And now I am going to wash my mouth out with soap.
1
I used to make decent money with staggered cds earning 5% or 6% back in the late 90’s early 2000’s. But the past 10 years has been rough. When you lose so much of the value of your hard earned investments it’s difficult to watch and hard to recover (aka 2008 recession). Even now cds are earning up to 3% but that is possibly not even on par with inflation. I guess a small % is preferred to zero %.
4
I remember Trump boasting about the stock market, pretty recently. What he fails to understand is that tweeting and not understanding the most basic policies, is antithetical to governing. You can't be a president if you don't like to read and get your information from 2 minute pieces on Fox News and CNN. The economy is fine right now, but the perception that no one is in charge or the one in charge is basing policy on some tantrum over an inferred insult, has people scared. Every single day we are bombarded by news, a tweet storm, crazy tariffs, attacks on Canada! Canada? And then the indictments of his team members, who can even keep track of the staff changes, the faces change so fast I wouldn't recognize them in a crowd. In other words chaos. Max Smart would spell it KAOS and he'd be right. Putin must be having a good old giggle. Who knew it would take just one narcissistic nincompoop to bring the once greatest nation on earth to it's knees. People who are scared don't function well and the stock market is just a measure of fear. Hang on everybody, we'll weather this storm, we've weathered other ones, but I would suggest you sign up for classes in Mandarin at your local community college. There may be having a slump right now, but they have a 10, 20 and 30 year plan and they could care less about America. They have bought their way into other countries by offering a little over asking. They are already there.
This decline was predictable more than a year ago. Debt.. Credit card debt..[buying online.] Fed gov't debt.. [illogical deficit spending.]... Student loan debt..[high interest payments and defaults.] ...Corporate debt..
[driven by tax cuts avarice to swallow other companies]..Slowing of real estate sales...[cap on deductions due to tax break by republicans' infinite wisdom]..All obvious...predictable.
2
The depression is coming and you all know it.
4
Uncertainty. How can anyone think that there is some sense in the financial market when we have an Unstable, impulsive, angry ignorant man in control? I realized this 1/12 year ago and got out. I cannot imagine anyone leaving their money on the table when this guy can "Tweet" some crazy nonsense and cause the market to crash suddenly. It has and will happen until he is removed completely. Lets hope the environment and the finances of this country can be repaired afterward.
10
trump the deal maker!
As far as I can tell he’s been making deals to enrich his family and gold toilets.
The rest of us, not at all.
How’s he working out for all the trumpeters this Xmas?
8
HFT, whatever happened to High Frequency Traders? that add nothing to the work, nothing of value to investing, but make out like bandits, up or down. Shouldn't we regulate them?
1
I know this paper loathes Trump/the GOP and is willing to do anything to undermine him and one of his strongest pillars, but five-alarm headlines like this don't help anyone. The market is controlled 80% by institutional investors. They are likely shifting things around now trying to not eat losses for year-end/quarter-end, by which I mean scrambling to recalibrate so as not to come in under their benchmarks by 0.5%. I doubt anyone is worried about trade. That's a shell game with the govt picking winners and losers and is likely to be a drop in the bucket. Interest rates are a modest concern and unlikely to affect anything in the long run. So is the goofy govt. shutdown, which never happens and never matters even when it does.
The stock market has become decoupled from the normal hallmarks for a long time. Even with weak growth since the recession it went up. The truth is no one really knows why. But suffice it to say that as growth is stable, which people mostly anticipate it will be next year, people are going to keep dumping money in the stock market.
Everyone's jittery for a bunch of reasons that are likely to not be material a few months from now. It may not be a great year or two. Who knows? That's not how the stock market works.
The market is a bet on the US economy. For the market to win it doesn't have to be an ideal bet, just a better bet than other places. The "panic" now is just people trying to avoid short term losses, not concerned with the longer term .
5
So glad we pulled all our savings out of the market and invested in real estate when Trump was elected. Of course, it helps that we are in a blue state where the housing market is doing well. Everyone wants to live in the Pacific Northwest.
5
@Anine
“Everyone wants to live in the Pacific Northwest.”
Except for those of us who really want to live in Cleveland.
1
Money is leaving stocks and going to bonds. By the way in the 1970’s even though unemployment was high interest rates went up even though stocks were going down. Currently bonds are going up when money leaves the stock market . Doesn’t always have to stay that way. Just last month the government had a $200 billion dollar deficit. In the next five years I see the ten year first going to 5% and then hitting 7%, possibly 9%. Cash flow from real estate will not cover investment products. If you are over invested in real estate go to cash . There is no way for rates to stay low if you run a trillion dollar deficit every year. Governments may choose to default on their debt or try to print worthless money to pay it off. In the next five years most likely rates are going to double or possibly triple.
1
Sure blame Trump but he is the icing on the cake . Our empire has come to the end of the line and the cake is rotten through and through .
Inevitably our manufacturing economy declined and the FIRE ( finances , insurance , real estate ) economy took its place . Traders on Wall Street can make millions in seconds , vast inequality is spawned and the hole only gets deeper .
We once had a Henry Ford who built things; Now Russian oligarchs Buy Trump properties with money that is lighter than air . All that is solid melts into air ....
8
@Howard kaplan
The best way to get away from idiotic policies is to realize that we are rotting from the top . We need to get rid of Trump by any legal manner possible. He wants to be the first dictator. He is envious of Putin who answers to no one and to the North Korean leader that has had death camps . We need to impeach Trump before he attempts a coup detat with the renamed Blackwater mercenary force.
3
Safe harbor for excess flows of capital? How to prevent massive volumes from entering the sea and just evaporating into the atmosphere? Oh dear.
Burying it on a treasure island or shuffling it about in filing cabinets in Panama fails to account for the potential inflationary period ahead: the capital will just evaporate before it reaches the sea!
Liquidity, flows, fluidity: how to pool the capital to prevent dissipation! All this water imagery, people running about, hands cupped with water, others following on their knees sponging up the drops, splashing and squeezing out their cash into leaky basins with the invisible hand gripping the drain plug looming over all as the Great Threat.
Is there a drought coming, are the weather patterns becoming less predictable, is there climate change in the financial sector inextricably linked to the real earth phenomena, chaotic in its apparent order then next its volatility? And just when you think it's all metaphor, does the reality strike, then fade, then strike again? Are we equally confused by what is real, what is a fabrication, and above all what is secure? Can we eat our commodities, and price them too? Can we hedge this racket and secure our holdings through elaborate narrative tales of fiction?
Will our political economy hold water? That is the question.
3
Individual -1 has made a fine mess; first, a free-for-all rich tax cut combined with a tit-for-tat with the rest of the financial world (except for his main Russian squeeze).
4
Thanks for the article anyway! Because you tell us that there isn’t any point in messing w anything now! ‘Cause there isn’t anywhere to turn anyway!
1
This is one of many intended consequences by those who manipulate Trump and Co. as a "useful idiots" ... injecting chaos and anxiety into our economy, our social fabric, our relations with allies, our human rights ethos ... his sociopathy and destructiveness is a tool for them ... if you don't believe this or are blind to it, read Malcolm Nance, or one of many ex- intelligence, ex- diplomats, ex- government people (ours and other western countries), or the plethora of well researched articles in newspapers and magazines ...
5
Renewable energy is key to global prosperity.
11
Like many seniors, we can not afford to risk putting any of our savings into the stock market. We need our savings to live, and if we had another crash like the one in 2008, we would never be able to make our money back. So, for the last 10 years we've been earning a measly 1% interest, which is a lot less than what we had planned. As a result, our savings have been depleted much faster than we had anticipated, and we'll now probably outlive our savings.
Janet Yellen may have been able to save the stock market for her investor class, but she did it at the expense of seniors and anyone else trying to save money the old fashioned way.
278
@Jack Edwards I am retired and all my "investments" are in individual stocks, those that pay dividends to pay my bills. The old fashion way is to invest to meet your desires, in my case all in stocks that pay dividends.
21
@vulcanalex - If you hold enough stocks that pay enough dividends to pay your bills, you're not the average American investor.
84
Seniors are in a tough place. Many have been forced into the stock market due to low interest rates. While banks make record profits, they no longer feel obligated to share those profits with their customers.
When I was young, people who had amassed some wealth in their lifetime simply lived off their savings and the interest from those accounts. Now you lose money every year you leave money in a CD or savings account even with relatively low inflation.
49
Tariffs will single handedly destroy our economy and take with it others around the world. Not winning.
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@Rod Zimmerman
Please provide some specific reasons as to why tariffs will destroy the economy.
@Michael raising prices in goods to US consumers, which means they will be able to purchase less, which means a downward pressure on economic growth. Many families never fully recovered from 2008, and the wage suppression on the middle and working classes has continued unabated. Full employment rates at suppressed wages merely keeps people dog-paddling to stay afloat; this does not create demand. Increasing prices shrinks that demand even more.
Tax cuts to billionaires also strangles economic growth. Jobs and investments are not resulting....no one with half a brain thought they would. Wages were only increased as. Result of the tax cut in those businesses that had been facing severe social pressure, some for more than a decade, to increase wages and stop using US social support programs to feed and House their employees.
Wage inequality is another downward pressure in the economy in this toxic mix.
7
@Michael: read the history of the Smoot-Hawley Tariff Act:
https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act
3
Retired in 2013 at an advanced age. I pulled my meager retirement investments out of the stock market shortly after the most recent presidential inauguration; put 'em mostly in money market with some in short term bonds. "Missed it," I told myself when market leaped up; "Smarty," replied me at downturn. I'm old enough to remember when I briefly played commodities in the '60s. Nearly lost my shirt. I simply don't have the credentials that many of these commenters appear to have. But I believe the pros are simply shaking us little guys out and cleaning up after us.
217
@Howard Morton "I believe the pros are simply shaking us little guys out and cleaning up after us."
Yes. You're called "the dumb money"...buying after a stock has gotten hot and selling at a loss after it has crashed.
2
From ground level, it looks as if we are overdue for a downturn. Job creation is often pointed to as a sign of our fundamental strength, but I see so many people working at jobs (often multiple jobs) that effectively pay what they did a decade or two ago. Home ownership and retirement accumulation are often impossible. Meanwhile the GOP has passed a massive distribution of wealth to corporations and stakeholders, and is moving to decimate government subsidized healthcare. It’s a bleak picture for the average consumer. There seems zero probability that it won’t get bleaker.
342
@the doctor I predict mass revolts and they may get very violent.
16
@the doctor, these bankers and investors and the wealthy are the people behind Trump and the Republican party. If they used their money for good, like direct investing in projects that help people, rather than trying to squeeze out every dime, and playing the odds (AKA various risky financial vehicles)like a drunk at a cheap Las Vegas roulette wheel, the country would have been better off fiscally and politically. Instead, they've created massive income inequality and have gaslighted regular people into believing that the Republican agenda is good for them. I got out of the stock market decades ago, and was hurt by it. A correction is much needed- both financially (starve the greed) and morally.
20
@the doctor Add in a government shutdown on 12/21 with the subsequent downgrading of America's debt and the situation becomes even more dire.
The American empire's ending will be brutal for all - except the 1%. Once the dollar is no longer the world's reserve currency, all bets are off. The worldwide "greater" depression will be upon the entire globe.
16
Trump’s silence is deafening
11
Art through the roof...
Crypto soon down 10X from a year ago - but still up 100,000X from a decade ago...
Tangible US wealth seems just so 60's...
I’m getting tired of all this “winning”!
10
Ahhh!
The comfort of a good money market fund.....cash just feels GOOD.
3
OMG! I SO wanted to retire and it looked like stocks were doing well! Now am SO fed up of Trump!
1
So tired of winning.
1
I guess instability in the markets has rattled our trust in an economy that seemed to be on solid ground, if only our failed businessman in-chief would stop interfering in world trade and tariffs that excel in stupid gestures with no rhyme nor reason. Can't Trump be confined to his soon-to-be-flooded golf courses (in spite of his denial of the science behind climate change), wiht a big tape on his big-mouth nonsense?
2
Oh, ain’t seen nothin yet.
3
The sky is not falling. During 2008, the S&P 500 dropped 37%. During the NINE subsequent years, the S&P 500 had positive returns, as follows: 2009 +27%, 2010 +15%, 2011 +2%, 2012 +16%, 2013 +32%, 2014 +14%, 2015 +1%, 2016 +12%, 2017 +22%. (If you don’t believe me, look it up online). Now, year-to-date 2018, we’re at -2%. If you invested $100 in a plain-vanilla S&P 500 index fund on Jan 1, 2008, and just let it sit all this time, you now have about $220. If you invested $100,000 and just let it sit all this time, you now have about $220,000. Do the math yourself. We haven’t had a year of negative returns in a very long time. Since 1928, when S&P started tracking the markets, there have been 90 years of tracked returns… 73% (66) of those years have had positive returns and 27% (24) of those years have had negative returns. On average, over periods of 15-20 or more years, the stock market has returned 8-12% per year for the buy and hold index fund investor (not gamblers day trading “flavor of the day” stocks). The news media and “financial industry” do a huge disservice to the investing public by making people think the sky is falling. Ignore “the experts” on tv. They need viewers, so they can sell TV commercials. The markets will go back up. A year where the market is down a mere -2%, after 9 years of VERY positive returns, should be viewed as nothing more than a “small hiccup,” if even that. If you can’t handle that, you don’t belong in the stock market in the first place.
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@ABC123 I love you.
11
@ABC123 Brilliant.
11
@ABC123
Yes, it's all true, but after you adjust for inflation, the average return is more like 5-9% per year, whereas the bills that come to you in retirement are relentless. This year, if you withdrew 4% from your portfolio as you generally do in retirement, your portfolio would be 8% down for the year after inflation. How many of those down years for the S&P came in a bunch? What was the worst 5 years? worst 10?. These are important considerations for older folks.
32
This is what happens when markets listen to a moron.
Why markets care about the moron when all proceeded just fine before the moron — and will proceed just fine after the moron — escapes me.
Markets should be wiser and ignore every tweet the moron sends.
2
Winning! Bigly!
2
Donald/GOP patterned their economic policy on Kansas; so it is not surprising things are in the toilet. Thx GOP and Donald; the con man who uses bankruptcy as a plan of business. Ray Sipe
1
Very interesting. This may sound crazy, but I would have thought that when investors run out of all other places to put their money they might think of paying their employees a higher wage. Y'know, to spur growth. -And spending. - And productivity. -And to quell civil unrest. -And to get a tax break. -And, like, spread some lubricant around to keep the engine running. Are the Scrooges of the world listening? Merry Xmas.
4
Let me try this again. The graph used in this article is misleading. One would think, for instance, that the S & P (purple line?) had taken a real dive in 2018, when in fact it has declined about 1% year-to-date. Another point is that the S & P was at 1,922 in the beginning of 2016, and that appears to be reflected in the graph, at least until you look at where the graph charts the S & P today.
>> Now the opposite appears to be unfolding, as the Fed pull backs
As the Fed pulls back, not "pull backs."
1
Icahn and Munchkin can smell the repossessions and all the billions they will make on bankruptcies and business failures in the next Republican caused Depression. Seems like prosperity for the majority of Americans is like the football Republican Lucy always promises she is the best one to hold for us.
8
@WeHadAllBetterPayAttentionNow
hmmmmm, your assertions struck a chord. for most, a tanked economy is a disaster, but for those who can buy up the detritus, it means a further re-distribution and/or consolidation of wealth at the top.
and now that i'ved typed that, am even more thoroughly depressed (if that's possible) about our country's downward trajectory.
6
The trade war is at bottom of the uncertainty, China is the real target of the trade war. They steal, lie and cheat their way to an economy. This clash us needed to clear the air. If you don't like it get out of the markets.
2
@Mike "Trade wars are good and easy to win" - DJT, March 2018.
To end concern about the stock, bond and commodities markets and make possible greater returns, 85-90% of an individual’s funds should be invested in Treasury Notes, the safest repository for funds on this planet. The remaining money can best be invested in a wide portfolio of high risk opportunities. This is the prescription for investors by Nassim Taleb in his book THE BLACK SWAN: The Impact of the Highly Improbable. (See page 205)
Ghee, I don’t hear Trump Tweeting and taking credit for this financial downturn.
2
The economy is crashing, but rest assured - Trump will keep us consumed with much more intriguing problems. Such as, the economy, the ecology, racism, wars, Trumps legal battles, Trump family legal battles, and don't forget despots that Trump loves.
2
And to top it all off, the fishing wasn't that great either.
2
Typical Republican economy. The rich get richer and the poor support them.
You would think anyone with half a brain would see how their economic policies always end up-with Democrats saving the economy and the Republicans calling them the 'Tax and Spend' party.
Each day, when I think things can't get worse, I read another article that busts that belief.
3
@Gdnrbob
Democrats may be the "Tax and Spend" party, but that's how the Government pays for the services we expect from them.
But It's much better than "Borrow and Spend", which is what Republican administrations do.
1
I don't see how this can be happening, after all, we have a stable genius in the White House.
1
I hope everyone who voted for Donald Trump because they thought he would be good for their wallets are having a fabulous day!!
There is a big part of me that welcomes the financial disaster headed our way as a wake up call to everyone who puts politics and the interest of the nation and the world for that matter on the back burner. Shame on all of you who voted for Trump because Hillary is a crook, or that Trump is a businessman-he’ll know what to do. Or worse than that the people who can’t decide if they are going to vote this year or that year for a whole slew of reasons- but I suspect because politics is boring or doesn’t interest me. Maybe next time you can take a break and learn something. Reading helps.
It’s not just Trump who owns this major recession coming our way but all the folks who walk around like vacant vessels consuming everything in their path and leaving easy to follow gigantic carbon footprints in their wake.
2
John Maynard Keynes, where are you when we need you? Who will vanquish these camps of the Chicago school?
When the largest economy is lead by a mad man, how does the world resist?
As political and economic events keep spewing out unsettling news, is there a "perfect storm" brewing that could send us into a recession?
1
Thanks, President Trump. You sure are Making America Great Again. "Not this year."
1
Headline:
"Investors Have Nowhere to Hide as Stocks, Bonds and Commodities All Tumble"
We are entering the Trump Economy.
And worse, we are entering the Trump Environment on Planet Earth, with climate change that eRATicates conditions of human civilization and life on Earth.
5
Time to get serious about Mr T “tariff man”
At this pace, the economy will crash and he’ll be the only one responsible with the lack of consistency and only one person interest of this government
His target is to look good at any price, including the American people
1
The "economy" is antithetical to life. Everything is exploited as a commodity that can turn a "profit". There is no regard for ecosystems. Either we can willingly start ramping this foolish way of living down or the planet will do it for us. We are creating an ending that will not be pretty once ecosystems collapse in a country with millions of firearms.
6
Beware: The Trump Depression is coming.
2
These cycles in the market are expected and normal. Interest rates should rise - mortgages shouldn't be given at sub-inflation rates, and savings accounts should yield. Taking shots at China's economy doesn't look wise to be, but at least it's debatable.
What is undeniably stupid is handing out huge tax cuts to corporations and billionaires and exploding the federal debt at a time when said corporations and billionaires are swamped with cash. If there's anxiety around normal market activity it's because the chuckleheads running the government have driven us right to the edge of the cliff in order to get fatter.
9
With trumpanomics fully implemented and creating global chaos as expected, I guess it makes perverse sense to ask someone from the Wharton school to decipher what is going on. I’d ask if what trump is doing is what is taught at Wharton, and if not, how did trump - who can’t read beyond the title of any text book - graduated and also got a diploma? Given that Wharton isn’t clamoring that they do not teach gut-conomics a la trump.
“It’s very rare that you get nothing working.” That’s the miracle of trump.
1
Time for another trillion dollar tax cut, or war. Either way the 0.1% win. Thanks Trumpkins, you got your reality TV business man in charge. I’m sure his stable leadership will right the ship.
While I’m certainly no financial expert, I know a few things.
1. Markets hate uncertainty. If there’s anything our Chaos President provides, it’s uncertainty.
2. The general prediction about the GOP’s wacko tax cuts was that they’d goose the markets for a year or so, because the money’d mostly flow towards stock buybacks, which is what happened.
3. Markets also hate tariffs and trade wars, which is what Stupid launched as idiots cheered. And no, it is NOT good that we’ve helped drive China’s economy down, because China is a major trading partner.
4. My suspicion is that Trump’s attacks on renewables aren’t helping, and neither is the artificial amping up of oil and coal. Oh, and neither are the shrieking attacks on health insurers.
5. My (mostly) groundless feeling is that somewhere, behind most of the scenes, chewing away from below, there’s something like the various “bundlings,” of mortgages and similar clever schemes that led directly to the 2006-2007 giant crash. I dunno, but in a deregulated business environment with an Administration that encourages mindless recklessness...
Oh, and this just in: it can’t be good for the markets to have a zooming deficit and debt, nothing done on infrastructure, and a sneaking feeling that our environmental sins are catching up with us.
Bigly.
19
Do what the Chinese do - put your money in jewels and gold and put it under your mattress or in a locked lacquer box.
Paper of any kind - stocks, bonds, CDs? Don't do it.
Wait it out. When Trump is gone in 2021, the world will sign with relief and we'll all be back on track.
58
Or buy real estate, particularly in the US. It pushes up housing prices here, and makes the housing crisis worse in some parts of the country, especially the Bay Area.
9
@Jane K I agree. My preferred method of investing in real estate is to buy good quality REIT's, e.g., companies owning apartment complexes in major metropolitan areas across the U.S. I also own REIT's that hold commercial property such as office parks and shopping malls. That avoids the lack of diversity and necessity to personally manage and maintain properties when purchasing individual real properties. Of course, they do pay regular dividends.
2
@Jane K
Not real estate - that's what got people in trouble in 2008.
The Chinese who invested in real estate these last ten years will be selling if stocks, bonds, and commodities continue to falter.
Watch them switch to gems and gold.
4
Let’s talk about spreading the wealth in a different way. One where all of us can participate in the economy.
We’ll be a much stronger nation.
5
@Roper. You mean by taking money from the people who worked hard and saved and giving it to the people who didn't? That was tried before in places like the Soviet Union, Venezuela, Nicaragua, Cuba, etc. It didn't work in those places. It wouldn't work here either.
1
Not my field of expertise, but the "tax cut" a.k.a. indirect tax hike on homeowners in the biggest housing markets cannot have helped in the real estate market slowdown.
We now live in a world in which there exists rampant overcapacity in just about every product and service, from raw materials to the highest value-added finished products.
This state of affairs was created by a combination of extremely low borrowing costs and industrial policies in certain countries, the largest by far being China, wherein unprofitable state-owned enterprises are kept afloat by heavy subsidies and other types of support.
This creates chronic DEflationary pressure on goods prices and wages. It's also the reason that trump's tax cut did NOT result in a boost in corporate spending that he and others predicted.
1
Well, I think we all know that any downturn in the economy is clearly Hillary Clinton's fault. Just as any uptick is Donald Trumps.
We've had so much "winning" under Donald Trump, that many of us are going to end up broke, homeless, unemployed, and without any social safety net, or health insurance.
After all, that's just the kind of "winning" Donald Trump has been bringing to people for decades.
8
This story highlights what I think is a continuing problem with financial advice and reporting.
Of course investors have a place to hide: shorting an index or a stock. Financial advisers almost never advise shorting but that -- in my opinion -- is exactly what an investor should have been doing for at least half a year, when the economic/financial skies began to darken. Why is it assumed that markets should only go up, and that investors should invest accordingly? I think I know why, which is that advising clients that markets can and will go down -- and possibly way down -- goes against the lucrative common wisdom that they will go up. Yes there are some short funds, but a tiny percentage of the total fund universe. This puzzles me...
@Marc Kaufman Difficult to do. That is why hedge funds have not kept up with the S&P 500 over the last ten years. Which is why many institutions have abandoned hedge funds. After all, market goes up the majority of the time (yes, a small majority, but signficant)
Personally, I pulled all my money out of the stock market in August and put it in a government bond fund. Not because I'm worried about a collapse, but because I just don't believe returns are going to be high enough, relative to government bonds, to pay for the risk in my case. It's been a great long run, but it's running out, I think, at least for awhile. I can only come close to holding my own relative to inflation now, but you just can't always make money with money. Or at least I haven't been able to. It's nice when you can.
3
The "quickly" is the problem. Ask just who profits from increased volatility. The "flash traders", the big and fastest short/long players, etc. Many ordinary "investors", and even institutional money, pension funds, etc. are becoming cynical, as they see that market volatility bears little relationship to the economy, and that they are the "suckers". If we/they are not to opt out altogether, the answer is an easy one; i.e. increased trading regulation and tax policy coordination, to sharply dampen short term speculation and increase long-term, true, INVESTMENT.
7
Falls into the same trap that many of the financial professionals I talk to continue - folks there is nothing magical about numbers in financial markets. Why is 0% magical - would you rather two years of 10% and 0% or two of 1% and 1%.
Have we become pythagoreans?
What inevitably matters is long term trends and not yearly performances. Balance your portfolio according to your appetite for risk and embrace the neutrality of numbers - they are not magical.
4
@SteveRR
Especially when the real number is -2% after inflation. That number doesn't look too magical to me.
1
@roseberry
Two year return - S&P 26.5%
Two year return - S&P 36.9%
Five year return - S&P 43.42% - so no
1
I wonder how badly this volatility has affected widows and other elderly persons who were fortunate enough to have stashed away stocks and bonds for their retirement?
If they attempt to transfer those assets, surely they will take a bath. The anxiety of losing wealth throughout the year must be devastating.
19
Basically, the value of investments depends on what people think the value is or will be. This value is not something that is real in itself; we create it. And then our lives are run by this creation of ours.
Since we create it, we should have more control over it so that it serves us and not the other way around. But instead we worship it.
1
@sdavidc9 That's absolutely not true. The value of an investment has nothing to do with "what you think the value will be". When you buy a stock, you own an interest in a company, which, based on its fundamentals, either does or does not have value. When people are hysterical, they forget that at the end of the day, most good companies will continue to thrive regardless of the latest tweet or current event. I mean, does anyone here think that Amazon is in any danger of going out of business? or Home Depot, or FedEx? Seriously.
5
@sdavidc9
Actually, companies do have value. It might be the dividends they pay (for persons requiring an income) or their growth and market potential for those seeking investment opportunity. To be sure though, fluctuations in the perception of their value have broader implications. But, don't worship it.
1
@Charles
Dividends and growth potential depend on the health of the whole economy as well as the ability of any particular company, and also on what technology comes up with. Stocks are tools of proven usefulness and proven unreliability; we would increase the former by fixing the latter. Rich people do not mind the unreliability, but the rest of us can have our lives wrecked if we need our nest eggs at a time when the market goes south.
There will be no Santa Claus rally on the street this year.
Most folks are going sticker shock when Q4 ends and they get their summary statements in early January.
Will folks begin to retrench? Is this the sequel to 2008?
The 2017 Trump Bump Honeymoon is clearly over.
High triple digit gains/losses have become the norm. Not healthy.
Individual-1 said the markets will crash if he gets impeached. Well, Individual-1 is in full Grinch mode right now. He's doing his best to destroy the world economy while he's in office.
15
Ok, I’m no economist, but it looks to me like the decreases near the middle where the graph says “2016” aren’t all that different from those at the end. So why does it say for the first time in decades? What am I missing?
1
@Samuel Yaffe
I believe in 2016, neither U.S. bonds or commodities actually went below the zero line.
4
@Samuel Yaffe
I hear ya. The more I look at that graph, the less clear it becomes.
If the stock market falters, we can always depend upon the Federal Reserve going back to zero or even negative interest and start buying bonds.
Better yet, the Federal Reserve should directly buy stocks.
Inflation, you say? It did not happen the last time, so it will not happen now.
I don't like to see investors lose money; but it would entirely healthy for the S & P 500 to decline by 20%, based on market hysteria and fear alone. The recent market gyrations seem mostly based on political instability, and lack of confidence in the decision-making at our senior levels. Valuations are a too high, and bringing them back to a more historical average would be a long-term benefit.
5
Trump is part of the problem, no question. But at heart it is the nature of modern capitalism--its built-in flaws--that are at play here. This is a very old business cycle; capitalism has been remarkably successful in reducing the state's power to regulate markets and form a counterweight to animal instincts. No one should be surprised that we are now entering the end-game.
While we're waiting to be wiped out, try reading Ray Dalio's "Big Debt Crises." Unsettling, brilliant, dead true.
2
Us Treasury Notes used to be golden as a safe investment. With the policies of the Trump Administration and the GOP Congress, the full faith and credit of the US is falling! Soon, even the US Dollar will weaken.
11
The markets have hurt my wife and me drastically at least twice in the last 20 years - the dotcom bust and the Great Recession, decimating our life savings, making IRA's and 501k's seem like pipe dreams - so this current mess, while nerve-wracking, seems not so awful by comparison; we're still ahead of where we were in 2017, which was a pretty good year overall.
At the same time, though, we didn't buy back much into the market once the recession was over, and we're not buying the market now. As we saw with the Big Crash, it's run on the one hand by speculators and grifters who take full advantage of, on the other hand, nervous, anxious, paranoid major investors who have one thing in common with the grifters: greed.
That's why we're parking some of what we have left in things like CDs and money market accounts, which are at least keeping up with and sometimes exceeding inflation. We figure that for now those are the least risky of several not-so-great options.
19
Although there is no arguing about the market declines, that graph seems designed to look as bad as possible. If you used the same sized graph but only showed market moves for 2018, I'm thinking it would look rather different. And what year is represented by the y axis?
1
Um, the y axis shows value change, not time. What’d be the point of having two time dimensions?
Cue science fictional jokes.
4
@Robert
What I mean is, when does the value change shown begin. 1/1/2016?
1
@redweather
The graph shows percent change (y) vs time (x). Time (years) is calibrated on the X axis. The caption indicates it is through Dec. 13 of 2018.
Last recession was driven by collapse of housing market and risky investments by banks and their demise. We do not see a sign of any such thing now. There will be normal fluctuations in different markets, it is just coincidental that bonds, stocks and commodities tumbling at the same time. With other countries joining the US in trade war against China, this time around China will make serious policy changes, and all markets will rise sharply. China is going through growing pains in its responsibilities as it accumulates wealth. They are smart enough to do the right things for their own good. I will buy stocks that got hit due to trade war.
3
@Kodali
"With other countries joining the US in trade war against China"
Apart from bullying Canada and Mexico into half-hearted compliance, the list is pretty short. Well, empty. really.
Whereas, the number of smaller nations throwing in their lot with Beijing is quite impressive.
And the other major player... which way has the EU jumped?
4
Corporate debt will be the source of trouble. Zombies will not be able to rollover as easily. Junk spreads will widen leading to defaults. Banks and no banking institutions that have lent/underwritten CLOs without default covenants will come under pressure. Those execs do not really care as they have rightly surmised that they will be bailed out. Easy to take enormous risks with other people's money.
4
@Kodali there is one which was discussed in this very newspaper a few months ago, that is, oil fracking companies. They've been living on cheap money for a long time, waiting for the price of oil to get high enough to make them profitable. If they cannot sustain growth outside of borrowing cheap money, then they're going to collapse and take a lot with them.
6
At the recent climate change conference in Poland, 441 institutional investment firms representing 31 Trillion dollars in invested funds stated that if action were not taken immediately to slow carbon emissions, the world economies faced a meltdown much worse than in 2008.Add to this the massive income inequality throughout the world and you have a perfect storm leading to the political upheaval which present day France is experiencing.The lower 90% (in income) is unable to pay for Macron's efforts to stem carbon emissions.Governments, bought off by the rich and the fossil fuel industry, are unable to respond to this looming crises.It's not China's economic problems or the "usual suspects" that have investors worried.It's political instability.Consumers and governments are simply running out of money.
33
@Iamcynic1 Well put.
So now its's time for the the first correction, redistribution, hopefully before revolution. Then we need to get back on track to alternative energies as the growth engine for the economy and dump fossil fuels asap. Infrastructure development at the same time. It's going to take smart people, lots of them. Education needs to be a big part of the solution, and it is going to cost more until we right this foundering ship.
If people are going to make money off of financial products, then let's make sure that the products reflect and are dependent upon decisions that prioritize the health of the environment and society, rather than this mess promulgated by the current ruling class of crass buffoons and fools.
4
Old dirty and politically connected industries buy our politicians and suppress new industries. Wages stagnate in what is a consumer economy. Decreases in taxes for the wealthy and increases for the poor through tariff taxes. Destruction of education. Destruction of truth. Destruction of law. Destruction of nature.
The floggings will continue until morale improves.
The stock market is meaningless to most people. The folks in the dungeon don't think it can get any worse.
A good old fashioned depression may be a good thing in that it could slow down our destruction of the planet just slightly and may buy us a couple more years. Perhaps a pause would allow us to see that we should invest in green technology and do what we all know we should. Just maybe.
34
US unemployment figures are another fraud inflicted on the American public. People have simply quit trying to find work, the jobs they can find are poorly paid (hence the failure of workers to see any growth in real wages), or the jobs are part time. The economy is only strong for the “elite”. The unrelenting attacks on unions by conservative states and administrations ensure declining wages and benefits for workers which inevitably will result in further erosion of purchasing power and further declines in the real economy. Economic security for the average individual is becoming a rare commodity.
94
The labor movement in the USA died 38 years ago, when entirely too many union members voted for Ronald Reagan, who then proceeded to bury it utterly. Wages and working conditions have stagnated ever since.
26
@Doug Thomson
Yes.
The unemployment rate is fairly low, but the underemployment rate is pretty high. Too many people have jobs that do not pay adequately, and too many need a second job or side hustle, or both, to make ends meet.
We could probably have near zero percent unemployment, but most of those created jobs would still be paying barely above minimum wage. (And employers wouldn't waste squat on training anyone for them, either.)
4
@Andy
I will be forever baffled as to how working class people can be manipulated into voting for Republican elitists. Can it be attributed to failings of our educational systems? Media manipulation?
I hope beyond hope that so many of my fellow citizens are not being swayed by base emotions and prejudices to the point of abandoning the ability to think rationally. True, many politicians are masters of manipulation. Maybe I'm not heeding H.L. Mencken's warning that no one never went broke underestimating the American public.
1
It's ironic that the stock market is depending on consumers to save the market. Are they the same consumers whose incomes are so shallow that they can't pay daily bills without taking a second job? Perhaps the market is depending more on those people borrowing at 10-15% interest rates to give the stock market a boost.
Banks are reluctant to give savers a decent rate for their savings, which has caused a great loss in their financial futures, say nothing of them supporting a "needy" economy.
I suppose that less than half of the population who invest in stocks can elevate the GDP.
32
For two decades we've had much more global money in pursuit of solid investments with a good return than actually exist. For limited periods of time the stock market or real estate can be used as a broad-based Ponzi scheme, but it always comes back to an imbalance of money to be invested versus a lack of opportunities that really make sense.
27
Welcome to the Trump “house of cards” economy, where you can get rich quick by simply getting rid of regulations and embracing unethical policies. And, no moral compass needed !!
The whole thing could come crashing down at any time, so grab all you can before it’s too late!!
Or maybe we could build a real economy that would be realistic and stable rather than let the greed of corrupt politicians lead the way.
This is an old story that has never ended well, and there have been times where America has been able to steer clear of the traps.
Hopefully it is not too late to make better choices.
65
Risk and return can not be de-linked. When U.S. regulators try to do that (as they have been trying to do for the last 25 years, most notoriously in the run-up to 2008), they simply defer the outcomes of risky investments to a later date, and redistribute the risks from bad investments into the broader markets.
Wealthy investors exploit this disfunction by making risky investments that privatize return and socialize risk.
The government should stop regulating risk, should allow the investment markets to operate more freely, should allow risky investments to exist and then to fail when necessary. Then the broader markets will be safer.
Unfortunately, it's a difficult political question, as one of the chief tools for regulating risk is industry protection, for example the subsidization of agriculture, the aeronautics and defense industries, etc.
13
@Benjamin Teral
I think Congress can and should place the onus where it belongs, by passing two simple laws:
1. Before any private institution can request a government bailout, the top two levels of management have to be immediately fired, with no bonuses, no parachutes and no exceptions.
2. Before any private institution can request a government bailout, the institution MUST declare bankruptcy, if only for one day, so that all contractual obligations, such as prearranged bonuses and parachutes, are voided.
Only by putting the onus on the "boss" will there be rational behavior. The "boss" will enforce such behavior at the risk of his or her future, and the "peons" who work for the "boss" will come to understand that taking unreasonable risks will also put their jobs at risk (because a rational "boss" would fire people who do risky things, rather than give them bonuses).
24
@Benjamin Teral
The problem I see with your formulation relates to pension fund investments in high risk instruments. I have in mind the experience of Kentucky's public employee retirement fund. They ended up in high return hedge funds, at the suggestion of now Governor but then financial advisor, which, surprise surprise, failed.
No sir, regulation is an absolute necessity in an environment all too ready to fleece those on the wrong side of the financial balance of power. Jail terms would be a nice addition.
3
@Joe from Boston, you hit the crux of the problem on multiple issues. When the Chairmen of these businesses are let off the hook financially, socially and politically you get people in this country angry. Why shouldn’t the upper levels of management suffer the consequences of poor business decisions the same as the worker bees do? Why do they get a bailout while the rest of us lose homes, 401K values, healthcare and a chance at retirement?
The 2008 recession created the environment in which The Tea Party was created. All of us worker bees are tired of watching the rich get richer and the poor get homeless because all the money stays at the top regardless if a company makes a lot of money or goes bankrupt. It’s the worker who makes the product or provides the services that make those at the top rich. If they mismanage it, they should pay the price just as sure as the rest of us.
11
China wants to move away from an economy based solely on growth to one of sustainability but it’s proving difficult as humans don’t work that way. We’re programmed to be unhappy with what we have and yearn for what’s over that next hill. I’ve seen over that next hill and believe me it ain’t pretty. There’s nothing there but denial.
25
@R. Koreman
It seems to me that it takes years to learn that lesson.
2
The social psychology of investment seems to have become just as knee-jerk as as social media. It communicates optimism or pessimism, or apparently, chaos.
2
The sky is falling! Everyone take a deep breath. Look at a chart of the Dow for the last 20 years. All these outsized moves to the downside have been TREMENDOUS (to coin a phrase) buying opportunities.
Relax.
11
@beatgirl99 - Looking only at the major movements of the market over time holds no value. Its important to understand why these movements have occurred.
8
@Patrick I've ridden this pony before. The machines will come in and buy this dip like nobody's business once the market has shaken out all the little guys. Sellers beware.
3
@beatgirl99
I'm not sure "everyone" has the luxury holding a stock through a downturn or taking advantage of a buying opportunity. For many Americans, they see the stock market as a "canary in the coal mine" (rightly, or not) as a sign of economic health and as a predictor as to whether they will still have a job.
2
Economic policies ,like medicine,
have negative side effects. Low
interest rates revived growth but
also encouraged excessive borrowing.
With the slow down these imbalances
will be cleared and resume normal
growth. Business cycles are part of
free market system.Fixation on growth to the exclusion of environmental and social well being is the root cause of the problem.Many fiscal and monetary decisions are like sugar consumption which gives energy for a while and then
the dip follows. Greed and speculation
in investing aggravate the problem.
Tesla, still not making profit and much
smaller than GM has much higher
market value than GM. It is pure
speculation. Euphoria can't last
for ever. Wonder why economics
is called science.
22
The current decline in the price of most asset classes is from a very high level, spurred by over optimism about the future of profits and economic growth under Mr. Trump. The US stock market began a torrid ride right after the election in 2016, and experienced a lofty elevation of evaluation, ie P/Es, to multi year highs. Now a bit of reality has crept in suggesting that growth and profits are going to slow for a while, and the air is coming out of the balloon, to be metaphoric. Headed for 1929? Not likely given the broad economic base here and most in most countries, versus the crumbling structure of the farm and financial economies 89 years ago. But a rough patch? Probably, until investors, not speculators, realize there are good values around. Great investments are made at the bottom, not the top. Hang in there sayeth the sage.
14
The answer for conservatives has always been to cut taxes with little ability to decrease spending. The fed has has propped up this scenario allowing millions to buy and refinance homes, college education and debt consolidation at reduced costs. This has helped avoid the political upheaval of cutting programs, loans used like income and the dreaded depletion of savings accounts. So were once again at the crossroads of letting the market tank or the fed relieving us from a day of reckoning.
2
Who would have guessed that global quantitative easing to the tune of over 20 trillion dollars pumped into the system would have driven rates to abnormal lows and removed all concept of markets pricing risk. Instead global central banks backstopped every bad decision and massive risk taking. FINALLY the backstop is SLOWLY going away so how on earth could this be a surprise?! QE will go down in history as the worst decision to hit global markets. Capitalism is supposed to create winners and losers but QE simply created winners.....right up until the punch bowl gets taken away.
15
@Flying V
The idea that the Federal Reserve "pumped over 20 trillion dollars into the system" is a mind boggling abstraction that should be better explained by our learned journalists.
Where did all this money go? Has it been converted into cars, houses, yachts, fracking, digital currency, all of the above? Were jobs created or was a fictional house of cards merely propped up all these years?
I gather the primary beneficiary of these trillions were the banks, while the losers were those relying on savings and only pulling a 1% return, if that, as some have commented.
Maybe a better paradigm for evaluating how banks and the investor class utilize capital should be measured in terms or responsible use and irresponsible use; something I can wrap my mind around.
2
i'm pretty sure 2009 was "the last time" that "all investment categories" failed, and that was less than one decade ago.
of course, "cash is king," and those of us who were entirely in cash at that time slept through the commotion. but cash isn't normally considered an investment category.
zoom out a little, and stocks have been essentially flat for the entire year. so nobody is losing their shirt, unless those with puts.
zoom out even farther, and it's clear that things can't keep going in the direction they're going. climate change, systemic complexity, political instability, regional unrest, geopolitical rivalry, resource deploetion and ever bloating human population ... something has to give.
16
@drollere
2008, not 2009.
The Bush-Cheney Depression, not the Obama Recovery, which Daycare Donnie is finally ending with classic Republican malpractice, greed and incompetence.
144
@drollere
Not all investment categories failed in 2008, in fact some people made a lot of money on - granted - very narrow categories.
The Trump Slump was only a matter of time.
You don't grow an economy with mindless deficit-exploding 0.1% tax cuts, Trade Tariff Tourette Syndrome, xenophobia and complete alienation of your global allies.
That's more of a recipe for bankruptcy, something Daycare Donnie has real experience in.
Trumpistan will only learn the hard way...when they fall over yet another Republican economic cliff of greed, incompetence and cultured stupidity.
256
@Socrates
Trumpistanis don’t learn. They will continue to consign us to one step forward, two steps back until we are no longer a “first world” country but rather a developing (un-developing?) economy.
20
@Socrates The conned never learn and never admit they were conned.
10
But you can bet they’ll blame it on everybody but those truly blameworthy
12
Trump and the Republicans who passed last year's tax cut thought they were creating a generational shift in the economy. Instead they have added a key ingredient to the perfect storm. Trump himself has thrown in a trade war for good measure. The next two years are going to be a wild downward ride. It may be the medicine we shouldn't have needed to reverse course.
59
@Ken L Money saved with tax cut for the top was not used to provide employment by investment. It was used to buy back stocks, increase executives income, etc.
8
Wages. Education. Transportation Infrastructure.
Wealth is not a number held in a computer file.
56
I think that it's interesting that the article put so much emphasis on the end of easing by central banks. The Fed stopped it's quantitative easing program in 2014. Rates started rising at the end of 2015 and have been on a steady and slow increase since then - telegraphed well in advance by the Fed.
What's happened in the last couple of months is the effect of trade wars, pure and simple. Yesterday's fall based on slowing China results is absolute confirmation. It's time for the Negotiator in Chief to put up or shut up.
76
@jcarys “What's happened in the last couple of months is the effect of trade wars, pure and simple. “
Exactly. Although we’re due for a recession, Trump intentionally tanked the US and global economy with his trade wars, which are as unnecessary as his stupid wall. The markets’ reaction is a rational response.
4
The economy is sinking? That must mean that Republicans are in charge of it again. Happens every time they are in charge.
399
@lynchburglady, When George W Bush left, the economy was in free fall,job losses were 700 to 800 k
every month. Obama stabilized
it. Here comes Trump on the slogan
of making America great again.
Unfortunately Trump has no idea what greatness is. The way he earned his money is anything but great.
126
No investor needs or wants a place to "hide". They have investments that meet their long term needs or desires so short term variation in the price makes little to no difference. Nor does variation in the actual economy. Now management and changes in its business do effect if you want to continue your investment. Pretty simple, but not easy to do.
Welcome to the real Trump economy subsequent to the knock benefits of Obama's policy influences. Massive debt, give-aways to corporations with offshore interests, trade wars with large economic partners, and a lack principles that lead to unpredictable policies, all combine to understandably produce weakness and volatility. Enjoy your holiday government shutdown courtesy of Mr. Tariff, but remember, he'll be back next year for more economic and regulatory abuse.
178
For about 10 years, the self-serving Fed has transferred trillions of tax dollars and lost interest on savings from the middle classes and seniors to Wall Street. This policy has decreased spending, labor participation, and wages for all but the wealthy, and has increased income inequality. The NYT has previously reported on these correlations. Major factors currently contributing to market volatility include the move toward normalizing interest rates during the past year or two, the results of years of outsourcing manufacturing, and a risky tech bubble. If under these conditions the market can't survive without pubic support, perhaps a new paradigm for the economy of the country will need to be devised.
33
"For the first time in "decades," every major type of investment has fared poorly..."
That's not accurate. Within the last decade (2009) during the financial meltdown, all the major types of investments were being hammered.
22
@ZHR
Many commodity prices boomed during 2009 eg oil doubled or more.
1
@ZHR
2008 - not 2009 - was the actual financial meltdown, as Bush and Cheney were crashing the ship of state into a Republican graveyard of 'free market' psychopathy, greed and epic incompetence.
In January of 2009—the month Bush-Cheney left office—the American economy lost 791,000 jobs in one month.
61
@Socrates
Yes, I was off by a few months in a couple of food groups; still the article was wrong in stating that this is the first time in decades that all the major investments have been losers. Here's a little back up:
May 2008 to early 2009 oil lost 2/3 of its value;
March to Oct 2008 gold lost 1/3 of its value:
Sept 20 2017 to March 2019
S&P 500 went from 1557-730;
Aug 29—nov 21 2008 there was a 10% loss in value Fidelity Total Bond Fund (which for a bond fund is enormous)
1
Left out of the picture was US sanctions against various and sundry countries in which the US insists that all countries adhere to. Italy in particular has been crushed with sanctions against Iran. Arresting a Chinese big shot on charges they were violating the USs Iranian sanctions falls right into the pattern of sanctions and trade war meeting. The world is becoming more hostile and what used to be unimaginable acts of aggression between countries is becoming the norm. Citizens United has made the likes of Sheldon Adelson stupid amounts of money and dangerous political influence. Then you have Trump as president and more unqualified person to be at the helm would be hard to find. The defunct Trump rally fueled by tax cuts for the wealthy has decidedly shown how the Republicans have mismanaged the economy.
104
Two years into the Trump administration Trump can no longer blame Obama for the economic conditions his administration has conjured up together with the Republican majority Congress. It will be interesting to see whom Trump will blame for conditions largely beyond his control. Although, his inept handling of international trade will certainly play a big part in how the economies of individual American voters will fare before the 2020 national election.
44
@RLW Who ever blamed Obama, I seem to remember Obama taking credit. And the real economy (not the stock market) is doing very well, it reflect reality not the emotional reaction to some things.
1
@vulcanalex - Obama rightly took credit for reducing the deficit, which put the economy on a more solid footing broadly. The Trump economy relies completely on consumer spending. As interest rates rise, that well of money will dry up. As spending drops, so will the jobs that are supported by it. Eventually, the snowball will start rolling.
15
@RLWActually stock market gains by Trump way below Obama and Clinton. That is the % gain not the final numbers. Bush was the lowest.
1
Given U.S. political instability since 2016, I can't believe the crash hasn't happened already.
115
I think that markets are built on trust as much as on supply and demand and degrees of knowledge about supply and demand. A buyer or a seller has to trust that the person at the other end of the table will act somewhat rationally. Those at the top of the political food chain have systematically shown everyone that they can no longer trust anyone even in their own political party. Look at the naked Republican Id in the office building at 1600 Pennsylvania Ave. Does anyone trust another human being anymore? They have systematically destroyed trust in our fellow human beings. I cannot for the life of me understand why the business community continues to support this.
92
According to article after article in this very paper, very few Americans are investors. That means workers and savers have lost little and likely are winning this year. One investment that has done well this year is the greenback. Dollars are up about 5% and that doesn’t include some good old bank interest. For the first time in a decade, actual work can be turned into wealth. I’m not dismayed that making money from other people’s money is not working out.
5
@G
"That means workers and savers have lost little and likely are winning this year."
Winning has different meanings to different people. But I agree, keeping people out of prison and in some form of work is better than the former. I just don't know if id call it an all around winning arrangement.
2
@G - Any gains workers and savers have made through interest rates and tax cuts have been wiped out by real inflation. That the dollar is up by 5% holds little consequence to a consumer holding debt.
3
@G, workers also have their money
invested thru 401K 0r 403B. Their
nest egg is also shinking.
1
Stocks go up and down, winners and losers. I see stimulus on the horizon! Why? It is because tax cuts rarely work.
4
We just got the stimulus in the form of massive borrowing to fund those tax cuts and give away corporate welfare checks to many the beneficiaries of said tax cuts (as well as some farmer victims). How's that working out?
43
This is what happens when someone with no understanding of markets, production, global supply chains, and monitory policy sits in the White House. Tweets are not carefully thought out policy. And so the Trump Recession begins.
308
@Jean Sims Tweets are about as complicated as Trump's very inadequate mind works. "Carefully thought out" is not something that applies to Trump policies. "Careful thought" does not apply to Trump supporters either.
69
Confidence in American "leadership" has evaporated. People may be polite about it here but abroad it is scorn, derision and hearty laughter. Watching America become weak and impotent is the New World Entertainment.
236
@max buda More like strong and potent at home, and allowing others to have freedom instead of trying to control them by leadership.
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@vulcanalex, how are those higher taxes from tariffs hitting home?
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@vulcanalex - Freedom to do what? Breathe dirty air and drink polluted water? Freedom to sicken and die without adequate health care?
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