Saving for the future.

[leftyguns21]

[MENTION=199597]jordanrb81[/MENTION] i get what you are saying about not paying house off early. i talked with another person and he asked why would i want to pay my house off early, to save $800/month (i have a really low mortgage). to me it isn't saving the $800/month its saving the thousands in interest. i bought my house in 2009, 10 years of $800 payments at 3.95% interest is roughly $70,000 in interest. now that i am breaking it down, that is only $7000/year, but over time it adds up. i basically make 3 extra payments a year on mine. its not much extra since i have such a low mortgage but long term (i plan on keep it and using as a rental in the future) it saves me thousands in interest.

without even realizing it, i am doing what you laid out in paragraph 1. anytime my paycheck is auto deposited i auto transfer from checking to savings roughly 10% of my check in addition to the 14% i am putting towards retirement accounts. i am single on a single income, saving is slower than most with dual incomes. i am mad at myself for waiting so long to set up a retirement account, my old company used to match at 6% and i never took advantage of it. now its become kind of an addiction to see it grow, and wondering how i can make it grow quicker.

 

[Oldmanb777]

Great conversation. Food for thought with good ideas. Mull all of it over, and then you can make a good decision, that's right for you. I've certainly made my mistakes along the way. But over all done ok. I had friends who were in pretty much the same or similar economic situation. We talked out lots of different strategies. Some good, some bad, but in the end that "support" group has proven priceless.

 

[jordanrb81]

[MENTION=199597]jordanrb81[/MENTION] i get what you are saying about not paying house off early. i talked with another person and he asked why would i want to pay my house off early, to save $800/month (i have a really low mortgage). to me it isn't saving the $800/month its saving the thousands in interest. i bought my house in 2009, 10 years of $800 payments at 3.95% interest is roughly $70,000 in interest. now that i am breaking it down, that is only $7000/year, but over time it adds up. i basically make 3 extra payments a year on mine. its not much extra since i have such a low mortgage but long term (i plan on keep it and using as a rental in the future) it saves me thousands in interest.

without even realizing it, i am doing what you laid out in paragraph 1. anytime my paycheck is auto deposited i auto transfer from checking to savings roughly 10% of my check in addition to the 14% i am putting towards retirement accounts. i am single on a single income, saving is slower than most with dual incomes. i am mad at myself for waiting so long to set up a retirement account, my old company used to match at 6% and i never took advantage of it. now its become kind of an addiction to see it grow, and wondering how i can make it grow quicker.

The point I am making isn't that your three "extra" payments aren't bad, it's just that there are more effective and efficient things you could do with that money. you're paying a really low APR and that's before you deduct the interest on your taxes. the opportunity cost of your extra payments is what I am referring to. Think about what an extra $2,400.00 a year into an index fund would have returned over the last decade? Also look at the liquidity. Again if you lose your income your mortgage is still due next month. How can you access the extra equity you have built? If an amazing opportunity comes along, perhaps another investment property, or a screaming deal on something else of value that requires cash? how much liquidity have you built into your financial model with that extra money? Over the last decade my portfolio has returned more than twice what you're paying in interest. so have you saved thousands or lost the opportunity to earn thousands? Still overpaying your mortgage is better than lighting your cigars with $100.00 bills for example. A mortgage only charges you interest on your remaining balance, so year over year that 3.85% is being charged on a smaller and smaller balance. meanwhile money saved compounds the other way, the interest you earn adds to your principal balance and increases year over year, effectively earning interest on interest. So theoretically even if you only earn 3.85% you'll still do better saving those extra mortgage payments over time than paying down your balance. This is mathematically provable.

 

[leftyguns21]

A mortgage only charges you interest on your remaining balance, so year over year that 3.85% is being charged on a smaller and smaller balance. meanwhile money saved compounds the other way, the interest you earn adds to your principal balance and increases year over year, effectively earning interest on interest.

this is a language i can understand. best explanation i have ever read.
i am going to adjust my principal on mortgage and add more to my savings/retirement.
i have over $150,000 in equity in my house. doing nothing. not earning me any money and could be lost at any point if we have another crash. i have often wondered do i take that and drop it in something else. obviously it would have to be something earning relatively high interest to make up for any heloc or refi and the extra payments i would have. based on what you mention above, i would be earning interest faster on that lump larger sum vs me putting the money i would use for a payment to pay it in an account. me putting $200-300/month in to a savings would earn much slower than say $75,000 already in there right?

 

[jordanrb81]

this is a language i can understand. best explanation i have ever read.
i am going to adjust my principal on mortgage and add more to my savings/retirement.
i have over $150,000 in equity in my house. doing nothing. not earning me any money and could be lost at any point if we have another crash. i have often wondered do i take that and drop it in something else. obviously it would have to be something earning relatively high interest to make up for any heloc or refi and the extra payments i would have. based on what you mention above, i would be earning interest faster on that lump larger sum vs me putting the money i would use for a payment to pay it in an account. me putting $200-300/month in to a savings would earn much slower than say $75,000 already in there right?

So the rate or return is the same, just the amount of money earning said return would be different. taking out your home equity in the form of a loan and investing it is sketchy. too many variables and quite a bit could go wrong. Again having equity isn't really a bad thing, it just isn't really terribly useful, until you decide to sell the property. I think you're doing great, if you were to add a couple hundred to your savings and just pay your regular normal mortgage I think you'd be in great shape. your above post mentioned 14% into retirement accounts, was a ROTH contribution included in that number? if not there's your answer max that ROTH, it's the single greatest savings vessel the US Government has ever given us. If you're already maxing I'd just add to your taxable savings.

 

[Go-Fast Boat]

Living within/below your means is key. Take advantage of a 401K and other programs if your employer provides them and save your money! You want to be able to enjoy life and live a little, but at the same time understand that you probably don't want to have to work until you drop. I work to live, I don't live to work.

 

[AKmoney]

bringing back a dead thread.

i got a call the other day from a money management company that works with people in my company to help manage their 401k accounts. he was a total sales man claiming he can make great gains with minimal loss and blah blah. i entertained him for a bit and was waiting to get a portfolio sample sheet from him. he cancelled our follow up meeting so he lost my business but got me to thinking. i just turned 40 recently and while i wont be retiring anytime soon i really need to laser in on making my account/savings grow so im not working till i am 70. should i be using a money manager? their fees are generally in the 1-1.5% range which isn't horrible if they can actually get you better investments. i only set my 401k up around 4 years ago, i've been contributing 14%(6% Roth IRA, rest in pre-tax) for awhile but its set to all of the default investments with 96% going to the bonds/retirement fund and rest to company stock. i asked a guy i work with and he showed me articles to prove the default settings have the best gains with lowest risk and fees. he told me using a money manager is a waste. another guy i work with said instead of putting money in 401k pay my mortgage off faster. i already apply extra principal to my mortgage and the value has doubled since i bought it. i feel pretty good about my home, with exception of how much interest i have already paid. its my actual retirement account i am worried about. i don't know what to believe and curious what everyone elses opinions are.

You do not need to hire a money manager. Avoid them and their AUM fee (1-1.5%) like the plague.

Firstly, I would never invest my 401k in company stock. Think Enron. Think about what just happened to GE. Your 401k has a time horizon measured in decades and it's impossible to predict what will happen to your employer.

Secondly, decide on an allocation. For someone who's 40, something like 80% stocks / 20% bonds might be appropriate. Only you can decide based on your risk profile.

Many 401k(s) offer target date retirement funds, ie, 2030, 2035, 2040, etc. They're "all in one" funds that start at like 90/10 and then drift more conservatively over time as they approach the target retirement date. Theoretically, you could invest everything into only one of these and be done with it, so long as the expense ratio isn't too high. Investing doesn't have to be complicated.

Stick with index funds. They are very low cost, they allow you to invest without thought or emotion and most importantly, they work. I recommend visiting bogleheads.org and reading the Wiki over there. Look up something called the "Three Fund Lazy Portfolio".

 

[jordanrb81]

I wouldn't agree with the above post per se. First, I don't know you so I cannot pretend to know what you "need" However an individual charging you 1.0-1.5% should be doing a lot more than simply managing your money, if that is what you think you're paying for then you're already on the wrong track. if they are providing guidance, stewardship and helping keep you on track, I might argue it's a small price to pay. Moreover let's break down the word "need" only let's make it about something seemingly less complicated, like fitness. you can go buy a 10/m membership to planet fitness and just figure it out. or you can pay more and go to a spinning class or a cross fit class, wonder why people do that, why pay more when you can just go to planet fitness? perhaps they find a class with an instructor gives them better results. still others pay for a personal trainer, so no more group lesson, now we're working with someone one on one, even more money and accountability, if you decide to hit snooze one two many times your personal trainer will call you and say, hey, I'm here at the gym, where are you? Still others pay for a home gym and have their trainer come to their home, and this cost even more. So Financial Planners are the same in many ways, it's a service model, they have access to the same research, data and investments that you do. The good ones will provide stewardship, ongoing coaching and accountability, and like a personal trainer they'll push you to do better. there is a study by DALBAR that shows the average market return over the last 20 years (so the ETF IVV) was like 9.6% yet the average investor only got 4.6% the average investor with an advisor got like 8.00% so 8% even less a 2% fee is still better than 4.6% it wasn't because the market behaved differently, or because advisors have wands or crystal balls. It is largely because the good ones are excellent counselors and are pretty good at managing behavior. There's nothing wrong with a membership to planet fitness, nor is there anything wrong with a personal trainer, as long as the somewhat significant increase in cost brings you the desired result.

 

[AKmoney]

There is not a single person on this planet who needs someone to charge them 1-1.5% on their assets.

How a 1% Fee Could Cost Millennials $590,000 in Retirement Savings - NerdWallet

I'm also not sure I follow your logic. You say:
- IVV returned 9.6%
- The average investor got 4.6% (probably because they don't know what they're doing and more importantly, don't know about index fund investing)
- The average advisor returnee 8% not including their fees

This begs the question: Why not just buy IVV and be done with it? Nobody needs an advisor for that.

 

[volkinator]

I wouldn't agree with the above post per se. .

There is not a single person on this planet who needs someone to charge them 1-1.5% on their assets.

It's obviously a choice and some people feel they need it, others don't. I know financial advisers (yes the fiduciary ones) and they are amazing for certain people. I also know and have received calls from the other sales oriented ones, and you can immediately tell the difference. It's also one of those things where you get what you put in.

It's also similar to a CPA. Yeah, you can figure out your own taxes, but lots of people have a tax professional so they don't have to think as much and can generally get better/more accurate tax statements.

Another piece that may be overlooked is working within the current tax laws (obviously we don't have a crystal ball) But since they are working in your best interest, a good financial adviser will work with you on your goals, and how to mitigate your tax liability. I know people that their CFP caught errors from their CPA's and saved them 16K/yr on taxes in retirement. Just from one line. Again, I'm sure some people can figure it out, but sometimes it helps having someone on your side. (and no, that person does not see that CPA anymore...)

Sometimes people nearing retirement need the reassurance that they'll be okay. Or, maybe you're way behind. Still have student loans, mortgage, just bought a new mall crawling 4runner w/ Gobi this and Icon that (gotta stay relevant I guess)... and want to retire in 5 years... and you have $20k net worth...

 

[jordanrb81]

There is not a single person on this planet who needs someone to charge them 1-1.5% on their assets.

How a 1% Fee Could Cost Millennials $590,000 in Retirement Savings - NerdWallet

I'm also not sure I follow your logic. You say:
- IVV returned 9.6%
- The average investor got 4.6% (probably because they don't know what they're doing and more importantly, don't know about index fund investing)
- The average advisor returnee 8% not including their fees

This begs the question: Why not just buy IVV and be done with it? Nobody needs an advisor for that.

you follow the logic perfectly, actually I couldn't have said it better myself. you could have just bought IVV and be done with it, but the DALBAR study shows that isn't the user experience. Most left to themselves buy high and sell low, I have seen "do it yourself" investors lose money in a year that the S&P returned 14% by doing the exact wrong thing over and over. Advisors usually, key word being usually don't put a clients entire portfolio in domestic equity. they buy bonds, small cap, international etc. so their return would naturally be different. the point the DALBAR study illustrates is the same point I was making with the gym, an individual is capable of getting the same results by themselves that they are with a trainer, but most don't, it's a simple fact of life. Having a coach usually elevates results, assuming it's a great coach. Further a good advisor can help with taxes, get you on track with estate planning, protect your income and a myriad of other things that have zero to do with investment return. Advisors help hold you accountable to your goals, and keep you on track. Again, it comes down to time, talent and inclination. Not everyone needs an advisor, and if you have the time, the talent and the inclination you're going to have a real hard time justifying the fee. Right now, as I type this there are a couple people painting in my house, I am paying someone $600.00 to paint. I can go to Lowes and by paint and brushes etc. I am certainly skilled enough to paint a wall, but l lack the time and inclination to do so, so I am paying someone to do it for me. When I met my advisor I was saving about 5% of my income, they showed me how I could budget effectively and save 20% of my income, they keep me on track and we speak every couple months about what else I can be doing. Again, some people can start running at a mile a day and in a year qualify for a marathon, others need a coach, neither are wrong. The value they add far exceeds the fees they charge if you need the guidance and they are good. If you don't see the value, you'd probably ignore the advice if it were free.

 

[AKmoney]

I have seen "do it yourself" investors lose money in a year that the S&P returned 14% by doing the exact wrong thing over and over. Advisors usually, key word being usually don't put a clients entire portfolio in domestic equity. they buy bonds, small cap, international etc. so their return would naturally be different.

This is why I'm advocating index fund investing. You get returns that precisely track the market less of fees (ETF/mutual fund expense ratios), but the fees are so low they almost don't matter. For example, Vanguard Total Stock Market's (VTI) ER is 0.04% and it can be purchased commission-free at several brokerages.

Your typical financial advisor will not only charge you 1% but will almost certainly invest your money into actively managed funds that charge steep loads. They're in it to earn commissions.

As you say, people think they can beat the market but the reality is very few people can consistently deliver better returns year over year. Often times, a fund manager can deliver better returns net of fees for several years but eventually the odds catch up to them and they'll trail the market. Even Warren Buffet trailed the market the past year.

Investing is a marathon, not a sprint. Timelines are in decades, not years.

Seriously, check out the Boglehead Three Fund portfolio. It consists of US Total Stock Market, ex-US (int'l) total market, and a US total bond fund. It's really all anyone needs.

 

[jordanrb81]

This is why I'm advocating index fund investing. You get returns that precisely track the market less of fees (ETF/mutual fund expense ratios), but the fees are so low they almost don't matter. For example, Vanguard Total Stock Market's (VTI) ER is 0.04% and it can be purchased commission-free at several brokerages.

Your typical financial advisor will not only charge you 1% but will almost certainly invest your money into actively managed funds that charge steep loads. They're in it to earn commissions.

As you say, people think they can beat the market but the reality is very few people can consistently deliver better returns year over year. Often times, a fund manager can deliver better returns net of fees for several years but eventually the odds catch up to them and they'll trail the market. Even Warren Buffet trailed the market the past year.

Investing is a marathon, not a sprint. Timelines are in decades, not years.

Seriously, check out the Boglehead Three Fund portfolio. It consists of US Total Stock Market, ex-US (int'l) total market, and a US total bond fund. It's really all anyone needs.

you still fail to see my point. it isn't "all anyone needs" you are correct, no advisor is going to consistently beat the market net of fees, but for like the 5th time THAT ISN'T WHAT YOU'RE PAYING THEM TO DO. Good financial advisors spend quite a bit more time managing their clients behavior than they do managing their portfolio. You're totally missing the point of a good advisor. if a person left to their own devices manages to save $5,000.00 a year but an advisor shows them how to save $20,000.00 a year the coaching advice alone is an incalculable return. You pay a CPA for intellectual capital, you pay an attorney or intellectual capital, you pay a financial advisor for intellectual capital. Good ones manage far more than your money. Again going back to the gym reference there is simply nothing an advisor can invest you in that you can't do yourself. but most people left to their own devices simply won't. Or they will but they will be emotional, impulsive and foolish. "should I buy gold?" "oooh Bitcoin looks like a good move" these are the foolish notions that the average person has run through their mind. A good advisor spends most of their energy saving people from themselves. You're relating fees to investment returns, you're not paying an advisor fees for investment returns, you're paying them for their counsel.

 

[BrianSD_42]

I feel like all this talk about how "your ~4% interest payment could be making ~10% in the market" really doesn't take into account that the market is going to go down. It always does, it always will. 2000 to 2010 is called the LOST decade for a reason, an entire decade where the market finished at less than 0% return after inflation. Sure it went up a huge amount after but you've got to plan for the fact that 2020 to 2030 could be the next lost decade. My retirement is all in the market and that's fine by me since I'm 36.

Back to the house loan, putting the extra cash you could have been using to pay down the principal into something risky like the market is playing with fire. Make early parents and also build a liquid pile of cash. Why not split the difference and make partial extra payments to principal, partial into savings CDs or money market funds and then left over partially into the market?

Things are going great right now, who is ready for the next recession?
.

 

[BrianSD_42]

Regarding the investment advisor vs index funds discussion I think you are both right. I like the analogies but it is true that many people actually don't need to pay 1% just to be advised against investing in Bitcoin or other dumb things and for every advisor against it there are plenty it there who are pro risk, many even get commission fees on risky trades or moving money into certain funds.

For one thing if I am paying a financial advisor to check my behavior and keep me from doing stupid stuff vs paying them for their investment pics then why should I give away 1% for that... It is like paying a therapist 1% of your life savings just to help manage your behavior. Some people need that ... many don't. Personally, for finance I would rather just pay them $$$ by the hour for each season which could be a chunk of change per session UPFRONT for each interaction vs tens of thousands over a decade in the background.

I mostly am in US stocks index funds and I don't need a full time fee account advisor because I've already consulted several on an hourly level and paid $$$ for that service. I don't need to keep paying for a service I am not using except twice a year.

What do think about these pics... been working great so far. Please let me know, I do want to hear it. The near 0% fees and lack of an additional advisor fee seemed like the right way to go. Warren Buffet recommends this approach.

FBGRX | Fidelity® Blue Chip Growth Fund (20%)

FXAIX | Fidelity 500 Index (25%)

FNCMX | Fidelity® Nasdaq® Composite Index Fund (20%)

VTSAX | Vanguard Total Stock Market Index Fund Admiral Shares (25% FYI one time $75 fee)

FDRXX | Fidelity Cash fund …. Near 2% (10%)

.

 

[jordanrb81]

I feel like all this talk about how "your ~4% interest payment could be making ~10% in the market" really doesn't take into account that the market is going to go down. It always does, it always will. 2000 to 2010 is called the LOST decade for a reason, an entire decade where the market finished at less than 0% return after inflation. Sure it went up a huge amount after but you've got to plan for the fact that 2020 to 2030 could be the next lost decade. My retirement is all in the market and that's fine by me since I'm 36.

Back to the house loan, putting the extra cash you could have been using to pay down the principal into something risky like the market is playing with fire. Make early parents and also build a liquid pile of cash. Why not split the difference and make partial extra payments to principal, partial into savings CDs or money market funds and then left over partially into the market?

Things are going great right now, who is ready for the next recession?
.

I think you're a little confused, the market is going to go up it always does and it always will. you said down instead of up. Google the S&P or Dow from 1910 to now, you'll see it only really goes in one direction, think of it like a mountain, you can be hiking a mountain and find yourself on the trail going downhill, but the prevailing direction is up. The lost decade specifically was largely due to a major correction in the tech industry. Since Warren Buffet has already been brought up, I remember an interview he gave in, I want to say 2001, he was asked why he didn't own any tech companies, yahoo! was given as an example. He scowled twisted is face all up and said "what do they make!" he was right (imagine that) what he said wasn't spot on but close, none of those companies had reported profits yet. However despite the major indexes in the US reporting a lost decade. REITS fared rather well, blue chips continued to pay significant dividends and the Euro market performed quite well. Hindsight is always 20/20 but the point is there was plenty of money made in that decade, just not in the large cap US market. The market will correct to be sure, but over 20 and 30 year periods it only goes in one direction. remember, like a mountain the goal in retirement isn't to get to the top, it's to get to the top and get safely back down. people are spending 30 years in retirement these days, you don't retire and just stop trying to earn a return in the market. That would be a huge mistake, what do you imagine grocery's will cost in 30 years. a CD after inflation and taxes yields a net loss, total waste of time and money.

which brings me to your housing question, you can earn 4% with relative safety and consistency. now an 8% return will require quite a bit of risk. the fact is you can actually do better saving at an interest rate lower than your mortgage simply because of compounding interest on the savings and effectively reverse compounding (amortization) on the mortgage. As previously mentioned there is also liquidity as well as opportunity cost to consider.

 

[jordanrb81]

Regarding the investment advisor vs index funds discussion I think you are both right. I like the analogies but it is true that many people actually don't need to pay 1% just to be advised against investing in Bitcoin or other dumb things and for every advisor against it there are plenty it there who are pro risk, many even get commission fees on risky trades or moving money into certain funds.

For one thing if I am paying a financial advisor to check my behavior and keep me from doing stupid stuff vs paying them for their investment pics then why should I give away 1% for that... It is like paying a therapist 1% of your life savings just to help manage your behavior. I would rather just pay them by the hour for each season which would be hundreds of dollars per session upfront vs tens of thousands over a decade in the background.

Personally I am in index funds and I don't need a full time fee account advisor because I've already consulted several on an hourly level and paid $$$ for that service. I don't need to keep paying for a service I am not using except twice a year.

What do think about these pics.. been working great so far. Please let me know, I do want to hear it. The near 0% fees and lack of an additional advisor fee seemed like the right way to go. Warren Buffet recommends this approach.


.

You're right, not commenting on the specific investments, that's not something I can speak to for your money. but the idea of paying an advisor on a fee only basis. this is a good approach and a model many advisors are adopting. depending on your fee and model they will meet with you usually once, twice or four times a year, give advice on strategy and asset allocation and then you go off and do your thing. if you're comfortable executing on your own, rebalancing quarterly, adjusting your allocation as the market moves and doing tax loss harvesting on your own. it's a very clean efficient model, as the advisor doesn't have custody or control of your money the only fee is the one you write out on a check, super transparent. The fact is 75% of people with a million or more invested have an advisor, that number increases to 86% of people with 5 million or more.

different people want different service models. Places like BNY Mellon and Wilmington Trust, US Trust etc. have family office services and will do everything from paying your mortgage and utilities to hiring your landscape services and getting you sporting and theater tickets. Some people don't feel comfortable executing trades on their own, some don't want to rebalance their portfolio. Let's be honest though less than 25% of Americans have more than 100k saved in their retirement and don't even know what a mutual fund is. People need all the help they can get. if you are highly competent and enjoy investing, find it interesting and are well disciplined you may very well not need to pay an advisor. for most people it's a tale of two totally different series of choices, if an advisor gets you on track and helps you make better choices, and coaches you through the ups and downs, provides education and stewardship. you're getting them most times at a bargain.

 

[BrianSD_42]

I think you're a little confused, the market is going to go up it always does and it always will. you said down instead of up. Google the S&P or Dow from 1910 to now, you'll see it only really goes in one direction, think of it like a mountain, you can be hiking a mountain and find yourself on the trail going downhill, but the prevailing direction is up. The lost decade specifically was largely due to a major correction in the tech industry.

I mean YES you are right that the market will always go up over 100 years but NO it will not always go up from 2020 to 2030. In fact we could be ripe for a major recession caused by tech all over again. Uber is valued at twice FedEx? Really?? Please. BTW there are countless articles saying this and for every major multi-year recession the market went up up and then crashed.

We have already crossed the threshold for longest amount month of a bull market ever recorded. The yield curve has been crossed. So yes I do think a major recession is due in the next 1-2 years and it could be at any time. I also think tech will be a major source of the crash.

BTW have you read the recent reporting on the crisis building around leveraged loans?

How regulators, Republicans and big banks fought for a big increase in lucrative but risky corporate loans
https://www.washingtonpost.com/busi...61983b7e0cd_story.html?utm_term=.a96c381ffb8e


Leveraged Loans: A Ticking Time Bomb, How Investors Can Take Advantage Of This?
Access to this page has been denied.


Big Banks Are Very Exposed To Leveraged Lending And CLO Markets
Big Banks Are Very Exposed To Leveraged Lending And CLO Markets


A $1.6 trillion credit market could batter the global economy. And you will take the hit if it implodes, not Wall Street.
What are leveraged loans, what are CLOs and should you be worried? - Business Insider

:bat:

 

[Charlievee]

Well do to climate change the world will end in 12 years (said members of Congress) so party like its 1999... wait a minute. They said y2k would bring the collapse and it didnt. Well, shit.

 

[jordanrb81]

I mean YES you are right that the market will always go up over 100 years but NO it will not always go up from 2020 to 2030. In fact we could be ripe for a major recession caused by tech all over again. Uber is valued at twice FedEx? Really?? Please. BTW there are countless articles saying this and for every major multi-year recession the market went up up and then crashed.

We have already crossed the threshold for longest amount month of a bull market ever recorded. The yield curve has been crossed. So yes I do think a major recession is due in the next 1-2 years and it could be at any time. I also think tech will be a major source of the crash.

BTW have you read the recent reporting on the crisis building around leveraged loans?

How regulators, Republicans and big banks fought for a big increase in lucrative but risky corporate loans
https://www.washingtonpost.com/busi...61983b7e0cd_story.html?utm_term=.a96c381ffb8e


Leveraged Loans: A Ticking Time Bomb, How Investors Can Take Advantage Of This?
Access to this page has been denied.


Big Banks Are Very Exposed To Leveraged Lending And CLO Markets
Big Banks Are Very Exposed To Leveraged Lending And CLO Markets


A $1.6 trillion credit market could batter the global economy. And you will take the hit if it implodes, not Wall Street.
What are leveraged loans, what are CLOs and should you be worried? - Business Insider

:bat:

SO, with a degree in Finance, a minor in Economics and an affinity for history, yeah, I know all of this. Strictly speaking if you ask a professor the market runs historically in seven year cycles, we are ten years into a bull run, so three years over due. I have been cautious about this since about 2017. That said, San Francisco is like 50 years over due for a major earthquake, and while I wouldn't discourage anyone from visiting the city, I would tell them not to be surprised if when they're there, there's an earthquake. which is to say, yes the market is due for a correction, and yes there are a couple bubbles. Not to mention a global economic slow down, trade tariffs, brexit all sorts of things, but the market isn't going to crash Monday...I don't think. Thing is, most people think the market is a little overbought if you consider P/E ratios large cap domestic specifically is a little "expensive" right now. Soooo when the market corrects, which yes it eventually will, everything will be on sale. Time to buy more, not hide in cash. I am not saying that's what you, or anyone else should do, but that's what I'll be doing for sure.