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Where are we going? Thoughts for 2019? Thanks for reading

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  • Where are we going? Thoughts for 2019? Thanks for reading

    OK, I have a fixed AA of VG index funds, and I am looking at not needing this $ for > 10 years. So I am not trying to time the market and guess what is going to happen as a speculative move, but I think it would be fun to see what people think and then to look back at this in 6 months, 12 months etc. This is more out of curiosity than anything else.

    With all that said:

    WHERE ARE WE AND WHERE ARE WE GOING? 5 CHOICES:

    1. This is the bottom and it will keep going back up, and up and up (Big bull for next 12 months)

    2. This is a small blip up and then it will go back down (way down!) (big bear  for next 12 months)

    3. The next 12 months will be mostly flat but end slightly down (loss of less than 5% for year)

    4. The next 12 months will be mostly flat but end slightly up (gain of less than 5% for year)

    5. Something else (please elaborate)


    I think it will probably be # 4, but when I was a resident I was told: “Dr. ____, your problem is that you are frequently wrong, but seldom in doubt”

    I am still frequently wrong, but more often in doubt and probably wrong here, but should be fun to see how wrong. Thanks for playing!

  • #2
    3

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    • #3
      I have no idea and it will not affect my decisions

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      • #4




        I have no idea and it will not affect my decisions
        Click to expand...


        Sure, same here, but not even a guess? What is the point of a guess? Because.......I'm bored, college football is over. Why not see how many people (really smart people) get it wrong?

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        • #5
          Odds are with 3 and 4 (technically an inside year), however you have so many factors that will materially change things that it is a bit dumb overall. Not really fair to make you pick a direction. I'd be more comfortable saying flattish +/-10%. Thats much more realistic, but still could be wildly wrong!

          I like thinking about the feds position as a collar (a put, the position, and a covered call). We go materially higher and econometrics dont change...they hike and cool the market. We go lower they not only dont hike but could cut...we probably would go down a bit further on recession fears but would put support under the market.

          Global economies- continue current path=trouble, recover=good

          Housing markets-same

          Trade war-someone gives=good, not=bad

          Mueller/Trump-serious stuff=bad then good, nothing=more of the same which tilts bad

          Inflation-material increase=hikes and likely end of cycle, steady=goldilocks, falls=cuts and cycle already turned

          of course this is balanced with every time the market does well Trump feels emboldened to be stronger on policies that hurt the market like trade and other such things. So a range, maybe a wild one, would be pretty consistent with the above.

          Those are just the most obvious known things. Then of course are crazy unknowns. Should make for an interesting year. I dont see any reason why China actually caves for trade, unless theyre about to go under ofc but thats unknowable. They can simply placate trump and wait him out.

           

           

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          • #6
            1!
            I am an optimist.

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            • #7
              I’ll take 4. I think the trade talk will settle and people will get unnecessarily excited. Did you see yesterday go up after a meeting was scheduled? So reactionary. Also, we will be seeing mor benefits from the tax breaks.

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              • #8




                I’ll take 4. I think the trade talk will settle and people will get unnecessarily excited. Did you see yesterday go up after a meeting was scheduled? So reactionary. Also, we will be seeing mor benefits from the tax breaks.
                Click to expand...


                More benefits from the tax breaks? It will be the opposite. Your one time amazing yoy changes go away, and now you have a global expansionary year comps with a declining global economy. Comps will be normalized now, if anything it will be worse, baseline it is neutral.

                Do you mean due to buybacks or something?

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                • #9
                  Yes, indirectly from buybacks, etc. I probably should have qualified that when I made the post.

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                  • #10
                    I also should have qualified that I really have no idea and I expect a recession in the next 18-24 months.

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                    • #11




                      I also should have qualified that I really have no idea and I expect a recession in the next 18-24 months.
                      Click to expand...


                      Agree thats a high probability if something doesnt change.

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                      • #12
                        Far far down (we are still young).

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                        • #13
                          Wow, this is fun! Thank you! Ok, maybe I did phrase it poorly (as Zaphod pointed out) but I was just wondering what people thought the general direction looked like for next year or so. Perhaps I should have just asked if we would get back to prior high by the end of year or go down more than current levels. Nevertheless, thanks for making my Saturday less boring. Hopefully we will get a few more responses and a year from now I will go back and look at this after knowing what happened. I sent myself an email (which will arrive a year from now) reminding me to look back at this. When I read posts by folks like Zaphod and Wonka31, I realize just how much I don't know. I guess predicting market directions, much like picking individual securities, is a fools errand!  Thank goodness for Jack Bogle! RIP!

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                          • #14




                            Wow, this is fun! Thank you! Ok, maybe I did phrase it poorly (as Zaphod pointed out) but I was just wondering what people thought the general direction looked like for next year or so. Perhaps I should have just asked if we would get back to prior high by the end of year or go down more than current levels. Nevertheless, thanks for making my Saturday less boring. Hopefully we will get a few more responses and a year from now I will go back and look at this after knowing what happened. I sent myself an email (which will arrive a year from now) reminding me to look back at this. When I read posts by folks like Zaphod and Wonka31, I realize just how much I don’t know. I guess predicting market directions, much like picking individual securities, is a fools errand!  Thank goodness for Jack Bogle! RIP!
                            Click to expand...


                            I think its good to make predictions. Even better if you come back and assess them and your thought processes and see where and how you were right, wrong, or nowhere close and why. Its a good exercise. Sometimes you can get all the underlying things right and the response wrong.

                            You should come away pretty open minded and able to change your outlook on a dime. This is in reality true, nothing is set in stone. Not the economy, not the feds approach, and certainly not sentiment. There are certain over arching themes like that and we bounce around that arc given data and how things are discussed/viewed day to day, etc...

                            This last couple quarters was a great example. The fed sounded quite harsh (probably purposefully so), essentially crashing the market, and then eased off and really relaxed their tone giving the market some comfort and we chilled out. In truth, the fed minutes and such didnt change their approach, only public signaling did. Their actual underlying approach no doubt would change if needed as well, and thats why nothing is set in stone and it can go either way. If things slow down and the fed is still aggressive it gets worse, if they try to manage a 'soft landing' as they call it, we could sidestep things, etc...Everything is always in flux.

                            I dont think theres any stopping the natural cycle, it can only be artificially lengthened, smoothed, or shortened.

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                            • #15


                              this is all just WAG but my money would be on


                              3 > 4 > 2 > 1

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